EXHIBIT NO. 10.6
MEZZANINE LOAN AGREEMENT
Dated as of March 19, 2003
by and among
PRIME/XXXXXXX DEVELOPMENT COMPANY, L.L.C.
as Borrower
and
LNR EASTERN LENDING, LLC
as Lender
Table of Contents
Page
ARTICLE I DEFINITIONS, PRINCIPLES OF CONSTRUCTION.......................2
Section 1.1 Definitions.............................................2
Section 1.2 Principles of Construction.............................30
ARTICLE II GENERAL......................................................31
Section 2.1 The Loan...............................................31
Section 2.2 Interest...............................................32
Section 2.3 Loan Payment...........................................35
Section 2.4 Prepayment.............................................36
Section 2.5 Release of the Collateral..............................37
Section 2.6 [Intentionally Deleted]................................37
Section 2.7 [Intentionally Deleted]................................37
Section 2.8 Extension of Initial Maturity Date.....................37
Section 2.9 [Intentionally Deleted]................................39
Section 2.10 [Intentionally Deleted]................................39
Section 2.11 Waiver of Exit Fee.....................................39
ARTICLE III CONDITIONS PRECEDENT.........................................39
Section 3.1 Conditions Precedent to the Loan.......................39
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BORROWER...............44
Section 4.1 Representations and Warranties of the Borrower.........44
Section 4.2 Survival of Representations............................53
ARTICLE V AFFIRMATIVE COVENANTS........................................53
Section 5.1 Affirmative Covenants of the Borrower..................53
ARTICLE VI NEGATIVE COVENANTS...........................................66
Section 6.1 Negative Covenants.....................................66
Section 6.2 Lender's Approval......................................75
ARTICLE VII CONSTRUCTION.................................................75
Section 7.1 Construction Covenants.................................75
Section 7.2 No Reliance............................................78
Section 7.3 Cooperation With Senior Lender.........................79
ARTICLE VIII CASUALTY AND CONDEMNATION....................................79
Section 8.1 Required Coverage......................................79
ARTICLE IX DEFAULTS.....................................................86
Section 9.1 Event of Default.......................................86
Section 9.2 Remedies...............................................91
Section 9.3 Construction Remedies..................................91
ARTICLE X PROPERTY MANAGEMENT AND LEASING AGREEMENT....................93
Section 10.1 Termination of Property Manager........................93
Section 10.2 Termination of Leasing Agent...........................93
ARTICLE XI MISCELLANEOUS................................................94
Section 11.1 Survival...............................................94
Section 11.2 Governing Law; Consent to Jurisdiction.................94
Section 11.3 Modification, Waiver in Writing........................95
Section 11.4 Failure to Enforce Not a Waiver........................96
Section 11.5 Notices................................................96
Section 11.6 Trial by Jury..........................................98
Section 11.7 Headings...............................................98
Section 11.8 Severability...........................................98
Section 11.9 Preferences............................................98
Section 11.10 Waiver of Notice.......................................98
Section 11.11 Remedies of the Borrower; Deemed Consent...............99
Section 11.12 Expenses, Indemnity....................................99
Section 11.13 Exhibits and Schedules Incorporated...................100
Section 11.14 Offsets, Counterclaims and Defenses...................100
Section 11.15 No Joint Venture or Partnership.......................100
Section 11.16 Publicity and Confidentiality.........................100
Section 11.17 Waiver of Marshaling of Assets........................101
Section 11.18 Conflict; Construction of Documents...................101
Section 11.19 Brokers and Financial Advisors........................101
Section 11.20 No Third Party Beneficiaries..........................101
Section 11.21 Prior Agreements......................................102
Section 11.22 Right of Setoff.......................................102
Section 11.23 Loan Assignability....................................102
Section 11.24 Exculpation of Lender; No Petition....................104
Section 11.25 Limitation on Liability...............................104
Section 11.26 Restricted Securities Account.........................105
Section 11.27 Register; Ownership Interest in the Loan..............106
TABLE OF CONTENTS
(continued)
EXHIBITS
EXHIBIT A - The Land
EXHIBIT B - Approved Construction Budget
EXHIBIT C - Form of Project Lease EXHIBIT D-1 - Form of
Architect's Certificate
EXHIBIT D-2 - Form of Construction Manager's Certificate
EXHIBIT D-3 - Form of Property Manager's Certificate
EXHIBIT E - Current Litigation
EXHIBIT F - Insurance Claims
EXHIBIT G - Obligations with respect to Tenant Allowances, Free
Rent Periods and Tenant Improvements
EXHIBIT H - Rights or Interests of Real Estate Brokers under Leases
EXHIBIT I - Rights to Purchase, Rights of First Refusal on Purchase
and Termination Rights under the Leases
EXHIBIT J - Borrower's Structure
EXHIBIT K - Form of Tenant Estoppel Certificate
EXHIBIT L - [Intentionally Deleted]
EXHIBIT M - Operating Agreements
EXHIBIT N - Schedule of Payment and Performance Bonds
THIS MEZZANINE LOAN AGREEMENT, dated as of March 19th, 2003 (this
"Agreement"), by and among PRIME/XXXXXXX DEVELOPMENT COMPANY, L.L.C., a Delaware
limited liability company (the "Borrower") and LNR EASTERN LENDING LLC, a
Georgia limited liability company ("Lender").
All capitalized terms used herein shall have the respective meanings set
forth in Section 1.1 hereof.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Dearborn Center, L.L.C., a Delaware limited liability
company (the "Property Owner"), owns that certain piece of land (the "Land") in
Chicago, Illinois, situated north of Xxxxx Street between State and Dearborn
Streets and as more fully described on Exhibit A attached hereto, on which it is
completing construction of a class "A" mixed use building (the "Building"),
known as "Dearborn Center", which contains approximately 1,395,000 NRSF of
office space, 107,000 NRSF of retail space and a parking facility containing at
least 209 parking stalls (the "Project");
WHEREAS, the Borrower is the owner of 100% of the issued and
outstanding membership interests in the Property Owner (the "Borrower Equity
Interests");
WHEREAS, in connection with the construction and development of the
Project, the Property Owner has entered into that certain Credit Agreement dated
as of January 5, 2001 with Bayerische Hypo- Und Vereinsbank AG, New York Branch
(the "Senior Lender"), as same has been amended by (i) that Omnibus First
Modification to Senior Loan Documents, (ii) that Amendment to Omnibus First
Modification to Senior Loan Documents, (iii) that Omnibus Second Modification to
Senior Loan Documents, and (iv) that Omnibus Third Modification to Senior Loan
Documents (collectively; the "Senior Loan Agreement");
WHEREAS, to provide additional financing for the construction and
development of the Project (the "Existing Mezzanine Loan"), the Borrower and
Bankers Trust Company, as agent and lender ("BT"), and other lenders (BT and
such other lenders being referred to, collectively, as the "Prior Lenders"),
entered into that certain Mezzanine Construction Loan Agreement dated as of
January 5, 2001, as amended by that Omnibus First Modification to Mezzanine Loan
Documents, that Omnibus Second Modification to Mezzanine Loan Documents and that
Omnibus Third Modification to Mezzanine Loan Documents (collectively, the "Prior
Loan Agreement");
WHEREAS, Borrower has requested and the Lender has agreed, subject
to and in accordance with the terms of this Agreement and the other Loan
Documents (as defined below), to make a loan to the Borrower in the principal
amount of the Loan Amount (as defined below) for the refinancing of the Existing
Mezzanine Loan relative to the Project.
NOW, THEREFORE, in consideration of the making of the Loan (as
defined below) by the Lenders and the covenants, agreements, representations and
warranties set forth in this Agreement, the parties hereto hereby covenant,
agree, represent and warrant as follows:
ARTICLE I
DEFINITIONS, PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided herein, capitalized terms in this Agreement shall have the
following meanings:
"Acceptable Development Team" shall mean (i) Prime Group Realty,
L.P. (so long as no Change of Control shall occur with respect to Prime Group
Realty, L.P.) and/or (ii) any other group of Persons that have day-to-day
responsibility for the construction and development of the Project, who have
relevant experience in the construction and development of facilities comparable
to the Project in the Chicago area and are reasonably satisfactory to the
Lender.
"Acceptable Leasing Agent" shall mean (i) Guarantor, Prime Group
Services, Inc. and their Affiliates or (ii) any other reputable and experienced
professional leasing company which (A) shall have at least five (5) years
experience in the leasing of facilities comparable to the Mortgaged Property,
(B) shall have under contract, at the time of its engagement as Leasing Agent,
not fewer than three (3) similar office buildings (excluding the Mortgaged
Property) and (C) shall be a Person approved by the Lender in advance, which
approval shall not be unreasonably withheld, or delayed.
"Acceptable Property Manager" shall mean (i) Guarantor (or any of
its Affiliates) or Prime Group Realty Services Inc. (or any of its Affiliates),
or (ii) any other reputable and experienced professional property management
company which (A) shall have at least five (5) years experience in the
management of facilities comparable to the Mortgaged Property, (B) shall have
under management, at the time of its engagement as Property Manager, not fewer
than three (3) similar office buildings (excluding the Mortgaged Property) and
(C) shall be a Person approved by the Lender in advance, which approval shall
not be unreasonably withheld or delayed.
"Accrued Management Fee" shall mean, at any time, the difference
between (i) the aggregate of the management fees which have theretofore been
earned pursuant to the Property Management Agreement (which amount shall not
exceed $1.00 per square foot) and (ii) the amount of management fees that have
theretofore been paid pursuant to the Property Management Agreement.
"Additional Subordinate Collateral" shall mean those second priority
interests in the Construction Agreement, the Architect's Agreement, the Property
Management Agreement, the Leasing Agreement and certain other "Agreements" (as
defined in the Assignment of Agreements) granted by the Property Owner in favor
of the Lender, pursuant to the Loan Documents.
"Advance" shall have the meaning set forth in Section 2.1.1 hereof.
"Affiliate" shall mean a Person or Persons directly or indirectly,
through one or more intermediaries, Controlling, Controlled by or under common
Control with the Person or Persons in question.
"Affiliate Contracts" shall mean any contract or agreement between
(i) the Borrower or the Property Owner or the Guarantor and (ii) an Affiliate of
any of the Borrower Parties.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"Applicable Interest Rate" shall have the meaning set forth in
Section 2.2.2 hereof.
"Approval", "Approved", "approval" or "approved" shall mean as the
context so determines, an approval in writing given to the party seeking
approval.
"Approved Banks" shall mean banks or other financial institutions
which have (i) (A) a minimum net worth of $500,000,000 or (B) total assets of at
least $5,000,000,000 and (ii) a minimum long-term senior unsecured debt rating
from the Rating Agencies at least equivalent to the Required Rating.
"Approved Construction Budget" shall mean the budget for total
estimated Construction Costs, dated as of the date hereof and attached hereto as
Exhibit B, as the same may be amended from time to time with the approval of the
Lender or as otherwise specifically permitted in this Agreement.
"Approved Lease" shall mean (i) the Bank One Lease, the Holland &
Knight Lease, the Citadel Lease and the Market Foods Lease; (ii) any Project
Lease for less than 10,000 NRSF that meets the criteria set forth in clause
(i)(B) of the definition of "Qualifying Lease" (provided that Approved Leases
pursuant to this clause (ii) may not amount in the aggregate to more than
200,000 NRSF); (iii) any Lease which meets the Minimum Net Effective Rent
Requirements; and/or (iv) any Lease approved by the Lender prior to the
execution thereof, in any case as the same shall have been executed and
delivered by all parties thereto (including any guarantors), it being agreed
that so long as a final copy of a Lease executed by the Tenant is submitted for
the Lender's approval, together with a copy of such Lease marked against the
form set forth in Exhibit C attached hereto, (A) the Lender shall endeavor to
approve or disapprove such Lease within seven (7) Business Days after the
Borrower's request for approval, (B) if the Lender fails to approve or
disapprove of a Lease in the period set forth in the immediately preceding
clause and the Borrower notifies the Lender of such failure (which second notice
shall reference this provision and shall state, in bolded language, "FAILURE TO
APPROVE OR DISAPPROVE OF A LEASE SHALL RESULT IN A DEEMED APPROVAL OF SUCH
LEASE"), the Lender shall endeavor to approve or disapprove of such Lease within
three (3) Business Days of receipt of such second notice and (C) in the event
that the Lender fails to approve or disapprove of such Lease in the period set
forth in the immediately preceding clause, the Lease shall be deemed to be an
Approved Lease.
"Architect" shall mean XxXxxxxxx and Partners, Ltd., and its
permitted successors and assigns, or any other architect approved by the Lender.
"Architect's Consent" shall mean that certain Second Priority
Architect's Consent and Subordination of Architect's Agreement relating to the
Mortgaged Property entered into by the Architect in favor of the Lender.
"Architect's Agreement" shall mean the applicable contract for
architectural services between the Property Owner and the Architect, with
respect to the design of the Improvements which has been approved by the Lender.
"Assignment" shall have the meaning set forth in Section 5.1(v)
hereof.
"Assignment of Agreements" shall mean that certain Second Priority
Assignment of Agreements, Licenses, Permits and Contracts, dated as of the date
hereof, from the Property Owner, as assignor, to the Lender, as assignee,
assigning to the Lender as security for the Loan all of the Property Owner's
interest in and to all licenses, permits and contracts necessary or desirable
for the construction, use and operation of the Improvements.
"Bank One" shall mean Bank One, NA, a national banking association
and its permitted successors and assigns.
"Bank One Lease" shall mean that certain Office Lease relating to
the Mortgaged Property, dated January 24, 2000, between the Property Owner, as
landlord, and Bank One, as tenant, as amended by that First Amendment to Office
Lease and Work Letter Agreement dated as of November 14, 2002, as same may be
amended from time to time in accordance with the terms of this Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy" as the same may be amended, modified, succeeded or
replaced, from time to time.
"Base Building Improvements" shall mean the Improvements to the Land
which comprise the Building, in furtherance of the Project, excluding tenant
fit-out work and any other so called "tenant improvements" with respect to
Approved Leases.
"Base Management Fee" shall mean a fee payable to the Property
Manager in the amount of sixty-four cents ($0.64) per square foot with respect
to space at the Project which is subject to Approved Leases.
"Basic Carrying Costs" shall mean the sum of the following costs
associated with the Mortgaged Property: (i) Taxes and Other Charges; and (ii)
Insurance Premiums.
"Beneficial", when used in the context of beneficial ownership,
shall have the analogous meaning to that specified in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
"Borrower" shall have the meaning set forth in the preamble to this
Agreement.
"Borrower Equity Interests" shall have the meaning set forth in the
recitals to this Agreement.
"Borrower Party" shall mean any of the Borrower, the Property Owner,
the Managing Member, the Guarantor or any of their respective successors and
assigns as permitted hereunder.
"Breakage Fee" shall mean the amount equal to all the amounts
referred to in Section 2.2.2(e) below.
"Building" shall have the meaning set forth in the recitals to this
Agreement.
"Business Day" shall mean any day (other than a Saturday and a
Sunday) on which commercial banks are not authorized or required to close in New
York City.
"Capital Expenditures" shall mean the costs incurred by the Property
Owner with respect to capital replacements and repairs made to the Mortgaged
Property (including, without limitation, repairs to, and replacements of, the
structural components, roofs, building systems, parking garages and parking
lots), in each case to the extent required to be capitalized in accordance with
GAAP.
"Cash" shall mean coin or currency of the United States of America
or immediately available federal funds, including such funds delivered by wire
transfer.
"Cash and Cash Equivalents" shall mean (i) Cash, (ii) U.S.
Government Securities, (iii) interest bearing or discounted obligations of
federal agencies and government sponsored entities or pools of such instruments
offered by Approved Banks and dealers, including, without limitation, Federal
Home Loan Mortgage Corporation participation sale certificates, Government
National Mortgage Association modified pass-through certificates, Federal
National Mortgage Association bonds and notes, Federal Farm Credit System
securities (provided all of the obligations described in this clause (iii) shall
be rated "AAA" by the Rating Agencies or backed by the full faith and credit of
the United States government for full and timely payment), (iv) time deposits,
domestic and Eurodollar certificates of deposit, bankers acceptances or
commercial paper rated at least A-1+ (or its equivalent) by the Rating Agencies,
and/or guaranteed by an entity having a long-term rating at least equal to the
Required Rating, (v) floating rate notes, other money market instruments and
letters of credit each issued by Approved Banks (provided that if the scheduled
maturity of any such note, instrument or letter of credit is more than six (6)
months after the date of purchase of such obligation by Borrower or Lender, the
note, instrument or letter of credit must be issued by a bank having a long-term
senior unsecured debt rating from the Rating Agencies at least equal to the
Required Rating), (vi) obligations issued by state and local governments or
their agencies, carrying a rating at least equal to the Required Rating and/or
guaranteed by an irrevocable letter of credit of an Approved Bank (provided that
if the scheduled maturity of any such obligation is more than six (6) months
after the date of purchase and such obligation is guaranteed by a letter of
credit, the letter of credit guaranteeing such obligation must be issued by an
Approved Bank having a long-term senior unsecured debt rating from the Rating
Agencies at least equal to the Required Rating), (vii) repurchase agreements
with major banks and primary government securities dealers fully secured by U.S.
government or agency collateral with a value equal to or exceeding the principal
amount on a daily basis and held in safekeeping (provided that at the time of
purchase the counterparty to such repurchase agreement must have a long-term
senior unsecured debt rating at least equal to the Required Rating), and (viii)
investments in money market funds and money market mutual funds substantially
all of the assets of which are comprised of investments described in clauses (i)
through (vii) above. Except as otherwise provided in this definition, Cash and
Cash Equivalents shall not include any investments commonly known as
"derivatives", any investments requiring a payment above par for an obligation,
and under no circumstances shall Cash and Cash Equivalents include interest-only
strips.
"Casualty" shall mean a fire, explosion, flood, collapse or other
casualty affecting the Mortgaged Property.
"Citadel" shall mean Citadel Investment Group, L.L.C. and its
permitted successors and assigns.
"Citadel Lease" shall mean that certain Lease Agreement dated as of
February 9, 2001, as same has been amended by (i) that certain First Amendment
to Lease Agreement, dated as of February 21, 2001, (ii) that certain Second
Amendment to Lease Agreement and First Amendment to Work Letter Agreement dated
as of August 19, 2002 and (iii) that certain Third Amendment to Lease Agreement
and Second Amendment to Work Letter Agreement dated as of August 19, 2002,
between the Property Owner, as landlord, and Citadel, as tenant, as amended from
time to time in accordance with the terms of this Agreement.
"Change of Control" shall mean with respect to Guarantor and Prime
Group Realty Trust ("PGRT"), the sale or transfer of more than forty-nine and
nine tenths percent (49.9%) of the aggregate of the common shares of PGRT and
the common limited partnership units of Guarantor to any one person or group of
related persons (as defined or used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) other than PGRT or any of its
Affiliates, including any successive sales and transfers of such ownership
interests, but excluding repurchases thereof by PGRT or Guarantor and their
respective Affiliates, as the case may be.
"Closing Date" shall mean March ___, 2003.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
as it may be further amended from time to time, any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"Collateral" shall mean (i) all of Borrower's right, title and
interest in, under and to the Organizational Documents of the Property Owner,
including the Borrower Equity Interests and all proceeds thereof, and (ii) all
of the Guarantor's right, title and interest in, under and to the Organizational
Documents of the Borrower, (iii) all Receipts, (iv) all other rights appurtenant
to the property described in clauses (i), (ii), and (iii) above (including,
without limitation, all voting rights), (v) the Additional Subordinate
Collateral, (vi) all accounts, certificated securities, chattel paper, commodity
accounts, commodity contracts, deposit accounts, documents, equipment, financial
assets, fixtures, general intangibles, goods, instruments, inventory, investment
property, money, payment intangibles, proceeds, securities, securities accounts,
security entitlements, and uncertificated securities of the Borrower, as those
terms are defined in the Uniform Commercial Code and (vii) any stock
certificates, other certificates or instruments evidencing any of the foregoing.
"Combined Debt Service" shall mean, for any period, the sum of (x)
Monthly Debt Service Payments payable for such period, plus (y) "Debt Service"
as defined in and calculated under the Senior Loan Agreement.
"Completion Guaranty" shall mean that certain Guaranty of Completion
and Indemnity, dated as of the date hereof, made by Guarantor in favor of the
Lender.
"Condemnation" shall mean a taking or voluntary conveyance during
the term hereof of all or any part of the Mortgaged Property or any interest
therein or right accruing thereto or use thereof, as the result of, or in
settlement of, any condemnation or other eminent domain proceeding by any
Governmental Authority, whether or not the same shall have actually been
commenced.
"Condemnation Proceeds" shall have the meaning set forth in the
definition of Net Proceeds.
"Conforming Estoppel Certificate" shall mean (i) an estoppel
certificate pursuant to which a Tenant has certified, at least, that (A) all
rental due and payable under the applicable Lease is paid and, if Final
Completion has occurred, Tenant has accepted and is in occupancy of the premises
demised by such Lease, (B) the Lease has not been amended or otherwise modified
and (C) neither the Property Owner (to such Tenant's actual Knowledge), as
landlord, nor Tenant is in default of any of its obligations under the Lease and
knows of no event which with notice or the passage of time, or both, would
result in a default by either the Property Owner or the Tenant under such Lease,
or (ii) if acceptable to the Lender, the form of estoppel certificate attached
as an exhibit to an Approved Lease.
"Consolidated Net Worth" shall mean at any time,
(i) the total assets of a Person and its Subsidiaries which would be shown as
assets on a consolidated balance sheet of such Person and its Subsidiaries as of
such time prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus of
Subsidiaries, minus
(ii) the total liabilities of such Person and its Subsidiaries which would be
shown as liabilities on a consolidated balance sheet of such Person and its
Subsidiaries as of such time prepared in accordance with GAAP, minus
(iii) the net book amount of all assets of such Person and its Subsidiaries
(after deducting any reserves applicable thereto) which would be shown as
intangible assets on a consolidated balance sheet of such Person and its
Subsidiaries as of such time prepared in accordance with GAAP.
"Construction Agreement" shall mean that certain Contract for
Construction dated as of July 21, 2000 entered into by and between the Borrower
and MDI.
"Construction Consultant" shall mean either an officer or employee
of the Lender or consulting architects, engineers or inspectors appointed by the
Lender which are identified by the Lender to the Borrower.
"Construction Costs" shall mean, for the Project, all costs and
expenses of constructing the Improvements, including, without limitation, all
Hard Costs, Soft Costs and other items delineated in the Approved Construction
Budget and the costs of all Construction Personal Property.
"Construction Documents" shall mean the Construction Agreement, the
Approved Construction Budget, the Plans and Specifications and each other
document executed by or on behalf of the Property Owner in connection with the
construction of the Improvements.
"Construction Manager" shall mean MDI.
"Construction Personal Property" shall mean materials, furnishings,
fixtures, machinery, equipment and all items of tangible and intangible personal
property now or hereafter owned by the Property Owner, wherever located, and
either (i) to be incorporated into the Improvements, or (ii) used solely in
connection with the construction of the Improvements.
"Construction Schedule" shall mean the schedule, broken down by
trade, of the estimated dates of commencement and completion of the construction
of the Improvements, dated of even date herewith, and approved by the
Construction Consultant.
"Contingent Obligation" as to any Person shall mean, without
duplication (i) any contingent obligation of such Person required to be shown on
such Person's balance sheet in accordance with GAAP, and (ii) any obligation
required to be disclosed in the footnotes to such Person's financial statements
in accordance with GAAP, guaranteeing partially or in whole any Indebtedness,
exclusive, however, of contractual indemnities (including, without limitation,
any indemnity or price-adjustment provision relating to the purchase or sale of
securities or assets) and guaranties of non-monetary obligations (other than
guaranties of completion) which have not yet been called on or quantified, of
such Person or of any other Person. The amount of any Contingent Obligation
described in clause (ii) shall be deemed to be (A) with respect to a guaranty of
interest or interest and principal, or an operating income guaranty, the net
present value of the sum of all payments required to be made thereunder (which
in the case of an operating income guaranty shall be deemed to be equal to the
debt service for the note secured thereby), calculated at the rate set forth in
the note secured thereby, through (1) in the case of an interest or interest and
principal guaranty, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder) or the
expiration date of such guaranty, whichever is earlier, or (2) in the case of an
operating income guaranty, the date through which such guaranty will remain in
effect, and (B) with respect to all guaranties not covered by the preceding
clause (A), an amount equal to the stated or determinable amount of the primary
obligation in respect of which such guaranty is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as recorded on the
balance sheet and on the footnotes to the most recent financial statements of
the Person. Notwithstanding anything contained herein to the contrary,
guaranties of completion shall not be deemed to be Contingent Obligations unless
and until a claim for payment or performance has been made thereunder, at which
time any such guaranty of completion shall be deemed to be a Contingent
Obligation in an amount equal to any such claim. Subject to the immediately
preceding sentence, (i) in the case of a joint and several guaranty given by
such Person and another Person, the amount of the guaranty shall be deemed to be
100% thereof unless and only to the extent that such other Person has delivered
Cash and Cash Equivalents to secure all or any part of such Person's guarantied
obligation and (ii) in the case of a guaranty (whether or not joint and several)
of an obligation otherwise constituting Indebtedness of such Person, the amount
of such guaranty shall be deemed to be only that amount in excess of the amount
of the obligation constituting Indebtedness of such Person. All matters
constituting "Contingent Obligations" shall be calculated without duplication.
"Control" or "control" shall mean, with respect to a Person that is
a corporation, the right to exercise, directly or indirectly, more than fifty
percent (50%) of the voting rights attributable to the shares of the controlled
corporation and, with respect to a Person that is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled Person. "Controlling"
and "controlled" shall have meanings correlative thereto.
"Debt" shall mean the outstanding principal amount set forth in, and
evidenced by, the Note, together with all interest accrued and unpaid thereon,
and all other sums due to the Lender in respect of the Loan, including the IRR
Amount (if any), the Make-Whole Amount (if any), the Exit Fee and the Breakage
Fee, and including any sums due or any obligation of any kind owing under the
Note, this Agreement, the Pledge Agreement or any other Loan Document
(including, without limitation but without duplication, any then unpaid [at the
time of determination] reimbursement or indemnity obligation).
"Debt Securities" shall mean debt obligations, other than U.S.
Government Securities, of any Person, whether evidenced by bonds, notes,
debentures, certificates, book entry deposits, certificates of deposit,
commercial paper, bankers acceptances, reinvestment letters, funding agreements
or other instruments, which (i) are not subject to prepayment or redemption
prior to maturity, (ii) are rated not less than the then Required Rating or
(iii) any combination of the foregoing. Any Debt Securities delivered to the
Lender as collateral for an obligation shall mature not less than one (1)
Business Day prior to the due date of such obligation.
"Debtor Relief Laws" shall mean applicable liquidation, bankruptcy,
conservatorship, moratorium, rearrangement, insolvency, reorganization or
similar laws, domestic or foreign, affecting the rights of creditors generally,
including, without limitation, Title 11 of the United States Code.
"Default" shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
"Default Rate" shall mean a rate per annum equal at all times to the
lesser of (i) the maximum non-usurious rate permitted by law and (ii) four
hundred basis points (4.00%) in excess of the Applicable Interest Rate.
"Eligible Account" shall mean (i) an account maintained with a
federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution, or (ii) a segregated trust
account or accounts maintained with the corporate trust department of a federal
depository institution or state-chartered depository institution subject to
regulations regarding fiduciary funds on deposit similar to Title 12 of the Code
of Federal Regulations Section 9.10(b) which, in either case, has corporate
trust powers, acting in its fiduciary capacity. No Eligible Account shall be
evidenced by a certificate of deposit, passbook or other instrument. Each
Eligible Account (A) shall be a separate and identifiable account from all other
funds held by the holding institution, (B) shall be established and maintained
in the name of the Lender, and (C) shall be under the sole dominion and control
of the Lender, and may contain only funds held for its benefit. Following a
rating downgrade, withdrawal, qualification or suspension of an Eligible
Institution which maintains an Eligible Account each such Eligible Account must
promptly (and in any case within not more than sixty (60) calendar days) be
moved to a qualifying Eligible Institution.
"Eligible Assignee" shall mean any entity other than an equity real
estate investment trust ("REIT") (or any twenty-five percent [25%] or greater
owner of a REIT or any Affiliate, director, officer or shareholder owning
twenty-five percent [25%] or more of the securities of a REIT or its Affiliate),
which REIT, Affiliate, director, officer or shareholder, either individually or
in the aggregate, owns office and/or industrial real estate in Chicago, Illinois
that competes with assets owned by Guarantor.
"Eligible Institution" shall mean an institution whose (i)
commercial paper, short-term debt obligations or other short-term deposits are
rated at least "A-1+" or the equivalent by the Rating Agencies, if the deposits
are to be held in the account for less than thirty (30) days, or (ii) long-term
senior unsecured debt obligations are rated at least "AA" or the equivalent, if
the deposits are to be held in the account for more than thirty (30) days.
"Engineering Report" shall mean the structural engineering report or
reports with respect to the Mortgaged Property prepared by an Independent
Engineer and delivered to the Lender in connection with this Agreement, and any
amendments or supplements thereto delivered to Lender.
"Environmental Auditor" shall mean LAW Engineering &
Environmental Services, Inc. or any other independent environmental engineer
or auditor approved by the Lender in its sole discretion.
"Environmental Claim" shall mean any written notice, claim,
proceeding, investigation, demand or other communication by any Person alleging
or asserting liability with respect to the Borrower, the Property Owner or the
Mortgaged Property arising out of, based on or resulting from (i) the presence,
use or Release of any Hazardous Substance, (ii) any fact, circumstance,
condition or occurrence forming the basis of any violation, or alleged
violation, of any Environmental Law, or (iii) any alleged injury or threat of
injury to property, health or safety or to the environment caused by Hazardous
Substances.
"Environmental Indemnity" shall mean the Environmental Indemnity
Agreement, dated as of the date hereof, executed by the Borrower and the
Guarantor in connection with the Loan for the benefit of the Lender.
"Environmental Laws" shall mean any and all of the following as
applicable to Borrower, the Property Owner and/or the Property: present and
future federal, state and local laws (whether under common law, statute,
ordinance, rule, regulation or otherwise), court or administrative orders or
decrees, requirements of permits issued with respect thereto, and other
requirements of Governmental Authorities relating to any Hazardous Substances or
Hazardous Substance Activity (including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Section 9601, et seq.) as heretofore or hereafter amended from time to time
"CERCLA").
"Environmental Reports" shall mean the Environmental Site Assessment
relating to the Mortgaged Property, and any amendments or supplements thereto
delivered to the Lender, and shall also include any other environmental reports
delivered to the Lender in connection with this Agreement and the Environmental
Indemnity.
"Environmental Site Assessment" shall mean a "Phase 1 Site
Assessment" in respect of the Mortgaged Property, performed by an Environmental
Auditor in accordance with ASTM Standard 1527-97 as modified by additional
requirements of the Lender, if any, and any "Phase 2" environmental site
assessment required by the Lender to be undertaken by the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" shall mean any Person that for purposes of Title
IV of ERISA is a member of the controlled group of the Borrower, or under common
control with the Borrower, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the PBGC
or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of the
Borrower or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by the Borrower or any ERISA Affiliate from
a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Event of Default" shall have the meaning set forth in Section
9.1(a) hereof.
"Existing Mezzanine Loan" shall mean that mezzanine construction
loan made by the Prior Lenders to the Borrower in the original principal amount
of $65,000,000, which mezzanine construction loan has been satisfied on this
date with the proceeds from the Loan.
"Exit Fee" shall mean an amount equal to one percent (1%) of each
and every principal amount of the Loan prepaid or paid upon maturity of the
Loan.
"Extended Maturity Date" shall have the meaning set forth in Section
2.8 hereof.
"Extension Fee" shall have the meaning set forth in Section 2.8
hereof.
"Extension Notice" shall have the meaning set forth in Section 2.8
hereof.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum (based on a 360-day year) equal, for each day of such
period, to the rate of interest quoted at 11:00 a.m. New York time charged on
overnight federal funds transactions with member banks of the Federal Reserve
System.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"Final Completion", with respect to the Base Building Improvements,
shall mean the date when all of the following conditions have been satisfied:
(i) all Work (including Punch List Items) shall have been completed
in a good and workmanlike manner and in accordance with the Plans and
Specifications and the Construction Agreement (except for non-material
deviations therefrom that do not adversely affect the use of the
Improvements for their intended purpose or their value);
(ii) copies of all required receipts, releases of Liens, affidavits,
waivers, guaranties, warranties and bonds applicable to the Work, as well
as any other documents required under this Agreement with respect to the
Work, shall have been issued and delivered to the Lender;
(iii) the Property Owner shall have obtained and the Borrower shall
have delivered to the Lender copies of all of the Governmental Approvals
and all sign-offs, permits, licenses and certificates required by any
Governmental Authority relating to the Work and the Base Building
Improvements; and
(iv) the Lender shall have received as-built drawings for the Work
reasonably acceptable to Lender, and such other documents, instruments,
certificates and materials as are required to be delivered to the Lender
on or prior to completion of the Work under this Agreement and the other
Loan Documents.
"Financing Statements" shall mean those certain Uniform Commercial
Code Financing Statements relating to the Loan executed by the Borrower, the
Property Owner and the Guarantor, as debtors, in favor of the Lender, as secured
party.
"Fiscal Year" shall mean the period commencing on the Closing Date
and ending on and including December 31 of the calendar year in which the
Closing occurs and thereafter each twelve-month period commencing on January 1
and ending on December 31 until the Debt is repaid in full.
"Force Majeure Event" shall mean any event or circumstance that is
beyond the Borrower's reasonable control, including, without limitation, any of
the following (in each case, but only to the extent that such event or
circumstance has actually caused a delay):
(i) acts of declared or undeclared war by a foreign enemy;
(ii) civil commotion, national emergency or riots;
(iii) accidents, fire or other casualty or condemnation;
(iv) floods;
(v) earthquakes or acts of God;
(vi) labor strikes or lock outs not within the reasonable control of
a Borrower Party or any contractor;
(vii) unavailability in the general market of fuel, power or
materials;
(viii) the passage or application of any Law or Regulation or
moratorium of any Governmental Authority that has the effect of preventing
or delaying any Work or the progress thereof;
(ix) unusual adverse weather conditions; or
(x) any failure of the Lender to grant or deny a consent or approval
within the time periods herein provided, but only to the extent such
failure has actually caused a delay.
"Four-Party Agreement" shall mean that certain Agreement, dated as
of the date hereof, among the Lender, the Senior Lender, Borrower and the
Property Owner.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as of the relevant date in question, consistently
applied.
"Governmental Approvals" shall mean all approvals, consents,
waivers, orders, acknowledgements, authorizations, permits and licenses required
under applicable Laws and Regulations to be obtained from any Governmental
Authority, including, without limitation, for the construction of the
Improvements and the use, occupancy and operation thereof following completion
of construction.
"Governmental Authority" shall mean any national or federal
government, any state, regional, local or other political subdivision thereof
with jurisdiction and any Person with jurisdiction exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government or quasi-governmental issues (including, without limitation, any
court).
"Guaranties" shall mean the Completion Guaranty, the Interest and
Operating Cost Guaranty and the Non-Recourse Carveout Guaranty.
"Guarantor" shall mean Prime Group Realty, L.P., a Delaware limited
partnership, and its permitted successors and assigns.
"Guaranty Obligations" shall mean any obligations guarantying any
Indebtedness of any other Person in any manner, whether direct or indirect, and
including, any obligation, whether or not contingent, (i) to purchase any such
Indebtedness or other obligation or any property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or purchase of
such Indebtedness or obligation or to maintain working capital, solvency or
other balance sheet condition of such other Person (including, without
limitation, keep well agreements, maintenance agreements, comfort letters or
similar agreements or arrangements), (iii) to lease or purchase any property,
securities or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation, or (iv) otherwise to assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect thereof;
provided, however, that Guaranty Obligations shall exclude endorsements of
negotiable instruments for collection or deposit, in either case in the ordinary
course of business or guaranties of customary non-recourse carve-outs.
"Hard Costs" shall mean the direct costs of building, improving or
repairing the Project and the Improvements, including, without limitation, the
cost of land, construction, bricks, mortar, steel, glass, painting and related
building maintenance, carpeting, roof repair and replacement, landscaping,
heating, ventilation and air conditioning equipment, sprinkler systems, site
improvements, hard Construction Costs delineated in the Approved Construction
Budget and other items generally considered hard costs under construction
industry practice.
"Hazardous Substance" shall mean (A) any chemical, compound,
material, mixture or substance that is now or hereafter defined or listed in, or
otherwise classified pursuant to, any Environmental Laws as a "hazardous
substance", "hazardous material", "hazardous waste", "extremely hazardous
waste", "infectious waste", "toxic substance", "toxic pollutant" or any other
formulation intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, or "EP toxicity" and (B)
petroleum, natural gas, natural gas liquid, liquefied natural gas, synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas), ash
produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters, and other wastes associated with
the exploration, development or reduction of crude oil, natural gas, or
geothermal resources. Without limiting the foregoing, Hazardous Substances shall
also include asbestos and asbestos-containing materials and polychlorinated
biphenyls.
"Holland & Knight" shall mean Holland & Knight, LLP, a Florida
limited liability partnership, and its permitted successors and assigns.
"Holland & Knight Lease" shall mean that certain Lease Agreement
relating to the Mortgaged Property, dated as of July 20, 2000, entered into by
and between the Property Owner, as landlord, and Holland & Knight, as tenant, as
the same was amended by that certain First Amendment to Lease and Work Letter,
dated as of November 1, 2000, that certain Second Amendment to Lease, dated as
of December 13, 2000, that certain Third Amendment to Lease, dated as of January
2, 2001, that certain Third Amendment to Work Letter Agreement dated as of May
31, 2002, that certain Fourth Amendment to Lease and Work Letter Agreement dated
as of October 1, 2002, and that certain side letter agreement dated as of
February 28, 2003, and as same may be further amended from time to time in
accordance with the terms of this Agreement.
"Improvements" shall mean all buildings, structures, fixtures and
improvements, together with any additions thereto or alterations or replacements
thereof, now or hereafter on the Land.
"Indebtedness" shall mean, with respect to any Person, without
duplication, the following, whether direct or contingent:
(i) all indebtedness for borrowed money (excluding trade and
construction payables and other similar working capital items up to
$1,300,000 in the aggregate outstanding at any time, provided that real
estate taxes and capital expenditures shall not be included in the
calculation of the amount of such payables or working capital amounts
unless and until the same are actually due and owing);
(ii) the deferred purchase price of assets or services which in
accordance with GAAP would be shown to be a liability (or on the liability
side of a balance sheet);
(iii) all Guaranty Obligations;
(iv) the maximum amount of all letters of credit issued or
acceptance facilities established for the account of such Person and,
without duplication, all drafts drawn thereunder (other than letters of
credit (A) supporting other Indebtedness of the Borrower or the Guarantor,
or (B) to the extent offset by Cash or Cash Equivalents held in escrow to
secure such letter of credit and draws thereunder);
(v) all lease obligations required to be capitalized under GAAP;
(vi) all Indebtedness of another Person secured by any lien on any
property of the Borrower, the Property Owner or the Guarantor, whether or
not such indebtedness has been assumed;
(vii) all obligations under take-or-pay or similar arrangements or
under interest rate, currency, or commodities agreements;
(viii) indebtedness created or arising under any conditional sale or
title retention agreement (other than conditional sale and title retention
agreements entered into in the ordinary course of business for assets
incidental to the management and operation of the Mortgaged Property); and
(ix) obligations of such Person with respect to withdrawal liability
to or on behalf of any Multiemployer Plan;
provided, however, that Indebtedness shall not include (1) current accounts
payable (other than for borrowed money or purchase money obligations) incurred
in the ordinary course of business (provided that all such liabilities, accounts
and claims shall be paid when due or in conformity with customary trade terms or
customary dispute resolution procedures) which do not exceed $1,300,000 in the
aggregate outstanding at any time, (2) accrued expenses (other than for borrowed
money or purchase money obligations) incurred in the ordinary course of
business, (3) indemnification and similar Contingent Obligations which are not
assurances of payment of the items described in subclauses (i) through (ix) of
this definition or not otherwise described in the Completion Guaranty, (4)
customary non-recourse carve-outs, (5) indebtedness in respect of which Cash or
Cash Equivalents have been deposited with a lender or its agent as collateral to
defease such indebtedness and (6) dividends and distributions payable by such
Person.
"Independent Engineer" shall mean any reputable engineer, approved
by the Lender in its sole discretion, that is licensed or registered in the
jurisdiction where the Mortgaged Property is located, if required by the laws of
such jurisdiction, and is not affiliated with any Borrower Party.
"Insufficiency" means, with any respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Initial Maturity Date" shall mean January 5, 2004.
"Insurance Premiums" shall have the meaning set forth in Section
8.1.1(d) hereof.
"Insurance Proceeds" shall have the meaning set forth in the
definition of Net Proceeds.
"Insurance Requirements" shall mean all terms of any insurance
policy required hereunder covering or applicable to the Mortgaged Property or
any part thereof, all requirements of the issuer of any such policy, and all
orders, rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting the Mortgaged Property or any part thereof or any use of the Mortgaged
Property or any part thereof.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement, dated as of the date hereof, by and between the Lender and the Senior
Lender.
"Interest and Operating Costs Guaranty" shall mean that certain
Guaranty of Interest and Operating Costs relating to the Loan, dated as of the
date hereof, made by Guarantor in favor of the Lender.
"Interest Payment Date" shall mean the date through which interest
is accrued and on which interest is due. Interest shall be payable monthly in
arrears, on the first Business Day of the first month following the initial
funding of the Advance under this Loan Agreement and on the first Business Day
of each month thereafter until the Note is repaid in full.
"IRR Amount" shall mean, (x) as of the Initial Maturity Date, an
amount which if paid to the Lender on the Initial Maturity Date, when added to
the aggregate amount of all interest payments made at the Applicable Interest
Rate (excluding the Lender Fees and any increased interest payable at the
Default Rate) with respect to the Loan on or prior to such date (including any
prior IRR Amounts or Make-Whole Amounts), is sufficient to provide the Lender
with a return (compounded monthly) on the then-outstanding principal amount of
the Loan being repaid on the Initial Maturity Date equal to fifteen percent
(15%) per annum through such date, and (y) as of the Extended Maturity Date, an
amount which if paid to the Lender on the Extended Maturity Date, when added to
the aggregate amount of all interest payments made at the Applicable Interest
Rate (excluding the Lender Fees and any increased interest payable at the
Default Rate) with respect to the Loan prior to such date (including any prior
IRR Amounts or Make-Whole Amounts), is sufficient to provide the Lender with a
return (compounded monthly) on the then-outstanding principal amount of the Loan
being repaid (I) for the period up to and including the Initial Maturity Date
equal to fifteen percent (15%) per annum and (II) for the period that the Loan
was outstanding after the Initial Maturity Date, an amount equal to the sum of
1,300 basis points (13.0%) and the LIBOR Rate in effect at the time of repayment
on the then-outstanding principal amount of the Loan. Notwithstanding the
foregoing, in the event the LIBOR Rate falls below 200 basis points (2%) at any
time, for the purposes of calculating the IRR Amount, the LIBOR Rate shall be
deemed to be equal to 200 basis points (2%).
"Knowledge" or words of similar import shall mean the actual
knowledge of a Person or, if such Person is not an individual, of such Person's
representatives, agents, employees, officers or directors who would be likely to
have material information as to the relevant subject matter.
"Land" shall have the meaning set forth in the recitals to this
Agreement.
"Laws and Regulations" or "Law or Regulation" shall mean all laws,
statutes, treaties, codes, permits, decrees, ordinances, orders, rules,
regulations, determinations, or requirements of any governmental authority,
arbiter or court, including, without limitation, any Environmental Laws, any
building, use, zoning and land use laws or regulations (including set back
requirements), whether now or hereafter enacted and in force, relating in any
way to (i) the Mortgaged Property, or the construction, ownership, use,
alteration or operation thereof, or any part thereof or (ii) the Borrower,
Managing Member or the Property Owner.
"Lease" shall mean any lease, sublease, license, letting,
concession, occupancy or agreement or other agreement (whether written or oral
and whether now or hereafter in effect), existing as of the date hereof or
hereafter entered into by the Property Owner, pursuant to which any Person is
granted a possessory interest in, or right to use or occupy all or any portion
of any space in the Mortgaged Property, and every modification, amendment or
other agreement relating to such lease, sublease, or other agreement entered
into pursuant thereto, and every guarantee of the performance and observance of
the covenants, conditions and agreements to be performed and observed by the
other party thereto.
"Leasing Agent" shall mean (i) any Acceptable Leasing Agent or (ii)
any other replacement Leasing Agent approved by the Lender.
"Leasing Agreement" shall mean (i) the leasing provisions contained
in the Property Management Agreement pursuant to which the Leasing Agent is to
provide leasing and other services with respect to the Mortgaged Property and
(ii) any other leasing agreement entered into with the prior written consent of
the Lender (not to be unreasonably withheld or delayed).
"Leasing Commission" shall mean, with respect to the Mortgaged
Property, all fees, commissions, expenses and other compensation (including,
without limitation, any incentive fees) heretofore paid by the Property Owner or
hereafter payable by the Property Owner to any party, including, without
limitation, the Leasing Agent pursuant to the Leasing Agreement, which Leasing
Commission shall reflect commercially reasonable, then current "market terms"
for the area in which the Mortgaged Property is located for a property of
similar type and quality, but in no event to exceed $19,432,698, in the
aggregate (unless additional equity is (or has heretofore been) contributed to
the Borrower by the Guarantor (and/or any other prior member of Borrower) in an
amount equal to any such excess of aggregate Leasing Commissions over
$19,432,698).
"Legal Requirements" shall mean:
(i) all Laws and Regulations,
(ii) all permits, licenses and authorizations relating thereto, and
(iii) all Operating Agreements and other covenants, conditions and
restrictions contained in any instruments at any time in force (whether or
not involving Governmental Authorities) affecting the Mortgaged Property
or any part thereof which, in the case of this clause (iii), require
repairs, modifications or alterations in or to the Mortgaged Property or
any part thereof, or in any material way limit or restrict the use and
enjoyment thereof.
"Lender" shall have the meaning set forth in the preamble to this
Agreement.
"Lender Expenses" shall mean all origination costs and all
out-of-pocket expenses and costs reasonably incurred by the Lender (or any of
its Affiliates) with respect to the making of the Loan customarily includes in
reimbursables, such as the duplication and binding of presentation books),
including for preparation of audits, agreed-upon-procedures, reasonable travel
expenses, preparation of environmental, seismic and engineering reports, credit
reports, appraisals, preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby (including reasonable attorneys' fees and
disbursements in connection therewith and in connection with Lender's due
diligence), UCC and other document filing fees; provided, however, that "Lender
Expenses" shall not include the syndication costs and expenses and loan
participation costs incurred by Lender after the Closing Date.
"Lender Fees" shall mean the Exit Fee and the Extension Fee.
"LIBOR Rate" shall mean for any day, as determined by Lender in its
good faith judgment, the interest rate per annum offered for deposits in U.S.
Dollars for a thirty (30) day period in the London interbank market which
appears on Telerate page 3750 or such other page as may replace Page 3750 on
that service or such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying such rate
(collectively, "Telerate Page 3750") at approximately 11:00 A.M. New York time
on the date that is two (2) Business Days prior to the first day of an Interest
Payment Date, as determined by Lender in its good faith judgment. If the
interest period is of a duration falling between the interest periods for which
such rate appears on Telerate Page 3750, the LIBOR Rate shall be the rate
determined by interpolation between rates for the next shorter and the next
longer interest periods for which such rate appears on Telerate Page 3750, as
determined by Lender in its good faith judgment, whose determination shall be
conclusive in the absence of manifest error. In the event that (i) more than one
such LIBOR Rate is provided, the average of such rates shall apply or (ii) no
such LIBOR Rate is published, then the LIBOR Rate shall be determined from such
comparable financial reporting company as the Lender, in its good faith
judgment, shall determine.
"Licenses" shall have the meaning set forth in Section 4.1(v)
hereof.
"Lien" shall mean any mortgage, deed of trust, lien (statutory or
other), pledge, hypothecation, assignment, preference, priority, security
interest, or any other encumbrance or charge on or affecting the Mortgaged
Property, the Collateral or any portion thereof or the Property Owner or
Borrower (including, without limitation, any conditional sale or other title
retention agreement, any sale-leaseback, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement or similar instrument under the Uniform Commercial Code
or comparable law of any other jurisdiction, domestic or foreign, and mechanics,
materialmen's and other similar liens and encumbrances).
"Loan" shall mean the Advance made pursuant to this Agreement and
the other Loan Documents, and evidenced by the Note and secured by the Pledge
Agreement and the other Loan Documents.
"Loan Amount" shall mean $75,000,000.00.
"Loan Documents" shall mean, collectively, this Agreement, the Note,
the Pledge Agreement, the Assignment of Agreements, the Environmental Indemnity,
the Guaranties, the Four-Party Agreement, the Construction Manager's Consent,
the Architect's Consent, the Property Manager's Consent and the Financing
Statements and any other document executed in connection with the Loan, as well
as all other documents executed and/or delivered in connection with the Loan or
hereafter delivered by or on behalf of the Borrower pursuant to the requirements
hereof or of any other Loan Document.
"Make-Whole Amount" shall mean with respect to any prepayment of the
Loan before the expiration of the Initial Maturity Date, an amount equal to the
difference between (x) the interest payments that would have been payable by the
Borrower on the amount of the Loan being prepaid from and after the date of such
prepayment to the Initial Maturity Date if such amount had remained outstanding
through the Initial Maturity Date at the rate of fifteen percent (15%) per
annum, compounded monthly, and (y) the amount of interest which would have been
payable over the same period, compounded monthly, at a rate equal to the yield
at the time of such prepayment on the U.S. Treasury issue with a maturity date
closest to, but not before the Initial Maturity Date (with such yield based on
the bid price for such issue as determined by the Lender).
"Managing Member" shall mean the Guarantor.
"Market Foods" shall mean Market Foods Limited L.L.C., an Arkansas
limited liability company, and its permitted successors and assigns.
"Market Foods Lease" shall mean that certain Lease Agreement dated
as of January 24, 2003 by and between Property Owner and Market Foods, as same
may be further amended from time to time in accordance with the terms of this
Agreement.
"Market Lease" shall have the meaning set forth in Section 5.1(t)
hereof.
"Material Adverse Effect" shall mean any material adverse effect
upon (i) the business operations, economic performance, assets or condition
(financial or otherwise) of any Borrower Party or the Mortgaged Property, (ii)
the ability of any Borrower Party to perform, in all material respects, its
material obligations under each of the Loan Documents, (iii) the enforceability
or validity of any Loan Document or the perfection or priority of any Lien
created under any Loan Document, (iv) the value of, or cash flow from, the
Mortgaged Property or the operations thereof or (v) the rights, interests and
remedies of the Lender under the Loan Documents.
"Material Agreements" shall mean each contract and agreement
relating to the ownership, development, construction, use, operation, leasing
(excluding Approved Leases), management, maintenance, repair or improvement of
the Mortgaged Property or any portion thereof, or otherwise imposing obligations
on the Property Owner or the Borrower, under which the Property Owner or the
Borrower would have the obligation to pay more than $500,000 per annum or which
has an unexpired term in excess of one (1) year and cannot be terminated by the
Property Owner or the Borrower without cause, penalty or premium upon thirty
(30) days notice or less.
"Maturity Date" shall mean the Initial Maturity Date or the Extended
Maturity Date, as appropriate, or if such day is not a Business Day then on the
first Business Day prior thereto, or such other date on which the final payment
of principal of the Note becomes due and payable as herein provided, whether at
such stated maturity date, by declaration of acceleration, or otherwise.
"Mezzanine Debt Service Coverage Ratio" shall mean, on any date of
determination, the ratio for the three-month period ending on such date of
determination, of (i) the aggregate Net Operating Income for such period to (ii)
the aggregate Combined Debt Service for such period.
"MDI" shall mean AMEC Construction Management, Inc., successor in
interest to Xxxxx Diesel International, Inc., and its permitted successors and
assigns.
"Minimum Net Effective Rent Requirements" shall mean, with respect
to any Lease of all or any portion of the Project described below, that such
Lease provides for the applicable Net Effective Rent in accordance with the
following schedule:
Gross Sq Ft Net Sq Ft NER
Retail - LL Sub 135,014 56,755 $20.42
Retail - Ground 1 incl. above 27,828 $38.23
Retail - 2nd 2 incl. above 30,179 $24.84
Low Rise 3-11 656,514 558,038 $16.73
Mid Rise 12-24 472,095 401,278 $14.20
High Rise 25-37 514,644 437,449 $15.35
Total 1,778,267 1,511,527 $16.35
"Monthly Debt Service Payment" shall have the meaning set forth in
Section 2.3.1 hereof.
"Mortgage" shall mean that certain first priority Mortgage, Security
Agreement, Assignment of Leases, Rents and Revenues, and Fixture Filing, dated
as of the date hereof, executed and delivered by the Property Owner as security
for the Senior Loan and encumbering the Mortgaged Property.
"Mortgaged Property" shall have the meaning set forth in the Senior
Loan Agreement.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Borrower Party or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within any of
the preceding five years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Borrower Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Borrower Party or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Effective Rent" shall mean, with respect to any Lease, the
actual rent per rentable square foot for the first year of such Lease, minus (i)
tenant allowance costs per rentable square foot divided by the term of such
Lease, (ii) leasing commissions costs per rentable square foot divided by the
term of such Lease, (iii) all free rent allowances and/or rental abatements
allowable to the Tenant at any time during the term of such Lease per rentable
square foot divided by the term of such Lease and (iv) any amount of operating
expense reimbursements for the Project with respect to which the Tenant is not
required to pay its pro rata share under such Lease and for which the Property
Owner is not otherwise entitled to be reimbursed.
"Net Operating Income" shall mean, with respect to the Mortgaged
Property for any period, Operating Income less Operating Expenses.
"Net Proceeds" shall mean: (i) the net amount of all insurance
proceeds received by the Lender as a result of any Casualty to the Mortgaged
Property, after deduction of the Lender's reasonable out-of-pocket costs and
expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting same ("Insurance Proceeds"); and/or (ii) the net amount of all
condemnation awards, proceeds and payments received by the Lender with respect
to any Partial Condemnation or Total Condemnation (as applicable), after
deduction of the Lender's reasonable out-of-pocket costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
same ("Condemnation Proceeds").
"Net Proceeds Deficiency" shall have the meaning set forth in
Section 8.1.4(e) hereof.
"Non-Recourse Carveout Guaranty" means that certain Non-Recourse
Carveout Guaranty relating to the Loan, dated as of the date hereof, made by
Guarantor in favor of the Lender.
"Note" shall mean that promissory note made by the Borrower in favor
of the Lender evidencing the Loan Amount, as such promissory note may be
amended, modified, restated, supplemented, extended, renewed, or replaced from
time to time.
"NRSF" shall mean net rentable square feet determined in accordance
with the Standard Method for Measuring Floor Area in Office Buildings (ANSI/BOMA
Z65.1, 1996).
"Occupies" or "Occupancy" in respect of a Lease shall mean that
Tenant under such Lease (i) has executed and delivered such Lease, (ii) has
accepted the premises demised pursuant to such Lease and has provided evidence
of acceptance thereof reasonably satisfactory to the Lender, and (iii) either
occupies the premises demised pursuant to such Lease or takes possession of such
premises for the purpose of constructing tenant improvements.
"Officer's Certificate" shall mean, with respect to any Borrower
Party, a certificate made by an individual authorized to act on behalf of such
Borrower Party. Without limiting the foregoing, if the individual signing the
certificate is doing so on behalf of a corporation, then such individual shall
hold the office of President, Executive Vice President, Senior Vice President,
Vice President, Chief Financial Officer, Treasurer or Controller (or the
equivalent) with respect to such corporation and if the certificate is being
delivered in connection with any financial statement, report or record, then
such certificate shall be signed by the Chief Financial Officer, Senior Vice
President - Finance, Controller or Treasurer of such Borrower Party.
"Operating Agreements" shall mean (i) reciprocal easement and/or
operating agreements, (ii) covenants, conditions and restrictions, and (iii)
similar agreements affecting the Mortgaged Property and binding upon and/or
benefiting the Property Owner and a third party. A list of Operating Agreements
is attached hereto as Exhibit M.
"Operating Expenses" shall mean, in respect of the Mortgaged
Property and for any specified period, on an accrual basis, all expenses paid
(or due and payable) by the Property Owner (or by an Acceptable Property Manager
for the account of the Property Owner) during such period in connection with the
operation of the Mortgaged Property (including Basic Carrying Costs), as well as
bookkeeping, accounting, insurance costs, Base Management Fees, Leasing
Commissions, wages and other costs and expenses incurred for the Mortgaged
Property and legal expenses incurred in connection with the operation of the
Mortgaged Property, determined, in each case, consistently with GAAP; but
"Operating Expenses" shall not include (i) depreciation or amortization or other
noncash items (other than expenses that are accrued but not yet paid), (ii) the
principal of and interest on the Senior Loan or any other Indebtedness of the
Property Owner, (iii) income taxes or other taxes in the nature of income taxes,
(iv) any expenses (including legal, accounting and other professional fees,
expenses and disbursements) incurred in connection with and allocable to the
Senior Loan, (v) the cost of any actual Capital Expenditures, (vi) distributions
to the members of the Property Owner of any management fees or similar
compensation (other than Base Management Fees and Leasing Commissions) or
similar compensation payable to any Affiliate of the Property Owner, and (vii)
any item of expense which otherwise would be considered within Operating
Expenses but is paid directly by any Tenant. Expenses that are accrued as
Operating Expenses during any period shall not be included in Operating Expenses
when paid during any subsequent period.
"Operating Income" shall mean, in respect of the Mortgaged Property
and for any specified period, all revenue received by the Property Owner (or by
an Acceptable Property Manager for the account of the Property Owner) from any
Person during such period in connection with the operation of the Mortgaged
Property, determined on an accrual basis of accounting consistent with GAAP,
including, without limitation, the following:
(i) all Rents and, without duplication, all charges received by the
Property Owner (or by an Acceptable Property Manager for the account of
the Property Owner) for electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, telecommunications,
telephone, utility or similar items, including overtime usage, HVAC
equipment charges, sprinkler charges, escalation charges, license fees,
maintenance and cleaning fees, charges for improvements, parking revenues
and income, Taxes and Other Charges and other amounts payable to the
Property Owner (or to an Acceptable Property Manager for the account of
the Property Owner) under any Lease (including tenant security deposits
but only to the extent the Property Owner is entitled to apply or retain
the security deposit in accordance with the Lease and any interest income
earned thereon and retained by the Property Owner) or other agreement
relating to the Mortgaged Property (it being expressly agreed that all
rent shall be adjusted to eliminate the effect of straight lining);
(ii) all amounts payable to the Property Owner (or to an Acceptable
Property Manager for the account of the Property Owner) pursuant to
Operating Agreements relating to the Mortgaged Property;
(iii) condemnation awards to the extent that such awards are
compensation for lost rent allocable to such specified period;
(iv) business interruption and loss of "rental value" insurance
proceeds to the extent such proceeds are allocable to such specified
period; and
(v) all other income, which is recurring and collected in the
ordinary course of business of operating the Mortgaged Property.
Notwithstanding the foregoing clauses (i) through (v), Operating Income shall
not include (A) any condemnation or insurance proceeds (other than of the types
described in clauses (iii) and (iv) above, (B) any proceeds resulting from the
sale, exchange, transfer, financing or refinancing of all or any part of the
Mortgaged Property (other than of the types described in clause (iii) above),
(C) any type of income that would otherwise be considered Operating Income
pursuant to the provisions above but is paid directly by any Tenant to a Person
other than the Property Owner or its agents and (D) any fees or other amounts
payable by a Tenant or another Person that are reimbursable by the Property
Owner to such Tenant or other Person.
"Organizational Documents" shall mean (i) with respect to any Person
that is a corporation, the certificate of incorporation or charter and by-laws
of such Person, (ii) with respect to any Person that is a partnership, the
partnership agreement and, if a limited partnership, the certificate of limited
partnership of such Person and the limited partnership agreement, and (iii) with
respect to any Person that is a limited liability company, the certificate of
formation or the articles of organization and the operating agreement of such
Person.
"Other Charges" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including vault charges and
license fees for the use of vaults and similar areas adjoining the Mortgaged
Property, now or hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof and payable by the Property Owner.
"Other Taxes" shall have the meaning set forth in Section 2.2.2(b)
hereof.
"Outside Completion Date" shall mean the earlier to occur of (i)
Substantial Completion of construction of the Base Building Improvements with
the understanding being that the only remaining items required to be completed
to cause Substantial Completion of construction of the Base Building
Improvements relate solely to those matters reflected in subpart (iv) of the
definition of "Substantial Completion" herein contained, and (ii) August 31,
2003, subject to delays caused by Force Majeure Events.
"Partial Condemnation" shall mean any condemnation or eminent domain
proceeding or action (including but not limited to any transfer made in lieu of
or in anticipation of the exercise of such taking) by any Governmental
Authority, whether for any permanent or temporary use, occupancy or other
interest affecting such portion of the Mortgaged Property other than a Total
Condemnation.
"Participation" shall have the meaning set forth in Section 5.1(v)
hereof.
"Payment and Performance Bonds" shall mean those dual-obligee
payment and performance bonds identified on Exhibit N.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"PCB" shall have the meaning set forth in the definition of
Hazardous Substance.
"Permits" shall mean all licenses, permits, variances and
certificates used or required in connection with the ownership, operation, use
or occupancy of the Mortgaged Property (including, without limitation, business
licenses, state health department licenses and all such other permits, licenses
and rights, obtained from any Governmental Authority or private Person).
"Permitted Encumbrances" shall have the meaning ascribed to such
term in the Senior Loan Agreement.
"Permitted Indebtedness" shall mean (i) the Debt, (ii) written
indemnities entered into in the ordinary course of business and on customary
terms and conditions in connection with the acquisition of goods or services,
and, (iii) any other unsecured indebtedness approved by the Lender in its sole
discretion.
"Person" shall mean any individual, sole proprietorship,
corporation, general partnership, limited partnership, limited liability company
or partnership, joint venture, association, joint stock company, bank, trust,
estate, unincorporated organization, endowment fund, any Governmental Authority
or any other form of entity.
"Plan" shall mean a Single Employer or a Multiple Employer Plan.
"Plans and Specifications" shall mean for the Project, the
architectural plans and specifications for the Improvements prepared by the
Architect and delivered to Lender, as the same may be amended and supplemented
from time to time in accordance with the terms of this Agreement.
"Pledge Agreement" shall mean that certain Pledge and Security
Agreement, dated as of the date hereof, made by Guarantor and Borrower in favor
of the Lender.
"Policies" shall have the meaning set forth in Section 8.1.1(c)
hereof.
"Prepayment" shall have the meaning set forth in Section 2.4.2
hereof.
"Prepayment Date" shall have the meaning set forth in Section 2.4.2
hereof.
"Prepayment Notice" shall have the meaning set forth in Section
2.4.2 hereof.
"Prohibited Amendment" shall have the meaning set forth in Section
6.1(v) hereof.
"Project" shall have the meaning set forth in the recitals to this
Agreement.
"Project Lease" shall mean a Lease substantially in the form
attached hereto as Exhibit C, which form has been approved by the Lender as the
standard office lease for the Project.
"Property Management Agreement" shall mean (i) the amended and
restated property management agreement entered into by the Property Owner and
the Property Manager and approved by the Lender as set forth in Section 10.1
hereof, pursuant to which the Property Manager is to provide management and
other services with respect to the Mortgaged Property and (ii) any other
management agreement entered into with the prior written consent of Lender
(which consent shall not be unreasonably withheld or delayed).
"Property Manager" shall mean (i) any Acceptable Property Manager or
(ii) any replacement Property Manager appointed in accordance with Section 10.1
hereof.
"Property Manager's Consent" shall mean that certain Second Priority
Property Manager's Consent and Subordination of Property Management Agreement
relating to the Mortgaged Property entered into by the Property Manager in favor
of the Lender.
"Property Owner" shall have the meaning set forth in the recitals to
this Agreement.
"Punch List Items" shall have the meaning set forth in the
definition of Substantial Completion.
"Qualified Survey" shall mean that survey of the Mortgaged Property
prepared by Chicago Guaranty Survey Company dated June 20, 2002 under Order
#0206004.
"Qualified Title Policy" shall mean that owner's title insurance
policy #N0001567P issued on Ticor Title Insurance Company or any new owner's
title insurance policy acceptable to Lender.
"Qualifying Lease" shall mean a Lease that (i) (A) is an Approved
Lease and (B) when considered together with all other Qualifying Leases other
than the Bank One Lease, provides for an average base rental rate (weighted pro
rata to the area of the applicable leased premises) of at least $22.50 per NRSF,
which rate assumes that the Tenant under the applicable Qualifying Lease must
pay its pro rata share (payable on a "net" basis) of Taxes and Operating
Expenses or (ii) the Lender otherwise approves as a Qualifying Lease.
"Rating Agency" shall mean any one or more of Standard & Poor's
Rating Services, a division of The XxXxxx-Xxxx Companies, Inc., Xxxxx'x
Investors Service, Inc., Fitch IBCA, Inc., or any other nationally-recognized
statistical rating agency and their respective successors, as selected by the
Lender.
"Receipts" shall mean (i) all of the Borrower's distributions, and
rights to distributions, from the Property Owner, and (ii) all of the
Guarantor's distributions and rights to distributions from the Borrower.
"Regulation D" shall mean Regulation D of the Federal Reserve Board,
as in effect from time to time.
"Related Party" shall mean any member, shareholder, partner,
principal, Affiliate, employee, officer, director, agent or representative of
any Borrower Party.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment (including, without limitation, the movement
of Hazardous Substances through ambient air, soil, surface water, groundwater,
wetlands, land or subsurface strata).
"Rents" shall mean all rents, rent equivalents, moneys payable as
damages pursuant to a Lease or in lieu of rent or rent equivalents, royalties
(including all oil and gas or other mineral royalties and bonuses), income,
receivables, receipts, revenues, deposits (including security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account or benefit of the Property Owner or its agents or employees from any and
all sources arising from or attributable to the Mortgaged Property and/or the
use and occupancy by Tenants thereof, including, without limitation, any
obligations now existing or hereafter arising or created out of the sale, Lease,
sublease, license, concession or other grant of the right of the use and
occupancy of the Mortgaged Property or rendering of services by the Property
Owner and proceeds, if any, from business interruption or other loss of income
insurance.
"Required Equity" shall mean an amount equal to $70,000,000, which
amount shall have been fully invested (or contributed in the form of land) by
the Borrower Parties in the Project in a manner reasonably satisfactory to the
Lender.
"Required Rating" shall mean "AA" (or its equivalent) by the Rating
Agencies.
"Required Records" shall have the meaning set forth in Section
5.1(k)(x) hereof.
"Restoration" shall mean the repair and restoration of the Mortgaged
Property to a substantially comparable condition as existed immediately prior to
a Casualty or Partial Condemnation, as applicable, together with such
alterations and additions as may be reasonably approved by the Lender or
required by a Governmental Authority.
"Restricted Securities Account" shall have the meaning set forth in
Section 11.26 hereof.
"Retainage" shall mean, for each construction contract and
subcontract, the greater of (i) ten percent (10%) of all Hard Costs funded to
the contractor or subcontractor under the contract or subcontract relating to
such contractor's or subcontractor's services until such time as the labor or
materials provided under such contract or subcontract is fifty percent (50%)
complete as certified by the Construction Consultant, at which time no further
Retainage under such contract or subcontract shall be required and (ii) the
actual retainage required under such contract or subcontract. There shall be no
Retainage on Soft Costs, unless retainage on Soft Costs is required under such
construction contract or subcontract, in which case the Retainage for such Soft
Costs shall be as set forth in such construction contract or subcontract.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Senior Lender" shall have the meaning set forth in the recitals to
this Agreement.
"Senior Loan" shall mean that certain loan contemplated pursuant to
the Senior Loan Agreement between the Property Owner and the Senior Lender.
"Senior Loan Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Senior Loan Amount" shall mean, from time to time, the "Loan
Commitment Amount" as defined in and calculated under the Senior Loan Agreement.
"Senior Loan Documents" shall mean the Senior Loan Agreement and all
additional documents executed or delivered by or on behalf of the Property Owner
in connection with the Senior Loan as of the date hereof, as heretofore amended,
and as may be further amended from time to time in accordance with the terms of
the Intercreditor Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Borrower Party or any ERISA Affiliate and no Person other than the Borrower
Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Borrower Party or any ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to be terminated.
"Soft Costs" shall mean all Construction Costs that are not Hard
Costs, and which are delineated in the Approved Construction Budget.
"Stabilized Occupancy" shall mean Occupancy by Tenants accounting
for 92% of the NRSF of the Project pursuant to Approved Leases.
"Subsidiary" shall mean (i) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries, (ii)
any partnership, association, trust, joint venture, limited liability company or
other entity in which such Person directly or indirectly through subsidiaries
has more than a 50% equity interest at any time and (iii) any partnership,
association, trust, joint venture, limited liability company or other business
entity which is required to be consolidated with another such business entity in
accordance with GAAP.
"Substantial Completion" shall mean the date when all of the
following conditions have been satisfied:
(i) all Work associated with the Base Building Improvements has been
completed in accordance with the Plans and Specifications and the
Construction Agreement (except for non-material deviations therefrom that
do not adversely affect the use of the Improvements for their intended use
or their value) and shall satisfy the requirements of all "Landlord's
Work" (other than tenant improvements) under the Bank One Lease, the
Holland & Knight Lease and the Citadel Lease, subject only to the
completion of non-material details of correction, construction or
mechanical adjustment, the non-completion of which does not interfere with
the use and occupancy of the Mortgaged Property for its intended purpose
(the "Punch List Items");
(ii) the Property Owner shall have obtained and the Borrower shall
have delivered or cause to be delivered to the Lender all required
Governmental Approvals and all sign-offs, permits, licenses and
certificates of any Governmental Authority regarding work associated with
the Base Building Improvements, issued, in each case, by the appropriate
Governmental Authority;
(iii) the Mortgaged Property shall be free of any Lien pertaining to
the Work (other than Permitted Encumbrances) and the Lender shall have
received such releases of liens, waivers and affidavits with respect
thereto as it may reasonably require; and
(iv) the Lender shall have received all other documents, sign-offs,
approvals, licenses and permits, including copies of completed AIA Form
G704 (Certificate of Substantial Completion), to determine that all
conditions to substantial completion of the Work have been met under the
terms of the Senior Loan Documents.
"Taxes" shall mean all real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents, and
other governmental charges now or hereafter levied or assessed or imposed
against the Property Owner or the Mortgaged Property or rents therefrom or which
may become Liens.
"Tenant" shall mean any Person liable by contract or otherwise to
pay monies (including a percentage of gross income, revenue or profits) pursuant
to a Lease.
"Title Company" shall mean Near North National Title Corporation, as
agent, and Ticor Title Insurance Company, Lawyers Title Insurance Corporation,
First American Title Insurance Company, Xxxxxxx Title Insurance Company and Old
Republic Title Insurance Company, as co-insurers.
"Total Condemnation" shall mean any condemnation or eminent domain
proceeding or action (including but not limited to any transfer made in lieu of
or in anticipation of the exercise of such taking) by any Governmental
Authority, whether for any permanent or temporary use, occupancy or other
interest affecting such portion of the Mortgaged Property as, when so taken or
condemned, would leave, in the Lender's reasonable determination, a balance of
the Mortgaged Property that, due either to the area so taken or the location of
the part so taken in relation to the part not taken, would not, under economic
conditions, physical constraints, zoning laws, building regulations and other
Laws and Regulations then existing, readily accommodate a new or reconstructed
building or buildings and other improvements of a type comparable to the
Improvements existing as of the date of such taking or condemnation.
"UCC" or "Uniform Commercial Code" shall mean (i) with respect to
any tangible Collateral, the Uniform Commercial Code as in effect on the date
hereof in the state where such Collateral is located, as amended from time to
time, and (ii) with respect to any intangible Collateral, the Uniform Commercial
Code as in effect on the date hereof in (A) the state in which the chief
executive office of the Person with ownership of such Collateral is located, and
(B) the state in which such Person is organized, in each case, as amended from
time to time.
"U.S. Government Securities" shall mean securities evidencing an
obligation to pay principal and interest in a full and timely manner that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person Controlled
or supervised by and acting as an agency or instrumentality of and guaranteed as
a full faith and credit obligation by the United States of America (including a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such securities or a specific
payment of principal of or interest on any such securities held by such
custodian for the account of the holder of such depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the securities or the
specific payment of principal of or interest on the securities evidenced by such
depository receipt).
"U.S. Tax" shall mean any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof (excluding any franchise and income taxes due from and
payable by Lender).
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Work" shall mean all construction, labor, materials, supplies,
monitoring, supervision, administration, contracting and other services or
materials necessary or desirable for the satisfactory performance, execution and
Final Completion of the construction of the Base Building Improvements in
accordance with the Plans and Specifications, the Construction Agreement and
good construction practice.
Section 1.2 Principles of Construction. (a) All references to sections,
schedules and exhibits are to sections, schedules and exhibits in or to this
Agreement unless otherwise specified. 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. The words "includes", "including" and similar terms
shall be construed as if followed by the words "without limitation". The terms
"Mortgaged Property" and "Collateral" shall be construed to be followed by the
phrase "or any part or portion thereof". 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. Any reference herein to
any Loan Document shall refer to such Loan Document as such Loan Document may be
amended, restated or otherwise modified from time to time. All accounting terms
not specifically defined herein shall be construed in accordance with GAAP, as
may be modified herein. As a matter of convenience herein, rating categories are
generally stated in the nomenclature of Standard & Poor's Ratings Services, it
being understood that unless otherwise expressly stated to the contrary,
reference to such category shall also be deemed to be a reference to the
comparable category of each other Rating Agency. Whenever in this Agreement any
Person is referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such Person, provided that the
foregoing shall not be deemed to permit any transfer of any ownership interest
that is otherwise prohibited hereunder. All covenants, promises and agreements
in this Agreement contained, by or on behalf of the Borrower, shall inure to the
benefit of the respective legal representatives, successors and assigns of the
Lender.
(b) Whenever in this Agreement the phrase the Borrower "shall, or shall
cause the Property Owner to" or "shall not permit the Property Owner to"
appears, or the Borrower otherwise undertakes and/or covenants to cause the
Property Owner to take, or refrain from taking, any action pursuant to this
Agreement or any other Loan Document, it shall be understood that Borrower's
actions in connection with such undertakings or covenants will be (i) pursuant
to proper limited liability company action and in observance of proper limited
liability company and entity formalities and capacities in accordance with the
Organization Documents of the Borrower and the Property Owner, (ii) not in
derogation of any contractual or legal obligations of the Property Owner, and
(iii) not in derogation of the Borrower's obligation to maintain its corporate
separateness from the Property Owner.
ARTICLE II
GENERAL
Section 2.1 The Loan.
2.1.1 Loan. On the date of funding of the Loan, the Lender shall, subject
to the terms and conditions set forth herein, advance the full amount of the
proceeds of the Loan Proceeds (the "Advance"). The Loan shall mature on the
Maturity Date. The Borrower hereby agrees to accept the Loan as of the date
hereof, subject to and upon the terms and conditions set forth herein. The
proceeds of the Advance shall only be used by the Borrower to repay the Existing
Mezzanine Loan.
2.1.2 Miscellaneous. The making of the Advance by the Lender shall not
constitute the Lender's approval or acceptance of the construction theretofore
completed or the materials furnished in connection therewith. The Lender's prior
or future inspection and approval of the Plans and Specifications, the
construction of the Improvements, or the workmanship and materials used therein,
shall impose no liability of any kind on the Lender.
2.1.3 No Re-advances. Any amount borrowed and repaid hereunder in respect
of the Loan may not be reborrowed.
2.1.4 The Note. The Loan shall be evidenced by a Note from the Borrower in
the principal amount of the Loan. The Note shall bear interest at the Applicable
Interest Rate with respect to the principal amount thereof advanced and
outstanding to and including the Maturity Date and thereafter (and at any time
during the continuance of an Event of Default) until repayment at the Default
Rate. The Note shall be subject to repayment as provided in Section 2.3 hereof,
shall be entitled to the benefits of this Agreement and shall be secured by the
Pledge Agreement and the Financing Statements and by certain of the other Loan
Documents.
Section 2.2 Interest.
2.2.1 Generally. Interest on the outstanding principal balance of the Loan
and the Note shall accrue at the Applicable Interest Rate and shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed in the applicable calendar month.
2.2.2 Determination of Interest Rate. (a) The rate at which the outstanding
principal amount of the Loan bears interest from time to time as set forth below
shall be referred to as the "Applicable Interest Rate". The Loan shall bear
interest at:
(i) A fixed rate of ten percent (10%) per annum through and including the
Initial Maturity Date; and
(ii) In the event the Maturity Date is extended to the Extended Maturity
Date in accordance with Section 2.8 below, a floating rate equal to 800 basis
points (8%) over the LIBOR Rate that is in effect two (2) Business Days prior to
the first day of a monthly interest period.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or other excise or property taxes, charges, or similar levies
which arise from any payment made hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other Loan
Documents or the Loan (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify Lender for the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.2.2) paid by the Lender and
any liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within thirty
(30) days after the date the Lender makes written demand therefor.
Notwithstanding the foregoing, in no event shall the Borrower be required to
indemnify the Lender (and the terms "Taxes" and "Other Taxes" shall specifically
exclude in the case of the Lender) in respect of taxes imposed on the Lender's
income (including penalties and interest in respect thereof) and franchise taxes
imposed by any Governmental Authority.
(d) If the Borrower is required by law to withhold or deduct any amount
from any payment hereunder in respect of any U.S. Tax, the Borrower shall
withhold or deduct the appropriate amount, remit such amount to the appropriate
Governmental Authority and pay to each Person to whom there has been an
Assignment or Participation of the Loan and who is not a U.S. Person such
additional amounts as are necessary in order that the net payment of any amount
due to such non-U.S. Person hereunder after deduction for or withholding in
respect of any U.S. Tax imposed with respect to such payment (or in lieu
thereof, payment of such U.S. Tax by such non-U.S. Person), will not be less
than the amount stated herein to be then due and payable, provided that the
foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to any Person unless such Person (or if such Person is
not the beneficial owner of the Loan, such beneficial owner) has
contemporaneously with its becoming a party to an Assignment or Participation,
complied with its obligations under Section 11.23(b) hereof;
(ii) to any U.S. Taxes imposed solely by reason of the failure by such
Person (or, if such Person is not the beneficial owner of the Loan, such
beneficial owner) to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of such
Person (or beneficial owner, as the case may be) if such compliance is required
by statute or regulation of the United States of America as a precondition to
relief or exemption from such U.S. Taxes unless such Person is legally unable to
do so;
(iii) with respect to any Person who is a fiduciary or a partnership or
other than the sole beneficial owner of such payment, to any U.S. Tax imposed
with respect to payments made under the Note to a fiduciary or a partnership to
the extent that the beneficial owner or member of the partnership would not have
been entitled to the additional amounts if such beneficial owner or member of
the partnership had been the holder of the Note; or
(iv) to any U.S. Tax imposed as a result of any act or omission by a Person
that is a holder or beneficial owner of the Note that would cause the Person to
be unable to comply with Section 11.23(b) hereof.
(e) (i) Without limiting the effect of any other provision of this
Agreement, Borrower shall pay to Lender on the last day before each and every
Interest Payment Date, so long as and to the extent that the Lender may directly
or indirectly be required in connection with the Loan to maintain reserves
against "Eurocurrency liabilities" under Federal Reserve Regulation D (as at any
time amended), for the monthly period immediately preceding such Interest
Payment Date (the "Interest Period") at an interest rate per annum equal, at all
times during such Interest Period for the Loan, to the excess of (i) the rate
obtained by dividing the LIBOR Rate for such Interest Period by a percentage
equal to 100% minus the reserve percentage applicable during such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or if more than one such percentage is so
applicable, minus the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) for
determining the maximum reserve requirement (including without limitation, any
marginal reserve requirement) for Lender in respect of liabilities or assets
consisting of or including "Eurocurrency liabilities" under Federal Reserve
Regulation D (as at any time amended) having a term equal to such Interest
Period over (ii) the LIBOR Rate for such Interest Period. Terms used in
Regulation D shall have the same meanings when used herein. Each such
determination made by Lender and each such notification by Lender to Borrower
under this subparagraph of the amount of additional interest payable hereunder
shall be conclusive as to the matters set forth therein, absent manifest error.
(ii) Borrower shall, from time to time, upon demand by Lender pay to Lender
amounts as shall be sufficient to compensate Lender for (i) any loss, cost, fee,
breakage or other expenses incurred or sustained directly or indirectly by
reason of the liquidation or reemployment of deposits or other funds acquired by
Lender to fund or maintain the Loan during any Interest Period as a result of
any prepayment of the Loan or any portion thereof or any attempt by Borrower to
rescind the selection of the LIBOR Rate as the applicable interest rate for the
Loan and (ii) any increased costs incurred by Lender, by reason of:
(x) taxes (or the withholding of amounts for taxes) of any nature
whatsoever, including, without limitation, income, excise and interest
equalization taxes (other than United States or state income taxes) as
well as all levels, imports, duties, or fees whether now in existence or
as the result of a change in, or promulgation of, any treaty, statute or
regulation or interpretation thereof, or any directive, guideline or
otherwise, by a central bank or fiscal authority or any other entity
(whether or not having the force of law) or a change in the basis of, or
time of payment of, such taxes and other amounts resulting therefrom;
(y) any reserve or special deposit requirements against or with
respect to assets or liabilities or deposits outstanding under a LIBOR
Rate (including, without limitation, those imposed under the Monetary
Control Act of 1978) currently required by, or resulting from a change in,
or the promulgation of, such requirements by treaty, statute, regulation,
interpretation thereof, or any directive, guidelines, or otherwise by a
central bank or fiscal authority (whether or not having the force of law);
and
(z) any other costs resulting from compliance with treaties,
statutes, regulations, interpretations or any directives or guidelines or
otherwise, promulgated by or of a central bank or fiscal authority or
other entity (whether or not having the force of law).
A certificate as to the amount of any such costs prepared by Lender, signed by
an authorized officer of Lender and submitted to Borrower, shall be conclusive
as to the matters therein set forth, absent manifest error. The Loan shall not
be deemed to have been paid and/or satisfied in full until all such additional
costs, in addition to the principal balance hereof and all interest thereon,
shall have been paid. Lender shall use commercially reasonable efforts to
mitigate Borrower's exposure to Breakage Fees.
(f) Within thirty (30) days after paying any amount from which it is
required by law to make any deduction or withholding, and within thirty
(30) days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the Borrower shall
deliver to such non-U.S. Person satisfactory evidence of such deduction,
withholding or payment (as the case may be).
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.2.2 shall survive the payment in full of
principal and interest hereunder, and the termination of this Agreement.
2.2.3 Default Rate. If an Event of Default shall have occurred and be
continuing (including the failure of the Borrower to make a payment of principal
or interest on an Interest Payment Date after any applicable cure periods have
expired), the Borrower shall pay interest at the Default Rate on the outstanding
amount of the Loan and accrued but unpaid interest thereon, upon demand from
time to time (which interest is payable both before and after the Lender has
obtained a judgment with respect to the Loan), to the extent permitted by
applicable law. Payment or acceptance of the increased rates provided for in
this Section 2.2.3 is not a permitted alternative to timely payment or full
performance by the Borrower and shall not constitute a waiver of any Default or
Event of Default or an amendment to this Agreement or any other Loan Document
and shall not otherwise prejudice or limit any rights or remedies of the Lender.
2.2.4 Late Payment Premium. The Borrower shall pay to the Lender a late
payment premium in the amount of five percent (5%) of any principal amortization
payment, interest, fee or other amount payable under the Loan made more than
five (5) calendar days after the due date thereof, which late payment premium
shall be due with any such late payment. The acceptance of a late payment
premium shall not constitute a waiver of any default then existing or thereafter
arising under this Agreement. Further, the Lender's failure to collect a late
payment premium at any time shall not constitute a waiver of the or Lender's
right to thereafter, at any time and from time to time (including, without
limitation, upon acceleration of the Note or upon payment in full of the Loan),
collect such previously uncollected late payment premiums or to collect
subsequently accruing late payment premiums (unless Lender agrees to so waive
such rights in writing).
Section 2.3 Loan Payment.
2.3.1 Monthly Debt Service Payment. From and after the Advance, and on each
and every Interest Payment Date thereafter until the Debt has been paid in full,
the Borrower shall pay interest in arrears at the Applicable Interest Rate on
the outstanding principal balance of the Loan as computed in accordance with
Section 2.2.2 hereof (the "Monthly Debt Service Payment").
2.3.2 Payment on Maturity Date. The Borrower shall repay any and all
outstanding principal indebtedness of the Loan in full on the Maturity Date,
together with all accrued and unpaid interest thereon to (but excluding) the
date of repayment, together with the required IRR Amount and, except as
hereinafter provided, the Exit Fee and all other amounts due to the Lender
hereunder or under the Note, the Pledge Agreement and the other Loan Documents.
2.3.3 Making of Payments. Each payment by the Borrower hereunder or under
the Note shall be made in funds immediately available to the payee thereof by
12:00 p.m. New York City time, on the date such payment is due and shall be made
in lawful money of the United States of America by wire transfer in federal or
other immediately available funds. Payments of interest and principal in respect
of the Note shall be made to the Lender pursuant to the wiring instructions
provided by the Lender to the Borrower. Any funds received by the Lender after
such time shall, for all purposes hereof, be deemed to have been paid on the
next succeeding Business Day. Except as otherwise provided herein, whenever any
payment hereunder or under the 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
immediately subsequent thereto (except in the case of payments due on the
Maturity Date, which if not a Business Day shall be made on the first Business
Day immediately prior thereto).
2.3.4 Application of Payments. Payments made by the Borrower in respect of
the principal and interest of the Loan shall be applied in accordance with
Paragraph 4 of the Note; provided, however, that notwithstanding any provision
herein or therein to the contrary, upon the occurrence and during the
continuance of an Event of Default, the Lender may apply any payments received
to the Debt in such order, manner and amount as the Lender in its sole
discretion shall determine and the Lender may exercise any remedies available
under this Agreement, at law and in equity.
2.3.5 No Setoffs. All amounts due hereunder or under the Note or the other
Loan Documents shall be payable without setoff, counterclaim or any other
deduction whatsoever.
Section 2.4 Prepayment.
2.4.1 Mandatory Prepayments.
(a) Except as described in Section 2.4.1(b) below, if the Mortgaged
Property or the Property Owner's interest therein is sold, transferred or
otherwise disposed of, voluntarily or involuntarily (other than as permitted by
Section 6.1(h) below), or if the Lien of the Senior Loan Documents is released
from the Mortgaged Property, then, not later than the closing date or effective
date of such sale, transfer, disposition or release, the Borrower shall repay
the Loan, in full, together with interest thereon through the date of such
prepayment, the Make-Whole Amount (if such prepayment occurs prior to the
Initial Maturity Date), the Exit Fee and the Breakage Fee.
(b) If there shall occur a Casualty or Condemnation in respect of the
Mortgaged Property and as a result thereof the Senior Loan is prepaid in whole
or in part, then, to the extent that there shall be excess proceeds or awards
available to either the Property Owner or the Borrower following the application
of such proceeds or awards pursuant to the terms of the Senior Loan Documents,
the Borrower shall apply the amount of such available excess proceeds or awards
first, to any outstanding default interest, fees, late charges or other costs
due and owning to the Lender; second, to any accrued and unpaid interest on the
Loan at the Applicable Interest Rate; third, to the outstanding principal
balance of the Loan; fourth, to the Make-Whole Amount then due (but only in the
event such Casualty or Condemnation occurs prior to the Initial Maturity Date);
fifth, to the Exit Fee; sixth, to the Breakage Fee; and seventh, the remainder
of such proceeds, if any, to the Borrower. Payments required under this
subsection (b) shall be due on the first Interest Payment Date occurring after
the determination under the Senior Loan Agreement that the related proceeds or
awards will be applied to the Senior Loan.
2.4.2 Permitted Prepayment. Subject to the terms and conditions set forth
in this Section 2.4.2, the Borrower may prepay (without penalty, premium or
other prepayment charge other than the Make-Whole Amount [if the prepayment
occurs prior to the Initial Maturity Date], the Exit Fee and the Breakage Fee)
the Loan in whole or in part (hereinafter, a "Prepayment"); provided that the
Borrower gives an irrevocable written notice (the "Prepayment Notice") to the
Lender not less than thirty (30) days prior to the date on which such Prepayment
is to be made (the "Prepayment Date") specifying the date and amount of the
Prepayment. On the Prepayment Date, the Borrower shall pay to the Lender the
principal amount of the Loan specified in the Prepayment Notice, all accrued and
unpaid interest thereon, the Make-Whole Amount (if such Prepayment occurs prior
to the Initial Maturity Date), the Exit Fee, the Breakage Fee, all other sums
then due under the Note, this Agreement, the Pledge Agreement and the other Loan
Documents with respect to the amount so prepaid, and all actual, out-of-pocket
costs and expenses of the Lender incurred in connection with the Prepayment,
including reasonable attorneys' fees and disbursements. The Lender shall not be
obligated to accept any Prepayment of the principal balance of the Loan unless
it is accompanied by all sums due in connection therewith pursuant to the terms
hereof.
2.4.3 Repayment upon Event of Default. If all or any part of the principal
amount of the Loan is prepaid upon acceleration of the Loan following the
occurrence of an Event of Default, the Borrower shall be obligated to pay all
amounts that would be payable in connection with a prepayment under Section
2.4.2 hereof, including all accrued and unpaid interest on the principal balance
of the Note to the date of repayment (including interest owed at the Default
Rate), the IRR Amount, the Make-Whole Amount (if such repayment occurs prior to
the Initial Maturity Date), the Exit Fee, the Breakage Fee, all other sums then
due under the Note, this Agreement, the Pledge Agreement and the other Loan
Documents, and all out-of-pocket costs and expenses of the Lender incurred in
connection with such Event of Default including reasonable attorneys' fees and
disbursements.
Section 2.5 Release of the Collateral. Except as set forth in this Section
2.5, no repayment or prepayment of all or any portion of the Note shall cause,
give rise to a right to require, or otherwise result in, the release of the Lien
of the Loan Documents on the Collateral. The Lender shall, at the expense of the
Borrower, upon payment in full of all principal and interest on the Loan
(including the IRR Amount, the Make-Whole Amount [if applicable], the Exit Fee
and Breakage Fee) and all other amounts due and payable under the Loan Documents
in accordance with the terms and provisions of the Note and this Loan Agreement,
promptly release the Lien of the Pledge Agreement and related Loan Documents and
shall deliver documents evidencing such release in a form suitable for filing
and shall promptly return to Borrower the original Note marked "Cancelled and
Paid in Full."
Section 2.6 [Intentionally Deleted].
Section 2.7 [Intentionally Deleted].
Section 2.8 Extension of Initial Maturity Date.
(a) Subject to the provisions of this Section 2.8, the Borrower may, by
notice (the "Extension Notice") delivered to the Lender not later than ninety
(90) days prior to the Initial Maturity Date, extend the Maturity Date to the
date that is the first anniversary of the Initial Maturity Date (the "Extended
Maturity Date"). The Borrower's right to extend the Maturity Date shall be
subject to the satisfaction of each of the following conditions precedent as of
the delivery of the Extension Notice and as of the Initial Maturity Date:
(i) no Event of Default shall have occurred;
(ii) the Borrower shall have delivered to the Lender together with the
Extension Notice a certificate which shall be deemed remade as of the Initial
Maturity Date executed by an authorized signatory of the Borrower having actual
Knowledge sufficient to make such certification, representing and warranting, as
of the date of such certification, to the Lender that (A) the Loan Documents are
in full force and effect, (B) the Loan Documents constitute the valid and
binding obligations of the Borrower and the other Borrower Parties enforceable
in accordance with their terms, subject to Debtor Relief Laws and general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), (C) the Borrower and the other Borrower Parties
do not have any offsets, counterclaims or defenses with respect to the payment
of the Loan or to the Loan Documents or the Borrower or the Borrower Parties'
obligations and liabilities under the Loan Documents, and (D) all of the
representations and warranties contained in the Loan Documents, or otherwise
made with respect to the Loan, remain true and correct in all material respects;
(iii) the Project shall generate Net Operating Income (giving no effect to
any free rent period or rental abatement period under any Lease) over the term
of the extension, as projected by the Lender upon receipt from the Borrower of
the Extension Notice, of not less than $26,500,000 based on Approved Leases
representing not more than eighty percent (80%) of the total NRSF of the office
and retail space in the Project;
(iv) the Tenants under the Approved Leases described in the immediately
preceding clause shall be in Occupancy of their demised premises in the Project;
(v) the Lender shall have received evidence and be reasonably satisfied
that the then-current Net Operating Income from the Project (computed on a going
forward basis), together with any interest reserve or holdback established under
the Senior Loan Agreement, will be sufficient to cover debt service payments on
both the Senior Loan and the Loan (at the Applicable Interest Rate) through the
Extended Maturity Date;
(vi) the Guarantor shall have delivered to the Lender a confirmation that
the Guaranties and the Environmental Indemnity shall continue in full force and
effect during such period in a form reasonably acceptable to the Lender and the
Guarantor shall be in compliance with all covenants under the Guaranties;
(vii) Substantial Completion of the Project shall have occurred;
(viii) The Property Owner shall have obtained an extension of the Senior
Loan as contemplated under Section 2.9 of the Senior Loan Agreement; and
(ix) Borrower shall pay to the Lender on the date of delivery of the
Extension Notice to the Lender an amount equal to one-half of one percent (0.5%)
of the amount of the Loan that will be outstanding as of the Initial Maturity
Date.
(b) As soon as practicable following an extension of the Maturity Date
pursuant to this Section 2.8, the Borrower Parties and the Lender shall (if
reasonably requested by the Lender) execute and deliver an amended and restated
Note and shall enter into such amendments to the related Loan Documents as may
be necessary or appropriate to evidence the modifications of the terms of the
Advance provided in this Section 2.8; provided, however, that no failure by the
Borrower Parties or the Lender to enter into any such amendments shall affect
the rights or obligations of the Borrower Parties or the Lender with respect to
the Advance or extension of the Loan.
Section 2.9 [Intentionally Deleted].
Section 2.10 [Intentionally Deleted].
Section 2.11 Waiver of Exit Fee. If Borrower so requests, and Lender elects
(in its sole and absolute discretion) to lend against or participate in a
senior, permanent loan to the Project (by reason of a refinancing of the Senior
Loan) or provide or participate in permanent mezzanine financing related to the
Project (by reason of a refinancing of the Loan or an extension of the Maturity
Date beyond the Extended Maturity Date for a term of not less than two (2)
years), then one-half (1/2) of the Exit Fee that would otherwise be due and
payable shall be waived by Lender.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to the Loan. To induce the Lender to enter
into this Agreement, the Borrower hereby agrees that the following conditions
precedent shall be satisfied not later than the Closing Date:
(a) Representation and Warranties; Compliance with Conditions. Each of the
representations and warranties of any Borrower Party contained in this Agreement
or any other Loan Document shall be true and correct in all material respects on
and as of the Closing Date with the same effect as if made on and as of such
date, and no Default or Event of Default shall have occurred and be continuing,
and each Borrower Party shall be in compliance in all material respects with all
terms and conditions set forth in this Agreement and in each other Loan Document
on its part to be observed or performed.
(b) Loan Agreement, Note and Pledge Agreement. The Lender shall have
received an original of this Agreement, the Note and the Pledge Agreement, in
each case duly executed by and delivered on behalf of the Borrower.
(c) Delivery of Certain Loan Documents; Title Insurance; Reports;
Leases.
(i) Financing Statements. The Lender shall have received from the Borrower
fully-executed and acknowledged counterparts of the Financing Statements, each
in form satisfactory for recording or filing in the appropriate public records,
and evidence that counterparts of the Financing Statements shall have been
delivered to the Title Company for recording or filing, so as to effectively
create upon such recording a valid and enforceable Lien upon the Collateral, of
first priority with respect to all Collateral other than the Additional
Subordinate Collateral, and of second priority with respect to the Additional
Subordinate Collateral, in favor of the Lender.
(ii) Title Insurance. The Lender shall have received a Qualified Title
Policy with respect to the Mortgaged Property in the form and manner required
hereunder and evidence that all premiums in respect thereof have been paid.
(iii) Survey. The Lender shall have received a survey that is, in all
respects, a Qualified Survey with respect to the Mortgaged Property.
(iv) Insurance. The Lender shall have received valid certificates of
insurance for the policies of insurance required hereunder, satisfactory to the
Lender, and evidence of the payment of all premiums then due and payable for the
existing quarterly policy period. Such certificates shall indicate that the
Lender is named as an additional insured, and shall contain a loss payee
endorsement in favor of the Lender (where applicable) with respect to the
insurance policies to be maintained hereunder.
(v) Environmental Reports. The Lender shall have received a copy of the
Environmental Site Assessment and any other Environmental Report required by the
Lender, each being satisfactory to Lender, together with a reliance letter
confirming that the Lender may rely fully on the content thereof, and shall be
reasonably satisfied that the Borrower, the Property Owner and the Mortgaged
Property are not subject to any present or contingent environmental liability.
(vi) Zoning. The Lender shall have received letters or other evidence with
respect to the Mortgaged Property from the appropriate Governmental Authority
concerning applicable zoning and building laws, and the Qualified Title Policy
shall have a zoning endorsement, each in form reasonably satisfactory to the
Lender.
(vii) Encumbrances. The Borrower shall have taken or caused to be taken
such actions in such a manner so that the Lender has a valid and perfected first
priority Lien on the Collateral other than the Additional Subordinate Collateral
and a second priority Lien on the Additional Subordinate Collateral as of the
Closing Date with respect to the Pledge Agreement and Financing Statements, and
evidence thereof satisfactory to the Lender shall have been received by the
Lender.
(viii) Engineering Reports. The Lender shall have received Engineering
Reports in respect of the Mortgaged Property satisfactory to the Lender,
together with a reliance letter confirming that the Lender may rely fully on the
contents thereof.
(ix) Material Agreements. The Lender shall have received true and complete
copies of all Material Agreements, certified by the Borrower as true and
complete.
(x) Operating Agreements. The Lender shall have received true and complete
copies of all Operating Agreements set forth on, certified by the Borrower as
true and complete.
(xi) Lien Search Reports. The Lender shall have received search reports
satisfactory to it with respect to UCC financing statements, tax lien and
judgment searches conducted by a search firm acceptable to the Lender with
respect to the Mortgaged Property and Borrower Parties in such jurisdictions as
the Lender shall have reasonably requested.
(xii) Construction Consultant's Report. The Lender shall have received from
the Construction Consultant a preliminary Project report satisfactory to the
Lender.
(xiii) [Intentionally Deleted].
(xiv) [Intentionally Deleted].
(xv) Other Documents. The Lender shall have received fully-executed copies
of each of the following documents, in each case in form and substance
satisfactory to the Lender: (A) the Guaranties, (B) the Environmental Indemnity,
(C) the Construction Agreement, (D) [Intentionally Deleted], (E) the Architect's
Agreement, (F) the Architect's Consent, (G) the Property Manager's Agreement,
(H) the Property Manager's Consent, (I) the Intercreditor Agreement, (J) the
Leasing Agreement, (K) the Assignment of Agreements, (L) the Leasing Agent's
Consent, (M) estoppel letters from each of the Construction Manager, the
Architect, MDI and the Property Manager confirming (among other things) that no
default exists under their respective agreements with the Property Owner or
relative to the Project and (N) the Four-Party Agreement.
(d) Related Documents. Each additional document not specifically referenced
herein, but relating to the transactions contemplated herein, shall have been
duly authorized, executed and delivered by all parties thereto and the Lender
shall have received and approved certified copies thereof.
(e) Authority. Borrower shall deliver or cause to be delivered to the
Lender copies certified by an officer or other authorized Person of the
applicable Borrower Party (i) all such Organizational Documents related to the
Borrower, the Property Owner and the Guarantor in each case together with each
amendment thereto and certified (as of a date reasonably near the Closing Date)
by the applicable Secretary of State as being a true and correct copy, (ii) a
certificate of the Secretary of State of the jurisdiction of each such Borrower
Party's formation (dated reasonably near the Closing Date), certifying that the
Borrower, the Property Owner and the Guarantor are duly formed and in good
standing under the laws of the State of the jurisdiction of their respective
organization, (iii) a certificate of the Secretary of State of the State of
Illinois (dated reasonably near the Closing Date), stating that the Borrower,
the Property Owner and the Guarantor are duly qualified and in good standing in
such State, (iv) a certificate of the Borrower signed by a duly authorized
officer or other authorized Person of the Managing Member (dated as of the
Closing Date), certifying (A) as to the truth of the representations and
warranties in all material respects contained in the Loan Documents, both before
and after giving effect to the making of the Loan by the Lender and to the
application of the proceeds therefrom and (B) that to such Person's Knowledge no
material event has occurred and is continuing, or would result from the making
of the Loan by the Lender or from the application of the proceeds therefrom,
that constitutes an Event of Default, (v) a certified copy of the resolution of
Prime Group Realty Trust approving the Loan, this Agreement, the Note and each
other Loan Document to which the Borrower is or is to be a party, and of all
documents evidencing other necessary partnership or corporate action and
governmental and other third party approvals and consents, if any, with respect
to the Loan, this Agreement, the Note and each other Loan Documents, and (vi) a
notarized certificate of Prime Group Realty Trust certifying the names and true
signatures of the Persons authorized to sign this Agreement, the Note and each
other Loan Document to which the Borrower is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(f) Opinions of Counsel. The Lender shall have received legal opinions from
counsel satisfactory to the Lender with respect to (i) the due organization and
existence of each Borrower Party, (ii) the due execution, delivery, authority,
enforceability of the Pledge Agreement, the Financing Statements, this
Agreement, the Note, the Environmental Indemnity, the Guaranties and each of the
other Loan Documents, and such other matters as the Lender may reasonably
require, all such opinions in form, scope and substance satisfactory to the
Lender in its reasonable discretion, (iii) the creation and perfection of the
security interests granted with respect to the Collateral, and (iv) such other
matters as the Lender may reasonably require.
(g) Construction Budget; Construction Schedule. The Borrower shall have
delivered the Approved Construction Budget and the Construction Schedule and a
summary setting forth and comparing the "Estimated Segment Delivery Dates" under
and as defined in the Bank One Lease, the "Required Delivery Date" under and as
defined in the Holland & Knight Lease, and the "Project Delivery Dates" under
the Citadel Lease to the applicable dates in the Construction Schedule.
(h) Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated by this Agreement
and the other Loan Documents and all documents incidental thereto shall be
reasonably satisfactory in form and substance to the Lender.
(i) No Material Adverse Change. The Lender shall be satisfied that, as of
the Closing Date, there shall have been no change or development, since February
13, 2003, that has or will have a Material Adverse Effect on the financial
condition, business, business prospects or operations of any Borrower Party.
(j) Reserve Account Agreement. Lender and Borrower shall have agreed upon
the terms and conditions of the so-called Reserve Account Agreement.
(k) Operating Agreement Estoppels. The Lender shall have received an
executed estoppel letter from each party to an Operating Agreement which is
required to deliver an estoppel pursuant to such Operating Agreement, which
shall be in form and substance reasonably satisfactory to the Lender (or in the
form required to be delivered under the applicable Operating Agreement).
(l) Appraisal. The Lender shall have received an appraisal for the
Mortgaged Property satisfactory to the Lender in all respects.
(m) Financial Statements. The Guarantor shall have provided the required
financial statements of Guarantor and Prime Group Realty Trust for the fiscal
quarter ending September 30, 2002, all of which statements shall be reasonably
satisfactory to the Lender and accompanied by an Officer's Certificate
certifying that each such financial statement presents fairly in all material
respects the financial condition or operating results, as applicable, of the
Guarantor and has been prepared in accordance with GAAP.
(n) [Intentionally Deleted].
(o) Consents, Licenses, Approvals, Etc. The Lender shall have received
copies or other evidence of all material consents, Licenses, Permits and
approvals, if any, required in connection with the execution, delivery and
performance by the Borrower, and the validity and enforceability of, the Loan
Documents, and such consents, Licenses, Permits and approvals shall be in full
force and effect.
(p) No Injunction. No law or regulation shall have been adopted, no order,
judgment or decree of any Governmental Authority shall have been issued, and no
litigation shall be pending or threatened, which in the good faith judgment of
the Agent would enjoin, prohibit or restrain, or impose or result in a Material
Adverse Effect upon, the making or repayment of the Loan or the consummation of
the transactions contemplated hereby.
(q) Payment of Lender Expenses by the Borrower. The Borrower shall have
paid all Lender Expenses.
(r) Additional Information. The Lender shall have received such other
information and documentation with respect to the Borrower, the Property Owner,
the other Borrower Parties and their respective Affiliates, the Collateral, the
Mortgaged Property and the transactions contemplated herein as Lender may
reasonably request, such information and documentation to be reasonably
satisfactory in form and substance to the Lender.
(s) Site Inspections. The Lender shall have performed or caused to be
performed on its behalf, on-site due diligence reviews of the Mortgaged
Property, satisfactory to Lender in its sole discretion.
(t) Leases. The Lender shall have received (i) a copy of the fully-executed
Bank One Lease, the Holland & Knight Lease, the Citadel Lease and the Market
Foods Lease, each certified by Borrower as to accuracy and completeness, and
(ii) an estoppel letter in favor of the Lender and copies of a subordination,
non-disturbance and attornment agreement in favor of the Senior Lender from Bank
One in respect of the Bank One Lease, from Holland & Knight in respect of the
Holland & Knight Lease and from Citadel in respect of the Citadel Lease, each in
form and substance satisfactory to the Lender.
(u) Senior Loan. Lender shall have received a complete set of the Senior
Loan Documents (including any and all amendments thereto) and an estoppel letter
from the Senior Lender in form and substance satisfactory to Lender.
(v) Deliveries. The following items or documents shall have been delivered
to the Lender:
(i) Plans and Specifications. One (1) complete set of the
architectural plans for the Project.
(ii) Payment and Performance Bonds. Copies of all existing Payment and
Performance Bonds.
(iii) Third Party Certificates. Certificates from the Architect (the
"Architect's Certificate"), and the Property Manager (the "Property
Manager's Certificate"), substantially in the forms attached hereto as
Exhibits D-1 and D-2 respectively.
(w) Construction Consultant Approval. The Construction Consultant has
advised the Lender that all matters relating to the construction of the Project
are progressing in substantial accordance with the Plans and Specifications and
the Construction Schedule.
(x) Required Equity. The Lender shall have received satisfactory evidence
that the Required Equity has been funded.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 4.1 Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Lender that, as of the Closing Date:
(a) Organization. It has been duly organized and is validly existing and is
in good standing with requisite power and authority to own 100% of the issued
and outstanding equity interests in the Property Owner and to transact the
businesses in which it is now engaged. It is duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so qualified
in connection with its properties, businesses and operations or, if not, the
failure to do so would not have a Material Adverse Effect. It possesses all
rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own the equity interests in the Property Owner and to
operate the businesses in which it is now engaged.
(b) Proceedings. All necessary action has been taken by it to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party. This Agreement and other Loan Documents have
been duly authorized, executed and delivered by it and constitute its legal,
valid and binding obligations enforceable against it in accordance with their
respective terms, subject, as to enforceability, to applicable Debtor Relief
Laws and general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). No consent, approval, authorization
or order of, or qualification with, any Governmental Authority is required in
connection with the execution, delivery or performance by it of this Agreement
or the other Loan Documents that has not been obtained.
(c) No Conflicts. The execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party 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 (other than pursuant
to the Loan Documents and the Senior Loan Documents) upon the Collateral or
applicable assets pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, trust agreement or other agreement
or instrument to which it or any of the Borrower Parties is a party or by which
it or any of the Borrower Parties' properties or assets is subject, nor, to the
Borrower's Knowledge, 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 it or any of its Affiliates' properties
or assets, and any consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority required for the execution,
delivery and performance by it of this Agreement or any other Loan Documents to
which it is a party has been obtained and is in full force and effect.
(d) Litigation. Except (i) as set forth on Exhibit E attached hereto and
(ii) for matters as to which individually the exposure to the Borrower or the
Property Owner is reasonably estimated at less than $500,000 and the Borrower
can demonstrate (at the Lender's request) are (or are reasonably anticipated to
be) entirely covered by insurance (other than with respect to the deductible for
such insurance), there are no actions, suits or proceedings at law or in equity
by or before any Governmental Authority or other agency now pending or, to
Borrower's Knowledge, threatened against or affecting it, the Property Owner or
the Mortgaged Property. Each of the matters set forth on Exhibit E satisfies the
criteria in clause (ii) above.
(e) Agreements. It is not in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
Material Agreement.
(f) Title. The Borrower has good, marketable and indefeasible title to 100%
of the issued and outstanding equity interests in the Property Owner, free and
clear of all Liens whatsoever (other than pursuant to the Loan Documents). With
respect to the Collateral, the Pledge Agreement, together with the Financing
Statements, when properly filed, will create a valid, perfected first priority
Lien on the Collateral (other than with respect to the Additional Subordinated
Collateral, as to which the Financing Statements will create a valid, perfected
second priority Lien). The Property Owner has good, marketable and indefeasible
title in fee to the real property comprising part of the Mortgaged Property,
free and clear of all Liens whatsoever except the Permitted Encumbrances, and
such other Liens as are permitted pursuant to or created by the Senior Loan
Documents. The Permitted Encumbrances do not and will not materially adversely
affect or interfere with the value, or intended use or operation, of the
Mortgaged Property, or the Borrower's ability to repay the Note or any other
Loan Document in accordance with the terms of the Loan Documents. Except as
indicated in and insured over by a Qualified Title Policy, there are no claims
for payment for work, labor or materials affecting the Mortgaged Property (other
than mechanics or materialmens Liens for work or materials performed or supplied
the costs for which are not yet past due or which are being contested in
accordance with Section 5.1(b)(ii)). Nothing in this Section 4.1(f) may be
relied on by the Title Company issuing any policies covering the Mortgaged
Property. No Person other than the Property Owner and the Senior Lender owns any
interest in any payments due under the Leases.
(g) No Bankruptcy Filing. Neither Borrower nor the Property Owner has filed
or is contemplating either the filing of a petition by it under any state or
federal bankruptcy or insolvency laws or the liquidation of their assets or
property, and the Borrower has no Knowledge of any Person contemplating the
filing of any such petition against it or the Property Owner.
(h) Full and Accurate Disclosure. No information contained in this
Agreement, the other Loan Documents, or any written statement furnished by or,
to Borrower's Knowledge, on behalf of it pursuant to the terms of this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not materially
misleading in light of the circumstances under which they were made. To
Borrower's Knowledge, 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 would have a Material Adverse Effect. The Borrower has disclosed to
the Lender all material facts of which it has Knowledge and has not failed to
disclose any material fact of which it has Knowledge that would cause any
representation or warranty made herein to be materially misleading. There is no
fact or circumstance presently known to it which has not been disclosed to the
Lender and which has, or is likely to have, a Material Adverse Effect.
(i) Compliance with ERISA.
(i) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(ii) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Lender, is complete
and accurate and fairly presents the funding status of such Plan, and since
the date of such Schedule B there has been no material adverse change in
such funding status.
(iii) Neither any Borrower Party nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(iv) Neither any Borrower Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA; and no such Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(j) Compliance. It, the Property Owner and the Mortgaged Property and the
use thereof comply in all material respects with all applicable existing Legal
Requirements and Insurance Requirements, including building and zoning
ordinances and codes. The Mortgaged Property is not a non-conforming use or
legal non-conforming use. 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 or on behalf of Borrower or, to Borrower's Knowledge, any
other Person involved with the operation or use of the Land and the Improvements
any act or omission affording the federal government or any state or local
government the right of forfeiture as against the Land and the Improvements or
any part thereof or any monies paid in performance of its obligations under any
of the Loan Documents.
(k) Material Agreements. Other than the Property Management Agreement, the
Architect's Agreement, the Construction Agreement, and that Space Disposition
Agreement dated March 19, 2002 with Xxxxxx X. Xxxxxxx, Inc. (as amended by that
instrument dated as of ___________, 2003), there currently are no Material
Agreements. A true and complete copy of each Material Agreement has been
delivered to the Lender. Each Material Agreement has been entered into at arm's
length in the ordinary course of business by or on behalf of the Borrower or the
Property Owner and provides for the payment of fees in amounts and upon terms
not less favorable to it than market rates and terms.
(l) Financial Information. All financial data and statements prepared by or
on behalf of it and delivered to the Lender prior to the date hereof (i) are
true, complete and correct, in all material respects to the extent not
subsequently corrected in a written document delivered to the Lender, (ii)
accurately represent in all material respects the financial condition or
operating results, as applicable, of the applicable Borrower Parties and the
Mortgaged Property as of the date of such reports, and (iii) have been prepared
in accordance with GAAP. It does not have any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, that are known to it and
that are reasonably likely to have a Material Adverse Effect, except as referred
to or reflected in said financial statements and operating statements.
(m) Condemnation. No Condemnation or other similar proceeding has been
commenced or, to its Knowledge, is contemplated with respect to all or any
portion of the Mortgaged Property or for the relocation of roadways providing
access to the Mortgaged Property.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any "margin stock" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or for any other purpose which would be inconsistent with such Regulation U or
any other Regulations of such Board of Governors, or for any purposes prohibited
by Legal Requirements or by the terms and conditions of this Agreement or the
other Loan Documents.
(o) Utilities and Public Access. The Mortgaged Property has rights of
access to dedicated public ways (and makes no material use of any means of
access or egress that is not pursuant to such dedicated public ways or recorded,
irrevocable rights-of-way or easements) and is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service the Mortgaged Property for
its current uses. All public utilities necessary for the full use and enjoyment
of the Mortgaged Property are located in the public right-of-way abutting the
Mortgaged Property or in or through a recorded irrevocable easement in favor of
the Mortgaged Property, and all such utilities are connected so as to serve the
Mortgaged Property without passing over other property (or, if not, such
services are readily available and will be connected to the Mortgaged Property
by Substantial Completion), except to the extent that such utilities are
accessible to the Mortgaged Property by virtue of a recorded irrevocable
easement or similar agreement or right. All roads necessary for the use of the
Mortgaged Property for its current purposes have been completed and are either
part of the Mortgaged Property (by way of deed or recorded easement) or
dedicated to public use and accepted by all Governmental Authorities.
(p) Not a Foreign Person. Neither it nor any of its Subsidiaries is a
"foreign person" within the meaning of Section 1445(f)(3) of the Code.
(q) Separate Lots. The Mortgaged Property is comprised of one (1) or more
parcels which constitute one or more separate tax lots which do not include any
property not a part of the Mortgaged Property.
(r) Basic Carrying Costs, Assessments. All Basic Carrying Costs due and
payable as of the date hereof have been paid. To its Knowledge there are no
pending or proposed special or other assessments for public improvements or
other matters affecting the Mortgaged Property (except as shown in the financial
statements described in Section 5.1(l) hereof), nor, to its Knowledge, are there
any contemplated improvements to the Mortgaged Property that are likely to
result in such special or other assessments.
(s) Enforceability. Each Loan Document to which it is a party is its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, subject only to Debtor Relief Laws and general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law). The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by it or the Guarantor, including the defense of usury,
nor would the operation of any of the terms of the Loan Documents, or the
exercise of any right thereunder, render the Loan Documents unenforceable,
subject to Debtor Relief Laws and general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law), and it has
not asserted any right of rescission, set-off, counterclaim or defense with
respect thereto.
(t) No Prior Assignment. Other than pursuant to the Senior 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, except in
connection with indebtedness to be repaid in full concurrently with the Closing
Date.
(u) Insurance. It or the Property Owner has obtained or caused to be
obtained and has delivered to the Lender insurance policies or certificates
thereof reflecting the insurance coverages, amounts and other requirements set
forth in this Agreement. All premiums on such insurance policies required to be
paid as of the date hereof have been paid for the current quarterly policy
period. Other than in connection with the matters set forth in Exhibit F
attached hereto, no claims have been made under any such policy, with respect to
the Mortgaged Property and, to its Knowledge, no Person, including the Borrower
and Property Owner, has done, by act or omission, anything which would impair
the coverage of any such policy.
(v) Licenses. The Property Owner (a) has obtained all certifications,
permits, licenses, approvals, registrations, authorizations, accreditations or
consents (collectively, the "Licenses") required as of the Closing Date by, and
accomplished all filings, notifications, registrations and qualifications with
(or obtained exemptions from any of the foregoing from) and (b) will obtain,
during the course of construction as and when required, all Licenses, and
accomplish all filings, notifications, registrations and qualifications with (or
obtain exceptions from any of the foregoing from), all applicable Governmental
Authorities to properly and legally own, develop, construct, manage and operate
the Property and necessary for the conduct of its business. Each License has
been or will be, as applicable, duly obtained, is or will be, as applicable,
valid and in full force and effect, and is not or will not be, as applicable,
subject to any pending or, to its Knowledge, threatened administrative or
judicial proceeding to revoke, cancel or declare such License invalid. The
Property Owner is not in default or violation with respect to any of the
Licenses in a manner that would have a Material Adverse Effect, and no event has
occurred which constitutes, or, to Borrower's Knowledge, with due notice or
lapse of time or both may constitute, a default by the Property Owner under, or
a violation of, any License that would have a Material Adverse Effect.
(w) Flood Zone. The Mortgaged Property is not located in an area identified
by the Federal Emergency Management Agency or the Federal Insurance
Administration as an area having special flood hazards (Zone A), and, to the
extent that any part of the Mortgaged Property is located in an area identified
by the Federal Emergency Management Agency as an area federally designated a
"100 year flood plain," the Mortgaged Property is covered by flood insurance
meeting the requirements set forth in Section 8.1.1(b)(i) hereof.
(x) Physical Condition. The Mortgaged Property is in good condition, order
and repair in all respects material to its current use, operation or value. To
the Borrower's Knowledge, there exist no structural or other material defects or
damages in the Mortgaged Property, whether latent or otherwise, which will
materially impair the value of the Mortgaged Property or the construction of
Improvements. Neither it nor the Property Owner has received written notice from
any insurance company or bonding company of any defects or inadequacies in the
Mortgaged Property or any part thereof, which would, alone or in the aggregate,
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.
(y) Leases. No person has any possessory interest in the Mortgaged Property
or right to occupy the same except under and pursuant to the provisions of the
Leases and that certain parking license agreement with J. Xxxx Xxxxxxx
Development Company dated on or about the date hereof, and true and complete
copies of Leases have been delivered to the Lender. The Leases are in full force
and effect and there are no material defaults thereunder by the lessor and, to
the Borrower's Knowledge, there are no material defaults thereunder by the
applicable lessee and to its Knowledge there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute a material
default thereunder. As to all Leases at the Mortgaged Property:
(i) (A) except as set forth on Exhibit G attached hereto, there are no
outstanding landlord obligations with respect to tenant allowances or free
rent periods or tenant improvement work, (B) all of the obligations and
duties of the landlord under the Leases that are due or are to be performed
(as applicable) on or prior to the date hereof have been fulfilled, and (C)
there are no pending claims asserted by any Tenant for offsets or
abatements against rent or any other monetary claim;
(ii) except as set forth on Exhibit H attached hereto, all of the
Leases are free and clear of any right or interest of any real estate
broker or any other person (whether or not such brokers or other persons
have negotiated the Leases or have contracted with the Property Owner or
the Borrower for the collection of the rents thereunder), and no brokerage
or leasing commission or other compensation is or will be due or payable to
any person, firm, corporation or other entity with respect to or on account
of any of the Leases;
(iii) the Property Owner is the sole owner of the lessor's interest in
all of the Leases and the Property Owner has not given or suffered any
other assignment, pledge or encumbrance in respect of any of the Leases or
its interests thereunder (other than pursuant to the Senior Loan
Documents), and the Property Owner has the sole right to collect rents and
other amounts due under the Leases (subject to the rights of the Senior
Lender under the Senior Loan Documents);
(iv) no Tenant is more than thirty (30) days in arrears on its rent or
other amounts due to the landlord under its Lease; and
(v) except for the provisions of the Bank One Lease, the Holland &
Knight Lease and the Citadel Lease described on Exhibit I attached hereto,
none of the Leases contains any option to purchase, any right of first
refusal to purchase or any right to terminate the lease term (except in the
event of a Casualty or Condemnation affecting all or substantially all of
the Mortgaged Property).
(z) Material Agreements. Neither it nor the Property Owner is in default of
any of their respective material obligations under any Material Agreement, and
neither of them has delivered any notice of default with respect to any Material
Agreement to the other party thereunder which has not been cured.
(aa) 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 existing Legal Requirements currently in
effect in connection with the transfer of the Mortgaged Property to the Property
Owner have been paid in full or deposited with the issuer of a Qualified Title
Policy for payment upon recordation of the deeds effecting such transfer. All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Person under applicable existing Legal Requirements currently in
effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents and the
Senior Loan Documents, including the Mortgage and the Financing Statements, and
the Liens intended to be created thereby, have been paid or deposited with a
title company for payment upon recordation of the Mortgage and filing of the
Financing Statements.
(bb) Taxes. It, the Property Owner and the Guarantor have each filed, or
caused to be filed, all material tax returns (federal, state, local and foreign)
required to be filed and paid all amounts of taxes shown thereon to be due
(including interest and penalties) and have paid all other taxes (including
intangible fees, assessments and other governmental charges or taxes) owing (or
necessary to preserve any Liens in favor of the Lender), by it, the Property
Owner and the Guarantor except for such taxes (i) which are not yet delinquent
or (ii) as are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
extension of time for assessment or payment by it, the Property Owner or the
Guarantor of any federal, state or local tax is in effect.
(cc) Investment Company Act. Neither it nor any of its Subsidiaries is (i)
an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; or (ii) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(dd) Fraudulent Transfer. It (i) has not entered into the Loan or any Loan
Document with the actual intent to hinder, delay, or defraud any creditor and
(ii) has received reasonably equivalent value in exchange for its obligations
under the Loan Documents. Giving effect to the transactions contemplated by the
Loan Documents, the fair saleable value of its assets exceeds and will,
immediately following the execution and delivery of the Loan Documents, exceed
its total liabilities, including subordinated, unliquidated, disputed or
contingent liabilities. The fair saleable value of its assets is and will,
immediately following the execution and delivery of the Loan Documents, be
greater than its probable liabilities, including the maximum amount of its
contingent liabilities or its debts as such debts become absolute and matured.
Its assets do not and, immediately following the execution and delivery of the
Loan Documents will not, constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted. It does not intend to, and
does not believe that it will, incur debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of its obligations).
(ee) Material Agreements and Management Agreements. Each Material Agreement
and the Property Management Agreement are in full force and effect and are valid
and enforceable against the applicable Borrower Party in all material respects,
subject in each case to Debtor Relief Laws and general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) with the exception of the Construction Agreement, there are no defaults,
breaches or violations under any such agreement by the Property Owner or, to
Borrower's Knowledge, any other party thereto, and to Borrower's Knowledge,
there are no conditions (other than payments that are due but not yet delinquent
and other non-delinquent executory obligations) that, with the passage of time
or the giving of notice, or both, would constitute a default by any party
thereunder, where with respect to any such Material Agreement or the Property
Management Agreement the effect of one or more of any such defaults would have a
Material Adverse Effect. As to the Construction Agreement, no parties thereto
have delivered any notice of default thereunder. Neither the execution and
delivery of the Loan Documents, its performance thereunder, filing of the
Financing Statements, nor the exercise of any remedies by the Lender, will
adversely affect the Property Owner's rights under any Material Agreement or the
Property Management Agreement relating to the Mortgaged Property.
(ff) Ownership. The current direct and indirect ownership interests in each
Borrower Party are as set forth in Exhibit J attached hereto.
(gg) Illegal Activity. The Property Owner has not purchased any portion of
the Mortgaged Property with proceeds of any illegal activity.
(hh) Acquisition Documents. It has delivered to the Lender true and
complete copies of all agreements and other instruments under which it or any of
its Affiliates or any other Person has rights or obligations in respect of the
Property Owner's acquisition of the Mortgaged Property.
(ii) Environmental Matters. Except for matters set forth in the
Environmental Reports:
(i) To the Borrower's Knowledge, the Land and the Improvements are in
compliance with all applicable existing Environmental Laws (which
compliance includes, but is not limited to, the possession by the Property
Owner or the Property Manager of all environmental health and safety
permits, approvals, licenses, registrations and other governmental
authorizations required in connection with the ownership and operation of
the Land and the Improvements under all existing Environmental Laws).
(ii) There is no Environmental Claim pending or, to the actual
Knowledge of any Borrower Party, threatened.
(iii) There are no present, or to the Knowledge of Borrower, past
Releases of any Hazardous Substance that are reasonably likely to form the
basis of any Environmental Claim.
(iv) Without limiting the generality of the foregoing, to the
Knowledge of the Borrower, there is not present at, on, in or under the
Land and the Improvements, PCB-containing equipment, asbestos or asbestos
containing materials, underground storage tanks or surface impoundments for
Hazardous Substances, lead in drinking water (except in concentrations that
comply with all existing Environmental Laws), or lead-based paint.
(v) No Liens are presently recorded with the appropriate land records
under or pursuant to any existing Environmental Law with respect to the
Land and the Improvements and, to the Borrower's actual Knowledge, no
Governmental Authority has been taking or is in the process of taking any
action to subject the Land and the Improvements to Liens under any existing
Environmental Law.
(vi) There have been no material environmental investigations,
studies, audits, reviews or other analyses conducted by the Borrower or the
Property Owner or that are in their possession in relation to the Land and
the Improvements which have not been made available to the Lender.
(jj) Plans and Specifications. It has furnished to the Lender true and
complete sets of the Plans and Specifications and the same comply (except for
non-material instances of non-compliance that do not adversely affect the use or
operation of the Property or the value thereof) with all Laws and Regulations,
all Governmental Approvals, and all restrictions, covenants and easements
affecting the Mortgaged Property, and have been approved by Construction
Manager, the Architect and by each such Governmental Authority as is required
for construction of the Improvements.
(kk) Construction Budget. The Approved Construction Budget heretofore
submitted to the Lender accurately reflects all construction costs heretofore
incurred or currently contemplated to be incurred by or on behalf of the
Property Owner in connection with the construction of the Improvements.
(ll) Qualifying Leases. There are fully-executed, delivered and effective
Qualifying Leases and Approved Leases which represent not less than 1,016,362
NRSF of the Project, and the Borrower has provided the Lender with a copy of
each such Qualifying Lease and Approved Lease certified as to its accuracy and
completeness.
(mm) Parking. Other than (i) that certain amendment to the City of Chicago
Zoning Ordinance known as Business Planned Development Number 743, published in
City of Chicago Journal on pages 33848-33864, (ii) that parking license
agreement with J. Xxxx Xxxxxxx Development Company dated on or about the date
hereof, and (iii) that side letter agreement with Holland & Knight dated
February 28, 2003, there are no restrictions with respect to required parking
spaces at the Project and there are no agreements with any Person other than
Tenants under Approved Leases in respect of parking at the Project. Pursuant to
the referenced amendment to the City of Chicago Zoning Ordinance, the Project is
required to have at least 209 parking spaces and the Plans and Specifications
currently provide for at least 209 parking spaces. To the Borrower's Knowledge,
the parking spaces provided under the Plans and Specifications are sufficient to
comply with applicable Laws and Regulations. Except as noted in the first
sentence of this subpart (mm), Borrower shall not, and shall not permit the
Property Owner to (x) enter into any arrangement with respect to parking, other
than pursuant to Approved Leases or (y) reduce the number of parking spaces
below 209 in either case without the prior written consent of the Lender.
(nn) Operating Agreements. The Borrower hereby represents that no Operating
Agreements exist as of the Closing Date, other than those identified on Exhibit
M.
Section 4.2 Survival of Representations. The parties hereto agree that all
of the representations and warranties set forth in Section 4.1 hereof and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any portion of the Debt is outstanding. All representations, warranties,
covenants and agreements made in this Agreement or in the other Loan Documents
by the Borrower or the Guarantor, as applicable, shall be deemed to have been
relied upon by the Lender notwithstanding any investigation heretofore or
hereafter made by the Lender or on behalf of the Lender.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1 Affirmative Covenants of the Borrower. The Borrower hereby
covenants and agrees, from the date of this Agreement, and as long as the
Borrower remains indebted to the Lender, as follows:
(a) Existence; Compliance with Legal Requirements; Insurance. The Borrower
shall do or cause to be done all things reasonably necessary to preserve, renew
and keep in full force and effect its and the Property Owner's existence,
rights, Licenses, Permits and franchises and comply in all respects with all
Legal Requirements applicable to them and the Mortgaged Property to the extent
that the failure to do so would have a Material Adverse Effect. The Borrower
shall cause the Property Owner to at all times maintain and preserve the
Mortgaged Property and keep the Mortgaged Property in good working order and
repair for its intended purpose, reasonable wear and tear excepted, and from
time to time make, or cause to be made, all reasonably necessary and desirable
repairs, renewals, replacements, betterments and improvements thereto, other
than to the extent that the failure to do so would not have a Material Adverse
Effect. The Borrower shall cause the Property Owner to operate, maintain, repair
and improve the Mortgaged Property in compliance in all material respects with
all Legal Requirements. Promptly upon receipt thereof (but in any event within
five (5) Business Days), the Borrower shall deliver, or cause to be delivered,
to the Lender copies of any and all notices from any licensing and/or certifying
agencies that any Permit relating to the operation of any of the Improvements is
being suspended or revoked or that the Improvements are being downgraded to a
substandard category or that any investigation or proceeding with respect to any
such action is pending.
(b) Taxes and Other Charges; Contest for Taxes and Other Charges, Legal
Requirements and Liens.
(i) Subject to the provisions of Section 5.1(b)(ii) hereof, the
Borrower shall cause the Property Owner to pay all Taxes and Other Charges
now or hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof prior to the date on which such sums become
delinquent. The Borrower shall deliver or cause to be delivered to the
Lender, upon request, receipts for payment or other evidence reasonably
satisfactory to the Lender that the Taxes and Other Charges have been so
paid. Subject to the provisions of Section 5.1(b)(ii) hereof and other than
Permitted Encumbrances, the Borrower shall not suffer and shall promptly
cause to be paid and discharged any Lien or charge whatsoever that may be
or become a Lien against the Mortgaged Property, and shall promptly cause
to be paid all utility services provided to the Mortgaged Property. Subject
to Section 5.1(b)(ii) hereof, the Borrower shall cause the Property Owner
to pay, bond or otherwise discharge, from time to time when the same shall
become due, all claims and demands of mechanics, materialmen, laborers and
others that, if unpaid, might result in, or permit the creation of, a Lien
on the Mortgaged Property, or on the Rents arising therefrom. The Borrower
shall not suffer or permit any mechanics' Lien claims to be filed or
otherwise asserted against the Project, and will discharge or cause the
Property Owner to discharge within thirty (30) Business Days the same in
case of the filing of any claims for Lien or proceedings for the
enforcement thereof; provided, however, that the Borrower shall have the
right to contest in good faith and with reasonable diligence the validity
of any such Lien or claim upon furnishing to the Title Company such
security or indemnity as it may require to induce said Title Company to
issue an endorsement to the Qualified Title Policy insuring against all
such claims or Liens.
(ii) Notwithstanding the foregoing, after prior written notice to the
Lender, the Borrower, at its own expense (or the expense of the Property
Owner), may contest or cause to be contested by appropriate legal,
administrative or other proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Taxes or Other Charges or Lien therefor or any
Legal Requirement or Insurance Requirement or Hazardous Substance Claim (as
defined in the Environmental Indemnity), or the application of any
instrument of record affecting the Borrower, the Property Owner, the
Mortgaged Property or any part thereof (other than any of the foregoing
relating to or arising under the Loan Documents and the Senior Loan
Documents) or any claims or judgments of mechanics, materialmen, suppliers,
vendors or other Persons or any Lien therefor, and may withhold payment of
the same pending such proceedings if permitted by law; provided that (A) no
Event of Default then exists, except for, prior to acceleration, an Event
of Default caused by the matter being contested, (B) such proceeding shall
suspend any collection of the contested Taxes, Other Charges or Liens from
the Mortgaged Property, Borrower Party or the Lender, (C) such proceeding
shall be permitted under and be conducted in accordance with the provisions
of any other instrument to which the Borrower or the Property Owner is
subject, (D) neither the Mortgaged Property nor any part thereof or
interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost, (E) upon the Lender's request, the Borrower shall have
furnished the Lender with security (in an amount and form reasonably
approved by the Lender, without duplication of and except for amounts
provided to the Senior Lender under Section 5.1(b)(ii) of the Senior Loan
Agreement) to ensure the payment of any such Taxes or Other Charges, or the
cost of the contested Legal Requirement or Insurance Requirement or the
removal of the Lien, in each case together with all reasonably anticipated
interest and penalties thereon, (F) in the case of an Insurance
Requirement, failure by the Borrower to comply therewith shall not impair
the validity of any insurance required to be maintained hereunder or the
right to full payment of any claims thereunder, (G) in the case of any
essential or significant service with respect to the Mortgaged Property,
any contest or failure to pay will not result in a discontinuance of any
such service, (H) in the case of any instrument of record affecting the
Mortgaged Property or any part thereof, the contest or failure to perform
under any such instrument shall not result in the placing of any Lien on
the Mortgaged Property or any part thereof (except if such Lien would be
removed upon completion of such proceedings and the compliance by the
parties with the terms of the resulting order, decision or determination
and, upon the Lender's request, the removal costs for such Lien have been
escrowed with the Lender or in the proceeding or bonded or otherwise
deposited or paid in connection with such proceedings), (I) neither the
failure to pay or perform any obligation which the Borrower is permitted to
contest under this Section 5.1(b)(ii) nor an adverse determination of any
such contest shall result in a Material Adverse Effect, and (J) the
Borrower shall promptly upon final determination thereof pay or cause to be
paid the amount, if any, of any such Taxes, Other Charges or Liens,
together with all costs, interest and penalties that may be payable in
connection therewith and the Lender shall disburse all amounts deposited by
the Borrower as security therefor to the Borrower to be used to pay
applicable Taxes, Other Charges or Liens. The Lender may pay over any such
cash deposit or part thereof held by the Lender to the claimant entitled
thereto at any time when, in the reasonable judgment of the Lender, the
entitlement of such claimant is finally determined, and the Lender shall
otherwise remit any remaining such amounts to the Borrower. The Lender
shall give the Borrower written notice of any such payments prior to the
making thereof.
(iii) If the Borrower shall fail to, or shall fail to cause the
Property Owner to, within sixty (60) days after becoming aware of same,
either (A) discharge, or (B) contest claims asserted and give security or
indemnity in the manner provided in Sections 5.1(b)(i) and 5.1(b)(ii)
hereof, or after having commenced to contest the same, and having given
such security or indemnity, fail to prosecute such contest with diligence,
or to maintain such indemnity or security as required by the Loan Documents
or by the Title Company for its full amount, or upon adverse conclusion of
any such contest, cause any judgment or decree to be satisfied and Lien to
be released, then and in any such event the Lender upon prior notice to the
Borrower (except if an Event of Default then exists) may, at its election
(but shall not be required to), procure the release and discharge of any
claim and any judgment or decree thereon and, further, may in its
reasonable discretion effect any settlement or compromise of the same, or
may furnish such security or indemnity to the Title Company, and any
amounts so expended by the Lender in excess of the amount of Cash or Cash
Equivalents security posted by the Borrower, including premiums paid or
security furnished in connection with the issuance of any surety company
bonds, shall be deemed to constitute disbursement of the proceeds of the
Loan hereunder. In settling, compromising or discharging any claims for
Lien, the Lender shall not be required to inquire into the validity or
amount of any such claim. Notwithstanding the foregoing, the Lender shall
have no obligation to make disbursements of the Advance under the terms of
this Agreement at any time prior to such time as the Borrower shall have
discharged or contested or caused the Property Owner to have discharged or
contested any claims in accordance with clauses (i) and (ii) above.
(c) Litigation. It shall give prompt written notice to the Lender of any
litigation or governmental proceedings pending or threatened in writing against
any Borrower Party or against or affecting the Mortgaged Property that, if
determined adversely to such Borrower Party or the Mortgaged Property, would
reasonably be expected to result in a Material Adverse Effect.
(d) Inspection. Subject to the terms of any Leases, it shall (i) permit and
shall cause the Property Owner to permit agents, representatives and employees
of the Lender (including any servicer) to (A) enter upon the Mortgaged Property,
(B) inspect the progress of any work being performed by or on behalf of the
Borrower or the Property Owner thereupon and the Improvements and all materials
to be used in the construction thereof, (C) examine the Plans and Specifications
and shop drawings related thereto which will be kept at the construction site at
all times, and (D) undertake any other type of inspection at the Mortgaged
Property, including, without limitation, the performance of appraisals and
environmental inspections thereof, all on any Business Day at reasonable hours
upon reasonable advance notice and with reasonable efforts not to interfere with
any work (except to a de minimus extent), and (ii) cooperate and shall cause the
Property Owner to cooperate in all reasonable respects, and use commercially
reasonable efforts to cause all contractors and subcontractors to cooperate,
with any such inspector to perform all required functions hereunder, unless
there exists an Event of Default, in each case at the Lender's sole cost and
expense and in accordance with all safety and security procedures in place at
the Mortgaged Property.
(e) Notice of Default. It shall promptly advise the Lender of any change in
the condition (financial or otherwise) of any Borrower Party that could be
expected to have a Material Adverse Effect or materially impair its ability to
comply with its obligations hereunder, or of the occurrence of any Default or
Event of Default of which any Borrower Party has Knowledge.
(f) Cooperate in Legal Proceedings. It shall cooperate in all reasonable
respects with the Lender with respect to any proceedings before any court, board
or other Governmental Authority that may in any way affect the rights of the
Lender hereunder or under the other Loan Documents and, in connection therewith,
permit the Lender, at its election, to participate in any such proceedings.
(g) Perform Loan Documents. It shall observe, perform and satisfy all the
terms, provisions, covenants and conditions required to be observed, performed
or satisfied by it and shall pay when due all costs, fees and expenses required
to be paid by it under the Loan Documents, subject to any cure periods provided
therein. It shall not enter into or otherwise suffer or permit any amendment,
waiver, supplement, termination or other modification of any Loan Document
executed and delivered by it without the prior written consent of the Lender.
(h) Insurance Benefits. After payment in full of the Senior Loan, the
Borrower shall cooperate and shall cause the Property Owner to cooperate with
the Lender in all reasonable respects in obtaining for the Lender the benefits
of any insurance proceeds lawfully or equitably payable in connection with the
Mortgaged Property, and the Lender shall be reimbursed for any out-of-pocket
expenses reasonably incurred in connection therewith (including reasonable
attorneys' fees and disbursements, and, if reasonably necessary to collect such
proceeds, the expense of an appraisal on behalf of the Lender in case of a fire
or other casualty affecting the Mortgaged Property or any part thereof) out of
such insurance proceeds, subject to Article VIII below.
(i) Development Team. The Borrower shall cause the Property Owner to
maintain an Acceptable Development Team for the Project at all times.
(j) Further Assurances. The Borrower shall, at its sole cost and expense:
(i) furnish to the Lender all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and
specifications, appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement and
instrument required to be furnished by any Borrower Party pursuant to the
terms of the Loan Documents or reasonably requested by the Lender in
connection therewith;
(ii) execute and deliver to the Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts
reasonably necessary or desirable, to evidence, preserve and/or protect the
Lien of the Lender at any time securing or intended to secure the
obligations of any Borrower Party under the Loan Documents, as the Lender
may reasonably require (provided that none of the foregoing has the result
of increasing the Borrower's monetary or other obligations or decreasing or
impairing Borrower's rights under the applicable Loan Documents, with
respect to rights and obligations not of a monetary nature, other than to a
de minimis extent);
(iii) be responsible for, and pay within thirty (30) days after demand
therefor, all Lender Expenses; and
(iv) use commercially reasonable efforts to deliver to the Lender
within thirty (30) days of a one-time written request by the Lender to the
Borrower a substantive non-consolidation opinion in form and substance
reasonably satisfactory to the Lender.
(k) Financial Reporting and Other Information.
(i) Each of the Borrower, the Property Owner and the Guarantor will
keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP, to the extent applicable, proper and
accurate books, records and accounts reflecting all of its financial
affairs and all items of Operating Income, Operating Expenses and Capital
Expenditures. The Lender shall have the right from time to time (at the
Lender's sole cost and expense, prior to an Event of Default having
occurred and thereafter during the continuance of such Event of Default at
the Borrower's sole cost and expense) at all times during normal business
hours upon reasonable advance notice to examine such books, records and
accounts at the office of any Borrower Party or other Person maintaining
such books, records and accounts and to make such copies or extracts
thereof, as the Lender shall desire; provided, however, that the Lender
shall use commercially reasonable efforts to keep such books, records and
accounts confidential, except that the Lender may disclose any such
information (A) to prospective co-lenders and participants, auditors and
other consultants in connection with the transaction described in this
Agreement (provided each such recipient is informed of the confidential
nature of such information and directed to keep the same confidential), (B)
to the extent required by any Law or Regulation, and (C) if such
information is otherwise available to the public not through a breach
hereof.
(ii) The Borrower shall furnish or cause to be furnished to the Lender
within one hundred twenty (120) days following the end of each Fiscal Year,
a complete copy of the annual financial statements of Borrower and the
Property Owner, audited by Ernst & Young or another "Big Four" accounting
firm or another independent certified public accounting firm acceptable to
Lender, in accordance with GAAP (subject to normal year-end adjustments),
together with an audit certificate from such accounting firm, for such
Fiscal Year and containing a balance sheet, income statement and cash flow
statement for the Borrower and the Property Owner, all in such detail as
the Lender may reasonably request. Such annual financial statements shall
be accompanied by an Officer's Certificate from the Borrower certifying
that such annual financial statement presents fairly, in all material
respects, the financial condition and results of operation of the Mortgaged
Property being reported upon and has been prepared in accordance with GAAP
(subject to normal year-end adjustments). Together with such annual
financial statements, the Borrower shall furnish to the Lender [x] an
Officer's Certificate of the Borrower certifying as of the date thereof
whether, to the Knowledge of the Person executing the Officer's Certificate
(so long as such Person is a member of the Managing Member), there exists a
Default or Event of Default, and if such a Default or Event of Default
exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy the same and [y] an annual report, for
the most recently completed Fiscal Year, containing (A) Capital
Expenditures made in respect of the Mortgaged Property, including separate
line items with respect to any Capital Expenditure costing in excess of
$50,000, and (B) Leasing levels for the Mortgaged Property (including a
then-current occupancy report as at the end of the Fiscal Year and rental
rates).
(iii) The Borrower shall furnish, or cause to be furnished, to the
Lender the following items, accompanied by an Officer's Certificate of the
Borrower, certifying that such items are true, correct, accurate, and
complete and fairly present, in all material respects, the financial
condition and results of the operations of the Borrower, the Property Owner
and the Mortgaged Property, to the extent applicable:
(A) within fifteen (15) Business Days after Borrower's
receipt thereof, any notice received from a Person
representing or claiming to represent a Tenant, alleging or
acknowledging a default by landlord under the applicable
Lease, requesting a termination or modification of any Lease,
or any other similar correspondence received by Borrower or
the Property Owner during the subject month; and
(B) within fifteen (15) Business Days after the end of
the month in question, monthly leasing reports (including
rents, deposits, closing dates, information regarding
potential Tenants and ongoing leasing efforts and such other
information as the Lender may reasonably request from time to
time), and other information necessary and sufficient, to the
extent applicable, to fairly represent the financial position
and results of operations of the Mortgaged Property during
such calendar month, all in form reasonably satisfactory to
the Lender.
(iv) The Borrower shall furnish, or cause to be furnished, to the
Lender in respect of the first three (3) fiscal quarters of each Fiscal
Year, the following items, accompanied by an Officer's Certificate of the
Borrower, certifying that such items are true, correct and complete and
fairly present, in all material respects, the financial condition and
results of the operations of the Borrower, the Property Owner and the
Mortgaged Property in a manner consistent with GAAP (except for the absence
of footnotes), to the extent applicable:
(A) on or before the forty-fifth (45th) day after the end of
each fiscal quarter, quarterly and year-to-date unaudited financial
statements prepared for such fiscal quarter with respect to the
Borrower and the Property Owner, including a balance sheet and
operating statement for such quarter;
(B) on or before the forty-fifth (45th) day after the end of
each fiscal quarter during the extension period permitted pursuant
to Section 2.8 hereof, if any, a comparison of the budgeted income
and expenses and the actual income and expenses for such quarter and
year to date for the Mortgaged Property, together with a detailed
explanation of any unfavorable variances of five percent (5%) or
more between budgeted and actual amounts in the aggregate and ten
percent (10%) or more on a line-item basis for such period and year
to date;
(C) on or before the forty-fifth (45th) day after the end of
each fiscal quarter, an Officer's Certificate of the Borrower
certifying as of the date thereof whether to the Knowledge of the
Person executing the Officer's Certificate (so long as such Person
is the Managing Member of the Borrower), there exists a Default or
an Event of Default, and if such Default or Event of Default exists,
the nature thereof, the period of time it has existed and the action
being taken to remedy the same; and
(D) on or before the twentieth (20th) day after the end of
each fiscal quarter, a current rent roll for the Project together
with a report detailing all Tenant receivables for such quarter.
(v) The Borrower shall provide to the Lender (x) on or before January
19th and July 19th of each year, an updated schedule of all contingent
obligations of the Guarantor (regardless of whether such obligations are
required to be disclosed on balance sheets, in footnotes or otherwise in
accordance with GAAP), showing each such contingent obligation in excess of
$1,000,000 and (y) promptly after the creation thereof, notice that the
Guarantor has incurred any new contingent obligation in excess of
$5,000,000 (regardless of whether such obligations are required to be
disclosed in accordance with GAAP or disclosed in footnotes).
(vi) The Borrower shall furnish to the Lender, within ten (10)
Business Days after request, such further detailed information with respect
to the operation of the Mortgaged Property and the financial affairs of the
Borrower and the Property Owner as may be reasonably requested by the
Lender.
(vii) The Borrower shall furnish to the Lender, promptly after
receipt, a copy of any written notice received by or on behalf of the
Borrower or the Property Owner from any Governmental Authority having
jurisdiction over the Mortgaged Property with respect to any Hazardous
Substance alleged to exist or emanate therefrom or thereat.
(viii) The Borrower shall, at any and all times, within a reasonable
time after written request by the Lender, furnish or cause to be furnished
to the Lender, in such manner and in such detail as may be reasonably
requested by the Lender, such information as may be necessary to permit the
Lender to comply with any request for information made by an investor in or
prospective institutional holder of the Note in connection with an
Assignment or Participation to be furnished under Rule 144A(d) under the
Securities Act (including any of the same relating to a Borrower Party).
(ix) The Borrower shall simultaneously furnish or cause to be
furnished to the Lender copies of all financial statements, reports,
certificates, notes and information delivered to the Senior Lender under
the Senior Loan Documents.
(x) If the Borrower fails to provide to the Lender or its designee any
of the financial statements, certificates, reports or information (the
"Required Records") required by this Section 5.1(k) within ten (10)
Business Days after written notice from the Lender of the date upon which
such Required Record is due, the same shall constitute an Event of Default.
(xi) The Lender shall have the right at any time and from time to time
to audit the financial information provided by the Borrower pursuant to the
terms of this Agreement in accordance with the then customary audit
policies and procedures of the Lender. The Lender shall pay for the costs
of its auditors; provided, however, if (A) such audit shall have been
commenced during an Event of Default or (B) such audit reveals a material
discrepancy from the information previously provided to the Lender, the
Borrower shall pay the reasonable, out-of-pocket costs and expenses of such
audit.
(xii) At the Lender's request, and to the extent not confidential and
available to the Borrower, the Borrower shall also cause any of the
Required Records to be delivered in electronic format (it being agreed that
the Borrower shall not be responsible for the inaccuracies in such
information resulting solely from the electronic transmission of the same).
(l) Business and Operations; Material Agreements. The Borrower and the
Property Owner shall continue to engage in the businesses currently conducted by
each of them as and to the extent the same are necessary for the ownership,
development, construction, maintenance, management and operation of the
Mortgaged Property or the terms hereof, or, if not, to the extent that the
failure to do so would not have a Material Adverse Effect. The Borrower shall
and shall cause the Property Owner to qualify to do business and shall remain in
good standing under the laws of each jurisdiction as and to the extent the same
are required for the ownership, development, construction, maintenance,
management and operation of the Mortgaged Property or the terms hereof. The
Borrower shall and shall cause the Property Owner to at all times (i) maintain
the Mortgaged Property or cause the Mortgaged Property to be maintained or,
prior to Final Completion, such that the Mortgaged Property can, upon
completion, be operated as a Class "A" mixed use project; (ii) maintain such
Licenses or arrangements in connection therewith so as to permit the Mortgaged
Property to be maintained at a standard at least equal to that maintained by
Class "A" office managers of similar facilities located near the Mortgaged
Property; (iii) promptly perform and/or observe in all material respects all of
the covenants and agreements required to be performed and observed by each of
them under the Property Management Agreement, the Leasing Agreement and any
other Material Agreement, and do all things reasonably required to preserve and
to keep unimpaired their rights thereunder; (iv) promptly notify the Lender in
writing of the giving of any notice of any default by any party under any
Material Agreement of which either of them is aware, including, without
limitation, the Property Management Agreement and the Leasing Agreement; and (v)
promptly enforce the performance and observance of all of the material covenants
and agreements required to be performed and/or observed by the other party under
each Material Agreement, including, without limitation, the Property Management
Agreement.
(m) Title to the Property. The Borrower shall cause the Property Owner to
warrant and defend against the claims of all Persons whomsoever the Property
Owner's title to the Mortgaged Property and every part thereof.
(n) Title to Collateral. The Borrower shall warrant and defend against the
claims of all Persons whomsoever (i) its title to the Borrower Equity Interests
and every part thereof and (ii) the validity and priority of the Liens granted
by the Pledge Agreement and the Financing Statements.
(o) Cost of Enforcement. In the event (i) that the Pledge Agreement is
foreclosed in whole or in part or the Note, any Loan Document, including such
Pledge Agreement, is put into the hands of an attorney for collection, suit,
action or foreclosure, (ii) of the foreclosure of any Lien or pledge prior to or
subsequent to the Pledge Agreement in which proceeding the Lender is made a
party, (iii) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of the Borrower or an assignment by the Borrower for the
benefit of its creditors, or (iv) the Lender shall attempt to remedy any Event
of Default hereunder, the Borrower shall be chargeable with and agrees to pay
all out-of-pocket costs incurred by the Lender as a result thereof, including
costs of collection and defense (including reasonable attorneys, experts,
consultants and witnesses fees and disbursements) in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, which shall be due and payable together with all required service or
use taxes.
(p) Estoppel Statement.
(i) After written request by the Lender, the Borrower shall within
fifteen (15) Business Days furnish the Lender with a statement, duly
acknowledged and certified, setting forth (i) the unpaid principal amount
of the Note, (ii) to Borrower's Knowledge, the Applicable Interest Rate,
(iii) the date installments of interest and/or principal were last paid,
(iv) that the Note, this Agreement, the Pledge Agreement and the other Loan
Documents are valid, legal and binding obligations, subject to Debtor
Relief Laws and general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law), and whether any
of such Loan Documents have been modified and, if modified, giving
particulars of such modification, and (v) such other matters as the Lender
may reasonably request. Any prospective purchaser of any interest in the
Loan shall be permitted to rely on such certificate.
(ii) The Borrower shall cause the Property Owner to request and use
reasonable good faith efforts to obtain for the Lender, upon request,
estoppel certificates (A) as applicable, from Bank One in respect of the
Bank One Lease, from Holland & Knight in respect of the Holland & Knight
Lease, and from Citadel in respect of the Citadel Lease, each in form and
substance similar to that attached to each such lease (if so attached),
and, if not attached, then in form and substance satisfactory to the Lender
(it being agreed that the estoppel certificate attached hereto as Exhibit K
is acceptable to the Lender), and (B) from any other Tenant in the form set
forth on Exhibit K attached hereto (or other form reasonably approved by
the Lender); provided that the Borrower shall not be required to deliver
such certificates more frequently than once in any calendar year (unless an
Event of Default hereunder or under any of the Loan Documents then exists,
in which case the Borrower shall endeavor to obtain, or cause the Property
Owner to obtain, as many such certificates as the Lender shall request and,
in any event, shall be obligated to obtain, or cause to be obtained, all
those as to which the Tenant under the applicable Lease has committed to
provide pursuant to such applicable Lease).
(iii) After written request by the Borrower, but not more often than
two (2) times in any twelve-month period, the Lender shall within fifteen
(15) Business Days furnish the Borrower with a statement, duly acknowledged
and certified, setting forth (i) the unpaid principal amount of the Note,
(ii) the Applicable Interest Rate, (iii) the date installments of interest
and/or principal on the Loan were last paid, and (iv) that the Note, this
Agreement, the Pledge Agreement and the other Loan Documents have not been
modified or, if modified, giving particulars of such modification.
(q) Advance. The Borrower shall use the proceeds of the Loan received by it
only for the purposes set forth in Section 2.1.1 hereof.
(r) Performance by Borrower. The Borrower shall in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each Loan
Document executed and delivered by it, and shall not enter into or otherwise
suffer or permit any amendment, waiver, supplement, termination or other
modification of any Loan Document executed and delivered by it without the prior
written consent of the Lender.
(s) No Joint Assessment. The Borrower shall not and shall not allow the
Property Owner to suffer, permit or initiate the joint assessment of the
Mortgaged Property (i) with any other real property constituting a tax lot
separate from the Mortgaged Property (provided, however that, subject to the
Borrower's obtaining, or causing to be obtained, a property identification
number endorsement to a Qualified Title Policy satisfactory to the Lender and
thus demonstrating to the Lender that such division would not result in a change
of ownership of any portion of the Mortgaged Property, the tax lot(s) comprising
the Mortgaged Property may be divided to provide for separately assessed tax
lots), and (ii) unless required by applicable law, with any portion of the
Mortgaged Property that may be deemed to constitute personal property, or any
other procedure whereby the Lien of any Taxes that may be levied against such
personal property shall be assessed or levied or charged to the Mortgaged
Property.
(t) Leasing Matters.
(i) All new Leases entered into from and after the date hereof, unless
otherwise specifically approved by the Lender, (A) shall be the result of
arm's-length negotiations, (B) shall satisfy Minimum Effective Rental
Requirements and provide for other market terms (including acceptable
subordination, non-disturbance and attornment agreements), (C) shall not
contain any terms that would materially adversely affect the Lender's
rights under the Loan Documents, (D) shall be Approved Leases and (E) shall
specifically provide that any right of first offer, right of first refusal,
expansion option or other right to lease additional space granted to the
Tenant under such Lease (however described) shall be expressly subordinate
to the rights of the Tenants under the Bank One Lease and, to the extent
applicable, the Holland & Knight Lease and the Citadel Lease.
(ii) With respect to any Lease which does not meet the Minimum Net
Effective Rent Requirements, no approval of the Lender shall be required
hereunder (i) if the Borrower demonstrates to the Agent's reasonable
satisfaction that such proposed Lease reflects then-current "market" terms
and conditions for similar leases to similar tenants for similar space in
Chicago's "Loop" area (a proposed Lease containing such terms and
conditions, a "Market Lease") or (ii) in the event of a disagreement
between the Borrower and the Lender as to whether a proposed Lease
constitutes a Market Lease, if CB Xxxxxxx Xxxxx, Inc. or another
independent third party acceptable to the Borrower and the Lender,
determines (which determination shall be binding on both Borrower and
Lender), after a review and comparison of the terms of such proposed Lease
to comparable leases in Chicago's "Loop" area (which review shall be
completed within thirty (30) days after the date such Lease is received by
CB Xxxxxxx Xxxxx, Inc. or such other third party) that such Lease does
constitute a Market Lease.
(iii) The Borrower shall cause the Property Owner to (A) observe and
perform in all material respects the obligations imposed upon the lessor
under the applicable Leases (within the time frames and subject to any
notice and/or cure periods contained therein); (B) enforce the material
terms, covenants and conditions contained in such Leases on the part of the
lessee thereunder to be observed or performed in a commercially reasonable
manner; (C) not collect any of the base or minimum rents more than one (1)
month in advance (other than security deposits); (D) require that all
security deposits under Leases be in the form of either Cash or a letter of
credit; and (E) not execute any assignment of lessor's interest in the
Leases or the Rents (other than to the Senior Lender).
(u) ERISA. The Borrower shall comply in all material respects with the
applicable provisions of ERISA and the Code and shall furnish to the Agent (i)
(A) promptly and in any event within 10 Business Days after any Borrower Party
or any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred, a statement of the Managing Member of the Borrower describing such
ERISA Event and the action, if any, that such Borrower Party or such ERISA
Affiliate has taken and proposes to take with respect thereto and (B) on the
date any records, documents or other information must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information; (ii) promptly and in any event within two
(2) Business Days after receipt thereof by any Borrower Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan; (iii)
promptly and in any event within thirty (30) days after the filing thereof with
the Internal Revenue Service, copies of each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) with respect to each Plan; and (iv)
promptly and in any event within five (5) Business Days after receipt thereof by
any Borrower Party or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, copies of each notice concerning (A) the imposition of Withdrawal
Liability by any such Multiemployer Plan, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C)
the amount of liability incurred, or that may be incurred, by such Borrower
Party or any ERISA Affiliate in connection with any event described in clause
(A) or (B).
(v) Assignment or Participation of Note. In the event that the Lender
notifies the Borrower that a sale of the Note or any interest in any thereof (an
"Assignment") to an Eligible Assignee (including, without limitation, a sale or
transfer of the Note held by the Lender to a trust, partnership, business trust
or other issuance vehicle accompanied by the simultaneous issuance by such
vehicle of a security backed by or representing an interest in the Note, either
alone or together with other assets transferred by the Lender or other parties),
or a sale of a participation interest in the Note in accordance with the terms
of Section 11.23 below (a "Participation"), to one or more other parties is
desirable, then the Borrower and the other Borrower Parties agree reasonably to
cooperate, at no material cost or additional liability to any such Borrower
Party, with the Lender in order to effectuate such Assignment or Participation.
(w) Splitting of Loan and Note. The Lender has the right, without any
Borrower Party's consent, on one or more occasions, to split the Loan into two
(2) or more separate loans, each in a principal amount as determined by the
Lender and providing for such subordination as between such split loans as the
Lender shall elect. The interest rate and economic and other terms for the split
loans shall be in the aggregate the same as that of the Loan as determined
pursuant to this Agreement and the Note. The Lender shall have the right to
allocate the security for the split loans in its sole and absolute discretion,
including, without limitation, the right to allocate the security provided by
the Guaranties and the Pledge Agreement. In connection with any such splitting
of the Loan, conforming changes shall be made to the Loan Documents as required
to reflect such splitting. Each Borrower Party agrees to cooperate in all
material respects in any such splitting of the Loan, at no material cost or
additional liability to any such Borrower Party, including, without limitation,
amending, modifying or restating this Agreement or any of the other Loan
Documents, or entering into such new documentation as reasonably required by the
Lender to effectuate the splitting of the Loan.
(x) Easements and Restrictions. The Borrower shall submit, and shall cause
the Property Owner to submit, to the Lender for the Lender's written approval
(which shall not be unreasonably withheld or delayed) prior to the execution
thereof by the Property Owner all proposed easements, restrictions, covenants,
Permits, Licenses and other instruments (including any redevelopment agreement
entered into by or on behalf of the Property Owner) which would affect the title
to the Mortgaged Property, accompanied by a survey or site plan showing the
proposed location thereof and such other information as the Lender shall
reasonably require. The Borrower shall not permit the Property Owner to subject
the Mortgaged Property or any part thereof to any easement, restriction or
covenant (including any restriction or exclusive use provision in any Lease or
other occupancy agreement other than in an Approved Lease) without the prior
written approval of the Lender.
(y) Further Assurance of Title. To further assure title, if at any time the
Lender reasonably believes that the Advance is not secured or will or may not be
secured by the Pledge Agreement and the other Loan Documents as a first and
prior Lien on or security interest in the Collateral other than the Additional
Subordinate Collateral and/or a second priority Lien on or security interest in
the Additional Subordinate Collateral, then Borrower shall, within ten (10)
Business Days after written notice from the Lender, do all things and matters
reasonably necessary (including execution and delivery to the Lender of all
further documents and performance of all other acts which the Lender reasonably
deems necessary or appropriate) to assure to the satisfaction of the Lender that
the Advance is secured or will be secured by the Pledge Agreement as a first and
prior Lien or security interest with respect to the Collateral.
(z) Commercial Leasing. The Borrower shall cause the Property Owner to
market in a commercially reasonable manner all vacant space in the Project.
(aa) Cooperation for Syndication. Subject to the terms of Section 11.23
below, the Borrower shall, and shall cause the Property Owner, (i) to reasonably
assist the Lender in the syndication of the Loan, which assistance may include,
among other things, providing to the Lender information prepared by or on behalf
of the Borrower Parties relating to the Project and the business, assets,
financial condition, operations and prospects of the Borrower and the Property
Owner with respect to the Project; (ii) to supplement such information from time
to time after request by the Lender, or otherwise to ensure the accuracy of such
information, until such time as the syndication of the Loan has been completed;
and (iii) to make members of the Borrower Parties' management and their
consultants and advisors available during regular business hours upon reasonable
advance written notice (A) to answer questions regarding the Project and the
Loan, (B) to review, comment on and assist in the preparation of the syndication
memorandum relating to the Loan, (C) to meet with prospective participants and
(D) to use their reasonable efforts, in light of their lending relationships, to
benefit the syndication efforts of the Lender.
(bb) Compliance with Senior Loan Documents. Borrower shall cause Property
Owner to (i) pay all principal, interest and other sums required to be paid by
Borrower or Property Owner under and pursuant to the provisions of the Senior
Loan Documents, (ii) diligently perform and observe all of the terms, covenants
and conditions of the Senior Loan Documents on the part of Property Owner to be
performed and observed, unless such performance or observance shall be waived or
not required in writing by Senior Lender and (iii) promptly notify Lender of the
giving of any notice by the Senior Lender to Property Owner or Borrower of any
default by Property Owner in the performance or observance of any of the
material terms, covenants or conditions of the Senior Loan Documents on the part
of Property Owner to be performed or observed and deliver to Lender a true copy
of each such notice.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1 Negative Covenants. The Borrower hereby covenants and agrees,
from the date of this Agreement, and as long as the Borrower remains indebted to
the Lender hereunder, as follows:
(a) Operation of Property. The Borrower shall not and shall not permit the
Property Owner to (except as elsewhere herein expressly provided): (i) surrender
or terminate any Material Agreement (unless, with respect to a Material
Agreement that is not the Property Management Agreement or the Leasing
Agreement, the other party thereto is in default thereunder and the termination
of such agreement would be commercially reasonable), (ii) surrender or terminate
any Property Management Agreement or Leasing Agreement (unless the applicable
Property Manager or Leasing Agent is in default thereunder and the termination
of such agreement would be commercially reasonable or unless such Property
Manager or Leasing Agent is being replaced with an Acceptable Property Manager
or an Acceptable Leasing Agent, as the case may be, pursuant to a commercially
reasonable agreement reasonably acceptable to Lender), or permit or suffer any
significant delegation or contracting of the Property Manager's or Leasing
Agent's duties except as permitted under the Property Management Agreement or
the Leasing Agreement, as the case may be, (iii) increase or consent to the
increase of the amount of any charges under any Material Agreement, except as
provided therein or on an arm's-length basis and commercially reasonable terms,
(iv) amend, modify, surrender or, except in accordance with the terms and
conditions thereof, terminate a Lease (provided, however, that the Borrower may,
or may permit the Property Owner to, amend or modify an Approved Lease of less
than 10,000 NRSF without the Lender's prior consent) , or (v) amend, modify,
surrender or waive any material rights or remedies under, or enter into or
terminate, any Material Agreement in each case without the Lender's approval,
which approval shall not be unreasonably withheld or delayed, unless, in the
case of any such termination, the Borrower causes the Property Owner to replace
the terminated Material Agreement within a commercially reasonable period with
another agreement that provides substantially equivalent benefits to the
Property Owner, on terms and conditions no worse to the Property Owner than the
corresponding benefits, terms and conditions which applied under the agreement
replaced.
(b) Liens. Subject to Section 5.1(b)(ii) hereof, the Borrower shall not
create, incur, assume, permit or suffer to exist any Lien on any portion of the
Collateral other than Liens created pursuant to the Loan Documents (and, with
respect to the Additional Subordinate Collateral only, the Senior Loan
Documents). The Borrower shall not permit the Property Owner to create, incur,
assume, permit or suffer to exist any Lien on any portion of the Mortgaged
Property, except as specifically permitted pursuant to the Senior Loan
Documents.
(c) Dissolution and Disposal. Except as expressly permitted in this
Agreement, none of the Borrower Parties shall (A) dissolve, terminate, wind up
its affairs, liquidate, merge with or consolidate into another Person or (B)
transfer, lease, assign, sell or otherwise dispose of in any way, in one
transaction or any combination of transactions, all or any part of the
Collateral or the Mortgaged Property.
(d) Debt Cancellation. The Borrower shall not and shall not permit the
Property Owner to cancel or otherwise forgive or release any material claim or
material debt owed to either of them in connection with the Collateral or the
Mortgaged Property, including any arising under any of the Leases and Material
Agreements except (i) with respect to such Leases and Material Agreements, in
accordance with and subject to the terms of this Agreement, and (ii) with the
Lender's consent, with respect to other matters, for adequate consideration in
the ordinary course of such Person's business and on commercially reasonable
terms, subject to other restrictions contained herein or in any other Loan
Document.
(e) Affiliate Transactions. The Borrower shall not, without the Lender's
consent, which shall not be unreasonably withheld, enter into, or be a party to,
any transaction with any other Borrower Party or any Affiliate of any Borrower
Party relating to or which affects the Collateral or the Mortgaged Property,
other than (i) transactions which are customary and in the normal course of
business, and on terms and conditions substantially as favorable to the Borrower
as would be obtainable by any of them in a comparable arm's-length transaction
with a Person other than an Affiliate and (ii) after notice to the Lender.
(f) Zoning and Uses. The Borrower shall not and shall not permit the
Property Owner to (i) initiate or support any limiting change in the permitted
uses of the Mortgaged Property (or, to the extent applicable, zoning
reclassification of the Mortgaged Property) or any portion thereof, seek any
variance under existing land use restrictions, laws, rules or regulations (or,
to the extent applicable, zoning ordinances) applicable to the Mortgaged
Property or use or permit the use of the Mortgaged Property in a manner that
would result in such use becoming a nonconforming use under applicable land-use
restrictions (and, if any, zoning ordinances) or that would violate the terms of
any Lease, Legal Requirements or any Permitted Encumbrance, (ii) modify, amend
or supplement any of the terms of any Permitted Encumbrance in a manner adverse
to the interests of the Lender, (iii) other than the Permitted Encumbrances,
impose or permit or suffer the imposition of any restrictive covenants,
easements or encumbrances upon the Mortgaged Property in any manner that
adversely affects in any material respect the value or utility of the Mortgaged
Property, (iv) execute or file any subdivision plat affecting the Mortgaged
Property, institute, or permit the institution of, proceedings to alter any tax
lot comprising the Mortgaged Property (provided, however that, subject to the
Borrower's obtaining, or causing to be obtained, a property identification
number title insurance policy endorsement satisfactory to the Lender and there
not occurring any change in ownership of any portion of the Mortgaged Property
and there being no resulting breach of any Approved Lease, the tax lot(s)
comprising the Mortgaged Property may be divided to provide for separately
assessed tax lots) or (v) permit or suffer the Mortgaged Property to be used by
the public or any Person in such manner as might make possible a claim of
adverse usage or possession or of any implied dedication or easement.
(g) Debt. The Borrower shall not incur or assume any Indebtedness other
than the Debt. The Borrower shall not permit the Property Owner to incur or
assume any Indebtedness except as specifically permitted pursuant to this
Agreement and the Senior Loan Agreement; provided, however, that notwithstanding
anything to the contrary in the Senior Loan Documents, the Borrower shall not
permit the Property Owner to incur trade or construction payables or other
similar working capital items in excess of $1,300,000 in the aggregate
outstanding at any one time (it being understood that real estate taxes and
capital expenditures shall not be included in the calculation of the amount of
such payables or working capital amounts unless and until the same are actually
due and owing).
(h) Transfers. Except in compliance with this Section 6.1(h) or another
express provision of this Agreement, there shall be no transfer or other
disposition of the Collateral or the Mortgaged Property or any portion thereof
or direct or indirect interest therein. Notwithstanding the foregoing, (1) the
Borrower may permit the sale or transfer of Equipment by the Property Owner in
accordance with the provisions of the Senior Loan Agreement, and (2) so long as
no Change of Control occurs as a result thereof, operating units or other
securities in Guarantor, and shares or other securities of Prime Group Realty
Trust may be issued, transferred, exchanged, converted and redeemed.
(i) TIF Financing. Except in connection with a redevelopment agreement
between the City of Chicago and the Property Owner and a note issued by the City
of Chicago pursuant thereto (a "TIF Note"), the Borrower shall not, and shall
not permit the Property Owner to, enter into any arrangement with respect to
real estate tax abatements, tax increment financing, payments in lieu of real
estate tax or any other financial contracts relating to the financing and
development of the Project. Except any pledge to Senior Lender and/or to the
Lender, any TIF Note shall not be pledged, transferred, encumbered, sold,
factored or otherwise monetized or collateralized without the prior written
consent of the Lender (such approval not to be unreasonably withheld or
delayed).
(j) Assignment of Licenses and Permits. Except in connection with a
transfer permitted under Section 6.1(h) hereof or any express provision of any
Loan Document, the Borrower shall not permit the Property Owner to assign or
transfer any of its interest in any Licenses pertaining to the Mortgaged
Property, or assign, transfer or remove or permit any other Person to assign,
transfer or remove any records pertaining to the Mortgaged Property other than
to the Senior Lender pursuant to the Senior Loan Documents.
(k) Place of Business. The Borrower shall not change its chief executive
office or its principal place of business without giving the Lender at least
thirty (30) days' prior written notice thereof and thereafter promptly providing
the Lender such information as the Lender may reasonably request in connection
therewith.
(l) Operating Obligations. Except as otherwise permitted under this
Agreement and the other Loan Documents, the Borrower shall not and shall not
permit the Property Owner to enter into, assume or permit to exist, any
obligations for the payment of rent for any property (real, personal or mixed,
tangible or intangible) under Leases, subleases or similar arrangements as
lessee other than operating leases, equipment leases and similar leases entered
into in ordinary course of business for assets incidental to the management and
operation of the Mortgaged Property.
(m) Sale and Leaseback. The Borrower shall not and shall not permit the
Property Owner to enter into any arrangement pursuant to which it will lease
back, as lessee, any property (real, personal or mixed, tangible or intangible)
previously owned by it and sold or otherwise transferred or disposed of,
directly or indirectly, to the owner-lessor of such property.
(n) Limitation on Distributions. If an Event of Default that can be cured
solely by the payment of money exists hereunder, the Borrower shall not permit
any distribution of any revenues received in connection with the Mortgaged
Property, Receipts or other disbursements (including direct or indirect
redemptions of membership interests) to any member, partner, shareholder or
Affiliate of the Borrower other than pursuant to the Property Management
Agreement and the Leasing Agreement until such Event of Default has been cured.
(o) Limitation on Negative Pledge Clauses. The Borrower shall not enter
into with any Person any agreement other than this Agreement and the other Loan
Documents or documents with respect to the Senior Loan, which prohibit or limit
the ability of the Borrower to create, incur, assume or suffer to exist any Lien
on the Collateral.
(p) Limitation on Securities Issuances. The Borrower shall not, and shall
not permit the Property Owner to, issue any additional equity interests, or
warrants, rights or options. Notwithstanding the foregoing, Lender agrees that
it will consider requests from the Borrower regarding the admission of one or
more additional members into the ownership structure of the Borrower, which
additional members may be entitled to a preferred return on their equity
investment; provided, however, that the terms and conditions governing the
admission of any additional members shall be subject to the prior written
consent of the Lender in its sole and absolute discretion.
(q) Limitation on Subsidiary Formation. The Borrower shall not form any
Subsidiaries other than the Property Owner. The Managing Member shall not form
any Subsidiaries other than the Borrower; provided, however, that if Guarantor
becomes the Managing Member in accordance with the provisions of the Borrower's
Organizational Documents, Guarantor shall be permitted to form Subsidiaries so
long as such Subsidiaries have no direct or indirect ownership interests in the
Collateral or the Mortgaged Property.
(r) Governing Documents. The Borrower shall not cause or permit (and shall
not permit the Property Owner to cause or permit) any amendment, modification,
supplement, waiver or termination of any of its Organizational Documents that
would be reasonably likely to cause a Material Adverse Effect (it being
understood that any changes to the "special purpose" or "independent manager"
provisions of the Borrower's Organizational Documents shall be deemed to cause a
Material Adverse Effect). None of the Borrower Parties (other than the Borrower)
will cause or permit any amendment, modification, supplement, waiver or
termination of any provisions of its respective organizational instruments, or
other governing documents, in a manner that would impair or limit its ability to
satisfy its obligations hereunder and under the other Loan Documents to which it
is a party.
(s) Third Party Fees. At no time during the term of the Loan (including any
extension thereof pursuant to Section 2.8 hereof) shall Borrower permit the
aggregate amount paid by the Property Owner (i) to the Property Manager to
exceed the Base Management Fee plus any portion of the Accrued Management Fee
which is payable in accordance with Section 10.1(c) below and (ii) in respect of
Leasing Commissions to exceed $19,432,698, in the aggregate.
(t) Leasing Matters. The Borrower shall not permit the Property Owner to
enter into any Lease that is not an Approved Lease without the Lender's consent
to the extent that the Borrower is required to obtain such consent hereunder. No
additional consent shall be required with respect to an extension of an Approved
Lease pursuant to the exercise of an option contained in such Approved Lease.
(u) Single Purpose Covenants of Borrower. The Borrower hereby represents,
warrants, covenants and agrees, and will cause its Organizational Documents to
reflect, that while the Debt is outstanding it has not and shall not:
(i) engaged or engage in any business or activity other than the ownership
of the Borrower Equity Interests and activities incidental thereto;
(ii) acquired or acquire or owned or own any material asset other than the
Borrower Equity Interests;
(iii) merge into or consolidate with any Person or dissolve, terminate or
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets (except as specifically permitted herein) or
change its legal structure;
(iv) failed or fail to preserve its existence as an entity duly organized,
validly existing and in good standing under the Laws and Regulations of the
jurisdiction of its organization or formation, or, without the prior written
consent of the Lender, amend, modify, terminate or fail to comply with the
provisions of its partnership agreement, articles or certificate of
incorporation, certificate of organization, operating agreement or similar
Organizational Documents, as the case may be, whichever is applicable, as the
same may be further amended or supplemented, if such amendment, modification,
termination or failure to comply would (A) create an amendment to the
limitations on the amendment of such documents as contained therein, (B) affect
the provisions of such documents pertaining to the matters set forth in this
Section 6.1(u), or (C) have a Material Adverse Effect;
(v) owned or own any Subsidiary other than the Property Owner, or made or
make any, investment in, any person or entity other than the Property Owner;
(vi) commingled or commingle its assets with the assets of any of its
Affiliates or of any other Person;
(vii) incurred or incur any debt, secured or unsecured, direct or
contingent (including guarantying any obligation), other than the Permitted
Encumbrances, Permitted Indebtedness and obligations incurred under this
Agreement, the Note and the Loan Documents;
(viii) became or become insolvent or failed or fail to pay its debts and
liabilities from its assets as the same shall become due;
(ix) failed or fail to maintain its records, books of account and bank
accounts separate and apart from those of its principals, Affiliates, general
partners or managing members, as the case may be, and the Affiliates of any such
general partner or managing member or principal, as the case may be, and any
other Person;
(x) failed or fail to maintain separate financial statements, showing its
assets and liabilities, separate and apart from those of any other Person
(though nothing herein contained shall restrict the Guarantor's ability or
obligation to consolidate the financial statements of Guarantor's Affiliates for
financial reporting purposes);
(xi) entered or enter into any contract or agreement with any of its
principals, Affiliates, general partners, managing members or any principal or
Affiliate thereof, except upon terms and conditions that are intrinsically fair
and substantially similar to those that would be available on an arm's-length
basis with third parties other than its principals or Affiliates, or any
principal or Affiliate thereof;
(xii) seek the dissolution or winding up in whole, or in part, of the
Borrower or any general partner or managing member thereof, as the case may be;
(xiii) failed or fail to correct any known misunderstandings regarding the
separate identity of the Borrower;
(xiv) held or hold itself out to be responsible for the debts of another
Person;
(xv) made or make any loans or advances to any Person, including its
general partners, managing members, principals or Affiliates;
(xvi) other than pursuant to the Loan Documents, guaranty, pledge its
assets for the benefit of, or otherwise become liable on or in connection with,
any obligation of any Person, including its general partners, managing members,
principals or Affiliates;
(xvii) failed or fail to file tax returns;
(xviii) failed or fail either to hold itself out to the public as a legal
entity separate and distinct from any other Person or to conduct its business
solely in its own name in order not to (A) mislead others as to the identity of
the Person with which such other party is transacting business, or (B) suggest
that it is responsible for the debts of any third party (including its
principals, Affiliates, general partner or managing member, as the case may be,
or any principal or Affiliate thereof);
(xix) failed or fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations;
(xx) failed or fail to pay the salaries of its own employees (if any) from
its own assets and maintain a sufficient number of employees in light of its
contemplated business operations;
(xxi) filed or file or consented or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for the
benefit of creditors;
(xxii) except as in existence on the date hereof, shared or share any
common logo with or held or hold itself out as or be considered as a department
or division of any of its principals or Affiliates, general partners or managing
members, as the case may be, or any other Person;
(xxiii) failed or fail to allocate any overhead for shared office space in
a fair and reasonable manner; or
(xxiv) failed or fail to use, on a consistent basis, separate stationery,
invoices and checks, except that, so long as Borrower identifies the
separateness of Borrower from Property Owner and/or Guarantor on its stationary,
Borrower may use stationary that also identifies Property Owner thereon and/or
Guarantor.
(v) Single Purpose Covenants of Property Owner. The Borrower hereby
represents, warrants, covenants and agrees, and will cause the Property Owner's
Organizational Documents to reflect, that the Property Owner has not and
Borrower shall cause the Property Owner to not:
(i) engaged or engage in any business or activity other than the ownership
of the Mortgaged Property and activities incidental thereto;
(ii) acquired or acquire or owned or own any material asset other than (A)
the Mortgaged Property, (B) the TIF Note and (C) such incidental personal
property as may be necessary for the operation of the Mortgaged Property;
(iii) merge into or consolidate with any Person or dissolve, terminate or
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets (except as specifically permitted in this
Agreement) or change its legal structure;
(iv) failed or fail to preserve its existence as an entity duly organized,
validly existing and in good standing under the Laws and Regulations of the
jurisdiction of its organization or formation, or, without the prior written
consent of the Lender, amend, modify, terminate or fail to comply with the
provisions of its partnership agreement, articles or certificate of
incorporation, certificate of organization, operating agreement or similar
Organizational Documents, as the case may be, whichever is applicable, as the
same may be further amended or supplemented, if such amendment, modification,
termination or failure to comply would (A) create an amendment to the
limitations on the amendment of such documents as contained therein, (B) affect
the provisions of such documents pertaining to the matters set forth in this
Section 6.1(v), or (C) have a Material Adverse Effect;
(v) owned or own any Subsidiary, or made or make any, investment in, any
Person or entity;
(vi) commingled or commingle its assets with the assets of any of its
Affiliates or of any other Person;
(vii) incurred or incur any debt, secured or unsecured, direct or
contingent (including guarantying any obligation), other than the Senior Loan,
Permitted Encumbrances and Permitted Indebtedness (under and as defined in the
Senior Loan Agreement);
(viii) became or become insolvent or failed or fail to pay its debts and
liabilities from its assets as the same shall become due;
(ix) failed or fail to maintain its records, books of account and bank
accounts separate and apart from those of its principals, Affiliates, general
partners or managing members, as the case may be, and the Affiliates of any such
general partner or managing member or principal, as the case may be, and any
other Person;
(x) failed or fail to maintain separate financial statements, showing its
assets and liabilities, separate and apart from those of any other Person
(though nothing herein contained shall restrict the Guarantor's ability or
obligation to consolidate the financial statements of Guarantor's Affiliates for
financial reporting purposes);
(xi) entered or enter into any contract or agreement with any of its
principals, Affiliates, general partners, managing members or any principal or
Affiliate thereof, except upon terms and conditions that are intrinsically fair
and substantially similar to those that would be available on an arm's-length
basis with third parties other than its principals or Affiliates, or any
principal or Affiliate thereof;
(xii) seek the dissolution or winding up in whole, or in part, of the
Property Owner, the Borrower or any general partner or managing member thereof,
as the case may be;
(xiii) failed or fail to correct any known misunderstandings regarding the
separate identity of the Property Owner or the Borrower;
(xiv) held or hold itself out to be responsible for the debts of another
Person;
(xv) made or make any loans or advances to any Person, including its
general partners, managing members, principals or Affiliates;
(xvi) other than with respect to the Additional Subordinate Collateral,
guaranty, pledge its assets for the benefit of, or otherwise become liable on or
in connection with, any obligation of any Person, including its general
partners, managing members, principals or Affiliates;
(xvii) failed or fail to file tax returns;
(xviii) failed or fail either to hold itself out to the public as a legal
entity separate and distinct from any other Person or to conduct its business
solely in its own name in order not to (A) mislead others as to the identity of
the Person with which such other party is transacting business, or (B) suggest
that it is responsible for the debts of any third party (including its
principals, Affiliates, general partner or managing member, as the case may be,
or any principal or Affiliate thereof);
(xix) failed or fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations;
(xx) failed or fail to pay the salaries of its own employees (if any) from
its own assets and maintain a sufficient number of employees in light of its
contemplated business operations;
(xxi) filed or file or consented or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for the
benefit of creditors;
(xxii) except as in existence on the date hereof, shared or share any
common logo with or held or hold itself out as or be considered as a department
or division of any of its principals or Affiliates, general partners or managing
members, as the case may be, or any other Person;
(xxiii) failed or fail to allocate any overhead for shared office space in
a fair and reasonable manner; or
(xxiv) failed or fail to use, on a consistent basis, separate stationery,
invoices and checks, except that, so long as Property Owner identifies the
separateness of Property Owner from Borrower and/or Guarantor on its stationary,
Property Owner may use stationary that also identifies Borrower and/or Guarantor
thereon.
(w) Covenants Regarding Senior Loan. Borrower shall not, and shall cause
Property Owner not to, (i) amend or modify (by agreement on the part of the
Property Owner or Borrower) or (ii) affirmatively permit the modification or
amendment of (by operation of law or otherwise) those Senior Loan Documents
which on the date of this Agreement evidence or secure the Senior Loan which
would constitute a Prohibited Amendment without the prior written consent of the
Agent. As used herein, a "Prohibited Amendment" shall mean an amendment or
modification to the existing Senior Loan Documents that (A) is reasonably likely
to have a Material Adverse Effect (provided that amendments pursuant to clauses
(1) and (2) below shall be deemed not to have a Material Adverse Effect), or (B)
which (1) increases the principal amount of the Senior Loan to more than
$230,000,000 (exclusive of protective advances), (2) increases the interest rate
payable under the Senior Loan, other than an increase, not to exceed twelve
percent (12%) per annum, applicable to any increase in the principal amount of
the Senior Loan from $230,000,000 to $245,000,000 (with such increased rate to
be payable only on the principal amount of the Senior Loan which exceeds
$230,000,000), (3) provides for the payment of any additional interest,
additional fees, reserve payments or escrows, (4) provides for any principal
amortization of the Senior Loan, (5) modifies the due-on-sale,
due-on-encumbrance, or collateral release provisions of the existing Senior Loan
Documents, (6) modifies the provisions governing replacement of the Property
Manager under the existing Senior Loan Documents, (7) adds material additional
obligations, liabilities or indemnities on the part of Property Owner, Borrower
or Guarantor, (8) shortens any default cure periods under the existing Senior
Loan Documents or (9) changes the maturity date of the Senior Loan. Any
amendment or modification to the existing Senior Loan Documents in violation of
this Section 6.1(w) shall be ineffective as between Borrower and the Lender,
and, if not cured by Borrower (to the extent the same is susceptible of cure) or
caused to be cured by Property Owner within fifteen (15) days after written
notice from the Lender, shall constitute an Event of Default hereunder, unless
the Lender consents thereto in writing in its sole and absolute discretion. In
addition to the foregoing, any deed-in-lieu of foreclosure, consensual sale,
consensual foreclosure or other similar voluntary transfer (excluding Leases) of
all or any portion of the Mortgaged Property or any interest therein (except as
expressly permitted in Section 6.1(h)) without the prior written consent of the
Lender shall constitute an Event of Default hereunder.
Section 6.2 Lender's Approval. In any instance in Section 6.1 hereof in
which the Lender agrees to be reasonable in its approval or disapproval of a
transaction that would otherwise be prohibited thereunder, it is agreed that
such approval may be conditioned on, among other things, the Lender's
satisfaction that the provisions of this Agreement and the other Loan Documents
(including the Liens and security interests granted hereby and thereby) shall be
applicable to any transferee of the business or assets of the Borrower or a
Borrower Party.
ARTICLE VII
CONSTRUCTION
Section 7.1 Construction Covenants. The Borrower hereby covenants and
agrees,
from the date of this Agreement, and as long as the Borrower remains indebted to
the Lender hereunder, as follows:
7.1.1 Construction Documents. The Borrower shall cause the Property Owner
(a) to enforce in all material respects the terms of the Construction Documents
in the best interests of the Improvements using sound business judgment, (b) to
waive none of the material obligations of any of the parties thereunder, (c) to
do no act which would relieve the contracting party thereto from its material
obligations thereunder, (d) to not surrender or terminate the Construction
Documents except in accordance with the terms thereof, and (e) to make no
material amendments to or changes under the Construction Documents, without the
prior approval of the Lender (which will not be, in each case, unreasonably
withheld or delayed).
7.1.2 Application of Advance. The Borrower shall use the Advance solely and
exclusively for the purposes set forth in Section 2.1.1 above.
7.1.3 [Intentionally Deleted].
7.1.4 Fees. Borrower shall pay when due the reasonable fees of the
Construction Consultant, all reasonable costs and expenses, including, without
limitation, appraisal fees, recording fees and charges, abstract fees, title
policy fees, escrow fees, reasonable attorneys' fees, fees of inspecting
architects and engineers to the extent provided hereunder in connection with the
Project, fees of environmental consultants and all other reasonable costs and
expenses of every character which have been incurred or which may hereafter be
incurred by the Lender in connection with the preparation and execution of the
Loan Documents, including any extension, amendment, syndication or modification
thereof, the funding of the Loan, the administration and enforcement of the
Pledge Agreement, the Note, and the other Loan Documents, reasonable attorneys'
fees relating to the syndication of or participation in the Loan, if any, and
the release of any Collateral, including, without limitation, attorneys' fees in
any action for the foreclosure of the Pledge Agreement and the collection of the
Loan, and all such fees incurred in connection with any bankruptcy or insolvency
proceeding; and the Borrower shall, within twenty (20) Business Days after
written demand by the Lender, reimburse the Lender for all such reasonable
expenses which have been incurred. All amounts incurred or paid by the Lender
under this Section 7.1.4, together with interest thereon at the Default Rate
from the due date until paid by the Borrower, shall be added to the indebtedness
secured hereby and shall be secured by the Lien of the Pledge Agreement and the
other Loan Documents.
7.1.5 Completion of Construction. Borrower shall, or shall cause the
Property Owner to, (a) diligently pursue and complete construction of each
portion of the Project demised by an Approved Lease by the related Lease
Completion Date in all material respects in accordance with the requirements of
such Approved Lease and obtain evidence of such completion from the Tenant under
such Approved Lease in accordance with Section 7.1.6; (b) diligently pursue and
complete construction of the entire Base Building Improvements to Substantial
Completion and obtain evidence of such completion satisfactory to Lender on or
prior to the Outside Completion Date in accordance with the Plans and
Specifications (except for changes thereto in accordance with Section 7.1.10)
and in compliance in all material respects with all restrictions, covenants and
easements affecting the Mortgaged Property, all Laws and Regulations, and all
Governmental Approvals, and with all terms and conditions of the Loan Documents;
and (c) pay all sums and perform such duties as may be necessary to complete
such construction of the Base Building Improvements to Substantial Completion
substantially in accordance with the Plans and Specifications (except for
changes thereto in accordance with Section 7.1.10) and in compliance with all
restrictions, covenants and easements affecting the Mortgaged Property, all Laws
and Regulations and all Governmental Approvals, and with all terms and
conditions of the Loan Documents, all of which shall be accomplished on or
before the Outside Completion Date, free from any Liens, claims or assessments
(actual or contingent) asserted against the Mortgaged Property for any material,
labor or other items furnished in connection therewith except for Permitted
Encumbrances and subject to Borrower's right to contest any of the foregoing in
accordance with the terms and conditions of this Agreement. Evidence of
satisfactory compliance with the foregoing shall be furnished by the Borrower to
the Lender on or before the Outside Completion Date. In addition, the Borrower
shall cause the Property Owner to diligently pursue construction of the entire
Improvements to Final Completion after the Outside Completion Date. The failure
of Substantial Completion to occur on or prior to the Outside Completion Date
shall constitute an Event of Default hereunder for which there shall be no
applicable cure period.
7.1.6 [Intentionally Deleted].
7.1.7 Construction Consultant. Borrower shall, and hereby does, acknowledge
that (a) the Lender may receive reports from the Construction Consultant and as
such the Construction Consultant may be retained by the Lender to act as a
consultant and only as a consultant to the Lender in connection with the
construction of the Improvements and has no duty to the Borrower, (b) the
Construction Consultant shall in no event have any power or authority to give
any approval or consent or to do any other act or thing which is binding upon
the Lender, (c) the Lender reserves the right to make any and all decisions
required to be made by the Lender under this Agreement and to give or refrain
(subject to the terms and conditions hereof) from giving any and all consents or
approvals required to be given by the Lender under this Agreement and to accept
or not accept any matter or thing required to be accepted by the Lender under
this Agreement, and without being bound or limited in any manner or under any
circumstance whatsoever by any opinion expressed or not expressed, or advice
given or not given, or information, certificate or report provided or not
provided, by the Construction Consultant with respect thereto, (d) the Lender
reserves the right in its sole and absolute discretion to disregard or disagree,
in whole or in part, with any opinion expressed, advice given or information,
certificate or report furnished or provided by the Construction Consultant to
the Lender or any other Person, and (e) the Lender reserves the right to replace
the Construction Consultant with another inspecting engineer at any time and
with prior notice to but without the approval of the Borrower.
7.1.8 Construction Consultant/Duties and Access. Borrower shall permit (and
shall cause the Property Owner to permit) the Lender to retain the Construction
Consultant, at the Borrower's reasonable cost, to perform the following services
on behalf of the Lender:
(a) Generally, to advise the Lender on matters relating to the construction
of the Improvements;
(b) To review and advise the Lender whether, in the opinion of the
Construction Consultant, the Plans and Specifications are satisfactory; and
(c) To complete any other task indicated in any Loan Document to be the
responsibility of the Construction Consultant.
The fees of the Construction Consultant and expenses incurred by the Lender on
account thereof shall be reimbursed to the Lender within ten (10) days of
written notice thereof delivered to the Borrower, but neither the Lender nor the
Construction Consultant shall have any liability to the Borrower on account of
(i) the services performed by the Construction Consultant or (ii) any approval
by the Construction Consultant of construction of the Improvements. Neither the
Lender nor the Construction Consultant assumes any obligation to the Borrower or
any other person concerning the quality of construction of the Improvements or
the absence therefrom of defects.
7.1.9 Correction of Defects. Borrower shall promptly correct or cause the
Property Owner to correct all defects (other than of an immaterial nature that
do not adversely affect the use of the Improvements for their intended purpose
or their value) in the Improvements or any departure from the Plans and
Specifications (except for non-material deviations therefrom that do not
adversely affect the use of the Improvements for their intended purpose or their
value). The Borrower agrees that the advance of any proceeds of the Loan whether
before or after such defects or departures from the Plans and Specifications are
discovered by, or brought to the attention of, the Lender shall not constitute a
waiver of the Lender's right to require compliance with this covenant.
7.1.10 Approval of Change Orders; Cost Savings. Borrower shall permit and
cause the Property Owner to permit no deviations from the Plans and
Specifications (except for non-material deviations therefrom that do not
adversely affect the use of the Improvements for their intended purpose or their
value) during construction without the prior approval of the Lender; provided,
however, that the Borrower may make changes without the Lender's prior approval
so long as (a) such changes do not result in changes in the Construction Costs
that exceed $250,000 each, (b) such changes do not result in changes in the
Construction Costs that exceed in the aggregate $1,000,000, (c) the Borrower
uses commercially reasonable efforts to deliver to the Lender prior notice of
such changes or, if the Borrower is unable to deliver prior notice, the Borrower
delivers such notice as soon thereafter as is reasonably practicable and (d)
such changes do not violate the terms of any Approved Lease. Notwithstanding the
foregoing, the Borrower shall be allowed to make nonmaterial field changes which
do not affect the scope, quality or character, or increase the cost, of the
Improvements without the Lender's or the Construction Consultant's consent or
approval (provided that no such changes shall be permitted if such changes would
violate the terms of any Approved Lease).
7.1.11 Bonds. To furnish copies to the Agent and cause the Property Owner
to maintain such Payment and Performance Bonds with respect to the obligations
of each contractor and each subcontractor which has commenced work on the
Project, as applicable, to the extent requested by the Lender and the Senior
Lender.
7.1.12 Laborers, Subcontractors and Materialmen. To notify the Lender
promptly, and in writing, if the Borrower or the Property Owner receives any
written default notice, notice of Lien or demand for past due payment, from any
contractor, subcontractor or materialman and, in respect of any Lien, from any
contractor, subcontractor or materialman. The Borrower shall also furnish to the
Lender at any time and from time to time upon reasonable demand by the Lender,
Lien waivers in form reasonably satisfactory to the Lender and the Title Company
bearing a then current date from the contractors and the subcontractors.
Section 7.2 No Reliance. All conditions and requirements of this Agreement
are for the sole benefit of the Lender and the Borrower Parties and no other
Person or party (including, without limitation, the Construction Consultant and
contractors, subcontractors, mechanics and materialmen engaged in the
construction of the Improvements) shall have the right to rely on the
satisfaction of such conditions and requirements by the Borrower. The Agent
shall have the right, in its sole and absolute discretion, to waive any such
condition or requirement.
Section 7.3 Cooperation With Senior Lender. The Lender hereby agrees to
cooperate with the Senior Lender in connection with information regarding the
Project and other matters reasonably requested by the Senior Lender.
ARTICLE VIII
CASUALTY AND CONDEMNATION
Section 8.1 Required Coverage. In addition to any insurance required to be
maintained by the Borrower pursuant to any other Loan Document or the documents
relating to the Senior Loan, or any other Lease or agreement, the Borrower, at
its sole cost and expenses, shall maintain the following insurance policies:
8.1.1 Insurance.
(a) (i) Insurance against loss customarily included under standard "All
Risk" policies including, flood, earthquake, terrorism (for "acts of terrorism"
as defined in the Terrorism Risk Insurance Act), vandalism, and malicious
mischief, boiler and machinery, and such other insurable hazards as, under good
insurance practices, from time to time are insured against for other property
and buildings similar to the Project in nature, use, location, height, and type
of construction. Such insurance policy shall also insure costs of demolition and
increased cost of construction (which insurance for demolition and increased
cost of construction may contain a sublimit of $2,000,000). The amount of such
insurance shall be not less than one hundred (100%) percent of the replacement
cost value of the Improvements. Each such insurance policy shall contain an
agreed amount replacement cost endorsement and shall cover, without limitation,
all tenant improvements and betterments that the Borrower is required to insure
on a replacement cost basis under this Agreement. If the insurance required
under this Section 8.1.1 is not obtained by blanket insurance policies, the
insurance policy shall be endorsed to also provide guaranteed building
replacement cost to the Improvements and such tenant improvements constructed by
the Property Owner and, as to such tenant improvements, may be required to be
insured by the Property Owner under any Lease, in an amount to be subject to the
approval of the Lender, which approval shall be unreasonably withheld. The
Borrower shall make commercially reasonable efforts to cause the Lender to be
named as a Loss Payee.
(ii) Rent loss and/or business interruption insurance (x) until and
including March 21, 2003, covering a period of eighteen (18) months and (y) from
and after March 22, 2003, covering a period of thirty (30) months plus an
extended period of indemnity of 365 days. The Lender shall be named as Loss
Payee as respects this coverage.
(iii) Comprehensive boiler and machinery insurance covering all mechanical
and electrical equipment against physical damage, rent loss and improvements
loss and covering, without limitation, all tenant improvements and betterments
that the Borrower is required to insure pursuant to any Lease on a replacement
cost basis and in the minimum amount of $10,000,000.
(b) At all times during the term of the Loan:
(i) General Public Liability insurance, including, without limitation,
Commercial General Liability insurance; Owned, Hired and Non Owned Auto
Liability; and Umbrella Liability coverage for Personal Injury, Bodily Injury,
Death, Accident and Property Damage, providing in combination no less than (i)
$50,000,000 until and including March 21, 2003 and (ii) $75,000,000 from and
after March 22, 2003 per occurrence and in the annual aggregate, per location.
The policies described in this Section 8.1.1 shall cover, without limitation:
elevators, escalators, independent contractors, Contractual Liability (covering,
to the maximum extent permitted by law, the Borrower's obligation to indemnify
the Lender as required under this Agreement), Products and Completed Operations
Liability coverage.
(ii) Workers Compensation and Employer Liability insurance as required by
Laws and Regulations. (iii) Such other types and amounts of insurance with
respect to the Project and the operation thereof that are commonly maintained in
the case of other property and buildings similar to the Project in nature, use,
location, height, and type of construction, as may from time to time be
reasonably required by the Lender.
(c) All policies of insurance (the "Policies") required pursuant to this
Section 8.1.1 shall be issued by companies reasonably approved by the Lender and
licensed to do business in the state where the Mortgaged Property is located.
Further, unless otherwise approved by the Lender in writing, the issuer(s) of
the Policies required under this Section 8.1.1 shall have a claims paying
ability rating of "A-" or better by the Rating Agencies or an A.M. Best rating
of A:IX or better. The Policies: (i) shall name the Lender and its successors
and/or assigns as their interest may appear as an additional insured or as a
loss payee (except that in the case of general liability insurance, the Lender
shall be named an additional insured and not a loss payee); (ii) shall contain a
Non-Contributory Standard Lender Clause and, except with respect to general
liability insurance, a Lender's Loss Payable Endorsement, or their equivalents,
naming the Lender as the person to which all payments made in excess of $250,000
by such insurance company shall be paid; (iii) shall include effective waivers
by the insurer of all claims for insurance premiums against all loss payees,
additional insureds and named insureds (other than the Borrower and the Property
Owner) and all rights of subrogation against any loss payee, additional insured
or named insured; (iv) shall be assigned to the Lender; (v) except as otherwise
provided above, shall be subject to a deductible, if any, not greater in any
material respect (in proportion to the coverage maintained) than the deductible
for such coverage on the date hereof unless approved by Lender; (vi) shall
contain such provisions as the Lender deems reasonably necessary or desirable to
protect its interest including endorsements providing that none of any Borrower
Party, the Lender or any other party shall be a co-insurer under said Policies
and that no adverse modification, reduction, cancellation or termination in
amount of, or material change (other than an increase) in, coverage of any of
the Policies shall be effective until at least thirty (30) days after receipt by
each named insured, additional insured and loss payee of written notice thereof
or thirty (30) days after receipt of such notice with respect to nonpayment of
premium; (vii) shall permit the Lender to pay the premiums and continue any
insurance upon failure of the Borrower or the Property Owner to pay premiums
when due, upon the insolvency of the Borrower or the Property Owner or through
foreclosure or other transfer of title to the Mortgaged Property (it being
understood that the Property Owner's rights to coverage under such policies may
not be assignable without the consent of the insurer); and (viii) shall provide
that any proceeds in excess of $250,000 thereunder be payable to the Lender and
that the insurance shall not be impaired or invalidated by virtue of (A) any
act, failure to act, negligence of, or violation of declarations, warranties or
conditions contained in such policy by the Borrower, the Property Owner, the
Lender or any other named insured, additional insured or loss payee, except for
the willful misconduct of the Lender knowingly in violation of the conditions of
such policy, (B) the occupation, use, operation or maintenance of the Mortgaged
Property for purposes more hazardous than permitted by the terms of the Policy,
(C) any foreclosure or other proceeding or notice of sale relating to the
Mortgaged Property or (D) any change in the possession of the Mortgaged Property
without a change in the identity of the holder of actual title to the Mortgaged
Property (provided that with respect to items (C) and (D) above, any notice
requirements of the applicable Policies are satisfied).
(d) Insurance Premiums, Certificates of Insurance.
(i) The Borrower shall cause the Property Owner to pay the premiums for
such Policies (the "Insurance Premiums") as the same become due and payable and
shall furnish to the Lender receipts for the payment of the Insurance Premiums
or other evidence of such payment reasonably satisfactory to the Lender
(provided, however, that such evidence shall not be required if such Insurance
Premiums are to be paid by the party acting as agent under the Senior Loan
Agreement). Within thirty (30) days after request by the Lender, the Borrower
shall cause the Property Owner to obtain such increases in the amounts of
coverage required hereunder as may be reasonably requested by the Lender, taking
into consideration changes in liability laws, changes in prudent customs and
practices, and the like. In the event the Property Owner satisfies the
requirements under this Section 8.1.1 through the use of a Policy or Policies
covering properties in addition to the Mortgaged Property, then, the Borrower
shall provide evidence satisfactory to the Lender that the Insurance Premiums
for the Mortgaged Property are separately allocated under such Policy or
Policies to the Mortgaged Property and that payment of such allocated amount (A)
shall maintain the effectiveness of such Policy or Policies as to the Mortgaged
Property and (B) shall otherwise provide the same protection as would a separate
policy or policies that complying with the terms of this Agreement as to the
Mortgaged Property, notwithstanding the failure of payment of any other portion
of the insurance premiums.
(ii) The Borrower shall deliver to the Lender on or prior to the Closing
Date certificates setting forth in reasonable detail the material terms
(including any applicable notice requirements) of all Policies from the
respective insurance companies (or their authorized agents) that issued the
Policies, including that such Policies may not be reduced, cancelled or
terminated in amount of, or materially changed (other than increased) in
coverage without thirty (30) days' prior notice to the Lender, or thirty (30)
days' notice with respect to nonpayment of premium as required pursuant to
Section 8.1.1(c)(vi). The Borrower shall deliver to the Lender, concurrently
with each change in any Policy, a certificate with respect to such changed
Policy certified by the insurance company issuing that Policy, in substantially
the same form and containing substantially the same information as the
certificates required to be delivered by the Borrower pursuant to the first
sentence of this clause (d)(ii) and stating that all premiums then due thereon
have been paid to the applicable insurers and that the same are in full force
and effect (or if such certificate and report shall not be obtainable by the
Borrower, the Borrower may deliver an Officer's Certificate to such effect in
lieu thereof). Notwithstanding the delivery of any Policies to the Lender, the
Lender shall not be deemed by reason of the receipt thereof to have any
Knowledge of the contents thereof.
(iii) From time to time, the Lender may request that the Borrower deliver
or cause the Property Owner to deliver to the Lender, within ten (10) Business
Days of receipt of such request, a report from a reputable and experienced
insurance broker or from the insurer, setting forth the particulars as to all
Policies obtained by the Property Owner pursuant to this Section 8.1.1 and then
in effect and stating that all Insurance Premiums then due thereon have been
paid in full to the applicable insurers (or the insurance brokers on behalf of
the insurers), that such Policies are in full force and effect and that, in the
opinion of such insurance broker or insurer, such Policies otherwise comply with
the requirements of this Section 8.1.1.
(e) Renewal and Replacement of Policies.
(i) Not less than fifteen (15) days prior to the expiration, termination or
cancellation of any Policy, the Borrower shall cause the Property Owner to renew
such policy or obtain a replacement policy or policies (or a binding commitment
for such replacement policy or policies), which shall be effective not later
than the date of the expiration, termination or cancellation of the previous
policy, and shall deliver to the Lender a certificate in respect of such policy
or policies (A) containing the same information as the certificates required to
be delivered pursuant to clause (d)(ii) above, or a copy of the binding
commitment for such policy or policies and (B) confirming that such policy
complies with all requirements hereof.
(ii) If the certificates as required under clause (d)(i) above are not
furnished to the Lender, the Lender may procure, but shall not be obligated to
procure, such replacement policy or policies and pay the Insurance Premiums
therefor, and the Borrower agrees to reimburse the Lender for the cost of such
Insurance Premiums promptly on demand, together with interest at the Default
Rate from the date the Lender paid such Insurance Premiums to and including the
date of repayment of the Lender by the Borrower.
(iii) Concurrently with the delivery of each replacement policy or a
binding commitment for the same pursuant to this clause (e), the Borrower, upon
Lender's request, shall deliver to the Lender a report from a reputable and
experienced insurance broker or from the insurer, setting forth the particulars
as to all Policies obtained by the Borrower pursuant to this Section 8.1.1 and
then in effect and stating that all Insurance Premiums then due thereon have
been paid in full to the applicable insurers, that such insurance policies are
in full force and effect and that, in the opinion of such insurance broker or
insurer, such insurance otherwise complies with the requirements of this Section
8.1.1.
(f) Separate Insurance. No Borrower Party shall take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained pursuant to this Section 8.1.1 unless such insurance complies with
clause (c) above.
8.1.2 Casualty. (a) Notice; Restoration. The Borrower shall or shall cause
the Property Owner to give the Lender prompt written notice of the occurrence of
any Casualty affecting the Mortgaged Property or any portion thereof. In the
event of any Casualty affecting the Mortgaged Property, the Borrower shall cause
the Property Owner to promptly commence and diligently prosecute Restoration of
the Mortgaged Property, provided the Net Proceeds are made available to the
Borrower or the Property Owner in accordance with this Agreement and the Senior
Loan Agreement.
(b) Availability of Net Proceeds for Restoration. The terms and provisions
of Article VIII of the Senior Loan Agreement shall control regarding the Net
Proceeds so long as the Senior Loan is outstanding; provided, however, that
notwithstanding any other provision of this Agreement, Net Proceeds which do not
exceed $250,000 in total shall be distributed to the Borrower without the
Lender's approval.
8.1.3 Condemnation. (a) Notice; Restoration. The Borrower shall or shall
cause the Property Owner to give the Lender prompt written notice of the actual
or threatened commencement of any Partial Condemnation or Total Condemnation
affecting the Mortgaged Property and shall deliver to the Lender copies of any
and all documents received or prepared by the Borrower or the Property Owner in
connection therewith. The Borrower shall cause the Property Owner, at the
Property Owner's expense, to diligently prosecute any such proceeding. The
Lender shall not be limited to the interest paid on the award by the condemning
authority but shall be entitled to receive out of the award or otherwise from
the Borrower interest at the Applicable Interest Rate provided for herein. The
terms and provisions of Article VIII of the Senior Loan Agreement shall control
the distribution of the Condemnation Proceeds, so long as the Senior Loan is
outstanding.
(b) Partial Condemnation. So long as the Senior Loan is outstanding, the
terms and provisions of Article VIII of the Senior Loan Agreement shall control
the distribution of the Net Proceeds resulting from a Partial Condemnation of
the Mortgaged Property.
(c) Total Condemnation. So long as the Senior Loan is outstanding, the
terms and provisions of Article VIII of the Senior Loan Agreement shall control
the distribution of Net Proceeds resulting from a Total Condemnation.
8.1.4 Disbursement of Net Proceeds. (a) If Net Proceeds are required to be
made available for Restoration pursuant to either Section 8.1.2 or 8.1.3 hereof,
the Lender shall make such Net Proceeds available to the Property Owner for the
Restoration; provided that, except in respect of Net Proceeds which do not
exceed $250,000 in total, each of the following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
(ii) no Lease of greater than 15,000 NRSF or having an annual base rent of
greater than $360,000 shall be terminated as a result of such Casualty or
Partial Condemnation and neither the Property Owner nor the Borrower has
received notice of termination relating to any such Lease (or otherwise has
Knowledge that a party to any such Lease intends to terminate such Lease);
(iii) the Borrower causes the Property Owner to promptly commence
Restoration and diligently pursue the same to completion to the Lender's
reasonable satisfaction;
(iv) Restoration is done and diligently completed by the Property Owner in
material compliance with all Legal Requirements and the Property and the use
thereof after Restoration will be in material compliance with and permitted
under all Legal Requirements and the terms hereof;
(v) the quality and character of the Mortgaged Property after Restoration
shall be comparable to the quality and character of the Mortgaged Property
immediately prior to such Casualty or Partial Condemnation;
(vi) the estimated time to complete the Restoration, as estimated by the
Construction Consultant, does not exceed the effective period of business
interruption insurance available to the Lender on account of such Casualty or
Partial Condemnation;
(vii) the Property Owner delivers to the Lender a written undertaking that
it will expeditiously commence and satisfactorily complete with due diligence
Restoration in accordance with the terms of this Agreement; and
(viii) the Borrower delivers to the Lender reasonable evidence that the Net
Proceeds, together with any Net Proceeds Deficiency, are sufficient to cover all
costs of the Restoration as determined by the Construction Consultant and that
the full undisbursed amount of the Senior Loan will be made available in
accordance with and subject to the provisions of the Senior Loan Documents
notwithstanding such Casualty, Condemnation and/or Restoration.
In the event any of the foregoing conditions are not satisfied at any time,
the disbursement of Net Proceeds shall be made in accordance with Section 8.1.5
hereof.
(b) The Net Proceeds shall be held in an interest-bearing escrow account
designated by the Lender, and until disbursed in accordance with the provisions
of this Section 8.1.4 shall constitute additional security for repayment of the
Loan. The Net Proceeds shall be disbursed by the Lender to the Borrower from
time to time during the course of Restoration (but not more frequently than once
in any calendar month), upon (x) receipt of evidence (including lien waivers)
reasonably satisfactory to the Lender and the Title Company, providing that (i)
all materials installed and work and labor performed (except to the extent that
they are to be paid for out of the requested disbursement) in connection with
the Restoration have been paid for in full, and (ii) there exist no notices of
pendency, stop orders, mechanic's or materialman's Liens or notices of intention
to file same (other than notices of Lien or other inchoate Liens with respect to
amounts not yet due and payable), or any other Liens or encumbrances of any
nature whatsoever affecting the Mortgaged Property arising out of the
Restoration which have not either been fully bonded to the satisfaction of the
Lender and discharged of record or in the alternative fully insured to the
satisfaction of the Lender by the Title Companies or are being contested as
permitted under Section 5.1(b)(ii) hereof and (y) the satisfaction of
disbursement procedures reasonably required by Lender. The Lender's expenses for
processing the payment of Net Proceeds to the Borrower shall be deducted, as
applicable, from each disbursement of Net Proceeds.
(c) All plans and specifications required in connection with any
Restoration (other than plans and specifications conforming to the approved
Plans and Specifications) shall be reviewed and reasonably approved by the
Construction Consultant and the Lender. The Lender shall have the use of the
plans and specifications and all Permits, Licenses and approvals required or
obtained in connection with the Restoration. The identity of the contractors,
subcontractors and materialmen engaged in such Restoration, as well as the
contracts under which they have been engaged, shall be subject to prior review
and approval by the Lender and the Construction Consultant (which approval shall
not be unreasonably withheld or delayed). All reasonable, out-of-pocket costs
and expenses incurred by the Lender in connection with making the Net Proceeds
available for the Restoration including, without limitation, reasonable
attorneys' fees and disbursements and the Construction Consultant's fees, shall
be paid by the Borrower.
(d) In no event shall the Lender be obligated to make disbursements of Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Construction Consultant, minus the Retainage for the applicable contracts or
subcontracts. The final advance of Retainage for the applicable contracts and
subcontracts shall not be made until (i) thirty (30) days after the Construction
Consultant certifies to the Lender that (A) the Restoration has been completed
in accordance with the provisions of this Section 8.1.4, and (B) all
Governmental Approvals necessary for the occupancy or re-occupancy and use of
the Mortgaged Property have been obtained from all appropriate Governmental
Authorities, (ii) the Lender receives evidence satisfactory to the Lender that
the costs of the Restoration have been paid in full or will be paid in full out
of the Retainage, and (iii) the Lender receives and approves an endorsement to
the Qualified Title Policy insuring that the Mortgaged Property is subject to no
Liens other than Permitted Encumbrances. If required by the Lender, the release
of the final portion of the retainage shall be approved by the surety company,
if any, which has issued a Payment and Performance Bond with respect to the
contractor, subcontractor or materialman.
(e) If at any time the Net Proceeds or the undisbursed balance thereof
shall not be sufficient to pay the balance of the total costs which are
estimated by the Construction Consultant to be incurred in connection with the
completion of the Restoration, the Borrower shall promptly deposit with the
Lender Cash or Cash Equivalents in an amount equal to the deficiency, without
duplication of and except for any amounts deposited with the Senior Lender under
Section 8.1.4 of the Senior Loan Agreement (the "Net Proceeds Deficiency"),
before any further disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with the Lender shall be held by the Lender in an
interest-bearing account and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 8.1.4(e) hereof shall constitute additional security for the obligations
of the Borrower hereunder.
(f) Provided that no Event of Default shall then exist, if at any time the
Net Proceeds, together with any Net Proceeds Deficiency, or the undisbursed
balance thereof, shall be in excess of the balance of the total costs which are
estimated by the Construction Consultant to be incurred in connection with the
completion of the Restoration, the Lender shall pay such excess to the Borrower.
No payment made to the Borrower pursuant to this Section 8.1.4(f) shall in any
event prevent the Lender from requiring the Borrower to make further Net
Proceeds Deficiency deposits in the event same shall be required pursuant to
Section 8.1.4(e) hereof.
(g) Any excess of Net Proceeds (together with any earnings thereon) and the
remaining balance, if any, of the Net Proceeds Deficiency deposited with the
Lender (together with any earnings thereon) shall be remitted by the Lender to
the Borrower (provided that no Event of Default shall have occurred and be
continuing under this Agreement), after the Construction Consultant certifies to
the Lender that Restoration has been substantially completed in accordance with
the provisions of this Section 8.1.4 and the receipt by the Lender of evidence
satisfactory to the Lender that all costs incurred in connection with
Restoration have been paid in full.
8.1.5 Retention of Net Proceeds by the Lender. All Net Proceeds (together
with any earnings thereon) not required (a) to be made available for the
Restoration, or (b) to be returned to the Borrower as excess Net Proceeds
pursuant to Section 8.1.4(f) or Section 8.1.4(g) hereof, may be retained and
applied by the Lender after such funds are received toward the payment of the
outstanding principal of the Loan and all other amounts (including, without
limitation, the IRR Amount, any Make-Whole Amount, the Exit Fee and the Breakage
Fee) provided for under this Agreement or any of the other Loan Documents,
whether or not then due and payable or, at the discretion of the Lender, the
same may be paid, either in whole or in part, to the Borrower.
8.1.6 Assignment of Net Proceeds. The Lender may participate in any action,
suit or proceeding relating to any insurance or condemnation proceeds, causes of
action, claims, compensation, awards or recoveries, and, subject to the rights
of the Senior Lender, the Lender is hereby authorized, in its own name or in the
Borrower's or the Property Owner's name, to adjust any Casualty covered by
insurance, or any Partial Condemnation or Total Condemnation claim or cause of
action, and to settle or compromise any claim or cause of action in connection
therewith, and the Borrower shall from time to time deliver to the Lender any
instrument required to permit such participation or further evidence same.
8.1.7 No Effect on Obligations. Notwithstanding any Partial Condemnation or
Total Condemnation, the Borrower shall continue to make all payments required to
be made pursuant to this Agreement at the time and in the manner provided for
herein and the outstanding principal of the Loan shall not be reduced until any
Net Proceeds shall have been actually received and applied by the Lender to the
reduction or discharge of the outstanding principal of the Loan.
8.1.8 Sale of Mortgaged Property Prior to Receipt of Net Proceeds. If the
Mortgaged Property is sold, through foreclosure or otherwise, prior to the
receipt by the Lender of the Insurance Proceeds or Condemnation Proceeds (as
applicable) of any Casualty or Condemnation occurring prior to such sale, the
Lender shall have the right, whether or not a deficiency judgment shall have
been sought, recovered or denied, to receive such Insurance Proceeds or
Condemnation Proceeds (as applicable), or a portion thereof sufficient to pay
the outstanding principal of the Loan, plus all other amounts owed by the
Borrower under the Loan Documents.
ARTICLE IX
DEFAULTS
Section 9.1 Event of Default.
(a) Each of the following events shall constitute an event of default
hereunder (each, an "Event of Default"):
(i) Payment. If any portion of the principal on the Loan is not paid when
due including, without limitation, on the Maturity Date, or interest on the Loan
or any other amount payable hereunder is not paid on the date such interest or
other amount is due; or
(ii) Taxes and Other Charges. If any of the Taxes or Other Charges are not
paid prior to the date on which the same become delinquent, subject to
Borrower's right to contest Taxes or Other Charges in accordance with Section
5.1(b) hereof; or
(iii) Insurance Policies. If the Policies are not kept in full force and
effect, or if the Policies are not delivered to the Lender upon request, and in
the latter case, such Default is not cured within ten (10) days after written
notice thereof from the Lender; or
(iv) Transfers. If (A) the Borrower permits the Property Owner to transfer
or encumber all or any portion of, or any interest in, the Mortgaged Property
except as expressly permitted herein, (B) the Borrower does not apply the
applicable Net Proceeds in accordance with Article VIII hereof, or (C) any
Collateral is transferred, assigned, pledged or encumbered except as expressly
permitted herein; or
(v) Representations. If any representation or warranty made by any Borrower
Party herein or in any other Loan Document shall be false in any material
respect as of the date the representation or warranty was or shall be made or
repeated or deemed repeated and not cured within ten (10) days of such date; or
(vi) Inability to Pay Debts. If any Borrower Party shall make an assignment
for the benefit of creditors, or if any Borrower Party shall generally not be
paying its debts as they become due or has admitted in writing its inability to
pay its debts; or
(vii) Bankruptcy. If a receiver, liquidator or trustee shall be appointed
for any Borrower Party, or if any Borrower Party 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 any Borrower Party, or
if any proceeding for the dissolution or liquidation of any Borrower Party shall
be instituted; provided, however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by all of the Borrower Parties,
upon the same not being discharged, stayed or dismissed within ninety (90) days;
or
(viii) Prohibited Assignment. If any Borrower Party attempts to assign or
delegate or encumber its rights under this Agreement or under any other Loan
Document or any interest herein or therein except in accordance with the terms
and conditions of this Agreement; or
(ix) Cross Default. If an Event of Default as defined or described herein
or an event of default as defined or described in any of the other Loan
Documents (other than covenant defaults under the Environmental Indemnity which
are governed by Section 9.1(x) below) occurs; or
(x) Covenant Defaults. If the Borrower shall continue to be in default
under any of the other terms, covenants or conditions of this Agreement or any
Borrower Party shall continue to be in default under any of the terms, covenants
or conditions of any other Loan Document to which it is a party, in either such
case to the extent not specified in clauses (i) to (ix) above or (xxvi) below
for ten (10) days after notice from the Lender, in the case of any Default that
can be cured by the payment of a sum of money, or for thirty (30) days after
notice from the Lender in the case of any other Default; provided, however, that
if such nonmonetary Default is susceptible of cure but cannot reasonably be
cured within such 30-day period and provided further that such Borrower Party
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 an additional period of time as is reasonably
necessary for such Borrower Party in the exercise of due diligence to cure such
Default, but the aggregate cure period under this Section 9.1(a)(x) shall not
exceed ninety (90) days; or
(xi) Failure to Pay Indebtedness. With respect to Indebtedness in excess of
$500,000 for the Borrower or the Property Owner and Indebtedness in excess of
$1,000,000 for the Guarantor (A) the Borrower or the Property Owner or the
Guarantor, as the case may be, shall (1) default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to any such
other Indebtedness, or (2) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default, in the
case of either (1) or (2), or other event or condition would permit the holder
or holders of such Indebtedness (or trustee or agent on behalf of such holders)
to cause (determined without regard to whether any notice or lapse of time is
required) any such Indebtedness to become due prior to its stated maturity or
(B) any Indebtedness of any Borrower Party shall not be paid upon its scheduled
maturity, shall be declared (or shall become) due and payable prior to the
stated maturity thereof or shall be required to be prepaid other than by a
regularly scheduled required prepayment prior to the stated maturity thereof; or
(xii) ERISA. (A) Any ERISA Event shall have occurred with respect to a
Plan, (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and the ERISA Affiliates related to
such ERISA Event), (B) any Borrower Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Party that it has incurred Withdrawal
Liability to such Multiemployer Plan, or (C) any Borrower Party or any ERISA
Affiliate shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, which in any case described in any of clauses (A)
through (C) hereof, alone or in the aggregate, would have a Material Adverse
Effect; or
(xiii) Invalidity. If any Loan Document shall fail to be in full force and
effect or to give the Lender the Liens, rights, powers and privileges purported
to be created thereby for ten (10) days after the notice to the Borrower from
the Lender (it being agreed that the Lender shall cooperate with the Borrower to
cure any such failure within the Lender's reasonable control), or if the
Borrower or the Guarantor shall assert that any Loan Document is not in full
force and effect or fails to give the Lender the Liens, rights, powers and
privileges purported to be created thereby; or
(xiv) Judgments. One or more final judgments or decrees shall be entered
against (i) any Borrower Party (other than the Guarantor) involving a liability
for which the creditor has recourse against such Borrower Party of $500,000 or
more, individually or in the aggregate for all such judgments and decrees
collectively and the amounts owing in respect of such final judgments or decrees
are not paid within thirty (30) days of the entry of such judgments or decrees,
or (ii) the Guarantor involving a liability for which the creditor has recourse
against the Guarantor of $1,000,000 or more, individually or in the aggregate
for all such judgments and decrees collectively and the amounts owing in respect
of such final judgments or decrees are not paid within thirty (30) days of the
entry of such judgments or decrees; or
(xv) Construction Suspended. Construction of any Improvements shall cease
or be suspended for seven (7) consecutive Business Days (except as provided for
in the Construction Schedule) for any reason other than a Force Majeure Event,
the status of such construction shall lag behind the date set forth for such
work in the Construction Schedule and the Lender reasonably concludes that such
delay will adversely affect the Outside Completion Date for any reason other
than a Force Majeure Event, or the Construction Consultant reasonably believes
that delivery of the premises demised under any Lease will be delayed past the
applicable Lease Completion Date for any reason other than an event which is
excused by the force majeure and/or tenant delay provisions, if any, of the
applicable Lease; or
(xvi) Survey. The appearance on any survey required hereunder of any
material adverse condition not approved by the Lender if such condition is not
remedied within thirty (30) days after notice thereof by the Lender to the
Borrower; or
(xvii) Permits. Any Governmental Approval or agreement obtained from or
issued by any Governmental Authority is withdrawn, canceled, terminated or
modified to the material detriment of the Borrower, the Property Owner or the
construction of any of the Improvements, unless the Borrower reinstates and
confirms in all respects such Governmental Approval, or agreement previously in
effect within a period of thirty (30) days thereafter; or
(xviii) Plans and Specifications. The failure to complete any Improvements
strictly in accordance with the Plans and Specifications (except for
non-material deviations therefrom that do not adversely affect the use of the
Improvements for their intended purpose or their value); or
(xix) Attachment. The Mortgaged Property shall be taken, attached or
sequestered on execution or other process of law in any action against the
Property Owner; or
(xx) Abandonment. The Borrower requests a termination of the Loan, or
confesses inability to cause the Property Owner to continue or complete
construction of the Improvements in accordance with this Agreement, or the
Borrower or the Property Owner ceases to do business; or
(xxi) [Intentionally Deleted].
(xxii) Solvency. The Borrower or any member of the Borrower is not solvent;
or
(xxiii) Default of Guarantor. Any default by the Guarantor occurs under the
terms of any of the Guaranties (including, without limitation, the failure to
comply with the financial covenants set forth therein); the Guarantor shall be
dissolved, liquidated, wound-up or merged in violation of Section 6.1 hereof;
the Guarantor shall be in default of any obligation under any secured or
unsecured credit facility; the Guarantor shall for any reason contest,
repudiate, or purport to revoke any Guaranty for any reason; or any Guaranty
shall cease to be in full force and effect as to the Guarantor, or shall be
judicially declared null and void as to the Guarantor, as applicable; or
(xxiv) Change of Control. A Change of Control shall occur with respect to
the Guarantor except as permitted under this Agreement; or
(xxv) [Intentionally Deleted]; or
(xxvi) Lease Defaults. Any breach of the covenant set forth in Section
5.1(t)(iii)(A); or
(xxvii) Senior Loan Default. An "Event of Default" shall occur under (and
as defined in) the Senior Loan Documents.
(b) Upon the occurrence of an Event of Default and at any time thereafter,
the Lender shall be entitled to exercise all remedies and actions available at
law or in equity, and the Lender may take any such action, without notice or
demand (except as otherwise required in this Agreement or if required by Laws
and Regulations and not waived hereunder), that the Lender deems advisable to
protect and enforce its rights (or less than all of its rights) against each and
every Borrower Party and in and to the Collateral (or any part thereof),
including declaring the Debt to be immediately due and payable (provided,
however, with respect to an Event of Default described in clause (iv), (vi),
(vii), (viii) or (xxii) above, the Debt and all other obligations of the
Borrower and each other Borrower Party hereunder and under the other Loan
Documents shall immediately and automatically become due and payable, without
any additional notice or demand, and the Borrower and each Borrower Party hereby
expressly waives any such notice or demand, anything contained herein or in any
other Loan Document to the contrary notwithstanding), and the Lender may enforce
or avail itself of any or all rights or remedies provided in the Loan Documents
against the Borrower or any other Borrower Party and all or any portion of the
Collateral, including all rights or remedies available at law or in equity.
Without limiting the generality of the foregoing, Lender agrees that with
respect to any default hereunder or under any other Loan Document, each Borrower
Party shall have the right, but not the obligation, to cure such default and
that it shall accept full cure of such defaults by Guarantor or any other
Borrower Party.
(c) Upon the occurrence and during the continuation of an Event of Default,
the Lender may, but without any obligation to do so and without (except as
otherwise required in this Agreement or if required by Laws and Regulations and
not waived hereunder) providing notice to or demand on any Borrower Party and
without releasing any Borrower Party from any obligation hereunder, take any
action to cure such Event of Default. The Lender may enter upon the Mortgaged
Property for such purposes or appear in, defend, or bring any action or
proceeding to protect the Lender's interests in the Collateral or to foreclose
the Pledge Agreement or collect the Debt. The costs and expenses incurred by the
Lender in exercising rights under this Section 9.1(c) (including reasonable
attorneys' fees to the extent permitted by law), with interest at the Default
Rate for the period after notice from the Lender that such costs or expenses
were incurred to the date of payment to the Lender, shall constitute a portion
of the Debt, shall be secured by the Pledge Agreement and the other Loan
Documents and shall be due and payable to the Lender upon demand therefor.
Section 9.2 Remedies. Upon the occurrence of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to the Lender against any Borrower Party under this Agreement or any of the
other Loan Documents executed and delivered by, or applicable to, the Borrower
or such other Borrower Party or at law (including, without limitation, an action
for collection) or in equity may be exercised by the Lender at any time and from
time to time, whether or not all or any of the Debt shall be declared due and
payable, and whether or not the Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to all or any portion of the Collateral.
Any such actions taken by the Lender shall be cumulative and concurrent and may
be pursued independently, singly, successively, together or otherwise, at such
time and in such order as the 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 the Lender permitted by law, equity or contract
or as set forth herein or in the other Loan Documents. Without limiting the
generality of the foregoing, each Borrower Party agrees that if an Event of
Default is continuing (a) the Lender is not subject to any "one action" or
"election of remedies" law or rule, and (b) all Liens and other rights, remedies
or privileges provided to the Lender shall remain in full force and effect until
the Lender has exhausted all of its remedies against the Collateral and the
Pledge Agreement has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.
Section 9.3 Construction Remedies. Upon the occurrence and during the
continuance of an Event of Default with the consent of the Senior Lender and
subject to the terms of the Senior Loan Documents (so long as the Senior Loan is
outstanding), the Lender may cause the Improvements to be completed and may
enter upon the Mortgaged Property and construct, equip and complete the
Improvements in accordance with the Plans and Specifications, with such changes
therein as the Lender may, from time to time reasonably deem appropriate (it
being hereby agreed by the Borrower that, upon such an occurrence, the Borrower
shall, to the extent necessary, cause the Property Owner to permit the same). In
connection with any construction of the Improvements undertaken by the Lender
pursuant to the provisions of this subsection, the Lender may:
(a) use any funds of the Borrower, including any balance which may be held
by the Agent as security or in escrow, and any funds remaining unadvanced under
the Loan;
(b) employ existing contractors, including subcontractors, agents,
architects, engineers, and the like, or terminate the same and employ others;
(c) employ security watchmen to protect the Mortgaged Property;
(d) make such additions, changes and corrections in the Plans and
Specifications as shall, in the judgment of the Lender, be necessary or
desirable (subject to the consent of the Senior Lender);
(e) take over and use any and all personal property contracted for or
purchased by the Borrower or the Property Owner, if appropriate, or dispose of
the same as the Lender sees fit;
(f) execute all applications and certificates on behalf of the Borrower and
the Property Owner which may be required by any Governmental Authority, Law or
Regulation or contract documents or agreements;
(g) pay, settle or compromise all existing or future bills and claims which
are or may be Liens against the Mortgaged Property, or may be necessary for the
completion of the Improvements or the clearance of title to the Mortgaged
Property, including, without limitation, all taxes and assessments;
(h) complete the marketing and leasing of leasable space in the
Improvements and modify or amend existing Leases and occupancy agreements, all
as the Agent shall deem to be necessary or desirable (but in each case subject
to the provisions of the Senior Loan Documents);
(i) prosecute and defend all actions and proceedings in connection with the
construction of the Improvements or in any other way affecting any part of the
Mortgaged Property or the Improvements and take such action and require such
performance as the Lender deems necessary under the Payment and Performance
Bonds; and
(j) take such other action hereunder, or refrain from acting hereunder, as
the Lender may, in its sole and absolute discretion, from time to time
determine, and without any limitation whatsoever (other than the terms of the
Senior Loan Documents), to carry out the intent of this Section 9.3. The
Borrower shall be liable to the Lender for all reasonable, out-of-pocket costs
paid or incurred for the construction, completion and equipping of any of the
Improvements, whether the same shall be paid or incurred pursuant to the
provisions of this Section 9.3 or otherwise, and all payments made or
liabilities incurred by the Lender hereunder of any kind whatsoever shall be
deemed advances made to the Borrower under this Agreement and shall be secured
by the Pledge Agreement and the other Loan Documents.
To the extent that any costs so paid or incurred by the Lender, together
with the Advance made by the Lender hereunder in accordance with the terms
hereof, exceed the Loan Amount, such excess costs shall be paid by the Borrower
to the Lender on demand, with interest thereon at the Default Rate until paid;
and the Borrower shall execute such notes or amendments to the Note as may be
requested by the Lender to evidence the Borrower's obligation to pay such excess
costs and until such notes or amendments are so executed by the Borrower, the
Borrower's obligation to pay such excess costs shall be deemed to be evidenced
by this Agreement. In the event the Lender takes control of the Mortgaged
Property and assumes control of such construction as aforesaid, the Lender shall
not be obligated to continue such construction longer than the Lender shall see
fit and may thereafter, at any time, change any course of action undertaken by
it or abandon such construction and decline to make further payments for the
account of the Borrower whether or not the Mortgaged Property shall have been
completed.
ARTICLE X
PROPERTY MANAGEMENT AND LEASING AGREEMENT
Section 10.1 Termination of Property Manager. (a) The Borrower represents,
warrants and covenants that the Property Management Agreement now provides, and
that Borrower shall cause Property Manager not to enter into any Property
Management Agreement hereafter that does not provide, the Property Owner the
right to terminate such Property Management Agreement without any penalty or fee
(other than accrued and unpaid fees thereunder) on thirty (30) days' notice, if
there exists an Event of Default under this Agreement. Unless otherwise waived
by the Lender, if an Event of Default exists, the Borrower shall cause the
Property Owner, within five (5) Business Days after the Lender's written
request, to issue a notice of termination with respect to the Property
Management Agreement and replace the Property Manager with an Acceptable
Property Manager, on commercially reasonable terms and conditions approved by
the Lender. If the Property Owner fails to issue the notice of termination to
the Property Manager in the manner required above within said five (5) Business
Day period, then the Lender shall have the right, and each Borrower Party hereby
irrevocably authorizes the Lender, at its sole option, to terminate on behalf
and in the name of the Borrower and the Property Owner, the Property Management
Agreement in accordance with the foregoing provisions of this Section 10.1(a);
provided that the Lender shall not have any liability if the Agent shall not
exercise such authority.
(b) The Borrower represents, warrants and covenants that it shall cause the
Property Owner to cause the Mortgaged Property at all times to be managed by an
Acceptable Property Manager. The Borrower shall cause any Property Management
Agreement entered into by the Property Owner to be in form and substance
satisfactory to the Lender, to be collaterally assigned to the Lender and to be
the subject of an agreement similar in form and substance to the Property
Manager's Consent, executed and delivered to the Lender by the Acceptable
Property Manager.
(c) Notwithstanding anything to the contrary set forth in the Property
Management Agreement, the Borrower agrees that it shall not permit the Property
Owner to pay property management fees in excess of the Base Management Fee at
any time that the Mezzanine Debt Service Coverage Ratio is less than 1.1x. With
respect to any calendar month when the Mezzanine Debt Service Coverage Ratio is
at least 1.1x, the Property Owner shall be permitted to pay the Base Management
Fee plus any portion of the Accrued Management Fee, provided that the payment of
such portion of the Accrued Management Fee will not result in the Mezzanine Debt
Service Coverage Ratio (recalculated taking into account the payment of such
portion of the Accrued Management Fee) being less than 1.1x.
Section 10.2 Termination of Leasing Agent. (a) The Borrower represents,
warrants and covenants that the Leasing Agreement now provides, and that
Borrower shall cause the Property Owner not to enter into any Leasing Agreement
hereafter that does not provide, the Property Owner the right to terminate such
Leasing Agreement without any penalty or fee (other than accrued and unpaid fees
thereunder) on thirty (30) days' notice, if there exists an Event of Default
under this Agreement. Unless otherwise waived by the Lender, if an Event of
Default exists, the Borrower shall cause the Property Owner, within five (5)
Business Days after the Lender's written request, to issue a notice of
termination with respect to the Leasing Agreement and replace the Leasing Agent
with an Acceptable Leasing Agent, on commercially reasonable terms and
conditions approved by the Lender. If the Property Owner fails to issue the
notice of termination to the Leasing Agent in the manner required above within
said five (5) Business Day period, then the Lender shall have the right, and
each Borrower Party hereby irrevocably authorizes the Lender, at its sole
option, to terminate on behalf and in the name of the Borrower and the Property
Owner, the Leasing Agreement in accordance with the foregoing provisions of this
Section 10.2(a); provided that the Lender shall not have any liability if the
Lender shall not exercise such authority.
(b) The Borrower represents, warrants and covenants that it shall cause the
Property Owner to cause all leasing with respect to the Mortgaged Property at
all times to be handled by an Acceptable Leasing Agent. The Borrower shall cause
any Leasing Agreement entered into by the Property Owner to be in form and
substance satisfactory to the Lender, to be collaterally assigned to the Lender
and to be the subject of an agreement similar in form and substance to the
Leasing Agent's Consent, executed and delivered to the Lender by the Acceptable
Leasing Agent.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by the Lender of the Loan and the
execution and delivery to the Lender of the Note, and shall continue in full
force and effect so long as all or any portion of the Debt is outstanding and
unpaid or any Commitment to lend remains in effect hereunder.
Section 11.2 Governing Law; Consent to Jurisdiction.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF ILLINOIS, AND MADE AND
ACCEPTED BY THE BORROWER IN THE STATE OF ILLINOIS, AND THE PROJECT IS LOCATED IN
THE STATE OF ILLINOIS. THIS AGREEMENT WAS NEGOTIATED BY THE LENDER IN THE STATE
OF FLORIDA, AND MADE BY THE LENDER IN THE STATE OF FLORIDA, THE PROCEEDS OF THE
LOAN WERE DISBURSED BY THE LENDER FROM THE STATE OF FLORIDA AND THE LENDER'S
MAIN OFFICE IS LOCATED IN THE STATE OF FLORIDA. BOTH THE STATES OF ILLINOIS AND
FLORIDA, THE PARTIES HERETO AGREE, HAVE A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY. IN ALL RESPECTS,
INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BUT SPECIFICALLY
EXCLUDING MATTERS RELATION TO USURY, THIS AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, THE LAWS OF THE STATE
OF FLORIDA SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR
THEREUNDER, EXCEPT THAT AS TO MATTERS OF USURY ONLY, THE INTERNAL LAWS OF THE
STATE OF ILLINOIS SHALL APPLY AND GOVERN. IN THE EVENT ANY COURT DETERMINES THAT
THE PARTIES' CHOICE OF ILLINOIS LAW AS TO USURY MATTERS IS UNENFORCEABLE, THEN
THE PARTIES HERETO AGREE THAT THE LAWS OF THE STATE OF FLORIDA SHALL GOVERN AND
BE CONTROLLING AS TO USURY ISSUES. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER, THE BORROWER OR
ANY OTHER BORROWER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN MIAMI, FLORIDA, AND THE BORROWER
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
THE BORROWER DOES HEREBY DESIGNATE AND APPOINT CT CORPORATION SYSTEM, WITH
OFFICES IN TALLAHASSEE, FLORIDA, OR AT SUCH OTHER OFFICE IN THE STATE OF
FLORIDA, 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 MIAMI-DADE COUNTY, FLORIDA, AND
AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE OF BORROWER MAILED OR DELIVERED TO THE BORROWER AT THE
ADDRESS SET FORTH AND IN THE MANNER PROVIDED IN SECTION 11.5 BELOW SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE BORROWER IN ANY
SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF FLORIDA. THE BORROWER (i) SHALL
GIVE PROMPT NOTICE TO THE 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 TALLAHASSEE, FLORIDA (WHICH OFFICE SHALL BE
DESIGNATED AS THE ADDRESS FOR SERVICE OR PROCESS), AND (iii) SHALL PROMPTLY
DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN
TALLAHASSEE, FLORIDA OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 11.3 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Note, or of any other Loan Document, nor any consent to any departure
by the 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 the Borrower or the Lender shall entitle the Borrower or
the Lender, as the case may be, to any other or future notice or demand in the
same, similar or other circumstances.
Section 11.4 Failure to Enforce Not a Waiver. Neither any failure nor any
delay on the part of the Borrower or Lender in insisting upon strict performance
of any term, condition, covenant or agreement, or exercising any right, power,
remedy or privilege hereunder, or under the Note or under any other Loan
Document, or any other instrument given as security therefor, shall operate as
or constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under this Agreement, the Note
or any other Loan Document, the Lender shall not be deemed to have waived any
right either to require prompt payment when due of all other amounts due under
this Agreement, the Note or the other Loan Documents, or to declare a default
for failure to effect prompt payment of any such other amount. Moreover, a
waiver of one Default or Event of Default with respect to any Borrower Party
shall not be construed to be a waiver of any subsequent Default or Event of
Default with respect to such Borrower Party or any other Borrower Party or to
impair any remedy, right or power consequent thereon. Nothing herein shall be
construed as prohibiting the Lender from seeking, and the Lender reserves the
right to seek, a deficiency judgment or preserve a deficiency claim to the
extent that the Lender deems the same necessary in connection with any
foreclosure or similar proceeding.
Section 11.5 Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, (b) expedited
overnight prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery or (c) facsimile transmission provided
confirmation of receipt is obtained by one of the methods in clause (a) or (b)
above, 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 11.5):
If to the Lender:
LNR Eastern Lending, LLC
c/o LNR Property Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Bilzin Xxxxxxx Xxxxx Price & Xxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Borrower:
Prime/Xxxxxxx Development Company, L.L.C.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx and Xxxxx Xxxxxxx, Esq.
Facsimile No. : (000) 000-0000
with a copy to:
Jenner & Block
One IBM Center
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx and Xxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Guarantor:
Prime Group Realty, L.P.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx and Xxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
with a copy to:
Jenner & Block
One IBM Center
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
A notice shall be deemed to have been given: in the case of hand delivery,
at the time of delivery; in the case of registered or certified mail, two (2)
Business Days after deposit in the mail; in the case of expedited overnight
prepaid delivery, upon the first attempted delivery on a Business Day; or in the
case of a facsimile transmission, at the time of the confirmed receipt thereof.
Section 11.6 Trial by Jury. EACH OF THE LENDER AND THE BORROWER HEREBY
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OR 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 EACH OF THE LENDER
AND THE 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. THE
LENDER AND THE BORROWER ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
Section 11.7 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 11.8 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable Laws and Regulations, but if any provision of this Agreement shall be
prohibited by or invalid under applicable Laws and Regulations, 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 11.9 Preferences. The Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by any
Borrower Party to any portion of the obligations of the Borrower Party
hereunder. To the extent the Borrower or any other Borrower Party makes a
payment or payments to the 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 Debtor Relief Laws and general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law), 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 the Lender.
Section 11.10 Waiver of Notice. None of the Borrower Parties shall be
entitled to any notices of any nature whatsoever from the Lender except with
respect to matters for which this Agreement or the other Loan Documents
specifically and expressly provide for the giving of notice by the Lender to the
Borrower or the Guarantor and except with respect to matters for which any
Borrower Party is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice. The Borrower hereby expressly waives the right to
receive any notice from the Lender with respect to any matter for which this
Agreement or the other Loan Documents do not specifically and expressly provide
for the giving of notice by the Lender to the Borrower or the Guarantor except
to the extent any such notice is required by and not waivable under applicable
Laws and Regulations.
Section 11.11 Remedies of the Borrower; Deemed Consent. (a) In the event
that, in respect of any consent or approval requested hereunder, a claim or
adjudication is made that the Lender or any of its agents, has acted
unreasonably or unreasonably delayed (or refrained from), acting in any case
where by law or under this Agreement or the other Loan Documents, the Lender or
such agent, as the case may be, has an obligation to act reasonably or promptly,
each Borrower Party agrees that neither the Lender nor its agents, shall be
liable for any monetary damages, and the sole remedy of each Borrower Party
shall be limited to commencing an action seeking injunctive relief or
declaratory judgment, except in any instance in which it has been finally
determined that the action of the Lender has constituted bad faith, gross
negligence, fraud, willful misconduct or an illegal act, in which event the
Borrower may seek any remedy available to it at law or in equity.
(b) The parties hereto agree that, except as otherwise provided herein, in
any circumstances where the Borrower requests the Lender, in writing, to provide
the Lender's consent or approval to any matter for which the Lender's consent or
approval is required hereunder, and the Lender fails to respond to such request
for consent or approval within thirty (30) days after the Lender receives such
request for consent or approval, the Borrower may send a second notice to the
Lender requesting such consent or approval, in writing, and specifically
referring to this Section 11.11 and the fact that the current notice is the
"Second Notice" thereunder, and if the Lender does not respond to such request
for its consent or approval within fifteen (15) Business Days of the Lender's
receipt of such second notice, the request in question shall be deemed consented
to or approved.
Section 11.12 Expenses, Indemnity.
(a) The Borrower covenants and agrees, subject to all the other terms of
this Agreement, to reimburse the Lender upon receipt of written notice from the
Lender for all (i) Lender Expenses; (ii) costs and expenses reasonably incurred
by the Lender in connection with (A) each Borrower Party's performance of and
compliance with each Borrower Party's respective agreements and covenants
contained in this Agreement and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including confirming
compliance with environmental and insurance requirements, (B) the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications to this Agreement and the other Loan Documents
and any other documents or matters requested by any Borrower Party or by the
Lender, (C) 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 any Borrower Party, this
Agreement, the other Loan Documents, the Collateral or any other security given
for the Loan or the Mortgaged Property and (D) enforcing any obligations of or
collecting any payments due from any Borrower Party under this Agreement, the
other Loan Documents or with respect to the Mortgaged Property 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.
(b) The Borrower shall indemnify and hold harmless the Lender from and
against any and all liabilities, obligations, actual losses, actual damages,
penalties, assessments, actions, judgments, suits, claims, demands,
out-of-pocket costs and expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for the Lender in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether a suit is brought or
whether the Lender shall be designated a party thereto), that may be imposed on,
incurred by, or asserted against the Lender in any manner relating to or arising
out of any breach by any Borrower Party of its obligations under, or any
misrepresentation by any Borrower Party contained in this Agreement or the other
Loan Documents, including, without limitation, any delay in failing to pay any
Taxes; provided, however, the Borrower shall not be liable for the payment of
any such costs and expenses to a Person otherwise indemnified under this
subsection to the extent the same are caused by or arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of such Person.
(c) The provisions of this Section 11.12 shall survive the repayment of
this Loan.
Section 11.13 Exhibits and Schedules Incorporated. Any exhibits and
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 11.14 Offsets, Counterclaims and Defenses. Any assignee of the
Lender's interest (which assignee shall be an Eligible Assignee) in and to this
Agreement, the Note and the other Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to such
documents which any Borrower Party may otherwise have on the date of such
assignment against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by any Borrower Party 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 the
Borrower and each Borrower Party. The Borrower hereby waives the right to assert
a counterclaim, other than a mandatory or compulsory counterclaim in any
proceeding brought against it by the Lender except to the extent that the
failure of the Borrower to assert such a counterclaim would preclude the
Borrower from asserting a counterclaim in a separate action against any other
Person other than the Lender.
Section 11.15 No Joint Venture or Partnership. The Borrower, on the one
hand, and Lender, on the other hand, intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between the
Borrower, on the one hand, and Lender.
Section 11.16 Publicity and Confidentiality. All news releases, publicity
or advertising by the Borrower or its Affiliates or the Lender through any media
intended to reach the general public which refers to the Loan Documents or the
financing evidenced by the Loan Documents, to the Borrower, the Property Owner,
or the Lender, shall be subject to the prior written approval of such referenced
party and the Lender (such approval of the or Lender not to be unreasonably
withheld or delayed). Notwithstanding the foregoing, the Borrower, its
Affiliates, and the Lender shall use commercially reasonable efforts to keep all
information obtained in respect of the Borrower Parties (including, without
limitation, information in respect of the Property Owner's leasing program) in
connection with the transaction described in this Agreement confidential, except
that the Lender may disclose any such information (a) to prospective co-lenders
and participants, auditors and other consultants in connection with the
transaction described in this Agreement (each such recipient being informed of
the confidential nature of such information and directed to keep the same
confidential), (b) to the extent required by any Law or Regulation, and (c) if
such information is otherwise available to the public not through a breach
hereof.
Section 11.17 Waiver of Marshaling of Assets. To the fullest extent the
Borrower may legally do so, the Borrower waives all rights to a marshaling of
the assets of the Borrower, its members, if any, and others with interests in
the Borrower and of the Collateral, or to a sale in inverse order of alienation
in the event of foreclosure of the interests hereby created or otherwise created
by any of the other Loan Documents, and agrees not to assert any right under any
laws pertaining to the marshaling of assets, the sale in inverse order of
alienation, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of the Lender under the Loan
Documents to a sale of any of the Collateral for the collection of the related
Debt without any prior or different resort for collection, or the right of the
Lender to the payment of the related Debt out of the net proceeds of the
Collateral in preference to every other claimant whatsoever. In addition, the
Borrower, for itself and its successors and assigns, waives in the event of
foreclosure of the Pledge Agreement, any equitable right otherwise available to
the Borrower which would require the separate sale of the Collateral.
Section 11.18 Conflict; Construction of Documents. In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by counsel in connection with the
negotiation and drafting of the Loan Documents and that such Loan Documents
shall not be subject to the principle of construing their meaning against the
party which drafted same.
Section 11.19 Brokers and Financial Advisors. The 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. The Borrower hereby indemnifies the Lender and
holds the Lender harmless from and against any and all claims, liabilities,
costs and expenses of any kind in any way relating to or arising from a claim by
any financial advisors, brokers, placement agents or finders that such Person
acted on behalf of the Borrower in connection with the transactions contemplated
herein. The provisions of this Section 11.19 shall survive the expiration and
termination of this Agreement and the repayment of the Debt.
Section 11.20 No Third Party Beneficiaries. This Agreement and the other
Loan Documents are solely for the benefit of the Lender and each Borrower Party,
and nothing contained in this Agreement or the other Loan Documents shall be
deemed to confer upon anyone other than the Lender and the Borrower Parties 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
the Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of the 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 the Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by the Lender if, in the Lender's
sole discretion, the Lender deems it advisable or desirable to do so.
Section 11.21 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, between the Borrower and the
Lender are superseded by the terms of this Agreement and the other Loan
Documents.
Section 11.22 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, upon the occurrence and during the
continuance of an Event of Default, the Lender is authorized at any time and
from time to time, subject to and with the prior approval of the Lender, without
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived to the extent permitted by Laws and Regulations),
to set-off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by the Lender
(including branches, agencies or Affiliates of the Lender wherever located) to
or for the credit or the account of any Borrower Party against the obligations
and liabilities of the Borrower Parties to the Lender hereunder, under the Note,
the other Loan Documents or otherwise, irrespective of whether the Lender shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event of
Default even though such charge is made or entered on the books of such Lender
subsequent thereto.
Section 11.23 Loan Assignability.
(a) The Loan, and all of the Lender's rights, remedies and privileges
hereunder and under the other Loan Documents, shall be assignable by the Lender
to an Eligible Assignee at any time and from time to time without the consent of
any Borrower Party. No Borrower Party may sell, assign or transfer any interest
in the Loan Documents or any portion thereof (including, without limitation, the
Borrowers' rights, title, interests, remedies, powers and duties hereunder and
thereunder).
(b) (i) Upon the assignment by the Lender of all or any portion of its
rights, remedies and privileges hereunder and the other Loan Documents to an
Eligible Assignee (and such Eligible Assignee's assumption of all or any portion
of such rights, remedies and privileges), the assignee shall become a "Lender"
for all purposes of this Agreement and the other Loan Documents and, to the
extent of such assignment and assumption, the assigning Lender shall be relieved
of its obligations hereunder to the extent of the interest being assigned. The
Borrower agrees that upon any such assignment and surrender of the Note, it will
promptly provide to the assignee a separate promissory Note substantially in the
form of the original Note with appropriate revisions (but, if applicable, with
notation thereon that it is given in substitution for and replacement of the
original Note or any replacement Note thereof).
(ii) If, pursuant to this subsection, any interest in this Agreement or the
Note is transferred to any transferee which is organized under the laws of any
jurisdiction other than the United States or any state thereof, the transferor
Lender shall cause such transferee, concurrently with the effectiveness of such
transfer, (A) to represent to the transferor Lender (for the benefit of the
transferor Lender and the Borrower) that under applicable law and treaties no
income, franchise, corporate, capital, stamp or other taxes, levies, duties,
imports, deductions, charges or fees of any nature will be required to be
withheld by the Borrower or the transferor Lender with respect to any payments
to be made to such transferee in respect of the Loan, (B) to furnish to the
transferor Lender either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such transferee claims entitlement
to complete exemption from U.S. federal withholding tax on all interest payments
hereunder) in fully-executed and completed form and (C) to agree (for the
benefit of the transferor Lender and the Borrower Parties) to provide the
transferor Lender a new Form 4224 or Form 1001 upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(c) Subject to the terms and provisions of the Intercreditor Agreement,
Lender may only sell, transfer, agent or assign participations in all or any
part of the Lender's interests and obligations hereunder to an Eligible Assignee
(except as otherwise provided in Section 11.23(d) below); provided that such
selling Lender shall remain the "Lender" for all purposes under this Agreement
(such selling Lender's obligations under the Loan Documents remaining unchanged)
and the participant shall not constitute a Lender hereunder. In the case of any
such participation, the participant shall not have any rights under this
Agreement or the other Loan Documents (the participant having rights only
against the selling Lender in respect of such participation as set forth in the
participation agreement with the Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if the Lender
had not sold such participations. The Borrower and the Guarantor agree that the
Lender shall have the right to disclose all information it has received from the
Borrower and the Guarantor to potential assignees or participants on a
confidential basis, subject to the requirements set forth in Section 11.16
hereof.
(d) Notwithstanding anything herein contained, but subject to the terms and
provisions of the Intercreditor Agreement, subsequent to the occurrence of an
Event of Default, Lender may sell or assign the Loan, or transfer, agent or
assign participations, in all or any part of Lender's interests and obligations
hereunder, to any party whatsoever, and not just to an Eligible Assignee.
(e) Notwithstanding any other provision contained in this Agreement or any
other Loan Document to the contrary, the Lender may assign all or any portion of
the Loan or Note to any Federal Reserve Bank of the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided that any payment in respect of the Loan or the Note made by the
Borrower to or for the account of the Lender in accordance with the terms of
this Agreement shall satisfy the Borrower's obligations hereunder in respect of
the Loan or Note to the extent of such payment. No such assignment shall release
the Lender from its obligations hereunder.
Section 11.24 Exculpation of Lender; No Petition. The Lender does not
undertake or assume any responsibility or duty to any Borrower Party or any
other party to select, review, inspect, examine, supervise, pass judgment upon
or inform any Borrower Party or any third party of (a) the existence, quality,
adequacy or suitability or appraisals of the Collateral, the Mortgaged Property
or any other collateral, (b) any environmental report, or (c) any other matters
or items, including, but not limited to, engineering, soils and seismic reports
which are contemplated in the Loan Documents. Any such selection, review,
inspection, examination and the like, and any other due diligence conducted by
the Lender, is solely for the purpose of protecting the Lender's rights under
the Loan Documents, and shall not render the Lender liable to any Borrower Party
or any third party for the existence, sufficiency, accuracy, completeness or
legality thereof. Each of the Borrower Parties and the Lender and each other
Person which becomes a party to this Agreement hereby acknowledges and agrees
that (i) the Lender has originated the Loan and is responsible for all
conversations and negotiations with the Borrower and each other Borrower Party
with respect to the Loan Documents and for all negotiation and preparation of
the Loan Documents on behalf of the Lender herein, (ii) the sole obligation of
the Lender under the Loan Documents and in connection therewith is to fund the
Loan in accordance with this Agreement and to perform any other obligations
expressly set forth in the Loan Documents on the date hereof and the Lender has
no other obligations or liabilities arising under or in connection with any Loan
Document and shall not be liable or responsible to any party to act or for the
failure to act in connection with any Loan Document except as provided in this
clause (ii) and as expressly set forth herein or in the other Loan Documents and
(iii) prior to the date that is one (1) year and one (1) day after the payment
in full of the Debt to the Lender the parties hereto will not institute against,
or join any other Person in instituting against, the Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 11.25 Limitation on Liability. The sole recourse of the Lender
hereunder and under the other Loan Documents shall be limited to the Collateral
and the other assets of the Borrower. Neither the Borrower nor any of the
members, partners, officers, shareholders, principals, directors, employees or
agents of the Borrower or any of their members, partners, officers,
shareholders, principals, directors employees or agents shall have any personal
liability for and on account of any nonpayment of the Loan or any amounts that
may become due under any of the Loan Documents or otherwise in connection with
the Loan, or for any nonperformance of any of the obligations hereunder to be
performed by the Borrower, or for any breach of any covenant, representation or
warranty made by the Borrower hereunder. Nothing contained in this Section
11.25, however, shall (a) be deemed to be a release or impairment of the Debt
evidenced by this Agreement, the Note, or the Liens and security interests
created by the Pledge Agreement or any of the other Loan Documents, (b) preclude
the Lender from foreclosing on the Pledge Agreement or, except as otherwise
expressly stated in this Section 11.25, from enforcing any of the other rights
of the Lender, (c) be deemed to release or otherwise affect the obligations of
any Person other than the Borrower under any of the Loan Documents (including,
without limitation, under the Guaranties or the Environmental Indemnity), (d) be
deemed to release the Borrower or the Guarantor from its liability for, and each
of the foregoing shall be personally liable to the Lender for, the Lender's
actual damages (which may include, without limitation, loss of principal or
interest and reasonable attorneys' fees and collection costs) arising directly
out of any of the following circumstances:
(i) any fraud or material misrepresentation committed by any Borrower Party
or any of its Affiliates;
(ii) any physical waste by the Property Owner, the Borrower or the Property
Manager of any portion of the Mortgaged Property;
(iii) any misappropriation or misapplication of Rents, revenues, security
deposits, Insurance Proceeds or Condemnation Proceeds relating to the Mortgaged
Property in violation of the Loan Documents;
(iv) any distributions or other payments made by the Borrower after the
occurrence and during the continuance of an Event of Default (other than
intentional and material breaches of Section 6.1(n) of this Agreement, which are
governed by Section 11.25(e) below, without duplication of amounts payable under
such Section 11.25(e));
(v) any matters covered by the Environmental Indemnity (subject to the
terms and conditions thereof);
(vi) any violation of the covenants set forth in Section 6.1(w) (subject to
the cure periods set forth in such section);
(vii) any intentional and material breach of the covenants set forth in
Section 6.1(b) (with respect to mechanics' or materialmens' Liens only);or
(e) be deemed to release the Borrower or the Guarantor from its liability
for, and each of the foregoing shall be personally liable to the Lender for, the
entire principal amount of the Loan, together with all interest thereon and all
other amounts payable under the Loan Documents (including, without limitation
the IRR Amount, the Make-Whole Amount, the Exit Fee and the Breakage Fee) upon
the occurrence of an Event of Default with respect to any of the following:
(i) any intentional and material breach of any of the covenants set forth
in Sections 6.1(b)(other than with respect to mechanics' or materialmen's Liens
only), Section 6.1(c), Section 6.1(g), Section 6.1(h) or Section 6.1(n) of this
Agreement; or
(ii) the filing of any (x) voluntary petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, by the Borrower, the Property Owner or the Guarantor or
(y) involuntary petition for bankruptcy, reorganization or arrangement pursuant
to federal bankruptcy law, or any similar federal or state law, against the
Borrower, the Property Owner or the Guarantor in which any of the Borrower, the
Property Owner or the Guarantor colludes, cooperates or acquiesces.
Section 11.26 Restricted Securities Account.
(a) Guarantor has heretofore established an interest-bearing cash account
with the Lender (the "Restricted Securities Account") in the amount of
$1,000,000.00.
(b) At such time as Borrower delivers to Lender an estoppel certificate or
other written evidence reasonably acceptable to Lender executed by MDI (the "MDI
Estoppel") reflecting the maximum that may be claimed by the MDI under the
Construction Agreement (the "MDI Claimed Amount") and such other matters as
Lender shall reasonably require, all in form and substance reasonably acceptable
to Lender, Lender shall release and/or apply, as applicable, the monies then on
deposit in the Restricted Securities Account as follows:
(i) Provided the MDI Claimed Amount is $183,000,000 or less, the Restricted
Securities Account shall be disbursed/returned to Borrower;
(ii) In the event the MDI Claimed Amount is greater than $183,000,000, the
amount then on deposit in the Restricted Securities Account shall be retained by
Lender as an additional fee (the "Additional Fee") for making the Loan (none of
such amount is to be applied against the outstanding balance of the Loan, any
interest or any other amount owing to Lender hereunder and any other Loan
Document); and
(iii) Upon the occurrence of an event of default under the Loan, Lender
shall be entitled to retain the full amount then on deposit in the Restricted
Securities Account as the Additional Fee.
(c) Notwithstanding anything contained herein, in the event Borrower is
unable to obtain the MDI Estoppel within fifteen (15) Business Days following
the date of this Agreement, then the amount on deposit in the Restricted
Securities Account shall be disbursed to Lender as the Additional Fee.
Section 11.27 Register; Ownership of Interest in the Loan The Ownership of
an interest in the Loan shall be registered on a record of ownership to be
maintained by Lender or its agent. Notwithstanding anything else in this Loan
Agreement to the contrary, the right to the principal of, and stated interest
on, the Loan may be transferred only if the transfer is registered on such
record of ownership and the transferee is identified as the owner of an interest
in the obligation. Borrower shall be entitled to treat the registered owner of
an interest in the Loan (as recorded on such record of ownership) as the owner
in fact for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in the Loan on the part of any other person or
entity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the date
and year first above written.
BORROWER:
PRIME/XXXXXXX DEVELOPMENT COMPANY,
L.L.C, a Delaware limited liability
company
By: Prime Group Realty, L.P., a
Delaware limited partnership,
its sole member
By: Prime Group Realty Trust,
a Maryland real estate
investment trust, its
managing general partner
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title:Co-President
LENDER:
LNR EASTERN LENDING, LLC, a Georgia
limited liability company
By:LNR Property Corporation
Eastern Region, a Georgia
corporation, its member
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title:Vice President
SOLELY FOR THE PURPOSE OF ACKNOWLEDGING AND AGREEING TO ANY WAIVERS OR CONSENTS
OR OTHER MATTERS SPECIFICALLY GRANTED BY THE BORROWER PARTIES IN SECTIONS 10.2,
11.11, 11.14, 11.22, 11.23, 11.24 AND 11.26
DEARBORN CENTER, L.L.C., a Delaware limited
liability company
By: Prime/Xxxxxxx Development Company, L.L.C., a
Delaware limited liability company, its sole member
By: Prime Group Realty, L.P., a Delaware
limited partnership, its sole member
By:Prime Group Realty Trust, a Maryland
real estate investment trust, its managing
general partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Its: Co-President
EXHIBIT A
The Land
XXXX 0, 0, 0 XXX XXXX XXXX XX XXX 0 LYING EAST OF THE EAST LINE OF DEARBORN
STREET (EXCEPTING THEREFROM THE NORTH 9 FEET OF SAID LOTS TAKEN FOR ALLEY), IN
BLOCK 141 IN SCHOOL SECTION ADDITION TO CHICAGO IN SECTION 16, TOWNSHIP 39
NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN XXXX COUNTY, ILLINOIS.
EXHIBIT B
Approved Construction Budget
[Intentionally omitted]
EXHIBIT C
Form of Project Lease
[Intentionally omitted]
EXHIBIT D-1
Form of Architect's Certificate
[Architect's Letterhead]
Borrower: Prime/Xxxxxxx Development Company, L.L.C.
Address: c/o Prime Group Realty Trust
00 Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Re: Project: Dearborn Center
Location: _______________, Chicago, Illinois
The undersigned ("Architect") has visited the site of the above referenced
project on ____________ (Insert Date).
The Architect hereby certifies that to the best of his [her] Knowledge,
information and belief, work performed on site has progressed in accordance with
the requirements of the contract documents and conforms to all applicable codes,
regulations and laws. The Architect further certifies that he [she] has no
reason to believe that the project, upon completion, will not be able to receive
all required permits to operate as its intended purpose pursuant to the contract
documents.
Very truly yours,
Architect of Record, AIA
Stamp
EXHIBIT D-2
Form of Property Manager's Certificate
[Property Manager's Letterhead]
-------------------
____________________________ (the "Lender") under that certain Mezzanine
Construction Loan Agreement dated as of _______, 2003, between the Lender and
the Borrower.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx
Dearborn Center
Ladies and Gentlemen:
The undersigned ("Property Manager") has been engaged by Dearborn
Center, L.L.C. (the "Borrower") to act as Property Manager in connection with
the Mortgaged Property and such engagement of Property Manager has been
confirmed by that certain Property Management Agreement (the "Contract"),
dated _________________, 2000.
1. Property Manager represents and warrants to Lender as
follows:
(a) All fees and other payments due and payable to Property
Manager, if any, have, on or prior to the date hereof,
been paid to Property Manager.
(b) Property Manager has not sent or received any notice of
default or any notice for the purpose of terminating the
Contract, and to the best of Property Manager's
Knowledge, there is no existing circumstance or event
which, but for the lapse of time or otherwise, would
constitute a default by Property Manager or Borrower
under the Contract.
(c) The provisions set forth in this letter shall be binding
upon Property Manager and Property Manager's successors
and assigns and shall inure to the benefit of the Lender
and the Lender's successors and assigns.
Very truly yours,
------------------------
By:_____________________
Name:
Title:
EXHIBIT E
Current Litigation
[Intentionally omitted]
EXHIBIT F
Insurance Claims
[Intentionally omitted]
EXHIBIT G
Obligations with respect to Tenant Allowances, Free Rent Periods and Tenant
Improvements
[Intentionally omitted]
EXHIBIT H
Rights or Interests of Real Estate Brokers under the Leases
[Intentionally omitted]
EXHIBIT I
Rights to Purchase, Rights of First Refusal on Purchase and Termination
Rights under the Leases
[Intentionally omitted]
EXHIBIT J
Borrower's Structure
[Intentionally omitted]
EXHIBIT K
Form of Tenant Estoppel Certificate
[Intentionally omitted]
EXHIBIT L
[Intentionally Deleted]
EXHIBIT M
Operating Agreements
None
EXHIBIT N
Schedule of Payment and Performance Bonds
[Intentionally omitted]
