Exhibit 1
LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of July 11, 2002, is by and between CTMPII FC
LF (MS) a Cayman Islands exempted company, having an address c/o Capital
Trust, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Loan
Administrator, Telefax Number (000) 000-0000 (together with its successors
and assigns, "Lender"), LFSRI II SPV REIT CORP., a Delaware corporation
with an address at c/o Lazard Freres Real Estate Investors L.L.C., 00
Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 Attention: General
Counsel, Telefax Number: (000) 000-0000 ("LFSRI II Borrower"), and SENIOR
QUARTERS FUNDING CORP., a Delaware corporation having the same address as
LFSRI II Borrower ("Senior Quarters Borrower"; Senior Quarters Borrower and
LFSRI II Borrower are hereinafter individually and collectively referred to
as "Borrower").
RECITALS
WHEREAS, Borrower desires to obtain a loan (the "Loan") from Lender in
the principal amount of up to SIXTY-FIVE MILLION DOLLARS ($65,000,000.00)
(the "Loan Amount");
WHEREAS, Lender is willing to make the Loan on the condition that
Borrower execute and deliver this Agreement which shall establish the terms
and conditions of the Loan;
NOW, THEREFORE, in consideration of the making of the Loan and the
mutual covenants and agreements set forth in this Agreement, the parties
hereby covenant and agree as follows:
CERTAIN DEFINITIONS
Definitions. For all purposes of this Agreement:
the terms defined in this Article I have the meanings assigned to them
in this Article I, and include the plural as well as the singular;
all accounting terms have the meanings assigned to them in accordance
with GAAP;
the words "herein", "hereof", and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, or other subdivision; and
the following terms have the following meanings:
"AAC III" means American Apartment Communities III, L.P., a Delaware
limited partnership.
"AAC, Inc." means American Apartment Communities III, Inc., a Maryland
corporation which is a REIT.
"AACDEC Transfer" has the meaning set forth in Section 2.6(b).
"AACDK Entities" means any of ARV, Atria, Cliveden, the Destination
Entities and Kapson.
"Accounts" has the meaning set forth in Section 3.4.
"Additional Interest" means collectively the Extension Additional
Interest Payment, the Exit Additional Interest Payment and the Unfunded
Commitment Additional Interest Payment.
"Advanced Interest Reserve" has the meaning set forth in Section
2.1(e).
"Affiliate" of any specified Person means any Person controlling,
controlled by or under common control with such specified Person. For the
purposes of this Agreement, "control" when used with respect to any
specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
voting securities or other beneficial interests, by contract or otherwise;
and the terms "controls", "controlling" and "controlled" have the meanings
correlative to the foregoing.
"Agreement" means this Loan Agreement, as the same may from time to
time hereafter be modified, supplemented or amended.
"Amortization Commencement Date" means the first Payment Date which
occurs following the first full Fiscal Quarter ending after the Senior Loan
is repaid in full.
"ARV" means ARV Assisted Living, Inc., a Delaware corporation.
"Assignee" has the meaning set forth in Section 8.34.2.
"Assisted Living Investments" means, collectively, ARV, Atria and
Kapson.
"Atria" means Atria, Inc., a Delaware corporation.
"Atria Advance" has the meaning set forth in Section 2.1.
"Atria Holdings" means Atria Holdings LLC, a Delaware limited
liability corporation.
"Atria Portfolio Loan" means a proposed loan to be made by Lender or
an affiliate or subsidiary thereof to a subsidiary of Atria and/or Kapson.
"Board Replacement Entities" means any of AAC III, AAC, Inc., the
Destination Entities and Cliveden.
"Boards" has the meaning set forth in Schedule III.
"Borrower" has the meaning provided in the preamble to this Agreement.
"Borrower's Certificate" means a certificate of the chief financial
officer of the Borrower, in form and substance satisfactory to Lender in
Lender's discretion, dated as of the Closing Date.
"Borrower Control Group" means each of LFSRI II, LFSRI II Alternative,
LFSRI-CADIM, AAC, Inc., Prometheus SE LLC, Prometheus SERT, LSFRI II
Assisted, Prometheus Assisted, Prometheus ES, Prometheus Interim,
Prometheus UK, Prometheus Senior Quarters, Prometheus SQ Holdings, Atria
Holdings, LFSRI SPV, LFSRI II ES and any direct or indirect Subsidiary of
Prometheus Senior Quarters formed to hold the investment in Atria and/or
Kapson.
"BT Agreement" means that certain Second Amended and Restated Credit
Agreement dated as of October 11, 2001, among Atria, LFSRI II, LFSRI II
Alternative, LFSRI-CADIM, Kapson, Hillhaven Properties, Ltd., Atria Stony
Brook, LLC, Atrium at Weston Court, LLC, Atria Springdale, LLC, Kapson
Tinton Falls Corp., and Bankers Trust Company.
"BT Guaranty" means the guaranty dated as of October 11, 2001
contained in Article XIII of the BT Agreement.
"Business Day" means any day other than (i) a Saturday or a Sunday,
and (ii) a day on which federally insured depository institutions in New
York are authorized or obligated by law, regulation, governmental decree or
executive order to be closed.
"Calculation Date" means each date, from and after the Effective Date,
on which a determination of Debt Service Coverage Ratio is made by Lender.
"Certificate of U.S. Withholding Status" means a certificate
substantially in the form of Exhibit B attached hereto.
"Chase" means JPMorgan Chase Bank.
"Chief Financial Officer" means the chief financial officer of a
specified Entity.
"Claim" has the meaning set forth in Section 8.29.
"Cliveden" means Cliveden Limited, a private company organized under
the laws of England and Wales.
"Closed Period" has the meaning set forth in Section 2.6.
"Closing Date" means July 11, 2002.
"Code" or "IRC" means the Internal Revenue Code of 1986, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, together with applicable U.S. Department of Treasury regulations
issued pursuant thereto in temporary or final form.
"Collateral" means, collectively, all property of any kind whatsoever
of Borrower, including the collateral granted to Lender pursuant to the
Pledge Agreements and Collateral Assignment and any collateral described in
any Loan Document, and all Proceeds and products of any of the foregoing,
all whether now owned or hereafter acquired, and all other property in
which Borrower may now or hereafter have an interest; provided; however,
that, as under the Senior Loan, Borrower shall only be required to pledge
the proceeds of its interest in PMAIT. In no event shall any Dividends and
Distributions in excess of 50% thereof paid or payable from time to time by
PMAIT to Borrower constitute Collateral under this Agreement or any of the
Loan Documents.
"Collateral Assignments" means the Collateral Assignments, dated as of
the date hereof, delivered by Borrower and its Affiliates in favor of
Lender, pursuant to Section 3.1 of this Agreement, and the additional
collateral assignments to be delivered to Lender from time to time in
accordance with Sections 2.1, 2.2, 5.1(o) and 6.1(i) of this Agreement, as
the same may be hereafter modified, amended or supplemented from time to
time.
"Conduit Entity" means any entity treated as a "conduit" under U.S.
Treasury Regulation Section 1.881-3 or applicable successor provision.
"Contingent Obligation" means any obligation of a Person guaranteeing
any indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including any obligation of Borrower,
whether or not contingent: (i) to purchase any such primary obligation, or
any property constituting direct or indirect security therefor; (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the
primary obligor; (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner or obligee under any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation; or (iv) otherwise to assure or hold harmless the
owner or obligee under such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum anticipated liability in respect thereof
(assuming that the contingently obligated Person is required to perform
thereunder) as determined by Lender in good faith.
"Convertible Securities" means, with respect to any Entity, any
security, right, subscription, warrant, option, "phantom" stock right or
other any agreement, instrument, indenture, security agreement or other
contract that gives the right to (i) purchase or otherwise receive or be
issued any Equity Interests in such Entity or any security of any kind
convertible into or exchangeable or exercisable for any Equity Interests in
such Entity or (ii) receive or exercise any benefits or rights similar to
any rights enjoyed by or accruing to the holder of Equity Interests of such
Entity, including any rights to participate in the equity or income of such
Entity or to participate in or direct the election of any directors or
officers of such Entity or the manner in which any Equity Interests in such
Entity are voted.
"Cost Exclusions" means, (i) payments due to no more than 150 Persons
on account of preferred stock held by such Persons in the applicable member
of the Borrower Control Group necessary for REIT qualification, and (ii)
income taxes due and payable by the applicable member of the Borrower
Control Group or its respective members or partners therein on account of a
specified transaction.
"Covered Taxes" means taxes other than Excluded Taxes.
"CTIMCO" means CT Investment Management Co., LLC.
"Debt Service" means, on any Calculation Date, the sum of the amount
of interest, the amount of all amortization payments and any Default Rate
interest, Late Charges, and Unfunded Commitment Additional Interest
Payments that become due and payable in accordance with the Loan Documents
during the Fiscal Quarter in which such Calculation Date occurs, all as
determined with respect to (x) the Principal Indebtedness outstanding on
such Calculation Date plus, (y) if the determination of Debt Service is
made under Section 2.1(b), the amount of any requested advance of the
Unfunded/Unreserved Loan Amount. The interest rate to be applied to any
calculation of Debt Service shall be (i) the actual Interest Rate
applicable to payments of Debt Service made or accrued during the
applicable Fiscal Quarter, and (ii) the Interest Rate in effect on the
Calculation Date with respect to Debt Service not yet due and payable for
the remainder of such Fiscal Quarter.
"Debt Service Achievement" means that, on any Calculation Date (y)
during the Initial Term, the Debt Service Coverage Ratio shall be at least
1.2:1 and (z) during the Extended Term, the Debt Service Coverage Ratio
shall be at least 1.3:1.
"Debt Service Coverage Ratio" means, on any Calculation Date, the
ratio of Net Cash Flow for the Fiscal Quarter immediately preceding the
Fiscal Quarter in which the Calculation Date occurs, to Debt Service for
the Fiscal Quarter in which the Calculation Date occurs.
"Debt Service Payments" has the meaning set forth in Section 2.1(e).
"Deemed Loan Amount Reduction" has the meaning set forth in Section
2.1.
"Default" means the occurrence of any event which, but for the giving
of notice or the passage of time, or both, would be an Event of Default.
"Default Rate" means the per annum interest rate equal to the lesser
of (i) the Maximum Amount or (ii) the Interest Rate plus five percent (5%).
"Deposit Account" has the meaning set forth in Section 3.3.
"Deposit Account Agreement" means that certain Deposit and Security
Agreement dated as of the date hereof entered into among Borrower and
certain members of the Borrower Control Group, Lender, Chase and the
Servicer, as the same may hereafter be modified, amended or supplemented
from time to time.
"Destination Entities" means Destination Europe Limited and
Destination Europe USA.
"Destination Europe Limited" means Destination Europe Limited, a
private company organized under the laws of England and Wales.
"Destination Europe USA" means Destination Europe USA, LLC, a Delaware
limited liability company.
"Determination Date" means with respect to any Interest Accrual
Period, the date which is two (2) Eurodollar Business Days before the
commencement of such Interest Accrual Period.
"Direction Letters" means the direction letters pursuant to which each
applicable Operating Company (excluding Cliveden and the Destination
Entities) or member of the Borrower Control Group is directed by Borrower
or the applicable member of the Borrower Control Group to pay directly into
the Deposit Account any and all payments of Dividends and Distributions on
account of such Borrower's or Borrower Control Group member's interest
therein.
"Dividends and Distributions" means all cash, securities, dividends,
distributions, proceeds and other property at any time paid or payable to a
Person on account of its Equity Interest in another Person.
"Effective Date" has the meaning set forth in Section 3.3.
"Entity" means a corporation, limited liability company, partnership,
joint venture, estate, trust, unincorporated association, or any other
entity, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on
behalf of any of the foregoing.
"Equity Interests" means, with respect to an Entity (i) if such Entity
is a limited partnership, partnership interests, associated voting rights
and Convertible Securities in such Entity, or (ii) if such Entity is a
limited liability company, membership interests (or shares), associated
voting rights and Convertible Securities in such Entity, or (iii) if such
Entity is a corporation or a business trust, the share or stock interests,
associated voting rights and Convertible Securities in such Entity, or (iv)
with respect to any other Entity, the ownership interests therein.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
Section references to ERISA are to ERISA, as in effect at the date of this
Agreement and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c)
of the Code, of which Borrower is a member, and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA
and Section 412(n) of the Code, described in Section 414(m) or (o) of the
Code, of which Borrower is a member.
"ERISA Investor" means an investor which is an employee benefit plan
subject to Part 4 of Title I of ERISA.
"Eurodollar Business Day" means a Business Day on which banks in the
City of London, England are open for interbank or foreign exchange
transactions.
"Event of Default" has the meaning set forth in Section 7.1.
"Excluded Taxes" means, with respect to any Lender or any other
recipient of any payment to be made by or on account of any obligation of
Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income or profits by reason of any connection between Lender or
any other party entitled to receive payment hereunder and the relevant
taxing jurisdiction, including, without limitation, a connection arising
from such other Person being or having been a citizen, domiciliary, or
resident of such jurisdiction, being organized in such jurisdiction, or
having or having had a permanent establishment, branch or other fixed place
of business therein, but excluding a connection arising solely from such
Person having executed, delivered, performed its obligations or received
any payment under this Agreement, (b) any taxes imposed by reason of the
Lender or such other party being a Conduit Entity, (c) any branch profits
taxes imposed by the United States of America or any similar tax imposed by
any other jurisdiction in which Borrower is located, (d) in the case of a
Foreign Lender, any tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign
Lender's failure to comply with Section 2.13, except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from Borrower with respect to such Tax pursuant to Section 2.9 and
(e) in the case of a Foreign Lender which is an assignee, any tax that is
imposed on amounts payable to such Foreign Lender which would not have been
imposed if CTMPII FC LF (MS) had not assigned the Loan.
"Exit Additional Interest Payment" means two percent (2.0%) of the
aggregate advances (including re-advances) made under the Loan; provided,
however, that the Exit Additional Interest Payment actually paid by
Borrower shall not exceed $1,300,000, in the aggregate.
"Extended Maturity Date" has the meaning set forth in Section 2.5(h).
"Extended Term" shall mean the period commencing on the Maturity Date
and, provided that the Loan has been extended in accordance with the
provisions of Section 2.5(h), terminating on the earlier to occur of the
Extended Maturity Date or the date the Indebtedness is paid in full.
"Extension Additional Interest Payment" means an amount equal to one
percent (1%) of the Principal Indebtedness that remains outstanding on the
Maturity Date (after taking into account any regularly scheduled quarterly
amortization or other amortization payments on or prior to such date).
"Fee Letter" means that certain letter agreement dated as of the date
hereof between Borrower and CTIMCO.
"Final Advance" has the meaning set forth in Section 2.1.
"Fiscal Quarter" means each 3-month period ending on January 31, April
30, July 31 and October 31 of each year; provided however that for the
purposes of Section 5.1(i), the term "fiscal quarter" shall mean each
calendar quarter.
"Fiscal Year" means the 12-month period ending on January 31 of each
year or such other fiscal year of Borrower as Borrower may select from time
to time with the prior written consent of Lender, such consent not to be
unreasonably withheld or delayed; provided however that for the purposes of
Sections 5.1(i) and 5.1(q), the term "Fiscal Year" shall mean each calendar
year.
"Foreign Lender" means any Lender that is not a "United States person"
(as such term is defined in Section 7701(a)(30) of the Code).
"Fund" means the collective reference to LFSRI II, LFSRI II
Alternative and LFSRI-CADIM.
"Funding Fee" means one percent (1%) of the amount of each advance
(including re-advances) of any portion of the Loan, which Funding Fee shall
be paid by Borrower to CTIMCO pursuant to the terms of the Fee Letter;
provided, however, that the Funding Fees actually paid by Borrower shall
not exceed $650,000, in the aggregate.
"GAAP" means generally accepted accounting principles consistently
applied in the United States of America as of the applicable date.
"Governmental Authority" means any national, federal, state, regional
or local government, or any other political subdivision of any of the
foregoing, in each case with jurisdiction over the relevant Entity,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GS Atria Loan" means that certain loan made by The Royal Bank of
Scotland PLC to A98 Senior L.L.C., K98 Senior L.L.C., A2000 Senior L.L.C.,
Atria Assisted Living, Virginia Beach, L.L.C., Atria Assisted Living,
Primacy, L.L.C. and Atria Assisted Living, Stamford, L.L.C. in the current
principal amount of $144,461,345.17.
"Guaranty" means the Guaranty of even date herewith from LFSRI II,
LFSRI II Alternative and LFSRI-CADIM to Lender.
"Holdings" means TRC Westfields Holdings L.L.C., a Virginia limited
liability company.
"Impositions" means all taxes other than Excluded Taxes (including all
real estate, ad valorem, sales (including those imposed on lease rentals),
use, single business, franchise, income, gross receipts, value added,
intangible transaction privilege, privilege, license or similar taxes),
assessments, ground rents, water, sewer or other rents and charges,
excises, levies, fees (including license, permit, inspection, authorization
and similar fees), and all other governmental charges, in each case whether
general or special, ordinary or extraordinary, foreseen or unforeseen, of
every character.
"including" means including without limiting the generality of the
foregoing.
"Indebtedness" means, at any given time, the Principal Indebtedness,
together with all accrued and unpaid interest, including Default Interest
and Late Charges thereon, Additional Interest, Funding Fees and all other
monetary obligations due to Lender or CTIMCO pursuant hereto, under the
Note, the Fee Letter or in accordance with any of the other Loan Documents,
and all other amounts, sums and expenses paid by or payable to Lender which
Borrower is obligated to pay hereunder or pursuant to the Note or any of
the other Loan Documents at such time.
"Indemnified Party" shall have the meaning set forth in Section 8.29.
"Independent Director" means, with respect to a corporation, a duly
appointed member of the board of directors of such corporation, reasonably
satisfactory to Lender, who shall not have been at the time of such
individual's appointment, and may not have been at any time during the five
years preceding such appointment, and shall not be at any time while
serving as Independent Director: (i) a direct or indirect legal or
beneficial owner of, or an officer, director, attorney, counsel, partner,
member or employee of, such corporation or any Affiliate thereof, (ii) a
customer or creditor of, or supplier or contractor to, or other Person who
derives more than 10% of its purchases or revenues from its activities with
such corporation or any Affiliate thereof, (iii) a Person controlling,
controlled by or under common control with any such direct or indirect
legal or beneficial owner, officer, director, attorney, counsel, partner,
member, employee, customer, creditor, contractor supplier or other Person,
or (iv) a member of the immediate family of any such direct or indirect
legal or beneficial owner, officer, director, attorney, counsel, partner,
member, employee, customer, creditor, contractor, supplier or other Person.
As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management, policies or activities or a person or entity, whether
through ownership of voting securities or other beneficial interest, by
contract or otherwise and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. Notwithstanding the foregoing, a
director designated in the ordinary course of the provision of services by
Corporation Trust Company, Inc. or a similar corporate service Entity shall
be deemed an Independent Director.
"Initial Advance" shall have the meaning set forth in Section 2.1.
"Initial Term" shall mean the period commencing on the date hereof and
terminating on the earlier to occur of the Maturity Date or the date the
Indebtedness is paid in full.
"Instruments" means all instruments, chattel paper, documents or other
writings evidencing a right to payment, including all notes, drafts,
acceptances, documents of title, guarantees and securities, now or
hereafter received. "Instruments" shall include the meaning given to such
term in the UCC.
"Interest Accrual Period" means each period of time commencing with
and including the first (1st) day of a calendar month to and including the
last day of such calendar month during the term of the Loan. If the Closing
Date shall occur on a date other than the first day of a calendar month,
the first Interest Accrual Period shall commence on and include the Closing
Date and end on and include the last day of the calendar month in which the
Closing Date occurs. If the Closing Date shall occur on the last day of a
calendar month, the first Interest Accrual Period shall consist of a one
(1) day period consisting of the Closing Date.
"Interest Rate" means, for any Interest Accrual Period, a per annum
interest rate equal to nine percent (9%) plus the greater of (i) three
percent (3%) and (ii) LIBOR, adjusted on the first day of each Interest
Accrual Period.
"Intown" means Intown Holding Company, LLC, a Delaware limited
liability company.
"Intown Agreement" means the Amended and Restated Limited Liability
Company Agreement, dated as of November 13, 1998, of Intown, as amended by
the First Amendment, dated as of October 23, 2000, and by the Second
Amendment, dated as of February 8, 2001.
"Investor" has the meaning provided in Section 8.27.
"Kapson" means Kapson Senior Quarters Corp., a Delaware corporation.
"Konover Consent" means that certain letter of consent of Lender dated
July 11, 2002 to Borrower, the Fund, Prometheus SERT and Prometheus SE LLC
relating to a certain series of transactions in connection with the
acquisition of KPT by Prometheus SERT and an affiliate of KIMCO Realty
Corporation.
"KPT" means Konover Property Trust, Inc., a Maryland corporation.
"Late Charge" means the lesser of (i) five percent (5%) of any amount
due but unpaid and (ii) the maximum late charge permitted to be charged
under the laws of the State of New York.
"Lazard Freres REI" means Lazard Freres Real Estate Investors L.L.C.,
a New York limited liability company which is the general partner of each
of LFSRI II, LFSRI II Alternative, and LFSRI-CADIM.
"Legal Requirements" means all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting Borrower, the Loan Documents, the Collateral or any
part thereof, enacted or entered and in force as of the relevant date, and
all permits and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments,
either of record or known to Borrower at any time in force affecting the
Collateral or any part thereof.
"Lender" has the meaning provided in the preamble to this Agreement.
"LFSRI-CADIM" means LFSRI II-CADIM Alternative Partnership L.P., a
Delaware limited partnership.
"LFSRI II" means LF Strategic Realty Investors II L.P., a Delaware
limited partnership.
"LFSRI II Alternative" means LFSRI II Alternative Partnership L.P., a
Delaware limited partnership.
"LFSRI II Assisted" means LSFRI II Assisted Living LLC, a Delaware
limited liability company.
"LFSRI II Borrower" has the meaning given to such term in the preamble
to this Agreement.
"LFSRI II ES" means LFSRI II Extended Stay L.L.C., a Delaware limited
liability company.
"LFSRI SPV" means LFSRI II SPV E.S. Corp., a Delaware corporation.
"Liabilities" has the meaning set forth in Section 8.34.3.
"LIBOR" means with respect to each Interest Accrual Period, the rate
(expressed as a percentage per annum, rounded to the nearest 100th) for
deposits in U.S. dollars for a one-month period that appears on Telerate
Page 3750 (or the successor thereto) as of approximately 11:00 a.m.,
London, England time, on the related Determination Date. If such rate does
not appear on Telerate Page 3750 as of approximately 11:00 a.m., London,
England time, on such Determination Date, LIBOR shall be the arithmetic
mean of the offered rates (expressed as a percentage per annum) for
deposits in U.S. dollars for a one-month period that appear on the Reuters
Screen LIBOR Page as of approximately 11:00 a.m., London, England time, on
such Determination Date, if at least two such offered rates so appear. If
fewer than two such offered rates appear on the Reuters Screen LIBOR Page
as of approximately 11:00 a.m., London, England time, on such Determination
Date, Lender shall request the principal London, England office of any four
major reference banks in the London interbank market selected by Lender to
provide such bank's offered quotation (expressed as a percentage per annum)
to prime banks in the London interbank market for deposits in U. S. Dollars
for a one-month period as of approximately 11:00 a.m., London, England
time, on such Determination Date for amounts of not less than One Million
U.S. Dollars (U.S. $1,000,000.00). If at least two such offered quotations
are so provided, LIBOR shall be the arithmetic mean of such quotations. If
fewer than two such quotations are so provided, Lender shall request any
three major banks in New York City selected by Lender to provide such
bank's rate (expressed as a percentage per annum) for loans in U.S. Dollars
to leading European banks for a one month period as of approximately 11:00
a.m., New York City time on the applicable Determination Date for amounts
of not less than One Million U.S. Dollars (U.S. $1,000,000.00). If at least
two such rates are so provided, LIBOR shall be the arithmetic mean of such
rates. If fewer than two rates are so provided, then LIBOR for the
applicable Interest Accrual Period shall be LIBOR that was in effect for
the next preceding Interest Accrual Period. LIBOR shall be determined by
Lender or its agent in accordance with this definition.
"Lien" means any mortgage, deed of trust, deed to secure debt, lien
(statutory or other), pledge, easement, restrictive covenant,
hypothecation, assignment, preference, priority, security interest, or any
other encumbrance or charge, or any interest in any of the foregoing,
including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, the filing of any financing
statement or similar instrument under the UCC or comparable law of any
other jurisdiction, domestic or foreign, and mechanic's, materialmen's and
other similar liens and encumbrances.
"Loan" has the meaning given to such term in the Recitals.
"Loan Amount" has the meaning given to such term in the Recitals.
"Loan Documents" means, collectively, this Agreement, the Note, the
Pledge Agreements, the Collateral Assignments, the Deposit Account
Agreement, the Guaranty and all other agreements, instruments, certificates
and documents executed and delivered by or on behalf of Borrower or any
other Person to evidence or secure the Loan or otherwise in satisfaction of
the requirements of this Agreement, or the other documents listed above, as
each such agreement, instrument, certificate or document may be amended,
supplemented or modified from time to time.
"Material Adverse Condition" means the occurrence, after the date of
this Agreement or, if earlier, the date of the financial statements most
recently furnished to Lender (as the same may have been supplemented in
writing) with respect to a specified Person, of (i) a material adverse
change in the business or the financial condition or results of operations
of a specified Person, (ii) a material adverse change in the ability of a
specified Person to make any payment payable by such Person under or to
perform any or all of such Person's other material obligations under this
Agreement or any of the other Loan Documents, (iii) a condition or
circumstance resulting in or causing any material adverse effect on the
legality, validity or enforceability of any of the Loan Documents or
Lender's ability to enforce any of its rights under the Loan Documents, or
(iv) a condition or circumstance resulting in or causing any material
adverse effect on the Lien and security interest of Lender in, or the value
of, the Collateral.
"Maturity Date" means July 11, 2005, or such earlier date resulting
from acceleration of the Indebtedness by Lender.
"Maximum Amount" means the maximum rate of interest designated by
applicable laws relating to payment of interest and usury.
"Monthly Interest Payment Amount" means, with respect to any Payment
Date, an amount equal to the aggregate of all accrued and unpaid interest
on the Loan at the applicable Interest Rate, and all accrued and unpaid
Unfunded Commitment Additional Interest Payments on the Loan as of the end
of the immediately preceding Interest Accrual Period.
"Monthly Payment Amount" means, with respect to any Payment Date, the
Monthly Interest Payment Amount plus, on each February 1, May 1, August 1
and November 1 from and after the Amortization Commencement Date, a
quarterly amortization payment in the amount of $2,000,000 on such Payment
Date.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Multiemployer Plan defined as such in
Section 3(37) of ERISA to which contributions have been made by Borrower or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Cash Flow" means the aggregate amount of all interest and
regularly scheduled principal payments, and ordinary dividends (but
excluding dividends constituting extraordinary dividends, that is,
dividends resulting from capital transactions and other non-recurring
events) paid by all Operating Companies to Borrower or any member of the
Borrower Control Group during any Fiscal Quarter; provided, that, to the
extent any Operating Company declares a reduction in any such future
dividends or shall have failed to pay any such interest when due (beyond
applicable notice and cure periods, if any) or any such regularly scheduled
principal payments, the actual amount of such interest, regularly scheduled
principal payments or dividends paid to Borrower or the applicable member
of the Borrower Control Group for the Fiscal Quarter preceding such
declaration shall be deemed reduced in proportion to the amount such
defaulted interest, principal payments and/or declared reduction in
dividends bears to the aggregate amount of Net Cash Flow (it being
understood that, in the case of an Assisted Living Investment, such deemed
reduction shall be appropriately adjusted to take into account the
limitations set forth in the following sentence). Notwithstanding anything
to the contrary hereinabove provided, the interest, regularly scheduled
principal payments and ordinary dividends paid by Assisted Living
Investments shall not account for more than twenty (20%) percent of Net
Cash Flow (determined after taking account of the limitation on Net Cash
Flow from Assisted Living Investments as hereinabove provided and the
resulting reduction, if any, in the corresponding computation of Net Cash
Flow).
"Net Cash Flow Rejection Factor" means an amount equal to the product
of (y) $5,000,000 multiplied by (z) a fraction, (i) the numerator of which
is the aggregate amount of all interest and regularly scheduled principal
payments, and ordinary dividends (but excluding dividends constituting
extraordinary dividends, that is dividends resulting from capital
transactions and other non-recurring events) paid by the Operating Company
which is the subject of the Transfer in question to Borrower or any member
of the Borrower Control Group during the Fiscal Quarter immediately
preceding the Fiscal Quarter in which the Transfer in question was made and
the attempted prepayment was rejected and (ii) the denominator of which is
the aggregate amount of all interest and regularly scheduled principal
payments, and ordinary dividends (but excluding dividends constituting
extraordinary dividends, that is dividends resulting from capital
transactions and other non-recurring events) paid by all Operating
Companies to Borrower or any member of the Borrower Control Group during
the Fiscal Quarter immediately preceding the Fiscal Quarter in which the
Transfer in question was made and the attempted prepayment was rejected.
"Net Equity Value" means the aggregate carry value of the Operating
Companies as set forth in the LF Strategic Realty Investors II Quarterly
Report distributed to its investors; provided, however, that if Lender
objects to such carry value, the Net Equity Value shall mean the fair
market value of the Fund's direct or indirect interest in the Operating
Companies, as determined by Lender in its reasonable discretion.
Notwithstanding anything to the contrary hereinabove provided, the carry
value attributable to Assisted Living Investments shall not exceed twenty
(20%) percent of the Net Equity Value (determined after taking account of
the limitation on Net Equity Value attributable to Assisted Living
Investments as hereinabove provided and the resulting reduction, if any, in
the corresponding computation of Net Equity Value).
"Net Equity Value Rejection Factor" means an amount equal to the
product of (y) $200,000,000 multiplied by (z) a fraction, (i) the numerator
of which is the aggregate carry value of the Operating Company which is the
subject of the Transfer in question during the Fiscal Quarter immediately
preceding the Fiscal Quarter in which the Transfer in question was made and
the attempted prepayment was rejected and (ii) the denominator of which is
the Net Equity Value during the Fiscal Quarter immediately preceding the
Fiscal Quarter in which the attempted prepayment was rejected.
"Note" means the promissory note, in form and substance satisfactory
to Lender in Lender's discretion, dated the date hereof, made by Borrower
to Lender pursuant to this Agreement, as such promissory note may be
modified, amended, supplemented, extended or consolidated in writing, and
any note(s) issued in exchange therefor or in replacement thereof.
"Officers' Certificate" means a certificate delivered to Lender by
Borrower which is signed by a senior executive officer of Borrower.
"Operating Company" means each of AAC III, KPT, Intown, PMAIT,
Xxxxxxxxxx, ARV, Holdings, Cliveden, Atria, Kapson, and the Destination
Entities.
"Other Borrowings" means, as to a specified Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services, (ii) all indebtedness
of such Person evidenced by a note, bond, debenture or similar instrument,
(iii) the face amount of all letters of credit issued for the account of
such Person and, without duplication, all unreimbursed amounts drawn
thereunder, (iv) all indebtedness of such Person secured by a Lien on any
property owned by such Person whether or not such indebtedness has been
assumed, (v) all Contingent Obligations of such Person, and (vi) all
payment obligations of such Person under any interest rate protection
agreement (including any interest rate swaps, caps, floors, collars or
similar agreements) and similar agreements; provided, however, that no
indemnity, assurance or other agreement to hold harmless another Person
which is given in the ordinary course of business or in connection with a
Permitted Transfer shall constitute an "Other Borrowing."
"Payment Breach" means the failure of Borrower to pay to Lender on any
Payment Date the amount due and owing on such Payment Date pursuant to this
Agreement.
"Payment Date" means the first (1st) day of each calendar month during
the Term of the Loan, and the Maturity Date (or, if applicable, the
Extended Maturity Date); provided, however, that for purposes of making
payments hereunder and under the Note, but not for purposes of calculating
Interest Accrual Periods, if the first (1st) day of a given month shall not
be a Business Day, then the Payment Date for such month shall be the next
succeeding Business Day.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"Permitted Indebtedness" means the debt and other obligations
described on Exhibit A hereto.
"Permitted Investments" shall mean the following; provided, however,
that any such investment shall mature not later than the Business Day
preceding the next Payment Date following the date of acquisition thereof:
(a) obligations of, or obligations guaranteed as to principal and
interest by, the United States government or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit
of the United States of America;
(b) Federal Housing Administration debentures;
(c) Federal Home Loan Mortgage Corp. Debt obligations, Farm Credit
System Consolidated system-wide bonds and notes, Federal Home Loan Banks
Consolidated Debt obligations, Federal National Mortgage Association Debt
obligations, Student Loan Marketing Association Debt obligations, Finance
Corp. debt obligations and Resolution Funding Corp. ("REFCORP") debt
obligations;
(d) federal funds, unsecured certificates of deposit, time or demand
deposits, banker's acceptances and repurchase agreements having maturities
of not more than three hundred sixty-five (365) days, of any bank, the
short-term debt obligations of which are rated "A" or better by S&P and "A"
or better by Moody's;
(e) deposits that are fully insured by the Federal Deposit Insurance
Corp. ("FDIC");
(f) debt obligations maturing in three hundred sixty-five (365) days
or less that are rated "A" or higher by S&P and "A" or higher by Moody's;
(g) commercial paper rated "A-1" by S&P and "P-1" by Moody's and
maturing in 365 days or less;
(h) investment in money market funds having assets equal to at least
$750,000,000 rated "Am" or "Am-G" by S&P and "A" by Moody's; or
(i) principal-only strips and interest-only strips of noncallable
obligations issued by the U.S. Treasury, and REFCORP securities stripped by
Federal Reserve Bank of New York;
provided, however, that all instruments described above in clauses
(a), (c), (d), (e), (f) and (g) shall not have an "r" highlighter affixed
to their rating and by its terms should have a predetermined fixed dollar
amount or principal due at maturity that cannot vary or change. Interest
may either be fixed or variable and should be tied to a single interest
rate index plus a single fixed spread (if any), and move proportionally
with that index.
"Permitted Transfer" means any Transfer among the members of the
Borrower Control Group whether by merger, operation of law or otherwise.
"Person" means any individual or Entity.
"Plan" means an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Plan Assets Regulation" means the plan assets regulation issued by
the U.S. Department of Labor, 29 C.F.R. Section 2510.3-101, November 13,
1986.
"Pledge Agreements" means the Pledge Agreements, dated as of the date
hereof, delivered by Borrower and its Affiliates in favor of Lender,
pursuant to Section 3.1 of this Agreement, and the additional pledge
agreements to be delivered to Lender from time to time in accordance with
Sections 2.1, 2.2, 5.1(o) and 6.1(i) of this Agreement, as the same may be
hereafter modified, amended or supplemented from time to time.
"PMAIT" means Prometheus Mid-Atlantic Investors Trust, a Maryland real
estate investment trust.
"Prepayment Premium" means (i) zero dollars in respect of scheduled
amortization payments and in respect of Principal Indebtedness prepaid
after the end of the Closed Period and (ii) the product of (x) ten percent
(10%) of the portion of Principal Indebtedness prepaid prior to the end of
the Closed Period and not otherwise permitted under the provisions of
Section 2.6(b), times (y) a fraction, the numerator of which is the number
of days remaining until the end of the Closed Period on the date of
prepayment and the denominator of which is 360.
"Principal Indebtedness" means the principal amount of the Loan
outstanding from time to time.
"Proceeds" means all "proceeds," as such term is defined in the UCC,
and, to the extent not included in such definition, all proceeds whether
cash or non-cash, movable or immovable, tangible or intangible (including
Insurance proceeds, condemnation proceeds and proceeds of proceeds), from
the Collateral, including, without limitation, those from the sale,
refinancing, exchange, transfer, collection, loss, damage, disposition,
substitution or replacement of any of the Collateral and all income, gain,
credit, distributions and similar items from or with respect to the
Collateral.
"Prometheus Assisted" means Prometheus Assisted Living LLC, a Delaware
limited liability company.
"Prometheus ES" means Prometheus Extended Stay LLC, a Delaware limited
liability company.
"Prometheus Interim" means Prometheus SQ Interim Corp., a Delaware
corporation.
"Prometheus SE LLC" means Prometheus Southeast Retail LLC, a Delaware
limited liability company.
"Prometheus Senior Quarters" means Prometheus Senior Quarters LLC, a
Delaware limited liability company.
"Prometheus SERT" means Prometheus Southeast Retail Trust, a Maryland
real estate investment trust.
"Prometheus SQ Holdings" means Prometheus SQ Holdings Corp., a
Delaware corporation.
"Prometheus UK" means Prometheus UK Hospitality LLC, a Delaware
limited liability company.
"Rating Agencies" means Fitch Investors Services, Inc., Moody's, Xxxx
& Xxxxxx Credit Rating Co. and S&P or any successor to any thereof, and any
other nationally recognized statistical rating organization to the extent
that any of the foregoing have been or will be engaged by Lender or its
designees in connection with or in anticipation of a Securitization (each
individually, a "Rating Agency").
"Red Capital Loan" means that certain loan made by Red Mortgage
Capital, Inc. to Atria Retirement and Assisted Living, Briarcliff, LLC,
Atria Retirement and Assisted Living, Stone Mountain, LLC and Atria
Retirement and Assisted Living, Laurel House, LLC in the aggregate current
principal amount of $6,771,452.52.
"REIT" means an entity which qualifies as a real estate investment
trust under the provisions of Sections 856 through 860 of the IRC or the
corresponding provisions of any successor statute.
"Release Amount" means (x) 100% of all amounts paid or to be paid to
Borrower or to any member of the Borrower Control Group in connection with
a Transfer contemplated under Section 2.6(b)(2) other than a Transfer of
the direct or indirect Equity Interests of the Borrower or Borrower Control
Group in PMAIT, Holdings or Xxxxxxxxxx and (y) 50% of all amounts paid or
to be paid to Borrower or to any member of the Borrower Control Group in
connection with a Transfer, contemplated under Section 2.6(b)(2), of the
direct or indirect Equity Interests of the Borrower or Borrower Control
Group in PMAIT, Holdings or Xxxxxxxxxx, less, in each of (x) and/or (y),
(i) Cost Exclusions, (ii) the reasonable and customary costs and expenses
of any such Transfer (including reasonable attorneys' fees and costs,
commercially reasonable brokerage commissions and transfer taxes) as shall
be reasonably approved by the Lender and (iii) any amounts payable under
the Senior Loan.
"Reporting Company" has the meaning set forth in Section 3.1(a)(10).
"Reuters Screen LIBOR Page" means the display designated as page
"LIBOR" on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBOR page on the service for the purpose of displaying
interbank rates from London in U.S. Dollars).
"Xxxxxxxxxx" means The Xxxxxxxxxx Company, L.P., a Delaware limited
partnership.
"Sale Entity" means each of AAC III, AAC Inc., the Destination
Entities and Cliveden.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Securities" has the meaning set forth in Section 8.34.3.
"Securitization" has the meaning set forth in Section 8.34.3.
"Self Funded Advances" has the meaning set forth in Section 2.1(e).
"Senior Lender" means Capital Trust, Inc., a Maryland corporation.
"Senior Lender Consent" means that certain letter of consent dated as
of the date hereof given by Senior Lender to Borrower.
"Senior Loan" means that certain loan in the principal amount of up to
$110,000,000 made by Senior Lender to Borrower.
"Senior Loan Agreement" means that certain Amended and Restated Loan
Agreement dated as of February 8, 2001 by and between Senior Lender and
Borrower, as amended by that certain letter agreement dated September 5,
2001 and by that certain Second Amendment to Amended and Restated Loan
Agreement dated as of June 30, 2002, and after giving effect to any
consents and waivers with respect thereto prior to the date hereof, and as
the same may hereafter be modified, amended or supplemented from time to
time.
"Senior Loan Deposit Account Agreement" means that certain Amended and
Restated Deposit and Security Agreement dated as of February 8, 2001,
entered into among Borrower and certain members of the Borrower Control
Group, Senior Lender, Chase and the Servicer in connection with the Senior
Loan, as the same may hereafter be modified, amended or supplemented from
time to time.
"Senior Loan Documents" means, collectively, the Loan Documents (as
defined in the Senior Loan Agreement), as such documents may be amended,
modified or supplemented from time to time.
"Senior Quarters Borrower" has the meaning provided in the preamble to
this Agreement.
"Servicer" has the meaning given to such term in the Deposit Account
Agreement.
"Servicing Fee" has the meaning set forth in the Fee Letter.
"Special Purpose Bankruptcy Remote Entity" has the meaning set forth
in Section 5.1(n).
"Subsidiary" of any Person means any corporation, partnership, limited
liability company or other Entity in which such Person holds an Equity
Interest constituting more than 50% of the equity classes issued by such
Entity.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Dow Xxxxx Telerate Service (or such other page as may replace Page 3750
on that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits).
"Term" means the period from and after July 11, 2002 to and including
the first to occur of (x) the Maturity Date or, if applicable, the Extended
Maturity Date, or (y) the date the Indebtedness is paid in full.
"Transaction Costs" means all fees, costs, expenses and disbursements
paid or payable by Borrower relating to the Transactions, including,
without limitation, all fees, costs, expenses and disbursements described
in Section 8.24.
"Transactions" means the transactions contemplated by the Loan
Documents.
"Transfer" means any conveyance, transfer, pledge, assignment,
hypothecation, refinancing, mortgage, encumbrance, gift, sale, lease
(including any amendment, extension, modification, waiver or renewal
thereof), Lien, or other disposition, whether direct or indirect, legal or
beneficial, by law or otherwise.
"UCC" means, with respect to any Collateral, the Uniform Commercial
Code as in effect from time to time in the State of New York and, to the
extent applicable, in each other jurisdiction.
"Unfunded Commitment Additional Interest Payment" has the meaning set
forth in Section 2.12.
"Unfunded Commitment Termination Date" shall mean the earlier to occur
of (i) five (5) Business Days after Lender's receipt of written notice from
Borrower that Borrower waives its right to make a request for the Final
Advance of the Loan, and (ii) February 1, 2003
"Unfunded/Unreserved Loan Amount" has the meaning set forth in Section
2.1.
"Unused Portion" shall be calculated on a daily basis and shall mean
the Loan Amount less the daily weighted average of the Principal
Indebtedness.
"U.S. Obligations" means obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or
any agency or instrumentality thereof provided such obligations are backed
by the full faith and credit of the United States of America including,
without limitation, obligations of the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI
financing), the Small Business Administration (guaranteed participation
certificates and guaranteed pool certificates), the U.S. Department of
Housing and Urban Development (local authority bonds) and the Washington
Metropolitan Area Transit Authority (guaranteed transit bonds); in each
case as selected by Borrower and approved by Lender which approval shall
not be unreasonably withheld, provided, however, that the investments
described in this definition must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must
move proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity.
GENERAL TERMS
Loan Advances.
On the Closing Date or, if later, the date on which Borrower fulfills
all conditions precedent to funding, Lender will advance to Borrower
$31,200,000 (the "Initial Advance"). At the request of the Borrower made in
accordance with and subject to the conditions contained in Section 2.1(b),
Lender will make a one-time final advance to Borrower (the "Final Advance")
on or before February 1, 2003 in an amount not to exceed the excess, if
any, of the Loan Amount over the sum of (i) the amount by which the Initial
Advance plus the Self Funded Advances exceeds the proceeds, if any, of the
Atria Portfolio Loan that are applied to the repayment of the Principal
Indebtedness plus (ii) if the Senior Loan has not been repaid in full on
the date of the Final Advance, the amounts of the Advanced Interest Reserve
(the amount which is available for disbursement for the Final Advance is
the "Unfunded/Unreserved Loan Amount"). On the earlier to occur of (1) the
date of the Final Advance and (2) the Unfunded Commitment Termination Date,
the Loan Amount shall be deemed reduced by an amount equal to the excess of
the Unfunded/Unreserved Loan Amount over the amount of the Final Advance
(the amount by which the Loan Amount is so deemed to be reduced is the
"Deemed Loan Amount Reduction"). It is contemplated that the Initial
Advance will be repaid in whole or in part from the proceeds of the Atria
Portfolio Loan if and when the same closes and funds. In this regard, it is
understood that, if the repayment of the Initial Advance occurs prior to
the Final Advance, Borrower shall have the right, subject to compliance
with the terms and conditions of this Agreement, to obtain a readvance of
an amount equal to the proceeds of the Atria Portfolio Loan which are
applied to the reduction of the Principal Indebtedness (i.e., such
repayment shall increase, dollar for dollar, the amount of the
Unfunded/Unreserved Loan Amount).
Lender's obligation to make the Final Advance of all or any portion of
the Unfunded/Unreserved Loan Amount following the Initial Advance shall be
subject to the conditions that, with respect to such advance requested:
no Default or Event of Default shall have occurred and be continuing;
no Material Adverse Condition shall exist with respect to Borrower,
the Fund taken as a whole, any other member of the Borrower Control Group
or any Operating Company; provided, that, if a Material Adverse Condition
exists solely with respect to one or more AACDK Entities and one or more
members of the Borrower Control Group (excluding the Borrower and the
Fund), that own, directly or indirectly, an interest in such AACDK Entities
(as long as the Material Adverse Condition affecting the applicable members
of the Borrower Control Group is solely caused by or results solely from
the Material Adverse Condition of the subject AACDK Entities), and all of
the other conditions to Lender's obligation to make advances of all or any
portion of the Unfunded/Unreserved Loan Amount are satisfied, Lender shall
be obligated to fund such subsequent advance as long as none of the
proceeds of such advance shall be advanced, contributed or otherwise
invested, directly or indirectly, in any Entity as to which a Material
Adverse Condition exists at the time of such advance;
Lender shall have received Borrower's written request for such advance
not less than 15 nor more than 60 days prior to the requested funding date
for such advance (which request may be revoked at any time by Borrower
prior to the date which is 15 days prior to the requested funding date,
provided that the request for such advance specifies that it is so
revocable), specifying the amount requested, the use of the proceeds
attributable to such advance (which use shall be for a use permitted under
Section 2.2 of this Agreement), the new Collateral, if any, to be furnished
in connection therewith, the Borrower's calculation (with all necessary
supporting information) demonstrating the Debt Service Coverage Ratio (if
such advance shall occur after the Effective Date), and the proposed
funding date, and certifying that no Default or Event of Default has
occurred and is continuing;
INTENTIONALLY DELETED;
INTENTIONALLY DELETED;
CTIMCO shall have received payment from Borrower of the Funding Fee,
if any, with respect to such advance;
except as set forth in the Konover Consent, in the event that
subsequent to the Closing Date (x) any member of the Borrower Control Group
shall have acquired any direct or indirect Equity Interest in any Entity,
or (y) any member of the Borrower Control Group shall have made any loans
to any Entity, or (z) any member of the Borrower Control Group shall have
purchased or otherwise acquired any property of any Entity, Lender shall
have received a perfected, second priority Lien in such Equity Interest,
loan and property (subject and subordinate only to a Lien in favor of
Senior Lender in accordance with the provisions of the Senior Loan
Documents), as created and evidenced by such instruments (including new
collateral assignments, pledge agreements, Direction Letters, and
amendments, if required by Lender, to the Deposit Account Agreement) as
Lender may request, all in form and substance reasonably satisfactory to
Lender; provided, however, that the foregoing shall not be deemed to
constitute a consent or waiver by Lender (to the extent that such consent
is otherwise required by this Agreement or any Loan Document) with respect
to any such purchase, acquisition or loan by Borrower or any member of the
Borrower Control Group;
the conditions precedent to funding contained in Section 3.1(a)(3),
(4), (5), (6), (7), (8), (9), (10) and (11) shall have been fulfilled
insofar as Lender shall deem them applicable to any subsequent advance;
provided, that, (x) the conditions precedent to funding contained in
Section 3.1(a)(3), (4), (5), (6), and (7) shall only be applicable with
respect to any new Collateral, and (y) the representations and warranties
set forth in the last two sentences of Section 4.1(r) hereto shall not be
remade with respect to any of the AACDK Entities; and
if such advance shall occur after the Effective Date, Debt Service
Achievement shall be in effect.
INTENTIONALLY DELETED.
Notwithstanding anything contained herein to the contrary, prior to
disbursement of any other portion of the Unfunded/Unreserved Loan Amount to
be advanced at any time after the Effective Date, there shall be deposited
from proceeds of the Loan (it being understood that to the extent there are
insufficient Loan proceeds remaining, such deficiency shall not affect
Borrower's obligation to fund the Interest Reserve and Borrower shall
nonetheless remain liable therefor) into the Interest Reserve of the
Deposit Account an amount which shall be sufficient to pay all interest, on
the portion of the Unfunded/Unreserved Loan Amount as to which Borrower has
requested a disbursement, which will become due and payable (i) on each
Payment Date following the date of such disbursement and occurring during
the Fiscal Quarter in which such disbursement is to occur, and (ii) at
Lender's discretion, on each of the first and second Payment Dates
occurring during the Fiscal Quarter next succeeding the Fiscal Quarter in
which such disbursement is to occur, all as estimated in accordance with
the provisions of the Deposit Account Agreement.
Borrower and Lender acknowledge and agree that the estimated aggregate
payments in respect of interest, the Funding Fee, the Unfunded Commitment
Additional Interest Payment and the Servicing Fee, that will accrue and
become due and payable on or under the Loan (the "Estimated Debt Service
Payments") from and after the date hereof until the Senior Loan is repaid
in full (based on the assumption that the Senior Loan will be repaid on or
about August 1, 2003) is approximately $8,000,000. Until the Senior Loan
has been repaid in full, Borrower hereby authorizes and directs Lender
(which authorization and direction shall be absolute, unconditional and
irrevocable), without necessity of further act or instrument, to make
monthly advances of the Loan for the payment of interest, the Funding Fee,
the Unfunded Commitment Additional Interest Payment and the Servicing Fee
(the "Debt Service Payments"), as the same accrue and become due and
payable on or under the Loan in accordance with the provisions of this
Agreement and/or the Fee Letter without the necessity of further act or
instrument (the "Self Funded Advances"). If the Senior Loan has not been
repaid on the date of the Final Advance, Lender shall in its sole
discretion recalculate the Estimated Debt Service Payments that will accrue
and become due and payable on or under the Loan from and after the date of
the Final Advance until the date the Senior Loan is paid in full, which
calculation shall be conclusive and binding upon Borrower absent manifest
error and Lender shall thereafter make any appropriate adjustments to the
Unfunded/Unreserved Loan Amount as a result thereof. Notwithstanding the
foregoing, if on the Unfunded Commitment Termination Date, the Senior Loan
has not been repaid in full, then (y) Lender shall in its sole discretion
recalculate the Estimated Debt Service Payments that will accrue and become
due and payable on or under the Loan from and after such date until the
date that the Senior Loan is repaid in full, which calculation shall be
conclusive and binding upon Borrower absent manifest error and (z) Borrower
shall be deemed to have made a request for an advance of a portion of the
Loan in an amount equal to the amount of such recalculated Estimated Debt
Service Payments, and Lender shall fund a portion of the Loan in such
amount (the "Advanced Interest Reserve"). Until the Senior Loan is repaid
in full, the Advanced Interest Reserve shall be reserved for disbursement
by Lender to cover the payment of the Debt Service Payments, as the same
accrue and become due and payable on or under the Loan in accordance with
the provisions of this Agreement and/or the Fee Letter until the Senior
Loan is repaid in full and such amount shall not be disbursed for any other
purpose. Following the repayment in full of the Senior Loan and provided no
Event of Default shall be continuing, Lender shall not have any right,
title or interest to or in the Advanced Interest Reserve funded pursuant to
this Section 2.1(e) and any funds so reserved shall be (i) deposited in the
Deposit Account in accordance with Section 7 of the Deposit Account
Agreement and (ii) thereafter shall be disbursed from the Deposit Account
in accordance with and subject to the provisions of the Deposit Account
Agreement.
Use of Proceeds. Proceeds of the Loan may be used by Borrower for the
following purposes. The Initial Advance shall be used by Borrower to (a)
pay interest, Additional Interest, fees, expenses and closing costs in
connection with the Transactions; and (b) to make a loan to Atria and/or
Kapson to allow such Entities to repay (together with funds from other debt
and equity sources) the GS Atria Loan and any portion of the Red Capital
Loan and fees, expenses and other transaction costs in connection
therewith. Until the Senior Loan has been repaid in full, additional
monthly advances of the Loan shall be made for the purposes set forth in
Section 2.1(e). To the extent funded in accordance with the provisions of
Section 2.1(e), the Advanced Interest Reserve shall be used by Borrower for
the purposes set forth in Section 2.1(e). Subject to compliance with the
terms, covenants and provisions contained herein and in the other Loan
Documents, the Final Advance of all or any portion of the
Unfunded/Unreserved Loan Amount shall be available to (y) pay interest,
Additional Interest, fees, expenses and closing costs in connection with
the Transactions and (z) fund loans to, or additional investments directly
or indirectly in, equity or debt securities of one or more Operating
Companies or in companies owned by one or more Operating Companies.
Security for the Loan. The Note and Borrower's obligations hereunder
and under the other Loan Documents shall be secured by the Loan Documents.
Note. Borrower's obligation to pay the principal of and interest on
the Loan (including Late Charges, Default Rate interest and Exit Additional
Interest Payment), shall be evidenced by this Agreement and by the Note,
duly executed and delivered by Borrower. The Note shall be payable as to
principal, interest, Late Charges, Default Rate interest and Exit
Additional Interest Payment, as specified in this Agreement, with a final
maturity on the Maturity Date or, if applicable, the Extended Maturity
Date. Borrower shall pay all outstanding Indebtedness on the Maturity Date
or, if applicable, the Extended Maturity Date.
Principal and Interest Payments.
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Accrual of Interest. Interest shall accrue on the outstanding
principal balance of the Note and all other amounts due to Lender under the
Loan Documents at the Interest Rate.
Payment of Principal and Interest. On each Payment Date, Borrower
shall pay to the Lender the Monthly Payment Amount (including, by way of
the Self Funded Advances in accordance with Section 2.1(e) hereof).
Payment Dates. All payments required to be made pursuant to
subsections (a) and (b) above shall be made beginning on the first Payment
Date immediately after the end of the first Interest Accrual Period.
Calculation of Interest. Interest shall accrue on the Principal
Indebtedness (from the date advanced) and all other amounts due to Lender
under the Loan Documents. Interest shall be computed on the actual number
of days elapsed in each Interest Accrual Period over a 360 day year.
Default Rate Interest. At any time that an Event of Default has
occurred and is continuing, the entire unpaid amount outstanding hereunder
and under the Note will bear interest at the Default Rate.
Late Charge. If Borrower fails to make any payment of any sums due
under the Loan Documents within three (3) Business Days after receipt of
notice that the same is due, Borrower shall pay the Late Charge.
Maturity Date. On the Maturity Date or, if applicable, the Extended
Maturity Date, Borrower shall pay to Lender all amounts owing under the
Loan Documents, including interest, principal, Late Charges, Default Rate
interest, and the Exit Additional Interest Payment.
Extension of Maturity. At Borrower's option, exercisable as set forth
below, the Loan shall be extended for one year and shall mature on July 11,
2006 or such earlier date as may result from acceleration of the
Indebtedness by Lender ("Extended Maturity Date"). The Borrower shall
exercise such option by delivery to Lender of a written request for such
extension not less than ninety (90) days before the Maturity Date. Such
extension shall be subject to the conditions that:
on each of the date of Borrower's request and the Maturity Date, (A)
no Default or Event of Default shall have occurred and be continuing, and
(B) no Material Adverse Condition shall exist with respect to the Borrower,
the Fund taken as a whole, any other member of the Borrower Control Group
or any Operating Company, other than a Material Adverse Condition which
exists solely with respect to one or more AACDK Entities and the members of
the Borrower Control Group (excluding the Borrower and the Fund) that own,
directly or indirectly, an interest in such AACDK Entities (as long as such
Material Adverse Condition affecting the applicable members of the Borrower
Control Group was solely caused by or resulted solely from the Material
Adverse Condition of the subject AACDK Entities);
Borrower shall represent and warrant to Lender in such request that,
as of the date thereof, no Default or Event of Default exists, and no
Material Adverse Condition exists with respect to the Borrower, the Fund
taken as a whole, any other member of the Borrower Control Group or any
Operating Company other than a Material Adverse Condition which exists
solely with respect to one or more AACDK Entities and the members of the
Borrower Control Group (excluding the Borrower and the Fund) that own,
directly or indirectly, an interest in such AACDK Entities (as long as such
Material Adverse Condition affecting the applicable members of the Borrower
Control Group was solely caused by or resulted solely from the Material
Adverse Condition of the subject AACDK Entities); and
Borrower's request for such extension shall be accompanied by the
estimated Extension Additional Interest Payment (based on the assumption
that only regularly scheduled quarterly amortization payments will be made
between the date of such notice and the Initial Maturity Date). Provided no
Event of Default shall be continuing, Lender will refund Borrower on the
Initial Maturity Date, the excess, if any, of the amount by which the
estimated Extension Additional Interest Payment exceeds the Extension
Additional Interest Payment that would actually have been due on such date.
Prepayments.
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Voluntary Prepayment. The provisions of this Section 2.6(a) are
subject to Section 2.6(b). Except for the repayment of the Initial Advance
directly or indirectly with the proceeds of the Atria Portfolio Loan,
Borrower shall not have the right to prepay all or any portion of the
principal balance of the Loan prior to January 11, 2004 (the "Closed
Period"). The tender of payment of the Indebtedness during the Closed
Period while an Event of Default exists shall be deemed to constitute a
voluntary prepayment for all purposes of this Agreement, and Lender shall
have no obligation to accept such tender unless accompanied by the
applicable Prepayment Premium and the Exit Additional Interest Payment.
From and after the end of the Closed Period, Borrower shall have the right,
on any Payment Date, to prepay the Loan in whole, or in part, upon at least
thirty (30) days' irrevocable prior written notice to Lender, specifying
the amount and the date of prepayment, provided that on the date of such
prepayment Borrower shall pay to Lender the Exit Additional Interest
Payment.
Mandatory Prepayment. (1) In the event (i) of a Transfer of Equity
Interests in, or a change in control of, Lazard Freres REI, or (ii) of a
change in the general partner of any of LFSRI II, LFSRI II Alternative and
LFSRI-CADIM, or (iii) that LFSRI II, LFSRI II Alternative and LFSRI-CADIM
cease to own and control, directly or indirectly, (y) 100% of the Equity
Interests in the Senior Quarters Borrower or (z) 100% of the common stock
in the LFSRI II Borrower, the entire Indebtedness shall become immediately
due and payable, together with the Exit Additional Interest Payment and any
applicable Prepayment Premium.
(2) Except with respect to a Permitted Transfer, in the event of
a Transfer of the Equity Interests held directly or indirectly by the Fund
in any member of the Borrower Control Group or any Operating Company (any
such Transfers to be made only in an arm's-length transaction to a bona
fide third party purchaser for fair market value), a portion of the
Indebtedness shall become due and payable as hereinafter set forth. Other
than with respect to a Transfer of the Equity Interests held directly or
indirectly by the Fund in AAC III, the Destination Entities or Cliveden (a
Transfer of such Equity Interests in AAC III, the Destination Entities or
Cliveden being hereinafter referred to as an "AACDEC Transfer"), the amount
of the Indebtedness required to be so prepaid shall be equal to the lesser
of (i) the Release Amount with respect to such Transfer, and (ii) the
outstanding Indebtedness. In the event of a Transfer of the direct or
indirect Equity Interests of Borrower or a member of the Borrower Control
Group in (i) AAC III, a portion of the Indebtedness in an amount equal to
the lesser of (1) $10,000,000 (unless, (y) such Transfer occurs prior to
the Unfunded Commitment Termination Date, the Unfunded/Unreserved Loan
Amount is $10,000,000 or more and Borrower simultaneously therewith
notifies Lender in writing of its election to irrevocably waive its right
to receive an advance of a portion of the Unfunded/Unreserved Loan Amount
in the amount of $10,000,000 (in which case the Loan Amount shall be deemed
to be reduced by $10,000,000 and no portion of the Indebtedness shall
become due and payable) or (z) there has been a Deemed Loan Amount
Reduction, in which case the amount, if any, by which $10,000,000 exceeds
the Deemed Loan Amount Reduction), and (2) the outstanding Indebtedness,
shall become immediately due and payable, and Lender shall not be permitted
to reject such prepayment and (ii) Cliveden or the Destination Entities, no
portion of the Indebtedness shall become due and payable. In the event that
any Transfer of assets of an Operating Company in the nature of a capital
transaction, or any other non-recurring event (whether in one transaction
or a series of transactions) yields to such Operating Company amounts used
to pay Dividends and Distributions to Borrower or any member of the
Borrower Control Group, then a portion of the Indebtedness shall become
immediately due and payable in an amount equal to the lesser of (x) the
amount by which such Dividends and Distributions exceeds the sum of (i) the
amount of Cost Exclusions resulting from the Transfer giving rise to such
Dividends and Distributions, and (ii) amounts payable under the Senior
Loan, if any, and (y) the outstanding Indebtedness. Any pre-payment
hereunder shall be made only with thirty (30) days' prior written notice
(which notice may be revoked by Borrower as long as such notice specifies
that it is revocable). Borrower shall be required to make mandatory
prepayments in accordance with Section 6(b) of the Deposit Account
Agreement.
(3) Notwithstanding anything to the contrary contained in
subsection (2) above (other than clause (i) of the third sentence of
subsection (2) above), Lender shall have the right, in its sole discretion,
at any time during the Closed Period, to reject all or any portion of any
prepayment contemplated by subsection (2) above, in which event Borrower
shall have no right or obligation to prepay the amount so rejected by
Lender (but Borrower shall not thereby be released from the obligation to
make further prepayments hereunder); provided, however, that if such
rejected prepayment relates to a Transfer of Equity Interests which is
other than an AACDEC Transfer, then from and after such rejection, (1) all
references to the term "Debt Service Coverage Ratio" and "Debt Service
Achievement" shall no longer be applicable and all provisions in the Loan
Documents referencing such definitions shall be deemed to be deleted, (2)
the minimum amount contained in the "Net Cash Flow" covenant contained in
Section 5.1(s) shall be reduced by the Net Cash Flow Rejection Factor and
(3) the minimum amount contained in the "Net Equity Value" covenant
contained in Section 5.1(t) shall be reduced by the Net Equity Value
Rejection Factor; provided, further, that in the event that the rejection
of any such prepayment by Lender pursuant to the foregoing provision would
result in Borrower being in default (including any default that, but for
the passage of time, would occur in close proximity to the rejection of
such prepayment and assuming that no other circumstances would
independently give rise to a default) under this Agreement, Lender shall
not be permitted to reject such prepayment unless Lender waives the default
resulting therefrom, which waiver shall be in form and substance
satisfactory to Lender and shall also contain a release of Borrower and its
affiliates from any liability resulting from or caused by Lender's
rejection of such prepayment.
Application of Prepayment. Upon the receipt of any prepayment, as long
as no Event of Default exists, Lender shall be required, on the date of
receipt thereof, to apply the amount of prepayment to the principal on the
Note in the inverse order of principal payments coming due, together with
accrued interest for the entire Interest Accrual Period in which prepayment
occurs, and all other amounts then due and payable on the Note.
Notwithstanding the provisions of this Section 2.6 to the contrary, if no
Event of Default exists and Borrower is otherwise permitted to make a
prepayment hereunder, Borrower shall have the right to make such prepayment
on a date other than a Payment Date, provided that, together with such
prepayment, Borrower shall also pay an amount necessary to reimburse Lender
for any costs, losses or expenses incurred in connection with breaking any
LIBOR contracts.
Partial Release. As long as no Event of Default has occurred and is
continuing, in connection with any Transfer described under Section
2.6(b)(2) hereof (irrespective of whether or not Lender accepts all or any
portion of any mandatory prepayment required thereby and irrespective of
the amount mandatorily required to be prepaid), Lender shall release the
Collateral, or portion thereof, which is the subject of the Transfer. The
costs and expenses of any such release shall be paid by the Borrower.
Lender shall grant such release promptly after Lender is satisfied with the
evidence and information supporting Borrower's right to a release.
Application of Payments. Except while an Event of Default exists, all
proceeds of any repayment, including prepayments, of the Loan shall be
applied to pay: first, any costs and expenses of Lender required to be
reimbursed under the terms of the Loan Documents, including the Lender's
commercially reasonable attorneys' fees and costs (i) arising as a result
of such repayment or (ii) expended by Lender to protect, preserve,
foreclose, or realize upon, or take any other action with respect to the
Collateral; second, accrued and unpaid interest on the Loan at the Interest
Rate; third, the Principal Indebtedness; and fourth, any other amounts then
due and owing under the Loan Documents. During the existence of an Event of
Default, all proceeds of repayment, including any payment or recovery on
the Collateral, shall be applied in such order and in such manner as Lender
shall elect in Lender's discretion.
Payment of Debt Service, Method and Place of Payment.
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Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not
later than 11:00 A.M., New York time, on the date when due, and shall be
made in lawful money of the United States of America in federal or other
immediately available funds to an account specified to Borrower by Lender
in writing, and any funds received by Lender after such time, for all
purposes hereof, shall be deemed to have been paid on the next succeeding
Business Day.
All payments made by Borrower hereunder or by Borrower under the other
Loan Documents, shall be made irrespective of, and without any deduction
for, any set-offs or counterclaims.
Taxes. All payments made by Borrower under this Agreement and under
the other Loan Documents shall be made free and clear of, and without
deduction or withholding for or on account of, any Covered Taxes.
Exit Additional Interest Payment. On the date of payment in full of
all of the Principal Indebtedness, whether upon a prepayment, acceleration
or at maturity of the Loan, Borrower shall pay the Exit Additional Interest
Payment.
INTENTIONALLY DELETED .
-----------------------
Unfunded Commitment Additional Interest Payment. Borrower shall make a
payment at the rate of 1% per annum (the "Unfunded Commitment Additional
Interest Payment") in respect of the Unused Portion of the Loan, which
Unfunded Commitment Additional Interest Payment shall be payable monthly in
arrears, shall be calculated separately for each calendar month or portion
thereof during the term of the Loan on the basis of the actual number of
days elapsed over a 360 day year and on the basis of the daily weighted
average of the Unused Portion of the Loan, from the date of this Agreement
until the Unfunded Commitment Termination Date. Amounts paid in respect of
the Unfunded Commitment Additional Interest Payment shall be credited
dollar for dollar against Borrower's obligation to pay to CTIMCO the
Funding Fee in respect of advances of the Loan subsequent to the Initial
Advance. For the avoidance of doubt, it is understood and agreed that the
sum of all payments made by Borrower in respect of the Unfunded Commitment
Additional Interest Payment and the Funding Fee in any case shall not
exceed $650,000 in the aggregate.
Withholding. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax with respect to any Covered Tax (including
by application of any treaty, the benefits of which such Lender is
entitled), with respect to payments under this Agreement shall deliver to
Borrower, on or prior to the date such Foreign Lender becomes a party to
this Agreement (or designates a new lending office) and at such other times
as may be necessary in the reasonable determination of Borrower, (i) two
original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor forms), properly completed and duly executed by such Lender, and
such other documentation required under the Code to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under this Agreement, or (ii) if
such Lender is not a "bank" or other Person described in Section 881(c)(3)
of the Code and cannot deliver either Internal Revenue Service Form W-8BEN
or W-8ECI pursuant to clause (i) above of this Section 2.13, a Certificate
of U. S. Withholding Status together with two original copies of Internal
Revenue Service Form W-8BEN (or any successor form), properly completed and
duly executed by such Lender, and such other documentation required under
the Code to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of interest payable under this Agreement. Each
Lender that is not a Foreign Lender shall deliver to Borrower two duly
completed copies of United States Internal Revenue Form W-9 (or applicable
successor form) unless it establishes to the satisfaction of Borrower that
the Lender is otherwise eligible for an exemption from backup withholding
tax or other applicable withholding tax. Lender hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates
or other evidence required to be provided pursuant to the first two
sentences of this Section 2.13, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete
or inaccurate in any material respect, that such Lender shall promptly
deliver to Borrower two new original copies of Internal Revenue Service
Form X-0XXX, X-0XXX or W-9 or a Certificate of U. S. Withholding Status and
two original copies of Internal Revenue Service Form W-8BEN, as the case
may be, properly completed and duly executed by such Lender, and such other
documentation required under the Code to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under this Agreement, or
notify Borrower of its inability to deliver any such forms, certificates or
other evidence.
CONDITIONS PRECEDENT AND THE ACCOUNTS
Conditions Precedent to the Making of the Loan.
As a condition precedent to the entry into this Agreement and the
funding of the Initial Advance, Borrower shall have satisfied the following
conditions (unless waived by Lender in accordance with Section 8.4) on or
before the Closing Date:
Commitment Conditions.
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(A) Borrower shall have paid to CTIMCO an origination fee equal
to $650,000. Such fee shall be deemed to have been fully earned upon
execution of this Agreement, regardless of whether all or part of the
Loan Amount is actually funded.
(B) Lender shall have completed its "due-diligence" review of
Borrower, the members of the Borrower Control Group, the Operating
Companies and their respective Affiliates, including the
organizational and governing documents, major agreements binding or
affecting, and financial condition of each of them, and such other
documents and information as Lender may request, and the results of
such review shall be satisfactory to Lender in its sole discretion.
Loan Documents.
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(A) Loan Agreement. Borrower shall have executed and delivered
this Agreement to Lender.
(B) Note. Borrower shall have executed and delivered to Lender
the Note.
(C) Collateral Assignments and Pledge Agreements. Borrower shall
have executed and delivered and shall have caused each applicable
member of the Borrower Control Group to execute and deliver to Lender
(i) the Collateral Assignments listed on Schedule II, attached hereto
and made a part hereof, in form and substance satisfactory to Lender
and (ii) the Pledge Agreements listed on Schedule IV, attached hereto
and made a part hereof, in form and substance satisfactory to Lender.
(D) Guaranty. LFSRI II, LFSRI II Alternative and LFSRI-CADIM
shall have executed and delivered to Lender a guaranty of repayment of
the Loan.
(E) Financing Statements. Borrower shall have executed and
delivered to Lender all financing statements required by Lender to be
filed of record in the appropriate filing offices in each of the
appropriate jurisdictions.
(F) Stock, etc. Certificates. The Borrower and other grantors
under the Collateral Assignments and the Pledge Agreements shall have
confirmed to the Lender in writing that such parties have previously
delivered the certificates and other instruments evidencing ownership
of the Collateral to Senior Lender in connection with the Senior Loan,
together with separate endorsements executed in blank with respect
thereto and shall have taken all other action necessary to grant
Lender a second priority perfected security interest (subject and
subordinate only to a security interest in favor of Senior Lender in
accordance with the provisions of the Senior Loan Documents) in all
"investment property" (as such term is defined in Article 9 of the
UCC) included in the Collateral.
(G) Lockbox. Borrower shall have executed and delivered and
caused the applicable members of the Borrower Control Group to execute
and deliver to Lender the Deposit Account Agreement.
(H) Custodial Agreement Letter. Lender shall have received from
LaSalle National Bank ("LaSalle"), as custodian under its Custodial
Agreement with Senior Lender, one or more agreements, in form and
substance satisfactory to Lender, pursuant to which LaSalle agrees
that it holds all certificates and other instruments evidencing
ownership of the Collateral for the benefit of Senior Lender and
Lender.
Opinions of Counsel. Lender shall have received from counsel
satisfactory to Lender, legal opinions in form and substance satisfactory
to Lender in Lender's discretion. All such legal opinions will be addressed
to Lender, dated as of the funding date, and in form and substance
satisfactory to Lender and its counsel. Borrower hereby instructs counsel
to deliver to Lender such opinions addressed to Lender.
Lien Search Reports. Lender shall have received satisfactory reports of
UCC, federal tax lien, bankruptcy, state tax lien, judgment and pending
litigation searches conducted by a search firm reasonably acceptable to
Lender. Such searches shall have been received in relation to Borrower, and
certain members of the Borrower Control Group. Such searches shall have
been conducted in each of the locations designated by Lender in Lender's
reasonable discretion.
Certificates. Lender shall have received Officer's Certificates, in each
case in form and substance satisfactory to Lender.
Consents, Licenses, Approvals. Lender shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by Borrower and the members of the
Borrower Control Group under, and the validity and enforceability of, the
Loan Documents, and such consents, licenses and approvals shall be in full
force and effect.
Additional Matters. Lender shall have received such other permits,
certificates, opinions, documents and instruments relating to the Loan as
may be reasonably required by Lender and all other documents and all legal
matters in connection with the Loan shall be satisfactory in form and
substance to Lender.
Representations and Warranties. The representations and warranties herein
and in the other Loan Documents shall be true and correct as of the date of
such funding.
No Injunction. No law or regulation shall have been adopted, no order,
judgment or decree of any Governmental Authority shall have been issued or
entered, and no litigation shall be pending or threatened, which in the
reasonable judgment of Lender would enjoin, prohibit or restrain, or impose
or result in an adverse effect upon the making or repayment of the Loan or
the consummation of the Transactions.
Financial Information. Lender shall have received all financial information
(which financial information shall be satisfactory to Lender in Lender's
discretion) relating to the Borrower, the members of the Borrower Control
Group and the Operating Companies, requested by Lender in Lender's
discretion. Such financial information shall be (i) prepared by an
accounting firm approved by Lender in Lender's discretion, (ii) prepared
based on a scope of work determined by Lender in Lender's discretion and
(iii) in form and content acceptable to Lender in Lender's discretion;
provided, however, that the requirements of the preceding sentence shall
not be applicable to any Operating Company that has securities registered
pursuant to Sections 12 or 15(d) of the Securities Exchange Act of 1934, as
amended (a "Reporting Company").
Transaction Costs. Borrower shall have paid or caused to be paid all
Transaction Costs.
Lender shall not be obligated to fund any portion of the Loan Amount
unless and until each of the applicable conditions precedent set forth in
this Article III is satisfied and until Borrower provides any other
information reasonably required by Lender. In addition, Lender shall not be
obligated to fund the Loan Amount (other than the Initial Advance) if a
Material Adverse Condition shall exist with respect to the Borrower, the
Fund taken as a whole, any other member of the Borrower Control Group or
any Operating Company; provided, that (i) if a Material Adverse Condition
exists solely with respect to one or more AACDK Entities and the members of
the Borrower Control Group (excluding the Borrower and the Fund) that own,
directly or indirectly, any interest in such AACDK Entities (as long as the
Material Adverse Condition affecting the applicable members of the Borrower
Control Group was solely caused by or results solely from the Material
Adverse Condition of the subject AACDK Entities), and (ii) all the other
conditions to Lender's obligation to make the Final Advance of all or any
portion of the Unfunded/Unreserved Loan Amount are satisfied, Lender shall
be obligated to fund such subsequent advance as long as none of the
proceeds of such advance shall be advanced, loaned, contributed or
otherwise invested, directly or indirectly, in any Entity as to which a
Material Adverse Condition exists at the time of such advance by Lender or
the advance, loan, contribution or investment by Borrower or the applicable
member of the Borrower Control Group.
In connection with the Loan, Borrower shall execute and deliver or
cause to be executed and delivered to Lender all additions, amendments,
modifications and supplements to the Note, the Pledge Agreements and the
other Loan Documents, if reasonably requested by Lender to effectuate the
provisions hereof or thereof, and to provide Lender with the full benefit
of the security intended to be provided under the Loan Documents. Without
in any way limiting the foregoing, such additions, modifications and
supplements shall include those deemed reasonably desirable by Lender's
counsel in the jurisdiction in which the Collateral or any part thereof is
located.
The funding of the Initial Advance and of each subsequent advance of a
portion of the Loan Amount shall constitute, without the necessity of
specifically containing a written statement to such effect, a confirmation,
representation and warranty by Borrower to Lender that, to the best of
Borrower's knowledge, all of the applicable conditions to be satisfied in
connection with the making of such advance have been satisfied (unless
waived by Lender in accordance with Section 8.4), and that all of the
representations and warranties of Borrower set forth in the Loan Documents
are true and correct in all material respects as of the date of the funding
of such advance; provided, that with respect to an advance of a portion of
the Loan Amount after the Initial Advance, the representations and
warranties set forth in the last two sentences of Sections 4.1(r) hereto
need not be true concerning an AACDK Entity or any Collateral constituting
Equity Interests in or Instruments issued by such AACDK Entity, so long as
none of the proceeds of such advance shall be advanced, contributed or
otherwise invested directly or indirectly in such AACDK Entity.
Form of Loan Documents and Related Matters. The Loan Documents and all
of the certificates, agreements, legal opinions and other documents and
papers referred to in this Article III, unless otherwise specified, shall
be delivered to Lender, and shall be in form and substance satisfactory to
Lender.
The Accounts.
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Borrower has previously established such reserve accounts and has
deposited and continues to deposit such amounts into such accounts as
required pursuant to the terms of the Senior Deposit Account Agreement and
the other Senior Loan Documents.
On or before the Effective Date, Borrower shall have established and
shall continue to maintain an account (the "Deposit Account") in Lender's
name as secured party at a financial institution designated by Borrower and
reasonably satisfactory to Lender. Commencing on the Effective Date, the
Deposit Account shall be governed by the Deposit Account Agreement. The
Deposit Account Agreement has been executed and delivered and is in full
force and effect as of the date hereof, but the provisions thereof shall
not become operative until the date (the "Effective Date") upon which the
Senior Loan has been paid in full, and all of the collateral for the Senior
Loan has been released by the Senior Lender. Upon repayment of the Senior
Loan, Borrower hereby irrevocably and unconditionally directs (i) Senior
Lender to remit or cause to be remitted to Lender, for deposit into the
Deposit Account, all funds from reserves under the Senior Loan Documents at
the time of termination of such reserves and (ii) Senior Lender to cause
all Collateral which is physical in nature and held by or for the benefit
of Lender (e.g., stocks, notes, etc.) in respect of the Senior Loan to be
transferred and delivered to or as directed by Lender, all of which
Collateral shall thereafter be held solely by or for the benefit of Lender
(and any entity which has extended a credit facility to Lender, if any), as
security for the payment of the Loan in accordance with the provisions of
this Agreement and the Deposit Account Agreement.
From and after the Effective Date, funds from the Deposit Account
shall be disbursed from time to time in accordance with and in such order
and priority as provided by the terms and provisions of the Deposit Account
Agreement and this Agreement. Until disbursed, Borrower shall have the
right to direct the investment of funds in the Deposit Account in Permitted
Investments, subject to Lender's reasonable approval.
Investment and Control of Accounts.
----------------------------------
All interest earned on amounts deposited into the Accounts shall be
held in the Accounts and shall be used or disbursed as provided herein and
in the Deposit Account Agreement for the benefit of Borrower. Neither
Lender nor the Servicer shall have any liability for any loss of interest
on funds in any Accounts and no such loss shall affect Borrower's
obligation to fund any Account as required hereunder. Borrower hereby
pledges, assigns and grants a lien and security interest to Lender, as
security for payment of all sums due under the Loan and the performance of
all other terms, conditions and provisions of the Loan Documents and this
Agreement on Borrower's part to be paid and performed, of all Borrower's
right, title and interest in and to the Deposit Account and all other
accounts and subaccounts maintained from time to time under the Deposit
Account Agreement (collectively, the "Accounts"). Borrower shall not,
without obtaining the prior written consent of Lender, further pledge,
assign or grant any lien or security interest in any Account, or permit any
lien or encumbrance to attach thereto, or any levy to be made thereon, or
any UCC Financing Statements, except those naming Lender as the secured
party, to be filed with respect thereto. This Agreement is, among other
things, intended by the parties to be a security agreement for purposes of
the Uniform Commercial Code in effect in New York and each other
jurisdiction in which Accounts may be located.
Notwithstanding the foregoing, at any time an Event of Default exists
and remains uncured after the Effective Date, the Servicer, at Lender's
option and to the extent permitted under applicable law without adversely
affecting the other rights and remedies provided to Lender under this
Agreement or the other Loan Documents, shall distribute all funds then held
in, and/or received subsequently in, the Accounts to Lender to be applied
in such order as Lender in its sole discretion shall determine, (1) to the
payment of (y) interest and Principal Indebtedness on the Note and (z) the
other Indebtedness, until all such amounts are paid in full and (2) to
preserve the Collateral.
The Lender shall have exclusive control over and sole right of
withdrawal from each of the Accounts, which shall be exercised solely in
accordance with the provisions of this Agreement and the Deposit Account
Agreement. The Accounts shall be released to or at the direction of the
Borrower upon payment in full of the Indebtedness.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of Borrower.
Organization. Borrower (i) is a duly organized and validly existing
Entity in good standing under the laws of the State of its formation, (ii)
is duly qualified as a foreign Entity in each jurisdiction in which the
nature or location of its business, its assets, or any of the Collateral
makes such qualification necessary or desirable, (iii) has the requisite
Entity power and authority to carry on its business as now being conducted,
and (iv) has the requisite Entity power to execute and deliver, and perform
its obligations under, the Loan Documents.
Authorization. The execution and delivery by Borrower of the Loan
Documents, Borrower's performance of its obligations thereunder and the
creation of the security interests and Liens provided for in the Loan
Documents (i) have been duly authorized by all requisite Entity action on
the part of Borrower, (ii) will not violate any provision of any applicable
Legal Requirements, any order, writ, decree, injunction or demand of any
court or other Governmental Authority, any organizational document (after
giving effect to certain amendments to the certificates of incorporation of
Borrower, copies of which have been delivered to Lender) of Borrower or any
indenture or agreement or other instrument to which Borrower is a party or
by which Borrower is bound, (iii) will not be in conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a
default under, or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the property or assets of Borrower pursuant
to, any indenture or agreement or instrument (after giving effect to the
Senior Lender Consent), and (iv) have been duly executed and delivered by
Borrower. Except for those obtained or filed on or prior to the Closing
Date, Borrower is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any
Governmental Authority or other agency in connection with or as a condition
to the execution, delivery or performance of the Loan Documents. The Loan
Documents to which Borrower is a party have been duly authorized, executed
and delivered by Borrower.
Entity Status. Borrower has been, and will continue to be, a duly
formed and existing Entity in good standing in all relevant jurisdictions.
Borrower at all times since its formation has complied, and will continue
to comply, with the provisions of all of its organizational documents, and
the laws of the state in which Borrower was formed or is doing business
relating to the Entity.
Litigation. Except as set forth on Schedule 4.1(d) to this Agreement,
there are no actions, suits or proceedings at law or in equity by or before
any Governmental Authority or other agency now pending and served or, to
the knowledge of Borrower, threatened against Borrower or the Collateral.
Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction which is reasonably likely to result in a
Material Adverse Condition with respect to the Borrower, the Fund taken as
a whole, any other member of the Borrower Control Group or any Operating
Company, other than a Material Adverse Condition solely with respect to one
or more AACDK Entities and the members of the Borrower Control Group
(excluding the Borrower and the Fund) that own, directly or indirectly, an
interest in such AACDK Entities (as long as such Material Adverse Condition
affecting the applicable members of the Borrower Control Group was solely
caused by or resulted solely from the Material Adverse Condition of the
subject AACDK Entities). Borrower is not in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any indenture, agreement or instrument to which
it is a party or by which Borrower or its property is bound or affected.
No Bankruptcy Filing. Borrower is not contemplating either the filing
of a petition by Borrower under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of the assets
or property of Borrower, any member of the Borrower Control Group nor any
Operating Company, and other than with respect to Cliveden, Borrower has no
knowledge of any Person contemplating the filing of any such petition
against any such Entity.
Full and Accurate Disclosure. No written statement of fact made by or
on behalf of Borrower or any member of the Borrower Control Group, whether
in the Loan Documents or in any other document or certificate delivered to
Lender by or on behalf of Borrower or any member of the Borrower Control
Group, contains any untrue statement of a material fact or omits to state
any material fact necessary to make statements contained herein or therein
not misleading. There is no fact presently known to Borrower which has not
been disclosed to Lender which materially adversely affects, nor as far as
Borrower can reasonably foresee, would materially adversely affect the
business, operations or condition (financial or otherwise) of Borrower or
any member of the Borrower Control Group or any Operating Company.
Location of Chief Executive Offices. The location of Borrower's
principal place of business and the location of Borrower's chief executive
office is the address listed in the first paragraph of this Agreement, and
Borrower has no other places of business.
Compliance. Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority, the
violation of which is reasonably likely to result in a Material Adverse
Condition with respect to the Borrower, the Fund taken as a whole, any
other member of the Borrower Control Group or any Operating Company, other
than a Material Adverse Condition solely with respect to one or more AACDK
Entities and the members of the Borrower Control Group (excluding the
Borrower and the Fund) that own, directly or indirectly, an interest in
such AACDK Entities (as long as such Material Adverse Condition affecting
the applicable members of the Borrower Control Group was solely caused by
or resulted solely from the Material Adverse Condition of the subject AACDK
Entities).
Other Debt and Obligations. Borrower has no financial obligation under
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which Borrower is a party, or by which Borrower is bound,
other than obligations under the Loan Documents and the Senior Loan
Documents. Borrower has not borrowed or received other debt financing that
has not been heretofore repaid in full (other than the indebtedness
evidenced and secured by the Senior Loan Documents) and Borrower has no
known material Contingent Obligations (exclusive of indemnities, assurances
or other agreements to hold harmless another Person which are given in the
ordinary course of business or in connection with a Permitted Transfer).
ERISA. (1) Each Plan and, to the knowledge of Borrower, each
Multiemployer Plan, is in compliance with, and has been administered in
compliance with, its terms and the applicable provisions of ERISA, the Code
and any other federal or state law, except for such noncompliance as is not
reasonably likely to result in a Material Adverse Condition with respect to
the Borrower, the Fund taken as a whole, any other member of the Borrower
Control Group or any Operating Company, other than a Material Adverse
Condition solely with respect to one or more AACDK Entities and the members
of the Borrower Control Group (excluding the Borrower and the Fund) that
own, directly or indirectly, an interest in such AACDK Entities (as long as
such Material Adverse Condition affecting the applicable members of the
Borrower Control Group was solely caused by or resulted solely from the
Material Adverse Condition of the subject AACDK Entities); and to the
knowledge of Borrower no event or condition has occurred as to which
Borrower or any ERISA Affiliate would be under an obligation to furnish a
report to Lender under Section 5.1(j).
(2) Borrower and each member of the Borrower Control Group that
has as an investor an ERISA Investor qualifies as a VCOC or otherwise
complies with an exception set forth in the Plan Assets Regulation, or is
an entity with no investors subject to Title I of ERISA or Section 4975 of
the Code, such that the assets of such Entity would not be subject to Title
I of ERISA and/or Section 4975 of the Code.
Solvency. Borrower (i) has not entered into this Loan Agreement or any
Loan Document with the actual intent to hinder, delay, or defraud any
creditor, and (ii) has received reasonably equivalent value in exchange for
its obligations under the Loan Documents. Giving effect to the transactions
contemplated hereby, the fair saleable value of Borrower's assets exceeds
and will, immediately following the execution and delivery of this
Agreement, exceed Borrower's total liabilities, including subordinated,
unliquidated, or disputed liabilities or Contingent Obligations. The fair
saleable value of Borrower's assets is and will, immediately following the
execution and delivery of this Agreement, be greater than Borrower's
probable liabilities, including the maximum amount of its Contingent
Obligations or its debts as such debts become absolute and matured.
Borrower's assets do not and, immediately following the execution and
delivery of this Agreement, will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted.
Borrower does not intend to, and does not believe that it will, incur debts
and liabilities (including Contingent Obligations and other commitments)
beyond its ability to pay such debts as they mature (taking into account
the timing and amounts to be payable on or in respect of obligations of
Borrower).
Not Foreign Person. Borrower is not a "foreign person" within the
meaning of ss. 1445(f)(3) of the Code.
Investment Company Act, Public Utility Holding Company Act. Borrower
is not (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of, and is not required to
register under, the Investment Company Act of 1940, as amended, (ii) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended,
or (iii) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.
No Defaults. No Default or Event of Default exists under or with
respect to any Loan Document.
Labor Matters. Borrower is not a party to any collective bargaining
agreements.
Use of Proceeds; Margin Regulations. Borrower will use the proceeds of
the Loan for the purposes described herein. Other than as set forth on
Schedule 4.1(q), no part of the proceeds of the Loan will be used, whether
directly, indirectly, immediately, incidentally or ultimately, (i) to
purchase or carry any "margin stock" within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System ("Board of Governors")
or to refund indebtedness originally incurred for such purpose, or (ii) for
any purpose which entails a violation of, or is inconsistent with, such
Regulation U or any other Regulations of the Board of Governors, or (iii)
for any purposes prohibited by applicable Legal Requirements. If requested
by Lender, the Borrower, any applicable member of the Borrower Control
Group and the recipient of any portion of the proceeds of the Loan Amount
shall furnish to Lender a statement on Federal Reserve Form G-3 referred to
in said Regulation U.
Financial Information. To the best knowledge of Borrower, the
financial data concerning the members of the Borrower Control Group and the
Operating Companies for the year ended December 31, 2001 and the quarter
ended March 31, 2002 that has been delivered by or on behalf of Borrower or
any member of the Borrower Control Group to Lender is true, complete and
correct in all material respects. Since March 31, 2002, except as otherwise
disclosed in writing to Lender, there has been no material adverse change
in the financial position of Borrower or any member of the Borrower Control
Group or any Operating Company or in the results of operations of Borrower
or any member of the Borrower Control Group or any Operating Company.
Except for the Permitted Indebtedness, since March 31, 2002, neither
Borrower, any member of the Borrower Control Group nor any Operating
Company has incurred any obligation or liability, contingent or otherwise,
not reflected in such financial data which might materially adversely
affect its business operations or the Collateral.
Enforceability. The Loan Documents executed by Borrower or any of its
Affiliates in connection with the Loan, including any Pledge Agreement and
Collateral Assignment, are the legal, valid and binding obligations of
Borrower or such Affiliate, enforceable against Borrower or such Affiliate
in accordance with their terms, subject only to bankruptcy, insolvency and
other limitations on creditors' rights generally and to equitable
principles. The Loan Documents, as of the Closing Date are not, subject to
any right of rescission, set-off, counterclaim or defense by Borrower or
such Affiliate, including the defense of usury, and the operation of any of
the terms of the Note, or any other Loan Documents, or the exercise of any
right thereunder, will not render the Loan Documents unenforceable against
Borrower or such Affiliate, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense by Borrower or such Affiliate,
including the defense of usury, and neither Borrower nor any Affiliate has
asserted any right of rescission, set-off, counterclaim or defense with
respect thereto.
No Liabilities. Borrower has no liabilities or obligations including
Contingent Obligations (and including liabilities or obligations in tort,
in contract, at law, in equity, pursuant to a statute or regulation, or
otherwise but exclusive of indemnities, assurances or other agreements to
hold harmless another Person which are given in the ordinary course of
business or in connection with a Permitted Transfer) other than those
liabilities and obligations expressly permitted by this Agreement
(including those liabilities and obligations under the Senior Loan).
Conduct of Business. Borrower does not conduct its business "also
known as", "doing business as" or under any name other than the Borrower's
name set forth in the preamble to this Agreement.
Pledge Agreements. The representations and warranties made by Borrower
and the respective pledgors and assignors under the Pledge Agreements and
Collateral Assignments are true and correct in all material respects.
REIT Status. LFSRF II Borrower has not engaged and does not engage in
activities which would in fact jeopardize its election to qualify and be
taxed as a REIT.
INTENTIONALLY DELETED.
Non-Affiliation. Neither Borrower is an affiliate of Senior Lender or
Citigroup.
Organizational Documents. The organizational documents of Borrower,
each member of the Borrower Control Group and each Operating Company have
previously been delivered to Senior Lender in connection with the closing
and funding of the Senior Loan and, other than those amendments and
modifications set forth on Schedule 4.1(z) (copies of which have been
delivered to Lender).
Delivery of Stock, etc.. Borrower and the other grantors under the
Collateral Assignments and the Pledge Agreements have previously delivered
all certificates and other instruments, if any, evidencing ownership of the
Collateral to Senior Lender in connection with the Senior Loan, together
with separate endorsements executed in blank with respect thereto and have
taken all other actions necessary to grant Senior Lender a first priority
perfected security interest in the Collateral.
Survival of Representations and Warranties. Borrower agrees that (i)
all of the representations and warranties of Borrower and its Affiliates
set forth in this Agreement and in the other Loan Documents delivered on
the Closing Date are made as of the Closing Date (except as expressly
otherwise provided) and (ii) all such representations and warranties made
by Borrower and its Affiliates shall survive the delivery of the Note and
continue for so long as any amount remains owing to Lender under this
Agreement, the Note or any of the other Loan Documents. All
representations, warranties, covenants and agreements made in this
Agreement or in the other Loan Documents shall be deemed to have been
relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf.
AFFIRMATIVE COVENANTS
Borrower Covenants. Borrower covenants and agrees that, from the date
hereof and until payment in full of the Indebtedness, unless Lender
otherwise consents in writing:
Existence; Compliance with Legal Requirements, Insurance. Borrower
shall do all things necessary to preserve, renew and keep in full force and
effect the Entity existence, rights, licenses, permits and franchises
necessary for the conduct of its business and comply in all respects with
all applicable Legal Requirements. Borrower shall notify Lender promptly of
any written notice or order that Borrower receives from any Governmental
Authority relating to Borrower's or any of its Affiliates' failure to
comply with applicable Legal Requirements. Borrower shall at all times
maintain, preserve and protect all franchises and trade names and preserve
all the remainder of its property necessary for the continued conduct of
its business.
Litigation. Borrower shall give prompt written notice to Lender of any
litigation or governmental proceedings pending or threatened against
Borrower.
Taxes and Other Charges. Borrower shall pay, or cause to be paid, all
Impositions owed by Borrower as the same become due and payable, and
deliver to Lender receipts for payment or other evidence satisfactory to
Lender that the Impositions have been so paid no later than 30 days before
they would be delinquent if not paid. After prior notice to Lender,
Borrower, at its own expense, may contest, by appropriate legal
proceedings, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application of any Impositions,
provided that (i) no Default or Event of Default has occurred and remains
uncured, (ii) such proceeding shall suspend the collection of the
Impositions, (iii) 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,
(iv) no part of or interest in the Collateral will be in danger of being
sold, forfeited, terminated, canceled or lost, (v) Borrower shall have
furnished such security as may be required in the proceeding, or as may be
requested by Lender, to insure the payment of any such Impositions,
together with all interest and penalties thereon, and (vi) Borrower shall
promptly upon final determination thereof pay the amount of such
Impositions, together with all costs, interest and penalties. Lender may
pay over any such cash deposit or part thereof held by Lender to the
claimant entitled thereto at any time when, in the judgment of Lender, the
entitlement of such claimant is established.
Performance of Other Agreements. Borrower shall observe and perform or
cause to be observed and performed each and every term to be observed or
performed by Borrower or any member of the Borrower Control Group pursuant
to the terms of any Pledge Agreement, Collateral Assignment or other Loan
Document.
Notice of Default. Borrower shall promptly advise Lender of any
material adverse change in Borrower's or any member of the Borrower Control
Group's or Operating Company's condition, financial or otherwise, or of the
occurrence of any Default or Event of Default.
Cooperate in Legal Proceedings. Except with respect to any claim by
Borrower against Lender, Borrower shall cooperate with Lender with respect
to any proceedings before any Governmental Authority which may in any way
affect the rights of Lender hereunder or any rights obtained by Lender
under any of the Loan Documents and, in connection therewith, not prohibit
or prevent Lender, at its election, from participating in any such
proceedings.
Perform Loan Documents. Borrower shall, and shall cause the members of
the Borrower Control Group to, observe, perform and satisfy all the terms,
provisions, covenants and conditions required to be observed, performed or
satisfied by any of them, and to pay when due all costs, fees and expenses
required to be paid by any of them under the Loan Documents.
Further Assurances. Borrower shall, at Borrower's sole cost and expense:
upon Lender's request therefor given from time to time after the
occurrence of any Default or Event of Default, pay for reports of UCC,
federal tax lien, state tax lien, judgment and pending litigation searches
relating to Borrower and the members of the Borrower Control Group;
furnish to Lender all instruments, documents, certificates, and
agreements, and each and every other document, certificate, agreement and
instrument required to be furnished pursuant to the terms of the Loan
Documents;
execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts
necessary or desirable, to evidence, preserve and/or protect the
Collateral, as Lender may require in Lender's reasonable discretion,
including the filing of any financing or continuation statements under the
UCC with respect to the Collateral, transferring the Collateral to Lender's
possession (if a security interest in such Collateral can be perfected by
possession) and endorsing to Lender any Collateral which may be evidenced
by an instrument; and
do and execute, and cause each member of the Borrower Control Group to
do and execute, all such further lawful acts, conveyances and assurances
for the better and more effective carrying out of the intents and purposes
of this Agreement and the other Loan Documents, as Lender shall require
from time to time in its discretion.
Financial Statements, Reporting. Until payment in full of the
Indebtedness, Borrower shall cause the following financial statements and
information, with respect to a Reporting Company, in a form consistent with
the reporting requirements pursuant to the securities laws applicable to
any such Reporting Company and otherwise in a form satisfactory to Lender,
to be delivered to Lender as and when hereinafter provided:
(1) as soon as practicable and in any event within one
hundred twenty (120) days after the end of each Fiscal Year of the
applicable Entities, audited combined statements of financial position of
LFSRI II, LFSRI II Alternative, LFSRI-CADIM (which shall be duly certified
by the Chief Financial Officer of Lazard Freres REI) and audited statements
of financial position of each Operating Company as of the end of each such
Fiscal Year during the Term, including a balance sheet and statement of
profits and losses, as of the date thereof, prepared in accordance with
GAAP by a nationally recognized accounting firm and accompanied by a
statement of the accountants that such financial statements present fairly,
in all material respects, the financial condition of each such Entity as of
the end of the Fiscal Year being reported on and that the results of the
operations and cash flows for such year were prepared and are being
reported on in conformity with GAAP;
promptly and in any event within sixty (60) days after the end of each
fiscal quarter of the applicable Entities, (i) quarterly combined
statements of financial position of LFSRI II, LFSRI II Alternative and
LFSRI-CADIM (which shall be duly certified by the Chief Financial Officer
of Lazard Freres REI), (ii) statements of financial position of each
Operating Company, including a balance sheet and statement of profits and
losses, and comparisons of results to prior year results, and (iii) with
respect to each of AAC III, Intown and Xxxxxxxxxx, a detailed schedule of
all indebtedness (including Contingent Obligations) of such Entity,
specifying the lender, the outstanding principal balance of the loan,
amortization requirements (if any), maturity date, extension options (if
any), the rate at which interest is payable and, if different, the rate at
which interest accrues, collateral (if any), and such other information as
Lender may reasonably request;
within five (5) days after filing, the annual Federal income tax
return of Borrower, with accompanying schedules prepared by Borrower;
within three (3) days following receipt by any member of the Borrower
Control Group, a copy of any notice of default regarding outstanding
financial indebtedness of any member of the Borrower Control Group or any
Operating Company;
(A) annual budgets and revisions thereto for each Operating Company,
approved by such Operating Company, and (B) from time to time, such other
reports and information which Lender reasonably requires, subject to
applicable restrictions on providing reports or information at law or in
any applicable agreement;
within five (5) Business Days following receipt by Borrower of all
monthly reports covering each Operating Company and the members of the
Borrower Control Group but in no event later than forty-five (45) days
after the close of the month being reported, copies of said reports;
together with each of the financial statements and information
required pursuant to subdivisions (1) through (4) above, inclusive, a
certificate of the Chief Financial Officer of Borrower that Borrower has
observed and performed, in all material respects, all of its covenants and
other agreements contained in this Agreement and the other Loan Documents,
whether there exists any material Default or Event of Default and, if there
is, specifying the nature and period of existence thereof and the action
taken or proposed to be taken with respect thereto; and
from time to time, within five (5) days following receipt thereof,
such reports, financial statements and correspondence related to the
Borrower Control Group or any Operating Company (subject to applicable
restrictions on providing such items at law or in any applicable agreement)
which, in Borrower's judgment, may have a material effect, either positive
or negative, on the financial performance or valuation of the Borrower, any
member of the Borrower Control Group or any Operating Company. For purposes
of this subsection (i)(8), a "material effect" shall mean an effect in
excess of $5 million outside the ordinary course of business.
ERISA. Borrower shall deliver to Lender as soon as possible, and in
any event within ten (10) days, after Borrower knows or has reason to
believe that any of the events or conditions specified below with respect
to any Plan or Multiemployer Plan has occurred or exists, a statement
signed by a senior financial officer of Borrower setting forth details
respecting such event or condition and the action, if any, that Borrower or
its ERISA Affiliate proposes to take with respect thereto (and a copy of
any report or notice required to be filed with or given to PBGC by Borrower
or an ERISA Affiliate with respect to such event or condition):
(2) any reportable event, as defined in Section 4043(b)
of ERISA and the regulations issued thereunder, with respect to a Plan, as
to which PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event that could reasonably be expected to result in (a) the
termination of such Plan (other than pursuant to a standard termination
under ERISA Section 4041(b)), (b) the imposition of a liability on the
Borrower or its ERISA Affiliates or (c) the imposition of a Lien on the
assets of the Borrower or its ERISA Affiliates (provided that a failure to
meet the minimum funding standard of Section 412 of the Code or Section 302
of ERISA, including the failure to make on or before its due date a
required installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code); and any request for
a waiver under Section 412(d) of the Code for any Plan;
the distribution under Section 4041 of ERISA of a notice of intent to
terminate any Plan or any action taken by Borrower or an ERISA Affiliate to
terminate any Plan (other than in a standard termination pursuant to ERISA
Section 4041(b));
the institution by PBGC of proceedings under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by PBGC with respect to
such Multiemployer Plan which could result in the imposition of liability
on the Borrower or its ERISA Affiliates;
the complete or partial withdrawal from a Multiemployer Plan by
Borrower or any ERISA Affiliate that results in liability under Section
4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt by Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under Section 4041A of ERISA
which could result in the imposition of liability on the Borrower or its
ERISA Affiliates;
the institution of a proceeding by a fiduciary of any Multiemployer
Plan against Borrower or any ERISA Affiliate to enforce Section 515 of
ERISA, which proceeding is not dismissed or settled within thirty (30)
days;
the adoption of an amendment to any Plan that, pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a part if Borrower or
an ERISA Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections; and
the imposition of a Lien or a security interest in connection with a Plan.
Entity Status. Borrower will and will cause each member of the
Borrower Control Group to (i) continue to comply, and cause their
respective Subsidiaries to comply, with the provisions of all of their
respective organizational and governing documents, and the laws of the
state in which each such Entity was formed relating to each such Entity,
and (ii) enter into such amendments and modifications to such
organizational documents as may reasonably be required by Lender or any
Rating Agency to facilitate a Securitization or other transaction as
described in Section 8.34 below. All customary formalities regarding the
Entity existence of Borrower and each member of the Borrower Control Group
will continue to be observed.
Impositions and Other Claims. Borrower shall or shall cause each
member of the Borrower Control Group to pay and discharge or cause to be
paid and discharged all Impositions, as well as all lawful claims for
labor, materials and supplies or otherwise, which could become a Lien on
the Collateral.
INTENTIONALLY DELETED.
Special Purpose Bankruptcy Remote Entity. Borrower shall continue to
be a Special Purpose Bankruptcy Remote Entity. A "Special Purpose
Bankruptcy Remote Entity" means a corporation, limited partnership or
limited liability company which at all times since its formation and at all
times thereafter (i) was and is organized solely for the purpose of (A)
owning a portion of the Collateral or (B) acting as a member of a limited
liability company that owns a portion of the Collateral, (ii) has not
engaged and will not engage in any business unrelated to (A) the ownership
of a portion of the Collateral, or (B) acting as a member of the limited
liability company that owns a portion of the Collateral, (iii) has not had
and will not have any assets other than those related to a portion of the
Collateral or its member interest in the limited liability company that
owns a portion of the Collateral, (iv) has not engaged, sought or consented
to and will not engage in, seek or consent to any dissolution, winding up,
liquidation, consolidation, merger, asset sale, transfer of partnership or
membership interests (if such entity is a general partner in a limited
partnership or a member in a limited liability company), or amendment of
its limited partnership agreement, articles of incorporation, articles of
organization, certificate of formation or operating agreement (as
applicable), (v) if such entity is a limited partnership, has, as its only
general partners, Special Purpose Bankruptcy Remote Entities that are
corporations, (vi) if such entity is a corporation has at least one
Independent Director, and has not caused or allowed and will not cause or
allow the board of directors of such entity to take any action requiring
the unanimous affirmative vote of 100% of the members of its board of
directors unless an Independent Director shall have participated in such
vote, (vii) if such entity is a limited liability company, has at least one
member that is a Special Purpose Bankruptcy Remote Entity that is a
corporation and such corporation is the managing member of such limited
liability company, (viii) if such entity is a limited liability company,
has articles of organization, a certificate of formation and/or an
operating agreement, as applicable, providing that (A) such entity will
dissolve only upon the bankruptcy of the managing member, (B) the vote of a
majority-in-interest of the remaining members is sufficient to continue the
life of the limited liability company in the event of such bankruptcy of
the managing member and (C) if the vote of a majority-in-interest of the
remaining members to continue the life of the limited liability company
following the bankruptcy of the managing member is not obtained, the
limited liability company may not liquidate its property without the
consent of the applicable Rating Agencies for as long as the Loan is
outstanding, (ix) without the unanimous consent of all of its partners,
directors or members, as applicable, shall not (A) file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings with
respect to itself or to any other entity in which it has a direct or
indirect legal or beneficial ownership interest, (B) dissolve, liquidate,
consolidate, merge, or sell all or substantially all of its assets or the
assets of any other entity in which it has a direct or indirect legal or
beneficial ownership interest, (C) engage in any other business activity,
or amend its organizational documents, (x) is and will remain solvent and
is maintaining and will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations, (xi) has not failed
and will not fail to correct any known misunderstanding regarding the
separate identity of such entity, (xii) has maintained and will maintain
its accounts, books and records separate from any other Person and will
file its own tax returns, (xiii) has maintained and will maintain its
books, records, resolutions and agreements as official records, (xiv)
except as required by the Senior Loan Deposit Account Agreement and the
Deposit Account Agreement, has not commingled and will not commingle its
funds or assets with those of any other Person, (xv) has held and will hold
its assets in its own name, (xvi) has conducted and will conduct its
business in its name, (xvii) has maintained and will maintain its financial
statements, accounting records and other entity documents separate from any
other Person, (xviii) has paid and will pay its own liabilities, including
the salaries of its own employees, only out of its own funds and assets,
(xix) has observed and will observe all partnership, corporate or limited
liability company formalities, as applicable, (xx) has maintained and will
maintain an arm's-length relationship with its Affiliates, (xxi) has no
indebtedness other than the Loan, the Senior Loan and liabilities in the
ordinary course of business relating to the ownership of the Collateral,
(xxii) has not and will not assume or guarantee or become obligated for the
debts of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person except for the Loan, the Senior
Loan and the liabilities permitted pursuant to this Agreement, (xxiii) has
not and will not acquire obligations or securities of its partners, members
or shareholders, (xxiv) has allocated and will allocate fairly and
reasonably any overhead for shared office space and uses separate
stationery, invoices and checks, (xxv) except in connection with the Loan
and the Senior Loan has not pledged and will not pledge its assets for the
benefit of any other Person, (xxvi) has held itself out and identified
itself and will hold itself out and identify itself as a separate and
distinct entity under its own name and not as a division or part of any
other Person, (xxvii) has maintained and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person, (xxviii)
except as permitted by Section 2.2 of the Senior Loan Agreement and by
Section 2.2 hereof, has not made and will not make loans to any Person,
(xxix) has not identified and will not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it,
(xxx) except as permitted by Section 2.2 of the Senior Loan Agreement and
by Section 2.2 hereof, has not entered into or been a party to, and will
not enter into or be a party to, any transaction with its partners,
members, shareholders or Affiliates except in the ordinary course of its
business and on terms which are intrinsically fair and are no less
favorable to it than would be obtained in a comparable arm's-length
transaction with an unrelated third party, (xxxi) except to the extent
covered by insurance, has no obligation to indemnify its partners,
officers, directors or members, as the case may be, or has such an
obligation that is fully subordinated to the Indebtedness and will not
constitute a claim against it in the event that cash flow in excess of the
amount required to pay the Indebtedness is insufficient to pay such
obligation, and (xxxii) if such entity is a corporation, it is required to
consider the interests of its creditors in connection with all corporate
actions.
Post-Closing Covenants. Borrower and the other specified members of
the Borrower Control Group shall comply with all post-closing covenants set
forth on Schedule III, attached hereto and made a part hereof.
Expenses. Borrower shall reimburse Lender upon receipt of notice for
all reasonable costs and expenses (including reasonable attorneys' fees and
costs) incurred by Lender in connection with (i) INTENTIONALLY DELETED;
(ii) Borrower's and its Affiliates' ongoing performance under and
compliance with the Loan Documents; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers
or other modifications of or under any Loan Document and any other
documents or matters requested by Lender; (iv) filing and recording of any
Loan Documents; (v) inspections and appraisals; (vi) 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, any member of the Borrower Control
Group, the Loan Documents, the Collateral, or any other security given for
the Loan; and (vii) enforcing any obligations of or collecting any payments
due from Borrower or any member of the Borrower Control Group under any
Loan Document or with respect to the Collateral or in connection with any
refinancing or restructuring of the Loan in the nature of a "work-out", or
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. Any costs and expenses due and
payable to Lender hereunder which are not paid by Borrower within ten days
after demand may be paid from any amounts in the Deposit Account, with
notice thereof to Borrower. The obligations and liabilities of Borrower
under this Section shall survive the Maturity Date and, if applicable, the
Extended Maturity Date, and the exercise by Lender of any of its rights or
remedies under the Loan Documents.
REIT Status. For Fiscal Year 2002 and each subsequent year during the
Term, (i) LFSRI II Borrower shall qualify and continue to be taxed as a
REIT, (ii) Borrower shall cause each of AAC Inc., PMAIT and (subject to the
transactions contemplated by the Konover Consent) Prometheus SERT to
qualify and continue to be taxed as a REIT, and (iii) Borrower shall not
engage in or cause or suffer any of its Subsidiaries under the direct or
indirect control of the Borrower to engage in any activities which would in
fact jeopardize such qualification and tax treatment.
Direction Letter Authorization. Borrower shall, and shall cause each
applicable member of the Borrower Control Group to, execute and deliver the
Direction Letters to each applicable Operating Company (excluding Cliveden
and the Destination Entities) and/or member of the Borrower Control Group,
as applicable, upon repayment in full of the Senior Loan. Borrower and each
applicable member of the Borrower Control Group shall cooperate with Lender
and take such actions required by Lender to ensure that all such Direction
Letters are countersigned and consented to by the Operating Companies
(other than AAC III).
Net Cash Flow. Subject to Section 2.6(b)(3), the Net Cash Flow with
respect to any Fiscal Quarter shall not be less than $5,000,000.
Net Equity Value. Subject to Section 2.6(b)(3), the Net Equity Value
shall at all times be equal to or in excess of $200,000,000.
Fund Covenants. Each of LFSRI II, LFSRI II Alternative and LFSRI-CADIM
covenants and agrees that from the date hereof until payment in full of the
Indebtedness:
INTENTIONALLY DELETED.
Indebtedness. The Fund shall not incur, create, assume, become or be
liable in any manner with respect to Other Borrowings, except the
Indebtedness, the Permitted Indebtedness identified under item 2 of Exhibit
A attached hereto and any Transaction Costs payable in connection with the
Transactions.
NEGATIVE COVENANTS
------------------
Borrower Negative Covenants. Borrower covenants and agrees that, until
payment in full of the Indebtedness, it will not do, directly or
indirectly, any of the following unless Lender consents thereto in writing:
Special Purpose Existence and Separateness of Entities.
(x) (i) take any actions in violation of the
Borrower's organizational or governing
documents or that would otherwise adversely
affect the Borrower's existence as a Special
Purpose Bankruptcy Remote Entity, or (ii)
amend, modify, waive or terminate the
Borrower's organizational or governing
documents.
(y) (i) dissolve or liquidate, in whole or in
part, or take any action that could have the
effect of causing a dissolution or
liquidation of any of its Subsidiaries, (ii)
consolidate or merge with or into any other
entity, (iii) make an assignment for the
benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal
for the appointment of a custodian, receiver,
trustee or other similar official for it, or
for a substantial part of its property,
commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of
debt or liquidation law, or admit its
inability to pay its debts generally as they
become due, (iv) cause or permit the
Collateral or other assets or property of
Borrower to be subject to any Lien other than
as provided for in the Loan Documents or as
provided for in the Senior Loan Documents,
(v) Transfer, in one transaction or a series
of transactions, all, or substantially all,
of its assets, (vi) make any material changes
in Borrower's present method of conducting
business, or (vii) lend money to any Person
(except as permitted by Section 2.2). (z) (i)
undertake the incurrence or assumption on
behalf of Borrower directly or indirectly, of
any indebtedness other than the Loan and the
Senior Loan, or (ii) xxxxx x Xxxx in
Borrower's assets other than as set forth in
the Loan Documents and in the Senior Loan
Documents.
Liens on the Collateral. Incur, create, assume, become or be liable in
any manner with respect to, or permit to exist, any Lien with respect to
any Collateral except Liens in favor of Lender and Liens in favor of Senior
Lender under the Senior Loan Documents.
Transfer. Except with respect to Permitted Transfers or as expressly
provided in this Agreement, or except as otherwise approved by Lender in
writing in Lender's discretion, allow to occur any Transfer with respect to
Equity Interests in Borrower, any member of the Borrower Control Group
(other than LFSRI II, LFSRI II Alternative and LFSRI-CADIM) or any
Operating Company, or of any Dividends and Distributions payable to or by
Borrower, any member of the Borrower Control Group or any Operating
Company, or any other Collateral, except (i) those Equity Interests which
are not owned or controlled (directly or indirectly) by LFSRI II, LFSRI II
Alternative and LFSRI-CADIM, (ii) Dividends and Distributions payable by
LFSRI II, LFSRI II Alternative or LFSRI-CADIM, or to any of them by any
Entity other than the Borrower, any member of the Borrower Control Group or
any Operating Company, (iii) Dividends and Distributions payable by
Borrower, any member of the Borrower Control Group or Operating Company
which is a REIT to holders of Equity Interests necessary to maintain
qualification as a REIT, (iv) Transfers in accordance with the provisions
of Section 2.6(b)(2) and (v) Transfers of 50% of the Dividends and
Distributions payable by PMAIT.
Other Borrowings. Incur, create, assume, become or be liable or allow
any member of the Borrower Control Group to become or be liable in any
manner with respect to Other Borrowings, except the Indebtedness, the
Permitted Indebtedness and any Transaction Costs payable in connection with
the Transactions.
Change In Business. 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 or allow any member of the Borrower Control Group to do any of the
foregoing.
Debt Cancellation. Cancel or otherwise forgive or release any material
claim or debt owed to Borrower by any Person, except for adequate
consideration or in the ordinary course of Borrower's business.
Affiliate Transactions. Except as permitted by Section 2.2 of the
Senior Loan Agreement or Section 2.2 hereof, enter into, or be a party to,
any transaction with an Affiliate of Borrower, except in the ordinary
course of business and on terms which are no less favorable to Borrower or
such Affiliate than would be obtained in a comparable arm's-length
transaction with an unrelated third party, and, if the amount to be paid to
the Affiliate pursuant to the transaction or series of related transactions
is greater than Fifty Thousand Dollars ($50,000.00) (determined annually on
an aggregate basis) fully disclosed to Lender in advance.
Certain Restrictions. Enter into any agreement which expressly
restricts the ability of Borrower or any member of the Borrower Control
Group to enter into amendments, modifications or waivers of any of the Loan
Documents.
Issuance of Equity Interests. Subject to the requirements of Section
5.1(o), issue or allow to be created any stock or shares or shareholder,
partnership or membership interests, as applicable, including Convertible
Securities or other ownership interests in Borrower or any member of the
Borrower Control Group, except for (x) the issuance of preferred stock to
no more than 150 Persons necessary for REIT qualification, and (y) the
issuance of new Equity Interests that are immediately pledged to Lender
pursuant to documents granting Lender a second priority security interest
(subject and subordinate only to a security interest in favor of Senior
Lender in accordance with the provisions of the Senior Loan Documents) and
which are otherwise reasonably acceptable in form and substance to Lender.
Place of Business. Change its chief executive office or its principal
place of business or place where its books and records are kept.
Identity. Change its name, identity or organizational structure in any
manner which might make any financing or continuation statement filed in
connection herewith seriously misleading within the meaning of Section
9-506 of the UCC (or any other applicable provision of the UCC).
Subsidiaries. Create any Subsidiaries or otherwise acquire Equity
Interests in any Entity without the prior written consent of Lender.
Contractual Obligations. Other than the Loan Documents and the Senior
Loan Documents, Borrower and its assets shall not be subject to any Other
Borrowings, and Borrower shall not enter into any agreement, instrument or
undertaking by which it or its assets are bound, except for incurring
liabilities, not material in the aggregate, that are incidental to its
activities as an owner of Collateral.
Borrower Control Group. Neither Borrower nor any member of the
Borrower Control Group shall fail to perform its obligations under (i) the
Loan Documents to which it is a party or by which it is bound, or (ii)
under its organizational or governing documents or any other material
agreement to which it is a party or by which it or its assets are bound or
affected.
ERISA. Neither Borrower nor any member of the Borrower Control Group
shall take any action, or omit to take any action, which would cause any of
such Entity's assets to constitute "plan assets" for purposes of ERISA or
the Code.
Direction Letters. Neither Borrower nor any member of the Borrower
Control Group shall attempt to revoke, rescind or modify any of the
Direction Letters.
DEFAULTS
Event of Default. The occurrence of one or more of the following
events shall be an "Event of Default" hereunder:
if Borrower fails to pay the outstanding Indebtedness on the Maturity
Date or, if applicable, the Extended Maturity Date; or if Borrower fails to
make any prepayment of all or any portion of the Indebtedness as and when
required by Section 2.6;
the occurrence of a Payment Breach;
the occurrence of the events identified elsewhere in the Loan
Documents or, as long as the Senior Loan is outstanding, the Senior Loan
Documents as constituting an "Event of Default" hereunder or thereunder;
any Transfer in violation of Section 6.1(c) of this Agreement;
if Borrower or any of its Affiliates fails to pay any other amount
payable by such Person pursuant to this Agreement or any other Loan
Document when due and payable in accordance with the provisions hereof or
thereof, as the case may be;
if any representation or warranty made by Borrower or any member of
the Borrower Control Group herein or in any other Loan Document, or in any
report, certificate, financial statement or other Instrument, agreement or
document furnished by or on behalf of Borrower in connection with this
Agreement, the Note or any other Loan Documents shall have been false or
misleading in any material respect as of the date such representation or
warranty was made or remade;
any violation of the covenants set forth in Section 5.1(n), 5.1(o),
5.1(s), 5.1(t), 5.2, 6.1(a), 6.1(b), 6.1(d), 6.1(i) or 6.1(l) of this
Agreement;
if Borrower or any member of the Borrower Control Group or any
Operating Company (other than an AACDK Entity) makes a general assignment
for the benefit of creditors;
if a receiver, liquidator or trustee shall be appointed for Borrower,
any member of the Borrower Control Group or any Operating Company (other
than an AACDK Entity), or if Borrower or any member of the Borrower Control
Group or any Operating Company (other than an AACDK Entity), shall be
adjudicated as bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to,
or acquiesced in by Borrower or any member of the Borrower Control Group or
any Operating Company (other than an AACDK Entity), or if any proceeding
for the dissolution or liquidation of Borrower or any member of the
Borrower Control Group or any Operating Company (other than an AACDK
Entity), shall be instituted or if Borrower or any member of the Borrower
Control Group or Operating Company (other than an AACDK Entity), shall
generally not be paying their respective debts as they become due;
if Borrower attempts to delegate its obligations or assign its rights
under this Agreement, any of the other Loan Documents or any interest
herein or therein;
if any provision of any organizational or governing document of
Borrower or any member of the Borrower Control Group is amended or modified
in any respect (except as required by Section 5.1(o) of this Agreement or
except as otherwise consented to in writing by Lender), or if Borrower or
any member of the Borrower Control Group fails to perform or enforce the
provisions of its organizational or governing documents or attempts to
dissolve;
if an event or condition specified in Section 5.1(j) shall occur or
exist with respect to any Plan or Multiemployer Plan and, as a result of
such event or condition, together with all other such events or conditions,
Borrower or any ERISA Affiliate shall incur or be reasonably likely to
incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would result in or constitute a
Material Adverse Condition with respect to Borrower, the Fund taken as a
whole, any other member of the Borrower Control Group or any Operating
Company, other than a Material Adverse Condition solely with respect to one
or more AACDK Entities and the members of the Borrower Control Group
(excluding Borrower and the Fund) that own, directly or indirectly, an
interest in such AACDK Entities (as long as such Material Adverse Condition
affecting the applicable members of the Borrower Control Group was solely
caused by or resulted solely from the Material Adverse Condition of the
subject AACDK Entities);
if any financial statement, report or information provided to Lender
by or on behalf of Borrower concerning the Borrower, any member of the
Borrower Control Group or any Operating Company proves to be inaccurate or
misleading in any material respect;
if a judgment is entered against Borrower or any member of the
Borrower Control Group or any Operating Company that adversely affects the
ability of Borrower or any member of the Borrower Control Group to perform
its obligations under the Loan Documents, unless such judgment is paid in
full within thirty (30) days after the date of such judgment;
if, after the Effective Date, Debt Service Achievement is not maintained;
if LFSRI II Borrower or any member of the Borrower Control Group or
any Operating Company which is a REIT ceases to be taxed as a REIT;
if Borrower or any member of the Borrower Control Group or any other
Person shall fail to perform any of the other obligations, agreements,
undertakings, terms, covenants, provisions or conditions of this Agreement,
the Note, or the other Loan Documents, not otherwise referred to in this
Section 7.1, for twenty (20) Business Days after written notice to Borrower
from Lender or its successors or assigns; provided that if such default
cannot reasonably be cured within such twenty (20) Business Day period and
Borrower shall have commenced to cure such default within such period and
thereafter diligently and expeditiously proceeds to cure the same, such
twenty (20) Business Day period shall be extended for as 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
ninety (90) days;
(ii) If Borrower fails to establish the Deposit Account
on or before the Effective Date;
(iii) from and after the Effective Date, the failure to
make any payment required to be made into the Deposit Account pursuant to
any of the Deposit Account Agreement, the Pledge Agreements and/or the
Collateral Assignments.
Remedies. Upon the occurrence and during the continuation of an Event
of Default, subject to the rights of the Senior Lender to exercise any of
its remedies under the Senior Loan Documents, all or any one or more of the
rights, powers and other remedies available to Lender against Borrower or
its Affiliates under this Agreement, the Note, or any of the other Loan
Documents, or at law or in equity may be exercised by Lender at any time
and from time to time (including the right to accelerate and declare the
outstanding principal amount, unpaid interest, Default Rate interest, Late
Charges, Exit Additional Interest Payment and any other amounts owing by
Borrower to be immediately due and payable), without notice or demand,
whether or not all or any portion of the Indebtedness shall be declared due
and payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies
under any of the Loan Documents with respect to all or any portion of the
Collateral. Any such rights of Lender shall be subordinate to the rights of
the Senior Lender and shall be cumulative and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order
as Lender may determine in its discretion, to the fullest extent permitted
by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth
herein or in the other Loan Documents. Notwithstanding anything contained
to the contrary herein, the outstanding principal amount, unpaid interest,
Default Rate interest, Late Charges, Exit Additional Interest Payment and
any other amounts owing by Borrower shall be accelerated and immediately
due and payable, without any election by Lender upon the occurrence of an
Event of Default described in Section 7.1(viii) or Section 7.1(ix).
Remedies Cumulative. The rights, powers and remedies of Lender under
this Agreement shall be cumulative and not exclusive of any other right,
power or remedy which Lender may have against Borrower or any other Person
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 singly, concurrently or otherwise, at such time and in such order
as Lender may determine in Lender's discretion. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to
time and as often as may be deemed expedient. A waiver of any Default or
Event of Default shall not be construed to be a waiver of any subsequent
Default or Event of Default or to impair any remedy, right or power
consequent thereon. Any and all of Lender's rights with respect to the
Collateral shall continue unimpaired, and Borrower shall be and remain
obligated in accordance with the terms hereof, notwithstanding (i) the
release or substitution of Collateral at any time, or of any rights or
interest therein or (ii) any delay, extension of time, renewal, compromise
or other indulgence granted by Lender in the event of any Default or Event
of Default with respect to the Collateral or otherwise hereunder. Borrower
acknowledges that (x) the use in this Agreement or any Loan Documents of
phrases like "if an Event of Default has occurred and is continuing," "if
an Event of Default remains uncured," or other similar phrases, are not
intended to grant to Borrower or any member of the Borrower Control Group
any cure rights other than those expressly set forth in this Agreement or
such Loan Documents, and (y) the tender of any cure after the occurrence of
an Event of Default may be accepted or rejected in Lender's sole
discretion.
Lender's Right to Perform. If Borrower fails to perform any covenant
or obligation contained herein and such failure shall continue for a period
of (5) five Business Days after Borrower's receipt of written notice
thereof from Lender, without in any way limiting Section 7.1 hereof, Lender
may, but shall have no obligation to, itself perform, or cause performance
of, such covenant or obligation, and the expenses of Lender incurred in
connection therewith shall be payable by Borrower to Lender upon demand.
Notwithstanding the foregoing, Lender shall have no obligation to send
notice to Borrower of any such failure.
MISCELLANEOUS
-------------
Survival. Subject to Section 4.2, this Agreement and all covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the execution and
delivery of this Agreement and the execution and delivery by Borrower to
Lender of the Note, and shall continue in full force and effect so long as
any portion of the Indebtedness is outstanding and unpaid. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party. All covenants,
promises and agreements in this Agreement contained, by or on behalf of
Borrower, shall inure to the benefit of the respective successors and
assigns of Lender. Nothing in this Agreement or in any other Loan Document,
express or implied, shall give to any Person other than the parties and the
holder(s) of the Note and the other Loan Documents, and their legal
representatives, successors and assigns, any benefit or any legal or
equitable right, remedy or claim hereunder.
Lender's Discretion. Whenever pursuant to this Agreement or any other
Loan Document, Lender exercises any right, option or election given to
Lender to approve or disapprove, or consent or withhold consent, or any
arrangement or term is to be satisfactory to Lender or is to be in Lender's
discretion, the decision of Lender to approve or disapprove, consent or
withhold consent, or to decide whether arrangements or terms are
satisfactory or not satisfactory or acceptable or not acceptable to Lender
in Lender's discretion, shall (except as is otherwise specifically herein
provided) be in the sole and absolute discretion of Lender.
Governing Law.
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This Agreement and the obligations arising hereunder shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and intended to be performed in such State,
without giving effect to principles of conflicts of laws, and any
applicable law of the United States of America. To the fullest extent
permitted by law, Borrower hereby unconditionally and irrevocably waives
any claim to assert that the law of any other jurisdiction governs this
Agreement and the Note, and this Agreement and the Note shall be governed
by and construed in accordance with the internal laws of the State of New
York, without giving effect to principles of conflicts of laws.
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN NEW YORK OR IN ANY FEDERAL OR STATE COURT IN ANY JURISDICTION IN
WHICH ANY COLLATERAL IS LOCATED, AND BORROWER WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY
DESIGNATE AND APPOINT XXXXXXXX X. XXXXXXXXXX, ESQ., WHOSE ADDRESS IS 00
XXXXXXXXXXX XXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AUTHORIZED AGENT TO
ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH
MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR
STATE COURT AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID
ADDRESS (OR AT SUCH OTHER OFFICE AS MAY BE DESIGNATED BY BORROWER FROM TIME
TO TIME IN ACCORDANCE WITH THE TERMS HEREOF) WITH A COPY TO BORROWER AT C/O
LAZARD FRERES REAL ESTATE INVESTORS L.L.C., 00 XXXXXXXXXXX XXXXX, XXX XXXX,
XXX XXXX 00000, ATTENTION: XXXX X. XXXXX AND WRITTEN NOTICE OF SAID SERVICE
OF BORROWER MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING. BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A
SUBSTITUTE AUTHORIZED AGENT (WHICH OFFICE SHALL BE DESIGNATED AS THE
ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.
Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this
Agreement, the Note or any other Loan Document, or consent to any departure
by Borrower or any of its Affiliates therefrom, shall in any event be
effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which
given. Except as otherwise expressly provided herein, no notice to or
demand on Borrower shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances.
Delay Not a Waiver. Neither any failure nor any delay on the part of
Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note, or of any other Loan Document, 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.
Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in
writing and shall be effective for all purposes if hand delivered or sent
by (a) hand delivery, with proof of attempted delivery, (b) certified or
registered United States mail, postage prepaid, (c) expedited prepaid
delivery service, either commercial or United States Postal Service, with
proof of attempted delivery, or (d) by telecopier (with answer back
acknowledged) provided that such telecopied notice must also be delivered
by one of the means set forth in (a), (b) or (c) above, addressed if to
Lender at its address set forth on the first page hereof, and if to
Borrower at its designated address set forth on the first page hereof, or
at such other address and Person as shall be designated from time to time
by any party hereto, as the case may be, in a written notice to the other
parties hereto in the manner provided for in this Section 8.6. A copy of
all notices, consents, approvals and requests directed to Borrower shall be
delivered concurrently to c/o Lazard Freres Real Estate Investors L.L.C.,
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
X. Xxxxx, Phone Number (000) 000-0000, Telefax Number (000) 000-0000. A
copy of all notices, consents, approvals and requests directed to Lender
shall be delivered concurrently to each of the following: CTMPII FC LF
(MS), c/o Capital Trust, Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Xxxxxx XxxxXxxxxx and Loan
Administrator. A notice shall be deemed to have been given: (a) in the case
of hand delivery, at the time of delivery; (b) in the case of registered or
certified mail, when delivered or the first attempted delivery on a
Business Day; (c) in the case of expedited prepaid delivery upon the first
attempted delivery on a Business Day; or (d) in the case of telecopier,
upon receipt of answer back confirmation, provided that such telecopied
notice was also delivered as required in this Section 8.6. A party
receiving a notice which does not comply with the technical requirements
for notice under this Section 8.6 may elect to waive any deficiencies and
treat the notice as having been properly given. If a party refuses
delivery, such party shall be deemed to have received notice on the date of
attempted delivery, as evidenced by courier's or post office proof of
attempted delivery.
TRIAL BY JURY. BORROWER AND LENDER, TO THE FULLEST EXTENT THAT THEY
MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING,
INCLUDING ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS
AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.
Headings. The Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
Assignment. 1. Lender shall have the right to assign in whole or in
part this Agreement and/or any of the other Loan Documents and the
obligations hereunder or thereunder to any Person and to sell or otherwise
transfer participation interests in all or any portion of the Loan
evidenced hereby provided that each assignee shall comply with the
provisions of Section 2.13 and no assignee that is a Foreign Lender shall
be entitled to the benefits of Section 2.9 and 2.13 unless such assignee
complies with Section 2.13.
The Note will be registered as to both principal and interest with
Borrower and transfer of the Note may be effected only by surrender of the
old Note and either the reissuance by Borrower of the old Note to the new
holder or the issuance by Borrower of a new instrument to the new holder.
Borrower shall cooperate in effecting any transfer requested by the holder.
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.
Preferences. Lender shall have no obligation to marshal any assets in
favor of Borrower or any other party or against or in payment of any or all
of the obligations of Borrower pursuant to this Agreement, the Note or any
other Loan Document. Lender shall have the continuing and exclusive right
to apply or reverse and reapply any and all payments by Borrower to any
portion of the obligations of Borrower hereunder. To the extent Borrower
makes a payment or payments to Lender for Borrower's benefit, which payment
or receipt of proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of
such payment or proceeds received, the obligations hereunder or part
thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
Waiver of Notice. Neither Borrower nor any of its Affiliates shall 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 an Affiliate thereof and except with respect to matters for
which Borrower and any applicable Affiliate are not, pursuant to applicable
Legal Requirements, permitted to waive the giving of notice. Borrower
hereby expressly waives the right to receive any notice from Lender with
respect to any matter for which this Agreement or the other Loan Documents
does not specifically and expressly provide for the giving of notice by
Lender to Borrower.
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 Agreement, the Note,
or the other Loan Documents, Lender or such agent, as the case may be, has
an obligation to act reasonably or promptly, then in such event Borrower
shall not be entitled to bring an action for damages, but shall be limited
to commencing an action seeking injunctive relief or declaratory judgment.
Full Recourse. The Loan and Borrower's obligations thereunder shall be
fully recourse to Borrower.
INTENTIONALLY DELETED.
Exhibits Incorporated. The information set forth on the cover, heading
and recitals hereof, and the Exhibits and Schedules attached hereto, are
hereby incorporated herein as a part of this Agreement with the same effect
as if set forth in the body hereof.
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 the Loan, this Agreement, the Note, and the other Loan
Documents which Borrower or any of its Affiliates may otherwise have
against any assignor, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower or any of its Affiliates in any
action or proceeding brought by any such assignee upon this Agreement, the
Note, and other Loan Documents and any such right to interpose or assert
any such unrelated offset, counterclaim or defense in any such action or
proceeding is hereby expressly waived by Borrower.
No Joint Venture or Partnership. Borrower and Lender intend that the
relationship created hereunder be solely that of borrower and lender.
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and
Lender.
Waiver of Marshalling of Assets Defense. To the fullest extent that
Borrower may legally do so, Borrower waives all rights to a marshalling of
the assets of Borrower, and others with interests in Borrower, and of the
Collateral, or to a sale in inverse order of alienation in the event of
foreclosure of the interests hereby created, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the
Collateral for the collection of the Indebtedness without any prior or
different resort for collection, or the right of Lender to the payment of
the Indebtedness in preference to every other claimant whatsoever.
Waiver of Counterclaim. Borrower hereby waives the right to assert a
counterclaim, other than compulsory counterclaim, in any action or
proceeding brought against Borrower by Lender or Lender's agents.
Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and the provisions of the Note, or
any of the other Loan Documents, the provisions of this Agreement shall
prevail. The parties hereto acknowledge that they were represented by
counsel in connection with the negotiation and drafting of the Loan
Documents and that the Loan Documents shall not be subject to the principle
of construing their meaning against the party which drafted same.
Brokers and Financial Advisors. Borrower and Lender hereby represent
that they have dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement. Borrower hereby agrees to indemnify and
hold Lender harmless from and against any and all claims, liabilities,
costs and expenses of any kind in any way relating to or arising from a
claim by any Person, that such Person acted on behalf of Borrower in
connection with the transactions contemplated herein. The provisions of
this Section shall survive the expiration and termination of this Agreement
and the repayment of the Indebtedness.
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Payment of Expenses. Borrower shall, whether or not the Transactions
are consummated, pay all Transaction Costs, which shall include all
commitment fees due and payable at closing and all reasonable out-of-pocket
fees, costs, expenses, and disbursements of Lender and its attorneys, local
counsel, accountants and other contractors in connection with (i) the
negotiation, preparation, execution and delivery of the Loan Documents and
the documents and instruments referred to therein, (ii) the creation,
perfection or protection of Lender's Liens in the Collateral (including
fees and expenses for title and lien searches and filing and recording
fees, intangibles taxes, personal property taxes, mortgage recording taxes,
due diligence expenses, travel expenses, (iii) the negotiation,
preparation, execution and delivery of any amendment, waiver or consent
relating to any of the Loan Documents, and (iv) the preservation of rights
under and enforcement of the Loan Documents and the documents and
instruments referred to therein, including any restructuring or
rescheduling of the Indebtedness. Notwithstanding anything to the contrary
which may be contained in this Agreement, upon the request of Lender,
Borrower shall pay all costs and expenses incurred by Lender in connection
with the Loan after the date hereof to a designated agent of Lender.
Bankruptcy Waiver. Borrower hereby agrees that, in consideration of
the recitals and mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, if Borrower (i) files with any bankruptcy court of competent
jurisdiction or is the subject of any petition under Title 11 of the U.S.
Code, as amended, (ii) is the subject of any order for relief issued under
Title 11 of the U.S. Code, as amended, (iii) files or is the subject of any
petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present
or future law relating to bankruptcy, insolvency or other relief of
debtors, (iv) has sought or consents to or acquiesces in the appointment of
any trustee, receiver, conservator or liquidator or (v) is the subject of
any order, judgment or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state
act or law relating to bankruptcy, insolvency or other relief for debtors,
the automatic stay provided by the Federal Bankruptcy Code and any other
such statute shall be modified and annulled as to Lender, so as to permit
Lender to exercise any and all of its rights and remedies, upon request of
Lender made on notice to Borrower and any other party in interest but
without the need of further proof or hearing. Neither Borrower nor any
Affiliate of Borrower shall contest the enforceability of this Section.
Entire Agreement. This Agreement, together with the Exhibits and
Schedules hereto and the other Loan Documents constitutes the entire
agreement among the parties hereto with respect to the subject matter
contained in this Agreement, the Exhibits and Schedules hereto and the
other Loan Documents and supersedes all prior agreements, understandings
and negotiations between the parties.
Dissemination of Information. If Lender determines at any time to
sell, transfer or assign the Note, this Loan Agreement and any other Loan
Document and any or all servicing rights with respect thereto, or to grant
participations therein or issue mortgage pass-through certificates or other
securities evidencing a beneficial interest in a rated or unrated public
offering or private placement, subject to receipt by Borrower of a
confidentiality agreement reasonably acceptable to it from any Investor
(herein defined), Lender may forward to each purchaser, transferee,
assignee, servicer, participant or investor in such securities
(collectively, the "Investor") or any Rating Agency rating such securities
and each prospective Investor, all documents and information which Lender
now has or may hereafter acquire relating to the Loan, Borrower, any member
of the Borrower Control Group, any guarantor, any indemnitor and the
Collateral, which shall have been furnished by or on behalf of Borrower,
any member of the Borrower Control Group, any guarantor, any indemnitor, or
any party to any Loan Document, or otherwise furnished in connection with
the Loan, as Lender in its discretion determines necessary or desirable.
Notwithstanding the provisions of this Section 8.27 or the provisions of
Section 8.34, Lender shall not disclose the identity of the investors in
LSFRI II, LSFRI II Alternative or LSFRI-CADIM or the members in Lazard
Freres REI in documents intended to be released to the public. Neither
Borrower nor any member of the Borrower Control Group shall have any
obligation to any such third party to which Lender delivers such
information unless such Entity so agrees in writing directly with such
third party. Notwithstanding the provisions of this Section 8.27 to the
contrary, neither Borrower nor any member of the Borrower Control Group
shall be required to release or disclose any non-public information
concerning any Entity, the securities of which are traded publicly, to any
Person who has not furnished a confidentiality agreement.
Limitation of Interest. It is the intention of Borrower and Lender to
conform strictly to applicable laws governing the maximum rate of interest
and other charges payable, including usury laws. Accordingly, if the
transactions contemplated hereby would violate any such applicable law,
then, in that event, notwithstanding anything to the contrary in any Loan
Document, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under applicable law that is taken, reserved,
contracted for, charged or received under any Loan Document or otherwise in
connection with the Loan shall under no circumstances exceed the maximum
amount of interest allowed by applicable law, and any excess shall be
credited to principal by Lender (or if the Loan shall have been paid in
full, refunded to Borrower); and (ii) in the event that the maturity of the
Loan is accelerated by reason of an election by Lender resulting from any
default hereunder or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest may
never include more than the maximum amount of interest allowed by
applicable law, and any interest in excess of the maximum amount of
interest allowed by applicable law, if any, provided for in the Loan
Documents or otherwise shall be canceled automatically as of the date of
such acceleration or prepayment and, if theretofore prepaid, shall be
credited to principal (or if the principal portion of the Loan and any
other amounts not constituting interest shall have been paid in full,
refunded to Borrower).
In determining whether or not the interest paid or payable under any
specific contingency exceeds the maximum amount allowed by applicable law,
Lender shall, to the maximum extent permitted under applicable law (a)
exclude voluntary prepayments and the effects thereof, and (b) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of the Loan so that the interest
rate is uniform throughout the entire term of the Loan; provided, that if
the Loan is paid and performed in full prior to the end of the full
contemplated term hereof, and if the interest received for the actual
period of existence thereof exceeds the maximum amount allowed by
applicable law, Lender shall refund to Borrower the amount of such excess,
and in such event, Lender shall not be subject to any penalties provided by
any laws for contracting for, charging or receiving interest in excess of
the maximum amount allowed by applicable law.
Indemnification.
---------------
In addition to any other indemnifications provided for herein or in
the other Loan Documents, Borrower shall protect, defend, indemnify and
hold harmless Lender and each of its Affiliates and their respective
successors and assigns (including their respective trustees, officers,
directors, partners, employees, attorneys, accountants, professionals and
agents and each other Person, if any, controlling Lender or any of its
affiliates within the meaning of either Section 15 of the Securities Act of
1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended) (each, including Lender, an "Indemnified Party") from and against
all liabilities, obligations, claims, and, damages, penalties, causes of
action, losses, fines, costs, expenses (including reasonable attorneys'
fees and costs) imposed upon or incurred by or asserted against any
Indemnified Party (other than with respect to taxes (except for taxes for
which Borrower is liable pursuant to this Agreement) and other than by
reason of such Indemnified Party's default under the Loan Documents or
active gross negligence or willful misconduct, as determined to have
occurred pursuant to the final nonappealable decision of a court of
competent jurisdiction) by reason of (i) ownership or holding of this
Agreement, the other Loan Documents, the Collateral or any of them or any
interest therein, including any funds deposited with Lender, (ii) receipt
and application of any balances in the Deposit Account, (iii) any failure
on the part of Borrower or any of its Affiliates, including the members of
the Borrower Control Group, to perform or comply with any of the terms of
this Agreement or any other Loan Document, (iv) any representation or
warranty made in the Note, this Agreement or any of the other Loan
Documents being false or misleading in any material respect as of the date
such representation or warranty was made, (v) any claim by Borrower or any
Affiliate of Borrower that the relationship of Lender and Borrower is other
than that of lender and borrower, or (vi) the execution and delivery of
this Agreement and the other Loan Documents, the transactions contemplated
hereby or thereby and the performance of the parties hereto of their
respective obligations hereunder or thereunder.
In addition to any other indemnification provided for herein or in the
other Loan Documents, LFSRI II, LFSRI II Alternative and LFSRI-CADIM,
jointly and severally, shall protect, indemnify, defend and hold harmless
the Indemnified Parties from and against all liabilities, obligations,
claims, damages, penalties, causes of action, losses, fines, costs,
expenses (including reasonable attorneys' fees and costs) imposed upon or
incurred by or asserted against any Indemnified Party (other than by reason
of such Indemnified Party's default under the Loan Documents or active
gross negligence or willful misconduct, as determined to have occurred
pursuant to the final, nonappealable decision of a court of competent
jurisdiction) by reason of any failure on the part of Borrower or any of
its Affiliates, including the members of the Borrower Control Group, to
perform or comply with any of the terms of this Agreement or any other Loan
Document.
Any amounts payable to any Indemnified Party by reason of the
application of this Section 8.29 shall become immediately due and payable
and shall bear interest at the Default Rate from the date loss or damage is
sustained by any Indemnified Party until paid. The indemnifications set
forth in this Section 8.29 shall not be applicable to the extent (1)
occasioned, arising and caused solely as the result of the active gross
negligence or willful misconduct of Lender, its nominee or wholly owned
subsidiary or their respective employees or agents and irrespective of
whether occurring prior to or subsequent to the date upon which Lender, its
nominee or wholly owned subsidiary acquires possession of any interest in
the Collateral by foreclosure, sale, acceptance of an assignment in lieu of
foreclosure or sale or otherwise, as determined to have occurred pursuant
to the final nonappealable decision of a court of competent jurisdiction,
or (2) as to matters specific and relating solely to the Collateral,
occasioned, arising and caused solely as the result of any act of any
Person (other than an act of Borrower or any of its Affiliates, or an act
of any Governmental Authority, including any change in any applicable law)
and occurring subsequent to the earlier to occur of (A) the date of payment
and performance in full of the Indebtedness and (B) the date upon which
Lender, its nominee or wholly owned subsidiary acquires ownership of the
Collateral by foreclosure, sale, acceptance of an assignment in lieu of
foreclosure or sale or otherwise of the Collateral. The obligations and
liabilities of Borrower, LFSRI II, LFSRI II Alternative and LFSRI-CADIM
(each individually, an "Indemnitor", and collectively "Indemnitors") under
this Section 8.29 shall survive any termination, satisfaction, or
assignment of this Agreement and the exercise by Lender of any of its
rights or remedies hereunder, including the acquisition of the Collateral
by foreclosure or a conveyance in lieu of foreclosure, or otherwise.
In case any claim, action or proceeding (a "Claim") is brought against
any Indemnified Party in respect of which indemnification may be sought by
such Indemnified party pursuant to this Section 8.29, such Indemnified
Party shall give notice thereof to the applicable Indemnitor(s); provided,
however, that the failure of such Indemnified Party to so notify the
applicable Indemnitor(s) shall not limit or affect such Indemnified Party's
rights to be indemnified pursuant to this Section 8.29 hereof, except to
the extent such delay shall materially and adversely prejudice the
applicable Indemnitor(s)'s defense of such Claim. Upon receipt of such
notice of Claim, the applicable Indemnitor(s) shall, at its sole cost and
expense, diligently defend any such Claim with counsel reasonably
satisfactory to such Indemnified Party. In the alternative, the Indemnified
Parties may elect to conduct their own defense through counsel of their own
choosing, and at the expense of the applicable Indemnitor(s) , if (i) the
Indemnified Parties reasonably determine that the conduct of its defense by
an Indemnitor presents a conflict or potential conflict between such
Indemnitor and an Indemnified Party that would make separate representation
advisable or otherwise could be prejudicial to its interests, (ii) the
Indemnitors refuse to defend or (iii) the Indemnitors shall have failed, in
Lender's reasonable judgment, to diligently defend the Claim. The
applicable Indemnitor(s)may settle any Claim against Indemnified Parties
without such Indemnified Parties' consent, provided that (x) such
settlement is without any liability, cost or expense whatsoever to such
Indemnified Parties, (y) the settlement does not include or require any
admission of liability or culpability by such Indemnified Parties under any
Legal Requirement, whether criminal or civil in nature, and (z) the
applicable Indemnitor(s) obtains an effective written release of liability
for such Indemnified Parties from the party to the Claim with whom such
settlement is being made, which release must be reasonably acceptable to
such Indemnified Parties, and a dismissal with prejudice with respect to
all Claims made by the party with whom such settlement is being made, with
respect to any pending legal action against such Indemnified Parties in
connection with such Claim. If the Indemnified Parties are conducting their
own defense as provided above, the applicable Indemnitor(s)shall be
responsible for any good faith settlement of such Claim entered into by
such Indemnified Parties; provided that such Indemnified Parties have
obtained the applicable Indemnitor(s)'s consent to any such settlement,
such consent not to be unreasonably withheld or delayed. Nothing contained
herein shall be construed as requiring any Indemnified Parties to expend
funds or incur costs to defend any Claim in connection with the matters for
which such Indemnified Parties are entitled to indemnification pursuant to
this Section 8.29 hereof.
Borrower Acknowledgments. Borrower hereby acknowledges to and agrees
with Lender that (i) the scope of Lender's business is wide and includes,
but is not limited to, financing, investment in real estate and other
transactions which may be viewed as adverse to or competitive with the
business of Borrower or its Affiliates and (ii) Borrower and its Affiliates
have been represented by competent legal counsel and have consulted with
such counsel prior to executing this Loan Agreement and the other Loan
Documents.
Publicity. Lender shall have the right to issue press releases,
advertisements and other promotional materials describing Lender's
participation in the origination of the Loan, subject to Borrower's
approval which shall not be unreasonably withheld, conditioned or delayed.
Cross Collateralization. Without limitation of any other right or
remedy provided to Lender in this Agreement or any of the other Loan
Documents, Borrower acknowledges and agrees that, to the full extent
permitted under applicable law, upon the occurrence of an Event of Default
(i) Lender shall have the right to pursue all of its rights and remedies in
one proceeding, or separately and independently in separate proceedings
which it, as Lender, in its sole and absolute discretion, shall determine
from time to time, (ii) Lender is not required to either marshal assets,
sell Collateral in any inverse order of alienation, or be subjected to any
"one action" or "election of remedies" law or rule, (iii) the exercise by
Lender of any remedies against any Collateral will not impede Lender from
subsequently or simultaneously exercising remedies against any other
Collateral, (iv) all Liens and other rights, remedies and privileges
provided to Lender in this Agreement and in the other Loan Documents or
otherwise shall remain in full force and effect until Lender has exhausted
all of its remedies against the Collateral and all Collateral has been
foreclosed, sold and/or otherwise realized upon and (v) all Collateral
shall be security for the performance of all of Borrower's obligations
hereunder.
Release. Upon full payment of the Indebtedness, Lender shall execute
such releases and reconveyances as are customary to release and reconvey
the Collateral which secures the Loan and, to the extent held by a
custodial agent, shall direct the custodial agent holding the certificates
of shares in KPT to return such shares to their owner.
Assignment by Lender; Participations; Securitization
----------------------------------------------------
8.34.1 Assignments and Participations. Borrower acknowledges that
Lender may on or after the Closing Date sell and assign participation
interests in and to the Loan, or pledge, hypothecate or encumber, or sell
and assign all or any portion of the Loan, to or with such domestic or
foreign banks, insurance companies, pension funds, trusts or other
institutional lenders or other Persons, parties or investors (including
grantor trusts, owner trusts, special purpose corporations, REMICs, FASITs,
real estate investment trusts or other similar or comparable investment
vehicles) as may be selected by Lender in its sole and absolute discretion
and on terms and conditions satisfactory to Lender in its sole and absolute
discretion. Subject to the restrictions on disclosure of certain
information contained in Section 8.27, Borrower and the members of the
Borrower Control Group shall cooperate in all respects with Lender in
connection with the sale of participation interests in, and the pledge,
hypothecation or encumbrance or sale of all or any portion of, the Loan,
and shall, in connection therewith, execute and deliver such estoppels,
certificates, instruments and documents as may be reasonably requested by
Lender, at no out-of-pocket cost to Borrower. Subject to entry into a
confidentiality agreement in customary form for such transactions, Borrower
grants to Lender the right to distribute financial and other information
concerning Borrower, the Collateral, and all other pertinent information
with respect to the Loan to any Person who has purchased a participation
interest in the Loan, or who has purchased the Loan, or who has made a loan
to Lender secured by the Loan or who has expressed an interest in
purchasing a participation interest in the Loan, or expressed an interest
in purchasing the Loan or the making of a loan to Lender secured by the
Loan. If requested by Lender, Borrower shall execute and deliver, and shall
cause the members of the Borrower Control Group (other than the Destination
Entities except to the extent same are directly or indirectly controlled by
Borrower) to execute and deliver, at no cost or expense to Borrower, such
documents and instruments as may be necessary to split the Loan into two or
more loans evidenced by separate sets of notes and secured by separate sets
of other related Loan Documents to the full extent required by Lender to
facilitate the sale of participation interests in the Loan or the sale of
the Loan or the making of a loan to Lender secured by the Loan, it being
agreed that (a) any such splitting of the Loan will not adversely affect or
diminish the rights of Borrower as presently set forth herein and in the
other Loan Documents and will not increase the respective obligations and
liabilities of Borrower or any other Person associated or connected with
the Loan or the Collateral, (b) the Loan Documents securing the Loan as so
split will have such priority of lien as may be specified by Lender, and
(c) the retained interest of Lender in the Loan as so split shall be
allocated to or among one or more of such separate loans in a manner
specified by Lender in its sole and absolute discretion. Notwithstanding
the provisions of this Section 8.34.1 to the contrary, neither Borrower nor
any member of the Borrower Control Group shall be required to release or
disclose any non-public information concerning any Entity, the securities
of which are traded publicly, to any Person who has not furnished a
confidentiality agreement.
8.34.2 Effect of Assignment. From and after the effective date of any
assignment of all or any portion of the Loan to any Person (an "Assignee")
(a) such Assignee shall be a party hereto and to each of the other Loan
Documents to the extent of the applicable percentage or percentages
assigned to such Assignee and, except as otherwise specified herein, shall
succeed to the rights and obligations of Lender hereunder in respect of
such applicable percentage or percentages, and (b) Lender shall relinquish
its rights and be released from its obligations hereunder and under the
Loan Documents to the extent of such applicable percentage or percentages.
The liabilities of Lender and each of the other Assignees shall be separate
and not joint and several. Neither Lender nor any Assignee shall be
responsible for the obligations of any other Assignee.
8.34.3 Securitization. Lender, at its option, may elect to effect a
securitization of the Loan by means of the issuance of certificates of
interest therein or notes secured thereby (the "Securities") rated by one
or more Rating Agencies (the "Securitization"). In such event and upon
request by Lender to seek to effect such a Securitization, Borrower shall,
subject to the restrictions on disclosure set forth in Section 8.27,
promptly thereafter cooperate (at no out-of-pocket cost to Borrower) in all
reasonable respects with Lender in the Securitization including (a)
amending this Agreement and the other Loan Documents, and executing such
additional documents, in order to bifurcate the Loan into two or more
constituent loans or to effect such other changes as may be reasonably
necessary or desirable in connection with a Securitization or requested by
a Rating Agency, (b) providing such information as may be requested in
connection with the preparation of a private placement memorandum or
registration statement required to privately place or publicly distribute
the Securities in a manner which does not conflict with federal or state
securities laws, (c) providing in connection with such information, an
indemnification certificate (i) certifying that Borrower has carefully
examined such private placement memorandum or registration statement, as
applicable, including the sections entitled "Special Considerations",
"Description of the Loan and the Underlying Properties", "Operator", "The
Borrower" and "Certain Legal Aspects of the Loan" (or similarly titled
sections), and that such Sections (and any other Sections reasonably
requested), insofar as they relate solely to Borrower, its Affiliates, the
Loan or (to Borrower's knowledge) the Collateral, 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, (ii) indemnifying Lender, the
underwriter or placement agent and any of their Affiliates for any losses,
claims, damages or liabilities (the "Liabilities") to which such parties
may become subject insofar as the Liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
relating to Borrower, its Affiliates, the Loan or the Collateral contained
in such Sections or arise out of or are based upon the omission or alleged
omission to state therein a material fact relating to Borrower, its
Affiliates, the Loan or (to Borrower's knowledge) the Collateral required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading
and (iii) agreeing to reimburse such parties for any legal or other
expenses reasonably incurred by such parties in connection with
investigating or defending the Liabilities, (d) causing to be rendered (at
Lender's expense) such customary and reasonable opinion letters as may be
requested by and satisfactory to any Rating Agency including substantive
nonconsolidation opinion letters and an opinion letter from local counsel
to the Borrower stating that the assignment of the Loan and the Loan
Documents to a trustee in connection with the Securitization is
enforceable, (e) making such customary and reasonable representations,
warranties and covenants with respect to the Borrower, and the members of
the Borrower Control Group, as may be requested by any Rating Agency, (f)
providing such information regarding the Collateral and Borrower, members
of the Borrower Control Group, and their respective Affiliates as may be
reasonably requested by a Rating Agency or potential investors in
Securities or otherwise reasonably required in connection with an election
of REMIC or FASIT or other tax status and ongoing administration and
reporting by any trust formed in connection with the Securitization, (g)
amending Borrower's organizational documents or making such other
reasonable changes to the structure of Borrower or such of its partners or
members or shareholders as may be required by any Rating Agency to conform
to requirements customarily imposed in similar transactions, and (h)
obtaining a comfort letter (in customary form and containing customary
exceptions) from a nationally recognized accounting firm in connection with
financial information relating to Borrower and the members of the Borrower
Control Group and which is, in connection with the Securitization,
presented in a private placement memorandum or prospectus. In no event
shall Borrower be required to pay any Rating Agency or other fees or
expenses or be required to pay any costs or expenses whatsoever in
connection with any such Securitization other than the overhead and
internal costs incurred by Borrower in cooperating in the manner described
in clauses (a) through (h) above. Notwithstanding the provisions of this
Section 8.34.3 to the contrary, neither Borrower nor any member of the
Borrower Control Group shall be required to release or disclose any
non-public information concerning any Entity, the securities of which are
traded publicly, to any Person who has not furnished a confidentiality
agreement.
8.34.4 Other Business. Lender, each Assignee and each participant and
their respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business
with, Borrower, members of the Borrower Control Group or any of them, any
Affiliate of Borrower, any of Borrower's subsidiaries and any Person who
may do business with or own interests in or securities of Borrower or any
such Affiliate or subsidiary, without any duty to account therefor.
8.34.5 Privity of Contract. This Agreement is being entered into by
Lender individually and as agent for all present and future Assignees, and
privity of contract is hereby created among Lender and all present and
future Assignees, on the one hand, and Borrower, on the other hand.
INTENTIONALLY DELETED.
Joint and Several Liability of Borrower. The obligations of the LFSRI
II Borrower and the Senior Quarters Borrower under this Agreement are joint
and several.
Agreement of Lender. In reliance on the truth and accuracy of the
representations and warranties of Borrower set forth in Section 4.1(aa),
Lender hereby agrees that the delivery of certificates and instruments
evidencing ownership of the Collateral to Senior Lender, together with
satisfaction of the conditions set forth in Section 3.1(a)(2)(H) hereof to
the satisfaction of Lender, shall fulfill the obligation of Borrower, as of
the date hereof, to deliver the Collateral to Lender.
Certain Fees. Notwithstanding anything to the contrary in the Fee
Letter or in this Agreement, the Origination Fee (as such term is defined
in the Fee Letter), the Funding Fee (as such term is defined in the Fee
Letter) and the Unfunded Commitment Additional Interest Payment shall not
exceed $1,300,000 in the aggregate.
Tax Status. CTMPII FC LF (MS) represents and warrants that it is a
corporation for United States federal income tax purposes.
Cooperation. Lender and Borrower acknowledge and agree that
contemporaneously with their execution and delivery of this Agreement,
Lender and Borrower (including various members of the Borrower Control
Group and/or the Operating Companies) have executed various amendments,
consents, waivers and collateral assignments supplementing and/or otherwise
modifying the provisions of this Agreement with the understanding that such
amendments, consents, waivers and collateral assignments are intended to
duplicate, to the extent applicable, the corresponding amendments,
consents, waivers and collateral assignments granted by the Senior Lender
or the Borrower (including various members of the Borrower Control Group
and/or the Operating Companies) prior to the date hereof with respect to
the Senior Loan. Any amendments, consents, waivers and collateral
assignments or other instruments executed and delivered on or prior to the
date hereof that had the effect of modifying the rights or obligations of
Senior Lender or Borrower under the Senior Loan Documents shall be
applicable to and similarly modify the rights and obligations of Borrower
or Lender under the Loan Documents and Lender shall not be permitted to
declare an Event of Default or make any other claim under the Loan
Documents if such Event of Default or if the facts giving rise to such
other claim would not have occurred had such amendments, consents and
waivers been executed and delivered on or prior to the date hereof with
respect to the Senior Loan Documents and been given similar effect with
respect to the Loan Documents. In furtherance of the foregoing, Lender and
Borrower shall (and Borrower shall cause each member of the Borrower
Control Group and each Operating Company to) do and execute, all such
further amendments, consents, waivers and collateral assignments to carry
out the intents and purposes of this Section to the extent that any
consents, waivers and collateral assignments given prior to the date hereof
in connection with the Senior Loan are discovered not to have been given in
connection with this Loan.
- SIGNATURES BEGIN ON NEXT PAGE -
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed by their duly authorized representatives, all as of the
day and year first above written.
LENDER:
CTMPII FC LF (MS),
a Cayman Islands exempted company
By:
-----------------------------
Name:
Title:
BORROWER:
LFSRI II Borrower: LFSRI II SPV REIT CORP.,
a Delaware corporation
By:
-----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and Chief Financial
Officer
Senior Quarters Borrower: SENIOR QUARTERS FUNDING CORP.,
a Delaware corporation
By:
-----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and Chief Financial
Officer
The undersigned are executing this Agreement solely for the purpose of
agreeing to be bound by the provisions of Section 5.1(o), Section 5.2 and
Section 8.29.
LF STRATEGIC REALTY INVESTORS II L.P.,
LFSRI II ALTERNATIVE PARTNERSHIP L.P., and
LFSRI II - CADIM ALTERNATIVE PARTNERSHIP L.P., all
Delaware limited partnerships
By: Lazard Freres Real Estate Investors L.L.C., a
New York limited liability company, their
general partner
By:
-----------------------------
Name: Xxxx X. Xxxxx
Title: Managing Principal and Chief
Financial Officer
EXHIBIT A
PERMITTED INDEBTEDNESS
1. As to Borrower: the Loan and the Senior Loan.
2. As to the Fund:
o obligations under the BT Guaranty;
o obligations under that certain Guaranty
dated as of February 8, 2001 given by
the Fund to Senior Lender under the
Senior Loan (the "Senior Loan
Guaranty");
o obligations under the Contribution
Agreement dated as of October 30, 1998
among LFSRI II, LFSRI-CADIM and LFSRI
II Alternative relating to the Cliveden
Hedge Guaranty;
o obligations under the Contribution Agreement
dated as of February 8, 2001 among members of
the Fund relating to the Senior Loan Guaranty;
o obligations under that certain Co-Investment Agreement dated as of
June 23, 2002 by and among Prometheus SERT, Kimkon Inc., PSCO
Acquisition Corp., the members of the Fund and Kimco Realty
Corporation, as amended or modified from time to time (the
"Co-Investment Agreement");
o obligations under the Contribution Agreement dated as of June 23, 2002
among members of the Fund, as amended or modified from time to time
relating to the Co-Investment Agreement;
o obligations under the Contribution Agreement
dated as of the Closing Date among the members
of the Fund relating to the Guaranty; and
o indebtedness to members of the Borrower Control Group for expenses
paid for by the Fund in the ordinary course of business on behalf of
other members of the Borrower Control Group
3. As to Prometheus Senior Quarters, Prometheus
SQ Holdings, Prometheus Interim and Atria Holdings,
o on the date hereof, (1) (a) obligations
pursuant to the Additional Guaranty (the
"Fleet Guaranty"), dated as of March 29,
2000, by Prometheus Senior Quarters,
Prometheus SQ Holdings, Atria Holdings,
Prometheus Interim, Atria, Xxxxxx, Xxxxxx Kew
Gardens Corp. and Kapson Riverdale Corp. in
favor of Fleet Bank, National Association
("Fleet"); (b) that certain Reaffirmation of
Additional Guaranty in favor of Fleet
reaffirming the obligations under the Fleet
Guaranty; and (c) obligations pursuant to
that certain Guaranty pursuant to which
Prometheus Senior Quarters has guaranteed the
obligations of Kapson Pittsburgh Corp.
("KSH") and Kapson under that certain
indemnity agreement pursuant to which KSH and
Kapson have agreed to indemnify Xxxxx X. Xxxx
("Rose") against liabilities under Rose's
guaranty of a loan secured by Xxxxxx'x South
Hills property; and hereafter, (2) such
obligations under guarantees of obligations
of Atria and Kapson as may be made from time
to time hereafter (provided that such members
of the Borrower Control Group shall update
this Exhibit from time to time to identify
all such new guarantees)
4. As to the members of the Borrower Control
Group (excluding the Fund):
indebtedness to any direct or indirect parent of such member of the
Borrower Control Group for expenses paid for in the ordinary course of
business by or on behalf of such member of the Borrower Control Group
EXHIBIT B
CERTIFICATE OF U. S. WITHHOLDING STATUS
Reference is made to the Loan Agreement, dated as of July 11, 2002 (as it
may be amended, supplemented or otherwise modified, the "Credit Agreement";
the terms defined therein and not otherwise defined herein being used
herein as therein defined), by and between CTMPII FC LF (MS), LFSRI II SPV
REIT Corp. and Senior Quarters Funding Corp.
Pursuant to Section 2.13 of the Credit Agreement, the undersigned hereby
certifies that:
1. The Lender is the sole record and beneficial
owner of the interest in the Loan (the "Interest") in respect of which it is
providing this certificate and it shall remain the sole beneficial owner of
the Interest at all times during which it is the record holder of such
Interest.
2. The Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code of 1986, as amended
(the "Code").
3. The Lender meets all of the requirements under
Code Section 871(a) or 881(c) to be eligible for a complete exemption from
withholding of Taxes on interest payments made to it under the Credit
Agreement, including without limitation, that it is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code). In
connection with the foregoing, the Lender represents and warrants that it
has not taken and will not take, any action that would cause an Interest
held by it at any time during the term of the Credit Agreement to fail to
be in registered form within the meaning of U.S. Treasury Regulations
Section 5f.103-1(c).
4. The Lender shall promptly notify the Borrower
if any of the representations and warranties made herein are no longer true
and correct.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate as
of the __ day of ________.
[NAME OF LENDER]
By:
----------------------
Name:
Title:
SCHEDULE I
----------
INTENTIONALLY DELETED
SCHEDULE II
-----------
COLLATERAL ASSIGNMENTS
1. Collateral Assignment dated as of the date hereof by and between Lender
and LFAL.
2. Collateral Assignment dated as of the date hereof by and between Lender
and Senior Quarters Borrower regarding a certain Promissory Note, dated
March 2, 2001, from Kapson to Senior Quarters Borrower in the maximum
advance amount of $15,000,000, a certain Promissory Note, dated March 2,
2001, from Atria to Senior Quarters Borrower in the maximum advance amount
of $15,000,000, a certain Promissory Note, dated September 7, 2001, from
Atria to Senior Quarters Borrower in the maximum advance amount of
$28,500,000, and a certain Promissory Note, dated September 7, 2001, as
amended, from Kapson to Senior Quarters Borrower in the maximum advance
amount of $7,000,000.
3. Collateral Assignment dated as of the date hereof by and between Lender
and Senior Quarters Borrower regarding a certain Promissory Note, dated
April 18, 2002 from Atria to Senior Quarters Borrower in the original
principal amount of $3,200,000.
4. Collateral Assignment dated as of the date hereof by and between Lender
and Senior Quarters Borrower regarding a certain Promissory Note, dated May
2, 2002 from Atria to Senior Quarters Borrower in the original principal
amount of $1,150,000.
5. Collateral Assignment dated as of the date hereof by and between Lender
and Senior Quarters Borrower regarding a certain Promissory Note dated July
11, 2002 from Atria to Senior Quarters Borrower in the original principal
amount of $19,700,000 and a certain Promissory Note dated July 11, 2002
from Kapson to Senior Quarters Borrower in the original principal amount of
$10,000,000.
SCHEDULE III
------------
POST-CLOSING COVENANTS
1. INTENTIONALLY DELETED.
---------------------
2. Board Replacement. At any time following
acceleration of the Note, subject to the rights of the Senior Lender under
the Senior Loan Documents, Lender shall have the right but not the
obligation to request Borrower or the applicable member of the Borrower
Control Group to, and thereupon Borrower or the applicable member of the
Borrower Control Group shall, cause the resignation of its or their
appointees or representatives, if any, to the boards of directors,
membership committees or other similar bodies having control or
decision-making capacity (collectively "Boards") of one or more Board
Replacement Entities, and Borrower and the applicable member of the
Borrower Control Group shall promptly exercise its substitution rights, if
any, by appointing or causing to be appointed individuals selected by
Lender to the Boards of such Board Replacement Entities; provided, however,
that, notwithstanding the foregoing provisions of this clause (2), neither
Borrower nor any member of the Borrower Control Group shall be required to
comply with the foregoing provisions of this clause (2) if such compliance
would require (a) Borrower, any member of the Borrower Control Group or any
of their respective partners, members, officers or directors to violate,
breach, or be in default of or under any applicable law or fiduciary
obligation to which such Person is bound or subject, or (b) Borrower or any
member of the Borrower Control Group to be in default under any contractual
obligation existing on the date hereof (other than the foregoing provisions
of this clause (2)) to which such Entity is bound or subject.
3. Sale of Assets. At any time following
acceleration of the Note, Borrower and the applicable member of the
Borrower Control Group shall exercise its rights, if any, to cause the sale
or other disposition for value of one or more of the Sale Entities. Any
such sale or other disposition shall only be effected on such terms and
price which would be obtained in an arm's-length transaction with a third
party bona fide purchaser for fair market value. At any time following the
occurrence and during the continuation of a monetary Event of Default, if
another Person having an Equity Interest in a Sale Entity requests the
consent of Borrower or its Affiliates to a sale or other disposition for
value of any Sale Entity, on terms and at a price which would be obtained
in an arm's-length transaction with a third party bona fide purchaser for
fair market value, Borrower shall promptly notify Lender thereof and
thereafter the Borrower or its appropriate Affiliate, as the case may be,
shall consent to such sale or other disposition for value and cooperate
fully in effectuating same. Notwithstanding the foregoing provisions of
this clause (3), neither Borrower nor any member of the Borrower Control
Group shall be required to comply with the foregoing provisions of this
clause (3) if such compliance would require (a) Borrower, any member of the
Borrower Control Group or any of their respective partners, members,
officers or directors to violate, breach, or be in default of or under any
applicable law or fiduciary obligation to which such Person is bound or
subject, or (b) Borrower or any member of the Borrower Control Group to be
in default under any contractual obligation existing on the date hereof
(other than the foregoing provisions of this clause (3)) to which such
Entity is bound or subject.
4. Requests for Consent. If at any time after the
Closing Date Borrower or any member of the Borrower Control Group is
requested to grant any consent or approval pursuant to, or in material
modification of, the Agreement of Limited Partnership of AAC III dated as
of December 22, 1997, as amended by the First Amendment thereto dated as of
November 19, 1998, the Second Amendment thereto dated as of October 6, 2001
and the Third Amendment thereto dated as of March 19, 2002, or the
Securityholder's Agreement dated as of December 22, 1997 by and among AAC
Inc., the persons listed on Exhibit A thereto and the securityholders of
AAC Management LLC listed on Exhibit B thereto, no such consent or approval
shall be granted without Lender's prior written consent unless the Borrower
or the applicable member of the Borrower Control Group obtains all
necessary consents, waivers and approvals (a) to the granting by Borrower
or the applicable member of the Borrower Control Group of a second priority
pledge and security interest to Lender (subject and subordinate only to a
pledge and security interest in favor of Senior Lender in accordance with
the provisions of the Senior Loan Documents) in the Equity Interests owned
by the Borrower and any member of the Borrower Control Group in AAC Inc.
and AAC III, such documents to be in form and substance reasonably
satisfactory to Lender, provided, however, that in the event such consent
is refused by the lender and, if different from the lender, the servicer
for the Federal National Mortgage Association ("FNMA") under the Master
Credit Facility Agreement, dated as of September 17, 1998, among AAC III,
Capri Mortgage Capital LLC and the other parties named therein, or under
other comparable credit facility agreements made or guaranteed by FNMA,
such pledge and security interest shall only be granted with respect to the
interests permitted to be pledged thereby, (b) to the execution and
delivery by AAC III of any consent to a Direction Letter which may be
requested by Lender, in form and substance reasonably satisfactory to
Lender, and (c) to an amendment to the organizational documents of AAC,
Inc., in form and substance reasonably satisfactory to Lender, to become
effective automatically upon acceleration of the Loan, waiving all REIT
ownership limitation provisions with respect to the Transfer to Lender and
its successors and assigns, of the Equity Interests in AAC, Inc. and AAC
III; provided, however, that, notwithstanding the foregoing provisions of
this clause (4), neither Borrower nor any member of the Borrower Control
Group shall be required to comply with the foregoing provisions of this
clause (4) (x) if such compliance would require Borrower, any member of the
Borrower Control Group or any of their respective partners, members,
officers or directors to violate, breach, or be in default of or under any
applicable law or fiduciary obligation to which such Person is bound or
subject, or (y) if such compliance would require Borrower or any member of
the Borrower Control Group to be in default under any contractual
obligation existing on the date hereof (other than the foregoing provisions
of this clause (4)) to which such Entity is bound or subject or (z) in
respect of any consent or approval requested in connection with the
divestiture or potential divestiture of any of the assets or properties of
AAC III or in the Equity Interest in AAC III.
5. Additional Collateral. At any time after the
Closing Date that any member of the Borrower Control Group shall acquire
any direct or indirect Equity Interest in any Entity or any debt instrument
thereof, Borrower shall cause to be granted to Lender a perfected, second
priority Lien (subject and subordinate only to a pledge and security
interest in favor of Senior Lender in accordance with the provisions of the
Senior Loan Documents) in such Equity Interest or debt instrument within 5
Business Days following the acquisition thereof. In furtherance of the
foregoing, at such times as Borrower makes loans to Atria and/or Kapson,
such loans shall be evidenced by notes and other loan documents in form
reasonably satisfactory to Lender, and Borrower will grant to Lender a
perfected second priority lien and security interest (subject and
subordinate only to a pledge and security interest in favor of Senior
Lender in accordance with the provisions of the Senior Loan Documents) in
the loans to said entities, the notes evidencing such loans and any
collateral granted to Borrower to secure such loans. Any such liens and
security interests shall be created and evidenced by documentation in form
and substance reasonably satisfactory to Lender, including any UCC or other
searches and filings, and legal opinions, which Lender may request. The
requirement to furnish such additional collateral shall not be deemed to
constitute the consent by Lender (to the extent that such consent is
otherwise required by this Agreement or any Loan Document) to any such
acquisition or to the making of any loan, or a waiver of any right to
withhold such consent which Lender may otherwise have. All such additional
collateral shall be provided at Borrower's expense. Notwithstanding the
foregoing, Borrower shall not be required to pledge any Equity Interests
with respect to Cliveden, the Destination Entities and PSCO Acquisition
Corp.
SCHEDULE IV
-----------
PLEDGE AGREEMENTS
-----------------
Pledge and Security Agreement dated as of the
date hereof by and between Lender, LFSRI II ES and Prometheus ES.
Pledge and Security Agreement dated as of the
date hereof by and between Lender and Prometheus Assisted.
Pledge and Security Agreement dated as of the
date hereof by and between Lender and LFSRI II Assisted.
Pledge and Security Agreement dated as of the
date hereof by and between Lender and Prometheus UK.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, the Fund, Prometheus Senior Quarters and
Prometheus Assisted.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, Prometheus SQ Holdings, Prometheus
Interim and Senior Quarters Borrower.
Pledge and Security Agreement dated as of the
date hereof by and between Lender and Prometheus Interim.
Pledge and Security Agreement dated as of the
date hereof by and between Lender and Atria Holdings.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, Prometheus Senior Quarters, Prometheus
SQ Holdings and Atria Holdings.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, and LFSRI II, LFSRI II Alternative and
LFSRI-CADIM.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, LFSRI II Borrower and PMAIT.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, LFSRI II Borrower, and Prometheus SE LLC
and Prometheus SERT.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, Prometheus SE LLC and Prometheus SERT.
Pledge and Security Agreement dated as of the
date hereof by and between Lender, LFSRI II ES and Prometheus ES.
SCHEDULE 4.1(d)
1. Xxxxx Xxxxx x. Xxxxxxx Property Trust, Inc. et. al. (including
Prometheus SERT), Civil No. 24-C-02-001430 [consolidated with
Civil No. 24-C-02-001810 and Civil No. 24-C-02-001823].
2. BlackAcre Bridge Capital LLC et al. x. Xxxxxxx Property Trust,
Inc., Civil No. ___.
3. The Series A Preferred Stockholders of Konover Property Trust,
Inc. have threatened litigation.
SCHEDULE 4.1(q)
A portion of the Final Advance may be used to purchase or carry "margin
stock" in accordance with Regulation U and any other Regulation of the
Board of Governors.
SCHEDULE 4.1(z)
1. Second Amendment to Agreement of Limited Partnership of American
Apartment Communities III, L.P., dated as of October 6, 2001, by and
among AAC Management LLC, a Delaware limited liability company,
Arlington Executive Club LLC, an Ohio limited liability company and
Alexandria Executive Club LLC, an Ohio limited liability company.
2. Third Amendment to Agreement of Limited Partnership of American
Apartment Communities, L.P., dated as of March 19, 2002, by and among
AAC Management LLC, a Delaware limited liability company, Arlington
Executive Club LLC, an Ohio limited liability company and Alexandria
Executive Club LLC, an Ohio limited liability company.
3. Sixth Amendment to Agreement of Limited Partnership of The Xxxxxxxxxx
Company, L.P., dated as of January 1, 2001, by and among TRC Realty,
Inc.-GP, a Pennsylvania corporation, Prometheus Mid-Atlantic Investors
Trust, a Maryland real estate investment trust and TRC Investment
Associates, L.P., a Pennsylvania limited partnership.
4. Seventh Amendment to Agreement of Limited Partnership and
Securityholders Agreement of The Xxxxxxxxxx Company, L.P., dated as of
November 8, 2001, by and among TRC Realty, Inc.-GP, a Pennsylvania
corporation, Prometheus Mid-Atlantic Investors Trust, a Maryland real
estate investment trust, TRC Investment Associates, L.P., a Pennsylvania
limited partnership and TRC Associates Limited Partnership, a Delaware
limited partnership.
5. Redemption Agreement, dated and effective as of June 30, 2002, by and
among the Xxxxxxxxxx Company, L.P. and Prometheus Mid-Atlantic Investors
Trust, a Maryland real estate investment trust.
6. Operating Agreement of TRC Westfield Holdings, L.L.C., dated and
effective as of June 30, 2002.
7. Agreement and Amendment to Operating Agreement dated as of May 13, 2002
by and among Prometheus UK Hospitality LLC and Xxxx Destination Europe,
LLC, among others.
8. Amendment to Operating Agreement of Destination Europe USA, LLC, dated
as of April 8, 1999.
9. Amendment to the Limited Liability Company Agreement of Prometheus
Extended Stay L.L.C. dated as of April 21, 1999.
10.First Amendment to the Limited Liability Company Agreement of
Prometheus Extended Stay L.L.C. dated as of June 30, 1999.
11.Amendment to the Limited Liability Company Agreement of Prometheus
Extended Stay L.L.C. dated as of April 24, 2000.
TABLE OF CONTENTS
-----------------
PAGE
----
Article I CERTAIN DEFINITIONS........................................1
Section 1.1. Definitions...................................1
Article II GENERAL TERMS.............................................22
Section 2.1. Loan Advances................................22
Section 2.2. Use of Proceeds..............................25
Section 2.3. Security for the Loan........................26
Section 2.4. Note.........................................26
Section 2.5. Principal and Interest Payments..............26
Section 2.6. Prepayments..................................27
Section 2.7. Application of Payments......................30
Section 2.8. Payment of Debt Service, Method and Place of
Payment......................................30
Section 2.9. Taxes........................................30
Section 2.10. Exit Additional Interest Payment.............30
Section 2.11. INTENTIONALLY DELETED........................30
Section 2.12. Unfunded Commitment Additional Interest
Payment......................................31
Section 2.13. Withholding..................................31
Article III CONDITIONS PRECEDENT AND THE ACCOUNTS.....................32
Section 3.1. Conditions Precedent to the Making of the
Loan.........................................32
Section 3.2. Form of Loan Documents and Related
Matters......................................36
Section 3.3. The Accounts.................................36
Section 3.4. Investment and Control of Accounts...........37
Article IV REPRESENTATIONS AND WARRANTIES............................37
Section 4.1. Representations and Warranties of
Borrower.....................................38
Section 4.2. Survival of Representations and
Warranties...................................43
Article V AFFIRMATIVE COVENANTS.....................................43
Section 5.1. Borrower Covenants...........................43
Section 5.2. Fund Covenants...............................51
Article VI NEGATIVE COVENANTS........................................52
Section 6.1. Borrower Negative Covenants..................52
Article VII DEFAULTS..................................................54
Section 7.1. Event of Default.............................55
Section 7.2. Remedies.....................................57
Section 7.3. Remedies Cumulative..........................58
Section 7.4. Lender's Right to Perform....................58
Article VIII MISCELLANEOUS.............................................58
Section 8.1. Survival.....................................58
Section 8.2. Lender's Discretion..........................59
Section 8.3. Governing Law................................59
Section 8.4. Modification, Waiver in Writing..............60
Section 8.5. Delay Not a Waiver...........................60
Section 8.6. Notices......................................60
Section 8.7. TRIAL BY JURY................................61
Section 8.8. Headings.....................................61
Section 8.9. Assignment...................................61
Section 8.10. Severability.................................62
Section 8.11. Preferences..................................62
Section 8.12. Waiver of Notice.............................62
Section 8.13. Remedies of Borrower.........................63
Section 8.14. Full Recourse................................63
Section 8.15. INTENTIONALLY DELETED........................63
Section 8.16. Exhibits Incorporated........................63
Section 8.17. Offsets, Counterclaims and Defenses..........63
Section 8.18. No Joint Venture or Partnership..............63
Section 8.19. Waiver of Marshalling of Assets Defense......63
Section 8.20. Waiver of Counterclaim.......................64
Section 8.21. Conflict; Construction of Documents..........64
Section 8.22. Brokers and Financial Advisors...............64
Section 8.23. Counterparts.................................64
Section 8.24. Payment of Expenses..........................64
Section 8.25. Bankruptcy Waiver............................65
Section 8.26. Entire Agreement.............................65
Section 8.27. Dissemination of Information.................65
Section 8.28. Limitation of Interest.......................66
Section 8.29. Indemnification..............................67
Section 8.30. Borrower Acknowledgments.....................69
Section 8.31. Publicity....................................69
Section 8.32. Cross Collateralization......................69
Section 8.33. Release......................................70
Section 8.34. Assignment by Lender; Participations;
Securitization...............................70
Section 8.35. INTENTIONALLY DELETED........................73
Section 8.36. Joint and Several Liability of Borrower......73
Section 8.37. Agreement of Lender..........................73
Section 8.38. Certain Fees.................................73
Section 8.39. Tax Status...................................73
Section 8.40. Cooperation..................................73
EXHIBIT A - PERMITTED INDEBTEDNESS
EXHIBIT B - CERTIFICATE OF U.S. WITHHOLDING STATUS
SCHEDULE I - INTENTIONALLY DELETED
SCHEDULE II -COLLATERAL ASSIGNMENTS
SCHEDULE III - POST-CLOSING COVENANTS
SCHEDULE IV -PLEDGE AGREEMENTS
SCHEDULE 4.1(d) - EXISTING AND THREATENED LITIGATION
SCHEDULE 4.1(q) - MARGIN PROCEEDS
SCHEDULE 4.1(z) - CERTAIN ORGANIZATIONAL DOCUMENTS
LOAN AGREEMENT
Dated as of July 11, 2002
by and between
LFSRI II SPV REIT CORP.
and SENIOR QUARTERS FUNDING CORP.
collectively, (as Borrower)
and
CTMPII FC LF (MS)
(as Lender)
