MODIFICATION TO PROMISSORY NOTE A-1
Exhibit 10.12
THIS MODIFICATION TO PROMISSORY NOTE A-1 (this “Agreement”) is executed as of
September 30, 2010 (the “Execution Date”), but effective for all purposes as of July 11,
2010 (the “Effective Date”), by and between by and between XXXXX XXXXXX HOLDINGS
LLC, a Delaware limited liability company (“Borrower”), whose address is c/o Morgans Hotel
Group, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and BANK OF AMERICA, NATIONAL ASSOCIATION, AS
SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE HOLDERS
OF WACHOVIA BANK COMMERCIAL MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
2007-WHALE 8 (“Lender”), having a place of business at 000 Xxxx Xxxxxxx Xxxxxx, Mail Code
IL4-540-18-04, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH
A. R.1 Wachovia Bank, National Association (“Original Lender”) made a loan (the
“Loan”) to Borrower in the amount of $217,000,000.00, which Loan is evidenced by that
certain Promissory Note A-1 (representing $108,500,000.00 of the total Debt) (“Note A-1”),
a copy of which is attached hereto as Schedule A, and that certain Promissory Note A-2
(representing $108,500,000.00 of the total Debt) (“Note A-2”, as modified by a Modification
to Promissory Note A-2, dated as of the date hereof, together with Note A-1, as modified by this
Agreement, hereinafter collectively, the “Note”), each dated as of October 6, 2006, between
Borrower and Original Lender.
R.2 On June 27, 2007, Note A-1 was assigned by Original Lender to LaSalle Bank National
Association, as Trustee for the Benefit of the Holders of Wachovia Bank Commercial Mortgage Trust,
Commercial Mortgage Pass Through Certificates, Series 2007-WHALE 8 (“LaSalle”).
R.3 By virtue of a merger effective as of October 17, 2008, Bank of America, National
Association, is successor by merger to LaSalle Bank National Association.
R.4 Borrower has requested, and Lender has agreed, subject to the terms of this Agreement, to
modify certain terms and provisions of Note A-1, as more particularly set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree as
follows:
1. The recitals set forth above are true and correct in every respect and are incorporated
herein by reference.
2. Capitalized terms used herein but not defined shall have the meanings ascribed to them in
Note A-1.
3. Note A-1 is hereby modified by deleting clause (i) in Section 2.1(e) thereof and replacing
it with the following:
“(i) Lender has received written notice not more than one hundred and twenty (120) days prior
to the Maturity Date and not more than ninety (90) days after the Maturity Date that Borrower
desires to extend the Maturity Date (the “Maturity Date Notice”) which shall be accompanied
by a payment of $100,000.00,”
4. Note A-1 is hereby modified by deleting the defined term LIBOR MARGIN and replacing it with
the following:
““LIBOR Margin” shall mean 103.16197135 basis points per annum.”
5. Notwithstanding the provisions of Section 2.1(e) of Note A-1, as a condition to entering
into this Agreement and as a condition to extending the Maturity Date of the Loan pursuant to
Section 2.1(e) of Note A-1, Borrower has delivered, or shall deliver prior to execution hereof, (a)
either an extension of the existing Rate Cap Agreement (the “Cap Agreement Extension”) or a
replacement Rate Cap Agreement (the “Replacement Cap Agreement”) with a LIBOR Rate strike
price of equal to or less than 5.33% per annum and a term expiring no earlier than the Extended
Maturity Date, and in either case issued by a cap provider with a long-term unsecured debt rating
or counterparty rating of at least “A+” (or its equivalent) by each Rating Agency, which Lender
hereby agrees shall satisfy the requirements regarding the Rate Cap Agreement pursuant to Section
2.1(e) of Note A-1, together with (b) either a modification of that certain Collateral Assignment
of Interest Rate Hedge Agreement dated as of October 6, 2006, by Borrower in favor of Original
Lender (the “Existing Hedge Agreement Collateral Assignment”) referencing the Cap Agreement
Extension, if Borrower delivers to Lender the Cap Agreement Extension, or a new Collateral
Assignment of Interest Rate Hedge Agreement collaterally assigning to Lender the Replacement Cap
Agreement in a form and content substantially similar to the Existing Hedge Agreement Collateral
Assignment, if Borrower delivers to Lender the Replacement Cap Agreement.
6. Borrower and Lender hereby acknowledge and agree that (a) this Agreement shall serve as
Borrower’s Maturity Date Notice to extend the Maturity Date of the Loan to the Extended Maturity
Date, (b) Borrower is herewith delivering to Lender the requisite Extension Fee in the amount of
0.25% of the outstanding balance of Note A-1, and (c) the requirement of Borrower to deliver
$100,000 to Lender at the time of the Delivery of the Maturity Date Notice is waived and such
amount shall not be due by Borrower. Lender hereby accepts such Maturity Date Notice and, subject
to Borrower’s satisfaction of Section 5 of this Agreement, confirms that all other conditions to
such extension have been satisfied in accordance with the terms of Section 2.1 of Note A-1 and, as
such, Borrower and Lender hereby agree that October 15, 2011 shall for all intents and purposes be
the Extended Maturity Date of the Loan. Borrower and Lender further agree that Borrower is not
entitled to any further extensions of the Maturity Date or the Extended Maturity Date, and that,
notwithstanding anything else in the Loan Documents to the contrary, the Note shall be due and
payable in full on the Extended Maturity Date of October 15, 2011.
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7. Except as expressly provided herein, the execution of this Agreement by Lender does not and
shall not constitute a waiver of any rights or remedies to which Lender is
entitled pursuant to the Loan Documents, nor shall the same constitute a waiver of any default
or Event of Default which may have heretofore occurred or which may hereafter occur with respect to
the Loan Documents. Lender reserves the right to declare any existing default or Event of Default
which subsequently comes to the attention of Lender whether pertaining to a period prior to the
Effective Date or on or after the Effective Date.
8. This Agreement may be executed in any number of counterparts with the same effect as if all
parties hereto had signed the same document. All such counterparts shall be construed together and
shall constitute one instrument, but in making proof hereof it shall only be necessary to produce
one such counterpart.
9. This Agreement was negotiated, executed and delivered in the State of New York, and made by
Lender and accepted by Borrower in the State of New York, and the proceeds of the Note were
disbursed from the State of New York, which state the parties agree has a substantial relationship
to the parties and to the underlying transactions 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 conflict of laws) and any applicable law
of the United States of America, except that at all times the provisions for the creation,
perfection, and enforcement of the liens and security interests created pursuant hereto and
pursuant to the other Loan Documents shall be governed by and construed according to the law of the
state in which the property encumbered by the Security Instrument is located, it being understood
that, to the fullest extent permitted by the law of such state, the law of the State of New York
shall govern the construction, validity and enforceability of all loan documents and all of the
obligations arising hereunder or thereunder. To the fullest extent permitted by law, Borrower
hereby unconditionally and irrevocably waives any claim to assert that the law of any other
jurisdiction governs this Agreement and the Note and the other Loan Documents, and this Agreement,
the Note and the other Loan Documents, shall be governed by and construed in accordance with the
laws of the State of New York.
10. Any legal suit, action, or proceeding against Lender or Borrower arising out of or
relating to this Agreement may at Lender’s option be instituted in any Federal or State Court in
the City of New York, County of New York, and Borrower waives any objections which it may now or
hereafter have based on venue and/or forum non conveniens of any such suit, action or proceeding,
and Borrower hereby irrevocably submits to the jurisdiction of any such court in any suit, action
or proceeding. Borrower does hereby designate and appoint CT Corporation System, 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 Borrower in the manner provided herein shall be deemed in every respect
effective service of process upon Borrower, in any such suit, action or proceeding in the State of
New York. Borrower (i) shall give prompt notice to Lender of any changed address of its authorized
agent hereunder, (ii) may at any time and from time to time upon not less than ten (10) days prior
written notice to Lender designate a substitute authorized agent with an office in New York, New
York (which substitute agent and office shall be designated as the person and address for service
of process), and (iii) shall
promptly designate such a substitute if its authorized agent ceases to have an office in New
York, New York, or is dissolved without leaving a successor.
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11. Within this Agreement, words of any gender shall be held and construed to include any
other gender, and words in the singular number shall be held and construed to include the plural,
unless the context otherwise requires. The section headings used herein are intended for reference
purposes only and shall not be considered in the interpretation of the terms and conditions hereof.
The parties acknowledge that the parties and their counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of this Agreement
or any exhibits or amendments hereto.
12. The terms and conditions of this Agreement may not be modified, altered or otherwise
amended except by an instrument in writing executed by all of Lender and Borrower.
13. This Agreement and the instruments, documents and agreements referenced in this Agreement
contain the entire Agreement between the parties hereto with respect to the modification of the
Loan and fully supersede all prior agreements and understanding between the parties pertaining to
such subject matter.
14. The terms and conditions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their successors and permitted assigns.
15. This Agreement represents the final agreement among the parties and may not be
contradicted by the parties. There are no unwritten oral agreements among the parties.
16. Each party to this Agreement agrees that any suit, action, or proceeding brought or
instituted by any party hereto on or with respect to this Agreement or any of the other Loan
Documents or which in any way relates directly or indirectly to the obligations under this
Agreement or the other Loan Documents or any event, transaction or occurrence arising out of or in
any way connected therewith, or the dealings of the parties with respect thereto, shall be tried
only by a court and not a jury. Each party hereby expressly waives any right to a trial by jury in
any such suit, action, or proceeding. Borrower acknowledges and agrees that this provision is a
specific and material aspect of this Agreement between the parties hereto, and that Lender would
not agree to the Agreements set forth herein if this waiver of jury trial provision were not a part
of this Agreement.
17. Nothing contained in this Agreement or the other Loan Documents constitutes or shall be
construed as the formation of a partnership, joint venture, tenancy-in-common, or any other form of
co-ownership, between Lender and Borrower or any other person or entity or the creation of any
confidential or fiduciary relationship of any kind between Lender and Borrower or any other person
or entity. Borrower acknowledges and agrees that Lender has at all times acted and shall at all
times continue to be acting only as a lender to Borrower within the normal and usual scope of
activities of a lender.
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18. If any clause or provision of this Agreement is determined to be illegal, invalid or
unenforceable under any present or future law by the final judgment of a court of
competent jurisdiction, the remainder of this Agreement will not be affected thereby. It is
the intention of the parties that if any such provision is held to be illegal, invalid or
unenforceable, there will be added in lieu thereof a provision as similar in terms to such
provision as is possible and be legal, valid and enforceable.
19. Except as expressly modified pursuant to this Agreement, all of the terms, covenants and
provisions of the Loan Documents shall continue in full force and effect. In the event of any
conflicts or ambiguity between the terms, covenants and provisions of this Agreement and those of
the Loan Documents, the terms, covenants and provisions of this Agreement shall prevail.
[Signatures on following page.]
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IN WITNESS WHEREOF Borrower and Lender have caused this Agreement to be executed as of the
date first above written.
LENDER:
BANK OF AMERICA, NATIONAL ASSOCIATION, AS SUCCESSOR BY MERGER TO LASALLE BANK
NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE HOLDERS OF WACHOVIA BANK
COMMERCIAL MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
2007-WHALE 8
| By and through CWCapital Asset Management LLC, solely in its capacity as Special Servicer for the Holder | ||||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | Vice President | |||
[Signature Page to Modification of Xxxxxx A-1 Note]
| BORROWER: | ||||||||||||
| XXXXX XXXXXX HOLDINGS LLC, a Delaware limited liability company | ||||||||||||
| By: | Xxxxx Xxxxxx Senior Mezz LLC, a Delaware limited liability company, its sole member | |||||||||||
| By: | Morgans Group LLC, a Delaware limited liability company, its sole member | |||||||||||
| By: | Morgans Hotel Group Co., a Delaware corporation, its managing member | |||||||||||
| By: | /s/ Xxxxxxx Xxxxxxxxx | |||||||||||
| Name: Xxxxxxx Xxxxxxxxx | ||||||||||||
| Title: Chief Financial Officer | ||||||||||||
[Signature Page to Modification of Xxxxxx A-1 Note]
SCHEDULE A
Note A-1
See attached.
Xxxxxx
PROMISSORY NOTE A-1
Note Amount: $108,500,000
Maturity Date: The Final Payment Date in July, 2010.
THIS
PROMISSORY NOTE A-1 (this “Note”), is made as of October 6, 2006 by the undersigned, as
maker (“Borrower”), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION and its successors or assigns,
as payee (“Lender”).
R E C I T A L S:
(a) Borrower is indebted to Lender with respect to a loan (the “Original Loan”) in the
original principal amount of TWO HUNDRED SEVENTEEN MILLION and 00/100 DOLLARS ($217,000,000.00)
which is secured by the lien and security interest created, among other things, by that certain
Agreement of Consolidation and Modification of Mortgage, Security Agreement, Assignment of Rents
and Fixture Filing dated as of the date hereof from Borrower, as mortgagor, in favor and for the
benefit of Lender, as mortgagee, as security for the Loan;
(b) The Original Loan is evidenced by that certain promissory note in the original principal
sum of $217,000,000 from Borrower to Lender dated as of October 6, 2006 (the “Original Note”);
(c) The current outstanding principal balance due under the Original Loan is
$217,000,000;
(d) Borrower and Lender have severed the Original Note pursuant to the terms of that certain
note severance agreement between Borrower and Lender dated the date hereof (the “Severance
Agreement”) into two (2) separate and distinct obligations in substitution for the Original Note
represented by this Note in the amount of $108,500,000 and that certain Substitute Promissory Note
A-2 in the amount of $108,500,000 (the “Substitute Note A-2”); and
(e) Borrower and Lender intend these Recitals to be a material part of this Note.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency, of which are hereby acknowledged, Borrower does hereby covenant and
promise to pay to the order of Lender, without any counterclaim, setoff or deduction whatsoever, on
the Maturity Date (as hereinafter defined), in immediately available funds, at Commercial Real
Estate Services, 0000 Xxxxxxxx Xxxxx URP 4, NC 1075, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or at such
other place as Lender may designate to Borrower in writing from time to time, in legal tender of
the United States of America, the Loan Amount and all other amounts due or becoming due hereunder,
to the extent not previously paid in accordance herewith, together with all interest accrued
thereon through the end of the Interest Accrual Period in which the Loan is repaid in full, at the
Interest Rate (as hereinafter defined) to be computed on the basis of the actual number of days
elapsed in a 360 day year, on so much of the Loan Amount as is from time to time outstanding on the
first day of the applicable Interest Accrual Period (as hereinafter defined).
SECTION 1. DEFINITIONS
As used herein, the following terms shall have the meanings herein specified unless the
context otherwise requires. Defined terms in this Note shall include in the singular number the
plural and in the plural number the singular. All capitalized terms not otherwise defined herein
shall have the meaning ascribed to them in the Security Instrument.
“Additional Taxes” shall have the meaning set forth in Section
2.1(d) hereof.
“Assumed Note Rate” shall mean an interest rate equal to the sum of one percent (1%)
plus the LIBOR Rate as determined on the preceding Interest Determination Date plus the LIBOR
Margin.
“Board” shall mean the Board of Governors of the Federal Reserve System, and any successor
thereof.
“Capital Adequacy Rule” shall mean any law, rule or regulation regarding capital
adequacy, or any interpretation or administration thereof adopted by any Governmental Authority,
central bank or comparable agency charged with the interpretation or administration thereof, or any
request or directive regarding capital adequacy of any such Governmental Authority, central bank or
comparable agency.
“Extension Option” shall have the meaning set forth in Section 2.1(a) hereof.
“Extension Term” shall have the meaning set forth in Section 2.1(a) hereof.
“Final Payment Date” shall mean (i) July 12, 2010 or (ii) if the Maturity Date is
extended pursuant to Section 2.1(e) hereof, October 12, 2011. Notwithstanding the foregoing, Lender
shall have the one (1) time right to change the Final Payment Date (but only in connection with a
change to the Interest Accrual Period) by giving notice of such change to Borrower.
“First Interest Accrual Period” shall mean the period commencing on the Closing Date
and ending on, but excluding, the Payment Date first occurring after the Closing Date.
“Interest Accrual Period” shall mean the period from the fifteenth (15th)
day of each month through and including the fourteenth (14th) day of the following
month, provided that, notwithstanding the foregoing, (a) Lender shall have the one (1) time right
to change the Interest Accrual Period but only in connection with a Securitization and concurrently
with a change to the Payment Date, by giving notice of such change to Borrower, and (b) the first
(1st) Interest Accrual Period shall be the First Interest Accrual Period. FOR
CLARIFICATION, NOTWITHSTANDING ANYTHING CONTAINED IN THIS NOTE OR IN THE SECURITY INSTRUMENT, BUT
SUBJECT TO SECTION 2.1(b) HEREOF, IN ADDITION TO ANY SUMS DUE UNDER SECTION 15.01 OF THE SECURITY
INSTRUMENT, IN THE EVENT THAT A PAYMENT OR PREPAYMENT OF THE PRINCIPAL AMOUNT IS MADE DURING THE
PERIOD FROM AND INCLUDING THE FIRST DAY IN A CALENDAR MONTH AFTER THE PAYMENT DATE IN SUCH CALENDAR
MONTH THROUGH AND INCLUDING THE LAST DAY OF THE INTEREST
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ACCRUAL
PERIOD IN WHICH THE PREPAYMENT OCCURS, ALL INTEREST ON THE PRINCIPAL AMOUNT BEING PREPAID WHICH WOULD HAVE ACCRUED FROM
THE FIRST DAY OF THE INTEREST ACCRUAL PERIOD IMMEDIATELY FOLLOWING THE INTEREST ACCRUAL PERIOD IN
WHICH THE PREPAYMENT OCCURS (THE “SUCCEEDING INTEREST ACCRUAL PERIOD”) THROUGH AND
INCLUDING THE END OF THE SUCCEEDING INTEREST ACCRUAL PERIOD, CALCULATED AT (I) THE INTEREST RATE,
IF SUCH PREPAYMENT OCCURS ON OR AFTER THE INTEREST DETERMINATION DATE FOR THE SUCCEEDING INTEREST
ACCRUAL PERIOD OR (II) THE ASSUMED NOTE RATE, IF SUCH PREPAYMENT OCCURS BEFORE THE INTEREST
DETERMINATION DATE FOR THE SUCCEEDING INTEREST ACCRUAL PERIOD (THE “SHORTFALL”), SHALL BE DUE TO
LENDER AND LENDER SHALL, IN THE EVENT OF A PAYMENT OF THE DEBT IN FULL, RELEASE ITS LIENS ON THE
PROPERTY. IF THE SHORTFALL IS CALCULATED BASED UPON THE ASSUMED NOTE RATE, UPON DETERMINATION OF
THE LIBOR RATE ON THE INTEREST DETERMINATION DATE FOR THE SUCCEEDING INTEREST ACCRUAL PERIOD, (X)
IF THE INTEREST RATE FOR SUCH SUCCEEDING INTEREST ACCRUAL PERIOD IS LESS THAN THE ASSUMED NOTE
RATE, LENDER SHALL PROMPTLY REFUND TO BORROWER THE AMOUNT OF THE SHORTFALL PAID, CALCULATED AT A
RATE EQUAL TO THE DIFFERENCE BETWEEN THE ASSUMED NOTE RATE AND THE INTEREST RATE, OR (Y) IF THE
INTEREST RATE IS GREATER THAN THE ASSUMED NOTE RATE, BORROWER SHALL PROMPTLY (AND IN NO EVENT LATER
THAN THE NINTH (9TH) DAY OF THE FOLLOWING MONTH) PAY LENDER THE AMOUNT OF SUCH ADDITIONAL SHORTFALL
CALCULATED AT A RATE EQUAL TO THE EXCESS OF THE INTEREST RATE OVER THE ASSUMED NOTE RATE. BORROWER
HEREBY ACKNOWLEDGES THAT (X) THE PROVISO IN THE FIRST SENTENCE OF SECTION 15.01(b)(ii) OF THE
SECURITY INSTRUMENT SHALL BE DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING “PROVIDED
THAT, IN THE EVENT OF ANY PREPAYMENT THAT OCCURS ON ANY DATE OTHER THAN A PAYMENT DATE OR THE FINAL
PAYMENT DATE, AS APPLICABLE, THE AMOUNT PREPAID SHALL BE DEPOSITED IN AN INTEREST-BEARING ACCOUNT
UNTIL THE IMMEDIATELY SUCCEEDING PAYMENT DATE OR THE FINAL PAYMENT DATE, AS THE CASE MAY BE, AND
ALL INTEREST ACCRUING THEREON THROUGH THE DATE IMMEDIATELY PRECEDING SUCH IMMEDIATELY SUCCEEDING
PAYMENT DATE OR FINAL PAYMENT DATE, AS THE CASE MAY BE, SHALL BE REMITTED TO BORROWER, PROVIDED
THAT BORROWER ACKNOWLEDGES THAT LENDER MAKES NO REPRESENTATION OR WARRANTY AS TO THE RATE OF
RETURN.”; AND (Y) THE LAST SENTENCE OF SECTION 15.01(b)(ii) IS SUPERSEDED HEREBY, IS HEREBY DEEMED
DELETED AND IS OF NO FURTHER FORCE AND EFFECT. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THE
OUTSTANDING PRINCIPAL BALANCE OF THE LOAN IS REPAID IN FULL ON ANY DAY FROM AND AFTER THE
COMMENCEMENT OF AN INTEREST ACCRUAL PERIOD UP TO AND INCLUDING THE PAYMENT DATE THAT OCCURS IN SUCH
INTEREST ACCRUAL PERIOD, BORROWER SHALL ONLY BE REQUIRED TO PAY INTEREST THROUGH THE END OF THE
INTEREST ACCRUAL PERIOD IN WHICH SUCH PAYMENT DATE OCCURS.
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“Interest Determination Date” shall mean (i) with respect to any Interest Accrual
Period prior to the Interest Accrual Period that commences in the month during which the
Securitization Closing Date occurs, two (2) LIBOR Business Days prior to the fifteenth
(15th) day of the calendar month in which the applicable Interest Accrual Period
commences; (ii) with respect to the Interest Accrual Period that commences in the month in which
the Securitization Closing Date occurs, the date that is two (2) LIBOR Business Days prior to the
Securitization Closing Date and (iii) with respect to each Interest Accrual Period thereafter, the
date that is two (2) LIBOR Business Days prior to the fifteenth (15th) day of the
calendar month in which such Interest Accrual Period commences, provided that notwithstanding the
foregoing, (a) Lender shall have the one (1) time right to change the Interest Determination Date
by giving notice of such change to Borrower and (b) with respect to the First Interest Accrual
Period, the Interest Determination Date shall be two (2) LIBOR Business Days prior to the Closing
Date.
“Interest Rate” shall mean the rate per annum (expressed as a percentage) equal to the LIBOR
Rate plus the LIBOR Margin, or if Lender shall exercise its rights under Section 2.6, the interest
rate specified therein.
“LIBOR Business Day” shall mean any day on which banks are open for dealing in foreign
currency and exchange in London, England.
“LIBOR Margin” shall mean 96.790322580645 basis points per annum.
“LIBOR Rate” shall mean the rate per annum calculated as set forth below:
(i) With respect to each Interest Accrual Period, the rate for deposits
in Dollars, for a period equal to one month, which appears on the Dow Xxxxx Market
Service (formerly Telerate) Page 3750 as of 11:00 a.m., London time, on the related
Interest Determination Date. If such rate does not appear on Dow Xxxxx Market
Service Page 3750, the rate for that Interest Accrual Period shall be determined on
the basis of the rates at which deposits in Dollars are offered by any four major
reference banks in the London interbank market selected by Lender to provide such
bank’s offered quotation of such rates at approximately 11:00 a.m., London time, on
the related Interest Determination Date to prime banks in the London interbank market
for a period of one month, commencing on the first day of such Interest Accrual
Period and in an amount that is representative for a single such transaction in the
relevant market at the relevant time. Lender shall request the principal London
office of any four major reference banks in the London interbank market selected by
Lender to provide a quotation of such rates, as offered by each such bank. If at
least two such quotations are provided, the rate for that Interest Accrual Period
shall be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that Interest Accrual Period shall be the
arithmetic mean of the rates quoted by major banks in New York City selected by
Lender, at approximately 11:00 a.m., New York City time, on the Interest
Determination Date with respect to such Interest Accrual Period for loans in Dollars
to leading European banks for a period equal to one month, commencing on the first
day of such Interest Accrual Period and in an amount that is representative for a
single
transaction in the relevant market at the relevant time. Lender shall determine the
LIBOR Rate for each Interest Accrual Period and the determination of the LIBOR Rate
by Lender shall be binding upon Borrower absent manifest error.
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(ii) In the event that Lender shall have determined in its reasonable
discretion that none of the methods set forth in the definition of “LIBOR Rate”
herein are available, then Lender shall forthwith give notice by telephone of such
determination, confirmed in writing, to Borrower at least one (1) day prior to the
last day of the related Interest Accrual Period. If such notice is given, the LIBOR
Rate, commencing with such related Interest Accrual Period, shall be the LIBOR Rate
in effect for the most recent Interest Accrual Period.
“Maturity
Date” shall have the meaning set forth in Section 2.1(a)(iii) hereof.
“Maturity Date Notice” shall have the meaning set forth in Section 2.1(e)
hereof.
“Maximum Amount” shall have the meaning set forth in Section 5.4(a)
hereof.
“Modification” shall have the meaning set forth in Section 5.2 hereof.
“Parent” shall mean, with respect to Lender, any Person Controlling Lender.
“Payment” shall have the meaning set forth in Section 2.2(a) hereof.
“Payment Date” shall mean the ninth (9th) day of each month, or if such day is not
a Business Day, the immediately preceding Business Day. Notwithstanding the foregoing, Lender shall
have the one (1) time right to change the Payment Date (but only in connection with a change to the
Interest Accrual Period) by giving notice of such change to Borrower.
“Securitization Closing Date” shall mean the date upon which a Securitization closes.
SECTION 2. PAYMENTS AND LOAN TERMS
Section 2.1. Interest Payments.
(a) Payments under this Note, calculated in accordance with the terms hereof, shall be
due and payable as follows:
(i) interest at the Interest Rate for the First Interest Accrual Period shall be due
and payable on the Closing Date;
(ii) interest at the Interest Rate in effect for the Interest Accrual Period in which
each Payment Date occurs shall be due and payable on the Payment Date in November, 2006 and on each
subsequent Payment Date through and including the month during which occurs the Maturity Date, as
such Maturity Date may be extended from time to time pursuant to Section 2.1(e) hereof;
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(iii) the entire outstanding Principal Amount, together with all accrued and unpaid
interest and any other charges and sums due hereon and on the other Loan Documents shall be due and
payable on July 12, 2010 (the “Maturity Date”), as such Maturity Date may be extended pursuant to
Section 2.1(e) hereof.
(b) For the sake of clarity, if Borrower shall have paid interest on the Payment Date in the
month in which the Final Payment Date occurs through the end of the then current Interest Accrual
Period and repays the Debt in full on or before the Final Payment Date, no additional interest
shall be due or payable by Borrower with respect to the period subsequent to the Payment Date.
Payments shall be paid by Borrower, without setoff or counterclaim, by wire transfer to Lender or
to such other location or account as Lender may specify to Borrower from time to time, in Federal
or other immediately available funds in lawful money of the United States of America, not later
than 2:00 PM, New York City time, on each Payment Date. If any payment hereunder or under any of
the other Loan Documents becomes due and payable on a day other than a Business Day, such payment
shall not be payable until the next succeeding Business Day; provided, however, if such
next succeeding Business Day falls within the next calendar month, such payment shall be due and
payable on the immediately preceding Business Day. If the date for any payments of principal is
extended on account of the foregoing or on account of operation of law or otherwise, interest
thereon shall be payable at the then applicable rate during such extension.
(c) Lender shall determine the LIBOR Rate as in effect from time to time on each Interest
Determination Date, and each such determination of the LIBOR Rate shall be conclusive and binding
absent manifest error.
(d) Payments made by Borrower under this Note shall be made free and clear of, and without
reduction for or on account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding income and franchise taxes of the
United States of America or any political subdivision or taxing authority thereof or therein (such
non-excluded taxes being called “Additional Taxes”). If any Additional Taxes are required to be
withheld from any amounts payable to Lender hereunder or under any of the other Loan Documents, the
amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after
payment of all Additional Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Note.
(e) Subject to the provisions of this Section 2.1(e), Borrower shall have one (1) option to
extend the term of the Loan from the original Maturity Date through October 12, 2011 (the “Extended
Maturity Date”) (the “Extension Option”, and the term extended pursuant thereto, the “Extension
Term”); provided that, with respect to the exercise of each Extension Option (i) Lender has
received written notice not more than one hundred twenty (120) days but not less than thirty (30)
days prior to the Maturity Date that Borrower desires to extend the Maturity Date or the extended
Maturity Date, as the case may be (the “Maturity Date Notice”) which shall be accompanied by a
payment of $100,000, (ii) no Event of Default has occurred and is continuing as of the date of the
Maturity Date Notice or the date the applicable Extension Term would commence, and (iii) Borrower
has delivered proof, reasonably satisfactory to Lender, that (A) the Debt Service Coverage for the
two (2) full fiscal quarters of the Borrower immediately preceding the Payment
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Date which is immediately prior to the Maturity Date is 1.55 to
1.00 or greater and (B) either the existing Rate Cap Agreement has been extended or a replacement
Rate Cap Agreement has been obtained in form and substance substantially similar to the Rate Cap
Agreement delivered on the Closing Date and issued by a cap provider having a long-term unsecured
debt rating of “AA” (or its equivalent) by each Rating Agency with a LIBOR Rate strike price of
seven percent (7.0%) per annum, and a term expiring no earlier than the Extended Maturity Date (and
if Lender is not the named beneficiary thereunder, the same has been pledged to Lender). Provided
that all of the foregoing conditions have been satisfied, as reasonably determined by Lender,
following the giving of the Maturity Date Notice, the term “Maturity Date” when used herein and in
the other Loan Documents shall mean the date to which the Maturity Date has been extended as if
such date was the original Maturity Date set forth herein. Simultaneously with the commencement of
the Extension Term, Borrower shall pay to Lender an extension fee (the “Extension Fee”) in the
amount of 0.25% of the outstanding principal balance of the Loan as of the date of the applicable
Maturity Date Notice less any sums previously paid to Lender pursuant to clause (i) above (it being
acknowledged that if the sums paid to Lender pursuant to clause (i) above are in excess of those
required to be paid pursuant to this sentence, Lender shall reimburse such excess amount to
Borrower). In the event that Lender determines that the conditions set forth in this subsection (e)
have not been satisfied, the exercise of the Extension Option shall be of no further force or
effect and any extension fee previously paid to Lender in connection with the subject extension
request, less any actual costs incurred by Lender in connection with its review of Borrower’s
request for an extension of the Maturity Date, shall be credited towards the outstanding principal
balance of the Loan at Maturity. All reasonable costs and expenses incurred in connection with each
request for, and, if applicable, each extension of the Maturity Date, including without limitation,
reasonable attorneys’ fees incurred by Lender and any sums incurred in connection with the
extension or replacement of the Rate Cap Agreement (and, if applicable, the pledging of same to
Lender) shall be at the sole cost and expense of Borrower and shall either be paid by Borrower
directly or on demand to Lender.
Section 2.2. Application of Payments.
(a) Each and every payment (a “Payment”) made by Borrower to Lender in accordance with
the terms of this Note and/or the terms of any one or more of the other Loan Documents and all
other proceeds received by Lender with respect to the Debt, shall be applied as follows:
(1) Payments other than Unscheduled Payments shall be applied (i) first, to all
interest (other than Default Rate Interest) which shall be due and payable with respect to
the Loan Amount pursuant to the terms hereof as of the date the Payment is received
(including any Interest Shortfalls and interest thereon to the extent permitted by applicable
law), (ii) second, to all Late Charges, Default Rate Interest or other premiums and other
sums payable hereunder or under the other Loan Documents (other than those sums included in
clause (i) of this Section 2.2(a)(1)) in such order and priority as determined by Lender in
its sole discretion and (iii) on the Maturity Date, to the Loan Amount until the Loan Amount
has been paid in full.
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(2) Unscheduled Payments shall be applied at the end of the Interest Accrual Period
in which such Unscheduled Payments are received as a principal prepayment of the Loan Amount
to amortize the Loan Amount.
(b) To the extent that Borrower makes a Payment or Lender receives any Payment or
proceeds for Borrower’s benefit, which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver,
custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such
extent, the obligations of Borrower hereunder intended to be satisfied shall be revived and
continue as if such Payment or proceeds had not been received by Lender.
Section 2.3. Prepayments.
The Debt may not be prepaid, in whole or in part, except as set forth in Article XV
of the Security Instrument.
Section 2.4. Indemnity.
Borrower agrees to indemnify Lender and to hold it harmless from any cost, loss or expense
which Lender may sustain or incur as a consequence of (a) Borrower making a payment or prepayment
of principal on the Loan on a day which is not a Payment Date with respect thereto, (b) default by
Borrower in making any prepayment after Borrower has given a notice of prepayment, and (c) any
acceleration of the maturity of the Loan by Lender in accordance with the terms of this Note and
the other Loan Documents, including, but not limited to, any such reasonable cost, loss or expense
arising in liquidating the Loan and from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain the Loan hereunder.
Section 2.5. Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, or any such Governmental Authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board), special deposit, insurance assessment or similar requirement
against assets of, deposits with or for the account of, or credit extended by, Lender or shall
impose on Lender or on the London interbank market any other condition affecting the Loan
(excluding, in each case, with respect to any such requirement reflected in the then effective
LIBOR Rate), and the result of any of the foregoing is to increase the cost to Lender of
maintaining the Loan at the Interest Rate (based upon the LIBOR Rate), or to reduce the amount of
any sum received or receivable by Lender under this Note with respect thereto, by an amount deemed
by Lender (acting reasonably) to be material, then, within ten (10) days after written demand by
Lender, Borrower shall pay to Lender such additional amount or amounts as will compensate Lender for such increased cost or reduction
suffered with respect to the Loan.
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(b) If Lender shall have reasonably determined in good faith that, after the date hereof, the
adoption of any Capital Adequacy Rule has or would have the effect of reducing the rate of return
on capital of Lender (or its Parent) as a consequence of Lender’s obligations hereunder to a level
below that which Lender (or its Parent) could have achieved but for such adoption of such Capital
Adequacy Rule (taking into consideration its policies with respect to capital adequacy) by an
amount deemed by Lender (acting reasonably) to be material, then from time to time, within fifteen
(15) days after written demand by Lender, Borrower shall pay to Lender such additional amount or
amounts as will compensate Lender (or its Parent) for such reduction suffered with respect to the
Loan.
(c) By its acceptance of this Note, Lender agrees, for itself and its successors and assigns,
that it will promptly notify Borrower of any event of which it has knowledge, occurring after the
date hereof, which will entitle Lender to compensation pursuant to this Section 2.5. By acceptance
of this Note, Lender agrees, for itself and its successors and assigns, that in connection with
claiming compensation under either Section 2.5(a) or 2.5(b), Lender shall deliver to Borrower a
certificate which shall set forth in reasonable detail the basis for and the calculation of such
amounts, (which at a minimum shall set forth at least the same amount of detail in respect of the
calculation of such amount as Lender provides in similar circumstances to other similarly situated
borrowers from Lender), and (ii) in the case of a certificate delivered in respect of amounts
payable pursuant to Section 2.5(b) include a statement by Lender that it has allocated to the Loan
a proportionately equal amount of any reduction of the rate of return on Lender’s capital due to a
Capital Adequacy Rule as it has allocated to each of its other outstanding loans that are affected
similarly by such Capital Adequacy Rule. Any certificate delivered pursuant to the immediately
preceding sentence shall be conclusive in the absence of manifest error.
(d) By acceptance of this Note, Lender agrees, for itself and its successors and assigns, that
Borrower shall not be required to compensate any Lender pursuant to this Section 2.5 for any
increased costs or reductions (i) incurred more than sixty (60) days prior to the date such Lender
notifies Borrower of the event which entitles Lender to compensation pursuant to Section 2.5 and/or
(ii) unless such Lender is also seeking compensation from other similarly situated borrowers as
well.
Section 2.6. Deposits Unavailable.
In the event, and on each occasion, that (a) Lender shall have determined that Dollar deposits
in the principal amounts of the Loan are not generally available to Lender in the London interbank
market, for such periods and amounts then outstanding hereunder or that reasonable means do not
exist for ascertaining the LIBOR Rate, or (b) Lender determines that the rate at which such Dollar
deposits are being offered will not adequately and fairly reflect the cost to Lender of maintaining
the Loan at the Interest Rate (based upon the LIBOR Rate) during such month, Lender shall, as soon
as practicable thereafter, give written notice of such determination to Borrower. In the event of
any such determination, until the circumstances giving rise to such notice no longer exist, the Loan shall bear interest at the interest rate applicable to
the immediately preceding Interest Accrual Period.
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Section 2.7. Illegality.
If, on or after the date of this Note, the adoption of any applicable law, rule or regulation,
or any change in any applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by Lender with any request or
directive (whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for Lender to maintain the Loan at the
Interest Rate (based upon the LIBOR Rate), Lender shall forthwith give notice thereof to Borrower.
If Lender shall determine that it may not lawfully continue to maintain the Loan at the Interest
Rate (based upon the LIBOR Rate) to maturity and shall so specify in such notice, the Loan shall
bear interest at the interest rate applicable to the immediately preceding Interest Accrual Period.
SECTION 3. DEFAULTS
Section 3.1. Events of Default.
This Note is secured by, among other things, the Security Instrument which specifies various
Events of Default, upon the happening of which all or portions of the sums owing under this Note
may be declared immediately due and payable as more specifically provided therein. Each Event of
Default under the Security Instrument or any one or more of the other Loan Documents shall be an
Event of Default hereunder.
Section 3.2. Remedies.
If an Event of Default shall occur and shall be continuing hereunder or under any
other Loan Document, interest on the Principal Amount and, to the extent permitted by applicable
law, all accrued but unpaid interest on the Principal Amount shall, commencing on the date of the
occurrence of such Event of Default, at the option of Lender, immediately and without notice to
Borrower, accrue interest at the Default Rate until such Event of Default is cured or if not cured
or such cure is not accepted by Lender, until the repayment of the Debt. The foregoing provision
shall not be construed as a waiver by Lender of its right to pursue any other remedies available to
it under the Security Instrument, or any other Loan Document, nor shall it be construed to limit in
any way the application of the Default Rate.
SECTION 4. EXCULPATION
Section 4.1. Exculpation.
Notwithstanding anything to the contrary contained in this Note or the other Loan Documents,
the obligations of Borrower hereunder shall be non-recourse except with respect to the Property and
as otherwise provided in Section 18.32 of the Security Instrument, the terms of which are
incorporated herein by reference as if fully set forth herein.
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SECTION 5. MISCELLANEOUS
Section 5.1. Further Assurances.
Borrower shall execute and acknowledge (or cause to be executed and acknowledged) and deliver
to Lender all documents, and take all actions, required by Lender from time to time to confirm the
rights created or now or hereafter intended to be created under this Note and the other Loan
Documents, to protect and further the validity, priority and enforceability of this Note and the
other Loan Documents, to subject to the Loan Documents any property of Borrower intended by the
terms of any one or more of the Loan Documents to be encumbered by the Loan Documents, or otherwise
carry out the purposes of the Loan Documents and the transactions contemplated thereunder;
provided, however, that no such further actions, assurances and confirmations
shall increase Borrower’s obligations, or decrease Borrower’s rights, under this Note or any of the
Loan Documents.
Section 5.2. Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination or waiver (a “Modification”) of
any provision of this Note, the Security Instrument or any one or more of the other Loan Documents,
nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought, and then such waiver
or consent shall be effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on, Borrower shall entitle
Borrower to any other or future notice or demand in the same, similar or other circumstances.
Lender does not hereby agree to, nor does Lender hereby commit itself to, enter into any
Modification. However, in the event Lender does ever agree to a Modification, the making and the
conditions for the making of such Modification shall only be upon the terms and conditions set
forth in the Security Instrument and such Modification.
Section 5.3. Costs of Collection.
Borrower agrees to pay all costs and expenses of collection incurred by Lender, in addition to
principal, interest and late or delinquency charges (including, without limitation, reasonable
attorneys’ fees and disbursements) and including all costs and expenses incurred in connection with
the pursuit by Lender of any of its rights or remedies referred to in Section 3 hereof or its
rights or remedies referred to in any of the Loan Documents or the protection of or realization of
collateral or in connection with any of Lender’s collection efforts, whether or not suit on this
Note, on any of the other Loan Documents or any foreclosure proceeding is filed, and all such costs
and expenses shall be payable on demand, together with interest thereon from the date due until the
date paid in full at the Default Rate thereon, and also shall be secured by the Security Instrument
and all other collateral at any time held by Lender as security for Borrower’s obligations to
Lender.
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Section 5.4. Maximum Amount.
(a) It is the intention of Borrower and Lender to conform strictly to the usury and
similar laws relating to interest and the collection of other charges from time to time in force,
and all agreements between Borrower and Lender, whether now existing or hereafter arising and
whether oral or written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or
agreed to be paid in the aggregate to Lender as interest or other charges hereunder or under the
other Loan Documents or in any other security agreement given to secure the Debt, or in any other
document evidencing, securing or pertaining to the Debt, exceed the maximum amount permissible
under applicable usury or such other laws (the “Maximum Amount”). If under any
circumstances whatsoever fulfillment of any provision hereof, or any of the other Loan Documents,
at the time performance of such provision shall be due, shall involve transcending the Maximum
Amount, then ipso facto, the obligation to be fulfilled shall be reduced to the Maximum Amount. For
the purposes of calculating the actual amount of interest or other charges paid and/or payable
hereunder, in respect of laws pertaining to usury or such other laws, all charges and other sums
paid or agreed to be paid hereunder to the holder hereof for the use, forbearance or detention of
the Debt, outstanding from time to time shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread from the date of disbursement of the proceeds of this
Note until payment in full of all of the Debt, so that the actual rate of interest on account of
the Debt is uniform through the term hereof. The terms and provisions of this Section 5.4 shall
control and supersede every other provision of all agreements between Borrower or any endorser and
Lender.
(b) If under any circumstances Lender shall ever receive an amount which would exceed the
Maximum Amount, such amount shall be deemed a payment in reduction of the Loan Amount owing
hereunder and any other obligation of Borrower in favor of Lender, and shall be so applied in
accordance with Section 2.2 hereof, or if such excessive interest exceeds the unpaid balance of the
Loan Amount and any other obligation of Borrower in favor of Lender, the excess shall be deemed to
have been a payment made by mistake and shall be refunded to Borrower.
Section 5.5. Waivers.
Borrower hereby expressly and unconditionally waives presentment, demand, protest, notice of
protest or notice of any kind, including, without limitation, any notice of intention to accelerate
and notice of acceleration, except as expressly provided herein, and in connection with any suit,
action or proceeding brought by Lender on this Note, any and every right it may have to (a) a trial
by jury, (b) interpose any counterclaim therein (other than a counterclaim which can only be
asserted in the suit, action or proceeding brought by Lender on this Note and cannot be maintained
in a separate action) and (c) have the same consolidated with any other or separate suit, action or
proceeding.
Section 5.6. Governing Law.
This Note and the obligations arising hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made and performed in
such State and any applicable law of the United States of America.
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Section 5.7. Headings.
The Section headings in this Note are included herein for convenience of reference only
and shall not constitute a part of this Note for any other purpose.
Section 5.8. Assignment.
Lender shall have the right to transfer, sell and assign this Note in accordance with
Section 17.01 of the Security Instrument. All references to “Lender” hereunder shall be deemed
to include the assigns of the Lender.
Section 5.9. Severability.
Wherever possible, each provision of this Note shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Note 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 Note.
Section 5.10. Joint and Several.
If Borrower consists of more than one Person or party, the obligations and liabilities
of each such Person or party hereunder shall be joint and several.
Section 5.11. Substitute Note.
This Note is “Substitute Note A-1” executed and delivered pursuant to the Severance Agreement.
The principal indebtedness evidenced hereby is a portion of the principal indebtedness evidenced by
the Original Note in the original principal sum of $217,000,000 made by Borrower to Lender.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Note has been duly executed by the Borrower the day and year first
written above.
| BORROWER: | ||||||
| XXXXX XXXXXX HOLDINGS LLC, a Delaware limited liability company |
||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Title: Authorized Signatory |
||||||
| Borrower’s Tax ID/SS#: 00-0000000 | ||||||
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