Exhibit 10.39
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AMENDED AND RESTATED
SENIOR MEZZANINE LOAN AGREEMENT
Dated as of November 21, 2003
Among
XXXXXXX PROPERTIES - 555 W. FIFTH SENIOR MEZZANINE, LLC
AND
XXXXXXX PROPERTIES - 808 S. XXXXX XXXXXX MEZZANINE, LLC
collectively,
as Borrower
and
BANK OF AMERICA, N.A.,
as Lender
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION..................................... 2
SECTION 1.1. DEFINITIONS............................................................. 2
SECTION 1.2. PRINCIPLES OF CONSTRUCTION.............................................. 16
ARTICLE II GENERAL TERMS............................................................... 16
SECTION 2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER............................... 16
SECTION 2.2. INTEREST RATE PROTECTION AGREEMENT...................................... 16
SECTION 2.3. LOAN PAYMENTS........................................................... 18
SECTION 2.4. LATE PAYMENT CHARGE..................................................... 19
SECTION 2.5. PREPAYMENT.............................................................. 19
SECTION 2.6. PAYMENTS AFTER DEFAULT.................................................. 21
SECTION 2.7. INTENTIONALLY DELETED................................................... 22
SECTION 2.8. USURY SAVINGS........................................................... 22
SECTION 2.9. UNAVAILABILITY OF RATE; FOREIGN TAXES; INCREASED COSTS.................. 22
SECTION 2.10. EXTENSION............................................................... 25
SECTION 2.11. ADDITIONAL PAYMENT PROVISIONS........................................... 26
ARTICLE III CONDITIONS PRECEDENT........................................................ 27
SECTION 3.1. REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH
CONDITIONS.............................................................. 27
SECTION 3.2. DELIVERY OF LOAN DOCUMENTS; TITLE POLICIES.............................. 27
SECTION 3.3. RELATED DOCUMENTS....................................................... 28
SECTION 3.4. ORGANIZATIONAL DOCUMENTS................................................ 29
SECTION 3.5. OPINIONS OF BORROWER'S COUNSEL.......................................... 29
SECTION 3.6. ANNUAL BUDGET........................................................... 29
SECTION 3.7. TAXES AND OTHER CHARGES................................................. 29
SECTION 3.8. COMPLETION OF PROCEEDINGS............................................... 29
SECTION 3.9. PAYMENTS................................................................ 29
SECTION 3.10. TRANSACTION COSTS....................................................... 29
SECTION 3.11. NO MATERIAL ADVERSE CHANGE.............................................. 30
SECTION 3.12. LEASES AND RENT ROLL.................................................... 30
SECTION 3.13. TENANT ESTOPPELS........................................................ 30
SECTION 3.14. [INTENTIONALLY OMITTED.]................................................ 30
SECTION 3.15. SUBORDINATION AND ATTORNMENT............................................ 30
SECTION 3.16. TAX LOT................................................................. 30
SECTION 3.17. PHYSICAL CONDITIONS REPORT.............................................. 30
SECTION 3.18. MANAGEMENT AGREEMENT.................................................... 30
SECTION 3.19. APPRAISAL............................................................... 30
SECTION 3.20. FINANCIAL STATEMENTS.................................................... 30
SECTION 3.21. [INTENTIONALLY DELETED.]................................................ 31
SECTION 3.22. FURTHER DOCUMENTS....................................................... 31
SECTION 3.23. MORTGAGE LOAN........................................................... 31
SECTION 3.24. OPINION LETTER.......................................................... 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................................. 31
SECTION 4.1. ORGANIZATION............................................................ 31
SECTION 4.2. STATUS OF BORROWER...................................................... 31
SECTION 4.3. VALIDITY OF DOCUMENTS................................................... 32
SECTION 4.4. NO CONFLICTS............................................................ 32
SECTION 4.5. LITIGATION.............................................................. 32
SECTION 4.6. AGREEMENTS.............................................................. 33
SECTION 4.7. SOLVENCY................................................................ 33
SECTION 4.8. FULL AND ACCURATE DISCLOSURE............................................ 33
SECTION 4.9. NO PLAN ASSETS.......................................................... 34
SECTION 4.10. NOT A FOREIGN PERSON.................................................... 34
SECTION 4.11. ENFORCEABILITY.......................................................... 34
SECTION 4.12. BUSINESS PURPOSES....................................................... 34
SECTION 4.13. COMPLIANCE.............................................................. 34
SECTION 4.14. FINANCIAL INFORMATION................................................... 34
SECTION 4.15. ILLEGAL ACTIVITY........................................................ 35
SECTION 4.16. PERMITTED ENCUMBRANCES.................................................. 35
SECTION 4.17. FEDERAL RESERVE REGULATIONS............................................. 35
SECTION 4.18. INVESTMENT COMPANY ACT.................................................. 35
SECTION 4.19. NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE......................... 35
SECTION 4.20. SPECIAL PURPOSE ENTITY.................................................. 36
SECTION 4.21. ASSUMPTIONS............................................................. 36
SECTION 4.22. INTELLECTUAL PROPERTY................................................... 36
SECTION 4.23. EMBARGOED PERSON........................................................ 36
SECTION 4.24. PATRIOT ACT............................................................. 36
SECTION 4.25. MORTGAGE LOAN REPRESENTATIONS........................................... 37
SECTION 4.26. NO CONTRACTUAL OBLIGATIONS.............................................. 37
SECTION 4.27. SUBSIDIARIES............................................................ 38
SECTION 4.28. PLEDGED COMPANY INTERESTS............................................... 38
SECTION 4.29. SURVIVAL................................................................ 38
ARTICLE V BORROWER COVENANTS.......................................................... 38
SECTION 5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS........................... 38
SECTION 5.2. MAINTENANCE AND USE OF PROPERTY......................................... 39
SECTION 5.3. WASTE................................................................... 39
SECTION 5.4. TAXES AND OTHER CHARGES................................................. 39
SECTION 5.5. LITIGATION.............................................................. 40
SECTION 5.6. ACCESS TO THE PROPERTY.................................................. 40
SECTION 5.7. NOTICE OF DEFAULT....................................................... 40
SECTION 5.8. COOPERATE IN LEGAL PROCEEDINGS.......................................... 40
SECTION 5.9. PERFORMANCE BY BORROWER................................................. 40
SECTION 5.10. AWARDS; INSURANCE PROCEEDS.............................................. 41
SECTION 5.11. FINANCIAL REPORTING..................................................... 41
SECTION 5.12. ESTOPPEL STATEMENT...................................................... 43
SECTION 5.13. LEASING MATTERS......................................................... 44
SECTION 5.14. PROPERTY MANAGEMENT..................................................... 45
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SECTION 5.15. LIENS................................................................... 47
SECTION 5.16. DEBT CANCELLATION....................................................... 47
SECTION 5.17. ZONING.................................................................. 47
SECTION 5.18. ERISA................................................................... 47
SECTION 5.19. NO JOINT ASSESSMENT..................................................... 47
SECTION 5.20. ALTERATIONS............................................................. 48
SECTION 5.21. [INTENTIONALLY DELETED.................................................. 48
SECTION 5.22. RECIPROCAL EASEMENT AGREEMENT........................................... 48
SECTION 5.23. [INTENTIONALLY DELETED.................................................. 48
SECTION 5.24. [INTENTIONALLY DELETED.................................................. 48
SECTION 5.25. SPECIAL DISTRIBUTIONS................................................... 48
SECTION 5.26. CURING.................................................................. 48
SECTION 5.27. LIENS................................................................... 49
SECTION 5.28. LIMITATION ON SECURITIES ISSUANCES...................................... 49
SECTION 5.29. LIMITATIONS ON DISTRIBUTIONS............................................ 49
SECTION 5.30. OTHER LIMITATIONS....................................................... 49
SECTION 5.31. [INTENTIONALLY DELETED.................................................. 50
SECTION 5.32. REFINANCING............................................................. 50
ARTICLE VI ENTITY COVENANTS............................................................ 51
SECTION 6.1. SINGLE PURPOSE ENTITY/SEPARATENESS...................................... 51
SECTION 6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE................................... 55
SECTION 6.3. BUSINESS AND OPERATIONS................................................. 55
SECTION 6.4. INDEPENDENT MANAGERS.................................................... 55
ARTICLE VII NO SALE OR ENCUMBRANCE...................................................... 56
SECTION 7.1. TRANSFER DEFINITIONS.................................................... 56
SECTION 7.2. NO SALE/ENCUMBRANCE..................................................... 56
SECTION 7.3. PERMITTED TRANSFERS..................................................... 57
SECTION 7.4. LENDER'S RIGHTS......................................................... 58
SECTION 7.5. ASSUMPTION.............................................................. 59
ARTICLE VIII INSURANCE; CASUALTY; CONDEMNATION; RESTORATION.............................. 61
SECTION 8.1. INSURANCE............................................................... 61
SECTION 8.2. CASUALTY................................................................ 65
SECTION 8.3. CONDEMNATION............................................................ 65
SECTION 8.4. RESTORATION............................................................. 66
ARTICLE IX RESERVE FUNDS............................................................... 70
ARTICLE X CASH MANAGEMENT............................................................. 71
ARTICLE XI EVENTS OF DEFAULT; REMEDIES................................................. 71
SECTION 11.1. EVENT OF DEFAULT........................................................ 71
SECTION 11.2. REMEDIES................................................................ 73
ARTICLE XII ENVIRONMENTAL PROVISIONS.................................................... 74
SECTION 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES............................ 74
iii
SECTION 12.2. ENVIRONMENTAL COVENANTS................................................. 75
SECTION 12.3. LENDER'S RIGHTS......................................................... 75
SECTION 12.4. OPERATIONS AND MAINTENANCE PROGRAMS..................................... 76
SECTION 12.5. ENVIRONMENTAL DEFINITIONS............................................... 76
ARTICLE XIII SECONDARY MARKET............................................................ 77
SECTION 13.1. TRANSFER OF LOAN........................................................ 77
SECTION 13.2. DELEGATION OF SERVICING................................................. 77
SECTION 13.3. DISSEMINATION OF INFORMATION............................................ 77
SECTION 13.4. COOPERATION............................................................. 77
SECTION 13.5. SECURITIZATION INDEMNIFICATION.......................................... 79
SECTION 13.6. [INTENTIONALLY OMITTED.]................................................ 82
SECTION 13.7. [INTENTIONALLY OMITTED.]................................................ 82
SECTION 13.8. MORTGAGE LOAN SECURITIZATION............................................ 82
ARTICLE XIV INDEMNIFICATIONS............................................................ 82
SECTION 14.1. GENERAL INDEMNIFICATION................................................. 82
SECTION 14.2. INTANGIBLE TAX INDEMNIFICATION.......................................... 82
SECTION 14.3. ERISA INDEMNIFICATION................................................... 83
SECTION 14.4. SURVIVAL................................................................ 83
ARTICLE XV EXCULPATION................................................................. 83
SECTION 15.1. EXCULPATION............................................................. 83
ARTICLE XVI NOTICES..................................................................... 86
SECTION 16.1. NOTICES................................................................. 86
ARTICLE XVII FURTHER ASSURANCES.......................................................... 88
SECTION 17.1. REPLACEMENT DOCUMENTS................................................... 88
SECTION 17.2. [INTENTIONALLY OMITTED.]................................................ 88
SECTION 17.3. FURTHER ACTS, ETC....................................................... 88
SECTION 17.4. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS................. 89
SECTION 17.5. EXPENSES................................................................ 89
ARTICLE XVIII WAIVERS..................................................................... 90
SECTION 18.1. REMEDIES CUMULATIVE; WAIVERS............................................ 90
SECTION 18.2. MODIFICATION, WAIVER IN WRITING......................................... 90
SECTION 18.3. DELAY NOT A WAIVER...................................................... 91
SECTION 18.4. TRIAL BY JURY........................................................... 91
SECTION 18.5. WAIVER OF NOTICE........................................................ 91
SECTION 18.6. REMEDIES OF BORROWER.................................................... 91
SECTION 18.7. WAIVER OF MARSHALLING OF ASSETS......................................... 92
SECTION 18.8. WAIVER OF STATUTE OF LIMITATIONS........................................ 92
SECTION 18.9. WAIVER OF COUNTERCLAIM.................................................. 92
SECTION 18.10. GRADSKY WAIVERS......................................................... 92
iv
ARTICLE XIX GOVERNING LAW............................................................... 93
SECTION 19.1. CHOICE OF LAW........................................................... 93
SECTION 19.2. SEVERABILITY............................................................ 94
SECTION 19.3. PREFERENCES............................................................. 94
ARTICLE XX MISCELLANEOUS............................................................... 94
SECTION 20.1. SURVIVAL................................................................ 94
SECTION 20.2. LENDER'S DISCRETION..................................................... 95
SECTION 20.3. HEADINGS................................................................ 95
SECTION 20.4. COST OF ENFORCEMENT..................................................... 95
SECTION 20.5. SCHEDULES INCORPORATED.................................................. 95
SECTION 20.6. OFFSETS, COUNTERCLAIMS AND DEFENSES..................................... 95
SECTION 20.7. NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES........................................................... 95
SECTION 20.8. PUBLICITY............................................................... 97
SECTION 20.9. CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE........................... 97
SECTION 20.10. ENTIRE AGREEMENT........................................................ 97
SECTION 20.11. CERTAIN ADDITIONAL RIGHTS OF LENDER (VCOC).............................. 97
SECTION 20.12. LIABILITY............................................................... 99
SECTION 20.13. CONTRIBUTION............................................................ 99
EXHIBITS
Exhibit A - Annual Budget
Exhibit B - Borrower Organizational Structure
Exhibit C - Form of Lease
v
AMENDED AND RESTATED SENIOR MEZZANINE LOAN AGREEMENT
THIS AMENDED AND RESTATED SENIOR MEZZANINE LOAN AGREEMENT, dated as
of November 21, 2003 (as amended, restated, replaced, supplemented or otherwise
modified from time to time, this "AGREEMENT"), between BANK OF AMERICA, N.A., a
national banking association, having an address at Bank of America Corporate
Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (together with
its successors and/or assigns, "LENDER") and XXXXXXX PROPERTIES - 555 W. FIFTH
SENIOR MEZZANINE, LLC, a Delaware limited liability company, having an address
at c/x Xxxxxxx Properties, Inc., 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000 ("WEST FIFTH") and XXXXXXX PROPERTIES - 808 S. XXXXX XXXXXX MEZZANINE,
LLC, a Delaware limited liability company, having an address at c/x Xxxxxxx
Properties, Inc., 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("SOUTH
OLIVE", and collectively with West Fifth, together with their respective
successors and/or assigns, "BORROWER").
RECITALS:
Bank of America, N.A., a national banking association, as mortgage
lender ("MORTGAGE LENDER"), has made a loan in the original principal amount of
TWO HUNDRED FIFTY MILLION and No/100 Dollars ($250,000,000.00) to Xxxxxxx
Properties - 555 W. Fifth, LLC and Xxxxxxx Properties - 808 S. Olive, LLC
(collectively, "MORTGAGE BORROWER") pursuant to a certain Loan Agreement, dated
as of June 27, 2003, between Mortgage Borrower and Mortgage Lender (as amended,
restated, replaced, supplemented or otherwise modified from time to time,
including that certain Amended and Restated Loan Agreement, dated as of the date
hereof, the "MORTGAGE LOAN AGREEMENT");
Pursuant to the Mortgage Loan Agreement, the original principal
amount of the loan was decreased to TWO HUNDRED THIRTY MILLION and No/100
Dollars ($230,000,000.00) (the "MORTGAGE LOAN"). The Mortgage Loan is evidenced
by a Promissory Note, dated as of June 27, 2003, made by Mortgage Borrower to
Mortgage Lender as amended, restated, replaced, consolidated or otherwise
modified from time to time (the "MORTGAGE NOTE"), and secured by, among other
things, that certain Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated as of June 27, 2003 granted by Mortgage
Borrower in favor of Mortgage Lender as amended, restated, replaced,
supplemented or otherwise modified from time to time (the "MORTGAGE"), pursuant
to which Mortgage Borrower has granted to Mortgage Lender a first priority
mortgage on, among other things, the real property and other collateral as more
fully described in the Mortgage (collectively, the "PROPERTY");
Borrower is the legal and beneficial owner of all of the membership
interests in Mortgage Borrower, consisting of a one hundred percent (100%)
membership interest therein (the "PLEDGED COMPANY INTERESTS");
Borrower has requested Lender to make a loan to it in the aggregate
principal amount of THIRTY MILLION and No/100 Dollars ($30,000,000.00) ("LOAN");
and
Pursuant to that certain Assignment and Assumption Agreement dated
as of the date hereof, Borrower has assumed all of the obligations of Xxxxxxx
Properties - 555 W. Fifth Mezzanine, LLC and Xxxxxxx Properties - 808 S. Olive
Mezzanine, LLC (collectively, "ORIGINAL MEZZANINE BORROWER") and Original
Mezzanine Borrower has been released from all of its obligations, under this
Agreement, under that certain Amended and Restated Pledge and Security
Agreement, dated as of the date hereof, and in favor of Lender (as amended,
restated, replaced, supplemented or otherwise modified from time to time,
"PLEDGE AGREEMENT"), pursuant to which Borrower has granted to Lender a first
priority security interest in the Collateral (as defined in the Pledge
Agreement) as collateral security for the Debt (as defined below) and under all
of the Loan Documents;
In consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:
"ACCEPTABLE ACCOUNTANT" shall mean a "Big Four" accounting firm or
other independent certified public accountant acceptable to Lender.
"ACCEPTABLE COUNTERPARTY" shall mean any counterparty to the
Interest Rate Protection Agreement that has, as of the date hereof, and shall
maintain until the expiration of the applicable Interest Rate Protection
Agreement a credit rating of not less than "AA-" from S&P and not less than Aa3
from Xxxxx'x.
"ACT" shall have the meaning set forth in Section 6.1(c) hereof.
"AFFILIATE" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
"AFFILIATED LOANS" shall mean a loan made by Lender to a parent,
subsidiary or such other entity affiliated with Borrower or Borrower Principal.
"AFFILIATED MANAGER" shall have the meaning set forth in Section 7.1
hereof.
"ALTERATION THRESHOLD" shall mean $1,000,000.00.
"ANNUAL BUDGET" shall mean the operating budget, including all
planned capital expenditures, for the Property approved by Lender in accordance
with Section 5.11(a)(iv) hereof for the applicable calendar year or other
period.
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"ASSIGNMENTS OF MANAGEMENT AGREEMENT" shall mean, collectively, that
certain Assignment and Subordination of Management Agreement dated the date
hereof among Lender, West Fifth and Manager, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, with
respect to the Tower Parcel and that certain Assignment and Subordination of
Management Agreement dated the date hereof among Lender, South Olive and
Manager, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, with respect to the Garage Parcel.
"AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of the
Property.
"BASE MANAGEMENT FEE" shall mean a monthly amount equal to $83,333.
"BORROWER OPERATING AGREEMENT" shall mean, collectively, the Amended
and Restated Limited Liability Company Operating Agreement for West Fifth and
the Amended and Restated Limited Liability Company Operating Agreement for South
Olive.
"BORROWER PRINCIPAL" shall mean Xxxxxxx Properties, L.P., a Maryland
limited partnership.
"BORROWER PRINCIPAL OBLIGATIONS" shall have the meaning set forth in
Section 18.10(c).
"BREAKAGE COSTS" shall have the meaning set forth in Section 2.9(e)
hereof.
"BUSINESS DAY shall mean a day on which Lender is open for the
conduct of substantially all of its banking business at its office in the city
in which the Note is payable (excluding Saturdays and Sundays), except that when
used with respect to the determination of LIBOR, "Business Day" shall mean a day
on which commercial banks are open for international business (including
dealings in U.S. Dollar deposits) in London, England.
"CASUALTY" shall have the meaning set forth in Section 8.2 hereof.
"CLOSING DATE" shall mean June 27, 2003.
"COLLATERAL" shall have the meaning set forth in the Pledge
Agreement.
"COLLATERAL ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT" shall
mean that certain Collateral Assignment of Interest Rate Protection Agreement,
dated as of the date hereof, executed by Borrower in connection with the Loan
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental Authority as the result, in lieu or in anticipation, of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
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"CONSEQUENTIAL LOSS" shall have the meaning set forth in Section
2.11(d) hereof.
"CONTRACTUAL OBLIGATION" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound, or any provision of the foregoing.
"CONTROL" shall have the meaning set forth in Section 7.1 hereof.
"CREDITORS RIGHTS LAWS" shall mean with respect to any Person any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to its debts or debtors.
"DEBT" shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Pledge Agreement or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular period of
time, scheduled principal and/or interest payments under the Note.
"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, with respect to the Loan, a rate per
annum equal to the lesser of (a) the maximum rate permitted by applicable law,
or (b) four percent (4%) above the Note Rate.
"DETERMINATION DATE" shall mean (a) with respect to any Interest
Period prior to the Interest Period that commences in the month during which the
Securitization Closing Date occurs, two (2) Business Days prior to the start of
the applicable Interest Period; (b) with respect to the Interest Period that
commences in the month during which the Securitization Closing Date occurs, the
date that is two (2) Business Days prior to the Securitization Closing Date and
(c) with respect to each Interest Period thereafter, the date that is two (2)
Business Days prior to the beginning of such Interest Period.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in Section
13.5 hereof.
"ELIGIBILITY REQUIREMENTS" means, with respect to any Person, that
such Person (i) has total assets (in name or under management) in excess of
$600,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder's equity of $250,000,000 and
(ii) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial mortgage properties.
"EMBARGOED PERSON" shall have the meaning set forth in Section 4.23
hereof.
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"ENVIRONMENTAL INDEMNITY" shall mean that certain Senior Mezzanine
Environmental Indemnity Agreement, dated as of the date hereof, executed by
Borrower and Borrower Principal in connection with the Loan for the benefit of
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"ENVIRONMENTAL LAW" shall have the meaning set forth in Section 12.5
hereof.
"ENVIRONMENTAL LIENS" shall have the meaning set forth in Section
12.5 hereof.
"ENVIRONMENTAL REPORT" shall have the meaning set forth in Section
12.5 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statutes thereto and
applicable regulations issued pursuant thereto in temporary or final form.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 11.1
hereof.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934,
as amended.
"FACTORY MUTUAL" shall have the meaning set forth in Section 8.1(b)
hereof.
"FITCH" shall mean Fitch, Inc.
"FOREIGN TAXES" shall have the meaning set forth in Section
2.9(b)(i).
"FOURTH ANNIVERSARY" shall mean the Payment Date occurring in July,
2007.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
"GARAGE PARCEL" shall mean the parking garage and other improvements
located at 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more particularly
described in the Mortgage.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
department, commission, office or other authority of any nature whatsoever for
any governmental unit (federal, state, county, municipal, city, town, special
district or otherwise) in the United States whether now or hereafter in
existence.
"HAZARDOUS MATERIALS" shall have the meaning set forth in Section
12.5 hereof.
"IMPROVEMENTS" shall have the meaning set forth in the granting
clause of the Mortgage.
"INDEMNIFIED LIABILITIES" shall have the meaning set forth in
Section 14.1 hereof.
"INDEMNIFIED PARTIES" shall mean (a) Lender, (b) any prior owner or
holder of the Loan or Participations in the Loan, (c) any Investor or prior
Investor of the Loan, (d) any
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Investor or prior Investor in any Securities, (e) any trustees, custodians or
other fiduciaries who hold or who have held a full or partial interest in the
Loan for the benefit of any Investor or other third party, (f) any receiver or
other fiduciary appointed in a foreclosure or other Creditors Rights Laws
proceeding, (g) any officers, directors, shareholders, partners, members,
employees, agents, representatives, affiliates or subsidiaries of any and all of
the foregoing, and (h) the heirs, legal representatives, successors and assigns
of any and all of the foregoing (including, without limitation, any successors
by merger, consolidation or acquisition of all or a substantial portion of the
Indemnified Parties' assets and business), in all cases whether during the term
of the Loan or as part of or following a foreclosure of the Mortgage.
"INDEPENDENT MANAGER" shall have the meaning set forth in Section
6.4(a) hereof.
"INSURANCE PREMIUMS" shall have the meaning set forth in Section
8.1(b) hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in Section
8.4(b) hereof.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement,
dated of even date herewith, between Lender and Mortgage Lender.
"INTEREST PERIOD" shall mean (a) with respect to the initial period
for the accrual of interest due under this Agreement, the period from and
including the date hereof through but excluding the Selected Day first occurring
after the date hereof, and (b) with respect to the Payment Date occurring in
January, 2004 and each Payment Date thereafter, the period from and including
the Selected Day immediately preceding the applicable Payment Date through but
excluding the Selected Day next occurring after the applicable Payment Date.
Notwithstanding the foregoing clause (b), if Lender so elects at any time, the
"Interest Period" shall be the calendar month preceding each Payment Date.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, as applicable (A)
an interest rate cap with a maturity date of the Maturity Date entered into with
an Acceptable Counterparty with a notional amount equal to the Loan Amount for
the term of the Loan and a LIBOR strike price not greater than three and one
half percent (3.50%); provided, however, that in the event the rating assigned
by any Rating Agency to the counterparty to any Interest Rate Protection
Agreement is downgraded, such Interest Rate Protection Agreement will be
replaced by an Interest Rate Protection Agreement in the same form and substance
as the Interest Rate Protection Agreement delivered by the Borrower in
connection with the closing of the Loan or in a form otherwise approved by
Lender in its reasonable discretion and shall be obtained from a counterparty
with a credit rating meeting the requirements of an Acceptable Counterparty; and
provided, that, each Interest Rate Protection Agreement shall provide for (i)
the calculation of interest, (ii) the determination of the interest rate, (iii)
the modification of the Interest Period and (iv) the distribution of payments
thereunder to be identical to the definition of Interest Period set forth
herein, and (B) a Replacement Interest Rate Protection Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, as it may be further amended from time to time, and any
successor statutes thereto, and
- 6 -
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"INVESTOR" shall have the meaning set forth in Section 13.3 hereof.
"ISSUER GROUP" shall have the meaning set forth in Section 13.5(b)
hereof.
"ISSUER PERSON" shall have the meaning set forth in Section 13.5(b)
hereof.
"JUNIOR MEZZANINE LOAN" shall mean that certain loan in the original
principal amount of $20,000,000 made by Bank of America, N.A. to Xxxxxxx
Properties - 555 W. Fifth Junior Mezzanine, LLC and Xxxxxxx Properties - 808 S.
Olive Junior Mezzanine, LLC, each a Delaware limited liability company, pursuant
to that certain Junior Mezzanine Loan Agreement dated as of the date hereof.
"JUNIOR SUBORDINATED MANAGEMENT FEE" shall mean a monthly amount
equal to (a) 3.0% of all Project Income (as defined in the Management Agreement)
for such month, minus (b) the Base Management Fee.
"LEASE" shall have the meaning set forth in the Mortgage.
"LEGAL REQUIREMENTS" shall mean all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting Borrower, Borrower Principal, Mortgage Borrower (or any of
their respective Affiliates), the Collateral or the Property or any part
thereof, or the construction, use, alteration or operation thereof, whether now
or hereafter enacted and in force, and all permits, licenses, authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to Borrower
or Mortgage Borrower, at any time in force affecting Borrower, Borrower
Principal, Mortgage Borrower (or any of their respective Affiliates), the
Collateral or the Property or any part thereof, including, without limitation,
any which may (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) in any way limit the use and enjoyment
thereof.
"LETTER OF CREDIT" shall mean a clean, irrevocable and unconditional
letter of credit in form and substance acceptable to Lender (a) that is issued
by a commercial bank, the long term unsecured obligations of which are rated no
less than AA- (or the equivalent) by the Rating Agencies, (b) that is payable
upon presentation of sight draft only in New York, New York or Los Angeles,
California to the order of Lender, (c) that has an initial expiration date of
not less than one (1) year from the date of issuance and is automatically
renewable, at least thirty (30) days prior to expiration, for successive one (1)
year periods, (d) that is transferable by Lender without the consent of the
issuing bank and (e) for which neither Borrower nor Mortgage Borrower have any
reimbursement or payment obligations.
"LIBOR" shall mean, with respect to each Interest Period, a rate of
interest per annum obtained by dividing
(a) with respect to each Interest Period, the rate for deposits in
U.S. Dollars, for a period equal to one month, which appears on the Telerate
Page 3750 as of 11:00 a.m.,
- 7 -
London time, on the related Determination Date; provided, however, if more than
one rate is specified on Reuters Screen LIBOR Page, the LIBOR Rate shall be the
arithmetic mean of all rates. Lender shall determine the LIBOR Rate for each
Interest Period and the determination of the LIBOR Rate by Lender shall be
binding upon Borrower absent manifest error, by
(b) a percentage equal to 100% minus the applicable Reserve
Percentage then in effect.
LIBOR may or may not be the lowest rate based upon the market for
U.S. Dollar deposits in the London Interbank Eurodollar Market at which Lender
prices loans on the date which LIBOR is determined by Lender as set forth above.
"LIBOR LOAN" shall mean the Loan at such time as interest thereon
accrues at the LIBOR Rate.
"LIBOR MARGIN" shall mean 3.750%.
"LIBOR RATE" shall mean, for any applicable Interest Period, a rate
per annum equal to the sum of (i) LIBOR plus (ii) the LIBOR Margin.
"LIEN" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting, Borrower, Mortgage Borrower, the Collateral,
the Property, any portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic's, materialmen's
and other similar liens and encumbrances.
"LIQUIDATION EVENT" shall have the meaning set forth in Section
2.5(g)(i).
"LITIGATION INDEMNITY" shall mean that certain Indemnity and
Agreement dated as of the date hereof among Borrower, Borrower Principal and
Lender.
"LLC AGREEMENT" shall have the meaning set forth in Section 6.1(c).
"LOAN" shall have the meaning set forth in the Recitals.
"LOAN AMOUNT" shall mean the outstanding principal balance of the
Loan.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note,
the Pledge Agreement, the Collateral Assignment of Interest Rate Protection
Agreement, the Intercreditor Agreement, the Subordination of Management
Agreement and any and all other documents, agreements and certificates executed
and/or delivered in connection with the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"LOCKOUT PERIOD" shall mean the period commencing on the date hereof
and ending on the date immediately preceding the Payment Date in August 2006.
- 8 -
"LOCKOUT PREPAYMENT PREMIUM" shall mean an amount equal to five
percent (5%) of the then outstanding principal amount of the Loan.
"LOSSES" shall mean any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, judgments, awards, amounts paid in settlement of whatever kind or nature
(including but not limited to legal fees and other costs of defense).
"MAJOR DECISIONS" shall mean (i) the sale of all or a substantial
portion of the Property, (ii) the approval of the Annual Budget, (iii) the
execution of any Lease which does not substantially comply with leasing
guidelines then in effect with respect to the Property; (iv) any material
modification of the leasing guidelines then in effect; (v) any material
modification of any Loan Documents requested by Borrower; (vi) any material
modification or refinancing of the Junior Mezzanine Loan; (vii) any merger or
consolidation of Borrower with any other entity, or the liquidation or
dissolution of Borrower other than in accordance with the terms of the
Borrower's operating agreement; (viii) any proposed settlement or compromise of
any claim, litigation or other legal proceeding by or against Borrower for more
than $1,000,000 (net of insurance coverage); (ix) any petition in bankruptcy or
reorganization or instituting any other type of bankruptcy, reorganization or
insolvency proceeding with respect to Borrower, the admission in writing by
Borrower of its inability to pay its debts generally as they become due or the
making by Borrower of a general assignment for the benefit of its creditors; (x)
except for the Management Agreement, any material agreement between Borrower and
any Affiliate of Borrower and (xi) such other items similar in scope to the
foregoing which (A) are consistent with veto rights typically held by
institutional investors holding majority but non-managing, non-controlling
interests in an entity, but (B) would not reasonably be deemed to constitute a
change in Control with respect to such entity.
"MAJOR LEASE" shall mean as to the Property (i) any Lease which,
individually or when aggregated with all other leases at the Property with the
same Tenant or its Affiliate, either (A) demises in the aggregate more than one
(1) full occupied floor of the Property, or (B) covers seventy-five (75) or more
parking spaces, (ii) any Lease which contains any option, offer, right of first
refusal or other similar entitlement to acquire all or any portion of the
Property, or (iii) any instrument guaranteeing or providing credit support for
any Lease meeting the requirements of (i) or (ii) above.
"MANAGEMENT AGREEMENT" shall mean the management agreement entered
into by and between Xxxxxxx Properties - 555 West Fifth, LLC and Manager with
respect to the Tower Parcel, and the management agreement entered into between
Xxxxxxx Properties - 808 S. Olive, LLC and Manager with respect to the Garage
Parcel, pursuant to which Manager is to provide management and other services
with respect to the Property, together with the sub-contract entered into
between Manager and Xxxxxxx Properties Services, Inc., as the foregoing
documents may be amended, restated, replaced, supplemented or otherwise modified
in accordance with the terms of this Agreement.
"MANAGER" shall mean Xxxxxxx Properties L.P., a Maryland limited
partnership or such other entity selected as the manager of the Property in
accordance with the terms of this Agreement.
- 9 -
"MATERIAL ADVERSE CHANGE" shall mean any event that is reasonably
likely to cause a material and adverse impact on a party's financial condition,
or the business of the Property, or the Collateral or could be anticipated to
prevent any person from complying with its material obligations under the Loan
Documents to which it is a party.
"MATURITY DATE" shall mean the Payment Date occurring in July, 2008.
"MAXIMUM LEGAL RATE" shall mean the maximum non-usurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the Note
and as provided for herein or the other Loan Documents, under the laws of such
state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.
"MEMBER" shall have the meaning set forth in Section 6.1(c) hereof.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE BORROWER COMPANY AGREEMENT" shall mean, collectively, each
Limited Liability Company Agreement of the Mortgage Borrower.
"MORTGAGE LOAN DEFAULT" shall mean a "Default" under and as defined
in the Mortgage Loan Agreement.
"MORTGAGE LOAN DOCUMENTS" shall mean, collectively, the Mortgage
Loan Agreement, the Mortgage Note, the Mortgage, and any and all other documents
defined as the "Loan Documents" in the Mortgage Loan Agreement, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
"MORTGAGE LOAN EVENT OF DEFAULT" shall mean an "Event of Default"
under and as defined in the Mortgage Loan Agreement.
"MORTGAGE RESERVE ACCOUNTS" shall mean the "Reserve Accounts" as
defined in the Mortgage Loan Agreement.
"NET LIQUIDATION PROCEEDS AFTER DEBT SERVICE" with respect to any
Liquidation Event, all amounts paid or payable to or received by or on behalf of
Mortgage Borrower in connection with such Liquidation Event, less amounts
required or permitted to be deducted therefrom pursuant to the Mortgage Loan
Documents and amounts paid pursuant to the Mortgage Loan Documents to Mortgage
Lender, including, without limitation, proceeds of any sale, refinancing or
other disposition or liquidation, the amount of any award or payment incurred in
connection with any condemnation or taking by eminent domain, and the amount of
any insurance proceeds paid in connection with any casualty loss, as applicable,
other than, in the case of a casualty loss or condemnation award, amounts
required or permitted by the terms of the Mortgage Loan Documents to be applied
to the restoration or repair of the Mortgaged Property, less (i) in the case of
a foreclosure sale or transfer of the Property in connection with realization
thereon following an Event of Default under the Mortgage Loan or other
disposition, such reasonable and customary costs and expenses of sale or other
disposition (including attorneys' fees and brokerage commissions), (ii) in the
case of a foreclosure sale, such costs and expenses
- 10 -
incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender
shall be entitled to receive reimbursement for under the terms of the Mortgage
Loan Documents, (iii) in the case of a casualty loss or condemnation, such costs
and expenses of collection (including attorneys' fees) of the related insurance
proceeds or condemnation award as shall be approved by Mortgage Lender pursuant
to the terms of the Mortgage Loan Documents, or if the Mortgage Loan has been
paid in full, by Lender, and (iv) in the case of a refinancing of the Mortgage
Loan or the Property, such costs and expenses (including attorneys' fees) of
such refinancing as shall be reasonably approved by Lender.
"NET PROCEEDS" shall have the meaning set forth in Section 8.4(b)
hereof.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 8.4(b)(vi) hereof.
"NOTE" shall mean that certain promissory note dated as of the
Closing Date in the original principal amount of $30,000,000.00, assumed by
Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"NOTE RATE" shall mean an interest rate per annum equal to (i) the
LIBOR Rate (in all cases where clause (ii) below does not apply), or (ii) the
Static LIBOR Rate, to the extent provided in accordance with the provisions of
Section 2.9.
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to Lender
by Borrower which is signed by an authorized senior officer of Borrower or an
entity authorized to act on behalf of Borrower.
"OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"OWNER'S TITLE INSURANCE POLICY" shall mean that certain ALTA
owner's title insurance policy issued to Borrower with respect to the Property.
"PARTICIPATIONS" shall have the meaning set forth in Section 13.1
hereof.
"PAYMENT DATE" shall mean the day that is six (6) Business Days
prior to the Selected Day.
"PERMITTED ENCUMBRANCES" shall mean, with respect to the Property,
collectively, (a) the Liens and security interests created by the Mortgage Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy (as defined in the Mortgage Loan Agreement), (c) Liens, if any,
for Taxes imposed by any Governmental Authority not yet delinquent, and (d) such
other title and survey exceptions as Lender has approved or may approve in
writing in Lender's sole discretion.
- 11 -
"PERSON" shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"PERSONAL PROPERTY" shall have the meaning set forth in the granting
clause of the Mortgage.
"PHYSICAL CONDITIONS REPORT" shall mean a report regarding the
physical condition of the Property prepared by Certified Environments, Inc. or a
company otherwise satisfactory to Lender, in form and substance satisfactory to
Lender in its sole discretion.
"PLEDGE AGREEMENT" shall have the meaning set forth in the Recitals.
"PLEDGED COMPANY INTERESTS" shall have the meaning set forth in the
Recitals.
"POLICIES" shall have the meaning set forth in Section 8.1(b)
hereof.
"POLICY" shall have the meaning set forth in Section 8.1(b) hereof.
"PROHIBITED TRANSFER" shall have the meaning set forth in Section
7.2(a) hereof.
"PROVIDED INFORMATION" shall have the meaning set forth in Section
13.4(a) hereof.
"QUALIFIED INVESTOR" shall mean one or more of the following:
(A) a real estate investment trust, bank, saving and loan
association, investment bank, insurance company, trust company, commercial
credit corporation, pension plan, pension fund or pension advisory firm,
mutual fund, government entity or plan, provided that any such Person
referred to in this clause (A) satisfies the Eligibility Requirements;
(B) an investment company, money management firm or "qualified
institutional buyer" within the meaning of Rule 144A under the Securities
Act of 1933, as amended, or an institutional "accredited investor" within
the meaning of Regulation D under the Securities Act of 1933, as amended,
provided that any such Person referred to in this clause (B) satisfies the
Eligibility Requirements;
(C) an institution substantially similar to any of the foregoing
entities described in clauses (ii)(A) or (ii)(B) that satisfies the
Eligibility Requirements;
(D) any entity Controlled by any of the entities described in clause
(i) or clauses (ii)(A) or (ii)(C) above.
For purposes of this definition of Qualified Investor, "Control"
means the ownership, directly or indirectly, in the aggregate of more than fifty
percent (50%) of the beneficial ownership interests of an entity and the
possession, directly or indirectly, of the power
- 12 -
to direct or cause the direction of the management or policies of an entity,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlled by," "controlling" and "under common control with" shall have the
respective correlative meaning thereto.
"QUALIFIED MANAGER" shall mean Manager or a reputable and
experienced professional management organization (a) which manages, together
with its affiliates, at least five (5) first class office buildings totaling at
least 2,500,000 square feet of gross leasable area, exclusive of the Property
and (b) approved by Lender, which approval shall not have been unreasonably
withheld and for which Mortgage Lender and Lender shall have received a Rating
Confirmation.
"RATING AGENCY" shall mean each of S&P, Xxxxx'x and Fitch, or any
other nationally-recognized statistical rating agency which has been approved by
Lender.
"RATING CONFIRMATION" with respect to the transaction or matter in
question, shall mean: (i) if all or any portion of the Mortgage Loan or the
Loan, by itself or together with other loans, has been the subject of a
Securitization, then each applicable Rating Agency shall have confirmed in
writing that such transaction or matter shall not result in a downgrade,
qualification, or withdrawal of any rating then in effect for any class of
certificates or other securities issued in connection with such Securitization;
and (ii) if the Mortgage Loan and the Loan or any portion thereof has not been
the subject of a Securitization, (a) the applicable Rating Agency shall have
confirmed in writing that such transaction or matter shall not result in a
downgrade, qualification, or withdrawal of any shadow rating or other rating
provided to the Loan or any portion thereof not the subject of a Securitization,
and (b) Lender shall have determined in its reasonable discretion (taking into
consideration such factors as Lender may determine, including the attributes of
the loan pool in which the Loan might reasonably be expected to be securitized)
that no rating for any certificate or other securities that would be issued in
connection with Securitization of such portion of the Mortgage Loan or the Loan
would be downgraded, qualified, or withheld by reason of such transaction or
matter.
"REA" shall mean that certain Reciprocal Easement Agreement dated as
of June 1, 1989, recorded April 5, 1990 as Instrument No. 90-655583 Official
Records executed by Pacific Xxxx, American Telephone and Telegraph and Xxxxxxx
Xxxxxx Partners-Fifth & Grand, Ltd. (predecessor to Borrower) and that certain
Parking Easement Agreement dated December 13, 2000, a memorandum of which was
recorded December 27, 2000 as Instrument No. 00-2009212 Official Records
executed by Xxxxxxx Xxxxxx Partners-Xxxxxxx Development Company and Xxxxxxx
Xxxxxx Partners-Fifth & Grand, Ltd.
"RELEASE" shall have the meaning set forth in Section 12.5 hereof.
"RENEWAL LEASE" shall have the meaning set forth in Section 5.13
hereof.
"RENT ROLL" shall have the meaning set forth in the Mortgage Loan
Documents.
"RENTS" shall have the meaning set forth in the Mortgage.
"REP & WARRANTY BREACH" shall have the meaning set forth in Section
11.1(e).
- 13 -
"REPLACEMENT INTEREST RATE PROTECTION AGREEMENT" shall mean an
interest rate cap from an Acceptable Counterparty with terms identical to the
Interest Rate Protection Agreement.
"RESERVE PERCENTAGE" shall mean, with respect to any day of any
Interest Period, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor), for determining the maximum reserve requirement (including
basic, supplemental, emergency, special and marginal reserves) generally
applicable to financial institutions regulated by the Federal Reserve Board
comparable in size and type to Lender in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on the Loan is determined), whether or not
Lender has any Eurocurrency liabilities or such requirement otherwise in fact
applies to Lender. The LIBOR Rate shall be adjusted automatically as of the
effective date of each change in the Reserve Percentage. As of the date hereof,
the Reserve Percentage is zero, however, there can be no assurance as to what
such amount may be in the future.
"RESTORATION" shall mean, following the occurrence of a Casualty or
a Condemnation which is of a type necessitating the repair of the Property, the
completion of the repair and restoration of the Property as nearly as possible
to the condition the Property was in immediately prior to such Casualty or
Condemnation, with such alterations as may be reasonably approved by Lender.
"RESTORATION CONSULTANT" shall have the meaning set forth in Section
8.4(b)(iii) hereof.
"RESTORATION RETAINAGE" shall have the meaning set forth in Section
8.4(b)(iv) hereof.
"RESTRICTED PARTY" shall have the meaning set forth in Section 7.1
hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
the XxXxxx-Xxxx Companies, Inc.
"SALE OR PLEDGE" shall have the meaning set forth in Section 7.1
hereof.
"SECURITIES" shall have the meaning set forth in Section 13.1
hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES LIABILITIES" shall have the meaning set forth in Section
13.5(b) hereof.
"SECURITIZATION" shall have the meaning set forth in Section 13.1
hereof.
"SECURITIZATION CLOSING DATE" shall mean a date selected by Lender
in its sole discretion by providing not less than twenty-four (24) hours prior
notice to Borrower.
- 14 -
"SELECTED DAY" means the fifteenth (15th) day of each calendar month
or such other date as determined by Lender pursuant to Section 2.3(g) hereof.
"SERVICER" shall have the meaning set forth in Section 13.2 hereof.
"SPECIAL MEMBER" shall have the meaning set forth in Section 6.1(c)
hereof.
"SPONSOR" shall mean Xxxxxxx Properties, Inc.
"STATE" shall mean, with respect to the Property, the State or
Commonwealth in which the Property or any part thereof is located.
"STATIC LIBOR RATE" shall have the meaning set forth in Section 2.9
hereof.
"STATIC LIBOR RATE LOAN" shall have the meaning set forth in Section
2.9(c) hereof.
"SUBORDINATION OF MANAGEMENT AGREEMENT" shall mean that certain
Subordination of Management Agreement dated the date hereof among Lender,
Borrower and Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"SUBSIDIARY" shall mean any corporation, partnership, limited
liability company or other entity in which a Person holds an equity interest
which is more than ten (10%) of the equity classes issued by such entity.
"SYNDICATION" shall have the meaning set forth in Section 13.1
hereof.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property (or any part thereof) or the Collateral (or any
part thereof).
"TENANT" shall mean any Person leasing, subleasing or otherwise
occupying any portion of the Property under a Lease or other occupancy agreement
with Mortgage Borrower (including, without limitation, any Major Lease).
"TOWER PARCEL" shall mean Gas Company Tower, located at 000 Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more particularly described in the
Mortgage.
"TRIBUNAL" shall mean any state, commonwealth, federal, foreign,
territorial or other court or governmental department, commission, board,
bureau, district, authority, agency, central bank, or instrumentality or any
arbitration authority.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial
Code as in effect in the State of Delaware.
- 15 -
"UCC-9 TITLE POLICY" shall mean that certain UCC-9 title policy
issued with respect to the Collateral and insuring the lien of the Pledge
Agreement encumbering such Collateral as of the date hereof.
"UNDERWRITER GROUP" shall have the meaning set forth in Section
13.5(b) hereof.
Section 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. All uses of the
word "including" shall mean "including, without limitation" unless the context
shall indicate otherwise. Unless otherwise specified, the words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.
ARTICLE II
GENERAL TERMS
Section 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.
(a) Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.
(b) Borrower may request and receive only one borrowing in respect
of the Loan and any amount borrowed and repaid in respect of the Loan may not be
re-borrowed.
(c) The Loan shall be evidenced by the Note and secured by the
Pledge Agreement and the other Loan Documents.
(d) Borrower shall use the proceeds of the Loan to (i) make an
equity contribution to the Mortgage Borrower in order to cause the Mortgage
Borrower to use such amounts for any use permitted pursuant to Section 2.1(d) of
the Mortgage Loan Agreement, (ii) pay costs and expenses incurred in connection
with the closing of the Loan, as approved by Lender and (iii) distribute the
balance, if any, to its members.
Section 2.2 INTEREST RATE PROTECTION AGREEMENT. Prior to or
contemporaneously with the Closing Date, Borrower shall have obtained the
Interest Rate Protection Agreement, which shall be coterminous with, or extend
beyond, the initial term of the Loan and have a notional amount which shall not
at any time be less than the outstanding principal balance of the Loan. The
Interest Rate Protection Agreement shall be maintained throughout the term of
the Loan with an Acceptable Counterparty. If the provider of the Interest Rate
Protection Agreement ceases to be an Acceptable Counterparty, Borrower shall
obtain a Replacement Interest Rate Protection Agreement from an Acceptable
Counterparty within ten (10) Business Days of receipt of notice from Lender or
Borrower's obtaining knowledge that the then-current counterparty under the
Interest Rate Protection Agreement is no longer an Acceptable Counterparty;
provided, however, in the event that the Interest Rate Protection
- 16 -
Agreement counterparty is Bank of America, N.A., the provisions of this sentence
shall not apply.(a) Borrower shall collaterally assign to Lender pursuant to the
Collateral Assignment of Interest Rate Protection Agreement all of its right,
title and interest to receive any and all payments under the Interest Rate
Protection Agreement (and any related guarantee, if any) and shall deliver to
Lender counterparts of such Collateral Assignment of Interest Rate Protection
Agreement executed by the Borrower and by the Acceptable Counterparty and notify
the Acceptable Counterparty of such collateral assignment (either in such
Interest Rate Protection Agreement or by separate instrument). At such time as
the Loan is repaid in full, all of Lender's right, title and interest in the
Interest Rate Protection Agreement shall terminate and Lender shall execute and
deliver at Borrower's sole cost and expense, such documents as may be required
to evidence Lender's release of the Interest Rate Protection Agreement and to
notify the Acceptable Counterparty of such release.
(b) Borrower shall comply with all of its obligations under the
terms and provisions of the Interest Rate Protection Agreement. All amounts paid
by the Acceptable Counterparty under the Interest Rate Protection Agreement to
Borrower or Lender shall be deposited immediately with Lender. Borrower shall
take all actions reasonably requested by Lender to enforce Lender's rights under
the Interest Rate Protection Agreement in the event of a default by the
Acceptable Counterparty and shall not waive, amend or otherwise modify any of
its rights thereunder.
(c) In the event that Borrower fails to purchase, maintain and/or
deliver to Lender the Interest Rate Protection Agreement in accordance with the
terms and provisions of this Agreement, Lender may purchase the Interest Rate
Protection Agreement and the cost incurred by Lender in purchasing the Interest
Rate Protection Agreement shall be paid by Borrower to Lender with interest
thereon at the Default Rate from the date such cost was incurred by Lender until
such cost is reimbursed by Borrower to Lender.
(d) In connection with the Interest Rate Protection Agreement and
any Replacement Interest Rate Protection Agreement, Borrower shall obtain and
deliver to Lender an opinion from counsel (which counsel may be in-house counsel
for the Acceptable Counterparty) for the Acceptable Counterparty (upon which
Lender and its successors and assigns may rely) which shall provide, in relevant
part, that:
(i) the Acceptable Counterparty is duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation
and has the organizational power and authority to execute and deliver, and
to perform its obligations under, the Interest Rate Protection Agreement;
(ii) the execution and delivery of the Interest Rate Protection
Agreement by the Acceptable Counterparty, and any other agreement which
the Acceptable Counterparty has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been and remain
duly authorized by all necessary action and do not contravene any
provision of its certificate of incorporation or by-laws (or equivalent
organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;
- 17 -
(iii) all consents, authorizations and approvals required for the
execution and delivery by the Acceptable Counterparty of the Interest Rate
Protection Agreement, and any other agreement which the Acceptable
Counterparty has executed and delivered pursuant thereto, and the
performance of its obligations thereunder have been obtained and remain in
full force and effect, all conditions thereof have been duly complied
with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance; and
(iv) the Interest Rate Protection Agreement, and any other agreement
which the Acceptable Counterparty has executed and delivered pursuant
thereto, has been duly executed and delivered by the Acceptable
Counterparty and constitutes the legal, valid and binding obligation of
the Acceptable Counterparty, enforceable against the Acceptable
Counterparty in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
Section 2.3 LOAN PAYMENTS.
(a) The Loan shall bear interest at a rate per annum equal to the
LIBOR Rate or the Static LIBOR Rate, as applicable (the "NOTE RATE"). Interest
shall be computed based on the daily rate produced assuming a three hundred
sixty (360) day year, multiplied by the actual number of days elapsed. Except as
otherwise set forth in this Agreement, interest shall be paid in arrears.
(b) Borrower hereby agrees to pay sums due under the Note as
follows: except as may be adjusted in accordance with Section 2.3(c),
consecutive monthly installments of interest calculated at the applicable Note
Rate for the applicable Interest Period shall be payable pursuant to the terms
of Section 2.3(d) (the "MONTHLY PAYMENT AMOUNT") on each Payment Date. Borrower
shall pay to Lender on the Maturity Date the outstanding principal balance, all
accrued and unpaid interest and all other amounts due hereunder and under the
Note, the Mortgage and other Loan Documents. The accrued and unpaid interest due
on the Maturity Date shall be calculated for the full final Interest Period,
notwithstanding that such Interest Period may extend beyond the Maturity Date.
(c) All interest shall be computed on the basis of a three hundred
sixty (360) day year and paid for the actual number of days elapsed in an
Interest Period. Lender shall determine the Note Rate applicable to the Debt in
accordance with this Agreement and its determination thereof shall be conclusive
in the absence of manifest error. The books and records of Lender shall be prima
facie evidence of all sums owing to Lender from time to time under this
Agreement, but the failure to record any such information shall not limit or
affect the obligations of Borrower under the Loan Documents.
(d) Each payment by Borrower hereunder or under the Note shall be
payable at X.X. Xxx 000000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, Attn: Commercial
Mortgage Loan Servicing #1777, or at such other place as the Lender may
designate from time to time in writing, on the date such payment is due, to
Lender by deposit to such account as Lender may designate
- 18 -
by written notice to Borrower. Each payment by Borrower hereunder or under the
Note shall be made in funds settled through the New York Clearing House
Interbank Payments System or other funds immediately available to Lender by 2:00
p.m., New York City time, on the date such payment is due, to Lender by deposit
to such account as Lender may designate by written notice to Borrower. 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
preceding such scheduled due date.
(e) Prior to the occurrence of an Event of Default, all monthly
payments made as scheduled under this Agreement and the Note shall be applied to
the payment of interest computed at the Note Rate. All voluntary and involuntary
prepayments on the Note shall be applied, to the extent thereof, to accrued but
unpaid interest on the amount prepaid, to the remaining principal amount, and
any other sums due and unpaid to Lender in connection with the Loan, in such
manner and order as Lender may elect in its sole and absolute discretion.
Following the occurrence of an Event of Default, any payment made on the Note
shall be applied to accrued but unpaid interest, late charges, accrued fees, the
unpaid principal amount of the Note, and any other sums due and unpaid to Lender
in connection with the Loan, in such manner and order as Lender may elect in its
sole and absolute discretion.
(f) All payments made by Borrower hereunder or under the Note or the
other Loan Documents shall be made irrespective of, and without any deduction
for, any setoff, defense or counterclaims.
(g) Borrower acknowledges that in connection with a Securitization
of the Loan and/or the Mortgage Loan, Lender may in its sole discretion change
the day of the month that constitutes the Selected Day.
Section 2.4. LATE PAYMENT CHARGE.
Except for the payment due on the Maturity Date, if any principal or
interest payment is not paid by Borrower on or before the date on which same is
due, Borrower shall pay to Lender upon demand an amount equal to the lesser of
four percent (4%) of such unpaid sum or the maximum amount permitted by
applicable law in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Any such amount shall be secured by the Mortgage
and the other Loan Documents to the extent permitted by applicable law.
Section 2.5. PREPAYMENT.
Except as otherwise expressly permitted by this Section 2.5 no
voluntary prepayments, whether in whole or in part, of the Loan or any other
amount at any time due and owing under the Note can be made by Borrower or any
other Person without the express written consent of Lender.
(a) Lockout Period. Borrower has no right to make, and Lender shall
have no obligation to accept, any voluntary prepayment, whether in whole or in
part, of the Loan during the Lockout Period. Notwithstanding the foregoing, if
either (i) Lender, in its sole and absolute discretion, accepts a full or
partial voluntary prepayment during the Lockout Period or (ii) there
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is an involuntary prepayment during the Lockout Period, then, in either case,
Borrower shall, in addition to any portion of the Loan prepaid (together with
all interest accrued and unpaid thereon), pay to Lender a prepayment premium in
an amount calculated in accordance with Section 2.5(c) hereof.
(b) Intentionally omitted.
(c) Involuntary Prepayment During the Lockout Period. If, during the
Lockout Period, payment of all or any part of the Debt is tendered by Borrower
or otherwise recovered by Lender in the exercise of its remedies under the Loan
Documents, such tender or recovery shall be (i) made on the next occurring
Payment Date together with the Monthly Payment Amount and (ii) deemed a
voluntary prepayment by Borrower in violation of the prohibition against
prepayment set forth in this Section 2.5 and Borrower shall pay, in addition to
the Debt, (x) an amount equal to the Lockout Yield Maintenance Premium and (y)
the accrued and unpaid interest calculated for the full Interest Period in which
such voluntary prepayment occurs.
(d) Insurance and Condemnation Proceeds; Excess Interest.
Notwithstanding any other provision herein to the contrary, and provided no
Event of Default exists, Borrower shall not be required to pay any prepayment
premium in connection with any prepayment occurring solely as a result of (i)
the application of Insurance Proceeds or Condemnation Proceeds pursuant to the
terms of the Loan Documents, or (ii) the application of any interest in excess
of the maximum rate permitted by applicable law to the reduction of the Loan.
(e) After the Lockout Period. Commencing on the day after the
expiration of the Lockout Period, and upon giving Lender at least sixty (60)
days (but not more than ninety (90) days) prior written notice, Borrower may
voluntarily prepay (without premium) the Note in whole (but not in part (except
as provided below)) on a Payment Date. Lender shall accept a prepayment pursuant
to this Section 2.5(e) on a day other than a Payment Date provided that, in
addition to payment of the full outstanding principal balance of the Note,
Borrower pays to Lender a sum equal to the amount of interest which would have
accrued on the Note if such prepayment occurred on the next Payment Date.
(f) Limitation on Partial Prepayments. In no event shall Lender have
any obligation to accept a partial prepayment, except in connection with a
prepayment in full of the Junior Mezzanine Loan or thereafter, in which case
Lender will accept a partial prepayment of up to $10,000,000.00.
(g) Liquidation Events.
(i) In the event of (A) any Casualty to the Property or any material
portion thereof, (B) any Condemnation of the Property or any material
portion thereof, (C) any transfer of the Property in connection with a
realization thereon following a Mortgage Event of Default, including,
without limitation, a foreclosure sale, or (D) any refinancing of the
Property or the Mortgage Loan (each, a "LIQUIDATION EVENT"), Borrower
shall cause the related Net Liquidation Proceeds After Debt Service to be
deposited directly into the Mezzanine Debt Service Account. On each date
on which Lender actually
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receives a distribution of Net Liquidation Proceeds After Debt Service,
Borrower shall prepay the outstanding principal balance of the Note in an
amount equal to one hundred percent (100%) of such Net Liquidation
Proceeds After Debt Service, together with interest which would have
accrued on such amount through the next Payment Date. Any amounts of Net
Liquidation Proceeds After Debt Service in excess of the Debt shall be
paid to Borrower. Any prepayment received by Lender pursuant to this
Section 2.5(g)(i) on a date other than a Payment Date shall be held by
Lender as collateral security for the Loan in an interest bearing account,
with such interest accruing to the benefit of Borrower, and shall be
applied by Lender on the next Payment Date.
(ii) Borrower shall notify Lender of any Liquidation Event no later
than one (1) Business Day following the first date on which Borrower has
knowledge of such event. Borrower shall be deemed to have knowledge of (i)
a sale (other than a foreclosure sale) of the Property on the date on
which a contract of sale for such sale is entered into, and a foreclosure
sale, on the date notice of such foreclosure sale is given, and (ii) a
refinancing of the Property, on the date on which a commitment for such
refinancing has been entered into. The provisions of this Section
2.5(g)(ii) shall not be construed to contravene in any manner the
restrictions and other provisions regarding refinancing of the Mortgage
Loan or the Sale or Pledge of the Property set forth in this Agreement and
the other Loan Documents.
(h) Prepayment of Mortgage Loan/Mortgage Borrower's Failure to
Extend Mortgage Loan. Except as provided in Section 5.32 hereof, in the event
that (i) the Mortgage Loan is paid in full at any time prior to the then
Maturity Date of the Loan or (ii) the Mortgage Borrower does not exercise its
right to extend the Mortgage Loan pursuant to Section 2.10 of the Mortgage Loan
Agreement, the Debt shall then be immediately due and payable regardless of the
Maturity Date of the Loan.
Section 2.6. PAYMENTS AFTER DEFAULT.
Upon the occurrence and during the continuance of an Event of
Default, interest on the outstanding principal balance of the Loan and, to the
extent permitted by law, overdue interest and other amounts due in respect of
the Loan, (a) shall accrue at the Default Rate, and (b) Lender shall be entitled
to receive and Borrower shall pay or cause to be paid to Lender all cash flow
from the Property in accordance with the terms of Article 10 of the Mortgage
Loan Agreement, such amount to be applied by Lender to the payment of the Debt
in such order as Lender shall determine in its sole discretion, including,
without limitation, alternating applications thereof between interest and
principal. Interest at the Default Rate shall be computed from the occurrence of
the Event of Default until the earlier of (i) the actual receipt and collection
of the Debt (or that portion thereof that is then due) and (ii) the cure of such
Event of Default. To the extent permitted by applicable law, interest at the
Default Rate shall be added to the Debt, shall itself accrue interest at the
same rate as the Loan and shall be secured by the Pledge Agreement. This
paragraph shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Lender by reason of the occurrence of any Event of Default; the
acceptance of any payment from Borrower shall not be deemed to cure or
constitute a waiver of any Event of Default; and Lender retains its rights under
this Agreement to accelerate and to continue to demand payment of the
- 21 -
Debt upon the happening of and during the continuance any Event of Default,
despite any payment by Borrower to Lender.
Section 2.7. INTENTIONALLY DELETED.
Section 2.8. USURY SAVINGS.
This Agreement and the Note are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower
is at any time required or obligated to pay interest on the principal balance
due hereunder at a rate in excess of the Maximum Legal Rate, the Note Rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.
Section 2.9. UNAVAILABILITY OF RATE; FOREIGN TAXES; INCREASED COSTS.
In the event that Lender shall have determined in its reasonable discretion that
none of the methods set forth in the definition of "LIBOR" herein are available,
then Lender shall forthwith give notice by telephone of such determination,
confirmed in writing, to Borrower at least one (1) day prior to the last day of
the related Interest Period. If such notice is given, the Note Rate, commencing
with such related Interest Period shall be the LIBOR Rate in effect for the most
recent Interest Period (the "STATIC LIBOR RATE").
(a)If, pursuant to the terms of this Agreement, the Loan has been
converted to the Static LIBOR Rate and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice thereof to Borrower, and
the Loan will be converted from the Static LIBOR Rate to the LIBOR Rate
effective on the first day of the next succeeding Interest Period.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Borrower have the right to elect to convert from the LIBOR Rate to the
Static LIBOR Rate.
(b)(i) All payments made by Borrower hereunder shall be made free
and clear of, and without reduction for or on account of, income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions, reserves or
withholdings imposed, levied, collected, withheld or assessed by any
Governmental Authorities, which are imposed, enacted or become effective on or
after the Closing Date (such non-excluded taxes being referred to collectively
as "FOREIGN TAXES"), excluding income and franchise taxes of the United States
of America or any political subdivision or taxing authority thereof or therein.
If any Foreign Taxes are required to be withheld from any amounts payable to
Lender hereunder and such Foreign Taxes are not a
- 22 -
result of activities of Lender unrelated to the Loan or Borrower, the amounts so
payable to Lender shall be increased to the extent necessary to yield to Lender
(after payment of all Foreign Taxes) interest or any such other amounts payable
hereunder at the rate or in the amounts specified hereunder. Whenever any
Foreign Taxes are payable pursuant to applicable law by Borrower, as promptly as
possible thereafter, Borrower shall send to Lender an original official receipt,
if available, or certified copy thereof showing payment of such Foreign Taxes.
Borrower hereby indemnifies Lender for any incremental taxes, interest or
penalties that may become payable by Lender which may result from any failure by
Borrower to pay any such Foreign Taxes when due to the appropriate taxing
authority of which Lender shall have provided Borrower with prior written
notice, if possible, or any failure by Borrower to remit to Lender the required
receipts or other required documentary evidence. Lender's inability to notify
Borrower of any such Foreign Taxes in accordance with the immediately preceding
sentence shall in no way relieve Borrower of its obligations under this Section
2.9(b). (ii) A Lender that is entitled to an exemption from or reduction of any
Foreign Taxes, with respect to payments under this Agreement shall deliver to
the Borrower, at the time or times prescribed by applicable law or reasonably
requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate. In addition, at Borrower's request, Lender
shall provide to Borrower its understanding as to whether any Foreign Taxes will
be applicable to any forthcoming payments due under the Loan Documents. Lender
shall not be entitled to claim compensation pursuant to this Section 2.9(b) for
any Foreign Taxes to the extent that such Foreign Taxes result from a failure to
comply with the requirements of this paragraph. (iii) If Lender determines in
good faith that a reasonable basis exists for contesting any Foreign Taxes for
which indemnification has been demanded hereunder, Lender shall cooperate with
Borrower in challenging such Taxes at Borrower's expense if so requested by
Borrower. If Lender receives a refund of Foreign Taxes for which a payment has
been made by Borrower pursuant to this Agreement, which refund in the good faith
judgment of Lender is attributable to such payment made by Borrower, then Lender
shall reimburse Borrower for such amount (together with any interest received
thereon) as Lender determines to be the proportion of the refund as will leave
it, after such reimbursement, in no better or worse position than it would have
been in if the payment had not been required. (iv) If the Borrower is required
to pay additional amounts to or for the account of any Lender pursuant to this
Section 2.9(b) as a result of a change in law or treaty occurring after such
Lender first became a party to this Agreement, then such Lender will, at the
request of the Borrower, change the jurisdiction of its applicable lending
office if such change (x) will eliminate or reduce any such additional payment
which may thereafter accrue and (y) is, in such Lender's sole, reasonable
discretion, determined not to be materially disadvantageous or cause
unreasonable hardship to such Lender, provided that fees, charges, costs or
expenses that are related to such change shall be borne by the Borrower on
behalf of a Lender, and the mere existence of such expenses, fees or costs shall
not be deemed to be materially disadvantageous or cause undue hardship to the
Lender. Lender agrees that it will (A) take all reasonable actions reasonably
requested by the Borrower in writing that are without material risk and cost to
Lender and consistent with the internal policies of such Lender and applicable
legal and regulatory restrictions (as the case may be) to maintain all
exemptions, if any, available to it from withholding taxes (whether available by
treaty or existing administrative waiver) and (B) to the extent reasonable and
without material risk and cost to it, otherwise cooperate with the Borrower to
minimize any amounts payable by the Borrower under this Section 2.9(b);
provided, however,
- 23 -
that in each case, any cost relating to such action or cooperation requested by
the Borrower shall be borne by the Borrower.
(c) If any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender to make or maintain a Loan with the Note Rate being based on LIBOR as
contemplated hereunder, (i) the obligation of Lender hereunder to make or
continue the Loan based on LIBOR or to convert the Loan from the Static LIBOR
Rate to the LIBOR Rate shall be canceled forthwith and (ii) any outstanding
LIBOR Loan shall be converted automatically to a loan bearing interest at the
Static LIBOR Rate (the "STATIC LIBOR RATE LOAN") on the next succeeding Payment
Date or within such earlier period as required by law. Borrower hereby agrees
promptly to pay Lender, upon demand, any additional amounts necessary to
compensate Lender for any costs incurred by Lender in making any conversion in
accordance with this Agreement, including, without limitation, any interest or
fees payable by Lender to lenders of funds obtained by it in order to make or
maintain the LIBOR Loan hereunder. If Lender becomes entitled to claim any
additional amounts pursuant to this Section 2.9(c), Lender shall provide
Borrower with not less than ninety (90) days written notice specifying in
reasonable detail the event by reason of which it has become so entitled and the
additional amount required to fully compensate Lender for such additional costs.
Lender's notice of such costs, as certified to Borrower, shall be conclusive
absent manifest error.
(d) In the event that any change in any requirement of law or in the
interpretation or application thereof, or compliance by Lender with any request
or directive (whether or not having the force of law) hereafter issued from any
central bank or other Governmental Authority:
(i) shall hereafter impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of Lender which is not otherwise
included in the determination of the LIBOR Rate hereunder;
(ii) shall hereafter have the effect of reducing the rate of return
on Lender's capital as a consequence of its obligations hereunder to a
level below that which Lender could have achieved but for such adoption,
change or compliance (taking into consideration Lender's policies with
respect to capital adequacy) by any amount deemed by Lender to be
material; or
(iii) shall hereafter impose on Lender any other condition and the
result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining loans or extensions of credit or to reduce
any amount receivable hereunder other than with respect to taxes; then, in
any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost
or reduced amount receivable which Lender deems to be material as
determined by Lender. If Lender becomes entitled to claim any additional
amounts pursuant to this Section 2.9(d), Lender shall provide Borrower
with not less than ninety (90) days written notice specifying in
reasonable detail the event by reason of which it has become so entitled
and the additional amount required to fully compensate Lender for such
- 24 -
additional cost or reduced amount. A certificate (together with such
supporting documentation as Lender shall provide) as to any additional
costs or amounts payable pursuant to the foregoing sentence submitted by
Lender to Borrower shall be conclusive in the absence of error. This
provision shall survive payment of the Note and the satisfaction of all
other obligations of Borrower under this Agreement and the Loan Documents.
(e) Borrower agrees to indemnify Lender and to hold Lender harmless
from any loss or expense which Lender sustains or incurs as a consequence of (i)
any default by Borrower in payment of the principal of or interest on a LIBOR
Loan, including, without limitation, any such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain a LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or
mandatory) of the LIBOR Loan that did not include all interest which had accrued
(or would have accrued) at the Note Rate through the end of the related Interest
Period, including, without limitation, such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain the LIBOR Loan hereunder, and (iii) the conversion (for any reason
whatsoever, whether voluntary or involuntary) of the Note Rate from the LIBOR
Rate to the Static LIBOR Rate with respect to any portion of the outstanding
principal amount of the Loan then bearing interest at the LIBOR Rate on a date
other than the Payment Date immediately following the last day of an Interest
Period, including, without limitation, such loss or expenses arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain a LIBOR Loan hereunder (the amounts referred to in clauses (i), (ii)
and (iii) are herein referred to collectively as the "BREAKAGE COSTS");
provided, however, Borrower shall not indemnify Lender from any loss or expense
arising from Lender's gross negligence or willful misconduct. This provision
shall survive payment of the Note in full and the satisfaction of all other
obligations of Borrower under this Agreement and the other Loan Documents.
Lender shall not be entitled to claim compensation pursuant to this
Section 2.9(e) for any Foreign Taxes, increased cost or reduction in amounts
received or receivable hereunder, or any reduced rate of return, which was
incurred or which accrued more than ninety (90) days before the date Lender
notified Borrower of the change in law or other circumstance on which such claim
of compensation is based and delivered to Borrower a written statement setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section 2.9(e), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
Section 2.10. EXTENSION.
In the event that Mortgage Borrower for any reason does not extend
the Maturity Date of the Mortgage Loan pursuant to Section 2.10 of the Mortgage
Loan Agreement, Borrower shall prepay the Loan (without payment of any
prepayment fee or penalty) on the Fourth Anniversary, as if such date were the
Maturity Date.
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Section 2.11 ADDITIONAL PAYMENT PROVISIONS.
(a) Within fifteen (15) days after request by Lender (or at the time
of any prepayment), Borrower shall pay to Lender such amount or amounts as will
compensate Lender for any loss, cost, expense, penalty, claim or liability,
including any loss incurred in obtaining, prepaying, liquidating or employing
deposits or other funds from third parties and any loss of yield, as determined
by Lender in its judgment reasonably exercised incurred by it with respect to
the Loan as a result of the payment or prepayment of any amount on a date other
than the date such amount is required or permitted to be paid or prepaid;
provided that Lender delivers to Borrower a certificate as to the amounts of
such costs described herein, which certificate shall be conclusive in the
absence of manifest error. Lender shall have no obligation to purchase, sell
and/or match funds in connection with the funding or maintaining of the Loan or
any portion thereof. The obligations of Borrower under this Section shall
survive any termination of the Loan Documents and payment of the Note and shall
not be waived by any delay by Lender in seeking such compensation.
(b) All payments made by Borrower hereunder or under the other Loan
Documents shall be made irrespective of, and without any deduction for, any
setoff, defense or counterclaims.
(c) Remittances in payment of any part of the Loan in less than the
required amount in immediately available U.S. funds shall not, regardless of any
receipt or credit issued therefor, constitute payment until the required amount
is actually received by the holder hereof in immediately available U.S. funds
and shall be made and accepted subject to the condition that any check or draft
may be handled for collection in accordance with the practices of the collecting
bank or banks.
(d) If at any time after the date hereof, Lender (which shall
include, for purposes of this Section, any corporation controlling Lender)
reasonably determines that due to the adoption or modification of any Legal
Requirement regarding taxation, Lender's required levels of reserves, deposits,
Federal Deposit Insurance Corporation insurance or capital (including any
allocation of capital requirements or conditions), or similar requirements, or
any interpretation or administration thereof by any Tribunal or compliance of
Lender with any of such requirements, has or would have the effect of (a)
increasing Lender's costs relating to the Loan, or (b) reducing the yield or
rate of return of Lender on the Loan, to a level below that which Lender could
have achieved but for the adoption or modification of any such Legal
Requirements, Borrower shall, within fifteen (15) days of any request by Lender,
pay to Lender such additional amounts as (in Lender's sole judgment, after good
faith and reasonable computation) will compensate Lender for such increase in
costs or reduction in yield or rate of return of Lender (a "CONSEQUENTIAL
LOSS"). No failure by Lender to immediately demand payment of any additional
amounts payable hereunder shall constitute a waiver of Lender's right to demand
payment of such amounts at any subsequent time. Nothing herein contained shall
be construed or so operate as to require Borrower to pay any interest, fees,
costs or charges greater than is permitted by applicable Law. If a change in the
applicable lending office of Lender would eliminate any Consequential Loss,
Lender shall use its best efforts to change such office, so long as such change
would not be materially disadvantageous or cause unreasonable hardship to
Lender.
- 26 -
(e) Any demand for payment pursuant to this Section 2.11 shall be
accompanied by an acknowledgement from Lender that it is applying these
provisions generally with respect to similar loan transactions and borrowers.
ARTICLE III
CONDITIONS PRECEDENT
The obligation of Lender to make the Loan hereunder is subject to
the fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date
Section 3.1. REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH
CONDITIONS. The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, and Lender shall have determined that no Default or an Event of
Default shall have occurred and be continuing nor will any Default or Event of
Default occur immediately following the Closing Date and Borrower shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Loan Document on its part to be observed or
performed.
Section 3.2. DELIVERY OF LOAN DOCUMENTS; TITLE POLICIES.
(a) Pledge Agreement, Loan Agreement and Note. Lender shall have
received from Borrower fully executed and acknowledged counterparts of the
Pledge Agreement and evidence that the Uniform Commercial Code financing
statements have been delivered to the title company for recording and/or filing,
in the reasonable judgment of Lender, so as to effectively create upon such
recording and/or filing valid and enforceable Liens upon the Collateral, of
first priority, in favor of Lender (or such other trustee as may be required or
desired under local law). Lender shall have also received from Borrower fully
executed counterparts of this Agreement, the Note, the Collateral Assignment of
Interest Rate Protection Agreement and all other Loan Documents.
(b) Owner's Title Policy; UCC-9 Title Policy.
(i) Lender shall have received an Owner's Title Insurance Policy
issued by a title company acceptable to Lender and dated as of the date hereof.
Such Title Insurance Policy shall (i) provide such coverage as may be reasonably
acceptable to Lender, free and clear of all exceptions from coverage other than
Permitted Encumbrances and standard exceptions and exclusions from coverage (as
modified by the terms of any endorsements), (ii) contain such endorsements and
affirmative coverages as Lender may reasonably request (including, without
limitation, the mezzanine financing endorsement), and (iii) name Mortgage
Borrower as the insured. The Owner's Title Insurance Policy shall be assignable.
Lender also shall have received evidence that all premiums in respect of such
Owner's Title Insurance Policy have been paid.
(ii) Lender shall have received a UCC-9 Title Policy with respect
to the Collateral issued by a title company acceptable to Lender and dated as of
the Closing Date.
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Such UCC-9 Title Policy shall (i) provide coverage in the Loan Amount or such
other amount as required by Lender, (ii) insure Lender that the Pledge Agreement
insured by such UCC-9 Title Policy creates a valid, perfected lien on the
Collateral of the requisite priority and that Borrower is the sole owner of the
Collateral, free and clear of all exceptions from coverage other than the
standard exceptions and exclusions from coverage, (iii) contain such
endorsements and affirmative coverages as Lender may reasonably request, and
(iv) name Lender as the insured. The UCC-9 Title Policy shall be assignable.
Lender also shall have received evidence that all premiums in respect of such
UCC-9 Title Policy have been paid.
(c) Survey. Lender shall have received a current title survey for
the Property, certified to the title company and Lender and their successors and
assigns, in form and content satisfactory to Lender and prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. The survey shall meet the classification of an "Urban Survey" and
the following additional items from the list of "Optional Survey
Responsibilities and Specifications" (Table A) should be added to each survey:
2, 3, 4, 6, 8, 9, 10, 11 and 13. Such survey shall reflect the same legal
description contained in the Title Insurance Policy referred to in subsection
(b) above and shall include, among other things, a metes and bounds description
of the real property comprising part of the Property reasonably satisfactory to
Lender. The surveyor's seal shall be affixed to the survey and the surveyor
shall provide a certification for the survey in form and substance acceptable to
Lender.
(d) Insurance. Lender shall have received copies of the Policies
required hereunder, satisfactory to Lender in its sole discretion, and evidence
of the payment of all Insurance Premiums payable for the existing policy period.
(e) Environmental Reports. Lender shall have received an
Environmental Report in respect of the Property satisfactory to Lender.
(f) Zoning/Building Code. Lender shall have received evidence of
compliance with zoning and building ordinances and codes with respect to the
Property, including, without limitation, required certificates of occupancy,
reasonably acceptable to Lender.
(g) Encumbrances. Borrower shall have taken or caused to be taken
such actions in such a manner so that Lender has a valid and perfected first
Lien as of the date hereof on the Collateral, subject only to applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents, and Lender shall have received satisfactory evidence thereof.
(h) Lien Searches. Borrower shall have delivered to Lender certified
search results pertaining to Borrower, Borrower Principal and such other Persons
as reasonably required by Lender for state and federal tax liens, bankruptcy,
judgment, litigation and state and local UCC filings.
Section 3.3. RELATED DOCUMENTS. Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly
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authorized, executed and delivered by all parties thereto and at Lender's
written request, Lender shall have received and approved certified copies
thereof.
Section 3.4. ORGANIZATIONAL DOCUMENTS. On or before the Closing
Date, Borrower shall deliver or cause to be delivered to Lender (a) copies
certified by Borrower of all organizational documentation related to Borrower
and Borrower Principal which must be acceptable to Lender in its sole
discretion, and (b) such other evidence of the formation, structure, existence,
good standing and/or qualification to do business of the Borrower and Borrower
Principal, as Lender may request in its sole discretion, including, without
limitation, good standing or existence certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and incumbency certificates as may be requested by Lender.
Section 3.5. OPINIONS OF BORROWER'S COUNSEL. Lender shall have
received opinions of Borrower's counsel (a) with respect to non-consolidation
issues, and (b) with respect to due execution, authority, enforceability of the
Loan Documents and such other matters as Lender may require, and (c) with
respect to the perfection of Lender's security interest in the Collateral, all
such opinions in form, scope and substance satisfactory to Lender and Lender's
counsel in their sole discretion.
Section 3.6. ANNUAL BUDGET. Borrower shall have delivered, and
Lender shall have approved, the Annual Budget for the current fiscal year, a
copy of which is attached as Exhibit A hereto.
Section 3.7. TAXES AND OTHER CHARGES. Mortgage Borrower shall have
paid all Taxes and Other Charges (including any in arrears) relating to the
Property, which amounts shall be funded with proceeds of the Mortgage Loan and
Loan.
Section 3.8. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.
Section 3.9. PAYMENTS. All payments, deposits or escrows required to
be made or established by Borrower under this Agreement, the Note and the other
Loan Documents on or before the Closing Date shall have been paid.
Section 3.10. TRANSACTION COSTS. Except as otherwise expressly
provided herein, Borrower shall have paid or reimbursed Lender for all out of
pocket expenses in connection with the underwriting, negotiation, and closing of
the Loan, including title insurance premiums and other title company charges;
registration, filing and similar fees, taxes and charges; transfer, deed, stamp
or documentary taxes or similar fees or charges; costs of third-party reports,
including without limitation, environmental studies, credit reports, seismic
reports, engineer's reports, appraisals and surveys; underwriting and
origination expenses; and all actual, reasonable legal fees and expenses charged
by counsel to Lender.
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Section 3.11 NO MATERIAL ADVERSE CHANGE. There shall have been no
Material Adverse Change in the financial condition or business condition of the
Property, Mortgage Borrower, Borrower, Borrower Principal, Manager or any other
person or party contributing to the operating income and operations of the
Property since the date of the most recent financial statements and/or other
information delivered to Lender. The income and expenses of the Property, the
occupancy and leases thereof, and all other features of the transaction shall be
as represented to Lender without material adverse change. None of Borrower,
Mortgage Borrower, Borrower Principal, or Affiliated Manager shall be the
subject of any bankruptcy, reorganization, or insolvency proceeding.
Section 3.12 LEASES AND RENT ROLL. Lender shall have received copies
of all Leases affecting the Property, which shall be satisfactory in form and
substance to Lender. Lender shall have received a current certified rent roll of
the Property, reasonably satisfactory in form and substance to Lender.
Section 3.13 TENANT ESTOPPELS. Borrower shall have delivered to
Lender copies of the executed tenant estoppel letters delivered to Mortgage
Lender, which shall be in form and substance satisfactory to Lender, from (a)
each Tenant under a Major Lease and (b) disregarding the area leased by those
Tenants described in clause (a) herein, Tenants leasing, in the aggregate, not
less than seventy-five percent (75%) of the remaining gross leasable area of the
Property.
Section 3.14 [INTENTIONALLY OMITTED.]
Section 3.15 SUBORDINATION AND ATTORNMENT. Borrower shall deliver to
Lender copies of the executed instruments delivered to Mortgage Lender
subordinating to the Mortgage all of the Leases previously designated by
Mortgage Lender.
Section 3.16 TAX LOT. Lender shall have received evidence that the
Property constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.
Section 3.17 PHYSICAL CONDITIONS REPORT. Lender shall have received
a Physical Conditions Report with respect to the Property, which report shall be
reasonably satisfactory in form and substance to Lender.
Section 3.18 MANAGEMENT AGREEMENT. Lender shall have received a
certified copy of the Management Agreement, which shall be satisfactory in form
and substance to Lender.
Section 3.19 APPRAISAL. Lender shall have received an appraisal for
the Property, which shall be satisfactory in form and substance to Lender.
Section 3.20 FINANCIAL STATEMENTS. Lender shall have received
financial statements and related information in form and substance satisfactory
to Lender and in compliance with any Legal Requirements promulgated by the
Securities and Exchange Commission, including, without limitation, a balance
sheet, income and expense statement and statement of cash flows with respect to
Borrower and an operating statement with respect to the
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Property for the year-to-date 2003, 2002, 2001, and 2000, audited (except with
respect to the year-to-date 2003) by an Acceptable Accountant and together with
an unqualified opinion of such Acceptable Accountant that such statements have
been prepared in accordance with GAAP applied on a consistent basis.
Section 3.21 [INTENTIONALLY DELETED.]
Section 3.22 FURTHER DOCUMENTS. Lender or its counsel shall have
received such other and further approvals, opinions, documents and information
as Lender or its counsel may have reasonably requested including the Loan
Documents in form and substance satisfactory to Lender and its counsel.
Section 3.23 MORTGAGE LOAN. The Mortgage Loan shall have closed and
Lender shall have approved all terms and conditions thereof.
Section 3.24 OPINION LETTER. Borrower shall deliver to Lender on the
Closing Date an opinion letter from counsel relating to Lender's security
interest being perfected by the delivery of certificates evidencing limited
liability company interests or by the filing of the UCC-1 Financing Statement
with the Delaware Secretary of State.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of Borrower and, where specifically indicated, Borrower
Principal represents and warrants to Lender as of the date hereof that:
Section 4.1. ORGANIZATION. Borrower, Mortgage Borrower and Borrower
Principal (when not an individual) (a) has been duly organized and is validly
existing and in good standing with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged, (b) 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, (c) possesses all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
Borrower is the ownership and management of Mortgage Borrower, and (d) in the
case of Borrower, has full power, authority and legal right to grant, bargain,
sell, pledge, assign, warrant, transfer and convey the Collateral pursuant to
the terms of the Loan Documents, and in the case of Borrower, Mortgage Borrower
and Borrower Principal, has full power, authority and legal right to keep and
observe all of the terms of the Loan Documents or Mortgage Loan Documents (as
applicable) to which it is a party. Borrower and Borrower Principal represent
and warrant that the chart attached hereto as Exhibit B sets forth an accurate
listing of the direct and indirect owners of the equity interests in Borrower
and Borrower Principal (when not an individual), to the extent such entity is
not publicly traded.
Section 4.2. STATUS OF BORROWER. Borrower's exact legal name is
correctly set forth on the first page of this Agreement, on the Pledge
Agreement, and on any UCC-1 Financing Statements filed in connection with the
Loan. Borrower is an organization of the type
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specified on the first page of this Agreement. Borrower is incorporated in or
organized under the laws of the state of Delaware. Borrower's principal place of
business and chief executive office, and the place where Borrower keeps its
books and records, including recorded data of any kind or nature, regardless of
the medium of recording, including software, writings, plans, specifications and
schematics, has been for the preceding four months (or, if less, the entire
period of the existence of Borrower) the address of Borrower set forth on the
first page of this Agreement. West Fifth's organizational identification number
assigned by the state of incorporation or organization is 3713734, and South
Olive's organizational identification number assigned by the state of
incorporation or organization is 3713735.
Section 4.3. VALIDITY OF DOCUMENTS. Borrower, Mortgage Borrower and
Borrower Principal have taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents and
Mortgage Loan Documents to which they are parties. This Agreement, the other
Loan Documents and the Mortgage Loan Documents have been duly executed and
delivered by or on behalf of Borrower, Mortgage Borrower and Borrower Principal
(as applicable) and constitute the legal, valid and binding obligations of
Borrower, Mortgage Borrower and Borrower Principal (as applicable) enforceable
against Borrower, Mortgage Borrower and Borrower Principal (as applicable) in
accordance with their respective terms, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
Section 4.4. NO CONFLICTS. The execution, delivery and performance
of this Agreement and the other Loan Documents and the Mortgage Loan Documents
by Borrower, Mortgage Borrower and Borrower Principal, to the extent such Person
is a party thereto, will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance (other than pursuant to the
Loan Documents or Mortgage Loan Documents) upon any of the property or assets of
Borrower, Mortgage Borrower or Borrower Principal pursuant to the terms of any
agreement or instrument to which Borrower, Mortgage Borrower or Borrower
Principal is a party or by which any of Borrower's, Mortgage Borrower's or
Borrower Principal's property or assets is subject, nor will such action result
in any violation of the provisions of any statute or any order, rule or
regulation of any Governmental Authority having jurisdiction over Borrower,
Mortgage Borrower or Borrower Principal or any of Borrower's, Mortgage
Borrower's or Borrower Principal's 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
Borrower, Mortgage Borrower or Borrower Principal of this Agreement or any of
the other Loan Documents or any of the Mortgage Loan Documents has been obtained
and is in full force and effect.
Section 4.5. LITIGATION. Except as disclosed on Schedule 4.5
attached hereto, there are no actions, suits or proceedings at law or in equity
by or before any Governmental Authority or other agency now pending for which
Borrower or an Affiliate of Borrower has been served or, to Borrower's or
Borrower Principal's knowledge, threatened in writing against or affecting
Borrower, Mortgage Borrower or Borrower Principal, which actions, suits or
proceedings, if determined against Borrower, Mortgage Borrower or Borrower
Principal, would materially adversely affect the condition (financial or
otherwise) or business of Borrower,
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Mortgage Borrower or Borrower Principal or the condition or ownership of the
Collateral or the Property (as applicable).
Section 4.6. AGREEMENTS. Neither Borrower nor Mortgage Borrower is a
party to any agreement or instrument or subject to any restriction which would
materially and adversely affect Borrower, Mortgage Borrower, the Property or the
Collateral, or Borrower's or Mortgage Borrower's business, properties or assets,
operations or condition, financial or otherwise. Neither Borrower nor Mortgage
Borrower is in default in any material respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party or by which Borrower, Mortgage
Borrower, the Property or the Collateral is bound. Neither Borrower nor Mortgage
Borrower has any material financial obligation under any agreement or instrument
to which Borrower or Mortgage Borrower is a party or by which Borrower, Mortgage
Borrower, the Property or the Collateral is otherwise bound, other than (a)
obligations incurred in the ordinary course of the ownership of the Collateral
or the Property (as applicable) and (b) obligations under the Loan Documents or
Mortgage Loan Documents (as applicable).
Section 4.7. SOLVENCY. Except as disclosed on Schedule 4.7 attached
hereto, Borrower and Borrower Principal have (a) not entered into the
transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received
reasonably equivalent value in exchange for their obligations under such Loan
Documents. Giving effect to the Loan, the fair saleable value of the assets of
Borrower and Borrower Principal exceeds and will, immediately following the
making of the Loan, exceed the total liabilities of Borrower and Borrower
Principal, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. No petition in bankruptcy has been filed against
Borrower, Borrower Principal, or Affiliated Manager in the last ten (10) years,
and neither Borrower nor Borrower Principal, or Affiliated Manager in the last
ten (10) years has made an assignment for the benefit of creditors or taken
advantage of any Creditors Rights Laws. Neither Borrower nor Borrower Principal,
or Affiliated Manager is contemplating either the filing of a petition by it
under any Creditors Rights Laws or the liquidation of all or a major portion of
Borrower's assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against Borrower or Borrower
Principal, or Affiliated Manager.
Section 4.8. FULL AND ACCURATE DISCLOSURE. No statement of fact made
by or on behalf of Borrower, Mortgage Borrower or Borrower Principal in this
Agreement or in any of the other Loan Documents or in any other document or
certificate delivered by Borrower, Mortgage Borrower or Borrower Principal or
any Affiliate thereof or, to Borrower's knowledge, in any third party reports
delivered on behalf of Borrower, Mortgage Borrower or Borrower Principal
contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading.
There is no material fact presently known to Borrower or Borrower Principal
which has not been disclosed to Lender which adversely affects, nor as far as
Borrower or Borrower Principal can reasonably foresee, might adversely affect,
the Collateral or the Property or the business, operations or condition
(financial or otherwise) of Borrower, Mortgage Borrower or Borrower Principal.
- 33 -
Section 4.9. NO PLAN ASSETS. Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Borrower constitutes or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code currently in effect, which prohibit
or otherwise restrict the transactions contemplated by this Agreement.
Section 4.10 NOT A FOREIGN PERSON. Neither Borrower nor Borrower
Principal is a "foreign person" within the meaning of Section 1445(f)(3) of the
Internal Revenue Code.
Section 4.11 ENFORCEABILITY. The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, 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 as a whole, and neither Borrower nor Borrower Principal has
asserted any right of rescission, set-off, counterclaim or defense with respect
thereto. No Default or Event of Default exists under or with respect to any Loan
Document.
Section 4.12 BUSINESS PURPOSES. The Loan is solely for the business
purpose of Borrower (including distributions to Borrower's constituent entity
and all subsequent upstream distributions), and is not for personal, family,
household, or agricultural purposes.
Section 4.13. COMPLIANCE. Borrower, Mortgage Borrower and the
Property, and the use and operation of the Property, comply in all material
respects with all Legal Requirements, including, without limitation, building
and zoning ordinances and codes and the Americans with Disabilities Act. To
Borrower's knowledge, neither Borrower nor Mortgage Borrower is in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority and Borrower has received no written notice of any such default or
violation. There has not been committed by Borrower, Mortgage Borrower or, to
Borrower's knowledge, any other Person in occupancy of or involved with the
operation or use of the Property any act or omission affording any Governmental
Authority the right of forfeiture as against the Property or any part thereof or
any monies paid in performance of Borrower's obligations under any of the Loan
Documents.
Section 4.14. FINANCIAL INFORMATION. All financial data, including,
without limitation, the balance sheets, statements of cash flow, statements of
income and operating expense and rent rolls, that have been delivered to Lender
in respect of Borrower, Mortgage Borrower, Borrower Principal and/or the
Property (a) are true, complete and correct in all material respects, (b)
accurately represent in all material respects the financial condition of
Borrower, Mortgage Borrower, Borrower Principal or the Property, as applicable,
as of the date of such reports, and (c) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP throughout the periods covered, except as disclosed therein. Neither
Borrower nor Mortgage Borrower has any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or
- 34 -
anticipated losses from any unfavorable commitments that are known to Borrower
or Mortgage Borrower and reasonably likely to have a material adverse effect on
the Property or the current and/or intended operation thereof, except as
referred to or reflected in said financial statements. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower, Mortgage Borrower or
Borrower Principal from that set forth in said financial statements.
Section 4.15. ILLEGAL ACTIVITY. No portion of the Collateral or the
Property has been or will be purchased with proceeds of any illegal activity,
and no part of the proceeds of the Loan will be used in connection with any
illegal activity.
Section 4.16. PERMITTED ENCUMBRANCES. None of the Permitted
Encumbrances, individually or in the aggregate, materially interferes with the
benefits of the security intended to be provided by the Mortgage Loan Documents,
materially and adversely affects the value of the Property, impairs the use or
the operation of the Property or impairs Mortgage Borrower's or Borrower's
ability to pay its obligations in a timely manner.
Section 4.17. FEDERAL RESERVE REGULATIONS. Borrower will use the
proceeds of the Loan for the purposes set forth in Section 2.1(d) hereof and not
for any illegal activity. 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 prohibited by the terms and conditions of this Agreement or the
other Loan Documents.
Section 4.18. INVESTMENT COMPANY ACT. Borrower is not (a) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
Section 4.19. NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. All
information submitted by Borrower, Mortgage Borrower or their respective agents
to Lender and in all financial statements, rent rolls, reports, certificates and
other documents submitted in connection with the Loan or in satisfaction of the
terms thereof and all statements of fact made by Borrower, Borrower Principal
and Mortgage Borrower in this Agreement, in any other Loan Document or in the
Mortgage Loan Documents, as may be updated by Borrower prior to the closing of
the Loan, are accurate and correct in all material respects and sufficiently
complete as to not be misleading in any material respect. To the best of
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 materially and adversely affects or might materially and adversely
affect the Collateral, the Property or the business operations or the financial
condition of Borrower, Borrower Principal or Mortgage Borrower. Borrower and
Mortgage Borrower have each
- 35 -
disclosed to Lender all material facts and have not failed to disclose any
material fact that could cause any representation or warranty made herein or in
any other documents delivered to Lender by Borrower, Mortgage Borrower or any of
their respective Affiliates or agents to be materially misleading.
Section 4.20. SPECIAL PURPOSE ENTITY. Borrower meets all of the
requirements of Article VI hereof as of the Closing Date.
Section 4.21. ASSUMPTIONS. Each of the assumptions contained in the
opinion related to issues of substantive consolidation delivered by Borrower to
Lender on the date hereof are true and accurate.
Section 4.22. INTELLECTUAL PROPERTY. All trademarks, trade names and
service marks necessary to the business of Borrower as presently conducted or as
Borrower contemplates conducting its business are in good standing and, to the
extent of Borrower's actual knowledge, uncontested. Borrower has not infringed,
is not infringing, and has not received notice of infringement with respect to
asserted trademarks, trade names and service marks of others. To Borrower's
knowledge, there is no infringement by others of trademarks, trade names and
service marks of Borrower.
Section 4.23. EMBARGOED PERSON. To the best of Borrower's knowledge,
as of the date hereof and at all times throughout the term of the Loan,
including after giving effect to any transfers of interests permitted pursuant
to the Loan Documents, (a) none of the funds or other assets of Borrower and
Borrower Principal constitute property of, or are beneficially owned, directly
or indirectly, by any person, entity or government subject to trade restrictions
under U.S. law, including but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C.Sections 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder with the result that the investment in Borrower or
Borrower Principal, as applicable (whether directly or indirectly), is
prohibited by law or the Loan made by Lender is in violation of law ("EMBARGOED
PERSON"); (b) no Embargoed Person has any interest of any nature whatsoever in
Borrower or Borrower Principal, as applicable, with the result that the
investment in Borrower or Borrower Principal, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of Borrower or Borrower Principal, as applicable, have been
derived from any unlawful activity with the result that the investment in
Borrower or Borrower Principal, as applicable (whether directly or indirectly),
is prohibited by law or the Loan is in violation of law.
Section 4.24. PATRIOT ACT. All capitalized words and phrases and all
defined terms used in the USA Patriot Act of 2001, 107 Public Law 56 (October
26, 2001) and in other statutes and all orders, rules and regulations of the
United States government and its various executive departments, agencies and
offices related to the subject matter of the Patriot Act, including Executive
Order 13224 effective September 24, 2001 (collectively referred to in this
Section only as the "PATRIOT ACT") and are incorporated into this Section. Each
of Borrower and Borrower Principal hereby represents and warrants that Borrower
and Borrower Principal and each and every Person affiliated with Borrower or
Borrower Principal or that to Borrower's knowledge has an economic interest in
Borrower, or, to Borrower's knowledge, that has or will
- 36 -
have an interest in the transaction contemplated by this Agreement or in the
Property or will participate, in any manner whatsoever, in the Loan, is: (i) not
a "blocked" person listed in the Annex to Executive Order Nos. 12947, 13099 and
13224 and all modifications thereto or thereof (as used in this Section only,
the "ANNEX"); (ii) in full compliance with the requirements of the Patriot Act
and all other requirements contained in the rules and regulations of the Office
of Foreign Assets Control, Department of the Treasury (as used in this Section
only, "OFAC"); (iii) operated under policies, procedures and practices, if any,
that are in compliance with the Patriot Act and available to Lender for Lender's
review and inspection during normal business hours and upon reasonable prior
notice; (iv) not in receipt of any notice from the Secretary of State or the
Attorney General of the United States or any other department, agency or office
of the United States claiming a violation or possible violation of the Patriot
Act; (v) not listed as a Specially Designated Terrorist or as a "blocked" person
on any lists maintained by the OFAC pursuant to the Patriot Act or any other
list of terrorists or terrorist organizations maintained pursuant to any of the
rules and regulations of the OFAC issued pursuant to the Patriot Act or on any
other list of terrorists or terrorist organizations maintained pursuant to the
Patriot Act; (vi) not a person who has been determined by competent authority to
be subject to any of the prohibitions contained in the Patriot Act; and (vii)
not owned or controlled by or now acting and or will in the future act for or on
behalf of any person named in the Annex or any other list promulgated under the
Patriot Act or any other person who has been determined to be subject to the
prohibitions contained in the Patriot Act. Borrower covenants and agrees that in
the event Borrower receives any notice that Borrower Principal or Borrower (or
any of its beneficial owners or affiliates or participants) become listed on the
Annex or any other list promulgated under the Patriot Act or is indicted,
arraigned, or custodially detained on charges involving money laundering or
predicate crimes to money laundering, Borrower shall immediately notify Lender.
It shall be an Event of Default hereunder if Borrower, Borrower Principal or any
other party to any Loan Document becomes listed on any list promulgated under
the Patriot Act or is indicted, arraigned or custodially detained on charges
involving money laundering or predicate crimes to money laundering.
Section 4.25. MORTGAGE LOAN REPRESENTATIONS. All of the
representations and warranties contained in the Mortgage Loan Documents are
hereby incorporated into this Agreement and deemed made by Borrower hereunder
and are true and correct as of the Closing Date and shall remain incorporated
without regard to any waiver, amendment or other modification thereof by the
Mortgage Lender or to whether the related Mortgage Loan Document has been
repaid, defeased or otherwise terminated, unless otherwise consented to in
writing by Lender.
Section 4.26. NO CONTRACTUAL OBLIGATIONS. Except in connection with
its activities as the sole member of Mortgage Borrower and other than the Loan
Documents, the Borrower Operating Agreement and the Mortgage Borrower Operating
Agreement, as of the date of this Agreement, Borrower is not subject to any
Contractual Obligations and has not entered into any agreement, instrument or
undertaking by which it or its assets are bound, or has incurred any
indebtedness (other than the Loan), and prior to the date of this Agreement,
neither Borrower nor any of its Subsidiaries has entered into any Contractual
Obligation, or any agreement, instrument or undertaking by which it or its
assets are bound or incurred any indebtedness (other than the Loan or the
Mortgage Loan (as applicable)).
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Section 4.27. SUBSIDIARIES. Effective as of the consummation of the
transactions contemplated by this Agreement, one hundred percent (100%) of the
limited liability company interests in Borrower is owned by Borrower Principal
free and clear of all Liens (other than the Liens created by the Loan
Documents). Borrower does not have any Subsidiaries except the Mortgage
Borrower. Borrower does not own any equity interests other than the Pledged
Company Interests.
Section 4.28. PLEDGED COMPANY INTERESTS. There are no Liens on the
Pledged Company Interests (other than the Liens created by the Loan Documents).
Section 4.29. SURVIVAL. Borrower agrees that, unless expressly
provided otherwise, all of the representations and warranties of Borrower set
forth in this Agreement and in the other Loan Documents shall survive for so
long as any portion of the Debt remains owing to Lender. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
ARTICLE V
BORROWER COVENANTS
From the date hereof and until repayment of the Debt in full and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Pledge Agreement (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
Section 5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) Borrower and Mortgage Borrower shall do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
existence, rights, licenses, permits and franchises and comply in all material
respects with all Legal Requirements applicable to it, Mortgage Borrower and the
Property. Borrower hereby covenants and agrees not to commit, permit or suffer
to exist any act or omission affording any Governmental Authority the right of
forfeiture as against the Collateral, the Property or any part thereof or any
monies paid in performance of Borrower's obligations under any of the Loan
Documents. Borrower shall at all times maintain, preserve and protect all
franchises and trade names used in connection with the operation of the
Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may permit Mortgage Borrower to contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the Legal Requirements affecting the Property, provided that (i) no
Default or Event of Default has occurred and is continuing; (ii) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower, Mortgage Borrower or the Property is
subject and shall not constitute a default thereunder; (iii) neither the
Property, any part thereof or interest therein, any of the tenants or occupants
thereof, nor Mortgage Borrower, nor Borrower shall be affected in
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any material adverse way as a result of such proceeding; (iv) non-compliance
with the Legal Requirements shall not impose civil or criminal liability on
Borrower, Mortgage Borrower or Lender; (v) Borrower shall have furnished, or
shall have caused Mortgage Borrower to furnish, the security as may be required
in the proceeding or by Lender to ensure compliance by Borrower and Mortgage
Borrower with the Legal Requirements; and (vi) Borrower shall have furnished, or
shall caused Mortgage Borrower to furnish, to Lender all other items reasonably
requested by Lender.
Section 5.2. MAINTENANCE AND USE OF PROPERTY. Borrower shall cause
Mortgage Borrower to maintain the Property in a good and safe condition and
repair. The Improvements and the Personal Property shall not be removed,
demolished or, other than in accordance with the provisions of Section 5.20,
materially altered (except for normal replacement or disposal of the Personal
Property in the ordinary course of Borrower's or Mortgage Borrower's business)
without the prior written consent of Lender, not to be unreasonably withheld,
conditioned or delayed. If under applicable zoning provisions the use of all or
any portion of the Property is or shall become a nonconforming use, Borrower
will not cause or permit the nonconforming use to be discontinued or the
nonconforming Improvement to be abandoned without the express written consent of
Lender.
Section 5.3. WASTE. Borrower shall not commit or suffer, and shall
not cause Mortgage Borrower to commit or suffer, any physical or actual waste of
the Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security
for the Loan. Borrower will not, without the prior written consent of Lender,
permit any drilling or exploration for or extraction, removal, or production of
any minerals from the surface or the subsurface of the Property, regardless of
the depth thereof or the method of mining or extraction thereof.
Section 5.4. TAXES AND OTHER CHARGES.
(a) Borrower shall cause Mortgage Borrower to pay all Taxes and
Other Charges now or hereafter levied or assessed or imposed against the
Property or any part thereof prior to delinquency; provided, however, Borrower's
obligation to cause Mortgage Borrower to directly pay Taxes shall be suspended
for so long as Mortgage Borrower complies with the terms and provisions of
Section 9.6 of the Mortgage Loan Agreement. Borrower shall cause Mortgage
Borrower to furnish to Lender receipts for the payment of the Taxes and the
Other Charges prior to the date the same shall become delinquent (provided,
however, that Borrower is not required to cause Mortgage Borrower to furnish
such receipts for payment of Taxes in the event that such Taxes have been paid
by Mortgage Lender pursuant to Section 9.6 of the Mortgage Loan Agreement).
Subject to Section 5.4(b), Borrower shall cause Mortgage Borrower to not suffer
and shall promptly cause Mortgage Borrower to pay and discharge any Lien or
charge whatsoever which may be or become a Lien or charge against the Property,
and shall cause Mortgage Borrower to promptly pay for all utility services
provided to the Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may permit Mortgage Borrower to contest by appropriate legal
proceeding, promptly initiated and
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conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any Taxes, Other Charges or any Liens,
provided that (i) no Default or Event of Default has occurred and remains
uncured; (ii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable Legal Requirements; (iii) neither
the Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, canceled or lost; (iv) Borrower shall cause
Mortgage Borrower to promptly upon final determination thereof pay the amount of
any such Taxes, Other Charges or any Liens, together with all costs, interest
and penalties which may be payable in connection therewith; (v) such proceeding
shall suspend the collection of such contested Taxes, Other Charges or any Liens
from the Property; and (vi) Borrower shall deliver evidence to Lender that
Mortgage Borrower shall have furnished Mortgage Lender with such security as may
be required in the proceeding, or shall have delivered to Mortgage Lender such
reserve deposits as may be requested by Mortgage Lender, to insure the payment
of any such Taxes, Other Charges or any Liens, together with all interest and
penalties thereon (unless Mortgage Borrower has paid all of the Taxes, Other
Charges or any Liens under protest).
Section 5.5. LITIGATION. Borrower shall give prompt written notice
to Lender of any litigation or governmental proceedings pending or threatened in
writing against Borrower, Borrower Principal or Mortgage Borrower which might
materially adversely affect Borrower's, Borrower Principal's or Mortgage
Borrower's condition (financial or otherwise) or business or the Property.
Section 5.6. ACCESS TO THE PROPERTY. Borrower shall cause Mortgage
Borrower to permit agents, representatives and employees of Lender to inspect
the Property or any part thereof at reasonable hours upon reasonable advance
notice, provided Lender shall use reasonable efforts to minimize interference
with the business of any tenants.
Section 5.7. NOTICE OF DEFAULT. Borrower shall promptly advise
Lender of any Material Adverse Change in the condition (financial or otherwise)
of Borrower, Mortgage Borrower, Borrower Principal, the Property or of the
occurrence of any Default or Event of Default hereunder or any Mortgage Loan
Event of Default (or any event which, but for the giving of notice or passage of
time, or both, would be a Mortgage Loan Event of Default) of which Borrower has
knowledge.
Section 5.8. COOPERATE IN LEGAL PROCEEDINGS. Borrower shall at
Borrower's expense cooperate fully with Lender with respect to any proceedings
before any court, board or other Governmental Authority which may in any way
affect the rights of Lender hereunder or any rights obtained by Lender under any
of the other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
Section 5.9. PERFORMANCE BY BORROWER. Borrower shall in a timely
manner observe, perform and fulfill each and every covenant, term and provision
to be observed and performed by Borrower under this Agreement and the other Loan
Documents and any other material agreement or instrument affecting or pertaining
to the Collateral and any amendments, modifications or changes thereto.
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Section 5.10. AWARDS; INSURANCE PROCEEDS. Borrower shall, and shall
cause Mortgage Borrower to, cooperate with Lender in obtaining for Lender the
benefits of any Awards or Insurance Proceeds lawfully or equitably payable in
connection with the Property, and Lender shall be reimbursed for any expenses
incurred in connection therewith (including reasonable, actual attorneys' fees
and disbursements and the payment by Borrower of the expense of an appraisal on
behalf of Lender in case of a Casualty or Condemnation affecting the Property or
any part thereof) out of such Awards or Insurance Proceeds.
Section 5.11. FINANCIAL REPORTING.
(a) Borrower and Borrower Principal shall, and shall cause Mortgage
Borrower to, keep adequate books and records of account in accordance with GAAP,
consistently applied and shall furnish or cause to be furnished to Lender:
(i) monthly (if required by Lender), quarterly, and annual
certified rent rolls signed and dated by Borrower and Mortgage
Borrower, detailing the names of all Tenants of the Improvements, the
portion of Improvements (in terms of square footage) occupied by each
Tenant, the base rent, additional rent and any other charges payable
under each Lease (including annual store sales required to be reported
by Tenant under any Lease), and the term of each Lease, including the
commencement and expiration dates and any tenant extension, expansion
or renewal options, the extent to which any Tenant is in default under
any Lease, and any other information as is reasonably required by
Lender, within thirty (30) days after the end of each calendar month,
forty-five (45) days after the end of each fiscal quarter or ninety
(90) days after the close of each fiscal year of Borrower and Mortgage
Borrower, as applicable;
(ii) monthly (if required by Lender), quarterly, and annual
operating statements of the Property, prepared and certified by the
chief financial officer of Borrower and Mortgage Borrower in form
acceptable to Lender in its reasonable discretion (with the annual
operating statement prepared and audited by an Acceptable Accountant),
detailing the revenues received, the expenses incurred and the net
operating income before and after debt service (principal and interest)
and major capital improvements for the period of calculation and
containing appropriate year-to-date information, within thirty (30)
days after the end of each calendar month, forty-five (45) days after
the end of each fiscal quarter or ninety (90) days after the close of
each fiscal year of Borrower and Mortgage Borrower, as applicable;
(iii) quarterly and annual balance sheets, profit and loss
statements, statements of cash flows, and statements of change in
financial position of Borrower, Mortgage Borrower and Borrower
Principal in form reasonably acceptable to Lender (with the annual
financial statements prepared and audited by an Acceptable Accountant),
within forty-five (45) days after the end of each fiscal quarter or
ninety (90) days after the close of each fiscal year of Borrower,
Mortgage Borrower and Borrower Principal, as applicable, as the case
may be; and
(iv) an Annual Budget not later than thirty (30) days prior to
the commencement of each fiscal year of Borrower and Mortgage Borrower
in form
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reasonably satisfactory to Lender. In the event that Lender objects to
a proposed Annual Budget submitted by or on behalf of Borrower, Lender
shall advise Borrower of such objections within fifteen (15) days after
receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall promptly revise such
Annual Budget and resubmit the same to Lender. Lender shall advise
Borrower in writing of any objections to such revised Annual Budget
within ten (10) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall
promptly revise the same in accordance with the process described in
this subsection until Lender approves the Annual Budget. Lender shall
have a period of thirty (30) days from receipt of such Annual Budget,
together with any other related documentation reasonably requested by
Lender, in which to approve or reject such Annual Budget, provided that
such Annual Budget is accompanied by a written request from Borrower
marked in bold lettering with the following language: "LENDER'S
RESPONSE IS REQUIRED WITHIN THIRTY (30) DAYS OF RECEIPT OF THIS NOTICE
PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND
LENDER" and the envelope containing the request must be marked
"PRIORITY - LENDER'S RESPONSE REQUIRED IN THIRTY (30) DAYS." In the
event that Lender fails to approve or reject such Annual Budget in such
period of time, Lender's consent to such Annual Budget shall be deemed
given. Until such time that Lender approves a proposed Annual Budget,
which approval shall not be unreasonably withheld, conditioned or
delayed, the most recent Annual Budget shall apply; provided that, such
approved Annual Budget shall be adjusted to reflect actual increases in
Taxes, Insurance Premiums, utilities expenses and expenses under the
Management Agreement. Without the prior written consent of Lender,
Borrower shall not approve or consent to Mortgage Borrower entering
into any contracts or other agreements or expending any funds not
provided for in the approved Annual Budget, other than expenditures
required to be made by reason of the occurrence of any emergency (i.e.,
an unexpected event which threatens imminent harm to persons or
property at the Property) and with respect to which it would be
impracticable, under the circumstances, to obtain Lender's prior
consent thereto. Borrower shall notify Lender as promptly as
practicable with respect to any such emergency expenditures made with
respect to the Property. At the request of Lender, Borrower agrees to
cause Mortgage Borrower to deliver evidence in a form satisfactory to
Lender that amounts allocated to budgeted expenses have been paid in
accordance with the approved Annual Budget.
(b) Upon request from Lender, Borrower shall promptly furnish or cause
to be furnished to Lender:
(i) a property management report for the Property, containing
a list of prospective tenants and any other information requested by
Lender, in reasonable detail and certified by Borrower and Mortgage
Borrower under penalty of perjury to be true and complete, but no more
frequently than quarterly;
(ii) an accounting of all security deposits held in connection
with any Lease of any part of the Property, including the name and
identification number of the accounts in which such security deposits
are held, the name and address of the financial institutions in which
such security deposits are held and the name of the Person to contact
at such
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financial institution, along with any authority or release necessary
for Lender to obtain information regarding such accounts directly from
such financial institutions; and
(iii) a report of all letters of credit provided by any Tenant
in connection with any Lease of any part of the Property, including the
account numbers of such letters of credit, the names and addresses of
the financial institutions that issued such letters of credit and the
names of the Persons to contact at such financial institutions, along
with any authority or release necessary for Lender to obtain
information regarding such letters of credit directly from such
financial institutions.
(c) Borrower and Borrower Principal shall furnish Lender (or cause
Mortgage Borrower to furnish to Lender) with such other additional financial or
management information (including state and federal tax returns) as may, from
time to time, be reasonably required by Lender in form and substance
satisfactory to Lender (including, without limitation, any financial reports
required to be delivered by any Tenant or any guarantor of any Lease pursuant to
the terms of such Lease), and shall furnish to Lender and its agents convenient
facilities for the examination and audit of any such books and records.
(d) All items requiring the certification of Borrower or Mortgage
Borrower shall, except where Borrower or Mortgage Borrower is an individual,
require a certificate executed by the general partner, managing member or chief
executive officer of Borrower or Mortgage Borrower, as applicable (and the same
rules shall apply to any sole shareholder, general partner or managing member
which is not an individual).
Section 5.12. ESTOPPEL STATEMENT.
(a) After request by Lender, Borrower shall within ten (10) Business
Days furnish Lender with a statement, duly acknowledged and certified, setting
forth (i) the amount of the original principal amount of the Note, (ii) the rate
of interest on the Note, (iii) the unpaid principal amount of the Note, (iv) the
date installments of interest and/or principal were last paid, (v) any offsets
or defenses to the payment of the Debt, if any, and (vi) that the Note, this
Agreement, the Pledge Agreement and the other Loan Documents are valid, legal
and binding obligations and have not been modified or if modified, giving
particulars of such modification.
(b) After request by Borrower, Lender shall promptly deliver to
Borrower a beneficiary's statement on Lender's (or its servicer's) then current
form of such document, which shall include the balance of the Loan and the then
applicable interest rate. In a separate writing, Lender shall provide to
Borrower, to the extent true, a statement that Lender has not delivered any
notices of default to Borrower.
(c) Borrower shall use its best efforts to deliver (or cause Mortgage
Borrower to deliver) to Lender, promptly upon request, duly executed estoppel
certificates from any one or more Tenants as required by Lender attesting to
such facts regarding the related Lease as Lender may require, including, but not
limited to attestations that each Lease covered thereby is in full force and
effect with no defaults thereunder on the part of any party, that none of the
Rents have been paid more than one month in advance, except as security, and
that the Tenant claims no defense or offset against the full and timely
performance of its obligations under the Lease.
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Other than in connection with a Securitization, Borrower shall not be required
to use its best efforts to deliver such estoppel certificates more than once per
year so long as no Event of Default exists.
Section 5.13. LEASING MATTERS.
(a) Borrower may permit Mortgage Borrower to enter into a proposed
Lease (including the renewal or extension of an existing Lease (a "Renewal
Lease")) without the prior written consent of Lender, provided such proposed
Lease or Renewal Lease (i) provides for rental rates and terms comparable to
existing local market rates and terms (taking into account the type and quality
of the tenant) as of the date such Lease is executed by Mortgage Borrower
(unless, in the case of a Renewal Lease, the rent payable during such renewal,
or a formula or other method to compute such rent, is provided for in the
original Lease), (ii) is an arm's-length transaction with a bona fide,
independent third party tenant, (iii) does not have a materially adverse effect
on the value of the Property taken as a whole, (iv) is subject and subordinate
to the Mortgage and the Tenant thereunder agrees to attorn to Lender, either by
the terms of such Renewal Lease or pursuant to a subordination, non-disturbance
and attornment agreement on Lender's then current form (v) does not contain any
option, offer, right of first refusal, or other similar right to acquire all or
any portion of the Property, (vi) has a base term of less than fifteen (15)
years including options to renew, (vii) has no rent, credits, free rents or
concessions granted thereunder, other than as consistent with then market
standards for prudent institutional owners of Class A office buildings in the
sub-market where the Property is located, and (viii) is written on the standard
form of lease approved by Lender and attached hereto as Exhibit C, subject to
tenant specific negotiated changes which do not, individually or in the
aggregate, cause a Material Adverse Change with respect to the Property or the
financial condition of Borrower. All proposed Leases which do not satisfy the
requirements set forth in this subsection shall be at Borrower's expense and
subject to the prior approval of Lender and its counsel, not to be unreasonably
withheld or delayed. Borrower shall cause Mortgage Borrower to promptly deliver
to Lender copies of all Leases which are entered into pursuant to this
subsection together with Borrower's certification that it has satisfied all of
the conditions of this Section.
(b) Borrower (i) shall cause Mortgage Borrower to observe and perform
all the obligations imposed upon the landlord under the Leases (or refrain from
such observance or performance to the extent the same is in accordance with
prudent institutional ownership practices for properties similar to and in the
same sub-market as Property) and shall not do or permit to be done anything to
impair the value of any of the Leases as security for the Debt; (ii) shall cause
Mortgage Borrower to promptly send copies to Lender of all notices of default
which Mortgage Borrower shall send or receive thereunder; (iii) shall cause
Mortgage Borrower to enforce all of the material terms, covenants and conditions
contained in the Leases upon the part of the tenant thereunder to be observed or
performed unless Borrower, in accordance with prudent institutional ownership
practices for properties similar and in the same sub-market as the Property,
elects not to enforce any such term, covenant or condition; (iv) shall not
permit Mortgage Borrower to collect any of the Rents more than one (1) month in
advance (except security deposits shall not be deemed Rents collected in
advance); (v) shall not permit Mortgage Borrower to execute any other assignment
of the landlord's interest in any of the Leases or the Rents; and (vi) shall not
permit Mortgage Borrower to consent to any assignment of or subletting
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under any Leases not in accordance with their terms, without the prior written
consent of Lender, such consent not to be unreasonably withheld, conditioned or
delayed.
(c) Borrower may, without the prior written consent of Lender, permit
Mortgage Borrower to amend, modify or waive the provisions of any Lease or
terminate, reduce Rents under, accept a surrender of space under, or shorten the
term of, any Lease (including any guaranty, letter of credit or other credit
support with respect thereto) provided that such action (taking into account, in
the case of a termination, reduction in rent, surrender of space or shortening
of term, the planned alternative use of the affected space) does not have a
materially adverse effect on the value of the Property taken as a whole, and
provided that such Lease, as amended, modified or waived, is otherwise in
compliance with the requirements of this Agreement and any subordination
agreement binding upon Lender with respect to such Lease. A termination of a
Lease with a tenant who is in default beyond applicable notice and grace periods
shall not be considered an action which has a materially adverse effect on the
value of the Property taken as a whole. Any amendment, modification, waiver,
termination, rent reduction, space surrender or term shortening which does not
satisfy the requirements set forth in this subsection shall be subject to the
prior approval of Lender and its counsel, at Borrower's expense. Borrower shall
cause Mortgage Borrower to promptly deliver to Lender copies of amendments,
modifications and waivers which are entered into pursuant to this subsection
together with Borrower's certification that it has satisfied all of the
conditions of this subsection.
(d) Notwithstanding anything contained herein to the contrary, Borrower
shall not permit Mortgage Borrower, without the prior written consent of Lender,
to enter into, renew, extend, amend, modify, waive any material provisions of,
terminate, reduce Rents under, accept a surrender of space under, or shorten the
term of any Major Lease.
(e) Notwithstanding anything to the contrary contained herein, to the
extent Lender's prior approval is required for any leasing matters set forth in
this Section 5.13, Lender shall have ten (10) Business Days from receipt of
written request and all required information and documentation relating thereto
in which to approve or disapprove such matter, provided that such request to
Lender is marked in capitalized bold lettering with the following language:
"LENDER'S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND
LENDER" and the envelope containing the request must be marked "PRIORITY -
LENDER'S RESPONSE REQUIRED IN TEN (10) BUSINESS DAYS." In the event that Lender
fails to respond to the leasing matter in question within such time, Lender's
approval shall be deemed given for all purposes. Borrower shall provide Lender
with such information and documentation as may be reasonably required by Lender,
including, without limitation, lease comparables and other market information as
required by Lender.
Section 5.14. PROPERTY MANAGEMENT.
(a) Borrower shall cause Mortgage Borrower to (i) promptly perform and
observe all of the covenants required to be performed and observed by it under
the Management Agreement and do all things necessary to preserve and to keep
unimpaired its material rights thereunder; (ii) promptly notify Lender of any
default under the Management Agreement of which it is aware; (iii) promptly
deliver to Lender a copy of any notice of default or other
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material notice received by Mortgage Borrower under the Management Agreement;
(iv) promptly give notice to Lender of any notice or information that Borrower
receives which indicates that Manager is terminating the Management Agreement or
that Manager is otherwise discontinuing its management of the Property; and (v)
promptly enforce the performance and observance of all of the covenants required
to be performed and observed by Manager under the Management Agreement.
(b) If at any time, (i) Manager shall become insolvent or a debtor in a
bankruptcy proceeding, (ii) an Event of Default has occurred and is continuing,
or (iii) a default has occurred and is continuing beyond applicable cure periods
under the Management Agreement, Borrower shall, at the request of Lender, cause
Mortgage Borrower to terminate the Management Agreement upon sixty (60) days
prior notice to Manager and replace Manager with a Qualified Manager reasonably
approved by Lender in accordance with the terms and conditions satisfactory to
Lender, it being understood and agreed that the management fee for such
replacement manager shall not exceed then prevailing market rates.
(c) In addition to the foregoing, in the event that Lender, in Lender's
reasonable discretion, at any time prior to the termination of the Subordination
of Management Agreement, determines that the Property is not being managed in
accordance with generally accepted management practices for projects similarly
situated, Lender may deliver written notice thereof to Borrower, Mortgage
Borrower and Manager, which notice shall specify with particularity the grounds
for Lender's determination. If Lender reasonably determines that the conditions
specified in Lender's notice are not remedied to Lender's reasonable
satisfaction by Borrower, Mortgage Borrower or Manager within sixty (60) days
from the date of such notice or that Borrower or Manager have failed to
diligently undertake correcting such conditions within such sixty (60) day
period, Lender may direct Borrower to terminate the Management Agreement,
provided Borrower has the right to do so pursuant to the terms of the Management
Agreement, and to replace Manager with a Qualified Manager approved by Lender on
terms and conditions satisfactory to Lender, it being understood and agreed that
the management fee for such replacement manager shall not exceed then prevailing
market rates.
(d) Borrower shall not permit Mortgage Borrower, without the prior
written consent of Lender (which consent shall not be unreasonably withheld,
conditioned or delayed) to (i) surrender, terminate or cancel the Management
Agreement or otherwise replace Manager or enter into any other management
agreement with respect to the Property; (ii) reduce or consent to the reduction
of the term of the Management Agreement; (iii) increase or consent to the
increase of the amount of any charges under the Management Agreement; or (iv)
otherwise modify, change, supplement, alter or amend, or waive or release any of
its rights and remedies under, the Management Agreement in any material respect.
In the event that Borrower replaces Manager at any time during the term of Loan
pursuant to this subsection, such Manager shall be a Qualified Manager.
(e) No resignation of Manager shall be effective unless (i) Manager
provides ninety (90) days prior written notice of its intent to resign and (ii)
a Qualified Manager has assumed responsibility for the management of the
Property pursuant to a written management agreement in form and substance
acceptable to Lender.
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Section 5.15. LIENS. Borrower shall not permit Mortgage Borrower,
without the prior written consent of Lender, to create, incur, assume or suffer
to exist any Lien on any portion of the Property or permit any such action to be
taken, except Permitted Encumbrances. Borrower shall not create, incur, assume
or suffer to exist any Lien on any portion of the Collateral or permit any such
action to be taken.
Section 5.16. DEBT CANCELLATION. Borrower shall not cancel or otherwise
forgive or release any claim or debt owed to Borrower by any Person, except for
adequate consideration and in the ordinary course of Borrower's business.
Borrower shall not permit Mortgage Borrower to cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to Mortgage Borrower by any Person, except for adequate
consideration and in the ordinary course of Mortgage Borrower's business
Section 5.17. ZONING. Borrower shall not permit Mortgage Borrower to,
initiate or consent to any zoning reclassification of any portion of the
Property or seek any variance under any existing zoning ordinance or use or
permit the use of any portion of the Property in any manner that could result in
such use becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation, without the prior consent of
Lender.
Section 5.18. ERISA.
(a) Borrower shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under the Note, this Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA.
(b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (i) Borrower is not
and does not maintain an "employee benefit plan" as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(3) of ERISA; (ii) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (iii) one or more of the following circumstances is true:
(A) Limited liability company interests in Borrower
are publicly offered securities, within the meaning of 29
C.F.R. Section 2510.3-101(b)(2);
(B) Less than twenty-five percent (25%) of each
outstanding class of limited liability company interests in
Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(c) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R.Section 2510.3-101(c) or (e).
Section 5.19. NO JOINT ASSESSMENT. Borrower shall not permit Mortgage
Borrower to suffer, permit or initiate the joint assessment of the Property with
(a) any other real property constituting a tax lot separate from the Property,
or (b) any portion of the Property
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which may be deemed to constitute personal property, or any other procedure
whereby the Lien of any taxes which may be levied against such personal property
shall be assessed or levied or charged to the Property.
Section 5.20. ALTERATIONS. Lender's prior approval (not to be
unreasonably withheld) shall be required in connection with any alterations to
any Improvements, exclusive of alterations to tenant spaces required under any
Lease, (a) that may have a material adverse effect on the Property, (b) that
affect the structure of the applicable building or (c) that, together with any
other alterations undertaken at the same time (including any related
alterations, improvements or replacements), are reasonably anticipated to have a
cost in excess of the Alteration Threshold. If the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements shall at
any time exceed the Alteration Threshold, Borrower shall promptly deliver to
Lender as security for the payment of such amounts and as additional security
for Borrower's obligations under the Loan Documents any of the following: (i)
cash, (ii) direct non-callable obligations of the United States of America or
other obligations which are "government securities" within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, to the extent acceptable
to Lender, (iii) other securities acceptable to Lender, or (iv) a completion
bond, provided that such completion bond is acceptable to Lender. Such security
shall be in an amount equal to the excess of the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements over the
Alteration Threshold.
Section 5.21. [INTENTIONALLY DELETED.]
Section 5.22. RECIPROCAL EASEMENT AGREEMENT. Borrower shall not permit
Mortgage Borrower to enter into, terminate or modify any REA without Lender's
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Borrower shall cause Mortgage Borrower to enforce,
comply with, and cause each of the parties to an REA to comply with all of the
material economic terms and conditions contained in such REA.
Section 5.23. [INTENTIONALLY DELETED.]
Section 5.24. [INTENTIONALLY DELETED.]
Section 5.25. SPECIAL DISTRIBUTIONS. On each date on which amounts are
required to be disbursed to Lender pursuant to the terms of Section 10.2 of the
Mortgage Loan Agreement or are required to be paid to Lender under any of the
Loan Documents, Borrower shall exercise its rights under the Mortgage Borrower
Company Agreement to cause Mortgage Borrower to make to Borrower a distribution
in an aggregate amount such that Lender shall receive the amount required to be
disbursed or otherwise paid to Lender on such date.
Section 5.26. CURING. Lender shall have the right, but shall not have
the obligation, to exercise Borrower's rights under the Mortgage Borrower
Company Agreement (a) to cure a Mortgage Loan Default or Mortgage Loan Event of
Default and (b) to satisfy any Liens, claims or judgments against the Property
(except for Liens permitted by the Mortgage Loan Documents), in the case of
either (a) or (b), unless Borrower or Mortgage Borrower shall be diligently
pursuing remedies to cure to Lender's sole satisfaction. Borrower shall
reimburse
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Lender on demand for any and all costs incurred by Lender in connection with
curing any such Mortgage Loan Default or Mortgage Loan Event of Default or
satisfying any Liens, claims or judgments against the Property.
Section 5.27. LIENS. Neither Borrower nor any of its Subsidiaries shall
take any action that would impair the Lien created under this Agreement, the
Pledge Agreement or any other Loan Document.
Section 5.28. LIMITATION ON SECURITIES ISSUANCES. None of Borrower or
any of its Subsidiaries shall issue any limited liability company interests or
other securities, other than those that have been issued as of the Closing Date.
Section 5.29. LIMITATIONS ON DISTRIBUTIONS. Following the occurrence
and during the continuance of an Event of Default, Borrower shall not make any
distributions to its members.
Section 5.30. OTHER LIMITATIONS. Prior to the payment in full of the
Debt, Borrower shall not, without the prior written consent of Lender (which may
be furnished or withheld at its sole and absolute discretion), give its consent
or approval to any of the following actions or items:
(a) except as permitted by the Mortgage Loan Documents and the Loan
Documents (i) any refinance of the Mortgage Loan, (ii) any prepayment in full of
the Mortgage Loan, (iii) any Sale or Pledge of the Property or any portion
thereof, or (iv) any action in connection with or in furtherance of the
foregoing;
(b) intentionally deleted;
(c) any material modification, amendment, consolidation, spread,
restatement, waiver or termination of any of the Mortgage Loan Documents;
(d) the distribution to the partners, members or shareholders of
Mortgage Borrower of property other than cash, except in accordance with the
provisions of Mortgage Borrower's organizational documents;
(e) except as set forth in an approved Annual Budget or as permitted
under the Mortgage Loan Documents, any (i) material improvement, renovation or
refurbishment of all or any part of the Property to a materially higher standard
or level than that of comparable properties in the same market segment and in
the same geographical area as the Property, except in connection with Tenant
Improvements undertaken in accordance with the terms of the Mortgage Loan
Agreement (ii) except in connection with Tenant Improvements undertaken in
accordance with the terms of the Mortgage Loan Agreement, removal, demolition or
material alteration of the improvements or equipment on the Property or (iii)
material increase in the square footage or gross leasable area of the
improvements on the Property if a material portion of any of the expenses in
connection therewith are paid or incurred by Mortgage Borrower;
(f) any material change in the method of conduct of the business of
Borrower or any of its Subsidiaries, such consent to be given in the sole
discretion of Lender;
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(g) except as required by the Mortgage Loan Documents, any
determination to restore the Property after a Casualty or Condemnation.
Section 5.31. [INTENTIONALLY DELETED.]
Section 5.32. REFINANCING. Borrower shall not consent to or permit a
refinancing of the Mortgage Loan unless it obtains the prior consent of Lender,
provided that Lender shall consent to a refinancing in full of the Mortgage Loan
if, after considering the following factors, Lender determines in its reasonable
discretion that such factors have been satisfied:
(a) no Event of Default or event which with the giving of notice and/or
lapse of time would constitute an Event of Default under this Agreement shall
have occurred and be continuing;
(b) the new mortgage loan ("NEW MORTGAGE LOAN") shall have (i) an
interest rate that is no higher than the then current interest rate for the
Mortgage Loan, as determined by Lender in its sole discretion (and shall provide
for an interest rate cap substantially identical to the Interest Rate Protection
Agreement), (ii) a principal balance that is no more than the balance of the
Mortgage Loan on the date of the refinancing, (iii) if the New Mortgage Loan
provides for amortization, an amortization schedule that provides for repayment
in monthly installments each of which is no greater than the monthly payments
due under the Mortgage Note, and (iv) a maturity date that is no earlier than
that provided for under the Mortgage Loan at the time of the closing thereof;
(c) the terms of the New Mortgage Loan shall not (i) have any other
payment requirements not in the Mortgage Loan (for example, equity kickers),
(ii) have more onerous prepayment provisions than those currently in the
Mortgage Loan, (iii) have any new collateral, and (iv) have any defaults not in
the Mortgage Loan;
(d) the terms of the New Mortgage Loan shall provide the same express
rights to Lender as the Mortgage Loan and shall not conflict with the terms of
the Loan and the new mortgage lender shall enter into an intercreditor agreement
with Lender with terms any less favorable to Lender than the Intercreditor
Agreement;
(e) no portion of the Property may be transferred in connection with
such refinancing except pursuant to a Sale or Pledge made in accordance with
Article VII of this Agreement;
(f) Borrower shall pay all costs and expenses of Lender incurred in
connection with any such refinancing, including, without limitation, reasonable
fees and expenses of Lender's counsel;
(g) Borrower shall execute and deliver such amendments to this
Agreement and the other Loan Documents as Lender may request in connection with
such New Mortgage Loan; and
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(h) Lender shall have received such settlement statements, pay-off
letters, opinions and other documentation as it shall reasonably request in
connection with such refinancing.
Upon the satisfaction of the foregoing, Borrower may permit or consent
to a refinancing of the Mortgage Loan, whereupon such New Mortgage Loan shall be
deemed to be the Mortgage Loan as defined herein.
ARTICLE VI
ENTITY COVENANTS
Section 6.1. SINGLE PURPOSE ENTITY/SEPARATENESS. Until the Debt has
been paid in full, Borrower represents, warrants and covenants as follows:
(a) Borrower has not and will not, and will not permit Mortgage
Borrower to:
(i) (x) with respect to Borrower, engage in any business or
activity other than the ownership of the Pledged Company Interests and
the Collateral and any activities incidental thereto or (y) with
respect to the Mortgage Borrower, engage in any business or activity
other than the ownership, operation and maintenance of the Property,
and any activities incidental thereto;
(ii) (x) with respect to Borrower, acquire or own any assets
other than (A) the Pledged Company Interests or the Collateral, and (B)
such incidental Personal Property as may be necessary for the ownership
of the Pledged Company Interests and the Collateral or (y) with respect
to the Mortgage Borrower, acquire or own any assets other than (A) the
Property, and (B) such incidental Personal Property as may be necessary
for the operation of the Property;
(iii) merge into or consolidate with any Person, or dissolve,
terminate, liquidate in whole or in part, transfer or otherwise dispose
of all or substantially all of its assets or change its legal
structure;
(iv) fail to observe all organizational formalities or fail to
preserve its existence as an entity duly organized, validly existing
and in good standing (if applicable) under the applicable Legal
Requirements of the jurisdiction of its organization or formation, or
amend, modify, terminate or fail to comply with the provisions of its
organizational documents;
(v) own any Subsidiary, or make any investment in, any Person;
(vi) commingle its assets with the assets of any other Person;
(vii) (x) with respect to Borrower, incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation)
or (y) with respect to Mortgage Borrower, incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any
obligation), other than (A) the Debt (as defined in the Mortgage Loan
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Agreement), (B) trade and operational indebtedness incurred in the
ordinary course of business with trade creditors, provided such
indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on
commercially reasonable terms and conditions, and (4) due not more than
sixty (60) days past the date incurred and paid on or prior to such
date, and/or (C) financing leases and purchase money indebtedness
incurred in the ordinary course of business relating to Personal
Property on commercially reasonable terms and conditions; provided
however, the aggregate amount of the indebtedness described in (B) and
(C) shall not exceed at any time three percent (3%) of the outstanding
principal amount of the Mortgage Note;
(viii) fail to maintain its records, books of account, bank
accounts, financial statements, accounting records and other entity
documents separate and apart from those of any other Person; except
that Borrower's and Mortgage Borrower's financial position, assets,
liabilities, net worth and operating results may be included in the
consolidated financial statements of an Affiliate, provided that such
consolidated financial statements contain a footnote indicating that
Borrower and Mortgage Borrower are separate legal entities and that
they maintain separate books and records;
(ix) enter into any contract or agreement with any general
partner, member, shareholder, principal, guarantor of the obligations
of Borrower or of Mortgage Borrower, or any Affiliate of the foregoing,
except upon terms and conditions that are intrinsically fair,
commercially reasonable and substantially similar to those that would
be available on an arm's-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be
costly or difficult to segregate, ascertain or identify its individual
assets from those of any other Person;
(xi) (A) assume or guaranty the debts of any other Person,
hold itself out to be responsible for the debts of any other Person, or
otherwise pledge its assets for the benefit of any other Person or hold
out its credit as being available to satisfy the obligations of any
other Person or (B) other than with respect to (I) the obligations of
Borrower or Mortgage Borrower guaranteed by Borrower Principal pursuant
to the terms of the Loan Documents, (II) reimbursement obligations, if
any, of Borrower Principal or its Affiliates (other than Mortgage
Borrower or Borrower) to the Issuing Bank with respect to the Reserve
Letters of Credit (as such terms are defined in the Mortgage Loan
Agreement) or (III) the Principals Guaranty (as defined in the Mortgage
Loan Agreement), permit any of its partners, members, shareholders or
other Affiliates to guarantee, become obligated for or hold its credit
out to be responsible for any of the debts or obligations of Borrower
or Mortgage Borrower;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns or file a consolidated
federal income tax return with any Person (unless prohibited or
required, as the case may be, by applicable Legal Requirements);
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(xiv) identify itself as a division of an Affiliate 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 or fail to correct any known misunderstanding regarding its
separate identity;
(xv) 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;
(xvi) without the unanimous written consent of all of its
members, and the written consent of 100% of the managers of Borrower or
Mortgage Borrower, as applicable, including, without limitation, each
Independent Manager, (a) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any Creditors
Rights Laws, (b) seek or consent to the appointment of a receiver,
liquidator or any similar official, (c) take any action that might
cause such entity to become insolvent, or (d) make an assignment for
the benefit of creditors;
(xvii) fail to allocate, fairly and reasonably, shared
expenses (including, without limitation, shared office space and
services performed by an employee of an Affiliate) among the Persons
sharing such expenses and to use separate stationery, invoices and
checks;
(xviii) fail to remain solvent or pay its own liabilities
(including, without limitation, salaries of its own employees) only
from its own funds;
(xix) acquire obligations or securities of its partners,
members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with
respect to Borrower, Mortgage Borrower and their principals in any
opinion letter pertaining to substantive consolidation delivered to
Lender in connection with the Loan;
(xxi) fail to maintain a sufficient number of employees in
light of its contemplated business operations;
(xxii) form, acquire, or hold any Subsidiary (other than
Mortgage Borrower);
(xxiii) permit any Affiliate independent access to its bank
accounts other than with respect to the Manager in its capacity as
manager of the Property pursuant to the Management Agreement;
(xxiv) fail to maintain the resolutions, agreements and other
instruments regarding the transactions contemplated by the Loan as
official records; or
(xxv) fail to make all oral and written communication,
including, without limitation, letters, invoices, purchase orders,
contracts, statements, and applications solely in the name of Borrower.
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(b) Borrower shall have as its sole member the Borrower Principal.
Borrower shall maintain its status as a single member Delaware limited liability
company.
(c) The limited liability company agreement of Borrower (the "LLC
AGREEMENT") shall provide that (i) upon the occurrence of any event that causes
the sole member of Borrower ("MEMBER") to cease to be the member of Borrower
(other than (A) upon an assignment by Member of all of its limited liability
company interest in Borrower and the admission of the transferee in accordance
with the Loan Documents and the LLC Agreement, or (B) the resignation of Member
and the admission of an additional member of Borrower in accordance with the
terms of the Loan Documents and the LLC Agreement), any person acting as
Independent Manager of Borrower shall, without any action of any other Person
and simultaneously with the Member ceasing to be the member of Borrower,
automatically be admitted to Borrower ("SPECIAL MEMBER") and shall continue
Borrower without dissolution and (ii) Special Member may not resign from
Borrower or transfer its rights as Special Member unless (A) a successor Special
Member has been admitted to Borrower as Special Member in accordance with
requirements of Delaware law and (B) such successor Special Member has also
accepted its appointment as an Independent Manager. The LLC Agreement shall
further provide that (i) Special Member shall automatically cease to be a member
of Borrower upon the admission to Borrower of a substitute Member, (ii) Special
Member shall be a member of Borrower that has no interest in the profits, losses
and capital of Borrower and has no right to receive any distributions of
Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited
Liability Company Act (the "ACT"), Special Member shall not be required to make
any capital contributions to Borrower and shall not receive a limited liability
company interest in Borrower, (iv) Special Member, in its capacity as Special
Member, may not bind Borrower and (v) except as required by any mandatory
provision of the Act, Special Member, in its capacity as Special Member, shall
have no right to vote on, approve or otherwise consent to any action by, or
matter relating to, Borrower, including, without limitation, the merger,
consolidation or conversion of Borrower; provided, however, such prohibition
shall not limit the obligations of Special Member, in its capacity as
Independent Manager, to vote on such matters required by the Loan Documents or
the LLC Agreement. In order to implement the admission to Borrower of Special
Member, Special Member shall execute a counterpart to the LLC Agreement. Prior
to its admission to Borrower as Special Member, Special Member shall not be a
member of Borrower.
Upon the occurrence of any event that causes the Member to cease to be
a member of Borrower, to the fullest extent permitted by law, the personal
representative of Member shall, within ninety (90) days after the occurrence of
the event that terminated the continued membership of Member in Borrower, agree
in writing (i) to continue Borrower and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute
member of Borrower, effective as of the occurrence of the event that terminated
the continued membership of Member of Borrower in Borrower. Any action initiated
by or brought against Member or Special Member under any Creditors Rights Laws
shall not cause Member or Special Member to cease to be a member of Borrower and
upon the occurrence of such an event, the business of Borrower shall continue
without dissolution. The LLC Agreement shall provide that each of Member and
Special Member waives any right it might have to agree in writing to dissolve
Borrower upon the occurrence of any action initiated by or brought against
Member or Special Member under any Creditors Rights Laws, or the occurrence of
an event that causes Member or Special Member to cease to be a member of
Borrower.
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Section 6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower shall not
change or permit to be changed (a) Borrower's name, (b) Borrower's identity
(including its trade name or names), (c) Borrower's principal place of business
set forth on the first page of this Agreement, (d) the corporate, partnership or
other organizational structure of Borrower, (e) Borrower's state of
organization, or (f) Borrower's organizational identification number, without in
each case notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in
Borrower's structure, without first obtaining the prior written consent of
Lender. In addition, Borrower shall not change or permit to be changed any
organizational documents of Borrower if such change would adversely impact the
covenants set forth in Sections 6.1 and 6.4 hereof. Borrower authorizes Lender
to file any financing statement or financing statement amendment required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the request of Lender, Borrower shall
execute a certificate in form satisfactory to Lender listing the trade names
under which Borrower intends to operate under, and representing and warranting
that Borrower does business under no other trade name with respect to the
Property. If Borrower does not now have an organizational identification number
and later obtains one, or if the organizational identification number assigned
to Borrower subsequently changes, Borrower shall promptly notify Lender of such
organizational identification number or change.
Section 6.3. BUSINESS AND OPERATIONS.
(a) Borrower will qualify to do business and will remain in good
standing under the laws of the State as and to the extent the same are required
for the ownership, maintenance, management and operation of the Pledged Company
Interests and the Collateral. Borrower shall not enter into any line of business
other than the ownership of the Pledged Company Interests and the Collateral, or
make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.
(b) Borrower will cause Mortgage Borrower to qualify to do business and
to remain in good standing under the laws of each State as and to the extent the
same are required for the ownership, maintenance, management and operation of
the Property. Borrower shall not permit Mortgage Borrower to enter into any line
of business other than the ownership of the Property, or make any material
change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business.
Section 6.4. INDEPENDENT MANAGERS.
(a) The organizational documents of Borrower shall provide that at all
times there shall be, and Borrower shall cause there to be, at least two duly
appointed Independent Managers of Borrower reasonably satisfactory to Lender
each of whom are not at the time of such individual's initial appointment, and
shall not have been at any time during the preceding five (5) years, and shall
not be at any time while serving as a director of Borrower, either (i) a
shareholder (or other equity owner) of, or an officer, director, partner,
manager, member (other than as a Special Member in the case of single member
Delaware limited liability companies), employee, attorney or counsel of,
Borrower, or any of their respective shareholders, partners,
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members, subsidiaries or affiliates; (ii) a customer or creditor of, or supplier
to, Borrower or any of its respective shareholders, partners, members,
subsidiaries or affiliates who derives any of its purchases or revenue from its
activities with Borrower or any Affiliate of any of them; (iii) a Person who
Controls or is under common Control with any such shareholder, officer,
director, partner, manager, member, employee, supplier, creditor or customer; or
(iv) a member of the immediate family of any such shareholder, officer,
director, partner, manager, member, employee, supplier, creditor or customer.
(b) The organizational documents of Borrower shall provide that the
board of managers of Borrower shall not take any action which, under the terms
of any certificate of incorporation, by-laws, articles of organization,
operating agreement or any voting trust agreement with respect to any limited
liability company interest (as applicable), requires a unanimous vote of the
board of managers of Borrower unless at the time of such action there shall be
at least two members of the board of managers who are Independent Managers.
Borrower will not, without the unanimous written consent of its board of
managers including each Independent Manager, on behalf of itself or Mortgage
Borrower (as applicable) (i) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any applicable Creditors
Rights Laws; (ii) seek or consent to the appointment of a receiver, liquidator
or any similar official; (iii) take any action that might cause such entity to
become insolvent; or (iv) make an assignment for the benefit of creditors.
ARTICLE VII
NO SALE OR ENCUMBRANCE
Section 7.1. TRANSFER DEFINITIONS. For purposes of this Article 7, an
"AFFILIATED MANAGER" shall mean any managing agent of the Property, other than
Borrower Principal, in which Mortgage Borrower, Borrower, Borrower Principal or
any affiliate of such entities has, directly or indirectly, any Controlling
legal, beneficial or economic interest; "CONTROL" shall mean the power to direct
the management and policies of a Restricted Party, directly or indirectly,
whether through the ownership of voting securities or other beneficial
interests, by contract or otherwise; "RESTRICTED PARTY" shall mean Mortgage
Borrower, Borrower, Borrower Principal, any Affiliated Manager, or any
shareholder, partner, member or non-member manager, or any direct or indirect
legal or beneficial owner of Mortgage Borrower, Borrower, Borrower Principal,
any Affiliated Manager or any non-member manager, provided, however, that no
direct or indirect owners of Borrower Principal, other than Sponsor, shall be
included within the definition of a Restricted Party; and a "SALE OR PLEDGE"
shall mean a voluntary or involuntary sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, grant of any options with respect to,
or any other transfer or disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration or of record) of a legal or beneficial interest, except for
Permitted Encumbrances.
Section 7.2. NO SALE/ENCUMBRANCE.
(a) Except as provided in Section 7.3 below, Borrower shall not cause,
suffer or permit a Sale or Pledge of the Collateral or the Property or any part
thereof or any legal or
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beneficial interest therein nor permit a Sale or Pledge of an interest in any
Restricted Party (in each case, a "PROHIBITED TRANSFER"), other than pursuant to
Leases of space in the Improvements to Tenants in accordance with the provisions
of Section 5.13, without the prior written consent of Lender.
(b) A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Mortgage Borrower agrees to sell the
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Mortgage Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Mortgage Borrower's right, title and interest in and to any Leases or any Rents;
(iii) if a Restricted Party is a corporation, any merger, consolidation or Sale
or Pledge of such corporation's stock or the creation or issuance of new stock
in one or a series of transactions; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general or limited partner or any profits or
proceeds relating to such partnership interests or the creation or issuance of
new partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of any member or
any profits or proceeds relating to such membership interest; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; (vii) the removal or
the resignation of a Manager (including, without limitation, an Affiliated
Manager) other than in accordance with Section 5.14.
Section 7.3. PERMITTED TRANSFERS. Notwithstanding the provisions of
Section 7.2, the following transfers shall not be deemed to be a Prohibited
Transfer: (a) a transfer by devise or descent or by operation of law upon the
death of a member, partner or shareholder of a Restricted Party; (b) the Sale or
Pledge, in one or a series of transactions, of not more than forty-nine percent
(49%) of the stock, partnership interests or membership interests (as the case
may be) in a Restricted Party other than Mortgage Borrower; provided, however,
no such transfers shall result in a change in Control in Borrower, Mortgage
Borrower or Borrower Principal or a change in the Manager, and as a condition to
each transfer of direct interests in Borrower (to the extent otherwise permitted
hereunder), Lender shall receive not less than thirty (30) days prior written
notice of such proposed transfer, (c) the transfer of interests held by Sponsor
and its Affiliates in any Restricted Party other than Borrower or Mortgage
Borrower in connection with the purchase, sale and/or financing of the ownership
interests in other properties owned by Sponsor, provided that (i) no such
transfers shall result in a change in Control in Borrower or Mortgage Borrower
or a change in Control of the Manager (ii) Sponsor remains at all times the
general partner of Borrower Principal, and (iii) Sponsor continues to own no
less than twenty-five percent (25%) of the direct or indirect interests in
Borrower, (d) transfers of direct or indirect interests in Borrower Principal,
provided that (i) no such transfers shall result in a change in Control in
Borrower, Mortgage Borrower or Manager, (ii) Sponsor remains at all times the
general partner of Borrower Principal, and (iii) Sponsor continues to own no
less than twenty-five (25%) of the direct or indirect interests in Borrower, (e)
so long as Sponsor is a publicly traded company, the pledge of Sponsor's
interests in any Restricted Party other than
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Borrower or Mortgage Borrower to secure an operating debt facility of Sponsor,
provided that (i) such operating debt facility is secured by a pledge of
interests in entities having a direct or indirect interest in substantially all
of the properties directly or indirectly owned by Sponsor and (ii) the
beneficiary of such pledge shall be a major financial institution with
significant real estate experience involving properties similar to the Property,
(f) Sponsor and its Affiliates may sell (but not pledge) to a Qualified Investor
up to 75% of the direct or indirect, non-managing limited liability company
interests in Borrower, provided that (i) Sponsor at all times maintains Control
of the Borrower and Mortgage Borrower (subject to the veto rights, if any, of
such Qualified Investor with respect to Major Decisions, provided that no such
veto right shall be construed to affect any rights or remedies of Lender under
the Loan Documents) and Borrower (ii) Sponsor shall at all times own, directly
or indirectly, at least 25% of the ownership interests in Borrower and Mortgage
Borrower and (iii) the Property shall at all times be managed by a Qualified
Manager, (g) transfers of ownership interests in Sponsor so long as Sponsor is a
publicly traded entity, (h) the merger of Sponsor with or into another entity,
provided that (x) the surviving entity is publicly traded and (y) such merger
does not result in a change of Control in Borrower, Mortgage Borrower or
Borrower Principal, (i) encumbrances of the Tower Parcel portion of the Property
with 365 parking covenants for the benefit of the property located at 000 Xxxxx
Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx pursuant to the terms of the Mortgage
Loan Agreement, (j) with respect to the Garage Parcel, the execution of a
parking covenant agreement pursuant to the terms of the Mortgage Loan Agreement
or (k) the pledge of interests and the foreclosure thereon pursuant to the
Junior Mezzanine Loan. Notwithstanding anything to the contrary contained in
this Section 7.3, if any Sale or Pledge permitted under this Section 7.3 results
in any Person and its Affiliates owning in excess of forty-nine percent (49%) of
the ownership interests in Borrower or Borrower Principal, Borrower shall, prior
to such transfer, and in addition to any other requirement for Lender consent
contained herein, deliver a revised substantive non-consolidation opinion to
Lender reflecting such transfer, which opinion shall be in form, scope and
substance acceptable in all respects to Lender and the Rating Agencies.
Section 7.4. LENDER'S RIGHTS. Lender reserves the right to condition
the consent to a Prohibited Transfer requested hereunder upon (a) a modification
of the terms hereof and an assumption of the Note and the other Loan Documents
as so modified by the proposed Prohibited Transfer, (b) receipt of payment of a
transfer fee equal to one half of one percent (0.5%) of the outstanding
principal balance of the Loan and all of Lender's expenses incurred in
connection with such Prohibited Transfer, (c) the proposed transferee's
continued compliance with the covenants set forth in this Agreement (including,
without limitation, the covenants in Article 6) and the other Loan Documents,
(d) to the extent that a Prohibited Transfer would result in a change of Control
of Borrower or Mortgage Borrower, a new manager for the Property and a new
management agreement satisfactory to Lender, (e) the satisfaction of all
conditions set forth in Section 7.4 of the Mortgage Loan Agreement, and (f) the
satisfaction of such other conditions and/or legal opinions as Lender shall
determine in its reasonable discretion to be in the interest of Lender. All
expenses incurred by Lender shall be payable by Borrower whether or not Lender
consents to the Prohibited Transfer. Lender shall not be required to demonstrate
any actual impairment of its security or any increased risk of default hereunder
in order to declare the Debt immediately due and payable upon a Prohibited
Transfer made without Lender's consent. This provision shall apply to each and
every Prohibited Transfer, whether or not Lender has consented to any previous
Prohibited Transfer. Notwithstanding anything to the contrary contained in this
Section 7.4, if any Sale or Pledge results in any Person and its
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Affiliates owning in excess of forty-nine percent (49%) of the ownership
interests in a Restricted Party, Borrower shall, prior to such transfer, and in
addition to any other requirement for Lender consent contained herein, deliver a
revised substantive non-consolidation opinion to Lender reflecting such
Prohibited Transfer, which opinion shall be in form, scope and substance
acceptable in all respects to Lender.
Section 7.5. ASSUMPTION.
(a) In the event Mortgage Borrower obtains the consent of Mortgage
Lender to a Transfer of the Property subject to, and assuming, the Mortgage Loan
Documents to another Person (a "TRANSFEREE MORTGAGE BORROWER"), such Transfer
shall nevertheless not be permitted hereunder unless (1) the sole holder of 100%
of the equity interests in the Transferee Mortgage Borrower (the "TRANSFEREE
MEZZANINE BORROWER") pledges its entire equity interest in the Transferee
Mortgage Borrower to Lender pursuant to a pledge agreement in the form of the
Pledge Agreement or otherwise acceptable to Lender in its sole discretion, (2)
the Transferee Mezzanine Borrower is substituted for and assumes all of
Borrower's obligations under the Loan Documents, and replacement guarantors and
indemnitors assume all of the obligations of Borrower Principal under the Loan
Documents (collectively, a "TRANSFER AND ASSUMPTION"), and (3) Lender approves
such Transfer and Assumption (including without limitation the creditworthiness
of the proposed "Transferee Mezzanine Borrower") in Lender's reasonable
discretion. Borrower may make a written application to Lender for Lender's
consent to the Transfer and Assumption, subject to the conditions set forth in
paragraphs (b) and (c) of this Section below. Together with such written
application, Borrower will pay to Lender the reasonable review fee, not to
exceed $25,000, then required by Lender. Borrower also shall pay on demand all
of the costs and expenses incurred by Lender, including reasonable attorneys'
fees and expenses, and including the fees and expenses of Rating Agencies, if
applicable, and other outside entities, in connection with considering any
proposed Transfer and Assumption, whether or not the same is permitted or
occurs.
(b) Lender may grant or withhold its consent to a Transfer and
Assumption in its reasonable discretion, subject, however, to satisfaction of
the following conditions:
(i) No Default or Event of Default shall have occurred and be
continuing;
(ii) Borrower shall have submitted to Lender true, correct and
complete copies of any and all information and documents of any kind
reasonably requested by Lender concerning the Property, Transferee
Mezzanine Borrower, replacement guarantors and indemnitors;
(iii) Evidence satisfactory to Lender shall have been provided
showing that the Transferee Mezzanine Borrower and such of its
Affiliates as shall be designated by Lender comply and will comply with
Article 6, as those provisions may be modified by Lender taking into
account the ownership structure of Transferee Mezzanine Borrower and
its Affiliates;
(iv) Borrower shall have obtained (and delivered to Lender) a
Rating Confirmation with respect to the Transfer and Assumption and all
related transactions;
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(v) Borrower shall have paid all of Lender's costs and
expenses in connection with considering the Transfer and Assumption,
and shall have paid the amount requested by Lender as a deposit against
Lender's costs and expenses in connection with effecting the Transfer
and Assumption;
(vi) Borrower, the Transferee Mezzanine Borrower, and the
replacement guarantors and indemnitors shall have indicated in writing
in form and substance reasonably satisfactory to Lender their readiness
and ability to satisfy the conditions set forth in Subsection (c)
below; and
(vii) The identity, experience, and financial condition of the
Transferee Mezzanine Borrower and the replacement guarantors and
indemnitors shall be satisfactory to Lender in its sole and absolute
discretion, exercised in good faith.
(c) If Lender consents to the Transfer and Assumption, the Transferee
Mezzanine Borrower and/or Borrower, as the case may be, shall deliver the
following to Lender:
(i) Borrower (or Transferee Mezzanine Borrower) shall deliver
to Lender an assumption fee in the amount of 1.0% of the then unpaid
principal balance of the Loan at the closing of the Transfer and
Assumption;
(ii) Borrower, Transferee Mezzanine Borrower, the original and
replacement guarantors and indemnitors shall execute and deliver any
and all documents reasonably required by Lender, in form and substance
reasonably required by Lender, to evidence the Transfer and Assumption,
including Loan Document modifications reasonably appropriate in light
of such Transfer and Assumption (modifying documentation if Lender
requires to address variations in the ownership structure of the
Transferee Mezzanine Borrower from that of the Borrower, for example,
so long as such modifications do not alter the economics of the Loan or
materially increase the Borrower's obligations thereunder);
(iii) Counsel to the Transferee Mezzanine Borrower and
replacement guarantors and indemnitors shall deliver to Lender opinions
in form and substance satisfactory to Lender as to such matters as
Lender and the Rating Agencies, if applicable, shall require, which may
include opinions as to substantially the same matters as were required
in connection with the origination of the Loan including, without
limitation, a bankruptcy non-consolidation opinion and a perfection
opinion;
(iv) Borrower shall cause to be delivered to Lender, (A) an
endorsement (relating to the change in the identity of the vestee and
execution and delivery of the Transfer and Assumption documents) to the
Owner's Policy of Title Insurance, and (B) a new UCC Title Policy, each
in form and substance acceptable to Lender, in Lender's reasonable
discretion; and
(v) Borrower shall deliver to Lender a payment in the amount
of all remaining unpaid costs incurred by Lender in connection with the
Transfer and Assumption, including but not limited to, Lender's
reasonable attorneys fees and expenses, all
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recording fees, and all fees payable to the title company in connection
with the Transfer and Assumption.
(d) Notwithstanding the foregoing, with respect to any proposed
Transfer or Assumption, if required by Lender, the Loan shall either be repaid
in full or shall be assumed by the new member of the Transferee Mezzanine
Borrower pursuant to an assumption permitted and approved by the Lender under
the Loan Documents.
Upon completion of a Transfer and Assumption approved in writing by
Lender and permitted hereunder and execution of replacement guaranties by
replacement guarantors as provided in (c) above, and provided that Lender has
approved the replacement guarantors as substitutes for the original Borrower
Principal as provided in (b) above, Borrower and any original Borrower Principal
shall, as part of the documentation executed at the closing of the Transfer and
Assumption, be released from liability under the Loan Documents accruing from
and after the completion of the Transfer and Assumption, but not from any
liabilities for acts and occurrences taking place prior to such Transfer and
Assumption or under the Environmental Indemnity Agreement.
ARTICLE VIII
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
Section 8.1. INSURANCE.
(a) Borrower shall cause Mortgage Borrower to obtain and maintain, at
all times insurance for Mortgage Borrower and for the Property providing at
least the following coverages:
(i) comprehensive "all risk" insurance on the Improvements and
the Personal Property, in each case (A) in an amount equal to one
hundred percent (100%) of the "Full Replacement Cost," which for
purposes of this Agreement shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities
and footings) with a waiver of depreciation; (B) containing an agreed
amount endorsement with respect to the Improvements and Personal
Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of $100,000 for all such insurance coverage; and
(D) if any of the Improvements or the use of the Property shall at any
time constitute legal non-conforming structures or uses, providing
coverage for contingent liability from Operation of Building Laws,
Demolition Costs and Increased Cost of Construction Endorsements and
containing an "Ordinance or Law Coverage" or "Enforcement" endorsement.
In addition, Borrower shall obtain: (y) if any portion of the
Improvements is currently or at any time in the future located in a
"special flood hazard area" designated by the Federal Emergency
Management Agency, flood hazard insurance in an amount equal to the
maximum amount of such insurance available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as each may be amended;
and (z) earthquake insurance in amounts and in form and substance
reasonably satisfactory to Lender in the event the Property is located
in an area with a high degree of seismic risk, provided that the
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insurance pursuant to clauses (y) and (z) hereof shall be on terms
consistent with the comprehensive all risk insurance policy required
under this subsection (i), provided, further, that the insurance
pursuant to clause (z) hereof shall provide for no deductible in excess
of 5% of the total insurable value (which includes annual rental value)
of the properties insured under the applicable policy;
(ii) Commercial General Liability insurance against claims for
personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, with such insurance (A) to be on the
so-called "occurrence" form with a general aggregate limit of not less
than $2,000,000 and a per occurrence limit of not less than $1,000,000;
(B) to continue at not less than the aforesaid limit until required to
be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least
the following hazards: (1) premises and operations; (2) products and
completed operations; (3) independent contractors; (4) blanket
contractual liability; and (5) contractual liability covering the
indemnities contained in Article 12 and Article 14 hereof to the extent
the same is available;
(iii) loss of rents insurance or business income insurance, as
applicable, (A) with loss payable to Lender, subject to the terms of
the Mortgage Loan Agreement; (B) covering all risks required to be
covered by the insurance provided for in subsection (i) above; and (C)
which provides that after the physical loss to the Improvements and
Personal Property occurs, the loss of rents or income, as applicable,
will be insured until such rents or income, as applicable, either
return to the same level that existed prior to the loss, or the
expiration of twenty-four (24) months, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such
period; and (D) which contains an extended period of indemnity
endorsement which provides that after the physical loss to the
Improvements and Personal Property has been repaired, the continued
loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of twelve
(12) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period. The amount
of such loss of rents or business income insurance, as applicable,
shall be determined prior to the date hereof and at least once each
year thereafter based on Borrower's reasonable estimate of the gross
income from the Property for the succeeding period of coverage required
above. All proceeds payable to Lender pursuant to this subsection shall
be held by Lender and shall be applied to the obligations secured by
the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained shall
be deemed to relieve Borrower of its obligations to pay the obligations
secured by the Loan Documents on the respective dates of payment
provided for in the Note, this Agreement and the other Loan Documents
except to the extent such amounts are actually paid out of the proceeds
of such loss of rents or business income insurance, as applicable;
(iv) at all times during which material structural
construction, repairs or alterations are being made with respect to the
Improvements, and only if the Property coverage form does not otherwise
apply, (A) owner's contingent or protective liability insurance
covering claims not covered by or under the terms or provisions of the
above
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mentioned commercial general liability insurance policy; and (B) the
insurance provided for in subsection (i) above written in a so-called
Builder's Risk Completed Value form (1) on a non-reporting basis, (2)
against "all risks" insured against pursuant to subsection (i) above,
(3) including permission to occupy the Property, and (4) with an agreed
amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of
the State, and employer's liability insurance in respect of any work or
operations on or about the Property, or in connection with the Property
or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on
terms consistent with the commercial property insurance policy required
under subsection (i) above;
(vii) excess liability insurance in an amount not less than
$50,000,000 per occurrence on terms consistent with the commercial
general liability insurance required under subsection (ii) above; and
(viii) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time
to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to
the Property located in or around the region in which the Property is
located.
The Policies required to be maintained pursuant to clauses (i) through
(viii) above shall contain no exclusion for Losses resulting from acts of
terrorism as certified under the Terrorism Risk Insurance Act of 2002, as the
same may be amended from time to time.
(b) All insurance provided for in Section 8.1(a) shall be obtained
under valid and enforceable policies (collectively, the "POLICIES" or in the
singular, the "POLICY"), and shall be subject to the approval of Lender as to
insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of "AA-" or better by at least two Rating Agencies, one of which
must be S&P or such other Rating Agencies approved by Lender, provided, however,
that if Borrower elects to have its insurance coverage provided by a syndicate
of insurers, then (i) if such syndicate consists of 5 or more members, (A) at
least 60% of the insurance coverage (and 100% of the first layer of such
coverage) shall be provided by insurance companies having a claims paying
ability rating of "AA-" or better by at least two Rating Agencies, one of which
must be S&P, and (B) of the remaining 40% of the coverage, (I) 30% (of the total
syndicate) shall be provided by insurance companies having a claims paying
ability rating of "BBB-" or better by at least two Rating Agencies, one of which
must be S&P, and (II) the remaining 10% (of the total syndicate) shall be
provided by insurance carriers having a general policy rating of "A" or better
and a financial class of "XII" or better by A.M. Best Company, Inc., or (ii) if
such syndicate consists of four or fewer members, (A) at least 75% of the
insurance coverage (and 100% of the first layer of such coverage) shall be
provided by insurance companies having a claims paying ability rating of "AA" or
better by at least two Rating Agencies, one of which must be S&P, and (B) of the
remaining 25% of the coverage, (I) 15% (of the total syndicate) shall be
provided by insurance
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companies having a claims paying ability rating of "BBB-" or better by at least
two Rating Agencies, one of which must be S&P, and (II) the remaining 10% (of
the total syndicate) shall be provided by insurance carriers having a general
policy rating of "A" or better and a financial class of "XII" or better by A.M.
Best Company, Inc. Notwithstanding anything to the contrary contained herein,
Lender shall accept an "all-risk" Policy issued by Factory Mutual Insurance
Company ("Factory Mutual"), provided that (I) Factory Mutual maintains a general
policy rating of "A" or better and a financial class of "XII" or better by A.M.
Best Company, Inc. and a claims paying ability rating of "A+" or better by
Fitch, and (II) in connection with a Securitization, Lender confirms that, in
Lender's reasonable determination based on information from the Rating Agencies,
the ratings assigned to the portion or the Securitization represented by the
Loan will not be adversely affected as a result of the "all-risk" Policy being
issued by Factory Mutual. The Policies described in Section 8.1(a) shall
designate Lender and its successors and assigns as a "Named Insured." Not less
than ten (10) days prior to the expiration dates of the Policies theretofore
furnished to Lender, renewal Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the "INSURANCE PREMIUMS")
shall be delivered by Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 8.1(a).
(d) All Policies provided for or contemplated by Section 8.1(a), except
for the Policy referenced in Section 8.1(a)(v), shall name Mortgage Borrower as
the insured, Lender as a "Named Insured," and Mortgage Lender as an additional
insured, as their interests may appear, and in the case of property damage,
boiler and machinery, flood and earthquake insurance, shall provide that the
loss thereunder shall be payable to Mortgagee Lender, as mortgagee and loss
payee, and Lender, as their interests may appear.
(e) All Policies provided for in Section 8.1(a) shall contain clauses
or endorsements to the effect that:
(i) no act or negligence of Mortgage Borrower, or anyone
acting for Mortgage Borrower, or of any Tenant or other occupant, or
failure to comply with the provisions of any Policy, which might
otherwise result in a forfeiture of the insurance or any part thereof,
shall in any way affect the validity or enforceability of the insurance
insofar as Lender is concerned;
(ii) the Policies shall not be materially changed (other than
to increase the coverage provided thereby) or canceled without at least
thirty (30) days' prior written notice to Lender;
(iii) the issuers thereof shall give written notice to Lender
if the Policies have not been renewed thirty (30) days prior to its
expiration;
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(iv) Lender shall not be liable for (A) any Insurance Premiums
thereon or subject to any assessments thereunder or (B) any reporting
requirements under such Policies; and
(v) any claim or defense the insurance company may have
against Borrower or Mortgage Borrower to deny payment of any claim by
Borrower or Mortgage Borrower thereunder shall not be effective against
Lender (and affirmatively providing that the insurance company will pay
the proceeds of such Policies to Lender notwithstanding any claim or
defense of the insurance company against Lender) and such Policies
shall contain an endorsement to such effect.
(f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Property, including, without
limitation, obtaining such insurance coverage as Lender in its sole discretion
deems appropriate. All premiums incurred by Lender in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and shall bear interest at the Default Rate.
Section 8.2. CASUALTY. If the Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (a "CASUALTY"), Borrower shall
give prompt notice of such damage to Lender and shall cause Mortgage Borrower to
promptly commence and diligently prosecute the Restoration of the Property in
accordance with Section 8.4 of this Agreement and Section 8.4 of the Mortgage
Loan Agreement, whether or not Mortgage Lender or Lender makes any Net Proceeds
available pursuant to Section 8.4 of the Mortgage Loan Agreement or Section 8.4
hereof (as applicable)(unless Borrower has satisfied all conditions set forth in
Section 8.4 and Lender does not disburse the Net Proceeds, in which case
Borrower shall have no obligation under this Agreement to restore the Property).
Borrower shall cause Mortgage Borrower to pay all costs of such Restoration
whether or not such costs are covered by insurance. Lender may, but shall not be
obligated to make proof of loss if not made promptly by Borrower, subject to the
rights and obligations of Mortgage Lender and Mortgage Borrower under the
Mortgage Loan Documents. Borrower shall cause Mortgage Borrower to adjust all
claims for Insurance Proceeds in consultation with, and approval of, Lender;
provided, however, if an Event of Default has occurred and is continuing, Lender
shall have the exclusive right to participate in the adjustment of all claims
for Insurance Proceeds.
Section 8.3. CONDEMNATION. Borrower shall promptly give Lender notice
of the actual or threatened commencement of any proceeding for the Condemnation
of the Property of which Borrower has knowledge and shall cause Mortgage
Borrower to deliver to Lender copies of any and all papers served in connection
with such proceedings. Lender may participate in any such proceedings, and
Borrower shall from time to time deliver to Lender all instruments requested by
it to permit such participation. Borrower shall cause Mortgage Borrower to, at
its expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner
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provided for its payment in the Note and in this Agreement and the Debt shall
not be reduced until any Award shall have been actually received and applied by
Lender, after the deduction of expenses of collection, to the reduction or
discharge of the Debt. 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 interest at the rate or rates provided herein or in the Note. If the
Property or any portion thereof is taken by a condemning authority, Borrower
shall cause Mortgage Borrower to promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section
8.4 hereof and Section 8.4 of the Mortgage Loan Agreement, whether or not Lender
or Mortgage Lender makes any Net Proceeds available pursuant to Section 8.4
hereof or Section 8.4 of the Mortgage Loan Agreement (as applicable). Subject to
the terms and provisions of the Mortgage Loan Documents, if the Collateral is
sold, through foreclosure or otherwise, prior to the receipt by Lender of the
Award, Lender shall have the right, whether or not a deficiency judgment on the
Note shall have been sought, recovered or denied, to receive the Award, or a
portion thereof sufficient to pay the Debt.
Section 8.4. RESTORATION. Subject to the rights of Mortgage Lender and
the obligations of Mortgage Borrower under the Mortgage Loan Documents, the
following provisions shall apply in connection with the Restoration of the
Property:
(a) If the Net Proceeds shall be less than $2,500,000 and the costs of
completing the Restoration shall be less than $2,500,000, the Net Proceeds will
be disbursed by Lender to Borrower or Mortgage Borrower upon receipt, provided
that all of the conditions set forth in Section 8.4(b)(i) below and those
conditions set forth in Section 8.4(b)(i) of the Mortgage Loan Agreement are
each met and Borrower delivers to Lender a written undertaking by Mortgage
Borrower to expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Agreement and the
Mortgage Loan Agreement.
(b) If the Net Proceeds are equal to or greater than $2,500,000 or the
costs of completing the Restoration are equal to or greater than $2,500,000,
Lender shall make the Net Proceeds available for the Restoration in accordance
with the provisions of this Section 8.4. The term "NET PROCEEDS" for purposes of
this Section 8.4 shall mean: (i) the net amount of all insurance proceeds
received by Lender pursuant to Section 8.1(a)(i), (iv), (vi) and (vii) as a
result of a Casualty, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
the same ("INSURANCE PROCEEDS"), or (ii) the net amount of the Award as a result
of a Condemnation, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
the same ("CONDEMNATION PROCEEDS"), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower or
Mortgage Borrower for Restoration provided that each of the following
conditions are met:
(A) Mortgage Lender is permitting such Net Proceeds
to be applied toward the Restoration of the Property in
accordance with the Mortgage Loan Documents;
(B) no Event of Default shall have occurred and be
continuing;
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(C) (1) in the event the Net Proceeds are Insurance
Proceeds, less than thirty percent (30%) of the total floor
area of the Improvements on the Property has been damaged,
destroyed or rendered unusable as a result of a Casualty or
(2) in the event the Net Proceeds are Condemnation Proceeds,
less than fifteen percent (15%) of the land constituting the
Property is taken, such land is located along the perimeter or
periphery of the Property, and no portion of the Improvements
is located on such land;
(D) Leases covering in the aggregate at least
seventy-five percent (75%) of the total rentable space in the
Property which has been demised under executed and delivered
Leases in effect as of the date of the occurrence of such
Casualty or Condemnation, whichever the case may be, and each
Major Lease in effect as of such date shall remain in full
force and effect during and after the completion of the
Restoration without abatement of rent beyond the time required
for Restoration;
(E) Borrower shall commence or cause Mortgage
Borrower to commence the Restoration as soon as reasonably
practicable (but in no event later than ninety (90) days after
such Casualty or Condemnation, whichever the case may be,
occurs) and shall diligently pursue the same to satisfactory
completion, with commencement defined for purposes hereof to
mean the filing of the requisite applications and ancillary
paperwork necessary to receive building permits;
(F) Lender shall be satisfied that any operating
deficits, including all scheduled payments of principal and
interest under the Note, which will be incurred with respect
to the Property as a result of the occurrence of any such
Casualty or Condemnation, whichever the case may be, will be
covered out of the insurance coverage referred to in Section
8.1(a)(iii) above;
(G) Lender shall be satisfied that the Restoration
will be completed on or before the earliest to occur of (1)
six (6) months prior to the Maturity Date, (2) the earliest
date required for such completion under the terms of any
Leases or material agreements affecting the Property, (3) such
time as may be required under applicable zoning law,
ordinance, rule or regulation, or (4) the expiration of the
insurance coverage referred to in Section 8.1(a)(iii);
(H) the Property and the use thereof after the
Restoration will be in compliance with and permitted under all
Legal Requirements;
(I) the Restoration shall be done and completed by
Borrower or Mortgage Borrower, as applicable, in an
expeditious and diligent fashion and in compliance with all
applicable Legal Requirements;
(J) such Casualty or Condemnation, as applicable,
does not result in the loss of access to the Property or the
Improvements, which access is otherwise
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not replaced via new improvements to the Property or an access
easement (respectively);
(K) Borrower shall deliver, or cause to be delivered,
to Lender a signed detailed budget approved in writing by
Mortgage Borrower's architect or engineer stating the
estimated entire cost of completing the Restoration, which
budget shall be reasonable acceptable to Lender; and
(L) the Net Proceeds together with any cash or cash
equivalent deposited by Borrower or Mortgage Borrower with
Lender are sufficient in Lender's reasonable judgment to cover
the cost of the Restoration.
(ii) Subject to the terms and provisions of the Mortgage Loan
Documents, the Net Proceeds shall be held by Lender until disbursements
commence, and, until disbursed in accordance with the provisions of
this Section 8.4, shall constitute additional security for the Debt and
other obligations under the Loan Documents. The Net Proceeds shall be
disbursed by Lender to, or as directed by, Borrower from time to time
during the course of the Restoration, upon receipt of evidence
satisfactory to Lender that (A) all the conditions precedent to such
advance, including those set forth in Section 8.4(b)(i), have been
satisfied, (B) 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 related Restoration item have been
paid for in full, and (C) there exist no notices of pendency, stop
orders, mechanic's or materialman's liens or notices of intention to
file same, or any other liens or encumbrances of any nature whatsoever
on the Property which have not either been fully bonded to the
satisfaction of Lender (and in accordance with applicable Legal
Requirements) and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the
Title Insurance Policy (as defined in the Mortgage Loan Agreement).
Notwithstanding the foregoing, Insurance Proceeds from the Policies
required to be maintained by Borrower pursuant to Section 8.1(a)(iii)
shall be controlled by Lender at all times, shall not be subject to the
provisions of this Section 8.4 and shall be used solely for the payment
of the obligations under the Loan Documents and Operating Expenses.
(iii) All plans and specifications required in connection with
the Restoration shall be subject to prior review and acceptance in all
respects by Lender and by an independent consulting engineer selected
by Lender (the "RESTORATION CONSULTANT"). 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 the
Restoration, as well as the contracts in excess of $250,000 under which
they have been engaged, shall be subject to prior review and acceptance
by Lender and the Restoration Consultant. All costs and expenses
incurred by Lender in connection with making the Net Proceeds available
for the Restoration, including, without limitation, reasonable counsel
fees and disbursements and the Restoration Consultant's fees, shall be
paid by Borrower or Mortgage Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the
costs actually incurred from time to time for
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work in place as part of the Restoration, as certified by the
Restoration Consultant, minus the Restoration Retainage. The term
"Restoration Retainage" shall mean an amount equal to ten percent (10%)
of the costs actually incurred for work in place as part of the
Restoration, as certified by the Restoration Consultant, until the
Restoration has been completed. The Restoration Retainage shall be
reduced to five percent (5%) of the costs incurred upon receipt by
Lender of satisfactory evidence that fifty percent (50%) of the
Restoration has been completed. The Restoration Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in
this Section 8.4(b), be less than the amount actually held back by
Borrower or Mortgage Borrower, as applicable, from contractors,
subcontractors and materialmen engaged in the Restoration. The
Restoration Retainage shall not be released until the Restoration
Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 8.4(b) and that all
approvals necessary for the re-occupancy and use of the Property have
been obtained from all appropriate Governmental Authorities, and Lender
receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the
Restoration Retainage; provided, however, that Lender will release the
portion of the Restoration Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as
of the date upon which the Restoration Consultant certifies to Lender
that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with
the provisions of the contractor's, subcontractor's or materialman's
contract, the contractor, subcontractor or materialman delivers the
lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested
by Lender or by the title company issuing the Title Insurance Policy,
and Lender receives an endorsement to the Title Insurance Policy
insuring the continued priority of the lien of the Mortgage and
evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Restoration
Retainage shall be approved by the surety company, if any, which has
issued a payment or performance bond with respect to the contractor,
subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the reasonable opinion of Lender in
consultation with the Restoration Consultant, be sufficient to pay in
full the balance of the costs which are estimated by the Restoration
Consultant to be incurred in connection with the completion of the
Restoration, Borrower or Mortgage Borrower shall deposit the deficiency
(the "NET PROCEEDS DEFICIENCY") with Lender before any further
disbursement of the Net Proceeds shall be made. The Net Proceeds
Deficiency deposited with Lender shall be held by Lender and shall be
disbursed for costs actually incurred in connection with the
Restoration on the same conditions applicable to the disbursement of
the Net Proceeds, and until so disbursed pursuant to this Section
8.4(b) shall constitute additional security for the Debt and other
obligations under the Loan Documents.
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(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited
with Lender after the Restoration Consultant certifies to Lender that
the Restoration has been completed in accordance with the provisions of
this Section 8.4(b) and Section 8.4(b) of the Mortgage Loan Agreement,
and the receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in
full, shall be remitted by Lender to Borrower (or as directed by
Borrower), provided no Event of Default shall have occurred and shall
be continuing under the Note, this Agreement or any of the other Loan
Documents.
(c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 8.4(b)(vii) above may (x) be retained and applied by Lender toward
the payment of the Debt whether or not then due and payable in such order,
priority and proportions as Lender in its sole discretion shall deem proper, or,
(y) at the sole discretion of Lender, the same may be paid, either in whole or
in part, to Borrower for such purposes and upon such conditions as Lender shall
designate.
(d) Notwithstanding anything herein to the contrary, in the event that
the Property is being restored by Mortgage Borrower pursuant to the Mortgage
Loan Documents, Lender shall agree to the release of the Net Proceeds for
Restoration of the Property pursuant to the terms and provisions of the Mortgage
Loan Documents, subject to Lender's rights to receive and approve in its
discretion all deliverables set forth in this Section 8.4.
ARTICLE IX
RESERVE FUNDS
Borrower shall cause Mortgage Borrower to comply with all of its
obligations under Article IX of the Mortgage Loan Agreement. Notwithstanding
anything to the contrary contained in this Agreement, if at any time and for any
reason (including, without limitation, the satisfaction of the Mortgage Loan),
Mortgage Borrower is no longer maintaining any of the Reserve Accounts (as
defined in the Mortgage Loan Agreement) in accordance with the terms of the
Mortgage Loan Documents or, with respect to the Replacement Reserve Funds, the
Reserve Letter of Credit in lieu thereof in accordance with the terms of the
Mortgage Loan Agreement, (i) Borrower shall promptly establish and maintain with
Lender and for the benefit of Lender reserves in replacement and substitution
thereof, which substitute reserves shall be subject to all of the same terms and
conditions applicable under the Mortgage Loan Documents with respect to the
Reserve Accounts being replaced (including, but not limited to, Article X of the
Mortgage Loan Agreement relating to cash management and Borrower shall, and
shall cause Mortgage Borrower to, acknowledge and agree to the amendments to
this Agreement relating to such substitution to cash management provided such
amendments are substantially similar to Article X of the Mortgage Loan
Agreement), and (ii) to the extent not prohibited by Mortgage Lender under the
Mortgage Loan Documents, Borrower shall or shall cause Mortgage Lender to remit
to Lender any funds from Reserve Accounts that were remaining in such reserves
at the time of the termination of such reserves for the purpose of funding the
equivalent substitute reserves. In addition, upon the occurrence of a Mezzanine
Litigation Event (as defined in the Litigation
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Xxxxxxxxx), Xxxxxx may cause Borrower to establish (or establish on Borrower's
behalf) an account to collect excess cash flow pursuant to the terms of the
Litigation Indemnity.
ARTICLE X
CASH MANAGEMENT
Borrower and Lender acknowledge and agree that all Rent and other
income from the Property will be deposited and disbursed in accordance with
Article X of the Mortgage Loan Agreement entitled "Cash Management."
Notwithstanding anything to the contrary contained in this Agreement, if at any
time and for any reason (including, without limitation, the satisfaction of the
Mortgage Loan), Mortgage Borrower is no longer maintaining the accounts
established pursuant to Article X of the Mortgage Loan Agreement or if the cash
management arrangement referred to in the Mortgage Loan Agreement is no longer
in full force and effect, Borrower shall promptly enter into a substitute cash
management agreement and related lockbox agreement with Agent (as defined in the
Mortgage Loan Agreement) (or such other depository institution as Lender shall
direct, or another agent selected by Borrower and reasonably acceptable to
Lender) on substantially the same terms as the agreements entered into as of the
date hereof in connection with the related Mortgage Loan.
ARTICLE XI
EVENTS OF DEFAULT; REMEDIES
Section 11.1. EVENT OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "EVENT OF DEFAULT":
(a) if any regularly scheduled portion of the Debt is not paid on or
prior to the date the same is due or if the entire Debt is not paid on or before
the Maturity Date or if any other portion of the Debt is not paid within five
(5) days of the date the same is due;
(b) intentionally omitted;
(c) if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender as provided in
Section 8.1;
(d) if any covenant contained in Article 6 or any covenant contained in
Article 7 hereof is breached;
(e) if any representation or warranty of, or with respect to, Borrower,
Mortgage Borrower, Borrower Principal, or any member, general partner, principal
or beneficial owner of any of the foregoing, made herein, in any other Loan
Document, or in any certificate, report, financial statement or other instrument
or document furnished to Lender at the time of the closing of the Loan or during
the term of the Loan shall have been false or misleading in any material respect
when made (a "REP & WARRANTY BREACH"), unless (i) Borrower notifies Lender of
such Rep & Warranty Breach promptly upon becoming aware of it and (ii) such Rep
&
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Warranty Breach (A) was unintentional, (B) is immaterial and (iii) if capable
of being cured, is cured within thirty (30) days following notice from Lender;
(f) if (i) Borrower or Mortgage Borrower shall commence any case,
proceeding or other action (A) under any Creditors Rights Laws, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, or (B) seeking appointment of
a receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or Borrower or Mortgage Borrower
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Borrower or Mortgage any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of sixty (60) days;
or (iii) there shall be commenced against Borrower or Mortgage any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of any order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or (iv) Borrower or Mortgage
Borrower shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) Borrower or Mortgage shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due;
(g) if Borrower shall be in default beyond applicable notice and grace
periods under any other pledge agreement or other security agreement covering
any part of the Collateral, whether it be superior or junior in lien to the
Pledge Agreement;
(h) intentionally omitted;
(i) if any federal tax lien is filed against Borrower, any member or
general partner of Borrower, Borrower Principal, the Collateral or the Property
and same is not discharged of record within thirty (30) days after same is
filed;
(j) if a judgment is filed against the Borrower in excess of $50,000
which is not fully covered by insurance or which is not vacated or discharged
within 90 days;
(k) if any default occurs under any guaranty or indemnity executed in
connection herewith and such default continues after the expiration of
applicable grace periods, if any;
(l) if Borrower or Mortgage Borrower shall permit any event within its
control to occur that would cause any REA to terminate without notice or action
by any party thereto or would entitle any party to terminate any REA and the
term thereof by giving notice to Borrower or Mortgage Borrower; or any REA shall
be surrendered, terminated or canceled for any reason or under any circumstance
whatsoever except as provided for in such REA; or any term of any REA shall be
modified or supplemented without Lender's prior written consent; or Borrower or
Mortgage Borrower shall fail, within ten (10) Business Days after demand by
Lender, to exercise its option to renew or extend the term of any REA or shall
fail or neglect to
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pursue diligently all actions necessary to exercise such renewal rights pursuant
to such REA except as provided for in such REA;
(m) if any of the assumptions contained in any opinion relating to
issues of substantive consolidation delivered to Lender in connection with the
Loan, or in any other opinion relating to substantive consolidation delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect;
(n) If any of Borrower or its Subsidiaries shall breach any of the
terms of:
(i) Section 2.5(g) (Payments upon a Liquidation Event);
(ii) Section 5.15 (Liens);
(iii) intentionally deleted;
(iv) Section 5.25 (Special Distributions);
(v) Section 5.28 (Limitations);
(vi) Section 5.29 (Limitations on Distributions);
(vii) Section 5.30 (Other Limitations);
(viii) intentionally deleted;
(ix) Section 5.32 (Refinancing);
(o) if a Mortgage Loan Event of Default occurs; or
(p) if Borrower shall continue to be in default under any other term,
covenant or condition of this Agreement or any of the Loan Documents for more
than ten (10) days after notice from Lender in the case of any default which can
be cured by the payment of a sum of money or for thirty (30) days after notice
from Lender in the case of any other default, provided that if such default
cannot reasonably be cured within such thirty (30) day period and Borrower shall
have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Borrower in
the exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of sixty (60) days.
Section 11.2. REMEDIES.
(a) Upon the occurrence of an Event of Default (other than an Event of
Default described in Section 11.1(f) above) and at any time thereafter Lender
may, in addition to any other rights or remedies available to it pursuant to
this Agreement and the other Loan Documents or at law or in equity, take such
action, without notice or demand, that Lender deems advisable to protect and
enforce its rights against Borrower and in the Collateral, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may
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enforce or avail itself of any or all rights or remedies provided in the Loan
Documents and may exercise all the rights and remedies of a secured party under
the UCC, as adopted and enacted by the State of Delaware or States where any of
the Collateral is located, against Borrower and the Collateral, including,
without limitation, all rights or remedies available at law or in equity; and
upon any Event of Default described in Section 11.1(f) above, the Debt and all
other obligations of Borrower hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default, all or any one or more
of the rights, powers, privileges and other remedies available to Lender against
Borrower under this Agreement or any of the other Loan Documents executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Lender at any time and from time to time, whether or not all or any of the
Debt shall be declared due and payable, and whether or not Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to the
Collateral. Any such actions taken by Lender shall be cumulative and concurrent
and may be pursued independently, singularly, successively, together or
otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
ARTICLE XII
ENVIRONMENTAL PROVISIONS
Section 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants, based upon the Environmental Report
of the Property and information that Borrower knows or should reasonably have
known, that: (a) there are no Hazardous Materials or underground storage tanks
in, on, or under the Property, except those that are both (i) in compliance with
Environmental Laws and with permits issued pursuant thereto (if such permits are
required), if any, and (ii) either (A) in the case of Hazardous Materials, in
amounts not in excess of that necessary to operate the Property for the purposes
set forth herein or (B) fully disclosed to and approved by Lender in writing
pursuant to the Environmental Report; (b) there are no past, present or
threatened Releases of Hazardous Materials in violation of any Environmental Law
or which would require remediation by a Governmental Authority in, on, under or
from the Property except as described in the Environmental Report; (c) there is
no threat of any Release of Hazardous Materials migrating to the Property except
as described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(e) Borrower does not know of, and has not received, any written or oral notice
or other communication from any Person relating to Hazardous Materials in, on,
under or from the Property; and (f) Borrower has truthfully and fully provided
to Lender, in writing, any and all information relating to environmental
conditions in, on, under or from the Property known to Borrower or contained in
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Borrower's files and records, including but not limited to any reports relating
to Hazardous Materials in, on, under or migrating to or from the Property and/or
to the environmental condition of the Property.
Section 12.2 ENVIRONMENTAL COVENANTS.
Borrower covenants and agrees that so long as Mortgage Borrower owns,
manages, is in possession of, or otherwise controls the operation of the
Property: (a) all uses and operations on or of the Property, whether by Mortgage
Borrower or any other Person, shall be in compliance with all Environmental Laws
and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous
Materials in, on, under or from the Property; (c) there shall be no Hazardous
Materials in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto,
if and to the extent required, and (ii) (A) in amounts not in excess of that
necessary to operate the Property for the purposes set forth herein or (B) fully
disclosed to and approved by Lender in writing; (d) cause Mortgage Borrower to
keep the Property free and clear of all Environmental Liens; (e) cause Mortgage
Borrower to, at its sole cost and expense, fully and expeditiously cooperate in
all activities pursuant to Section 12.4 below, including but not limited to
providing all relevant information and making knowledgeable persons available
for interviews; (f) Borrower shall cause Mortgage Borrower, at its sole cost and
expense, to perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender, upon Lender's reasonable belief that the
Property is not in full compliance with all Environmental Laws and share with
Lender the reports and other results thereof, and Lender and other Indemnified
Parties shall be entitled to rely on such reports and other results thereof; (g)
Borrower shall or shall cause Mortgage Borrower to, at its sole cost and
expense, comply with all reasonable written requests of Lender to (i) reasonably
effectuate remediation of any Hazardous Materials in, on, under or from the
Property that are found to be in violation of Environmental Law; and (ii) comply
with any Environmental Law; (h) Borrower shall not allow Mortgage Borrower, any
tenant or other user of the Property to violate any Environmental Law; and (i)
Borrower shall immediately notify Lender in writing after it has become aware of
(A) any presence or Release or threatened Release of Hazardous Materials in, on,
under, from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or
potential Environmental Lien against the Property; (D) any required or proposed
remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a Governmental
Authority) relating in any way to Hazardous Materials. Any failure of Borrower
to perform its obligations pursuant to this Section 12.2 shall constitute bad
faith waste with respect to the Property.
Section 12.3 LENDER'S RIGHTS.
Lender and any other Person designated by Lender, including but not
limited to any representative of a Governmental Authority, and any environmental
consultant, and any receiver appointed by any court of competent jurisdiction,
shall have the right, but not the obligation, to enter upon the Property at all
reasonable times to assess any and all aspects of the environmental condition of
the Property and its use, including but not limited to conducting any
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environmental assessment or audit (the scope of which shall be determined in
Lender's sole discretion) and taking samples of soil, groundwater or other
water, air, or building materials, and conducting other invasive testing. To the
extent that any such Person is an agent of Lender, Lender shall require that
such Person is bonded and insured. Provided Lender gives Borrower at least 2
days advance notice and agrees to use reasonable efforts to minimize
interference with any tenants, Borrower shall cooperate with and provide (or
cause Mortgage Borrower to provide) access to Lender and any such person or
entity designated by Lender. Other than in connection with what Lender
determines to be an emergency situation, Lender agrees not to conduct any
invasive testing.
Section 12.4 OPERATIONS AND MAINTENANCE PROGRAMS.
If recommended by the Environmental Report or any other environmental
assessment or audit of the Property, Borrower shall cause Mortgage Borrower to
establish and comply with an operations and maintenance program with respect to
the Property, in form and substance reasonably acceptable to Lender, prepared by
an environmental consultant reasonably acceptable to Lender, which program shall
address any asbestos-containing material or lead based paint that may now or in
the future be detected at or on the Property. Without limiting the generality of
the preceding sentence, Lender may require (a) periodic notices or reports to
Lender with regard to Borrower's operations and maintenance programs in form,
substance and at such intervals as Lender may specify, (b) an amendment to such
operations and maintenance program to address changing circumstances, laws or
other matters, (c) at Borrower's sole expense, supplemental examination of the
Property by consultants specified by Lender, (d) provided Lender gives Borrower
at least 2 days advance notice and agrees to use reasonable efforts to minimize
interference with any tenants, access to the Property by Lender, its agents or
servicer, to review and assess the environmental condition of the Property and
Mortgage Borrower's compliance with any operations and maintenance program, and
(e) variation of the operations and maintenance program in response to the
reports provided by any such consultants.
Section 12.5 ENVIRONMENTAL DEFINITIONS.
"ENVIRONMENTAL LAW" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations, standards, policies and
other government directives or requirements, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act and the
Resource Conservation and Recovery Act, that apply to Borrower or the Property
and relate to Hazardous Materials or protection of human health or the
environment. "ENVIRONMENTAL LIENS" means all Liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of
Borrower or any other Person. "ENVIRONMENTAL REPORT" means the written reports
resulting from the environmental site assessments of the Property delivered to
Lender in connection with the Loan. "HAZARDOUS MATERIALS" shall mean petroleum
and petroleum products and compounds containing them, including gasoline, diesel
fuel and oil; explosives, flammable materials; radioactive materials;
polychlorinated biphenyls and compounds containing them; lead and lead-based
paint; asbestos or asbestos-containing materials in any form that is or could
become friable; underground or above-ground storage tanks, whether empty or
containing any substance; any substance the presence of which on the Property is
prohibited by any federal, state or local authority; any substance that requires
special handling; and any other material or substance now
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or in the future defined as a "hazardous substance," "hazardous material",
"hazardous waste", "toxic substance", "toxic pollutant", "contaminant", or
"pollutant" within the meaning of any Environmental Law. "RELEASE" of any
Hazardous Materials includes but is not limited to any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Materials.
ARTICLE XIII
SECONDARY MARKET
Section 13.1 TRANSFER OF LOAN. Lender may, at any time, sell, pledge,
transfer or assign the Loan Documents, or grant participations therein (all of
the foregoing, "PARTICIPATIONS") or syndicate the Loan ("SYNDICATION") or issue
mortgage pass-through certificates or other securities evidencing a beneficial
interest in a rated or unrated public offering or private placement
("SECURITIES") (the Syndication or the issuance of Participations and/or
Securities, a "SECURITIZATION").
Section 13.2 DELEGATION OF SERVICING. At the option of Lender, the Loan
may be serviced by a servicer/trustee selected by Lender ("SERVICER") and Lender
may delegate all or any portion of its responsibilities under this Agreement and
the other Loan Documents to such servicer/trustee pursuant to a servicing
agreement between Lender and such servicer/trustee.
Section 13.3 DISSEMINATION OF INFORMATION. Lender may forward to each
purchaser, transferee, assignee, or servicer of, and each participant, or
investor in, the Loan, or any Participations and/or Securities or any of their
respective successors (collectively, the "INVESTOR") or any Rating Agency rating
the Loan, or any Participations and/or Securities, each prospective Investor,
and any organization maintaining databases on the underwriting and performance
of commercial mortgage loans, all documents and information which Lender now has
or may hereafter acquire relating to the Debt and to Borrower, Mortgage
Borrower, any managing member or general partner thereof, Borrower Principal,
and the Property, including financial statements, whether furnished by Borrower
or otherwise, as Lender determines necessary or desirable. Borrower irrevocably
waives any and all rights it may have under applicable Legal Requirements to
prohibit such disclosure, including but not limited to any right of privacy.
Section 13.4 COOPERATION. At the request of the holder of the Note and,
to the extent not already required to be provided by Borrower under this
Agreement, Borrower and Borrower Principal shall use reasonable efforts to
provide information not in the possession of the holder of the Note in order to
satisfy the market standards to which the holder of the Note customarily adheres
or which may be reasonably required in the marketplace or by the Rating Agencies
in connection with such sales or transfers, including, without limitation, to:
(a) provide, or cause Mortgage Borrower to provide, (i) updated
financial, budget and other information with respect to the Property, the
Collateral, Borrower, Mortgage Borrower, Sponsor, Borrower Principal and Manager
and (ii) modifications and/or updates to the appraisals, market studies,
environmental reviews and reports (Phase I reports and, if appropriate, Phase II
reports) and engineering reports of the Property obtained in connection with
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the making of the Loan (all of the foregoing being referred to as the "PROVIDED
INFORMATION"), together, if customary, with appropriate verification and/or
consents of the Provided Information through letters of auditors or opinions of
counsel of independent attorneys acceptable to Lender and the Rating Agencies;
(b) make changes to the organizational documents of Borrower or
Mortgage;
(c) at Borrower's expense, cause counsel to render or update existing
opinion letters as to enforceability and non-consolidation, which may be relied
upon by the holder of the Note, the Rating Agencies and their respective
counsel, which shall be dated as of the closing date of the Securitization;
(d) provided Lender gives at least 2 days advance notice and agrees to
use reasonable efforts to minimize interference with any tenants, permit site
inspections, appraisals, market studies and other due diligence investigations
of the Property, as may be reasonably requested by the holder of the Note or the
Rating Agencies or as may be necessary or appropriate in connection with the
Securitization;
(e) make the representations and warranties with respect to the
Property, the Collateral, Borrower, Mortgage Borrower, Borrower Principal,
Manager and the Loan Documents as Borrower has made in the Loan Documents and,
subject to such knowledge or diligence qualifiers as may be necessary, such
other representations and warranties with respect to Borrower, Mortgage
Borrower, the Property, the Collateral and Manager, as may be reasonably
requested by the holder of the Note or the Rating Agencies;
(f) execute such amendments to the Loan Documents as may be requested
by the holder of the Note or the Rating Agencies or otherwise to effect the
Securitization including, without limitation, bifurcation of the Loan into two
or more components and/or separate notes and/or creating a senior/subordinate
note structure; provided, however, that Borrower shall not be required to modify
or amend any Loan Document if such modification or amendment would (i) change
the interest rate, the stated maturity or the amortization of principal set
forth in the Note, except in connection with a bifurcation of the Loan which may
result in varying fixed interest rates and amortization schedules, but which
shall have the same initial weighted average coupon of the original Note, or
(ii) in the reasonable judgment of Borrower, modify or amend any other material
economic term of the Loan, or (iii) in the reasonable judgment of Borrower,
materially increase Borrower's obligations and liabilities, or materially
decrease Borrower's rights, under the Loan Documents. Borrower acknowledges that
in connection with a Securitization, Lender may change the Selected Day in its
sole discretion, but in no event to earlier than the fifth (5th) of each month.
(g) deliver to Lender and/or any Rating Agency, (i) one or more
certificates executed by an officer of Borrower certifying as to the accuracy,
as of the closing date of the Securitization, of all representations made by
Borrower in the Loan Documents as of the Closing Date in all relevant
jurisdictions or, if such representations are no longer accurate, certifying as
to what modifications to the representations would be required to make such
representations accurate as of the closing date of the Securitization, and (ii)
certificates of the relevant
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Governmental Authorities in all relevant jurisdictions indicating the good
standing and qualification of Borrower as of the date of the closing date of the
Securitization;
(h) have reasonably appropriate personnel participate in a bank meeting
and/or presentation for the Rating Agencies or Investors; and
(i) cooperate with and assist Lender in obtaining ratings of the
Securities from two (2) or more of the Rating Agencies.
Borrower shall pay all costs and expenses incurred by Borrower in
connection with the compliance of Borrower and, if applicable, Mortgage Borrower
and Borrower Principal, with requests made under this Section 13.4, including,
without limitation, any additional costs and expenses payable in connection with
the substitution for Factory Mutual of an acceptable insurer pursuant to Section
8.1 hereof; provided, however, that Borrower shall not be responsible for the
payment of any costs or expenses incurred by or on behalf of Lender, or any
Rating Agency fees, in connection with a Securitization.
In the event that Borrower requests any consent or approval hereunder
and the provisions of this Agreement or any Loan Documents require the receipt
of written confirmation from each Rating Agency with respect to the rating on
the Securities, or, in accordance with the terms of the transaction documents
relating to a Securitization, such a rating confirmation is required in order
for the consent of Lender to be given, Borrower shall pay all of the costs and
expenses of Lender, Lender's servicer and each Rating Agency in connection
therewith, and, if applicable, shall pay any fees imposed by any Rating Agency
as a condition to the delivery of such confirmation.
Section 13.5 SECURITIZATION INDEMNIFICATION.
(a) Borrower and Borrower Principal understand that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement, offering memorandum or private placement memorandum (each, a
"DISCLOSURE DOCUMENT") and may also be included in filings with the Securities
and Exchange Commission pursuant to the Securities Act or the Exchange Act, or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower and Borrower Principal
will cooperate with the holder of the Note in updating the Disclosure Document
by providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.
(b) Borrower and Borrower Principal agree to provide in connection with
each of (i) a preliminary and a final offering memorandum or private placement
memorandum or similar document (including any Investor or Rating Agency "term
sheets" or presentations relating to the Property and/or the Loan) or (ii) a
preliminary and final prospectus or prospectus supplement, as applicable, which
are delivered to Borrower and Borrower Principal for review, an indemnification
certificate (A) certifying that (I) Borrower and Borrower Principal have
carefully examined such memorandum or prospectus or other document actually
delivered by or
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on behalf of Lender (including any Investor or Rating Agency "term sheets" or
presentations relating to the Property and/or the Loan), as applicable,
including without limitation, the sections entitled "Special Considerations,"
and/or "Risk Factors," and "Certain Legal Aspects of the Mortgage Loan," or
similar sections, and all sections relating to Borrower, Borrower Principal,
Manager, their Affiliates, the Loan, the Loan Documents and the Property, and
any risks or special considerations relating thereto, and any other sections
reasonably requested by Lender (all such sections, collectively, the "DISCLOSED
MATERIALS"), and (II) to the best of Borrower's knowledge except as specifically
identified by Borrower, the Disclosed Materials do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they
were made, not misleading, (B) indemnifying Lender (and for purposes of this
Section 13.5, Lender hereunder shall include its officers and directors) and the
Affiliate of Lender that (i) has filed the registration statement, if any,
relating to the Securitization and/or (ii) which is acting as issuer, depositor,
sponsor and/or a similar capacity with respect to the Securitization (any Person
described in (i) or (ii), an "ISSUER PERSON"), and each director and officer of
any Issuer Person, and each Person or entity who controls any Issuer Person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the "ISSUER GROUP"), and each Person which is acting
as an underwriter, manager, placement agent, initial purchaser or similar
capacity with respect to the Securitization, each of its directors and officers
and each Person who controls any such Person within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act (collectively, the
"UNDERWRITER GROUP") for any Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Losses arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Disclosed Materials or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated in the Disclosed Materials or necessary in order to make the statements
in the Disclosed Materials or in light of the circumstances under which they
were made, not misleading (collectively the "SECURITIES LIABILITIES") and (C)
agreeing to reimburse Lender, the Issuer Group and the Underwriter Group for any
legal or other expenses reasonably incurred by Lender and Issuer Group in
connection with investigating or defending the Securities Liabilities; provided,
however, that Borrower will be liable in any such case under clauses (B) or (C)
above only to the extent that any such Securities Liabilities arise out of or is
based upon any such untrue statement or omission made therein in reliance upon
the Disclosed Materials or any reports delivered by or on behalf of Borrower or
Borrower Principal in connection with the underwriting of the Loan, including,
without limitation, financial statements of Borrower or Borrower Principal,
operating statements, rent rolls, environmental site assessment reports and
Property condition reports with respect to the Property. This indemnity
agreement will be in addition to any liability which Borrower and Borrower
Principal may otherwise have. Moreover, the indemnification provided for in
Clauses (B) and (C) above shall be effective whether or not an indemnification
certificate described in (A) above is provided and, if Borrower or Borrower
Principal do not provide the indemnification certificate, shall be applicable
based on information previously provided by Borrower and Borrower Principal or
their Affiliates.
(c) In connection with filings under the Exchange Act or any
information provided to holders of Securities on an ongoing basis, Borrower and
Borrower Principal agree to indemnify (i) Lender, the Issuer Group and the
Underwriter Group for Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Securities
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Liabilities arise out of or are based upon the omission or alleged omission to
state in the Provided Information a material fact required to be stated in the
Provided Information in order to make the statements in the Provided
Information, in light of the circumstances under which they were made not
misleading and (ii) reimburse Lender, the Issuer Group or the Underwriter Group
for any legal or other expenses reasonably incurred by Lender, the Issuer Group
or the Underwriter Group in connection with defending or investigating the
Securities Liabilities.
(d) Promptly after receipt by an indemnified party under this Section
13.5 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 13.5, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent that failure to notify
causes prejudice to the indemnifying party. In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such indemnified
party under this Section 13.5 the indemnifying party shall be responsible for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. The indemnifying party shall not be liable for the
expenses of more than one such separate counsel unless an indemnified party
shall have reasonably concluded that there may be legal defenses available to it
that are different from or additional to those available to another indemnified
party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 13.5(c)
or Section 13.5(d) is or are for any reason held to be unenforceable by an
indemnified party in respect of any losses, claims, damages or liabilities (or
action in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 13.5(c) or Section 13.5(d), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) the indemnified party's, Borrower's and Borrower Principal's relative
knowledge and access to information concerning the matter with respect to which
claim was asserted; (ii) the opportunity to correct and prevent any statement or
omission; and (iii) any other equitable considerations appropriate in the
circumstances. Lender,
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Borrower and Borrower Principal hereby agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation.
(f) The liabilities and obligations of Borrower, Borrower Principal and
Lender under this Section 13.5 shall survive the satisfaction of this Agreement
and the satisfaction and discharge of the Debt.
Section 13.6 [INTENTIONALLY OMITTED.]
Section 13.7 [INTENTIONALLY OMITTED.]
Section 13.8 MORTGAGE LOAN SECURITIZATION. Borrower also agrees to
cooperate with Mortgage Lender in connection with the Securitization of the
Mortgage Loan as set forth in Section 13.4 of the Mortgage Loan Agreement and,
to the extent set forth therein, at Borrower's expense.
ARTICLE XIV
INDEMNIFICATIONS
Section 14.1 GENERAL INDEMNIFICATION. Borrower shall indemnify, defend
and hold harmless the Indemnified Parties from and against any and all Losses
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Property or any part thereof or
on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (b) any use, nonuse or condition in, on or about the Property
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (c) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property or any part thereof; (d) any failure of the Property or the Collateral
to be in compliance with any applicable Legal Requirements; (e) any and all
claims and demands whatsoever which may be asserted against Lender by reason of
any alleged obligations or undertakings on its part to perform or discharge any
of the terms, covenants, or agreements contained in any Lease; (f) the holding
or investing of the Mortgage Reserve Accounts or the performance of the Required
Work (as defined in the Mortgage Loan Agreement), or (g) the payment of any
commission, charge or brokerage fee to anyone which may be payable in connection
with the funding of the Loan (collectively, the "INDEMNIFIED LIABILITIES");
provided, however, that Borrower shall not have any obligation to Lender
hereunder to the extent that such Indemnified Liabilities arise from the gross
negligence, illegal acts, fraud or willful misconduct of Lender. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Lender.
Section 14.2 INTANGIBLE TAX INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified
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Parties and directly or indirectly arising out of or in any way relating to any
tax on the making of the Pledge Agreement, the Note or any of the other Loan
Documents, but excluding any income, franchise or other similar taxes.
Section 14.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Section 4.9 or Section 5.18 of this Agreement.
Section 14.4 SURVIVAL. The obligations and liabilities of Borrower
under this Article 14 shall fully survive indefinitely notwithstanding any
termination, satisfaction, or assignment of the Collateral pledged in the Pledge
Agreement. Notwithstanding the foregoing, if the Loan is paid off in full on the
Maturity Date, Borrower shall have no further liability under this Article 14
with respect to any event that occurs subsequent to the Maturity Date.
ARTICLE XV
EXCULPATION
Section 15.1 EXCULPATION.
(a) Except as otherwise provided herein or in the other Loan Documents,
Lender shall not enforce the liability and obligation of Borrower or Borrower
Principal, as applicable, to perform and observe the obligations contained
herein or in the other Loan Documents by any action or proceeding wherein a
money judgment shall be sought against Borrower, except that Lender may bring an
action under the UCC, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
this Agreement, the Note, the Pledge Agreement and the other Loan Documents, and
the interest in the Collateral and any other collateral given to Lender created
by this Agreement, the Note, the Pledge Agreement and the other Loan Documents;
provided, however, that, except as specifically provided herein, any judgment in
any such action or proceeding shall be enforceable against Borrower or Borrower
Principal, as applicable, only to the extent of Borrower's or Borrower
Principal's interest in the Collateral and in any other collateral given to
Lender. Lender, by accepting this Agreement, the Note, the Pledge Agreement and
the other Loan Documents, agrees that it shall not, except as otherwise provided
in this Section 15.1, xxx for, seek or demand any deficiency judgment against
Borrower or Borrower Principal in any such action or proceeding, under or by
reason of or under or in connection with this Agreement, the Note, the Pledge
Agreement or the other Loan Documents. The provisions of this Section 15.1 shall
not, however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Agreement, the Note, the Pledge Agreement or the
other Loan Documents; (ii) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
this Agreement and the Pledge Agreement; (iii) affect the validity or
enforceability of any indemnity (including, without limitation, those
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contained in Section 13.5 and Article 14 of this Agreement and the Environmental
Indemnity), guaranty, master lease or similar instrument made in connection with
this Agreement, the Note, the Pledge Agreement and the other Loan Documents;
(iv) impair the right of Lender to obtain the appointment of a receiver; (v)
impair the enforcement of the assignment of leases provisions contained in the
Pledge Agreement; or (vi) impair the right of Lender to obtain a deficiency
judgment or other judgment on the Note against Borrower or Borrower Principal if
necessary to obtain any Insurance Proceeds or Awards to which Lender would
otherwise be entitled under this Agreement; provided however, Lender shall only
enforce such judgment to the extent of the Insurance Proceeds and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the
contrary, Borrower and Borrower Principal shall be personally liable to Lender
on a joint and several basis for Losses due to:
(i) fraud or intentional misrepresentation by Borrower,
Borrower Principal or any other Affiliate of Borrower or Borrower
Principal in connection with the execution and the delivery of this
Agreement, the Note, the Pledge Agreement, any of the other Loan
Documents, or any certificate, report, financial statement or other
instrument or document furnished to Lender at the time of the closing
of the Loan or during the term of the Loan;
(ii) Mortgage Borrower's or Borrower's misapplication or
misappropriation of Rents received by Mortgage Borrower or Borrower
after the occurrence of an Event of Default;
(iii) Mortgage Borrower's or Borrower's misapplication or
misappropriation of tenant security deposits or Rents collected in
advance;
(iv) the misapplication or the misappropriation of Insurance
Proceeds or Awards;
(v) Borrower's or Mortgage Borrower's failure to pay Taxes,
Other Charges (except to the extent that sums sufficient to pay such
amounts have been deposited in escrow with Mortgage Lender pursuant to
the terms of the Mortgage Loan Agreement or with Lender pursuant to the
terms hereof and there exists no impediment to Mortgage Lender's or
Lender's utilization thereof), charges for labor or materials or other
charges that can create liens on the Property beyond any applicable
notice and cure periods specified herein;
(vi) Borrower or Mortgage Borrower's failure to return or to
reimburse Lender for all Personal Property taken from the Property by
or on behalf of Mortgage Borrower or Borrower and not replaced with
Personal Property of the same utility and of the same or greater value;
(vii) the misappropriation by Mortgage Borrower or Borrower of
any Net Liquidation Proceeds or other amounts due to Lender;
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(viii) Borrower's or Mortgage Borrower's failure following any
Event of Default to deliver to Lender upon demand all Rents and books
and records relating to the Property or the Collateral;
(ix) any act of intentional waste or arson by Mortgage
Borrower, Borrower, any principal, Affiliate, member or general partner
thereof or by Borrower Principal, any principal, Affiliate, member or
general partner thereof; or
(x) Borrower's or Mortgage Borrower's gross negligence or
willful misconduct.
(c) Notwithstanding the foregoing, the agreement of Lender not to
pursue recourse liability against Borrower and Borrower Principal as set forth
in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further
force and effect and the Debt shall be fully recourse to Borrower and Borrower
Principal jointly and severally in the event of (i) a default by Borrower or
Borrower Principal of any of the covenants set forth in Article 6, or a breach
by Mortgage Borrower under Article 6 of the Mortgage Loan Agreement, provided,
however, that a breach of the covenants set forth in Article 6 of this Agreement
or the Mortgage Loan Agreement, as applicable, shall not result in recourse
liability hereunder unless such breach was material and, within fifteen (15)
days of notice from Lender, Borrower fails to cure such breach and fails to
deliver to Lender a new or revised substantive non-consolidation opinion, in
form and substance and from counsel reasonably satisfactory to Lender in
accordance with the Rating Agency standards for the same, to the effect that
such failure does not negate/impair the opinion previously delivered to Lender,
(ii) a default by Borrower, Borrower Principal with respect to any of the
covenants set forth in Article 7 hereof, or (iii) if (A) a voluntary bankruptcy
or insolvency proceeding is commenced by Borrower or Mortgage Borrower, or (B)
an involuntary bankruptcy or insolvency proceeding is commenced against Borrower
or Mortgage Borrower which is not dismissed within ninety (90) days of filing
(provided, however, that Borrower and Borrower Principal shall not have recourse
liability hereunder in connection with any involuntary bankruptcy or insolvency
proceeding unless such involuntary proceeding is solicited, procured, consented
to or acquiesced in by Borrower, Mortgage Borrower, Borrower Principal or any
Affiliate of the foregoing in bad faith collusion with an intent to circumvent
the prohibition on recourse liability against the Borrower or Borrower Principal
set forth herein).
(d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the Pledge Agreement or to require that all collateral shall continue
to secure all of the indebtedness owing to Lender in accordance with this
Agreement, the Note, the Pledge Agreement or the other Loan Documents.
(e) Notwithstanding any provisions of this Article 15 to the contrary,
in no event shall Borrower's failure to pay Operating Expenses in the event cash
flow is insufficient to pay such expenses be considered an act of waste.
(f) Notwithstanding any other provision hereof, in the event that of a
foreclosure under the Pledge Agreement, and the subsequent transfer of interests
in Mortgage Borrower to Lender, Borrower Principal shall be released from its
liabilities under this Article 15
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with respect to any matters arising from events occurring subsequent to the date
of such transfer, as of the effective date of such transfer of interests in
Mortgage Borrower.
(g) The liability of the Borrower Principal and the Borrower under this
Section 15.1 shall be direct and immediate and not conditional or contingent
upon the pursuit of any remedies against Borrower or any other Person, nor
against the Collateral, and shall not be impaired or limited by any event,
including, without limitation, the following events, in each case whether
occurring with or without notice to the Borrower Principal or with or without
consideration:
(i) any extensions of time for performance required by any of
the Loan Documents or any extension or renewal of the Note;
(ii) any sale, assignment or foreclosure of the Note, the
Pledge Agreement or any of the other Loan Documents, or the Mortgage
Loan Documents or any Sale or Transfer of any or all of the Collateral;
(iii) any Assumption or any other change in the composition of
Borrower including the withdrawal or removal of the Borrower Principal
from any current or future position of ownership, management or control
of Borrower;
(iv) the accuracy or inaccuracy of the representations made by
Borrower in any of the Loan Documents;
(v) the release of Borrower or of any other Person from
performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents or the Mortgage Loan
Documents by operation of law, Lender's voluntary act or otherwise; or
(vi) the modification of the terms of any one or more of the
Loan Documents or the Mortgage Loan Documents.
Borrower Principal acknowledges that Lender would not make the Loan but for the
personal liability undertaken by the Borrower Principal in this Agreement. The
Borrower Principal agrees that it shall not demand or accept any payment from
Borrower in respect of any amounts owing or paid by the Borrower Principal
hereunder until one year and one day after such time as the Debt shall have been
paid in full.
ARTICLE XVI
NOTICES
Section 16.1. NOTICES.
All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested, (b)
expedited prepaid overnight delivery service, either commercial or United
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States Postal Service, with proof of attempted delivery, or by (c) telecopier
(with answer back acknowledged provided an additional notice is given pursuant
to subsection (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):
If to Lender: Bank of America, N.A.
Capital Markets Servicing Group
000 Xxxxx Xxxxxx Xxxxxx
6th Floor
CA9-706-06-42
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Servicing Manager
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Bank of America Legal Department
GCIB/CMBS
NC1-007-20-01
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower: Xxxxxxx Properties - 555 W. Fifth Senior Mezzanine, LLC/
Xxxxxxx Properties - 808 S. Xxxxx Xxxxxx Mezzanine, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Lammas, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower: Xxxxxxx Properties, L.P.
Principal 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Lammas, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
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A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.
ARTICLE XVII
FURTHER ASSURANCES
Section 17.1. REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Document which is not of public record: (i) with respect to
any Loan Document other than the Note, Borrower will issue, in lieu thereof, a
replacement of such other Loan Document, dated the date of such lost, stolen,
destroyed or mutilated Loan Document in the same principal amount thereof and
otherwise of like tenor and (ii) with respect to the Note, (a) Borrower will
execute a reaffirmation of the Debt as evidenced by such Note acknowledging that
Lender has informed Borrower that the Note was lost, stolen destroyed or
mutilated and that such Debt continues to be an obligation and liability of the
Borrower as set forth in the Note, a copy of which shall be attached to such
reaffirmation and (b) if requested by Lender, Borrower will execute a
replacement note and Lender or Lender's custodian (at Lender's option) shall
provide to Borrower Lender's (or Lender's custodian's) then standard form of
lost note affidavit and indemnity, which such form shall be reasonably
acceptable to Borrower.
Section 17.2. [INTENTIONALLY OMITTED.]
Section 17.3. FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every further acts, deeds, conveyances, deeds of trust, mortgages,
assignments, security agreements, control agreements, notices of assignments,
transfers and assurances as Lender shall, from time to time, reasonably require,
for the better assuring, conveying, assigning, transferring, and confirming unto
Lender the property and rights hereby mortgaged, deeded, granted, bargained,
sold, conveyed, confirmed, pledged, assigned, warranted and transferred or
intended now or hereafter so to be, or which Borrower may be or may hereafter
become bound to convey or assign to Lender, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing or
registering of the Pledge Agreement, or for complying with all Legal
Requirements. Borrower, on demand, will execute and deliver, and in the event it
shall fail to so execute and deliver, hereby authorizes Lender to execute in the
name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements and financing statement
amendments to evidence more effectively, perfect and maintain the priority of
the security interest of Lender in the Collateral. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender at
law and in equity, including without limitation, such rights and remedies
available to Lender pursuant to this Section 17.3.
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Section 17.4. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended after the date of this
Agreement which imposes a tax, either directly or indirectly, on the Debt or
Lender's interest in the Property or the Collateral, Borrower will pay the tax,
with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Borrower would be unlawful or taxable to
Lender or unenforceable or provide the basis for a defense of usury then Lender
shall have the option by written notice of not less than one hundred twenty
(120) days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property or the Collateral, or any part thereof which
imposes a tax either directly or indirectly on the Debt or Lender's interest in
the Property or the Collateral, and no deduction shall otherwise be made or
claimed from the assessed value of the Property or the Collateral, or any part
thereof, for real estate or personal property tax purposes by reason of the
Mortgage, the Pledge Agreement or the Debt. If such claim, credit or deduction
shall be required by law, Lender shall have the option, by written notice of not
less than one hundred twenty (120) days, to declare the Debt immediately due and
payable.
(c) If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, the Pledge Agreement, or any of the other Loan Documents or
impose any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
Section 17.5. EXPENSES.
Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all reasonable
costs and expenses (including reasonable, actual attorneys' fees and
disbursements and the allocated costs of internal legal services and all actual
disbursements of internal counsel) reasonably incurred by Lender in accordance
with this Agreement in connection with (a) the underwriting and closing of the
Loan, including, without limitation, expenses related to Lender's legal
representation, underwriting, third party reports, travel and site inspections,
interest rate hedging and other customary items (except with respect to a
Securitization, any costs and expenses related to which that are payable by
Borrower shall be as set forth in Article 13 hereof) and all the costs of
furnishing all opinions by counsel for Borrower (including without limitation
any opinions requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Property or the
Collateral); (b) Borrower's ongoing performance of and compliance with
Borrower's respective agreements and covenants contained in this Agreement, the
Pledge Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (c) following a
request by Borrower, Lender's ongoing performance and compliance with all
agreements and conditions contained in this Agreement, the Pledge Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (d) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan
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Documents and any other documents or matters requested by Lender; (e) securing
Borrower's compliance with any requests made pursuant to the provisions of this
Agreement; (f) the filing and recording fees and expenses, title insurance and
reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred in creating and perfecting
the Lien in favor of Lender pursuant to this Agreement, the Pledge Agreement and
the other Loan Documents; (g) 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 Borrower, this
Agreement, the other Loan Documents, the Collateral, or any other security given
for the Loan; and (h) enforcing any obligations of or collecting any payments
due from Borrower under this Agreement, the other Loan Documents or with respect
to the Property or the Collateral or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower shall not be liable for the payment of any such costs and
expenses to the extent the same arise by reason of the gross negligence, illegal
acts, fraud or willful misconduct of Lender.
ARTICLE XVIII
WAIVERS
Section 18.1. REMEDIES CUMULATIVE; WAIVERS.
The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower or Borrower Principal pursuant to this Agreement or
the other Loan Documents, or existing at law or in equity or otherwise. Lender's
rights, powers and remedies may be pursued singularly, concurrently or
otherwise, at such time and in such order as Lender may determine in Lender's
sole discretion. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power
or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A
waiver of one Default or Event of Default with respect to Borrower shall not be
construed to be a waiver of any subsequent Default or Event of Default by
Borrower or to impair any remedy, right or power consequent thereon.
Section 18.2. MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination or waiver
of any provision of this Agreement, or of the Note, or of any other Loan
Document, nor consent to any departure by Borrower or Borrower Principal
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to, or
demand on Borrower or Borrower Principal, shall entitle Borrower or Borrower
Principal to any other or future notice or demand in the same, similar or other
circumstances.
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Section 18.3. DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under the Note or
under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
Section 18.4. TRIAL BY JURY.
BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES NOT TO ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND LENDER, AND
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER, BORROWER
PRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER, BORROWER
PRINCIPAL AND LENDER.
Section 18.5. WAIVER OF NOTICE.
Borrower nor Borrower Principal shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrower or Borrower Principal and except with
respect to matters for which Borrower or Borrower Principal is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Borrower
and Borrower Principal hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Agreement or the other
Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower or Borrower Principal.
Section 18.6. REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case where
by law or under this
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Agreement or the other Loan Documents, Lender or such agent, as the case may be,
has an obligation to act reasonably or promptly, Borrower and Borrower Principal
agree that neither Lender nor its agents shall be liable for any monetary
damages (except to the extent that Borrower or Borrower Principal, as
applicable, can prove Lender's bad faith or willful misconduct), and Borrower's
and Borrower Principal's sole remedies shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. The parties hereto agree that
any action or proceeding to determine whether Lender has acted reasonably shall
be determined by an action seeking declaratory judgment. Lender agrees that, in
such event, it shall cooperate in expediting any action seeking injunctive
relief or declaratory judgment.
Section 18.7. WAIVER OF MARSHALLING OF ASSETS.
To the fullest extent permitted by law, Borrower and Borrower
Principal, each for itself and its successors and assigns, waives all rights to
a marshalling of the assets of Borrower, Mortgage Borrower and other Persons
with interests in Borrower or Mortgage Borrower, and of the Property and the
Collateral, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Collateral for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Collateral in preference to
every other claimant whatsoever.
Section 18.8. WAIVER OF STATUTE OF LIMITATIONS.
Borrower and Borrower Principal hereby expressly waive and release, to
the fullest extent permitted by law, the pleading of any statute of limitations
as a defense to payment of the Debt or performance of its other obligations set
forth in the Loan Documents.
Section 18.9. WAIVER OF COUNTERCLAIM.
Borrower and Borrower Principal hereby waive the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Lender or its agents.
Section 18.10. GRADSKY WAIVERS.
Borrower Principal hereby waives each of the following:
(a) Any rights of Borrower Principal of subrogation, reimbursement,
indemnification, and/or contribution against Borrower or any other person or
entity, and any other rights and defenses that are or may become available to
Borrower Principal or any other person or entity by reasons of Sections
2787-2855, inclusive of the California Civil Code;
(b) Any rights or defenses that may be available by reason of any
election of remedies by Lender (including, without limitation, any such election
which in any manner impairs, effects, reduces, releases, destroys or
extinguishes Borrower Principal's subrogation rights, rights to proceed against
Borrower for reimbursement, or any other rights of Borrower
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Principal to proceed against any other person, entity or security, including but
not limited to any defense based upon an election of remedies by Lender under
the provisions of Section 580(d) of the California Code of Civil Procedure or
any similar law of California or of any other State or of the United Sates); and
(c) Any rights or defenses Borrower Principal may have because its
obligations under this Agreement (the "BORROWER PRINCIPAL OBLIGATIONS") are
secured by the Collateral. These rights or defenses include, but are not limited
to, any rights or defenses that are based upon, directly or indirectly, the
application of Section 580a, Section 580b, Section 580d or Section 726 of the
California Code of Civil Procedure to the Borrower Principal Obligations.
The provisions of this subsection (c) mean, among other things:
(y) Lender may collect from Borrower Principal without first
foreclosing on the Collateral; and
(z) If Lender forecloses on the Collateral:
(1) The Borrower Principal Obligations shall not be
reduced by the price for which the Collateral is sold at the
foreclosure sale or the value of the Collateral at the time of the
sale.
(2) Lender may collect from Borrower Principal even if
Lender, by foreclosing on the Collateral, has destroyed any right
of Borrower Principal to collect from Borrower. Further, the
provisions of this Agreement constitute an unconditional and
irrevocable waiver of any rights and defenses Borrower Principal
may have because Borrower's obligations are secured by the
Collateral. These rights and defenses, include, but are not limited
to, any rights or defenses based upon Section 580a, Section 580b,
Section 580d or Section 726 of the California Code of Civil
Procedure.
ARTICLE XIX
GOVERNING LAW
Section 19.1. CHOICE OF LAW.
This Agreement shall be deemed to be a contract entered into pursuant
to the laws of the State of New York and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of the State of New
York.
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR THE BORROWER
PRINCIPAL ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT OF THE CREATION, PERFECTION OR
ENFORCEMENT OF A LIEN OR SECURITY INTEREST CREATED PURSUANT TO ANY LOAN
DOCUMENTS NOT GOVERNED BY THE LAWS OF THE STATE OF NEW YORK) MAY BE INSTITUTED
IN
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ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK. BORROWER AND BORROWER
PRINCIPAL HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND (ii) IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
Section 19.2. SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
Section 19.3. PREFERENCES.
Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
Creditors Rights Laws, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.
ARTICLE XX
MISCELLANEOUS
Section 20.1. SURVIVAL.
This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
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Section 20.2. LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be satisfactory
to Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.
Section 20.3. 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 20.4. COST OF ENFORCEMENT.
In the event (a) that the Pledge Agreement is foreclosed in whole or in
part, (b) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Mortgage Borrower or Borrower or any of its constituent
Persons or an assignment by Mortgage Borrower or Borrower or any of its
constituent Persons for the benefit of its creditors, or (c) Lender exercises
any of its other remedies under this Agreement or any of the other Loan
Documents, Borrower shall be chargeable with and agrees to pay all costs of
collection and defense, including attorneys' fees and costs, incurred by Lender
or Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.
Section 20.5. SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as a part
of this Agreement with the same effect as if set forth in the body hereof.
Section 20.6. OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement, the Note
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 20.7. NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower and Lender intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy
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relationship between Borrower and Lender nor to grant Lender any interest in the
Collateral other than that of secured party, pledgee or lender.
(b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
(c) The general partners, members, principals and (if Borrower is a
trust) beneficial owners of Borrower are experienced in the ownership and
operation of properties similar to the Property and the Collateral, and Borrower
and Lender are relying solely upon such expertise and business plan in
connection with the ownership and operation of the Property and the Collateral.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property or the Collateral.
(d) Notwithstanding anything to the contrary contained herein, Lender
is not undertaking the performance of (i) any obligations under the Leases; or
(ii) any obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.
(e) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Agreement, the
Pledge Agreement, the Note or the other Loan Documents, including, without
limitation, any officer's certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal, or insurance policy,
Lender shall not be deemed to have warranted, consented to, or affirmed the
sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
(f) Borrower recognizes and acknowledges that in accepting this
Agreement, the Note, the Pledge Agreement and the other Loan Documents, Lender
is expressly and primarily relying on the truth and accuracy of the
representations and warranties set forth in Article 4 of this Agreement without
any obligation to investigate the Property or the Collateral and notwithstanding
any investigation of the Property or the Collateral by Lender; that such
reliance existed on the part of Lender prior to the date hereof, that the
warranties and representations are a material inducement to Lender in making the
Loan; and that Lender would not be willing to make the Loan and accept this
Agreement, the Note, the Pledge Agreement and the other Loan Documents in the
absence of the warranties and representations as set forth in Article 4 of this
Agreement.
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Section 20.8. PUBLICITY.
All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public which refers
to the Loan, Lender, Banc of America Securities LLC, or any of their Affiliates
shall be subject to the prior written approval of Lender, not to be unreasonably
withheld. After the closing of the Loan, Lender shall be permitted to make any
news, releases, publicity or advertising by Lender or its Affiliates through any
media intended to reach the general public which refers to the Loan, the
Property, the Collateral, Mortgage Borrower, Borrower, Borrower Principal and
their respective Affiliates without the approval of Borrower or any such
Persons. Borrower also agrees that Lender may share any information pertaining
to the Loan with Bank of America Corporation, including its bank subsidiaries,
Banc of America Securities LLC and any other Affiliates of the foregoing, in
connection with the sale or transfer of the Loan or any Participations and/or
Securities created.
Section 20.9. CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this Agreement
and any of the other Loan Documents, the provisions of this Agreement shall
control. The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan
Documents and that such Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same. Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its
own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
Section 20.10. ENTIRE AGREEMENT.
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 Borrower and Lender are superseded by
the terms of this Agreement and the other Loan Documents.
Section 20.11. CERTAIN ADDITIONAL RIGHTS OF LENDER (VCOC).
(a) Notwithstanding anything which may be contained in this Agreement
to the contrary, so long as the Loan is outstanding, Lender shall have:
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(i) the right to designate any party to receive payment of all
fees, costs and expenses otherwise payable to Lender under this
Agreement or the other Loan Documents;
(ii) the right to consult with and advise Borrower's
management regarding the significant business activities and business
and financial developments of Borrower, provided, however, that such
consultations shall not include discussions of environmental compliance
programs or disposal of hazardous substances. Consultation meetings
should occur on a regular basis (no less frequently than quarterly)
with Lender having the right to call special meetings at any reasonable
times;
(iii) the right to examine the books and records of Borrower,
at any time upon reasonable notice;
(iv) the right to receive the financial reports as provided in
Section 5.11 of this Agreement;
(v) the right, without restricting any other rights of Lender
under this Agreement (including any similar right), to restrict
financing to be obtained in connection with future property
transactions, refinancing of any acquisition financings, and unsecured
debt;
(vi) the right, without restricting any other right of Lender
under this Agreement (including any similar right), to restrict, upon
the occurrence of an Event of Default, Borrower's payments of
management consulting or similar fees to affiliates of Borrower (or
their personnel), other than in accordance with the express terms of
the Management Agreement;
(vii) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), to approve
any operating budget and/or capital expenditures of Borrower that (A)
vary by more than 15% from the expenses set forth in the related
approved Annual Budget and/or approved capital plan for the immediately
preceding fiscal year or (B) when added to all prior operating and
capital expenditures for the year, exceed 15% of aggregate budgeted
operating and capital expenditures set forth in the related approved
Annual Budget and/or approved capital plan for the immediately
preceding fiscal year;
(viii) the right, without restricting any other rights of
Lender under this Agreement (including any similar right), upon the
occurrence and during the continuance of an Event of Default, to vote
the owners' interests in Borrower pursuant to irrevocable proxies
granted, at the request of Borrower in advance for this purpose; and
(ix) the right, without restricting any other rights of Lender
under this Agreement (including any similar right), to restrict the
transfer to voting interests in Borrower held by its members or
partners (as the case may be), and the right to restrict the transfer
of interests in such member or partner (as the case may be), except for
any transfer that is expressly permitted hereunder.
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(b) The rights granted in this Section 20.11 may be exercised by any
entity which owns and controls directly or indirectly substantially all of the
interests in Lender.
Section 20.12. LIABILITY. If Borrower consists of more than one Person,
the obligations and liabilities of each such Person hereunder shall be joint and
several. This Agreement shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.
Section 20.13. CONTRIBUTION.
(a) As a result of the transactions contemplated by this Agreement,
each Borrower will benefit, directly and indirectly, from each Borrower's
obligation to pay the Debt and perform its obligations hereunder and under the
other Loan Documents (collectively, the "OBLIGATIONS") and in consideration
therefore each Borrower desires to enter into an allocation and contribution
agreement among themselves as set forth in this Section 20.13 to allocate such
benefits among themselves and to provide a fair and equitable agreement to make
contributions among each of Borrowers in the event any payment is made by any
individual Borrower hereunder to Lender (such payment being referred to herein
as a "CONTRIBUTION," and for purposes of this Section 20.13, includes any
exercise of recourse by Lender against any Collateral of a Borrower and
application of proceeds of such Collateral in satisfaction of such Borrower's
obligations, to Lender under the Loan Documents).
(b) Each Borrower shall be liable hereunder with respect to the
Obligations only for such total maximum amount (if any) that would not render
its Obligations hereunder or under any of the Loan Documents subject to
avoidance under Section 548 of the U.S. Bankruptcy Code or any comparable
provisions of any State law.
(c) In order to provide for a fair and equitable contribution among
Borrowers in the event that any Contribution is made by an individual Borrower
(a "FUNDING BORROWER"), such Funding Borrower shall be entitled to a
Reimbursement Contribution ("REIMBURSEMENT CONTRIBUTION") from all other
Borrowers for all payments, damages and expenses incurred by that Funding
Borrower in discharging any of the Obligations, in the manner and to the extent
set forth in this Section 20.13.
(d) For purposes hereof, the "BENEFIT AMOUNT" of any individual
Borrower as of any date of determination shall be the net value of the benefits
to such Borrower and its Affiliates from extensions of credit made by Lender to
(i) such Borrower and (ii) to the other Borrowers hereunder and the Loan
Documents to the extent such other Borrowers have guaranteed or mortgaged their
property to secure the Obligations of such Borrower to Lender.
(e) Each Borrower shall be liable to a Funding Borrower in an amount
equal to the greater of (i) the (A) ratio of the Benefit Amount of such Borrower
to the total amount of Obligations, multiplied by (B) the amount of Obligations
paid by such Funding Borrower, or (ii) ninety-five percent (95%) of the excess
of the fair saleable value of the property of such Borrower over the total
liabilities of such Borrower (including the maximum amount reasonably expected
to become due in respect of contingent liabilities) determined as of the date on
which the payment made by a Funding Borrower is deemed made for purposes hereof
(giving effect to
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all payments made by other Funding Borrowers as of such date in a manner to
maximize the amount of such Contributions).
(f) In the event that at any time there exists more than one Funding
Borrower with respect to any Contribution (in any such case, the "APPLICABLE
CONTRIBUTION"), then Reimbursement Contributions from other Borrowers pursuant
hereto shall be allocated among such Funding Borrowers in proportion to the
total amount of the Contribution made for or on account of the other Borrowers
by each such Funding Borrower pursuant to the Applicable Contribution. In the
event that at any time any Borrower pays an amount hereunder in excess of the
amount calculated pursuant to this Section 20.13 above, that Borrower shall be
deemed to be a Funding Borrower to the extent of such excess and shall be
entitled to a Reimbursement Contribution from the other Borrowers in accordance
with the provisions of this Section.
(g) Each Borrower acknowledges that the right to Reimbursement
Contribution hereunder shall constitute an asset in favor of Borrower to which
such Reimbursement Contribution is owing.
(h) No Reimbursement Contribution payments payable by a Borrower
pursuant to the terms of this Section 20.13 shall be paid until all amounts then
due and payable by all of Borrowers to Lender, pursuant to the terms of the Loan
Documents, are paid in full in cash. Nothing contained in this Section 20.13
shall limit or affect in any way the Obligations of any Borrower to Lender under
this Note or any other Loan Documents.
(i) Each Borrower waives:
(i) any right to require Lender to proceed against any other
Borrower or any other person or to proceed against or exhaust any
security held by Lender at any time or to pursue any other remedy in
Lender's power before proceeding against Borrower;
(ii) any defense based upon any legal disability or other
defense of any other Borrower, any guarantor of any other person or by
reason of the cessation or limitation of the liability of any other
Borrower or any guarantor from any cause other than full payment of all
sums payable under the Note, this Agreement and any of the other Loan
Documents;
(iii) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on
behalf of any other Borrower or any principal of any other Borrower or
any defect in the formation of any other Borrower or any principal of
any other Borrower;
(iv) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in any other respects more burdensome than that of a
principal;
(v) any defense based upon any failure by Lender to obtain
collateral for the indebtedness or failure by Lender to perfect a lien
on any collateral;
(vi) presentment, demand, protest and notice of any kind;
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(vii) any defense based upon any failure of Lender to give
notice of sale or other disposition of any collateral to any other
Borrower or to any other person or entity or any defect in any notice
that may be given in connection with any sale or disposition of any
collateral;
(viii) any defense based upon any failure of Lender to comply
with Applicable Laws in connection with the sale or other disposition
of any collateral, including, without limitation, any failure of Lender
to conduct a commercially reasonable sale or other disposition of any
collateral;
(ix) any defense based upon any use of cash collateral under
Section 363 of the U.S. Bankruptcy Code;
(x) any defense based upon any agreement or stipulation
entered into by Lender with respect to the provision of adequate
protection in any bankruptcy proceeding;
(xi) any defense based upon any borrowing or any grant of a
security interest under Section 364 of the U.S. Bankruptcy Code;
(xii) any defense based upon the avoidance of any security
interest in favor of Lender for any reason;
(xiii) any defense based upon any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding, including any discharge of, or bar or stay
against collecting, all or any of the obligations evidenced by the Note
or owing under any of the Loan Documents; and
(xiv) any defense or benefit based upon Borrower's, or any
other party's, resignation of the portion of any obligation secured by
the Mortgage or the Pledge Agreement to be satisfied by any payment
from any other Borrower or any such party.
(j) Each Borrower waives:
(i) all rights and defenses arising out of an election of
remedies by Lender even though the election of remedies, such as
non-judicial foreclosure with respect to security for the Loan or any
other amounts owing under the Loan Documents, has destroyed Borrower's
rights of subrogation and reimbursement against any other Borrower;
(ii) all rights and defenses that Borrower may have because
any of Debt is secured by real property. This means, among other
things: (i) Lender may collect from Borrower without first foreclosing
on any real or personal property collateral pledged by any other
Borrower, (ii) if Lender forecloses on any real property collateral
pledged by any other Borrower, (a) the amount of the Debt may be
reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale
price, (b) Lender may collect from Borrower even if any other Borrower,
by foreclosing on the real property collateral, has destroyed any right
Borrower may have to
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collect from any other Borrower. This is an unconditional and
irrevocable waiver of any rights and defenses Borrower may have because
any of the Debt is secured by real property; and
(iii) except as may be expressly and specifically permitted
herein, any claim or other right which Borrower might now have or
hereafter acquire against any other Borrower or any other person that
arises from the existence or performance of any obligations under the
Note, this Agreement, the Pledge Agreement or the other Loan Documents,
including, without limitation, any of the following: (i) any right of
subrogation, reimbursement, exoneration, contribution, or
indemnification; or (ii) any right to participate in any claim or
remedy of Lender against any other Borrower or any collateral security
therefor, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
CONFORM BORROWER SIGNATURE BLOCK
Xxxxxxx Properties - 555 W. Fifth Mezzanine, LLC,
a Delaware limited liability company, its sole
member
By: Xxxxxxx Properties, L.P. a Maryland limited
partnership, its sole member
By: Xxxxxxx Properties, Inc., a Maryland
corporation, its general partner
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Xxxxxxx Properties - 808 S. Olive Mezzanine, LLC,
a Delaware limited liability company, its sole
member
By: Xxxxxxx Properties, L.P., a Maryland
limited partnership, its sole member
By: Xxxxxxx Properties, Inc., a Maryland
corporation, its general partner
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
BORROWER PRINCIPAL:
Acknowledged and agreed to with respect to its
obligations and waivers set forth in Article 4,
Article 13, Article 15 and Article 18 hereof:
XXXXXXX PROPERTIES, L.P., a Maryland limited
partnership
By: Xxxxxxx Properties, Inc., a Maryland
corporation, its general partner
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
LENDER:
BANK OF AMERICA, N.A., a national banking
association
By:
----------------------------------------------
Name:
Title:
