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EXHIBIT 10.18
MEZZANINE
LOAN AGREEMENT
Dated as of February 14, 2001
Between
MEGAPLEX HOLDINGS, INC.,
as Mezzanine Borrower
and
iSTAR FUNDING, LLC
as Mezzanine Lender
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TABLE OF CONTENTS
Page
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I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION..................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Principles of Construction............................................................16
II. GENERAL TERMS: MEZZANINE LOAN...........................................................................16
Section 2.1 Mezzanine Loan Commitment; Disbursement to Mezzanine Borrower.........................16
Section 2.2 Interest; Loan Payments; Late Payment Charge..........................................17
Section 2.3 Prepayments...........................................................................19
Section 2.4 Defeasance Events.....................................................................20
Section 2.5 Defeasance............................................................................21
Section 2.6 Release of Collateral.................................................................23
III. CONDITIONS PRECEDENT....................................................................................24
Section 3.1 Conditions Precedent to Closing.......................................................24
IV. REPRESENTATIONS AND WARRANTIES..........................................................................29
Section 4.1 Mezzanine Borrower Representations....................................................29
V. MEZZANINE BORROWER COVENANTS............................................................................40
Section 5.1 Affirmative Covenants.................................................................40
Section 5.2 Negative Covenants....................................................................50
VI. INSURANCE...............................................................................................54
Section 6.1 Insurance.............................................................................54
VII. RESERVE FUNDS...........................................................................................57
Section 7.1 [Intentionally Omitted]...............................................................57
Section 7.2 Tax and Insurance Escrow Fund.........................................................57
Section 7.3 Replacements and Replacement Reserve..................................................57
Section 7.4 Ground Lease Reserve Fund.............................................................57
Section 7.5 Liquidity Reserve.....................................................................57
Section 7.6 [Intentionally Omitted]...............................................................58
Section 7.7 Reserve Funds, Generally..............................................................58
VIII. DEFAULTS................................................................................................59
Section 8.1 Event of Default......................................................................59
Section 8.2 Remedies..............................................................................61
Section 8.3 Remedies Cumulative; Waivers..........................................................63
Section 8.4 Limitation on Mezzanine Lender's Responsibility.......................................63
IX. MISCELLANEOUS...........................................................................................64
Section 9.1 Survival..............................................................................64
Section 9.2 Successors and Assigns................................................................64
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Section 9.3 Mezzanine Lender's Discretion.........................................................64
Section 9.4 Governing Law.........................................................................64
Section 9.5 Modification, Waiver in Writing.......................................................66
Section 9.6 Delay Not a Waiver....................................................................66
Section 9.7 Notices...............................................................................66
Section 9.8 Trial by Jury.........................................................................68
Section 9.9 Headings..............................................................................68
Section 9.10 Severability..........................................................................68
Section 9.11 Preferences...........................................................................68
Section 9.12 Waiver of Notice......................................................................69
Section 9.13 Remedies of Mezzanine Borrower........................................................69
Section 9.14 Expenses; Indemnity...................................................................69
Section 9.15 Schedules Incorporated................................................................70
Section 9.16 Offsets, Counterclaims and Defenses...................................................70
Section 9.17 No Joint Venture or Partnership; No Third Party Beneficiaries.........................71
Section 9.18 Publicity.............................................................................71
Section 9.19 Waiver of Counterclaim................................................................71
Section 9.20 Conflict; Construction of Documents; Reliance.........................................71
Section 9.21 Brokers and Financial Advisors........................................................72
Section 9.22 Prior Agreements......................................................................72
Section 9.23 Exculpation...........................................................................72
Section 9.24 Satisfaction of Obligations by Borrower or Master Tenants.............................74
Section 9.25 Servicer..............................................................................75
Section 9.26 Set-off...............................................................................75
Section 9.27 Counterparts..........................................................................75
Section 9.28 Reinstatement.........................................................................75
Section 9.29 Cooperation...........................................................................75
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SCHEDULES
Schedule I - Properties
Schedule II - Additional Leases
Schedule III - Mezzanine Note Amortization Schedule
Schedule 3.1.14 Litigation
Schedule 4.3.31 Ground Lease Exceptions
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of February 14, 2001 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
"AGREEMENT"), between iSTAR FUNDING, LLC, a Delaware limited liability company,
having an address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("MEZZANINE LENDER") and MEGAPLEX HOLDINGS, INC., a Missouri corporation, having
an address at 00 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx 00000
("MEZZANINE BORROWER").
W I T N E S S E T H:
WHEREAS, Bear, Xxxxxxx Funding, Inc., a Delaware corporation, as
mortgage lender ("LENDER"), is making a loan in the principal amount of One
Hundred Three Million Six Hundred Thousand Dollars ($103,600,000.00) (the
"LOAN") to [Megaplex Nine, Inc., a Missouri corporation ("BORROWER"), pursuant
to a Loan Agreement, dated February 14, 2001 (as amended supplemented or
otherwise modified from time to time, the "LOAN AGREEMENT"), which Loan is
evidenced by a Promissory Note dated February 14, 2001 (the "Note") made by
Borrower to Lender and secured by, among other things, mortgages and deeds of
trust granting Lender a first priority lien on the real property more fully
described therein;
WHEREAS, Mezzanine Borrower is the legal and beneficial owner of all of
the shares of capital stock in Borrower (the "PLEDGED SECURITIES");
WHEREAS, Mezzanine Borrower has requested Mezzanine Lender to make a
loan to it in the aggregate principal amount of Twenty-One Million Four Hundred
Thousand Dollars ($21,400,000.00) (the "MEZZANINE LOAN"); and
WHEREAS, as a condition precedent to the obligation of Mezzanine Lender
to make the Mezzanine Loan Mezzanine Borrower has agreed to enter into a pledge
agreement, dated as of the date hereof, in favor of Mezzanine Lender (as
amended, supplemented or otherwise modified from time to time, the "PLEDGE
AGREEMENT"), pursuant to which Mezzanine Borrower shall grant to Mezzanine
Lender a first priority security interest in the Pledged Securities and all
proceeds thereof (collectively, the "COLLATERAL") as collateral security for the
Mezzanine Debt (as defined below).
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:
"ADDITIONAL INSOLVENCY OPINION" shall have the meaning set forth in
Section 4.1.29(c).
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"AFFILIATE" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
"AGENT" shall mean First Union Bank or any successor Eligible
Institution acting as Agent under the Mezzanine Cash Management Agreement.
"AGREEMENT" shall mean this Mezzanine Loan Agreement, as amended,
supplemented or modified from time to time.
"ALLOCATED MEZZANINE LOAN AMOUNT" shall have the meaning set forth in
Section 7.5.1 hereof.
"ANNUAL BUDGET" shall mean the operating budget, including all planned
capital expenditures, for the Properties prepared by Borrower for the applicable
Fiscal Year or other period.
"APPLICABLE INTEREST RATE" shall mean fifteen and three-hundredths
percent (15.03%).
"APPROVED ANNUAL BUDGET" shall have the meaning set forth in Section
5.1.9(d) hereof.
"APPROVED APPRAISAL" shall mean an MAI appraisal of the applicable
Individual Property prepared by an appraiser satisfactory to Mezzanine Lender
that is no more than one (1) year old and is otherwise satisfactory in form and
substance to Mezzanine Lender.
"BASIC CARRYING COSTS" shall mean, with respect to each Individual
Property, the sum of the following costs associated with such Individual
Property for the relevant Fiscal Year or payment period: (i) Taxes, (ii)
Insurance Premiums and (iii) Ground Rents.
"BORROWER" shall mean Megaplex Holdings, Inc., a Missouri corporation,
together with its permitted successors and assigns.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in Xxx Xxxx, Xxx Xxxx, Xxxxxxx, Xxxxxxxx or
Kansas City, Missouri are not open for business.
"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash Management
Agreement of even date herewith among Borrower, Agent and Lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
"CLOSING DATE" shall mean the date of the funding of the Mezzanine
Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, as it
may be further amended from time to time, and any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"COLLATERAL" shall have the meaning set forth in the Recitals hereof.
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"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
any Individual Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting such
Individual Property or any part thereof.
"DEBT" shall have the meaning ascribed to such term in the Loan
Agreement.
"DEBT SERVICE COVERAGE RATIO" shall have the meaning set forth in the
Loan Agreement, except that, for purposes of this Agreement, the denominator
shall be the sum of (i) the aggregate amount of principal and interest due and
payable on the Note or, in the event a "Defeasance Event" (as defined in the
Loan Agreement) has occurred, the Undefeased Note, for such period plus (ii) the
aggregate amount of principal and interest due and payable on the Mezzanine
Note, or, as applicable, the Undefeased Mezzanine Note for such period.
"DEFAULT" shall mean the occurrence of any event hereunder or under any
other Mezzanine Loan Document which, but for the giving of notice or passage of
time, or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Mezzanine Loan, a rate
per annum equal to the lesser of (a) the maximum rate permitted by applicable
law, or (b) five percent (5%) above the Applicable Interest Rate.
"DEFEASANCE DEPOSIT" shall mean an amount equal to the remaining
principal amount of the Mezzanine Note or the Undefeased Mezzanine Note, as
applicable, the Defeasance Premium, any costs and expenses incurred or to be
incurred in the purchase of U.S. Obligations necessary to meet the Scheduled
Defeasance Payments and any revenue, documentary stamp or intangible taxes or
any other tax or charge due in connection with the transfer of the Mezzanine
Note or the Defeased Mezzanine Note, as applicable, the creation of the Defeased
Mezzanine Note and the Undefeased Mezzanine Note, if applicable, or otherwise
required to accomplish the agreements of Sections 2.4 and 2.5 hereof (including,
without limitation any fees and expenses of accountants, attorneys and the
Rating Agencies incurred in connection therewith).
"DEFEASANCE DATE" shall have the meaning set forth in Section 2.5
hereof.
"DEFEASANCE EVENT" means the defeasance or partial defeasance of the
Mezzanine Note in accordance with Sections 2.4 and 2.5.
"DEFEASANCE PREMIUM" shall mean the amount (if any) which, when added
to the remaining principal amount of the Note or the principal amount of a
Defeased Note, as applicable, will be sufficient to purchase U.S. Obligations
providing the required Scheduled Defeasance Payments.
"DEFEASED NOTE" shall have the meaning ascribed to such term in the
Loan Agreement.
"DEFEASED MEZZANINE NOTE" shall have the meaning set forth in Section
2.5 hereof.
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"ELIGIBLE ACCOUNT" shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (b)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R.
Section 9.10(b), having in either case a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution or trust
company, the short term unsecured debt obligations or commercial paper of which
are rated at least P-1 by Moody's and in the case of accounts in which funds are
held for 30 days or less (or, in the case of accounts in which funds are held
for more than 30 days, the long term unsecured debt obligations of which are
rated at least and "Aa2" by Moody's).
"ENVIRONMENTAL INDEMNITY" shall mean, with respect to the Properties,
that certain Environmental Indemnity Agreement executed by Mezzanine Borrower
and Indemnitor in connection with the Mezzanine Loan for the benefit of
Mezzanine Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1(a)
hereof.
"EXTRAORDINARY EXPENSE" shall have the meaning set forth in Section
5.1.9(e) hereof.
"FISCAL YEAR" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the
Mezzanine Loan.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or
otherwise) whether now or hereafter in existence.
"GROSS INCOME FROM OPERATIONS" shall have the meaning set forth in the
Loan Agreement.
"GROUND LEASE PROPERTY" shall mean the real property demised pursuant
to the Ground Leases.
"GROUND LEASE RESERVE FUND" shall have the meaning set forth in the
Loan Agreement.
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"GROUND LEASES" shall mean, collectively (a) with respect to the
Individual Property known as First Colony, Houston, TX, that certain Lease
between The First Colony Mall Venture, as landlord, and American Multi-Cinema,
Inc., as tenant, dated as of December 17, 1996, as assigned by American
Multi-Cinema, Inc. to Entertainment Properties Trust pursuant to that certain
Assignment and Assumption Agreement dated as of December 23, 1997, as further
assigned from Entertainment Properties Trust to Borrower pursuant to that
certain Assignment and Assumption Agreement dated as of the date hereof and (b)
with respect to the Individual Property known as Oakview, Omaha, NE, that
certain Lease between Xxxxxx X. Xxxxxxxxxx, Xxxxx X. Xxxxxx, Xxxxx Xxxxxxxxxx
and Xxxx Xxxx Xxxxxx, as landlord, and American Multi-Cinema, Inc., as tenant,
dated as of June 11, 1996, as amended pursuant to that certain First Amendment
to Ground Lease dated as of May 13, 1997, between Xxxxxx X. Xxxxxxxxxx, Xxxxx X.
Xxxxxx, Xxxxx Xxxxxxxxxx and Xxxx Xxxx Xxxxxx and American Multi-Cinema, Inc.,
as assigned by American Multi-Cinema, Inc. to Entertainment Properties Trust
pursuant to that certain Assignment and Assumption Agreement as of December 23,
1997, as further assigned by Entertainment Properties Trust to Borrower pursuant
to that certain Assignment and Assumption Agreement dated as of the date hereof.
"GROUND RENTS" shall have the meaning set forth in the Loan Agreement.
"IMPROVEMENTS" shall have the meaning set forth in the granting clause
of the related Mortgage with respect to each Individual Property.
"INDEBTEDNESS" of a Person, at a particular date, means the sum
(without duplication) at such date of (a) all indebtedness or liability of such
Person, including, but not limited to, amounts for borrowed money; (b)
obligations evidenced by bonds, debentures, notes, or other similar instruments;
(c) obligations for the deferred purchase price of property or services
(including trade obligations); (d) obligations under letters of credit; (e)
obligations under acceptance facilities; (f) all guaranties, endorsements (other
than for collection or deposit in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for payment, to supply
funds, to invest in any Person or entity, or otherwise to assure a creditor
against loss; and (g) obligations secured by any Liens, whether or not the
obligations have been assumed.
"INDEMNITOR" shall mean EPT DownREIT, Inc., a Missouri corporation, and
its successors.
"INDEMNITOR PARENT" shall mean Entertainment Properties Trust, a
Maryland real estate investment trust, and its successors.
"INDEPENDENT DIRECTOR" shall mean a director of Mezzanine Borrower who
is not at the time of initial appointment, or at any time while serving as a
director of Mezzanine Borrower, and has not been at any time during the
preceding five (5) years: (a) a stockholder, director (with the exception of
serving as an Independent Director of Borrower), officer, employee, partner,
attorney or counsel of Mezzanine Borrower or any Affiliate thereof; (b) a
customer, supplier or other person who derives any of its purchases or revenues
from its activities with Mezzanine Borrower or any Affiliate thereof; (c) a
Person controlling or under common control with any such stockholder, director,
officer, partner, customer, supplier or other Person; or (d) a member
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of the immediate family of any such stockholder, director, officer, employee,
partner, customer, supplier or other person. As used in this definition, the
term "CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise.
"INDIVIDUAL PROPERTY" shall mean each parcel of real property, the
Improvements thereon and all personal property owned by Borrower and encumbered
by a Mortgage, together with all rights pertaining to such property and
Improvements, as more particularly described in the Granting Clauses of each
Mortgage and referred to therein as the "PROPERTY."
"INSOLVENCY OPINION" shall mean that certain opinion letter dated the
date hereof delivered by Xxxxx Xxxx LLP in connection with the Loan.
"INSURANCE PREMIUMS" shall have the meaning set forth in Section 6.1(b)
hereof.
"INTERCREDITOR AGREEMENT" shall mean an Intercreditor Agreement between
Lender and Mezzanine Lender, and any extensions, renewals, amendments or
modifications thereof.
"LEASE" shall mean any lease, sublease or subsublease, letting,
license, concession or other agreement (whether written or oral and whether now
or hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in any
Individual Property, including, without limitation, the Master Leases, and every
modification, amendment or other agreement relating to such lease, sublease,
subsublease, or other agreement entered into in connection with such lease,
sublease, subsublease, or other agreement and every guarantee of the performance
and observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.
"LEGAL REQUIREMENTS" shall mean, with respect to each Individual
Property, all federal, state, county, municipal and other governmental statutes,
laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions
of Governmental Authorities affecting such Individual Property or any part
thereof, or the construction, use, alteration or operation thereof, or any part
thereof, whether now or hereafter enacted and in force, and all permits,
licenses and authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Mezzanine Borrower, at any time in force affecting such
Individual Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or alterations in or to such
Individual Property or any part thereof, or (b) in any way limit the use and
enjoyment thereof.
"LENDER" shall mean Bear, Xxxxxxx Funding, Inc., together with its
successors and assigns.
"LETTER OF CREDIT" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit acceptable to Mezzanine Lender
(either an evergreen letter of credit or one which does not expire until at
least thirty (30) Business Days after the Maturity Date) in favor of Mezzanine
Lender and entitling Mezzanine Lender to draw thereon in New York, New York,
issued by a domestic Eligible Institution or the U.S. agency or branch of a
foreign Eligible Institution. If at any time the issuer of any such Letter of
Credit shall cease to be an Eligible
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Institution, Mezzanine Lender shall have the right immediately to draw down the
same in full and hold the proceeds of such draw in accordance with the
applicable provisions hereof.
"LICENSES" shall have the meaning set forth in Section 4.1.21 hereof.
"LIEN" shall mean, with respect to each Individual Property and the
Collateral, any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of,
on or affecting the Collateral, the related Individual Property, or any portion
thereof or any interest therein or the Mezzanine Borrower, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic's, materialmen's
and other similar liens and encumbrances.
"LIQUIDATION EVENT" shall mean (i) any casualty to any Individual
Property (where the insurance proceeds are not applied to repair and restoration
in accordance with the restoration provisions of the Master Leases), (ii) any
condemnation of any Individual Property (where the condemnation awards are not
applied to repair and restoration in accordance with the restoration provisions
of the Master Leases), (iii) a transfer of any Individual Property in connection
with a realization thereon following an Event of Default under the Mezzanine
Loan, including without limitation a foreclosure sale and (iv) any refinancing
of any Individual Property or the Mezzanine Loan.
"LIQUIDITY RESERVE ACCOUNT" shall have the meaning set forth in Section
7.5.1 hereof.
"LIQUIDITY RESERVE FUND" shall have the meaning set forth in Section
7.5.1 hereof.
"LIQUIDITY RESERVE RELEASE AMOUNT" shall have the meaning set forth in
Section 7.5.1 hereof.
"LOAN" shall mean the meaning set forth in the Recitals hereof.
"LOAN AGREEMENT" shall have the meaning set forth in the Recitals
hereof.
"LOAN DOCUMENTS" shall mean, collectively, the Loan Agreement, the
Note, the Mortgages, the Cash Management Agreement and all other documents
executed and/or delivered in connection with the Loan.
"LOAN TRANSFER" shall have the meaning set forth in Section 9.29
hereof.
"LOAN TRANSFEREE" shall have the meaning set forth in Section 9.2.
"MASTER LEASES" shall mean, collectively, (a) that certain Lease dated
as of December 23, 1997 between Entertainment Properties Trust, a Maryland real
estate investment trust, as landlord, and American Multi-Cinema, Inc., a
Missouri corporation, as tenant, with respect to the Individual Property known
as First Colony 24 located in Houston, Texas, as assigned by Entertainment
Properties Trust to Borrower pursuant to that certain Assignment of Lease dated
as of the date hereof; (b) that certain Lease dated as of June 29, 1998 between
EPT DOWNREIT, INC., a Missouri corporation, as landlord, and American
Multi-Cinema, Inc.,
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Missouri corporation, as tenant, with respect to the Individual Property known
as Hampton Town Center 24 located in Hampton , Virginia, as assigned by EPT
DOWNREIT, INC., to Borrower pursuant to that certain Assignment of Lease dated
as of the date hereof; (c) that certain Lease dated as of April 17, 1998 between
EPT DOWNREIT, INC., a Missouri corporation, as landlord, and American
Multi-Cinema, Inc., Missouri corporation, as tenant, with respect to the
Individual Property known as, Mesquite 30, located in Mesquite, Texas, as
assigned by EPT DOWNREIT, INC., to Borrower pursuant to that certain Assignment
of Lease dated as of the date hereof; (d) that certain Lease dated as of
December 23, 1997 between Entertainment Properties Trust, a Maryland real estate
investment trust, as landlord, and American Multi-Cinema, Inc., a Missouri
corporation, as tenant, with respect to the Individual Property known as Leawood
Town Center 20, located in Kansas City, Missouri, as assigned by Entertainment
Properties Trust to Borrower pursuant to that certain Assignment of Lease dated
as of the date hereof; (e) that certain Lease dated as of March 9, 1998 between
EPT DOWNREIT, INC., a Missouri corporation, as landlord, and American
Multi-Cinema, Inc., Missouri corporation, as tenant, with respect to the
Individual Property known as South Barrington 30, located in Chicago, Illinois,
as assigned by Entertainment Properties Trust to Borrower pursuant to that
certain Assignment of Lease dated as of the date hereof; (f) that certain Lease
dated as of February 2, 1998 between Entertainment Properties Trust, a Maryland
real estate investment trust, as landlord, and American Multi-Cinema, Inc., a
Missouri corporation, as tenant, with respect to the Individual Property known
as Gulf Pointe 30, located in Houston, Texas, as assigned by Entertainment
Properties Trust to Borrower pursuant to that certain Assignment of Lease dated
as of the date hereof; (g) that certain Lease dated as of December 23, 1997
between Entertainment Properties Trust, a Maryland real estate investment trust,
as landlord, and American Multi-Cinema, Inc., a Missouri corporation, as tenant,
with respect to the Individual Property known as Oak View 24, located in Omaha,
Nebraska, as assigned by Entertainment Properties Trust to Borrower pursuant to
that certain Assignment of Lease dated as of the date hereof; (h) that certain
Lease dated as of December 23, between EPT DOWNREIT, INC., a Missouri
corporation, as landlord, and Xxxxxxx Theatres Circuit, Inc., a California
corporation, as tenant, with respect to the Individual Property known as Aliso
Viejo Stadium 20, located in Aliso Viejo, California, as assigned by EPT
DOWNREIT, INC., to Borrower pursuant to that certain Assignment of Lease dated
as of the date hereof; and (i) that certain Lease dated as of November 25, 1998,
between EPT DOWNREIT, INC., a Missouri corporation, as landlord, and Muvico
Entertainment, L.L.C., a Delaware limited liability company, with respect to the
Individual Property located at 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, as
any such lease may be amended, modified, extended or renewed as assigned by EPT
DOWNREIT, INC., to Borrower pursuant to that certain Assignment of Lease dated
as of the date hereof.
"MASTER TENANT" shall mean the tenant under each of the Master Leases,
and its successors and/or assigns.
"MATURITY DATE" shall mean the Payment Date occur in March, 2006 or
such other date on which the final payment of principal of the Mezzanine Note
becomes due and payable as therein or herein provided, whether at such stated
maturity date, by declaration of acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on
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the indebtedness evidenced by the Mezzanine Note and as provided for herein or
the other Mezzanine Loan Documents, under the laws of such state or states whose
laws are held by any court of competent jurisdiction to govern the interest rate
provisions of the Mezzanine Loan.
"MAXIMUM LIQUIDITY RESERVE AMOUNT" shall have the meaning set forth in
Section 7.5.1.
"MEZZANINE ACCOUNT" shall have the meaning set forth in the Mezzanine
Cash Management Agreement.
"MEZZANINE BORROWER" shall mean Megaplex Holdings, Inc., a Missouri
corporation, and its permitted successors and assigns under the Mezzanine Loan
Documents.
"MEZZANINE CASH MANAGEMENT AGREEMENT" shall mean the Mezzanine Cash
Management Agreement, dated the date of this Agreement, among Mezzanine
Borrower, Mezzanine Lender and Agent, and any extensions, renewals, amendments
or modifications thereof.
"MEZZANINE DEBT" shall mean the outstanding principal amount set forth
in, and evidenced by, this Agreement and the Mezzanine Note together with all
interest accrued and unpaid thereon and all other sums due or owing to Mezzanine
Lender in respect of the Mezzanine Loan under the Mezzanine Note, this
Agreement, the Pledge Agreement or any other Mezzanine Loan Document.
"MEZZANINE FINANCING STATEMENTS" shall mean financing statements
pertaining to the Collateral and the collateral described in the Mezzanine Cash
Management Agreement, as renewed, extended, continued, amended or modified from
time to time.
"MEZZANINE INDEMNITY" shall mean the Indemnity Agreement, dated the
date of this Agreement, among Mezzanine Borrower, Indemnitor and Mezzanine
Lender, as the same may be amended, restated, supplemented or otherwise modified
from time to time.
"MEZZANINE LENDER" shall mean iStar Funding, LLC, a Delaware limited
liability company, and its successors and assigns under the Mezzanine Loan
Documents.
"MEZZANINE LOAN" shall have the meaning set forth in the Recitals
hereof.
"MEZZANINE LOAN DOCUMENTS" shall mean the collective reference to this
Agreement, the Mezzanine Note, the Pledge Agreement, the Mezzanine Financing
Statements, the Mezzanine Cash Management Agreement, the Mezzanine Indemnity,
the Environmental Indemnity and any and all other agreements or documents
executed and/or delivered by Mezzanine Borrower or its Affiliates in connection
with the Mezzanine Loan, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"MEZZANINE NOTE" shall have the meaning set forth in Section 2.1.3.
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"MONTHLY DEBT SERVICE PAYMENT AMOUNT" mean a monthly payment equal to
the sum of (a) interest on the outstanding principal balance of the Mezzanine
Note and (b) an amount of principal set forth on Schedule III hereof.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"MORTGAGE" shall have the meaning set forth in the Loan Agreement.
"NET CASH FLOW" shall have the meaning set forth in the Loan Agreement.
"NET LIQUIDATION PROCEEDS" shall mean with respect to any Liquidation
Event, all amounts paid to or received by or on behalf of the Borrower in
connection with such Liquidation Event, including, without limitation, proceeds
of any sale, refinancing or other disposition or liquidation, less amounts
required or permitted to be deducted therefrom and amounts paid pursuant to the
Loan Documents to Lender (whether in the form of a payment to Lender to reduce
the principal balance of the Loan or a deposit with Lender for any purpose set
forth in the Loan Agreement including, without limitation, amounts held by
Lender or released or paid to Borrower or Master Tenant for the repair or
restoration of any Individual Property or for a business interruption resulting
from a casualty or condemnation), and less (i) in the case of a foreclosure sale
or Transfer of any Individual Property in connection with realization thereon
following an Event of Default under the Loan, or other disposition, reasonable
costs and expenses of sale or other disposition (including attorneys' fees and
brokerage commissions), (ii) in the case of a foreclosure sale, such costs and
expenses incurred by Lender under the Loan Documents as Lender shall be entitled
to receive reimbursement for under the terms of the Loan Documents and (iii) in
the case of a refinancing of the Loan, or any Individual Property, reasonable
costs and expenses (including attorneys' fees) of such refinancing as shall be
reasonably approved by Mezzanine Lender.
"NET OPERATING INCOME" shall have the meaning set forth in the Loan
Agreement.
"NOTE" shall have the meaning set forth in the Recitals hereof.
"OFFERING MEMORANDUM" means the Offering Memorandum dated February 9,
2001 pertaining to $103,600,000 Bear Xxxxxxx Commercial Mortgage Securities
Inc., Commercial Mortgage Pass-Through Certificates, Series 2001-EPR.
"OFFICER CERTIFICATE" shall mean a certificate delivered to Mezzanine
Lender by Mezzanine Borrower which is signed by a duly authorized senior officer
of Mezzanine Borrower.
"OPERATING EXPENSES" shall have the meaning set forth in the Loan
Agreement.
"OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining any Individual Property, now or hereafter levied or
assessed or imposed against such Individual Property or any part thereof.
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"PARTIAL DEFEASANCE PROPERTY" shall have the meaning ascribed to such
term in the Loan Agreement.
"PAYMENT DATE" shall mean the tenth (10th) day of each calendar month
during the term of the Mezzanine Loan or, if such day is not a Business Day, the
immediately preceding Business Day.
"PERMITTED ENCUMBRANCES" shall mean with respect to an Individual
Property, collectively, (a) the Liens and security interests created by the Loan
Documents and the Mezzanine Loan Documents, (b) all Liens, encumbrances and
other matters disclosed in the Title Insurance Policies relating to such
Individual Property or any part thereof, (c) Liens, if any, for Taxes imposed by
any Governmental Authority not yet due or delinquent, and (d) such other title
and survey exceptions as Mezzanine Lender has approved or may approve in writing
in Mezzanine Lender's sole discretion, which Permitted Encumbrances in the
aggregate do not materially adversely affect the value or use of such Individual
Property or Mezzanine Borrower's ability to repay the Mezzanine Loan.
"PERMITTED INVESTMENTS" shall have the meaning set forth in the Cash
Management Agreement.
"PERMITTED RELEASE DATE" shall have the meaning set forth in the Loan
Agreement.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"PERSONAL PROPERTY" shall have the meaning set forth in the granting
clause of the Mortgage with respect to each Individual Property.
"PHYSICAL CONDITIONS REPORT" shall mean, with respect to each
Individual Property, a structural engineering report prepared by a company
satisfactory to Mezzanine Lender regarding the physical condition of such
Individual Property, satisfactory in form and substance to Mezzanine Lender in
its sole discretion, which report shall, among other things, (a) confirm that
such Individual Property and its use complies, in all material respects, with
all applicable Legal Requirements (including, without limitation, zoning,
subdivision and building laws), (b) include a copy of a final certificate of
occupancy with respect to all Improvements on such Individual Property and (c)
if required by Mezzanine Lender, include a seismic report.
"PLEDGE AGREEMENT" shall have the meaning set forth in the Recitals
hereof.
"PLEDGED SECURITIES" shall have the meaning set forth in the Recitals
hereof.
"POLICIES" shall have the meaning specified in Section 6.1(b) hereof.
"PROPERTIES" shall mean, collectively, each and every Individual
Property which is subject to the terms of this Agreement.
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"RATING AGENCIES" shall mean Xxxxx'x Investors Service, Inc., or any
other nationally-recognized statistical rating agency which has been approved by
Mezzanine Lender.
"RENTS" shall mean, with respect to each Individual Property, all
rents, percentage rent, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil
and gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, proceeds, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or paid
to or for the account of or benefit of Borrower or its agents or employees from
any and all sources arising from or attributable to the Individual Property, and
proceeds, if any, from business interruption or other loss of income insurance.
"REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth in the
Loan Agreement.
"REPLACEMENT RESERVE FUND" shall have the meaning set forth in the Loan
Agreement.
"REPLACEMENT RESERVE MONTHLY DEPOSIT" shall have the meaning set forth
in the Loan Agreement.
"REPLACEMENTS" shall have the meaning set forth in the Loan Agreement.
"RESERVE FUNDS" shall mean the Liquidity Reserve Fund or any other
escrow fund established by the Mezzanine Loan Documents.
"SERVICER" shall have the meaning set forth in Section 9.25 hereof.
"SERVICING AGREEMENT" shall have the meaning set forth in Section 9.25
hereof.
"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in Section
8.2(c) hereof.
"SPECIAL PURPOSE ENTITY" shall mean a corporation which at all times on
and after the date hereof until the 91st day after such time as the Mezzanine
Debt and all obligations of the Mezzanine Borrower have been indefeasibly
satisfied in full:
(i) is organized solely for the purpose of owning, holding,
transferring and exchanging the Collateral, entering into this
Agreement with Mezzanine Lender, refinancing the Collateral in
connection with a permitted repayment of the Mezzanine Loan,
and transacting lawful business that is incident, necessary
and appropriate to accomplish the foregoing;
(ii) is not engaged and will not engage in any business unrelated
to the ownership of the Collateral;
(iii) does not have and will not have any assets other than those
related to the Collateral;
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(iv) has not engaged, sought or consented to and will not engage
in, seek or consent to any dissolution, winding up,
liquidation, consolidation, merger, sale of all or
substantially all of its assets or amend its articles of
incorporation, certificate of formation with respect to the
matters set forth in this definition;
(v) has at least one Independent Director, and has not caused or
allowed and will not cause or allow the board of directors of
such entity to take any action requiring the unanimous
affirmative vote of one hundred percent (100%) of the members
of its board of directors unless the Independent Director
shall have participated in such vote;
(vi) has a certificate of incorporation or articles that, in each
case, provide that such entity will not: (1) dissolve, merge,
liquidate, consolidate; (2) sell all, or substantially all, of
its assets or cause the sale of all, or substantially all of
the assets of Borrower; (3) engage in any other business
activity, or amend its organizational documents with respect
to the matters set forth in this definition without the
consent of Mezzanine Lender; or (4) without the affirmative
vote of the Independent Director and of all other directors of
the corporation file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings with respect to
itself or to any other entity in which it has a direct or
indirect legal or beneficial ownership interest;
(vii) is and will remain solvent and pay its debts and liabilities
(including, as applicable, shared personnel and overhead
expenses) from its assets as the same shall become due, and is
maintaining and will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size
and character and in light of its contemplated business
operations;
(viii) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such
entity;
(ix) has maintained and will maintain its accounts, books and
records separate from any other Person and will file its own
tax returns, except to the extent that it is required to file
consolidated tax returns by law;
(x) has maintained and will maintain its own records, books,
resolutions and agreements;
(xi) other than as provided in the Mezzanine Cash Management
Agreement, (a) has not commingled and will not commingle its
funds or assets with those of any other Person and (b) has not
participated and will not participate in any cash management
system with any other Person;
(xii) has held and will hold its assets in its own name;
(xiii) has conducted and will conduct its business in its name or in
a name franchised or licensed to it by an entity other than an
Affiliate of Mezzanine Borrower, except for services rendered
under a business management services agreement with an
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Affiliate that complies with the terms contained in Section
4.1.30 herein, so long as the manager, or equivalent thereof,
under such business management services agreement holds itself
out as an agent of Mezzanine Borrower;
(xiv) has maintained and will maintain its financial statements,
accounting records and other entity documents separate from
any other Person and has not permitted and will not permit its
assets to be listed as assets on the financial statement of
any other entity except as required by GAAP; provided,
however, that any such consolidated financial statement shall
contain a note indicating that its separate assets and
liabilities are neither available to pay the debts of the
consolidated entity nor constitute obligations of the
consolidated entity;
(xv) has paid and will pay its own liabilities and expenses,
including the salaries of its own employees, out of its own
funds and assets, and has maintained and will maintain a
sufficient number of employees in light of its contemplated
business operations;
(xvi) has observed and will observe all corporate formalities;
(xvii) has and will have no Indebtedness other than (i) the Mezzanine
Loan, and (ii) such other liabilities that are permitted
pursuant to this Agreement;
(xviii) has not and will not assume or guarantee or become obligated
for the debts of any other Person or hold out its credit as
being available to satisfy the obligations of any other Person
except as permitted pursuant to this Agreement;
(xix) has not and will not acquire obligations or securities of its
shareholders or any other Affiliate other than stock in the
Borrower;
(xx) has allocated and will allocate fairly and reasonably any
overhead expenses that are shared with any Affiliate,
including, but not limited to, paying for shared office space
and services performed by any employee of an Affiliate;
(xxi) maintains and uses and will maintain and use separate
stationery, invoices and checks bearing its name. The
stationery, invoices, and checks utilized by the Special
Purpose Entity or utilized to collect its funds or pay its
expenses shall bear its own name and shall not bear the name
of any other entity unless such entity is clearly designated
as being the Special Purpose Entity's agent;
(xxii) has not pledged and will not pledge its assets for the benefit
of any other Person;
(xxiii) has held itself out and identified itself and will hold itself
out and identify itself as a separate and distinct entity
under its own name or in a name franchised or licensed to it
by an entity other than an Affiliate of Borrower and not as a
division or part of any other Person, except for services
rendered under a business management services agreement with
an Affiliate that complies with the terms contained in Section
4.1.30 herein, so long as the manager, or equivalent thereof,
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under such business management services agreement holds itself
out as an agent of the Borrower;
(xxiv) has maintained and will maintain its assets in such a manner
that it will not be costly or difficult to segregate,
ascertain or identify its individual assets from those of any
other Person;
(xxv) has not made and will not make loans to any Person or hold
evidence of indebtedness issued by any other Person or entity
(other than cash and investment-grade securities issued by an
entity that is not an Affiliate of or subject to common
ownership with such entity);
(xxvi) has not identified and will not identify its shareholders, or
any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a
division of any other Person;
(xxvii) has not entered into or been a party to, and will not enter
into or be a party to, any transaction with its shareholders
or Affiliates except (A) in the ordinary course of its
business and on terms which are intrinsically fair,
commercially reasonable and are no less favorable to it than
would be obtained in a comparable arm's-length transaction
with an unrelated third party and (B) in connection with this
Agreement;
(xxviii) has not and will have any obligation to, and will not,
indemnify its officers, directors or shareholders, as the case
may be, unless such an obligation is fully subordinated to the
Mezzanine Debt and will not constitute a claim against it in
the event that cash flow in excess of the amount required to
pay the Mezzanine Debt is insufficient to pay such obligation;
(xxix) shall consider the interests of its creditors in connection
with all corporate actions;
(xxx) does not and will not have its obligations guaranteed by any
Affiliate; and
(xxxi) has complied and will comply with all of the terms and
provisions contained in its organizational documents. The
statement of facts contained in its organizational documents
are true and correct and will remain true and correct.
"STATE" shall mean, with respect to an Individual Property, the State
or Commonwealth in which such Individual Property or any part thereof is
located.
"SURVEY" shall have the meaning set forth in the Loan Agreement.
"TAX AND INSURANCE ESCROW FUND" shall have the meaning set forth in the
Loan Agreement.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against any Individual Property or part thereof.
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"THRESHOLD AMOUNT" shall have the meaning set forth in Section 5.1.19
hereof.
"TITLE INSURANCE POLICIES" shall have the meaning set forth in the Loan
Agreement.
"TRANSFER" shall have the meaning set forth in Section 5.2.13 hereof.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial
Code as in effect in the State of New York.
"UNDEFEASED MEZZANINE NOTE" shall have the meaning set forth in Section
2.5.
"U.S. OBLIGATIONS" shall mean direct non-callable obligations of the
United States of America or other obligations which are "government securities"
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, to
the extent acceptable to the applicable Rating Agencies.
SECTION 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and schedules
in or to this Agreement unless otherwise specified. All uses of the word
"including" shall mean "including, without limitation" unless the context shall
indicate otherwise. Unless otherwise specified, the words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined. References to terms defined in the Loan Agreement shall refer
to the definitions of such terms in the Loan Agreement as in effect on the
Closing Date. For purposes of this Agreement, the "knowledge" of Mezzanine
Borrower shall be deemed to include the knowledge of Borrower. References to
definitions, sections and provisions of, or exhibits or schedules to, the Loan
Agreement (deemed to include reference to defined terms, sections, provisions,
exhibits and schedules referred to in such definitions, provisions, sections,
exhibits and schedules) and other Loan Documents, refer to the definitions,
sections, provisions, exhibits and schedules of the Loan Agreement and other
Loan Documents as in effect on the Closing Date, without regard to subsequent
amendment, modification, supplementation or restatement thereof.
II. GENERAL TERMS: MEZZANINE LOAN
SECTION 2.1 MEZZANINE LOAN COMMITMENT; DISBURSEMENT TO
MEZZANINE BORROWER.
2.1.1 THE LOAN. Subject to and upon the terms and conditions set forth
herein, Mezzanine Lender hereby agrees to make and Mezzanine Borrower hereby
agrees to accept the Mezzanine Loan on the Closing Date.
2.1.2 DISBURSEMENT TO MEZZANINE BORROWER. Mezzanine Borrower may
request and receive only one borrowing hereunder in respect of the Mezzanine
Loan and any amount borrowed and repaid hereunder in respect of the Mezzanine
Loan shall not be reborrowed.
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2.1.3 THE MEZZANINE NOTE AND MEZZANINE LOAN DOCUMENTS. The Mezzanine
Loan shall be evidenced by that certain Promissory Note (Mezzanine Loan) of even
date herewith, in the stated principal amount of Twenty-One Million Four Hundred
Thousand and No/100 Dollars ($21,400,000.00) executed by Mezzanine Borrower and
payable to the order of Mezzanine Lender (together with all notes given in
substitution or exchange therefor, as such Promissory Note and substituted or
exchanged notes may hereafter be amended, supplemented, restated, increased,
extended or consolidated from time to time, the "MEZZANINE NOTE") and shall be
repaid in accordance with the terms of this Agreement and the Mezzanine Note.
The Mezzanine Note shall be secured by, among other things, the Pledge Agreement
and the other Mezzanine Loan Documents.
2.1.4 USE OF PROCEEDS. Mezzanine Borrower shall use the proceeds of the
Mezzanine Loan to (i) pay costs and expenses incurred in connection with the
closing of the Mezzanine Loan; and (ii) make an equity contribution to Borrower
as may be necessary or desirable in order to cause Borrower to have sufficient
funds to meet certain obligations as set forth on a disbursement statement
approved or accepted by Mezzanine Lender.
SECTION 2.2 INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE.
2.2.1 INTEREST GENERALLY. Interest on the outstanding principal balance
of the Mezzanine Loan shall accrue from the Closing Date to but excluding the
Maturity Date at the Applicable Interest Rate.
2.2.2 INTEREST CALCULATION. Interest on the outstanding principal
balance of the Mezzanine Loan shall be calculated on the basis of a three
hundred sixty (360) day year composed of twelve (12) months of thirty (30) days
each except that interest due and payable for a period less than a full month
shall be calculated by multiplying the actual number of days elapsed in such
period by a daily rate based on said 360 day year.
2.2.3 PAYMENTS GENERALLY. Mezzanine Borrower shall pay to Mezzanine
Lender on the first Payment Date following the Closing Date, and on each Payment
Date thereafter up to but excluding the Maturity Date, an amount equal to the
Monthly Debt Service Payment Amount, which payments shall be applied first to
accrued and unpaid interest and the balance to principal.
2.2.4 PAYMENT ON MATURITY DATE. Mezzanine Borrower shall pay to Lender
on the Maturity Date the outstanding principal balance, all accrued and unpaid
interest and all other amounts due hereunder and under the Mezzanine Note, the
Pledge Agreement and the other Mezzanine Loan Documents.
2.2.5 PAYMENTS AFTER DEFAULT. Upon the occurrence and during the
continuance of an Event of Default interest on the outstanding principal balance
of the Mezzanine Loan and, to the extent permitted by law, overdue interest and
other amounts due in respect of the Mezzanine Loan, shall accrue at the Default
Rate, calculated from the date such payment was due without regard to any grace
or cure periods contained herein. Interest at the Default Rate shall be computed
from the occurrence of the Event of Default until the actual receipt and
collection of the Mezzanine Debt (or that portion thereof that is then due). To
the extent permitted by
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applicable law, interest at the Default Rate shall be added to the Mezzanine
Debt, shall itself accrue interest at the Applicable Interest Rate and shall be
secured by the Pledge Agreement and the other Mezzanine Loan Documents. This
section shall not be construed as an agreement or privilege to extend the date
of the payment of the Mezzanine Debt, nor as a waiver of any other right or
remedy accruing to Mezzanine Lender by reason of the occurrence of any Event of
Default, and Mezzanine Lender retains its rights under the Mezzanine Note and
the other Mezzanine Loan Documents to accelerate and to continue to demand
payment of the Mezzanine Debt upon the happening of any Event of Default.
2.2.6 LATE PAYMENT CHARGE. If any principal, interest or any other sums
due under the Mezzanine Loan Documents is not paid by Mezzanine Borrower on the
date on which it is due, Mezzanine Borrower shall pay to Mezzanine Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or
the Maximum Legal Rate in order to defray the expense incurred by Mezzanine
Lender in handling and processing such delinquent payment and to compensate
Mezzanine Lender for the loss of the use of such delinquent payment. Any such
amount shall be secured by the Pledge Agreement and the other Mezzanine Loan
Documents to the extent permitted by applicable law.
2.2.7 USURY SAVINGS. This Agreement and the Mezzanine Note are subject
to the express condition that at no time shall Mezzanine Borrower be obligated
or required to pay interest on the principal balance of the Mezzanine Loan at a
rate which could subject Mezzanine Lender to either civil or criminal liability
as a result of being in excess of the Maximum Legal Rate. If, by the terms of
this Agreement or the other Mezzanine Loan Documents, Mezzanine Borrower is at
any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the Applicable Interest
Rate or the Default Rate, as the case may be, shall be deemed to be immediately
reduced to the Maximum Legal Rate and all previous payments in excess of the
Maximum Legal Rate shall be deemed to have been payments in reduction of
principal and not on account of the interest due hereunder. All sums paid or
agreed to be paid to Mezzanine Lender for the use, forbearance, or detention of
the sums due under the Mezzanine Loan, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Mezzanine Loan until payment in full so that the rate or
amount of interest on account of the Mezzanine Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the
Mezzanine Loan for so long as the Mezzanine Loan is outstanding.
2.2.8 MAKING OF PAYMENTS. Each payment by Mezzanine Borrower hereunder
or under the Mezzanine Note shall be made in funds settled through the New York
Clearing House Interbank Payments System or other funds immediately available to
Mezzanine Lender by 11:00 a.m., New York City time, on the date such payment is
due, to Mezzanine Lender by deposit to such account as Mezzanine Lender may,
from time to time, designate by written notice to Mezzanine Borrower. Whenever
any payment hereunder or under the Mezzanine Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the first
Business Day preceding such scheduled due date.
2.2.9 NO DEDUCTIONS, ETC. All payments required to be made by Mezzanine
Borrower hereunder or under the Mezzanine Note or the other Mezzanine Loan
Documents shall be made irrespective of, and without deduction for, any setoff,
defense or counterclaims.
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2.2.10 DEPOSITS INTO MEZZANINE ACCOUNT. Mezzanine Borrower shall
irrevocably and unconditionally direct that all cash distributions from the
Borrower be deposited into the Mezzanine Account in accordance with the
Mezzanine Cash Management Agreement. Disbursements from the Mezzanine Account
will be made in accordance with the terms and conditions of this Agreement and
the Mezzanine Cash Management Agreement. Mezzanine Lender shall have sole
dominion and control over the Mezzanine Account and any other cash management
account established pursuant to the Mezzanine Cash Management Agreement and,
except as set forth in the Mezzanine Cash Management Agreement, Mezzanine
Borrower shall have no rights to make withdrawals therefrom. Mezzanine Borrower
shall be responsible for all costs of maintaining the Mezzanine Account.
Notwithstanding anything to the contrary contained in this Agreement or the
other Mezzanine Loan Documents, and provided no Event of Default has occurred
and is continuing, Mezzanine Borrower's obligations with respect to the monthly
payment of principal and interest and any amounts due for the Reserve Funds
shall be deemed satisfied to the extent sufficient amounts are deposited in the
Mezzanine Account to satisfy such obligations on the dates each such payment is
required, regardless of whether any of such amounts are so applied by Mezzanine
Lender.
SECTION 2.3 PREPAYMENTS.
2.3.1 PREPAYMENTS GENERALLY. Except as otherwise provided herein,
Mezzanine Borrower shall not have the right to prepay the Mezzanine Loan in
whole or in part prior to the Maturity Date.
2.3.2 MANDATORY PREPAYMENT.
(a) In the event of a Liquidation Event described in parts (i) or (ii)
of the definition of Liquidation Event, Mezzanine Borrower shall cause the
related Net Liquidation Proceeds, if any, to be deposited directly into the
Mezzanine Account. On each date on which Mezzanine Lender actually receives a
distribution of Net Liquidation Proceeds described in parts (i) or (ii) of the
definition of Liquidation Event, Mezzanine Borrower shall prepay the outstanding
principal balance of the Mezzanine Note in an amount equal to the amount of such
Net Liquidation Proceeds, together with interest that would have accrued on such
amount through the next Payment Date. Any amounts of such Net Liquidation
Proceeds in excess of the Mezzanine Debt shall be paid to Mezzanine Borrower.
Any prepayment received by Mezzanine Lender pursuant to this Section 2.3.2 on a
date other than a Payment Date shall be held by Mezzanine Lender as collateral
security for the Mezzanine Loan in an interest bearing account, with such
interest accruing to the benefit of Mezzanine Borrower, and shall be applied by
Mezzanine Lender on the next Payment Date.
(b) Mezzanine Borrower shall notify Mezzanine Lender of any Liquidation
Event described in parts (i) or (ii) of the definition of Liquidation Event, or
anticipated Liquidation Event described in parts (i) or (ii) of the definition
of Liquidation Event, not later than two (2) Business Days following the first
date on which Mezzanine Borrower has knowledge of such event. Mezzanine Borrower
shall be deemed to have knowledge of (i) an anticipated sale (other than a
foreclosure sale) of any Individual Property on the date on which a contract of
sale for such sale is entered into, and a foreclosure sale, on the date notice
of such foreclosure sale is given, and (ii) an anticipated refinancing of any
Individual Property, on the date on which a
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commitment for such refinancing has been entered into. The provisions of Section
2.3.2(a) and (b) shall not be construed to contravene in any manner the
restrictions and other provisions regarding refinancing of the Mezzanine Loan or
transfer of any Individual Property or otherwise set forth in Section 5.2.13 or
otherwise in this Agreement or the Loan Agreement.
(c) Notwithstanding any provision contained in this Agreement or in the
other Mezzanine Loan Documents to the contrary, Mezzanine Borrower shall not
permit any Liquidation Events described in parts (iii) and (iv) of the
definition of Liquidation Event or any release or partial release pursuant to
Section 2.5 of the Loan Agreement to occur, except as otherwise provided in
Section 2.4, and any such Liquidation Event, release or partial release shall be
an Event of Default and any Net Liquidation Proceeds on account thereof shall be
paid to Mezzanine Lender in accordance with Section 2.3.3.
2.3.3 PREPAYMENTS AFTER DEFAULT. If, following an Event of Default,
payment of all or any part of the Mezzanine Debt is tendered by Mezzanine
Borrower or otherwise recovered by Mezzanine Lender, such tender or recovery
shall be (a) made on the next occurring Payment Date together with the Monthly
Debt Service Payment and (b) deemed a voluntary prepayment by Mezzanine Borrower
in violation of the prohibition against prepayment set forth in Section 2.3.1
and Mezzanine Borrower shall pay, in addition to the Mezzanine Debt, an amount
equal to the greater of (i) five percent (5%) of the outstanding principal
balance of the Mezzanine Loan to be prepaid or satisfied or (ii) the Defeasance
Premium that would be required if a Defeasance Mezzanine Event had occurred in
an amount equal to the outstanding principal amount of the Mezzanine Loan to be
prepaid or satisfied.
SECTION 2.4 DEFEASANCE EVENTS.
Except as set forth in Sections 2.4 and 2.5, Mezzanine Borrower shall
not permit any Partial Defeasance Event or Defeasance Event to occur. If a
Liquidation Event described in parts (iii) or (iv) of the definition of
Liquidation Event, shall occur, such event shall be an Event of Default unless
all of the following conditions are satisfied:
(a) Borrower shall have satisfied all of the applicable conditions of
Sections 2.4 and 2.5 of the Loan Agreement;
(b) After giving effect to any release permitted under Section 2.4 of
the Loan Agreement, the Debt Service Coverage Ratio for the Properties then
remaining subject to the Liens of the Mortgages shall be (i) equal to the
greater of (A) the Debt Service Coverage Ratio for the twelve (12) full calendar
months immediately preceding the Closing Date, and (B) the Debt Service Coverage
Ratio for all of the then remaining Properties (including the "Partial
Defeasance Property" (as defined in the Loan Agreement) to be released and
taking into account the Debt evidenced by the Defeased Note in question and the
Mezzanine Debt of the Mezzanine Defeased Note in question) for the twelve (12)
full calendar months immediately preceding the release of the Partial Defeasance
Property; and (ii) in no event less than 1.50 to 1.0;
(c) After giving effect to the release in question, the ratio of (i)
the appraised value of the Properties (as set forth in Approved Appraisals with
respect to such Properties) then remaining subject to the Liens of the Mortgages
to (ii) (x) the outstanding principal balance of
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the Undefeased Note plus (y) the outstanding principal balance of the Undefeased
Mezzanine Note shall not be less 1.50:1;
(d) The Partial Defeasance Property to be released shall be conveyed to
a Person other than Borrower or any of its Affiliates;
(e) No Event of Default shall have occurred and then be continuing
(other than Event of Default which will be fully cured by virtue of the
applicable Liquidation Event, release or partial release); and
(f) the conditions of Section 2.5 shall be satisfied.
SECTION 2.5 DEFEASANCE.
In addition to the conditions specified in Section 2.4, the following
conditions must also be satisfied to effect a Defeasance or Partial Defeasance
pursuant to Section 2.4:
(i) Mezzanine Borrower shall provide not less than thirty (30)
days prior written notice to Mezzanine Lender specifying the date (the
"DEFEASANCE DATE") on which the Defeasance Event and the principal amount of the
Mezzanine Loan to be defeased which date must be a Payment Date, and which
principal amount shall not be less than the Net Liquidation Proceeds for the
Liquidation Event in question and if the Defeasance Event in question pertains
to the entire Mezzanine Loan, an amount not less than the principal amount of
the Mezzanine Loan;
(ii) Mezzanine Borrower shall pay to Mezzanine Lender all
accrued and unpaid interest on the principal balance of the Mezzanine Loan to
and including the Defeasance Date;
(iii) Mezzanine Borrower shall pay to Mezzanine Lender all
other sums, not including scheduled interest or principal payments, then due
under the Mezzanine Note, this Agreement and the other Mezzanine Loan Documents;
(iv) Mezzanine Borrower shall deliver to Mezzanine Lender the
Defeasance Deposit applicable to the Defeasance Event;
(v) In the event only a portion of the Mezzanine Loan is the
subject of the Defeasance Event, Mezzanine Borrower shall prepare all necessary
documents to modify this Agreement and to amend and restate the Mezzanine Note
and issue two substitute notes, one note having a principal balance equal to the
defeased portion of the original Mezzanine Note and a maturity date equal to the
Maturity Date (the "DEFEASED MEZZANINE NOTE") and the other note having a
principal balance equal to the undefeased portion of the Mezzanine Note (the
"UNDEFEASED MEZZANINE NOTE"). The Defeased Mezzanine Note and Undefeased
Mezzanine Note shall otherwise have terms identical to the Mezzanine Note,
except that a Defeased Mezzanine Note cannot be the subject of any further
Defeasance Event;
(vi) Mezzanine Borrower shall execute and deliver a security
agreement, in form and substance satisfactory to Mezzanine Lender, creating a
first priority lien on the
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Defeasance Deposit and the U.S. Obligations purchased with the Defeasance
Deposit in accordance with the provisions of this Section 2.5 (the "SECURITY
AGREEMENT");
(vii) Mezzanine Borrower shall deliver an opinion of counsel
for Mezzanine Borrower in form that would be satisfactory to a prudent Mezzanine
Lender stating, among other things, that Mezzanine Borrower has legally and
validly transferred and assigned the U.S. Obligations and all obligations,
rights and duties under and to the Mezzanine Note or Defeased Mezzanine Note (as
applicable) to the Successor Mezzanine Borrower, that Mezzanine Lender has a
perfected first priority security interest in the Defeasance Deposit and the
U.S. Obligations delivered by Mezzanine Borrower and that (A) any REMIC Trust
formed pursuant to a securitization will not fail to maintain its status as a
"real estate mortgage investment conduit" within the meaning of Section 860D of
the Code as a result of such Defeasance Event or (B) any grantor trust within
the meaning of subpart E, part I of subchapter J of the Code will not fail to
maintain its status as a grantor trust as a result of such Defeasance Event, as
applicable;
(viii) If the Mezzanine Loan has been securitized, Mezzanine
Borrower shall deliver confirmation in writing from the applicable Rating
Agencies to the effect that such release will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any such securitization and shall
pay all fees and expenses of the Rating Agencies incurred in connection with
such confirmation. If required by the applicable Rating Agencies, Mezzanine
Borrower shall also deliver or cause to be delivered a non-consolidation opinion
with respect to the Successor Mezzanine Borrower in form and substance
satisfactory to Mezzanine Lender and the applicable Rating Agencies and will pay
all fees and expenses of the Rating Agencies incurred in connection with the
review and approval of such non-consolidation opinion;
(ix) Mezzanine Borrower shall deliver an Officer's Certificate
certifying that the requirements set forth in Sections 2.4 and 2.5 have been
satisfied;
(x) Mezzanine Borrower shall deliver a certificate of
Mezzanine Borrower's independent certified public accountant certifying that the
U.S. Obligation purchased with the Defeasance Deposit generate monthly amounts
equal to or greater than the Scheduled Defeasance Payments;
(xi) Mezzanine Borrower shall deliver such other certificates,
documents or instruments as Mezzanine Lender may reasonably request; and
(xii) Mezzanine Borrower shall pay all costs and expenses of
Mezzanine Lender and the Rating Agencies incurred in connection with the
Defeasance Event, including reasonable attorneys' fees and expenses.
In connection with each Defeasance Event, Mezzanine Borrower hereby
appoints Mezzanine Lender as its agent and attorney-in-fact for the purpose of
using the Defeasance Deposit to purchase U.S. Obligations which provide payments
on or prior to, but as close as possible to, all successive scheduled payment
dates after the Defeasance Date upon which interest and principal payments are
required under the Note, in the case of a Defeasance Event for the entire
outstanding principal balance of the Mezzanine Loan, or under the Defeased
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Mezzanine Note created pursuant to the related Defeasance Event, in the case of
a Defeasance Event for only a portion of the outstanding principal balance of
the Mezzanine Loan relating to one or more of the Partial Defeasance Properties,
as applicable, and in amounts equal to the scheduled payments due on such dates
under the Mezzanine Note or the Defeased Mezzanine Note, as applicable
(including, without limitation, scheduled payments of principal, interest,
servicing fees (if any), the rating surveillance charge, if any, and any other
amounts due under the Mezzanine Loan Documents on such dates) and assuming such
Mezzanine Note or Defeased Mezzanine Note is paid in full on the Maturity Date
(the "SCHEDULED DEFEASANCE PAYMENTS"). Mezzanine Borrower, pursuant to the
Security Agreement or other appropriate document, shall authorize and direct
that the payments received from the U.S. Obligations may be made directly to the
Mezzanine Account (unless otherwise directed by Mezzanine Lender) and applied to
satisfy the obligations of Mezzanine Borrower under the Undefeased Mezzanine
Note or the Defeased Mezzanine Note, as applicable. Any portion of the
Defeasance Deposit in excess of the amount necessary to purchase the U.S.
Obligations required by this Section 2.5 and satisfy Mezzanine Borrower's other
obligations under this Section 2.4 and Section 2.5 shall be remitted to
Mezzanine Borrower or the Successor Borrower, as applicable.
2.5.2 SUCCESSOR BORROWER. In connection with any Defeasance Event,
Mezzanine Borrower may at its option, or if requested by Mezzanine Lender or the
Rating Agencies rating the securities in any securitization of the Mezzanine
Loan, shall, establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a single purpose bankruptcy remote entity with an
Independent Director approved by Mezzanine Lender, and Mezzanine Borrower shall
transfer and assign all obligations, rights and duties under and to the
Mezzanine Note or the Defeased Mezzanine Note, as applicable, together with the
pledged U.S. Obligations to such Successor Borrower. Such Successor Borrower
shall assume the obligations under the Mezzanine Note or the Defeased Mezzanine
Note, as applicable, and the Security Agreement and Mezzanine Borrower shall be
relieved of its obligations under such documents. Mezzanine Borrower shall pay
One Thousand and No/100 Dollars ($1,000) to any such Successor Borrower as
consideration for assuming the obligations under the Mezzanine Note or the
Defeased Mezzanine Note, as applicable, and the Security Agreement.
Notwithstanding anything in this Agreement to the contrary, no other assumption
fee shall be payable upon a transfer of the Mezzanine Note or the Defeased
Mezzanine Note, as applicable, in accordance with this Section 5.1, but
Mezzanine Borrower shall pay all costs and expenses incurred by Mezzanine
Lender, including Mezzanine Lender's attorneys' fees and expenses, and any fees
and expenses of any Rating Agencies, incurred in connection therewith.
SECTION 2.6 RELEASE OF COLLATERAL.
(a) Provided no Event of Default has occurred and is continuing,
Mezzanine Borrower shall have the right to effect a defeasance of the entire
Mezzanine Loan at any time after the Permitted Release Date and before the
Maturity Date in accordance with Section 2.5 hereof and, provided, Mezzanine
Borrower shall have properly effected full defeasance in accordance with Section
2.5, Mezzanine Borrower shall have the right to obtain a release of the
Collateral and a release of the funds on deposit in the Mezzanine Account and
any of the Reserve Funds held by Mezzanine Lender, provided that payments on
account of the Defeased Mezzanine Note or Mezzanine Note, as applicable, shall
be paid directly to Mezzanine Lender
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(rather than into the Mezzanine Account) and provided further that such release
shall only be granted if the following conditions have been met or satisfied:
(b) Mezzanine Borrower shall submit to Mezzanine Lender, not less than
fifteen (15) days prior to the date of such release, a release of Lien (and
related Mezzanine Loan Documents) for the Collateral or other documents suitable
to evidence the termination of Mezzanine Lender's Lien on the Collateral for
execution by Mezzanine Lender. Such release or other documents shall be in form
and substance appropriate and reasonably satisfactory to Mezzanine Lender. In
addition, Mezzanine Borrower shall provide all other documentation Mezzanine
Lender reasonably requires to be delivered by Mezzanine Borrower in connection
with such release; and
(c) Mezzanine Borrower shall pay all costs and expenses of Mezzanine
Lender incurred in connection with the payment of the Mezzanine Loan, including
reasonable attorneys' fees and expenses.
III. CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING.
The obligation of Mezzanine Lender to make the Mezzanine Loan hereunder
is subject to the fulfillment by Mezzanine Borrower or waiver by Mezzanine
Lender of the following conditions precedent no later than the Closing Date:
3.1.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. The
representations and warranties of Mezzanine Borrower contained in this Agreement
and the other Mezzanine Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, and no Default or an Event of Default shall have occurred and be
continuing; and Mezzanine Borrower shall be in compliance in all material
respects with all terms and conditions set forth in this Agreement and in each
other Mezzanine Loan Document on its part to be observed or performed.
3.1.2 MEZZANINE LOAN AGREEMENT AND MEZZANINE NOTE. Mezzanine Lender
shall have received an original copy of this Agreement and the Mezzanine Note,
in each case, duly executed and delivered on behalf of Borrower.
3.1.3 DELIVERY OF MEZZANINE LOAN DOCUMENTS; TITLE INSURANCE; REPORTS;
LEASES, ETC.
(a) Mezzanine Loan Documents. Lender shall have received duly executed
copies of the following items:
(i) the Environmental Indemnity;
(ii) the Mezzanine Indemnity Agreement;
(iii) the Mezzanine Cash Management Agreement;
(iv) the Mezzanine Financing Statements; and
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(v) the Pledge Agreement.
(b) Title Insurance. Mezzanine Lender shall have received an original
of the owner's title insurance policies issued by the title company issuing the
title policies with respect to the Loan dated as of the Closing Date. Such title
insurance policies shall (i) provide coverage in amounts not less than the
amount of the title policies provided to the Lender plus 125% of the Allocated
Mezzanine Loan Amount for the applicable Individual Property; (ii) insure that
Borrower is the owner of the Properties; (iii) contain a mezzanine lender
endorsement; (iv) contain the same exceptions and endorsements (other than any
so-called usury endorsement) as the title policies provided to the Lender
(except the Mortgages and the related assignments of leases and rents securing
the Loan shall be permitted exceptions with respect to said owners title
insurance policies and the owners policy comprehensive endorsement form will be
substituted for the loan policy comprehensive endorsement form); (v) delete any
creditors' rights, exclusions or exceptions, (vi) not include any coinsurance
exception or exclusion, and (vii) name Borrower as the insured. The title
insurance policies shall be assignable. Mezzanine Lender also shall have
received evidence that all premiums in respect of such title insurance policies
have been paid.
(c) Survey. Mezzanine Lender shall have received a current title survey
for each Individual Property, certified to the title company and Mezzanine
Lender and their successors and assigns, in form and content satisfactory to
Lender. Each such survey shall reflect the same legal description contained in
the title insurance policies described in Section 3.1.3(b) relating to such
Individual Property and shall include, among other things, a metes and bounds
description, or a recorded plat description, of the real property comprising
part of such Individual Property. The surveyor's seal shall be affixed to each
survey and the surveyor shall provide a certification for each survey in form
and substance acceptable to Lender (but also certified to Mezzanine Lender, its
successors and assigns).
(d) Insurance. Mezzanine Lender shall have received valid certificates
of insurance for the policies of insurance required hereunder and evidence of
compliance with the insurance requirements of the Loan Documents, satisfactory
to Mezzanine Lender in its sole discretion, and evidence of the payment of all
premiums payable for the existing policy period.
(e) Environmental Reports. Mezzanine Lender shall have received a Phase
I environmental report (and, if recommended by the Phase I environmental report,
a Phase II environmental report) in respect of each Individual Property, in each
case satisfactory in form and substance to Lender.
(f) Zoning. With respect to each Individual Property, Mezzanine Lender
shall have received, at Lender's option, either (i) (A) letters or other
evidence with respect to each Individual Property from the appropriate municipal
authorities (or other Persons) concerning applicable zoning and building laws,
or (B) an ALTA 3.1 zoning endorsement for the applicable title insurance policy
or (ii) a zoning opinion letter, in each case in substance reasonably
satisfactory to Mezzanine Lender.
(g) Encumbrances. Mezzanine Borrower shall have taken or caused to be
taken such actions in such a manner so that Mezzanine Lender has a valid and
perfected first Lien as of the
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Closing Date with respect to the Accounts and Collateral, and Mezzanine Lender
shall have received satisfactory evidence thereof.
3.1.4 RELATED DOCUMENTS. Each additional document not specifically
referenced herein, but relating to the transactions contemplated herein, shall
be in form and substance satisfactory to Mezzanine Lender, and shall have been
duly authorized, executed and delivered by all parties thereto and Mezzanine
Lender shall have received and approved certified copies thereof.
3.1.5 DELIVERY OF ORGANIZATIONAL DOCUMENTS. On or before the Closing
Date, Mezzanine Borrower shall deliver or cause to be delivered to Mezzanine
Lender copies certified by Mezzanine Borrower of all organizational
documentation related to Mezzanine Borrower, Indemnitor and Borrower and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Mezzanine Lender may request in its sole discretion, including,
without limitation, good standing certificates, qualifications to do business in
the appropriate jurisdictions, resolutions authorizing the entering into of the
Mezzanine Loan and incumbency certificates as may be requested by Mezzanine
Lender.
3.1.6 OPINIONS OF COUNSEL. Mezzanine Lender shall have received
opinions of Mezzanine Borrower's and Indemnitor's counsel (a) with respect to
non-consolidation, true sale and true contribution issues, and (b) with respect
to due execution, authority, enforceability of the Mezzanine Loan Documents and
such other matters as Mezzanine Lender may require, all such opinions in form,
scope and substance satisfactory to Mezzanine Lender and Mezzanine Lender's
counsel in their sole discretion.
3.1.7 BUDGETS. Mezzanine Borrower shall have delivered, and Mezzanine
Lender shall have approved, the Annual Budget for the current Fiscal Year.
3.1.8 BASIC CARRYING COSTS. Mezzanine Borrower shall have paid, or
shall have caused the Borrower or Master Tenants to have paid, all Basic
Carrying Costs relating to the Properties which are in arrears, including
without limitation, (a) accrued but unpaid insurance premiums relating to the
Properties, (b) currently due Taxes (including any in arrears) relating to the
Properties, and (c) currently due Other Charges relating to the Properties,
which amounts shall be funded with proceeds of the Loan.
3.1.9 COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated by this
Agreement and other Mezzanine Loan Documents and all documents incidental
thereto shall be satisfactory in form and substance to Mezzanine Lender, and
Mezzanine Lender shall have received all such counterpart originals or certified
copies of such documents as Lender may reasonably request.
3.1.10 PAYMENTS. All payments, deposits or escrows required to be made
or established by Mezzanine Borrower under the Loan Agreement, this Agreement,
the Mezzanine Note and the other Mezzanine Loan Documents on or before the
Closing Date shall have been paid.
3.1.11 GROUND LESSOR ESTOPPELS. Mezzanine Lender shall have received a
copy of an executed ground lessor estoppel letter, which shall be in form and
substance satisfactory to the Mezzanine Lender, from each of the ground lessors
under the Ground Leases.
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3.1.12 TENANT ESTOPPELS. Mezzanine Lender shall have received a copy of
an executed tenant estoppel letter, which shall be in form and substance
satisfactory to Mezzanine Lender, from each Master Tenant and any other tenant
leasing any portion of any Individual Property. Such tenant estoppel letters
shall be addressed to Mezzanine Lender, or if not addressed to Mezzanine Lender,
Mezzanine Lender will, pursuant to such tenant estoppel letters or by separate
agreement from the applicable tenants, be permitted to rely on the tenant
estoppel letters.
3.1.13 TRANSACTION COSTS. Mezzanine Borrower shall have paid or
reimbursed Mezzanine Lender for all title insurance premiums, recording and
filing fees, costs of environmental reports, Physical Conditions Reports,
appraisals and other reports, the fees and costs of Mezzanine Lender's counsel
and all other third party out-of-pocket expenses incurred in connection with the
origination of the Mezzanine Loan.
3.1.14 MATERIAL ADVERSE CHANGE. Except in connection with the
litigation set forth in SCHEDULE 3.1.14 hereof, there shall have been no
material adverse change in the financial condition or business condition of
Borrower, Mezzanine Borrower, Indemnitor, any Master Tenant, any parent or
principal of any Master Tenant or any Individual Property since the date of the
most recent financial statements delivered to Mezzanine Lender. The income and
expenses of the Properties, the occupancy leases thereof, and all other features
of the transaction shall be as represented to Mezzanine Lender without material
adverse change. Neither Mezzanine Borrower, Borrower nor any of their
constituent Persons shall be the subject of any bankruptcy, reorganization, or
insolvency proceeding.
3.1.15 LEASES AND RENT ROLL. Mezzanine Lender shall have received
copies of all tenant leases, certified copies of the Master Leases and any other
tenant leases as requested by Mezzanine Lender and certified copies of the
Ground Leases. Mezzanine Lender shall have received a current certified rent
roll of the Properties, reasonably satisfactory in form and substance to
Mezzanine Lender.
3.1.16 TAX LOT. Mezzanine Lender shall have received evidence that each
Individual Property constitutes one (1) or more separate tax lots, which
evidence shall be reasonably satisfactory in form and substance to Mezzanine
Lender.
3.1.17 PHYSICAL CONDITIONS REPORTS. Mezzanine Lender shall have
received Physical Conditions Reports and environmental site assessments with
respect to each Individual Property, which reports and assessments shall be
satisfactory in form and substance to Mezzanine Lender. Such reports and
assessments shall, by their terms, permit Mezzanine Lender, its successors and
assigns, to rely on such reports and assessments or separate reliance letters
shall be provided to Mezzanine Lender authorizing such reliance.
3.1.18 APPRAISAL. Mezzanine Lender shall have received an Approved
Appraisal of each Individual Property, which shall be satisfactory in form and
substance to Mezzanine Lender. Such appraisals shall, by their terms, permit
Mezzanine Lender to rely on such appraisals or separate reliance letters shall
be provided to Mezzanine Lender authorizing such reliance.
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3.1.19 INVENTORY. Mezzanine Lender shall have received a complete
inventory of the fixtures and equipment present at each Individual Property or
used in connection with each Individual Property, indicating the owner of each
item and its location (if other than on the site of the related Individual
Property); provided, however, that such information with respect to fixtures and
equipment owned, leased or otherwise supplied by the related Master Tenant shall
only be required to the extent such information has been made available to
Borrower or any of its Affiliates.
3.1.20 LOAN DOCUMENTS. Mezzanine Borrower shall have delivered to
Mezzanine Lender, true and complete copies of the Loan Documents.
3.1.21 ACCOUNTS. All accounts and sub-accounts to be established
pursuant to the Cash Management Agreement and the Mezzanine Cash Management
Agreement shall have been established and be open to the satisfaction of
Mezzanine Lender.
3.1.22 NOTICES. Notices to Master Tenants and lessors under the Ground
Leases shall have been given advising such Persons of Borrower's acquisition of
the applicable Individual Property and specifying that copies of notices to the
ground tenant or landlord, as applicable, shall be given to Mezzanine Lender.
3.1.23 PERFECTION. Mezzanine Lender shall have received all original
certificates evidencing the Collateral, duly executed stock powers in blank
pertaining to the Collateral, a duly executed transaction confirmation statement
from Borrower acknowledging the pledge and agreeing that no further consent or
action from Mezzanine Borrower, Borrower or Borrower's shareholders or board is
required to effect a transfer pursuant to the Pledge Agreement and agreeing that
it has been irrevocably directed to distribute funds to Mezzanine Borrower in
accordance with the Cash Management Agreement. All other actions required to
perfect a security interest in the Collateral and Accounts shall have been
taken.
3.1.24 CLOSING OF LOAN. The Loan shall have been closed and the
proceeds of the Loan shall have been disbursed in accordance with a disbursement
statement approved by Mezzanine Lender.
3.1.25 CT CORPORATION. Mezzanine Borrower shall have retained CT
Corporation to act as its agent pursuant to Section 9.4(B).
3.1.26 INTERCREDITOR AGREEMENT. Lender and Mezzanine Lender shall have
executed and delivered the Intercreditor Agreement.
3.1.27 LIQUIDITY RESERVE FUNDING. The Liquidity Reserve shall have been
funded as required under Section 7.5.1.
3.1.28 FURTHER DOCUMENTS. Mezzanine Lender or its counsel shall have
received such other and further approvals, opinions, documents and information
as Mezzanine Lender or its counsel may have reasonably requested including the
Mezzanine Loan Documents in form and substance satisfactory to Lender and its
counsel.
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IV. REPRESENTATIONS AND WARRANTIES
SECTION 4.1 MEZZANINE BORROWER REPRESENTATIONS.
Mezzanine Borrower represents and warrants as of the date hereof and as
of the Closing Date that:
4.1.1 ORGANIZATION. Mezzanine Borrower and Indemnitor have been duly
organized and is validly existing and in good standing with requisite power and
authority to own its assets and to transact the businesses in which it is now
engaged. Mezzanine Borrower and Indemnitor are duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so qualified
in connection with its assets, businesses and operations. Mezzanine Borrower and
Indemnitor possess all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own their respective
assets and to transact the businesses in which it is now engaged, and the sole
business of Mezzanine Borrower is to own the capital stock of Borrower.
4.1.2 PROCEEDINGS. Mezzanine Borrower and Indemnitor have taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the other Mezzanine Loan Documents. This Agreement and such other
Mezzanine Loan Documents have been duly executed and delivered by or on behalf
of Mezzanine Borrower and Indemnitor and constitute legal, valid and binding
obligations of Mezzanine Borrower and Indemnitor enforceable against Mezzanine
Borrower and Indemnitor in accordance with their respective terms, subject only
to applicable bankruptcy, insolvency and similar laws and legal principles
affecting rights of creditors generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
4.1.3 NO CONFLICTS. The execution, delivery and performance of this
Agreement and the other Mezzanine Loan Documents by Mezzanine Borrower and
Indemnitor will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance (other than pursuant to the
Mezzanine Loan Documents) upon any of the property or assets of Mezzanine
Borrower or Indemnitor pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, management agreement or other
agreement or instrument to which Mezzanine Borrower, Indemnitor or Borrower is a
party or by which any of Mezzanine Borrower's, Indemnitor's or Borrower's
property or assets is subject, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Mezzanine Borrower,
Indemnitor, Borrower or any of Mezzanine Borrower's, Indemnitor's or Borrower's
properties or assets, and any consent, approval, authorization, order,
registration or qualification of or with any court or any such regulatory
authority or other governmental agency or body required for the execution,
delivery and performance by Mezzanine Borrower or Indemnitor of this Agreement
or any other Mezzanine Loan Documents has been obtained and is in full force and
effect.
4.1.4 LITIGATION. There are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending or
threatened against or affecting Mezzanine Borrower, Borrower or, except as
expressly disclosed in the Offering
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Memorandum, any Individual Property, which actions, suits or proceedings, if
determined against Mezzanine Borrower, Borrower or any Individual Property,
might materially adversely affect the condition (financial or otherwise) or
business of Mezzanine Borrower or Borrower, or the condition or ownership of any
Individual Property.
4.1.5 AGREEMENTS. Neither Mezzanine Borrower, Indemnitor nor Borrower
is a party to any agreement or instrument or subject to any restriction which
might materially adversely affect Mezzanine Borrower, Indemnitor, Borrower or
any Individual Property, or Mezzanine Borrower's Indemnitor's or Borrower's
business, properties or assets, operations or condition, financial or otherwise.
None of Mezzanine Borrower, Indemnitor or Borrower is in default in any material
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party or by which Mezzanine Borrower, Indemnitor or Borrower or any of the
Properties are bound. Mezzanine Borrower has no material financial obligation
under any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which Mezzanine Borrower is a party or by which Mezzanine
Borrower or the Properties is otherwise bound, other than obligations under the
Mezzanine Loan Documents.
4.1.6 SOLVENCY. Mezzanine Borrower (a) has not entered into the
transaction or executed the Mezzanine Note, this Agreement or any other
Mezzanine Loan Documents with the actual intent to hinder, delay or defraud any
creditor and (b) received reasonably equivalent value in exchange for its
obligations under such Mezzanine Loan Documents. Giving effect to the Mezzanine
Loan, the fair saleable value of Mezzanine Borrower's assets exceeds and will,
immediately following the making of the Mezzanine Loan, exceed Mezzanine
Borrower's total liabilities, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. The fair saleable value of
Mezzanine Borrower's assets is and will, immediately following the making of the
Mezzanine Loan, be greater than Mezzanine Borrower's probable liabilities,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured. Mezzanine Borrower's assets do not and,
immediately following the making of the Mezzanine Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Mezzanine Borrower does not intend to, and does not believe
that it will, incur debt and liabilities (including contingent liabilities and
other commitments) beyond its ability to pay such debt and liabilities as they
mature (taking into account the timing and amounts of cash to be received by
Mezzanine Borrower and the amounts to be payable on or in respect of obligations
of Mezzanine Borrower). Except as expressly disclosed to Mezzanine Lender in
writing, no petition in bankruptcy has been filed against Mezzanine Borrower or
any constituent Person in the last seven (7) years, and neither Mezzanine
Borrower nor any constituent Person in the last seven (7) years has ever made an
assignment for the benefit of creditors or taken advantage of any insolvency act
for the benefit of debtors. Neither Mezzanine Borrower nor any of its
constituent Persons are 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 Mezzanine Borrower's assets or property, and Mezzanine
Borrower has no knowledge of any Person contemplating the filing of any such
petition against it or such constituent Persons.
4.1.7 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
Mezzanine Borrower in this Agreement or in any of the other Mezzanine Loan
Documents contains any
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untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. Except
as expressly disclosed in the Offering Memorandum, there is no material fact
presently known to Mezzanine Borrower which has not been disclosed to Mezzanine
Lender which materially and adversely affects, nor as far as Mezzanine Borrower
can foresee, might materially and adversely affect, any Individual Property or
the business, operations or condition (financial or otherwise) of Mezzanine
Borrower.
4.1.8 NO PLAN ASSETS. Mezzanine Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Mezzanine Borrower constitutes or will constitute "plan
assets" of one or more such plans within the meaning of 29 C.F.R. Section
2510.3-101. In addition, (a) Mezzanine Borrower is not a "governmental plan"
within the meaning of Section 3(32) of ERISA and (b) transactions by or with
Mezzanine Borrower are not subject to state statutes regulating investment of,
and fiduciary obligations with respect to, governmental plans similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code currently in
effect, which prohibit or otherwise restrict the transactions contemplated by
this Agreement.
4.1.9 COMPLIANCE. Mezzanine Borrower and the Properties and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes.
Mezzanine Borrower is not in default or violation of any order, writ,
injunction, decree or demand of any Governmental Authority. There has not been
committed by Mezzanine Borrower or, to the best knowledge of Mezzanine Borrower,
any other Person in occupancy of or involved with the operation or use of the
Properties, any act or omission affording the federal government or any other
Governmental Authority the right of forfeiture as against any Individual
Property or any part thereof or any monies paid in performance of Mezzanine
Borrower's obligations under any of the Mezzanine Loan Documents.
4.1.10 FINANCIAL INFORMATION. All financial data, including, without
limitation, any statements of cash flow and income and operating expense, that
have been prepared by or on behalf of Mezzanine Borrower, Borrower or any of
their Affiliates and delivered to Mezzanine Lender in respect of the Properties,
Mezzanine Borrower and Borrower (i) are true, complete and correct in all
material respects, (ii) accurately represent the financial condition of the
Properties as of the date of such reports, and (iii) to the extent prepared or
audited by an independent certified public accounting firm, have been prepared
in accordance with GAAP throughout the periods covered, except as disclosed
therein. Mezzanine Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Mezzanine
Borrower and reasonably likely to have a materially adverse effect on any
Individual Property or the operation thereof as a megaplex movie theater, except
as referred to or reflected in said financial statements. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Mezzanine Borrower from that set
forth in said financial statements. Mezzanine Borrower has no reason to believe
or suspect that any financial data provided by or on behalf of any Master Tenant
in respect of any of the Properties and delivered to Mezzanine Lender is not
true, complete and correct in all material respects or does not accurately
represent the financial condition of the related Individual Property as of the
date thereof. It is agreed that the representations and warranties in this
Section
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4.1.10, to the extent that such representation and warranty is a representation
and warranty as to the accuracy and completeness of information supplied by
tenants under the Leases, is made only to the best knowledge of the Mezzanine
Borrower.
4.1.11 CONDEMNATION. No Condemnation or other proceeding has been
commenced or, to Mezzanine Borrower's best knowledge, is threatened or
contemplated with respect to all or any portion of any Individual Property or
for the relocation of roadways providing access to any Individual Property.
4.1.12 FEDERAL RESERVE REGULATIONS. No part of the proceeds of the
Mezzanine Loan will be used for the purpose of purchasing or acquiring any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose which would be inconsistent
with such Regulation U or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of this Agreement or the other Mezzanine Loan Documents.
4.1.13 UTILITIES AND PUBLIC ACCESS. Each Individual Property has rights
of access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service such Individual Property for its respective
intended uses. All public utilities necessary or convenient to the full use and
enjoyment of each Individual Property are located either in the public
right-of-way abutting such Individual Property (which are connected so as to
serve such Individual Property without passing over other property) or in
recorded easements serving such Individual Property and such easements are set
forth in and insured by the Title Insurance Policies. All roads necessary for
the use of each Individual Property for their current respective purposes have
been completed and dedicated to public use and accepted by all Governmental
Authorities.
4.1.14 NOT A FOREIGN PERSON. Mezzanine Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Code.
4.1.15 SEPARATE LOTS. Each Individual Property is comprised of one (1)
or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Individual
Property.
4.1.16 ASSESSMENTS. There are no pending or, to the best knowledge of
the Mezzanine Borrower, proposed special or other assessments for public
improvements or otherwise affecting any Individual Property, nor are there any
contemplated improvements to any Individual Property that may result in such
special or other assessments.
4.1.17 ENFORCEABILITY. The Mezzanine Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Mezzanine Borrower,
including the defense of usury, nor would the operation of any of the terms of
the Mezzanine Loan Documents, or the exercise of any right thereunder, render
the Mezzanine Loan Documents unenforceable (subject to principles of equity and
bankruptcy, insolvency and other laws generally affecting creditors' rights and
the enforcement of debtors' obligations), and Mezzanine Borrower has not
asserted any right of rescission, set-off, counterclaim or defense with respect
thereto.
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4.1.18 NO PRIOR ASSIGNMENT. Except pursuant to the Loan Documents,
there are no prior assignments of the Leases or any portion of the Rents due and
payable or to become due and payable which are presently outstanding.
4.1.19 INSURANCE. Mezzanine Borrower has obtained, or cause to be
obtained, and has delivered to Mezzanine Lender certificates of insurance
reflecting the insurance coverages, amounts and other requirements set forth in
the Loan Agreement and this Agreement. No claims have been made under any
insurance policy evidenced by such certificates and neither Mezzanine Borrower
nor Borrower, or, to the best knowledge of Mezzanine Borrower, any other Person,
has done, by act or omission, anything which would impair the coverage of any
such policy.
4.1.20 USE OF PROPERTY. Each Individual Property is used exclusively as
a movie theater and for other appurtenant and related uses.
4.1.21 CERTIFICATE OF OCCUPANCY; LICENSES. All certificates of
completion and occupancy permits and, to the best knowledge of Mezzanine
Borrower, all other certifications, permits, licenses and approvals, including,
without limitation, any applicable liquor license required for the legal use,
occupancy and operation of each Individual Property as a megaplex movie theater
and all appurtenant and related uses (collectively, the "LICENSES"), have been
obtained and are in full force and effect. Mezzanine Borrower shall keep and
maintain, or cause Borrower or the related Master Tenant to keep and maintain,
all licenses necessary for the operation of each Individual Property as a
megaplex movie theater and all appurtenant and related uses. The use being made
of each Individual Property is in conformity with the certificate of occupancy
issued for such Individual Property.
4.1.22 FLOOD ZONE. None of the Improvements on any Individual Property
are located in an area as identified by the Federal Emergency Management Agency
as an area having special flood hazards and, if so located, the flood insurance
required pursuant to Section 6.1(a)(i) is in full force and effect with respect
to each such Individual Property.
4.1.23 PHYSICAL CONDITION. Except as otherwise disclosed in the
Physical Conditions Reports, to the best knowledge of Mezzanine Borrower, each
Individual Property, including, without limitation, all buildings, improvements,
parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,
HVAC systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects;
there exists no structural or other material defects or damages in any
Individual Property, whether latent or otherwise. Mezzanine Borrower has not
received notice from any insurance company or bonding company of any defects or
inadequacies in any Individual Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
4.1.24 BOUNDARIES. All of the improvements which were included in
determining the appraised value of each Individual Property pursuant to the
related Approved Appraisal of such Individual Property lie wholly within the
boundaries and building restriction lines of such
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Individual Property, and no improvements on adjoining properties encroach upon
such Individual Property, and no easements or other encumbrances upon the
applicable Individual Property encroach upon any of the improvements, so as to
affect the value or marketability of the applicable Individual Property except
those which are insured against by title insurance.
4.1.25 LEASES. The Properties are not subject to any Leases other than
the Master Leases and any other Leases described on Schedule II attached hereto
and made a part hereof. Borrower is the owner and lessor of landlord's interest
in the Leases. No Person has any possessory interest in any Individual Property
or right to occupy the same except under and pursuant to the provisions of the
Leases. The Leases are in full force and effect and there are no defaults
thereunder by either party and there are no conditions that, with the passage of
time or the giving of notice, or both, would constitute defaults thereunder. No
Rent (including security deposits) has been paid more than one (1) month in
advance of its due date. All work to be performed by Borrower under each Lease
has been performed as required and has been accepted by the applicable tenant,
and any payments, free rent, partial rent, rebate of rent or other payments,
credits, allowances or abatements required to be given by Borrower to any tenant
has already been received by such tenant. Except pursuant to the Loan Documents,
there has been no prior sale, transfer or assignment, hypothecation or pledge of
any Lease or of the Rents received therein. No Master Tenant or other tenant
listed on Schedule II has assigned its Lease or sublet all or any portion of the
premises demised thereby, no Master Tenant or such other tenant holds its leased
premises under assignment or sublease, nor does anyone except the related Master
Tenant or such other tenant and its employees occupy such leased premises. No
tenant under any Lease (other than American Multi-Cinema, Inc., as to its rights
of first offer and rights of first refusal pursuant to the Master Leases under
which it is the Master Tenant) has a right or option pursuant to such Lease or
otherwise to purchase all or any part of the leased premises or the building of
which the leased premises are a part. No tenant under any Lease has any right or
option for additional space in the Improvements. To the best knowledge of
Mezzanine Borrower, no hazardous wastes or toxic substances, as defined by
applicable federal, state or local statutes, rules and regulations, have been
disposed, stored or treated by any tenant under any Lease on or about the leased
premises nor does Mezzanine Borrower have any knowledge of any tenant's
intention to use its leased premises for any activity which, directly or
indirectly, involves the use, generation, treatment, storage, disposal or
transportation of any petroleum product or any toxic or hazardous chemical,
material, substance or waste.
4.1.26 SURVEY. The Survey for each Individual Property delivered to
Lender in connection with the Loan Agreement has been prepared in accordance
with the Loan Agreement and does not fail to reflect any material matter
affecting such Individual Property or the title thereto.
4.1.27 WARRANTY OF COLLATERAL. Mezzanine Borrower has good title to the
Collateral, free and clear of all Liens whatsoever except such Liens as are
permitted pursuant to the Mezzanine Loan Documents and the Liens created by the
Mezzanine Loan Documents. The Pledge Agreement, together with the pledge of the
stock in Borrower and any UCC financing statements required to be filed in
connection therewith, creates a valid, perfected first priority lien on the
Collateral, subject only to the Liens created by the Loan Documents and the
Mezzanine Loan Documents. The Mezzanine Cash Management Agreement, upon
execution by all parties thereto and any UCC Financing Statements required to be
filed in connection
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therewith, creates a valid, perfected first priority lien on the "MEZZANINE
COLLATERAL" (as defined in the Mezzanine Cash Management Agreement), subject
only to the Liens created by the Loan Documents and the Mezzanine Loan
Documents.
4.1.28 FILING AND RECORDING TAXES. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of the Collateral to Mezzanine Borrower and the
transfer of the Properties to Borrower have been paid. All mortgage, mortgage
recording, stamp, intangible or other similar tax required to be paid by any
Person under applicable Legal Requirements currently in effect in connection
with the execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Mezzanine Loan Documents, including, without
limitation, the Pledge Agreement, has been paid, and, under current Legal
Requirements, the Pledge Agreement and the other Mezzanine Loan Documents are
enforceable in accordance with their respective terms by Mezzanine Lender (or
any subsequent holder thereof), subject to principles of equity and bankruptcy,
insolvency and other laws generally applicable to creditors' rights and the
enforcement of debtors' obligations. The continued priority, validity and
enforceability of the Pledge Agreement and the other Mezzanine Loan Documents
does not require the payment by any Person of any additional documentary stamps,
filing, recording or registration fee or tax or any other similar tax or fee.
4.1.29 SPECIAL PURPOSE ENTITY/SEPARATENESS.
(a) Until the Mezzanine Debt has been paid in full, Mezzanine Borrower
hereby represents, warrants and covenants that Mezzanine Borrower is, shall be
and shall continue to be a Special Purpose Entity.
(b) The representations, warranties and covenants set forth in this
Section 4.1.29 shall survive for so long as any amount remains payable to
Mezzanine Lender under this Agreement or any other Mezzanine Loan Document.
(c) All of the factual assumptions made in the Insolvency Opinion,
including, but not limited to, any exhibits attached thereto, are true and
correct in all respects and any factual assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Mezzanine Loan
Documents (an "ADDITIONAL INSOLVENCY OPINION"), including, but not limited to,
any exhibits attached thereto, will have been and shall be true and correct in
all respects. Mezzanine Borrower has complied and will comply with all of the
factual assumptions made with respect to it in the Insolvency Opinion. Mezzanine
Borrower will have complied and will comply with all of the factual assumptions
made with respect to it in any Additional Insolvency Opinion. Each entity other
than Mezzanine Borrower with respect to which a factual assumption shall be made
in any Additional Insolvency Opinion will have complied and will comply with all
of the factual assumptions made with respect to it in any Additional Insolvency
Opinion.
4.1.30 MANAGEMENT OF PROPERTIES. Each Individual Property is
self-managed by Borrower insofar as each Individual Property is leased to a
Master Tenant which is required to perform typical property management functions
(other than collection of rents under such Master Leases) pursuant to the
related Master Lease and no third party property manager has been retained with
respect to any Individual Property.
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4.1.31 GROUND LEASES. Mezzanine Borrower covenants, represents and
warrants to Mezzanine Lender with respect to the Ground Leases as follows:
(a) Except as previously disclosed to Mezzanine Lender and scheduled on
SCHEDULE 4.3.31, no default has occurred and is continuing under the terms of
any Ground Lease, and no event has occurred that, with the passage of time or
service of notice, or both, would constitute an event of default under any
Ground Lease.
(b) Each Ground Lease is in full force and effect.
(c) All rents, additional rents, percentage rents and all other charges
due and payable under each Ground Lease have been fully paid.
(d) Subject to the Permitted Encumbrances, Borrower is the owner of the
entire lessee's interest in and under each Ground Lease and has or had the right
and authority under each Ground Lease to execute the Loan Agreement, the related
Mortgage and other related Loan Documents, and to encumber Borrower's interest
in the Ground Leases.
(e) Mezzanine Borrower shall, at its sole cost and expense, promptly
and timely perform and observe, or cause the related Master Tenant or Borrower
to promptly and timely perform and observe, all the material terms, covenants
and conditions required to be performed and observed by Borrower as lessee under
each Ground Lease (including, but not limited to, the payment of all rent,
additional rent, percentage rent and other charges required to be paid under
such Ground Lease).
(f) Lender is permitted the opportunity to cure any default under the
Ground Lease, which is curable after the receipt of notice of any default before
the ground lessor thereunder may terminate the Ground Lease.
(g) The actions or payments of Lender to cure any such default under
any Ground Lease shall not remove or waive, as between Mezzanine Borrower and
Mezzanine Lender, the default that occurred under this Agreement by virtue of
such default under any Ground Lease. All sums expended by Mezzanine Lender in
connection with such default shall be paid by Mezzanine Borrower to Mezzanine
Lender, upon demand, with interest on such sum at the rate set forth in the
Mezzanine Note from the date such sum is expended to and including the date the
reimbursement payment is made to Mezzanine Lender. All such indebtedness shall
be deemed to be secured by the Pledge Agreement.
(h) Mezzanine Borrower shall, or shall cause Borrower to notify
Mezzanine Lender promptly in writing of the occurrence of any material default
by the lessor under any Ground Lease or the occurrence of any event that, with
the passage of time or service of notice, or both, would constitute a material
default by the lessor under any Ground Lease, and the receipt by Mezzanine
Borrower or Borrower of any notice (written or otherwise) from the lessor under
any Ground Lease noting or claiming the occurrence of any default by Borrower
under any Ground Lease or the occurrence of any event that, with the passage of
time or service of notice, or both, would constitute a default by Borrower under
any Ground Lease. Mezzanine Borrower shall, or shall cause Borrower to, promptly
deliver to Mezzanine Lender a copy of any such written notice of default.
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(i) Within thirty (30) days after written demand by Mezzanine Lender,
Mezzanine Borrower shall use reasonable efforts (other than payments to the
lessor) to obtain from the lessor under any Ground Lease and furnish to
Mezzanine Lender the estoppel certificate of such lessor stating the date
through which rent has been paid and whether or not there are any defaults
thereunder and specifying the nature of such claimed defaults, if any.
(j) The generality of the provisions of this Section relating to the
Ground Leases shall not be limited by other provisions of this Agreement or the
other Mezzanine Loan Documents setting forth particular obligations of Mezzanine
Borrower that are also required of Mezzanine Borrower with respect to the Ground
Leases or the related Ground Lease Properties.
(k) Mezzanine Borrower shall not, and shall not without Mezzanine
Lender's prior written consent, suffer or permit Borrower to surrender,
terminate, forfeit, or suffer or permit the surrender, termination or forfeiture
of, or change, modify or amend in a material or adverse manner, any Ground
Lease. Consent to one amendment, change, agreement or modification shall not be
deemed to be a waiver of the right to require consent to other, future or
successive amendments, changes, agreements or modifications. Mezzanine Borrower
shall cause any acquisition of any lessor's interest in any Ground Lease by
Borrower or any affiliate of Borrower to be accomplished by Borrower in such a
manner so as to avoid a merger of the interests of lessor and lessee in such
Ground Lease, unless consent to such merger is granted by Mezzanine Lender.
(l) Notwithstanding anything to the contrary contained in this
Agreement, Mezzanine Borrower shall not permit Borrower, without Mezzanine
Lender's written consent, to elect to treat any Ground Lease as terminated under
subsection 365(h)(l) of the Bankruptcy Code. Any such election made without
Mezzanine Lender's prior written consent shall be void.
(m) In addition to those events otherwise set forth in this Agreement,
the occurrence of any of the following events shall, at Mezzanine Lender's
option, constitute an Event of Default, as such term is defined in Section 8.1
hereof and, upon the occurrence of an Event of Default, Lender shall have all of
the rights and remedies available to it under Section 8.2 hereof:
(i) A breach or default by Borrower under any condition or
obligation contained in any Ground Lease that is not cured within any applicable
cure period provided therein;
(ii) The occurrence of any event or condition that gives the
lessor under any Ground Lease a right to terminate or cancel such Ground Lease;
or
(iii) Mezzanine Borrower's or Borrower's failure to permit
Mezzanine Lender and/or its representatives at all reasonable times upon
reasonable prior written notice to make investigation or examination concerning
Borrower's performance and observance of the terms, covenants and conditions of
any Ground Lease.
(n) Mezzanine Borrower shall not permit Borrower, without Mezzanine
Lender's written consent, to fail to exercise any option or right to renew or
extend the term of any Ground Lease at least six (6) months prior to the date of
termination of any such option or right, and shall give immediate written notice
to Mezzanine Lender and shall execute, acknowledge, deliver and
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record any document requested by Mezzanine Lender to evidence such extended or
renewed lease term; provided, however, Mezzanine Borrower shall not be required
to cause Borrower to exercise any particular such option or right to renew or
extend to the extent Mezzanine Borrower shall have received the prior written
consent of Mezzanine Lender (which consent may be withheld by Mezzanine Lender
in its sole and absolute discretion) allowing Mezzanine Borrower to permit
Borrower to forego exercising such option or right to renew or extend.
(o) Mezzanine Borrower shall not permit Borrower to waive, excuse,
condone or in any way release or discharge the lessor under any Ground Lease of
or from such lessor's material obligations, covenant and/or conditions under
such Ground Lease without the prior written consent of Mezzanine Lender.
(p) To the best of Mezzanine Borrower's knowledge, as of the Closing
Date, there has been no event which would materially alter information contained
in those ground lessor estoppels delivered to Mezzanine Lender with respect to
the Ground Leases prior to the date hereof.
(q) The execution, delivery and performance of the Mezzanine Loan
Documents, the assignment of the Ground Leases to Borrower, the borrowing of the
Mezzanine Loan, the execution, delivery and performance of the Loan Documents,
the borrowing of the Loan, the pledge of the Collateral and the exercise of
Mezzanine Lender's remedies under the Pledge Agreement is not a breach or
default under the Master Leases or Ground Leases and does not require the
consent of the landlord or tenant under any such Ground Leases or Master Leases
or entitle the tenant or landlord to a right of first refusal, right of first
offer or other pre-emptive or right.
4.1.32 ILLEGAL ACTIVITY. No portion of any Individual Property has been
or will be purchased by Mezzanine Borrower, Borrower or any of their Affiliates
with proceeds of any illegal activity.
4.1.33 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. All information
submitted by Mezzanine Borrower to Mezzanine Lender and in all financial
statements, rent rolls, reports, certificates and other documents submitted in
connection with the Mezzanine Loan or in satisfaction of the terms thereof and
all statements of fact made by Mezzanine Borrower in this Agreement or in any
other Mezzanine Loan Document, are accurate, complete and correct in all
material respects. There has been no material adverse change in any condition,
fact, circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading in any material respect or that otherwise
materially adversely affects or might materially adversely affect the use,
operation or value of any Individual Property or the business operations or the
financial condition of Mezzanine Borrower unless such change has been fully
disclosed to Mezzanine Lender. Mezzanine Borrower has disclosed to Mezzanine
Lender all material facts and has not failed to disclose any material fact that
could cause any such provided information or representation or warranty made
herein to be materially misleading.
4.1.34 INVESTMENT COMPANY ACT. Mezzanine Borrower is not (a) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) a
"holding company" or a "subsidiary
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company" of a "holding company" or an "affiliate" of either a "holding company"
or a "subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended; or (c) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.
4.1.35 TAX FILINGS. Mezzanine Borrower has filed (or has obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and has paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by Mezzanine
Borrower. Mezzanine Borrower believes that its tax returns properly reflect the
income and taxes of Mezzanine Borrower for the periods covered thereby, subject
only to reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit.
4.1.36 AFFILIATES.
(a) Effective as of the consummation of the transactions contemplated
by this Agreement, Mezzanine Borrower is the sole shareholder of Borrower and
Mezzanine Borrower is wholly owned by Indemnitor, which is a wholly-owned
subsidiary of Indemnitor Parent.
(b) Mezzanine Borrower does not own any equity interests other than the
equity interests in Borrower.
4.1.37 OTHER.
(a) All of the representations and warranties of the Borrower in the
Loan Documents are true and correct in all material respects.
(b) Mezzanine Borrower has provided Mezzanine Lender with true and
complete copies of the Ground Leases, the Master Leases and all other Leases,
all guaranties of the Master Leases and other Leases, the Loan Documents, the
articles of incorporation (or analogous document) and bylaws of the Mezzanine
Borrower and Borrower.
(c) The United States taxpayer identification number of the Mezzanine
Borrower is 00-0000000.
(d) Except as provided in the Loan Documents and Mezzanine Loan
Documents, neither Borrower nor Mezzanine Borrower is a party to, or otherwise
bound by, any agreement or other obligation which precludes, impairs,
prejudices, limits, prohibits or impedes or might preclude, impair, prejudice,
limit, prohibit or impede distributions or dividends to the Mezzanine Borrower.
(e) Under applicable state and federal law, Borrower does not pay any
income (or analogous) tax on its income.
(f) Mezzanine Borrower has provided Mezzanine Lender with a true and
complete copy of the Offering Memorandum.
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4.1.38 SURVIVAL OF REPRESENTATIONS. Mezzanine Borrower agrees that all
of the representations and warranties of Borrower set forth in this Section 4.1
and elsewhere in this Agreement and in the other Mezzanine Loan Documents shall
survive for so long as any amount remains owing to Mezzanine Lender under this
Agreement or any of the other Mezzanine Loan Documents by Mezzanine Borrower.
All representations, warranties, covenants and agreements made in this Agreement
or in the other Mezzanine Loan Documents by Mezzanine Borrower shall be deemed
to have been relied upon by Mezzanine Lender notwithstanding any investigation
heretofore or hereafter made by Mezzanine Lender or on its behalf.
V. MEZZANINE BORROWER COVENANTS
SECTION 5.1 AFFIRMATIVE COVENANTS.
From the date hereof and until payment and performance in full of all
obligations of Mezzanine Borrower under the Mezzanine Loan Documents or the
release of the Collateral (and all related obligations) in accordance with the
terms of this Agreement and the other Mezzanine Loan Documents, Mezzanine
Borrower hereby covenants and agrees with Mezzanine Lender that:
5.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS; INSURANCE.
Mezzanine Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply, or cause Borrower to comply, with
all Legal Requirements applicable to it, Borrower and the Properties. There
shall never be committed by Mezzanine Borrower and, if known to Mezzanine
Borrower, Mezzanine Borrower shall not suffer or permit to be committed by any
other Person in occupancy of or involved with the operation or use of the
Properties, any act or omission affording the federal government or any state or
local government the right of forfeiture as against any Individual Property or
any part thereof or any monies paid in performance of Mezzanine Borrower's
obligations under any of the Mezzanine Loan Documents. Mezzanine Borrower hereby
covenants and agrees not to cause Borrower to commit, permit or suffer to exist
any act or omission affording such right of forfeiture. Mezzanine Borrower shall
cause Borrower at all times to maintain, preserve and protect all franchises and
trade names and preserve all the remainder of its property used or useful in the
conduct of its business and shall, or shall cause the Master Tenants to, keep
the Properties in good working order and repair, and from time to time make, or
cause to be made, in accordance with the applicable Master Leases, all
reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided herein. Mezzanine Borrower
shall, or shall cause the applicable Master Tenant to, keep each Individual
Property insured at all times by financially sound and reputable insurers, to
such extent and against such risks, and Mezzanine Borrower shall, or shall cause
the applicable Master Tenant to, maintain liability and such other insurance, as
is more fully provided in this Agreement. After prior written notice to
Mezzanine Lender, Mezzanine Borrower or the applicable Master Tenant, at its or
Borrower's own expense, may contest, or cause to be contested, by appropriate
legal proceeding promptly initiated and conducted in good faith and with due
diligence, the validity of any Legal Requirement, the applicability of any Legal
Requirement to Mezzanine Borrower, Borrower, the applicable Master Tenant or any
Individual Property or any alleged violation of any Legal Requirement, provided
that (i) no
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Default or Event of Default has occurred and remains uncured; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which Mezzanine Borrower or Borrower is subject
and shall not constitute a default thereunder and such proceeding shall be
conducted in accordance with all applicable statutes, laws and ordinances; (iii)
no Individual Property nor the Collateral nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost; (iv) promptly upon final non-appealable determination thereof, Mezzanine
Borrower or Borrower shall, or shall cause the applicable Master Tenant to,
comply with any such Legal Requirement determined to be valid or applicable or
cure any violation of any Legal Requirement; (v) such proceeding shall suspend
the enforcement of the contested Legal Requirement against Mezzanine Borrower or
Borrower or any Individual Property; and (vi) if such contest affects the
Borrower or any Individual Property, such contest shall be conducted only in
conjunction with contest by Borrower; and (vii) if not furnished by Borrower,
Mezzanine Borrower or the applicable Master Tenant in accordance with the terms
of the applicable Master Leases, furnish such security as may be required in the
proceeding, or as may be requested by Mezzanine Lender, to ensure compliance
with such Legal Requirement, together with all interest and penalties payable in
connection therewith. Mezzanine Lender may apply any such security, as necessary
to cause compliance with such Legal Requirement at any time when, in the
reasonable judgment of Mezzanine Lender, the validity, applicability or
violation of such Legal Requirement is finally established, by a final
non-appealable judgment, or any Individual Property (or any part thereof or
interest therein) shall be in danger of being sold, forfeited, terminated,
cancelled or lost.
5.1.2 TAXES AND OTHER CHARGES.
Mezzanine Borrower shall, or shall cause Borrower or the applicable
Master Tenant to, pay all Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Properties or any part thereof before the
earlier of (i) the date same become delinquent or (ii) the date required
pursuant to the Loan Documents; provided, however, Mezzanine Borrower's
obligation to directly pay, or cause Borrower or the applicable Master Tenant to
directly pay, Taxes with respect to an Individual Property shall be suspended
for so long as such Taxes are paid from the Tax and Insurance Escrow Fund and
Borrower complies with the terms and provisions of Section 7.2 of the Loan
Agreement. Mezzanine Borrower will deliver, or cause to be delivered, to
Mezzanine Lender receipts for payment or other evidence satisfactory to
Mezzanine Lender that the Taxes and Other Charges have been so paid or are not
then delinquent no later than ten (10) days prior to the date on which the Taxes
and/or Other Charges would otherwise be delinquent if not paid. Mezzanine
Borrower shall furnish, or cause to be furnished, to Mezzanine Lender receipts
for the payment of the Taxes and the Other Charges prior to the date the same
shall become delinquent (provided, however, that Mezzanine Borrower is not
required to furnish such receipts for payment of Taxes in the event that such
Taxes have been paid by Mezzanine Lender pursuant to Section 7.2 hereof).
Subject to Mezzanine Borrower's right to contest as set forth in this Section
5.1.2, Mezzanine Borrower shall not suffer and shall promptly cause to be paid
and discharged any Lien or charge whatsoever which may be or become a Lien or
charge against the Properties (other than the Lien securing the Loan), and shall
promptly pay, or cause the applicable Master Tenant to pay, for all utility
services provided to the Properties. After prior written notice to Mezzanine
Lender, Mezzanine Borrower or the applicable Master Tenant, at its or Borrower's
own expense, may contest, or cause to be contested, by appropriate legal
proceeding, promptly initiated and conducted in good faith and
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with due diligence, the amount or validity or application in whole or in part of
any Taxes or Other Charges, provided that (i) no Default or Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any other instrument to which
Mezzanine Borrower or Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) no Individual Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) Mezzanine Borrower, Borrower or the
applicable Master Tenant shall promptly upon final non-appealable determination
thereof pay the amount of any such Taxes or Other Charges, together with all
costs, interest and penalties which may be payable in connection therewith; (v)
such proceeding shall suspend the collection of such contested Taxes or Other
Charges from the applicable Individual Property; (vi) if such contest affects
the Borrower or the Properties, such contest shall be conducted only in
conjunction with contest by Borrower; and (vii) if not furnished by Borrower,
Mezzanine Borrower or the applicable Master Tenant in accordance with the
applicable Master Lease terms, shall furnish such security as may be required in
the proceeding, or as may be requested by Mezzanine Lender, to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon. Mezzanine Lender may pay over any such cash deposit or part
thereof held by Mezzanine Lender to the claimant entitled thereto at any time
when, in the judgment of Mezzanine Lender, the entitlement of such claimant is
established by a final non-appealable judgment or any Individual Property (or
part thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost or there shall be any danger of the Lien of any
Mortgage being primed by any related Lien.
5.1.3 LITIGATION.
Mezzanine Borrower shall give prompt written notice to Mezzanine Lender
of any litigation or governmental proceedings pending or threatened against
Mezzanine Borrower or Borrower which might materially adversely affect Mezzanine
Borrower's condition (financial or otherwise) or business or, except as
disclosed in the Offering Memorandum, any Individual Property.
5.1.4 ACCESS TO PROPERTIES.
Mezzanine Borrower shall permit, or cause to be permitted in accordance
with the applicable Master Lease terms, agents, representatives and employees of
Mezzanine Lender to inspect the Properties or any part thereof at reasonable
hours upon reasonable advance notice and subject to the rights of tenants under
the Leases.
5.1.5 NOTICE OF DEFAULT.
Mezzanine Borrower shall promptly advise Mezzanine Lender of any
material adverse change in Mezzanine Borrower's condition, financial or
otherwise, or of the occurrence of any Default or Event of Default of which
Mezzanine Borrower has knowledge.
5.1.6 COOPERATE IN LEGAL PROCEEDINGS.
Mezzanine Borrower shall cooperate fully with Mezzanine Lender with
respect to any proceedings before any court, board or other Governmental
Authority which may in any way
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affect the rights of Mezzanine Lender hereunder or any rights obtained by
Mezzanine Lender under any of the other Mezzanine Loan Documents and, in
connection therewith, permit Mezzanine Lender, at its election, to participate
in any such proceedings.
5.1.7 PERFORM MEZZANINE LOAN DOCUMENTS.
Mezzanine Borrower shall observe, perform and satisfy all the terms,
provisions, covenants and conditions of, and shall pay when due all costs, fees
and expenses to the extent required under the Mezzanine Loan Documents executed
and delivered by, or applicable to, Mezzanine Borrower.
5.1.8 FURTHER ASSURANCES.
Mezzanine Borrower shall, at Mezzanine Borrower's sole cost and
expense:
(a) do, execute, acknowledge and deliver to Mezzanine Lender all and
every such further acts, documents, instruments, certificates, conveyances,
assignments, notices of assignments, transfers, assurances and other writings as
Mezzanine Lender shall, from time to time, reasonably require, necessary for the
assuring, conveying, assigning, transferring, and confirming unto Mezzanine
Lender the property and rights, granted, conveyed, confirmed, pledged, assigned,
and transferred or intended now or hereafter so to be, or which Mezzanine
Borrower may be or may hereafter become bound to convey or assign to Mezzanine
Lender, or for carrying out the intention or facilitating the performance of the
terms of the Mezzanine Loan Documents, or for complying with all Legal
Requirements, or to evidence, preserve and/or protect the Collateral at any time
securing or intended to secure the obligations of Mezzanine Borrower under the
Mezzanine Loan Documents. Mezzanine Borrower, on demand, will execute and
deliver, and in the event it shall fail to so execute and deliver, hereby
authorizes Mezzanine Lender to execute in the name of Mezzanine Borrower or
without the signature of Mezzanine Borrower to the extent Mezzanine Lender may
lawfully do so, one or more financing statements to evidence more effectively
the security interest of Mezzanine Lender in the Collateral. Mezzanine Borrower
grants to Mezzanine Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Mezzanine Lender at law and in equity with respect to any
of the Mezzanine Loan Documents, including without limitation such rights and
remedies available to Mezzanine Lender pursuant to this Section 5.1.8. Nothing
contained in this Section 5.1.8 shall be deemed to create an obligation on the
part of Mezzanine Borrower to pay any costs and expenses incurred by Mezzanine
Lender in connection with the sale or transfer of the Mezzanine Loan;
(b) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Mezzanine Loan Documents,
as Mezzanine Lender shall reasonably require from time to time; and
(c) if at any time the United States of America, the State or any
subdivision of the State shall require revenue or any other stamps or taxes to
be affixed to the Mezzanine Note, the Pledge Agreement, or any of the other
Mezzanine Loan Documents or impose any other tax or
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charge on the same, Mezzanine Borrower shall pay for the same, with interest and
penalties thereon, if any.
5.1.9 FINANCIAL REPORTING.
(a) Mezzanine Borrower will keep and maintain or will cause to be kept
and maintained on a Fiscal Year basis, in accordance with GAAP (or such other
accounting basis acceptable to Mezzanine Lender), proper and accurate books,
records and accounts reflecting all of the financial affairs of Mezzanine
Borrower and all items of income and expense in connection with the Collateral
and with Borrower's operation on an individual basis of the Properties.
Mezzanine Lender shall have the right from time to time at all times during
normal business hours upon reasonable notice to examine such books, records and
accounts at the office of Mezzanine Borrower or any other Person maintaining
such books, records and accounts and to make such copies or extracts thereof as
Mezzanine Lender shall desire. After the occurrence of an Event of Default,
Mezzanine Borrower shall pay any costs and expenses incurred by Mezzanine Lender
to examine Mezzanine Borrower's accounting records with respect to the
Collateral and the Properties, as Mezzanine Lender shall determine to be
necessary or appropriate in the protection of Mezzanine Lender's interest.
(b) Mezzanine Borrower will furnish, or cause to be furnished, to
Mezzanine Lender annually, within one hundred and twenty (120) days following
the end of each Fiscal Year of Borrower, a complete copy of Borrower's and
Mezzanine Borrower's annual financial statements audited by a "Big Five"
accounting firm or other independent certified public accountant acceptable to
Mezzanine Lender in accordance with GAAP (or such other accounting basis
acceptable to Mezzanine Lender) covering the Properties on a combined basis as
well as each Individual Property for such Fiscal Year and containing statements
of profit and loss for Borrower and, to the extent Borrower receives such
information from the Master Tenants, the Properties and a balance sheet for
Borrower. Such statements shall set forth the financial condition and the
results of operations for the Properties and Borrower for such Fiscal Year, and
shall include, but not be limited to, amounts representing annual Net Cash Flow,
Net Operating Income, Gross Income from Operations and Operating Expenses.
Borrower's annual financial statements shall be accompanied by (i) the actual
income and expenses for the prior Fiscal Year, (ii) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal
Year, (iii) a statement of the annual sales of each tenant under the Leases,
(iv) a certificate executed by the chief financial officer of Mezzanine Borrower
stating that each such annual financial statement presents fairly the financial
condition and the results of operations of Borrower and Mezzanine Borrower and,
to the extent Mezzanine Borrower or Borrower receives such information from the
Master Tenants, the Properties being reported upon and has been prepared in
accordance with GAAP and (v) an unqualified opinion of a "Big Five" accounting
firm or other independent certified public accountant reasonably acceptable to
Mezzanine Lender. Together with the annual financial statements of Borrower and
Mezzanine Borrower to be delivered pursuant to this Section 5.19(b), Mezzanine
Borrower shall furnish to Mezzanine Lender an Officer's Certificate certifying
as of the date thereof whether there exists an event or circumstance which
constitutes a Default or Event of Default under the Mezzanine Loan Documents or
a "Default" or "Event of Default" (as defined in the Loan Agreement) executed
and delivered by, or applicable to, Mezzanine Borrower or Borrower, and if such
"Default" (as defined in the Loan Agreement) or "Event of Default" (as defined
in the Loan Agreement) exists,
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the nature thereof, the period of time it has existed and the action then being
taken to remedy the same. It is agreed that Mezzanine Borrower makes no
representation or warranty with respect to the accuracy or completeness of
financial information provided by the tenants under the Master Leases which is
provided to Mezzanine Lender pursuant to this Section, provided, however,
Mezzanine Borrower shall be deemed to represent and warrant that any such
information is true and complete to the best of its knowledge.
(c) Mezzanine Borrower will furnish, or cause to be furnished, to
Mezzanine Lender on or before twenty (20) days after the end of each calendar
month the following items, accompanied by a certificate of the chief financial
officer of Mezzanine Borrower stating that such items are true, correct,
accurate, and complete and fairly present the financial condition and results of
the operations of Borrower and Mezzanine Borrower, and, to the extent Mezzanine
Borrower or Borrower receives such information from the Master Tenants, the
Properties on a combined basis as well as each Individual Property (subject to
normal year-end adjustments) as applicable: (i) a rent collection report; (ii)
reports on theater ticket and other sales for the calculation of percentage
rents under the Master Leases to the extent such information is available to
Borrower pursuant to the terms and provisions of the Master Leases; and (iii) a
calculation reflecting the annual Debt Service Coverage Ratio for the
immediately preceding twelve (12) month period as of the last day of such month
accompanied by an Officer's Certificate with respect thereto. In addition, such
certificate shall also be accompanied by a certificate of the chief financial
officer of Mezzanine Borrower stating that the representations and warranties of
Mezzanine Borrower set forth in Section 4.1.29 are true and correct as of the
date of such certificate and that there are no trade payables of Borrower or
Mezzanine Borrower outstanding for more than sixty (60) days.
(d) For the partial year period commencing on the date hereof, and for
each Fiscal Year thereafter, Mezzanine Borrower shall submit, or cause to be
submitted, to Mezzanine Lender, an Annual Budget for the Properties not later
than sixty (60) days prior to the commencement of such period or Fiscal Year in
form reasonably satisfactory to Mezzanine Lender. The Annual Budget shall be
subject to Mezzanine Lender's written approval (each such Annual Budget, an
"APPROVED ANNUAL BUDGET"), subject to the terms and conditions of the
Intercreditor Agreement. In the event that Mezzanine Lender objects to a
proposed Annual Budget submitted by Mezzanine Borrower, Mezzanine Lender shall
advise Mezzanine Borrower of such objections within fifteen (15) days after
receipt thereof (and deliver to Mezzanine Borrower a reasonably detailed
description of such objections) and Mezzanine Borrower shall promptly revise
such Annual Budget and resubmit the same to Mezzanine Lender. Mezzanine Lender
shall advise Mezzanine Borrower of any objections to such revised Annual Budget
within ten (10) days after receipt thereof (and deliver to Mezzanine Borrower a
reasonably detailed description of such objections) and Mezzanine Borrower shall
promptly revise the same in accordance with the process described in this
subsection until Mezzanine Lender approves the Annual Budget. Until such time
that Mezzanine Lender approves a proposed Annual Budget, the most recently
Approved Annual Budget shall apply, provided that such Approved Annual Budget
shall be adjusted to reflect actual increases in any real estate taxes,
insurance premiums and utilities expenses which are not the obligations of a
Master Tenant pursuant to the terms and provisions of the related Master Lease.
Mezzanine Borrower shall cause Borrower to comply with the most recently
Approved Annual Budget.
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(e) In the event that Borrower must incur an extraordinary operating
expense or capital expense not set forth in the Approved Annual Budget (each an
"EXTRAORDINARY EXPENSE"), then Mezzanine Borrower shall promptly deliver, or
cause to be delivered, to Mezzanine Lender a reasonably detailed explanation of
such proposed Extraordinary Expense for Mezzanine Lender's approval.
(f) If requested by Mezzanine Lender, Mezzanine Borrower shall provide,
or cause to be provided, promptly upon request, with any other or additional
financial statements, or financial, statistical or operating information, as
shall otherwise be reasonably requested by Mezzanine Lender (to the extent any
such information regarding the operation of any Individual Property by a Master
Tenant is available to Mezzanine Borrower or Borrower).
(g) Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) in paper form, (ii) on a
diskette, and (iii) if requested by Mezzanine Lender and within the capabilities
of Mezzanine Borrower's data systems without change or modification thereto, in
electronic form and prepared using a Microsoft Word for Windows or WordPerfect
for Windows files (which files may be prepared using a spreadsheet program and
saved as word processing files). Mezzanine Borrower agrees that Mezzanine Lender
may disclose information regarding the Properties, Borrower and Mezzanine
Borrower that is provided to Mezzanine Lender pursuant to this Section in
connection with a transfer of the Mezzanine Loan.
5.1.10 BUSINESS AND OPERATIONS. Mezzanine Borrower will cause Borrower
to continue to engage in the businesses presently conducted by it as and to the
extent the same are necessary for the ownership, maintenance, management and
operation of the Properties. Mezzanine Borrower will qualify to do business and
will remain in good standing under the laws of each jurisdiction as and to the
extent the same are required for the ownership of the Collateral.
5.1.11 LOAN DOCUMENTS AND GROUND LEASE. Mezzanine Borrower shall cause
Borrower to fully and timely perform all of its obligations under the Loan
Documents and the Ground Leases.
5.1.12 COSTS OF ENFORCEMENT. In the event (a) that Mezzanine Lender
exercises any of its rights or remedies under the Pledge Agreement or any other
Mezzanine Loan Documents as and when permitted hereby, or (b) of the bankruptcy,
insolvency, rehabilitation or other similar proceeding in respect of Mezzanine
Borrower or any of its constituent Persons or an assignment by Mezzanine
Borrower or any of its constituent Persons for the benefit of its creditors,
Mezzanine Borrower, its successors or assigns, shall be chargeable with and
agrees to pay all costs of collection and defense, including attorneys' fees and
costs, incurred by Mezzanine Lender or Mezzanine Borrower in connection
therewith and in connection with any appellate proceeding or post-judgment
action involved therein, together with all required service or use taxes.
5.1.13 ESTOPPEL STATEMENT. After request by Mezzanine Lender, Mezzanine
Borrower shall within ten (10) days furnish Mezzanine Lender with a statement,
duly acknowledged and certified by an executive officer of Mezzanine Borrower
with knowledge of the matter in question, setting forth (i) the amount of the
original principal amount of the Mezzanine Note,
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(ii) the unpaid principal amount of the Mezzanine Note, (iii) the Applicable
Interest Rate of the Mezzanine Note, (iv) the date installments of interest
and/or principal were last paid, (v) any offsets or defenses to the payment of
the Mezzanine Debt, if any, and (vi) that the Mezzanine Note, this Agreement,
the Pledge Agreement and the other Mezzanine Loan Documents are valid, legal and
binding obligations and have not been modified or if modified, giving
particulars of such modification. After request by Mezzanine Lender, Mezzanine
Borrower shall, within fifteen (15) days after such request, obtain and deliver
to Mezzanine Lender, the statement described in Section 5.1.15 of the Loan
Agreement, duly acknowledged and certified to Mezzanine Lender.
5.1.14 LOAN PROCEEDS. Mezzanine Borrower shall use the proceeds of the
Mezzanine Loan received by it on the Closing Date only for the purposes set
forth in Section 2.1.4.
5.1.15 PERFORMANCE BY MEZZANINE BORROWER. Mezzanine Borrower shall in a
timely manner observe, perform and fulfill each and every covenant, term and
provision of each Mezzanine Loan Document executed and delivered by, or
applicable to, Mezzanine Borrower, and shall not enter into or otherwise suffer
or permit any amendment, waiver, supplement, termination or other modification
of any Mezzanine Loan Document executed and delivered by, or applicable to,
Mezzanine Borrower without the prior written consent of Mezzanine Lender.
5.1.16 MAINTENANCE OF PROPERTY. Mezzanine Borrower shall cause the
Properties to be maintained in a good and safe condition and repair, subject to
ordinary wear and tear.
5.1.17 NO JOINT ASSESSMENT. Mezzanine Borrower shall not suffer, permit
or initiate the joint assessment of any Individual Property (a) with any other
real property constituting a tax lot separate from such Individual Property, and
(b) which constitutes real property with any portion of such Individual Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any taxes which may be levied against such personal property
shall be assessed or levied or charged to such real property portion of the
Individual Property.
5.1.18 LEASING MATTERS. Any Leases with respect to an Individual
Property written after the date hereof, shall be approved by Mezzanine Lender,
which approval shall not be unreasonably withheld, conditioned or delayed. Upon
request, Mezzanine Borrower shall furnish Mezzanine Lender with executed copies
of all Leases. All renewals of Leases (unless the terms of such renewal are
already provided for in the Lease) and all proposed Leases shall provide for
rental rates comparable to existing local market rates. All proposed Leases
shall be on commercially reasonable terms and shall not contain any terms which
would materially affect title to the Properties or Mezzanine Lender's rights
under the Mezzanine Loan Documents. Mezzanine Borrower (i) shall cause Borrower
to observe and perform the obligations imposed upon the lessor under the Leases
in a commercially reasonable manner; (ii) shall cause Borrower to enforce the
terms, covenants and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed in a commercially reasonable
manner and in a manner not to impair the value of the Individual Property
involved except that no termination by Borrower or acceptance of surrender by a
tenant of any Leases shall be permitted without the prior written consent of
Mezzanine Lender; (iii) shall cause Borrower not to collect any of the Rents
more than one (1) month in advance (other than security deposits); (iv) shall
cause Borrower not to execute any other assignment of lessor's interest in the
Leases or the Rents
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(except as contemplated by the Loan Documents); (v) shall cause Borrower not to
alter, amend, modify or change the terms of any Lease without the prior written
consent of Mezzanine Lender; and (vi) shall cause Borrower to execute and
deliver at the request of Mezzanine Lender all such further assurances,
confirmations and assignments in connection with the Leases as Mezzanine Lender
shall from time to time reasonably require. Notwithstanding anything to the
contrary contained herein, Mezzanine Borrower shall cause Borrower not to enter
into a lease of all or substantially all of any Individual Property without
Mezzanine Lender's prior written consent.
5.1.19 ALTERATIONS. Mezzanine Borrower shall obtain Mezzanine Lender's
prior written consent to any alterations to any Improvements, which consent
shall not be unreasonably withheld or delayed except with respect to alterations
that may have a material adverse effect on Mezzanine Borrower's or Borrower's
financial condition, the value of the applicable Individual Property or the Net
Operating Income. Notwithstanding the foregoing, Mezzanine Lender's consent
shall not be required in connection with any alterations that will not have a
material adverse effect on Mezzanine Borrower's or Borrower's financial
condition, the value of the applicable Individual Property or the Net Operating
Income, provided that such alterations are made in connection with (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the date hereof and costing no more than the Threshold Amount, (b) tenant
improvement work performed pursuant to the terms and provisions of a Lease or
alterations performed by a Master Tenant in accordance with the terms and
provisions of the applicable Master Lease and not adversely affecting any
structural component of any Improvements, any utility or HVAC system contained
in any Improvements or the exterior of any building constituting a part of any
Improvements or costing in excess of the Threshold Amount, or (c) alterations
performed in connection with the restoration of an Individual Property after the
occurrence of a casualty in accordance with the terms and provisions of the Loan
Agreement. If the total unpaid amounts due and payable with respect to
alterations to the Improvements at any Individual Property shall at any time
exceed the lesser of (i) Five Hundred Thousand and No/100 Dollars ($500,000) and
(ii) the cost of any tenant improvement work or alterations requiring the
consent of the landlord pursuant to the terms and provisions of the applicable
Master Lease (the "THRESHOLD AMOUNT"), Mezzanine Borrower shall cause Borrower
promptly to deliver to Lender as security for the payment of such amounts and as
additional security for Mezzanine Borrower's obligations under the Mezzanine
Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other
securities having a rating acceptable to Mezzanine Lender, or (D) a completion
and performance bond or an irrevocable letter of credit (payable on sight draft
only) issued by a financial institution having a rating by Xxxxx'x of not less
than "P-1" if the term of such bond or letter of credit is no longer than three
(3) months or, if such term is in excess of three (3) months, issued by a
financial institution having a rating that is acceptable to Mezzanine Lender.
Such security shall be in an amount equal to the excess of the total unpaid
amounts with respect to alterations to the Improvements on the applicable
Individual Property (other than such amounts to be paid or reimbursed by tenants
under the Leases) over the Threshold Amount.
5.1.20 PROPERTY MANAGEMENT. In the event that Mezzanine Lender
determines that any Individual Property is not being managed in accordance with
generally accepted management practices for properties similar to such
Individual Property, Mezzanine Lender may deliver written notice thereof to
Mezzanine Borrower, which notice shall specify with particularity the grounds
for Mezzanine Lender's determination. If Mezzanine Lender reasonably determines
that
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the conditions specified in Mezzanine Lender's notice are not remedied to
Mezzanine Lender's reasonable satisfaction by Mezzanine Borrower or Borrower
within thirty (30) days from receipt of such notice or that Mezzanine Borrower
or Borrower has failed to diligently undertake correcting such conditions within
such thirty (30) day period, Mezzanine Borrower shall, at Mezzanine Lender's
direction, engage or cause Borrower to engage a professional third party
property manager reasonably acceptable to Mezzanine Lender to manage such
Individual Property pursuant to a property management agreement reasonably
acceptable to Mezzanine Lender, which property management agreement shall
require such manager to manage such Individual Property subject to the rights of
the applicable Master Tenant under the related Master Lease. Mezzanine Borrower
shall cause Borrower and such manager to execute an agreement acceptable to
Mezzanine Lender conditionally assigning Mezzanine Borrower's or Borrower's
interest in such management agreement to Mezzanine Lender and subordinating
manager's right to receive fees and expenses under such agreement while the
Mezzanine Debt remains outstanding.
5.1.21 SPECIAL DISTRIBUTIONS. On each date on which amounts are
required to be disbursed to the Mezzanine Account pursuant to the terms of the
Mezzanine Cash Management Agreement or are required to be paid to Mezzanine
Lender under any of the Mezzanine Loan Documents, Mezzanine Borrower shall cause
the Borrower to make to Mezzanine Borrower a distribution in an aggregate amount
such that Mezzanine Lender shall receive the amount required to be disbursed to
the Mezzanine Account or otherwise paid to Mezzanine Lender on such date.
5.1.22 REPORTS, ETC. Mezzanine Borrower shall furnish, or cause to be
furnished, to Mezzanine Lender true and complete copies of all financial
statements, reports, budgets and summaries required to be delivered to Lender
under the Loan Documents, Borrower disbursement requests and other notices
related to the Loan, at the same time as each such document is furnished to the
Lender. Within three (3) Business Days after Borrower's receipt, Mezzanine
Borrower shall give, or cause to be given, to Mezzanine Lender, a true and
complete copy of all notices, demands, requests, reports, certifications, and
correspondence received by Borrower or Mezzanine Borrower from, or on behalf of,
the Lender, the lessors under the Ground Leases, the tenants under the Master
Leases or any other Leases or the guarantors of the tenants' obligations with
respect to the Master Leases and other Leases, the Borrower or the Agent.
5.1.23 CURING. Mezzanine Lender shall have the right, but shall not
have the obligation, to exercise Mezzanine Borrower's rights, to the extent
Mezzanine Borrower shall have the same, to cure a Default or an Event of Default
by Borrower under the Loan, unless Mezzanine Borrower or Borrower shall with
reasonable diligence be diligently pursuing remedies to cure the same (provided,
however, nothing in this Section 5.23 shall operate to modify, waive or amend
any rights or remedies of Mezzanine Lender contained in Article 8 hereof or
elsewhere herein or in the other Mezzanine Loan Documents upon the occurrence
and during the continuance of an Event of Default). Mezzanine Borrower shall
reimburse Mezzanine Lender on demand for any and all costs incurred by Mezzanine
Lender in connection with curing a Default or Event of Default by the Mezzanine
Borrower under the Loan or satisfying any Liens, claims or judgments against the
Properties.
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5.1.24 TITLE TO THE PROPERTY. Mezzanine Borrower will warrant and
defend (a) the title to the Collateral and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances) and (b) the
validity and priority of the Liens of the Pledge Agreement and subject only to
Liens permitted hereunder (including Permitted Encumbrances), in each case
against the claims of all Persons whomsoever. Mezzanine Borrower shall reimburse
Mezzanine Lender for any losses, costs, damages or expenses (including
reasonable attorneys' fees and court costs) incurred by Mezzanine Lender if an
interest in the Collateral, other than as permitted hereunder, is claimed by
another Person.
SECTION 5.2 NEGATIVE COVENANTS.
From the date hereof until payment and performance in full of all
obligations of Mezzanine Borrower under the Mezzanine Loan Documents, Mezzanine
Borrower covenants and agrees with Mezzanine Lender that it will not do,
directly or indirectly, and will not suffer or permit Borrower to do, directly
or indirectly, any of the following:
5.2.1 OPERATION OF PROPERTY. Mezzanine Borrower shall not retain and
shall cause Borrower not to retain, without the prior consent of Mezzanine
Lender, a third party manager with respect to any Individual Property or enter
into any management agreement with respect to any Individual Property.
5.2.2 LIENS. Mezzanine Borrower shall not create, incur, assume or
suffer to exist any Lien on any portion of the Collateral or permit any such
action to be taken, except:
(i) Permitted Encumbrances;
(ii) Liens created by or permitted pursuant to the
Mezzanine Loan Documents;
(iii) Liens for Taxes or Other Charges not yet delinquent; and
(iv) Liens which are being contested in good faith in
accordance with the terms and conditions of the Mezzanine Loan Documents.
5.2.3 DISSOLUTION. Mezzanine Borrower shall not (and will not permit
Borrower to) (a) engage in any dissolution, liquidation or consolidation or
merger with or into any other business entity, (b) engage in any business
activity not related to the ownership of the Collateral (or Properties, in the
case of Borrower), (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
assets of Mezzanine Borrower or Borrower except to the extent permitted by the
Mezzanine Loan Documents, (d) modify, amend, waive or terminate its
organizational documents or its qualification and good standing in any
jurisdiction or amend, modify, waive or terminate its certificate of
incorporation or bylaws, in each case, without obtaining the prior written
consent of Mezzanine Lender or Mezzanine Lender's designee.
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5.2.4 CHANGE IN BUSINESS. Mezzanine Borrower shall not enter into any
line of business other than the ownership of the Collateral or make any material
change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business..
5.2.5 DEBT CANCELLATION. Mezzanine Borrower shall not cancel or
otherwise forgive or release any claim or debt owed to Mezzanine Borrower by any
Person, except for adequate consideration and in the ordinary course of
Mezzanine Borrower's business.
5.2.6 AFFILIATE TRANSACTIONS. Mezzanine Borrower shall not enter into,
or be a party to, any transaction with an Affiliate of Borrower or any of the
shareholder of Mezzanine Borrower except in the ordinary course of business and
on terms which are fully disclosed to Mezzanine Lender in advance and are no
less favorable to Mezzanine Borrower or such Affiliate than would be obtained in
a comparable arm's-length transaction with an unrelated third party.
5.2.7 ZONING. Mezzanine Borrower shall not cause Borrower to initiate
or consent to any zoning reclassification of any portion of any Individual
Property or seek any variance under any existing zoning ordinance or use or
permit the use of any portion of any Individual Property in any manner that
could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, without the
prior consent of Mezzanine Lender.
5.2.8 ASSETS. Mezzanine Borrower shall not purchase or own any assets
other than the Collateral.
5.2.9 DEBT. Mezzanine Borrower shall not create, incur or assume any
Indebtedness other than the Mezzanine Debt except to the extent expressly
permitted hereby.
5.2.10 NO JOINT ASSESSMENT. Mezzanine Borrower shall not suffer, permit
or initiate the joint assessment of any Individual Property with (a) any other
real property constituting a tax lot separate from such Individual Property, or
(b) any portion of such Individual Property which may be deemed to constitute
personal property, or any other procedure whereby the Lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such Individual Property.
5.2.11 PRINCIPAL PLACE OF BUSINESS. Mezzanine Borrower shall not change
its principal place of business set forth on the first page of this Agreement
without first giving Mezzanine Lender thirty (30) days prior written notice.
5.2.12 ERISA.
(a) Mezzanine Borrower shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Mezzanine Lender of any of its rights under the Mezzanine Note, this
Agreement or the other Mezzanine Loan Documents) to be a non-exempt (under a
statutory or administrative class exemption) prohibited transaction under ERISA.
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(b) Mezzanine Borrower further covenants and agrees to deliver to
Mezzanine Lender such certifications or other evidence from time to time
throughout the term of the Mezzanine Loan, as requested by Mezzanine Lender in
its sole discretion, that (A) Mezzanine Borrower is not and does not maintain an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, or a "governmental plan" within the meaning of Section 3(3) of
ERISA; (B) Mezzanine Borrower is not subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(C) one or more of the following circumstances is true:
(i) Equity interests in Mezzanine Borrower are publicly
offered securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Mezzanine Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R.Section 2510.3-101(f)(2); or
(iii) Mezzanine Borrower qualifies as an "operating company"
or a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e).
5.2.13 TRANSFERS. Without the prior written consent of Mezzanine
Lender, neither Mezzanine Borrower nor any other Person having an ownership or
beneficial interest, direct or indirect, in Mezzanine Borrower shall (a)
Transfer, or cause to be Transferred, the Properties or the Collateral or any
part thereof or any direct or indirect interests therein or in Borrower or
Mezzanine Borrower or permit or suffer the Properties or Collateral or any part
thereof or any direct or indirect interest therein or in the Borrower or
Mezzanine Borrower to be Transferred. "TRANSFER" shall mean any of the
following: (i) any direct or indirect sale, transfer, conveyance, mortgage,
pledge, encumbrance, grant, bargain or assignment of any Individual Property,
the Collateral, any part thereof or any interest therein (including any direct
or indirect ownership interest in Borrower, Mezzanine Borrower or any
shareholder of Borrower or Mezzanine Borrower), (ii) the further encumbrance,
alienation, granting of a Lien or granting any other interest in any Individual
Property, the Collateral or any parts thereof (including any ownership interest
in Borrower, Mezzanine Borrower, any shareholder of Borrower or Mezzanine
Borrower), whether voluntarily or involuntarily other than the Mortgages and
related assignments of leases and rents securing the Loan, (iii) an installment
sales agreement wherein Borrower or Mezzanine Borrower agrees to sell any
Individual Property or a portion thereof for a price to be paid in installments,
(iv) an agreement by Borrower leasing all or a substantial part of any
Individual Property for other than actual occupancy by a space tenant
thereunder, (v) a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower's right, title and interest in and to any Leases
or any Rents; or (vi) the entering into of any easement or other agreement
granting rights in or restricting the use or development of the Properties other
than Leases. Notwithstanding any provision contained in this Section 5.2.13,
Transfers of stock in Indemnitor Parent are permitted without the consent of the
Mezzanine Lender so long as (a) such Transfers are not and do not effect, a
"Default" or "Event of Default" under the Loan Documents (as such terms are
defined in the Loan Documents), (b) no such Transfers of stock in Indemnitor
Parent result in any single transaction or related series of transactions in a
Transfer of more than 49% of voting
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securities in Indemnitor and (c) no Persons or their Affiliates shall, by virtue
of the applicable Transfers, own, beneficially, directly or indirectly, 49% or
more of the voting securities in Indemnitor other than such Persons, if any,
who, together with their Affiliates own 49% or more of the voting securities of
Indemnitor Parent on the Closing Date.
5.2.14 LIMITATION ON SECURITIES ISSUANCES. Mezzanine Borrower shall not
issue any stock or other securities other than those that have been issued as of
the date hereof.
5.2.15 LIMITATIONS ON DISTRIBUTIONS. Following the occurrence and
during the continuance of an Event of Default, Mezzanine Borrower shall not make
any distributions to its stockholders.
5.2.16 OTHER LIMITATIONS. Prior to the payment in full of the Mezzanine
Debt, Mezzanine Borrower shall not, without the prior written consent of
Mezzanine Lender (which may be furnished or withheld at its sole and absolute
discretion), give its consent or approval to the distribution to the
stockholders of the Mezzanine Borrower of property other than cash.
5.2.17 CONTRACTUAL OBLIGATIONS. Other than the Mezzanine Loan
Documents, neither Mezzanine Borrower nor its assets shall be subject to any
contractual obligations, and Mezzanine Borrower shall not enter into any
agreement, instrument or undertaking by which it or its assets are bound, except
for such liabilities that are incidental to its activities as a stockholder of
Borrower. Mezzanine Borrower shall not, without Mezzanine Lender's consent,
permit Borrower to (a) terminate any Lease or Ground Lease or release any
obligor, tenant or guarantor of any Lease, (b) modify or amend the Loan
Documents or the Ground Leases, (c) request Lender to consent to any material
matter, circumstance, action, omission, condition, document or event where
Lender's consent is required under the Loan Documents, or (d) request Lender to
waive any material obligations under the Loan Documents or any material
conditions under the Loan Documents. Mezzanine Borrowers shall not request any
disbursement from the Reserves specified in Article VII of the Loan Agreement
except in accordance with the provisions of Article VII of the Loan Agreement
and must provide Mezzanine Lender with true and complete copies of all requests
for such disbursements and supporting documentation required under Article VII
of the Loan Agreement at the same time such request and documentation is given
to the Lender.
5.2.18 OTHER. Mezzanine Borrower shall not, without the consent of
Mezzanine Lender, permit Borrower to (a) request disbursement or release of
funds not in strict conformity with the Loan Documents, (b) terminate Leases or
guaranties of Leases or (c) release any tenant, guarantor or obligor from
liabilities with respect to the Leases or guaranties of Leases. Mezzanine
Borrower will not enter into, and will not permit Borrower to enter into or
become bound by, any agreement which would impair, impeach, preclude or postpone
distributions and dividends to Mezzanine Borrower by Borrower, other than the
Loan Documents.
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VI. INSURANCE
SECTION 6.1 INSURANCE.
(a) Mezzanine Borrower shall obtain and maintain, or cause to be
obtained and maintained, insurance for Borrower, Mezzanine Borrower and the
Properties providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and
the Personal Property, including loss caused by any type of windstorm or hail,
on the Improvements and the Personal Property, including (A) in an amount equal
to one hundred percent (100%) of the "Full Replacement Cost," which for purposes
of this Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of
depreciation, but the amount shall in no event be less than the outstanding
principal balance of the Loan and the Mezzanine Loan (to the extent the
Mezzanine Loan has not been defeased in accordance with the Agreement); (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions or to be written on a no
coinsurance form; (C) providing for no deductible in excess of Ten Thousand and
No/100 Dollars ($10,000) for all such insurance coverage, other than (I) with
respect to the Individual Property located in Davie, Florida, in which case the
deductible for loss due to windstorm or hail shall be such amount established by
applicable law and (II) with respect to the insurance covering any of the
Properties for which American Multi-Cinema, Inc. is the Master Tenant, in which
case the deductible shall not be in excess of One Hundred Thousand and No/100
Dollars ($100,000.00) provided that America Multi-Cinema, Inc. is the Master
Tenant; and (D) if any Individual Property is a legal non-conforming use,
coverage for loss due to operation of law in an amount equal to the Full
Replacement Cost, coverage for demolition costs, and coverage for increased
costs of construction. In addition, Mezzanine Borrower shall cause Borrower to
obtain or cause to be obtained: (x) if any portion of the Improvements is
currently or at any time in the future located in a federally designated
"special flood hazard area", flood hazard insurance in an amount equal to the
lesser of (1) the outstanding principal balance of the Note or (2) the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended or such greater amount as Lender or
Mezzanine Lender shall require; and (y) earthquake insurance in amounts and in
form and substance satisfactory to Lender or Mezzanine Lender in the event the
Individual Property is located in an area with a high degree of seismic activity
and a significant probable maximum loss as determined by Lender and Mezzanine
Lender.
(ii) business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above; (C) in an annual aggregate amount equal to all
rents or estimated gross revenues from the operation of the properties and
covering business interruption for a period of at least eighteen (18) months
from the date that the applicable Individual Property is repaired or replaced
and operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period; provided, however, with
respect to the insurance covering the Individual Property located in Davie,
Florida, such period shall be reduced to twelve (12) months; and (D) in an
amount equal to one hundred percent (100%) of the projected gross income from
each Individual
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Property for a period of eighteen (18) months from the date that such Individual
Property is repaired or replaced and operations are resumed; provided, however,
with respect to the insurance covering the Individual Property located in Davie,
Florida, such period shall be reduced to twelve (12) months. The amount of such
business income insurance shall be determined prior to the date hereof and at
least once each year thereafter based on Borrower's reasonable estimate of the
gross income from each Individual Property for the succeeding eighteen (18)
month period; provided, however, with respect to the insurance covering the
Individual Property located in Davie, Florida, such period shall be reduced to
twelve (12) months;
(iii) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements, and only
if the Individual Property coverage form does not otherwise apply, (A) owner's
contingent or protective liability insurance, otherwise known as Owner
Contractors Protective Liability covering claims not covered by or under the
terms or provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in subsection (i) above
written in a so-called builder's risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
subsection (i) above, (3) including permission to occupy the Individual
Property, and (4) with an agreed amount endorsement waiving co-insurance
provisions;
(iv) comprehensive boiler and machinery insurance, if steam
boilers or other pressure-fixed vessels are in operation, in amounts as shall be
reasonably required by Lender or Mezzanine Lender on terms consistent with the
commercial property insurance policy required under subsection (i) above;
(v) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Individual Property, such insurance (A) to be on the so called
"occurrence" form with a combined limit of not less than Two Million dollars
($2,000,000) in the aggregate and One Million Dollars ($1,000,000) per
occurrence; provided, however, with respect to the insurance covering any of the
Properties for which American Multi-Cinema, Inc. is the Master Tenant, American
Multi-Cinema, Inc. shall be permitted to self-insure up to $400,000 of such
commercial general liability insurance for so long as American Multi-Cinema,
Inc. remains as the Master Tenant of such Properties; (B) to continue at not
less than the aforesaid limit until required to be changed by Lender in writing
by reason of changed economic conditions making such protection inadequate; and
(C) to cover at least the following hazards: (1) premises an operations; (2)
products and completed operations on an "if any" basis; (3) independent
contractors; (4) blanket contractual liability for all legal contracts; and (5)
contractual liability covering the indemnities contained in Article 9 of the
Mortgages to the extent the same is available;
(vi) automobile liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, of One Million Dollars ($1,000,000);
(vii) worker's compensation and employee's liability insurance
subject to the worker's compensation laws of the applicable state;
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(viii) umbrella liability insurance in an amount not less than
Fifty Million Dollars ($50,000,000) per occurrence on terms consistent with the
commercial general liability insurance policy required under subsection (ii)
above including supplemental coverage for workers' compensation and automobile
liability, which umbrella liability coverage shall apply in excess of the
automobile liability coverage in clause (vi) above;
(ix) upon sixty (60) days' written notice, such other
reasonable insurance, such as sinkhole or land subsidence insurance, and in such
reasonable amounts as Lender or Mezzanine Lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the Individual Property located
in or around the region in which the Individual Property is located.
(b) All insurance provided for in Section 6.1(a) shall be obtained
under valid and enforceable policies (collectively, the "POLICIES" or in the
singular, the "POLICY"), and shall be subject to the approval of Mezzanine
Lender and Lender as to insurance companies, amounts, deductibles, loss payees
and insureds. The Policies shall be issued by financially sound and responsible
insurance companies authorized to do business in the State having a financial
strength rating of "A2" or better by the Rating Agencies rating the Securities
or as otherwise acceptable to such Rating Agency as evidenced by written
confirmation that such Policies will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with a Securitization. The Policies
described in Section 6.1 (other than those strictly limited to liability
protection) shall designate Lender as loss payee. Not less than ten (10) days
prior to the expiration dates of the Policies theretofore furnished to Mezzanine
Lender, Mezzanine Borrower shall cause certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Mezzanine Lender of payment of
the premiums due thereunder (the "INSURANCE PREMIUMS"), to be delivered by
Mezzanine Borrower to Mezzanine Lender.
(c) Any blanket insurance Policy shall specifically allocate to the
Individual Property the amount of coverage from time to time required hereunder
and shall otherwise provide the same protection as would a separate Policy
insuring only the Properties in compliance with the provisions of Section
6.1(a).
(d) If at any time Mezzanine Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Mezzanine Lender shall have the right, without notice to Mezzanine Borrower or
Borrower, to take such action as Mezzanine Lender deems necessary to protect its
interest in the Collateral and the Properties, including, without limitation,
the obtaining of such insurance coverage as Mezzanine Lender in its sole
discretion deems appropriate. All premiums incurred by Mezzanine Lender in
connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Mezzanine Borrower to Mezzanine Lender upon demand and,
until paid, shall be secured by the Pledge Agreement and shall bear interest at
the Default Rate.
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VII. RESERVE FUNDS
SECTION 7.1 [Intentionally Omitted]
SECTION 7.2 TAX AND INSURANCE ESCROW FUND.
7.2.1 TAX AND INSURANCE ESCROW FUND. Borrower shall cause Borrower to
timely make all required deposits into the Tax and Insurance Escrow Fund, when
required to do so.
SECTION 7.3 REPLACEMENTS AND REPLACEMENT RESERVE.
7.3.1 REPLACEMENT. Mezzanine Borrower shall cause Borrower to timely
make the Replacement Reserve Monthly Deposits and shall not permit Borrower to
use the Replacement Reserve Fund and the Replacement Reserve Account for any
purpose other than to pay for Replacements in accordance with the Loan
Agreement.
7.3.2 PERFORMANCE OF REPLACEMENTS. Mezzanine Borrower shall make, or
cause Borrower or the applicable Master Tenant to make, Replacements as and when
required, and in compliance with, the Loan Agreement.
7.3.3 INDEMNIFICATION. Mezzanine Borrower shall defend, indemnify and
hold Mezzanine Lender harmless from and against any and all actions, suits,
claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys fees and expenses)
arising from or in any way connected with the performance of the Replacements.
Mezzanine Borrower shall assign to Mezzanine Lender all rights and claims
Mezzanine Borrower may have against all persons or entities supplying labor or
materials in connection with the Replacements; provided, however, that Mezzanine
Lender may not pursue any such right or claim unless an Event of Default has
occurred and remains uncured.
SECTION 7.4 GROUND LEASE RESERVE FUND.
7.4.1 DEPOSITS TO GROUND LEASE FUND. Mezzanine Borrower shall cause
Borrower to timely make all deposits required to be deposited into the Ground
Lease Reserve Fund pursuant to the Loan Agreement and shall cause timely payment
of all Ground Rents. Mezzanine Borrower will cause Borrower to use the Ground
Lease Fund only for the purposes set forth in the Loan Agreement.
SECTION 7.5 LIQUIDITY RESERVE.
7.5.1 DEPOSITS TO LIQUIDITY RESERVE FUND. On the Closing Date,
Mezzanine Borrower shall deposit with Mezzanine Lender cash or a Letter of
Credit in an amount equal to the total Monthly Debt Service Payment Amounts for
six (6) months (the "MAXIMUM LIQUIDITY RESERVE AMOUNT"). Amounts or any Letter
of Credit so deposited shall hereinafter be referred to as the "LIQUIDITY
RESERVE FUND" and the account in which such amounts are held shall hereinafter
be referred to as the "LIQUIDITY RESERVE ACCOUNT". Upon the request to Mezzanine
Lender of Mezzanine Borrower in writing, not to occur more frequently than once
per month, Mezzanine Lender shall if no Event of Default then exists, release to
Mezzanine Borrower an
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amount equal to the Liquidity Reserve Release Amount if any Master Tenant is
rated "Baa3" or higher by the Rating Agencies on the date such funds are
requested and disbursed to Mezzanine Borrower (the "REQUIRED RATING"). If
subsequent to the release of any Liquidity Reserve Release Amount, any Rating
Agency lowers the rating of the applicable Master Tenant for which such release
was made below the Required Rating, then Mezzanine Borrower shall within two (2)
Business Days after request by Mezzanine Lender deposit with Mezzanine Lender
the Liquidity Reserve Release Amount applicable to such Master Tenant. The
"LIQUIDITY RESERVE RELEASE AMOUNT" shall mean the product of (a) the Maximum
Liquidity Reserve Amount multiplied by (b) a fraction, the numerator of which is
the Allocated Mezzanine Loan Amount for the applicable Individual Property that
is leased to a Master Tenant having the Required Rating and (ii) the denominator
of which is the original principal balance of the Mezzanine Loan. "ALLOCATED
MEZZANINE LOAN AMOUNT" shall mean for an Individual Property, the amount set
forth on Schedule I hereto. Notwithstanding any provision in this Agreement to
the contrary, Mezzanine Borrower shall not permit the amount of the Liquidity
Reserve Fund on deposit in the Liquidity Reserve Account to ever be less than
the Maximum Liquidity Reserve Amount, subject to permitted releases and required
deposits of the applicable Liquidity Reserve Release Amount.
7.5.2 APPLICATION OF LIQUIDITY RESERVE FUND. From and after the
occurrence, and during the continuance, of an Event of Default and during the
continuance thereof, Mezzanine Lender shall have the right, in Mezzanine
Lender's sole discretion, to apply the Liquidity Reserve Fund (or draw down the
related Letter of Credit and apply the proceeds of such draw) to (a) debt
service payments with respect to the Mezzanine Debt or any other amounts due and
payable to Mezzanine Lender under the Loan Documents or (b) tenant refurbishment
and improvement costs with respect to any Individual Property, leasing
commissions or other costs or expenses with respect to any Individual Property
that would otherwise be payable by Borrower. Any amount so applied by Mezzanine
Lender pursuant to the preceding sentence shall, without waiving the Event of
Default or otherwise affecting Mezzanine Lender's rights and remedies, be
replenished within the ensuing twelve (12) month period from (i) interest
earnings, if any, on any cash amounts on deposit in the Liquidity Reserve
Account, (ii) amounts that would otherwise be released to Mezzanine Borrower
from the Mezzanine Account pursuant to the terms and provisions of the Mezzanine
Cash Management Agreement or (iii) deposits with Mezzanine Lender of cash by
Mezzanine Borrower. If cash amounts in the Liquidity Reserve Fund exceed an
amount equal to the total Monthly Debt Service Payment Amounts for six (6)
months, Mezzanine Lender shall deposit such excess for distribution in
accordance with Section 3.3 of the Cash Management Agreement, provided that no
Event of Default has occurred and is continuing.
SECTION 7.6 [Intentionally Omitted]
SECTION 7.7 RESERVE FUNDS, GENERALLY.
7.7.1 Mezzanine Borrower grants to Mezzanine Lender a first priority
perfected security interest in each of the Reserve Funds and any and all monies
now or hereafter deposited in each Reserve Fund as additional security for
payment of the Mezzanine Debt. Until expended or applied in accordance herewith,
the Reserve Funds shall constitute additional security for the Mezzanine Debt.
Subject to the Mezzanine Cash Management Agreement, to the extent any excess
funds in the Tax and Insurance Escrow Fund, the Replacement Reserve Fund or the
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Ground Lease Reserve Fund are disbursed to Borrower for any purpose other than
the purposes specified in the applicable provisions of the Loan Agreement (or
for no purpose), Mezzanine Borrower will cause such funds to be promptly
distributed to Mezzanine Borrower and concurrently be paid to Mezzanine Lender
for application to the Mezzanine Debt.
7.7.2 Upon the occurrence of an Event of Default, Mezzanine Lender may,
in addition to any and all other rights and remedies available to Mezzanine
Lender, apply any sums then or thereafter present in any or all of the Reserve
Funds to the payment of the Mezzanine Debt in any order in its sole discretion.
7.7.3 The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Mezzanine Lender.
7.7.4 Mezzanine Borrower shall not, without obtaining the prior written
consent of Mezzanine Lender, further pledge, assign or grant any security
interest in any Reserve Fund or the monies deposited therein or permit any lien
or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1
Financing Statements, except those naming Mezzanine Lender as the secured party,
to be filed with respect thereto.
VIII. DEFAULTS
SECTION 8.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an event of default
hereunder (an "EVENT OF DEFAULT"):
(i) if any portion of the Mezzanine Debt is not paid when due;
(ii) if any of the Taxes or Other Charges are not paid prior
to delinquency;
(iii) if the Policies are not kept in full force and effect,
or if certified copies of the Policies (or, if such insurance is being provided
by a Master Tenant, certificates of insurance evidencing the Policies) are not
delivered to Mezzanine Lender upon request;
(iv) if Mezzanine Borrower transfers or encumbers or permits
the transfer or encumbrance of any portion of the Properties or the Collateral
without Mezzanine Lender's prior written consent or otherwise violates the
provisions of Section 5.2.13 hereof;
(v) if any representation or warranty made by Mezzanine
Borrower herein or in any other Mezzanine Loan Document, or in any report,
certificate, financial statement or other instrument, agreement or document
furnished to Mezzanine Lender shall have been false or misleading in any
material respect as of the date the representation or warranty was made (if the
report, certificate, financial statement or other item pertains to a Master
Tenant and was prepared by such Master Tenant, no Event of Default will occur by
virtue of same unless Mezzanine Borrower had knowledge that such item was
materially false or materially misleading);
(vi) if Mezzanine Borrower or any guarantor under any guaranty
issued in connection with the Mezzanine Loan shall make an assignment for the
benefit of creditors;
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(vii) if a receiver, liquidator or trustee shall be appointed
for Mezzanine Borrower or any guarantor under any guarantee issued in connection
with the Mezzanine Loan or if Mezzanine Borrower or such guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Mezzanine Borrower or such guarantor, or if any proceeding for the
dissolution or liquidation of Mezzanine Borrower or such guarantor shall be
instituted; provided, however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Mezzanine Borrower or such
guarantor, upon the same not being discharged, stayed or dismissed within ninety
(90) days;
(viii) if Mezzanine Borrower attempts to assign its rights
under this Agreement or any of the other Mezzanine Loan Documents or any
interest herein or therein in contravention of the Mezzanine Loan Documents;
(ix) if Mezzanine Borrower breaches any of its respective
negative covenants contained in Article V or any covenant contained in Section
4.1.29 hereof;
(x) if Mezzanine Borrower fails to provide Mezzanine Lender
with any financial information required to be provided pursuant to Section 5.1.9
within ten (10) Business Days of notice from Mezzanine Lender to Mezzanine
Borrower of its failure to provide such information on the date such information
is required to be delivered pursuant to Section 5.1.9;
(xi) with respect to any term, covenant or provision set forth
herein which specifically contains a notice requirement or grace period, if
Mezzanine Borrower shall be in default under such term, covenant or condition
after the giving of such notice or the expiration of such grace period;
(xii) if any of the factual assumptions contained in the
Insolvency Opinion, or in any Additional Insolvency Opinion is or shall become
untrue in any material respect;
(xiii) if Mezzanine Borrower shall continue to be in Default
under any of the other terms, covenants or conditions of this Agreement not
specified in subsections (i) to (xii) above, for ten (10) days after notice to
Mezzanine Borrower from Mezzanine Lender, in the case of any Default which can
be cured by the payment of a sum of money, or for thirty (30) days after notice
from Mezzanine Lender in the case of any other Default; provided, however, that
if such non-monetary Default is susceptible of cure but cannot reasonably be
cured within such 30-day period and provided further that Mezzanine Borrower
shall have commenced to cure such Default within such 30-day period and
thereafter diligently and expeditiously proceeds to cure the same, such 30-day
period shall be extended for such time as is reasonably necessary for Mezzanine
Borrower in the exercise of due diligence to cure such Default, such additional
period not to exceed sixty (60) days;
(xiv) if there shall be default under any of the other
Mezzanine Loan Documents beyond any applicable cure periods contained in such
documents, whether as to Mezzanine Borrower or any Collateral, or if any other
such event shall occur or condition shall exist, if the effect of such event or
condition is to accelerate the maturity of any portion of the
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Mezzanine Debt or to permit Mezzanine Lender to accelerate the maturity of all
or any portion of the Mezzanine Debt;
(xv) an Event of Default (as defined in the Loan Agreement)
occurs and is continuing under the Loan Agreement;
(xvi) if the amount of the Liquidity Reserve Fund on deposit
in the Liquidity Reserve Account is less than the amount required pursuant to
Section 7.5.1; or
(xvii) the occurrence of an Event of Default specified
elsewhere in this Agreement.
(b) Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter, in addition to any other rights or remedies available to it pursuant
to this Agreement and the other Mezzanine Loan Documents or at law or in equity,
Mezzanine Lender may take such action, without notice or demand, that Mezzanine
Lender deems advisable to protect and enforce its rights against Mezzanine
Borrower and in and to all or any Collateral, including, without limitation,
declaring the Mezzanine Debt to be immediately due and payable, and Mezzanine
Lender may enforce or avail itself of any or all rights or remedies provided in
the Mezzanine Loan Documents and may exercise all the rights and remedies of a
secured party under the Uniform Commercial Code, as adopted and enacted by the
State or States where any Collateral is located against Mezzanine Borrower and
the Collateral, including, without limitation, all rights or remedies available
at law or in equity; and upon any Event of Default described in clauses (vi),
(vii) or (viii) above, the Mezzanine Debt and all other obligations of Mezzanine
Borrower hereunder and under the other Mezzanine Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Mezzanine Borrower hereby expressly waives any such notice or demand,
anything contained herein or in any other Mezzanine Loan Document to the
contrary notwithstanding.
SECTION 8.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, all or any one or more
of the rights, powers, privileges and other remedies available to Mezzanine
Lender against Mezzanine Borrower under this Agreement or any of the other
Mezzanine Loan Documents executed and delivered by, or applicable to, Mezzanine
Borrower or at law or in equity may be exercised by Mezzanine Lender at any time
and from time to time, whether or not all or any of the Mezzanine Debt shall be
declared due and payable, and whether or not Mezzanine Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Mezzanine Loan Documents with respect to
the Collateral. Any such actions taken by Mezzanine Lender shall be cumulative
and concurrent and may be pursued independently, singularly, successively,
together or otherwise, at such time and in such order as Mezzanine 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
Mezzanine Lender permitted by law, equity or contract or as set forth herein or
in the other Mezzanine Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing (i)
Mezzanine Lender is not subject to any "one action" or "election of
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remedies" law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Mezzanine Lender shall remain in full force and effect
until Mezzanine Lender has exhausted all of its remedies against the Collateral
and the Collateral has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Mezzanine Debt or the Mezzanine Debt has been paid in full.
(b) Mezzanine Lender may seek satisfaction out of all of the Collateral
or any part thereof, in its absolute discretion in respect of the Mezzanine
Debt, including, without limitation, the following circumstances: (i) in the
event Mezzanine Borrower defaults beyond any applicable grace period in the
payment of one or more scheduled payments of principal and interest, Mezzanine
Lender may foreclose upon the Collateral to recover such delinquent payments, or
(ii) in the event Mezzanine Lender elects to accelerate less than the entire
outstanding principal balance of the Mezzanine Loan, Mezzanine Lender may
foreclose the Collateral to recover so much of the principal balance of the
Mezzanine Loan as Mezzanine Lender may accelerate and such other sums secured by
the Collateral as Mezzanine Lender may elect. Notwithstanding one or more
partial foreclosures, the Collateral shall remain subject to the Pledge
Agreement to secure payment of sums secured by the Mezzanine Loan Documents and
not previously recovered.
(c) Lender shall have the right from time to time to sever the
Mezzanine Note and the other Mezzanine Loan Documents into one or more separate
notes, pledge agreements and other security documents (the "SEVERED LOAN
DOCUMENTS") in such denominations as Mezzanine Lender shall determine in its
sole discretion for purposes of evidencing and enforcing its rights and remedies
provided hereunder. Mezzanine Borrower shall execute and deliver to Mezzanine
Lender from time to time, promptly after the request of Lender, a severance
agreement and such other documents as Mezzanine Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Mezzanine Lender. Mezzanine Borrower hereby
absolutely and irrevocably appoints Mezzanine Lender as its true and lawful
attorney, coupled with an interest, in its name and stead to make and execute
all documents necessary or desirable to effect such severance, Mezzanine
Borrower ratifying all that its said attorney shall do by virtue thereof;
provided, however, Mezzanine Lender shall not make or execute any such documents
under such power until three (3) days after notice has been given to Mezzanine
Borrower by Mezzanine Lender of Mezzanine Lender's intent to exercise its rights
under such power. Mezzanine Borrower shall not be obligated to pay any costs or
expenses incurred in connection with the preparation, execution, recording or
filing of the Severed Loan Documents and the Severed Loan Documents shall not
contain any representations, warranties or covenants not contained in the
Mezzanine Loan Documents and any such representations and warranties contained
therein will be given by Mezzanine Borrower only as of the Closing Date.
(d) Any amounts recovered from the Collateral for the Mezzanine Loan
after an Event of Default may be applied by Mezzanine Lender toward the payment
of any interest and/or principal of the Mezzanine Loan and/or any other amounts
due under the Mezzanine Loan Documents in such order, priority and proportions
as Mezzanine Lender in its sole discretion shall determine.
(e) After the occurrence and during the continuance, of an Event of
Default, any amounts from time to time in the Mezzanine Account shall, in
Mezzanine Lender's sole
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discretion, be paid to Mezzanine Lender and all Net Cash Flow not required to be
paid to, or for the account of, Lender shall be paid to Mezzanine Lender and
Mezzanine Borrower shall cause Borrower to make the requisite distributions to
Mezzanine Borrower to cause such payments to be made to Mezzanine Lender and
Mezzanine Borrower hereby authorizes and directs Borrower to make such
distributions directly to Mezzanine Lender, subject to the Cash Management
Agreement and Mezzanine Cash Management Agreement.
SECTION 8.3 REMEDIES CUMULATIVE; WAIVERS.
The rights, powers and remedies of Mezzanine Lender under this
Agreement shall be cumulative and not exclusive of any other right, power or
remedy which Mezzanine Lender may have against Mezzanine Borrower pursuant to
this Agreement or the other Mezzanine Loan Documents, or existing at law or in
equity or otherwise. Mezzanine Lender's rights, powers and remedies may be
pursued singularly, concurrently or otherwise, at such time and in such order as
Mezzanine Lender may determine in Mezzanine Lender's sole discretion. No delay
or omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Mezzanine Borrower shall not be construed to be
a waiver of any subsequent Default or Event of Default by Mezzanine Borrower or
to impair any remedy, right or power consequent thereon.
No provision of the Mezzanine Loan Documents shall operate to place any
obligation or liability for the control, care, management or repair of the
Properties or collateral upon Mezzanine Lender, nor shall it operate to make
Mezzanine Lender responsible or liable for any waste committed on the Properties
by the tenants or any other Person, or for any dangerous or defective condition
of the Properties, or for any negligence in the management, upkeep, repair or
control of the Properties resulting in loss or injury or death to any tenant,
licensee, employee or stranger; provided, however, Mezzanine Lender shall be
liable and responsible for the fraud, gross negligence, illegal acts and willful
misconduct of Mezzanine Lender and its agents, employees or contractors.
Mezzanine Lender shall not be liable for any acts or omissions of any successor
or permitted assignee of Mezzanine Lender.
SECTION 8.4 LIMITATION ON MEZZANINE LENDER'S RESPONSIBILITY.
No provision of the Mezzanine Loan Documents shall operate to place any
obligation or liability for the control, care, management or repair of the
Properties or Collateral upon Mezzanine Lender, nor shall it operate to make
Mezzanine Lender responsible or liable for any waste committed on the Properties
by the tenants or any other Person, or for any dangerous or defective condition
of the Properties, or for any negligence in the management, upkeep, repair or
control of the Properties resulting in loss or injury or death to any tenant,
licensee, employee or stranger; provided, however, Mezzanine Lender shall be
liable and responsible for the fraud, gross negligence, illegal acts and willful
misconduct of Mezzanine Lender and its agents, employees or contractors.
Mezzanine Lender shall not be liable for any acts or omissions of any successor
or permitted assignee of Mezzanine Lender.
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IX. MISCELLANEOUS
SECTION 9.1 SURVIVAL.
This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Mezzanine Lender of the Mezzanine Loan and the execution
and delivery to Mezzanine Lender of the Mezzanine Note, and shall continue in
full force and effect so long as all or any of the Mezzanine Debt is outstanding
and unpaid unless a longer period is expressly set forth herein or in the other
Mezzanine Loan Documents.
SECTION 9.2 SUCCESSORS AND ASSIGNS.
All covenants, promises and agreements in this Agreement, by or on
behalf of Mezzanine Borrower, shall inure to the benefit of the legal
representatives, successors and assigns of Mezzanine Lender; except that the
Mezzanine Borrower may not Transfer any of its rights under this Agreement, the
Mezzanine Note or any other Mezzanine Loan Document without the prior written
consent of Mezzanine Lender except as otherwise specifically provided herein.
Mezzanine Borrower acknowledges and agrees that Mezzanine Lender may at any
time, without consent of the Mezzanine Borrower, Transfer the Mezzanine Loan
(including all or any of the rights under the Mezzanine Loan Documents) or
Transfer or grant participations in the Mezzanine Loan (including all rights
under the Mezzanine Loan Documents) to other Persons (each, a "LOAN
TRANSFEREE"), and Mezzanine Borrower shall reasonably cooperate in all respects
in order to help effect such transfer but shall not be required to incur any
third-party costs in connection therewith, and provided, further, that in the
event Mezzanine Lender Transfers the Mezzanine Loan to more than one Person, all
such Persons shall determine an agent to represent such Persons in respect of
this Agreement and the other Mezzanine Loan Documents. Subject to the foregoing,
Mezzanine Borrower acknowledges and agrees that upon its receipt of notice of
such Transfer each Loan Transferee may exercise all rights of payment (including
without limitation rights of set-off) with respect to the Mezzanine Loan as
fully as if such Transferee were the initial Mezzanine Lender or the direct
holder thereof, as applicable, except that all participants in the Mezzanine
Loan may only take such actions through the Mezzanine Lender.
SECTION 9.3 MEZZANINE LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Mezzanine Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Mezzanine Lender, the decision of Mezzanine Lender to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Mezzanine Lender and shall be final and conclusive.
SECTION 9.4 GOVERNING LAW.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE
MEZZANINE LOAN WAS MADE BY MEZZANINE LENDER AND ACCEPTED BY MEZZANINE BORROWER
IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE MEZZANINE NOTE DELIVERED
PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
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PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, MEZZANINE BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE MEZZANINE NOTE, AND THIS
AGREEMENT AND THE MEZZANINE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST MEZZANINE LENDER OR
MEZZANINE BORROWER ARISING OUT OF OR RELATING TO THIS MEZZANINE AGREEMENT MAY AT
MEZZANINE LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX
XXXX XX XXX XXXX, XXXXXX XX XXX XXXX, PURSUANT TO SECTION 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND MEZZANINE BORROWER WAIVES ANY OBJECTIONS WHICH IT
MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND MEZZANINE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. MEZZANINE
BORROWER DOES HEREBY DESIGNATE AND APPOINT:
CT CORPORATION SYSTEM
0000 XXXXXXXX
XXX XXXX, XXX XXXX 00000
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO MEZZANINE BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON MEZZANINE BORROWER IN
ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. MEZZANINE BORROWER
(I) SHALL GIVE PROMPT NOTICE TO MEZZANINE LENDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE
A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND
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OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS),
AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
SECTION 9.5 MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination or waiver
of any provision of this Agreement, or of the Mezzanine Note, or of any other
Mezzanine Loan Document, nor consent to any departure by Mezzanine 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 Mezzanine Borrower, shall entitle Mezzanine Borrower to any other or
future notice or demand in the same, similar or other circumstances.
SECTION 9.6 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Mezzanine 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
Mezzanine Note or under any other Mezzanine 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 Mezzanine Note or any other
Mezzanine Loan Document, Mezzanine 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 Mezzanine Note or the other Mezzanine Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
SECTION 9.7 NOTICES.
All notices, consents, approvals and requests required or permitted
hereunder or under any other Mezzanine Loan Document shall be given in writing
and shall be effective for all purposes if (a) hand delivered; (b) sent by (i)
certified or registered United States mail, postage prepaid, return receipt
requested or (ii) expedited prepaid delivery service, either commercial or
United States Postal Service, with proof of attempted delivery, or (c) sent by
telecopier (with advice by telephone to recipient that a telecopy notice is
forthcoming and a machine-generated confirmation of successful transmission),
addressed as follows (or at such other address and Person as shall be designated
from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this Section):
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If to Mezzanine Lender: iStar Funding, LLC
c/o iStar Financial Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to: iStar Financial Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
iStar Financial Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx, Esq., General
Counsel
Facsimile No.: (000) 000-0000
Telephone No. (000) 000-0000
Xxxxxx Xxxxxx Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No. (000) 000-0000
If to Mezzanine Borrower: Megaplex Holdings, Inc.
00 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No. (000) 000-0000
Telephone No. (000) 000-0000
With a copy to: Entertainment Properties Trust
00 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No. (000) 000-0000
Telephone No. (000) 000-0000
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery
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on a Business Day; in the case of expedited prepaid delivery, upon the first
attempted delivery on a Business Day; or in the case of telecopy, upon sender's
receipt of a machine-generated confirmation of successful transmission after
advice by telephone to recipient that a telecopy notice is forthcoming.
SECTION 9.8 TRIAL BY JURY.
MEZZANINE BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY MEZZANINE BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. MEZZANINE LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY MEZZANINE
BORROWER.
SECTION 9.9 HEADINGS.
The Article and/or Section headings and the Table of Contents in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 9.10 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 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 9.11 PREFERENCES.
Mezzanine Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Mezzanine Borrower to any portion
of the obligations of Mezzanine Borrower hereunder. To the extent Mezzanine
Borrower makes a payment or payments to Mezzanine Lender, which payment or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
received, the obligations hereunder or part thereof intended to be satisfied
shall be revived and continue in full force and effect, as if such payment or
proceeds had not been received by Mezzanine Lender.
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SECTION 9.12 WAIVER OF NOTICE.
Mezzanine Borrower shall not be entitled to any notices of any nature
whatsoever from Mezzanine Lender except with respect to matters for which this
Agreement or the other Mezzanine Loan Documents specifically and expressly
provide for the giving of notice by Mezzanine Lender to Mezzanine Borrower and
except with respect to matters for which Mezzanine Borrower is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice.
Mezzanine Borrower hereby expressly waives the right to receive any notice from
Mezzanine Lender with respect to any matter for which this Agreement or the
other Mezzanine Loan Documents do not specifically and expressly provide for the
giving of notice by Mezzanine Lender to Mezzanine Borrower.
SECTION 9.13 REMEDIES OF MEZZANINE BORROWER.
In the event that a claim or adjudication is made that Mezzanine Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where by law or under this Agreement or the other Mezzanine Loan Documents,
Mezzanine Lender or such agent, as the case may be, has an obligation to act
reasonably or promptly, Mezzanine Borrower agrees that neither Mezzanine Lender
nor its agents shall be liable for any monetary damages, and Mezzanine
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 Mezzanine Lender has acted reasonably
shall be determined by an action seeking declaratory judgment.
SECTION 9.14 EXPENSES; INDEMNITY.
(a) Mezzanine Borrower covenants and agrees to pay or, if Mezzanine
Borrower fails to pay, to reimburse, Mezzanine Lender upon receipt of written
notice from Mezzanine Lender for all reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) incurred by Mezzanine Lender in
connection with (i) the preparation, negotiation, execution and delivery of this
Agreement and the other Mezzanine Loan Documents and the consummation of the
transactions contemplated hereby and thereby and all the costs of furnishing all
opinions by counsel for Mezzanine Borrower (including without limitation any
opinions requested by Mezzanine Lender as to any legal matters arising under
this Agreement or the other Mezzanine Loan Documents with respect to the
Collateral); (ii) Mezzanine Borrower's ongoing performance of and compliance
with Mezzanine Borrower's respective agreements and covenants contained in this
Agreement and the other Mezzanine Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (iii) Mezzanine
Lender's ongoing performance and compliance with all agreements and conditions
contained in this Agreement and the other Mezzanine Loan Documents on its part
to be performed or complied with after the Closing Date; (iv) the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications to this Agreement and the other Mezzanine Loan
Documents and any other documents or matters requested by Mezzanine Lender; (v)
securing Mezzanine Borrower's compliance with any requests made pursuant to the
provisions of this Agreement; (vi) the filing and recording fees and expenses,
title insurance and reasonable fees and expenses of counsel for providing to
Mezzanine Lender all required legal
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opinions, and other similar expenses incurred in creating and perfecting the
Liens in favor of Mezzanine Lender pursuant to this Agreement and the other
Mezzanine Loan Documents; (vii) enforcing or preserving any rights, in response
to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Mezzanine Borrower, this Agreement, the other Mezzanine Loan Documents, the
Collateral, or any other security given for the Mezzanine Loan; (viii) curing
defaults under the Loan Documents or satisfying obligations under the
Intercreditor Agreement with respect to the cure or waiver of defaults under the
Loan Documents; and (ix) enforcing any obligations of or collecting any payments
due from Mezzanine Borrower under this Agreement, the other Mezzanine Loan
Documents or with respect to the Collateral or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings; provided, however, that Mezzanine Borrower shall not be liable for
the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of
Mezzanine Lender. Any cost and expenses due and payable to Mezzanine Lender may
be paid from any amounts in the Mezzanine Account.
(b) Mezzanine Borrower shall indemnify, defend and hold harmless
Mezzanine Lender from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for Mezzanine
Lender in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not Mezzanine Lender shall be
designated a party thereto), that may be imposed on, incurred by, or asserted
against Mezzanine Lender in any manner relating to or arising out of (i) any
breach by Mezzanine Borrower of its obligations under, or any material
misrepresentation by Mezzanine Borrower contained in, this Agreement or the
other Mezzanine Loan Documents, (ii) any breach by Borrower of its obligations
under, or any material misrepresentation by Borrower contained in, the Loan
Documents, or (iii) the use or intended use of the proceeds of the Mezzanine
Loan (collectively, the "INDEMNIFIED LIABILITIES"); provided, however, that
Mezzanine Borrower shall not have any obligation to Mezzanine Lender hereunder
to the extent that such Indemnified Liabilities arise from the gross negligence,
illegal acts, fraud or willful misconduct of Mezzanine Lender. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, Mezzanine Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Mezzanine Lender.
SECTION 9.15 SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as a part
of this Agreement with the same effect as if set forth in the body hereof.
SECTION 9.16 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Mezzanine Lender's interest in and to this Agreement,
the Mezzanine Note and the other Mezzanine Loan Documents shall take the same
free and clear of all offsets, counterclaims or defenses which are unrelated to
such documents which Mezzanine Borrower
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may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Mezzanine Borrower in
any action or proceeding brought by any such assignee upon such documents and
any such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Mezzanine
Borrower.
SECTION 9.17 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Mezzanine Borrower and Mezzanine Lender intend that the
relationships created hereunder and under the other Mezzanine Loan Documents be
solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Mezzanine Borrower and Mezzanine Lender.
(b) This Agreement and the other Mezzanine Loan Documents are solely
for the benefit of Mezzanine Lender and Mezzanine Borrower and nothing contained
in this Agreement or the other Mezzanine Loan Documents shall be deemed to
confer upon anyone other than Mezzanine Lender and Mezzanine Borrower any right
to insist upon or to enforce the performance or observance of any of the
obligations contained herein or therein. All conditions to the obligations of
Mezzanine Lender to make the Mezzanine Loan hereunder are imposed solely and
exclusively for the benefit of Mezzanine Lender and no other Person shall have
standing to require satisfaction of such conditions in accordance with their
terms or be entitled to assume that Mezzanine Lender will refuse to make the
Mezzanine Loan in the absence of strict compliance with any or all thereof and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Mezzanine Lender if, in Mezzanine Lender's sole discretion, Mezzanine Lender
deems it advisable or desirable to do so.
SECTION 9.18 PUBLICITY.
All news releases, publicity or advertising by Mezzanine Borrower or
their Affiliates through any media intended to reach the general public which
refers to the Mezzanine Loan Documents or the financing evidenced by the
Mezzanine Loan Documents, to Mezzanine Lender, or any of their Affiliates shall
be subject to the prior written approval of Mezzanine Lender, except as
otherwise required by applicable law.
SECTION 9.19 WAIVER OF COUNTERCLAIM.
Mezzanine Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Mezzanine Lender or its agents.
SECTION 9.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this Agreement
and any of the other Mezzanine Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of
the Mezzanine Loan Documents and that such Mezzanine Loan Documents shall not be
subject to the principle of construing their meaning against the
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party which drafted same. Mezzanine Borrower acknowledges that, with respect to
the Mezzanine Loan, Mezzanine Borrower shall rely solely on its own judgment and
advisors in entering into the Mezzanine Loan without relying in any manner on
any statements, representations or recommendations of Mezzanine Lender or any
parent, subsidiary or Affiliate of Mezzanine Lender. Mezzanine Lender shall not
be subject to any limitation whatsoever in the exercise of any rights or
remedies available to it under any of the Mezzanine Loan Documents or any other
agreements or instruments which govern the Mezzanine Loan by virtue of the
ownership by it or any parent, subsidiary or Affiliate of Mezzanine Lender of
any equity interest any of them may acquire in Mezzanine Borrower, and Mezzanine
Borrower hereby irrevocably waives the right to raise any defense or take any
action on the basis of the foregoing with respect to Mezzanine Lender's exercise
of any such rights or remedies. Mezzanine Borrower acknowledges that Mezzanine
Lender engages in the business of real estate financings and other real estate
transactions and investments which may be viewed as adverse to or competitive
with the business of Mezzanine Borrower or its Affiliates.
SECTION 9.21 BROKERS AND FINANCIAL ADVISORS.
Mezzanine Borrower hereby represents that it has dealt with no
financial advisors, brokers, underwriters, placement agents, agents or finders
in connection with the transactions contemplated by this Agreement. Mezzanine
Borrower hereby agrees to indemnify, defend and hold Mezzanine Lender harmless
from and against any and all claims, liabilities, costs and expenses of any kind
(including Mezzanine Lender's attorneys' fees and expenses) in any way relating
to or arising from a claim by any Person that such Person acted on behalf of
Mezzanine Borrower or Mezzanine Lender in connection with the transactions
contemplated herein. The provisions of this Section 9.21 shall survive the
expiration and termination of this Agreement and the payment of the Mezzanine
Debt.
SECTION 9.22 PRIOR AGREEMENTS.
This Agreement and the other Mezzanine Loan Documents contain the
entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, including, without limitation,
any term sheet or commitment letter between Mezzanine Borrower and Mezzanine
Lender are superseded by the terms of this Agreement and the other Mezzanine
Loan Documents.
SECTION 9.23 EXCULPATION.
Subject to the qualifications below, Mezzanine Lender shall not enforce
the liability and obligation of Mezzanine Borrower to perform and observe the
obligations contained in the Mezzanine Note, this Agreement, the Pledge
Agreement or the other Mezzanine Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Mezzanine Borrower, except that
Mezzanine Lender may bring a foreclosure action, an action for specific
performance or any other appropriate action or proceeding to enable Mezzanine
Lender to enforce and realize upon its interest under the Mezzanine Note, this
Agreement, the Pledge Agreement and the other Loan Documents, or in the
Collateral or any other collateral given to Mezzanine Lender pursuant to the
Mezzanine Loan Documents; provided, however,
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that, except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Mezzanine Borrower only to the extent of
Mezzanine Borrower's interest in the Collateral and in any other collateral
given to Mezzanine Lender, and Mezzanine Lender, by accepting the Mezzanine
Note, this Agreement, the Pledge Agreement and the other Mezzanine Loan
Documents, agrees that it shall not xxx for, seek or demand any deficiency
judgment against Mezzanine Borrower in any such action or proceeding under or by
reason of or under or in connection with the Mezzanine Note, this Agreement, the
Pledge Agreement or the other Mezzanine Loan Documents. The provisions of this
Section shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Mezzanine Loan Documents; (b)
impair the right of Mezzanine Lender to name Mezzanine Borrower as a party
defendant in any action or suit for foreclosure and sale under the Pledge
Agreement; (c) affect the validity or enforceability of or any guaranty made in
connection with the Mezzanine Loan or any of the rights and remedies of
Mezzanine Lender thereunder; (d) impair the right of Mezzanine Lender to obtain
the appointment of a receiver; (e) constitute a prohibition against Mezzanine
Lender to seek such relief against Mezzanine Borrower as may be necessary to
fully realize the security granted by the Pledge Agreement or to commence any
other appropriate action or proceeding in order for Mezzanine Lender to exercise
its remedies against the Collateral; or (g) constitute a waiver of the right of
Mezzanine Lender to enforce the liability and obligation of Mezzanine Borrower,
by money judgment or otherwise, to the extent of any loss, damage, cost,
expense, liability, claim or other obligation incurred by Mezzanine Lender
(including attorneys' fees and costs reasonably incurred) arising out of or in
connection with the following:
(i) fraud or intentional misrepresentation by Borrower or
Mezzanine Borrower or any guarantor in connection with the Loan or Mezzanine
Loan;
(ii) the gross negligence or willful misconduct of Borrower or
Mezzanine Borrower;
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity Agreement concerning
environmental laws, hazardous substances and asbestos and any indemnification of
Mezzanine Lender with respect thereto in such document;
(iv) the removal or disposal of all or any portion of the
Collateral after an Event of Default;
(v) any security deposits, advance deposits or any other
deposits collected with respect to the Properties which are not delivered to
Lender or Mezzanine Lender upon a foreclosure or action in lieu thereof;
(vi) the removal or disposal of any portion of the Properties,
other than by Lender or Mezzanine Lender, after an Event of Default;
(vii) The misapplication or conversion by Borrower or
Mezzanine Borrower of (A) any insurance proceeds paid by reason of any loss,
damage or destruction of the Properties,
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(B) any awards or other amounts received in connection with the condemnation of
all or any portion of the Properties, or (C) any Rents following an Event of
Default;
(viii) failure to pay charges for labor or materials or other
charges that can create liens on any of the Properties; and
(ix) in the event of: (A) Mezzanine Borrower files a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; or (B) any Person files an involuntary petition against
Mezzanine Borrower under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law in which Mezzanine Borrower or any Affiliate of
Mezzanine Borrower colludes with, or otherwise assists, such Person, or (C)
Mezzanine Borrower files an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or solicits or causes to be solicited petitioning creditors for any involuntary
petition from any Person; or (D) Mezzanine Borrower consents to or acquiesces in
or joins in an application for the appointment of a custodian, receiver,
trustee, or examiner for Mezzanine Borrower or any portion of the Property; or
(E) Mezzanine Borrower makes an assignment for the benefit of creditors, or
admits, in writing or in any legal proceeding, its insolvency or inability to
pay its debts as they become due.
Notwithstanding anything to the contrary in this Agreement, the
Mezzanine Note or any of the Mezzanine Loan Documents, (A) Mezzanine Lender
shall not be deemed to have waived any right which Mezzanine Lender may have
under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Mezzanine Debt
secured by the Pledge Agreement or to require that all Collateral shall continue
to secure all of the Mezzanine Debt owing to Mezzanine Lender in accordance with
the Mezzanine Loan Documents, and (B) the Mezzanine Debt shall be fully recourse
to Mezzanine Borrower in the event that: (i) the first full monthly payment of
principal and interest under the Mezzanine Note is not paid when due; (ii)
Borrower or Mezzanine Borrower fails to provide financial information, fails to
maintain its status as a Single Purpose Entity or fails to appoint a third party
property manager upon the request of Mezzanine Lender as permitted hereunder,
each as required by, and in accordance with the terms and provisions of this
Mezzanine Loan Agreement, the Pledge Agreement and the other Mezzanine Loan
Documents or Loan Documents; (iii) Mezzanine Borrower fails to obtain Mezzanine
Lender's prior written consent to any subordinate financing or other voluntary
Lien encumbering any Collateral or any Individual Property other than the
Mortgages; or (iv) Mezzanine Borrower fails to obtain Mezzanine Lender's prior
written consent to any assignment, transfer, or conveyance of any Collateral or
any Individual Property or any interest therein as required by the Pledge
Agreement or hereunder.
SECTION 9.24 SATISFACTION OF OBLIGATIONS BY BORROWER OR MASTER
TENANTS.
Mezzanine Borrower may satisfy any of its obligations pursuant to the
terms and provisions of this Agreement and the other Mezzanine Loan Documents by
causing Borrower or the applicable Master Tenant to timely satisfy such
obligation.
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SECTION 9.25 SERVICER.
At the option of Mezzanine Lender, the Mezzanine Loan may be serviced
by a servicer/trustee (the "SERVICER") selected by Mezzanine Lender and
Mezzanine Lender may delegate all or any portion of its responsibilities under
this Agreement and the other Mezzanine Loan Documents to the Servicer pursuant
to a servicing agreement (the "SERVICING AGREEMENT") between Mezzanine Lender
and Servicer. Mezzanine Borrower shall be responsible for any reasonable set-up
fees or any other initial costs relating to or arising under the Servicing
Agreement, provided, however, that Mezzanine Borrower shall not be responsible
for payment of the monthly servicing fee due to the Servicer under the Servicing
Agreement.
SECTION 9.26 SET-OFF.
In addition to any rights and remedies of Mezzanine Lender provided by
law, Mezzanine Lender shall have the right, without prior notice to Mezzanine
Borrower, any such notice being expressly waived by Mezzanine Borrower to the
extent permitted by applicable law, upon and during the continuance of any Event
of Default to set-off and apply against any indebtedness, whether matured or
unmatured, of Mezzanine Borrower to Mezzanine Lender, any amount owing from
Mezzanine Lender to Mezzanine Borrower, and the aforesaid right of set-off may
be exercised by Mezzanine Lender against Mezzanine Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of Mezzanine
Borrower, or against anyone else claiming through or against Mezzanine Borrower
or such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Mezzanine Lender prior to such Event of Default.
SECTION 9.27 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
SECTION 9.28 REINSTATEMENT.
This Agreement and each other Mezzanine Loan Document shall continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Mezzanine Debt or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by the Mezzanine Borrower, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Mezzanine Debt shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
SECTION 9.29 COOPERATION.
Mezzanine Borrower acknowledges that Lender, Mezzanine Lender and their
successors and assigns may (a) sell or otherwise Transfer the Note, the Loan
Agreement and the other Loan
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Documents and/or the Mezzanine Note, the Mezzanine Loan and the other Mezzanine
Loan Documents to one or more investors as a whole loan, (b) participate the
Loan or the Mezzanine Loan to one or more investors, (c) deposit the Loan or the
Mezzanine Loan with a trust, which trust may sell certificates to investors
evidencing an ownership interest in the trust assets, or (d) otherwise, sell or
otherwise Transfer the Loan or the Mezzanine Loan or any interest therein to
investors (the transactions, or any combination thereof, referred to in clauses
(a) through (d) are hereinafter each referred to as a "LOAN TRANSFER").
Mezzanine Borrower shall cooperate with Mezzanine Lender, and, if requested by
Mezzanine Lender, Lender, in effecting any such Loan Transfer and shall
cooperate to implement all requirements imposed by any Rating Agency involved in
any Loan Transfer, with regard to the Mezzanine Loan, and, if requested by
Mezzanine Lender, the Loan Documents, including the execution of amendments to
the Loan Documents, the Mezzanine Loan Documents and organizational documents as
may be requested by Mezzanine Lender or otherwise to effect the Loan Transfer;
provided, however, that Mezzanine Borrower and Borrower shall not be required to
modify or amend any Loan Document, Mezzanine Loan Document or organizational
document of Mezzanine Borrower or its Affiliates if such modification or
amendment would (i) have a material adverse economic effect on Mezzanine
Borrower, Borrower or its Affiliates or (ii) alter or modify any financial term
of the Mezzanine Loan or the Loan (including interest rate, term and principal
amount) or materially increase Mezzanine Borrower's or Borrower's obligations or
the obligations of Mezzanine Borrower's or Borrower's Affiliates or materially
decrease the rights of Mezzanine Borrower or Mezzanine Borrower's Affiliates
thereunder; provided further, however, that on or prior to a Loan Transfer,
Mezzanine Borrower shall execute and cause Borrower to execute such amendments
to the Loan Documents and the Mezzanine Loan Documents as may be requested by
Mezzanine Lender to change or modify the amortization schedule of the Loan
and/or the Mezzanine Loan in connection with a change or modification in the
amortization schedule of the Loan and/or the Mezzanine Loan so long as such
changes or modifications taken as a whole do not change or modify the combined
amortization schedule of the Loan and the Mezzanine Loan on the date hereof.
Mezzanine Borrower shall provide such information and documents relating to
Mezzanine Borrower and Borrower as Mezzanine Lender may reasonably request in
connection with any such Loan Transfer, in each case at Mezzanine Lender's sole
cost and expense. In addition, Mezzanine Borrower shall make available to Lender
and Mezzanine Lender all information concerning its business and operations that
Mezzanine Lender may reasonably request. Lender and Mezzanine Lender shall be
permitted to share all such information with the investment banking firms,
Rating Agencies, accounting firms, law firms and other third-party advisory
firms involved with the Mezzanine Loan and the Mezzanine Loan Documents or the
applicable Loan Transfer. It is understood that the information provided by
Mezzanine Borrower to Lender and Mezzanine Lender may ultimately be incorporated
into the offering documents for the Loan Transfer and, thus, various investors
may also see some or all of the information. Lender and Mezzanine Lender and all
of the aforesaid third-party advisors and professional firms in the Loan
Transfer shall be entitled to rely on the information supplied by, or on behalf
of, Mezzanine Borrower in the form as provided by Mezzanine Borrower. Mezzanine
Lender may publicize the existence of the Mezzanine Loan in connection with its
marketing for a Loan Transfer. It is agreed that Mezzanine Borrower makes no
representation or warranty with regard to financial information provided by
tenants other than to the best knowledge of Mezzanine Borrower.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
MEGAPLEX HOLDINGS, INC., a Missouri
corporation
By:______________________________________
Name: Xxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
iStar Funding, LLC, a Delaware limited liability
company
By: iStar Financial Inc., a Maryland
corporation, its sole member
By: ____________________________________
Name: _______________________________
Title: ______________________________
82
SCHEDULE I
PROPERTIES
ALLOCATED LOAN
PROPERTY NAME OPERATOR LOCATION SECURITY AMOUNT
--------------------------- ----------- ----------------- ----------- -------------
1. First Colony AMC Houston, TX Leasehold $1,660,640
2. Gulf Pointe AMC Houston, TX Fee $2,773,440
3. Mesquite AMC Dallas, TX Fee $2,499,520
4. South Barrington AMC Chicago, IL Fee $3,704,768
5. Leawood Town Center AMC Leawood, KS Fee $1,592,160
6. Oakview AMC Omaha, NE Leasehold $1,787,328
7. Xxxxxxx Xxxx XXX Xxxxxxx, XX Fee $2,487,536
8. Paradise Muvico Davie, FL Fee $2,556,016
9. Aliso Viejo Xxxxxxx Los Angeles, CA Fee $2,338,592
-----------
$21,400,000
===========
SCH. I-1
83
SCHEDULE II
ADDITIONAL LEASES
None
SCH. II-1
84
SCHEDULE III
MEZZANINE NOTE AMORTIZATION SCHEDULE
SCH. IV-1
85
SCHEDULE 3.1.14
LITIGATION
The Master Tenant under the Master Lease of the Individual Property known as
Aliso Viejo located in Los Angeles, California is presently a debtor under a
Chapter 11 proceeding.
SCH. IV-1
86
SCHEDULE 4.1.31
GROUND LEASE EXCEPTIONS
NONE
SCH. IV-1
