EXHIBIT 10.2
LOAN AGREEMENT
Dated as of July __, 2001
between
METROPOLITAN 000 0xx XXXXXX, XXX,
as Borrower,
and
XXXXXX FINANCIAL CORPORATION,
as Lender
DEFINITIONS
ARTICLE I
GENERAL TERMS
1.1. The Loan......................................................................................26
1.2. Interest and Principal........................................................................27
1.3. Method and Place of Payment...................................................................28
1.4. Taxes.........................................................................................28
1.5. Release.......................................................................................28
ARTICLE II
DEFEASANCE AND ASSUMPTION
2.1. Defeasance....................................................................................29
2.2. Assumption....................................................................................31
ARTICLE III
ACCOUNTS
3.2. Distributions from Cash Management Account....................................................34
3.3. Low DSCR Reserve Account......................................................................35
3.4. Tax, Insurance and Ground Rents Escrow Account................................................36
3.5. TI/LC Reserve Account.........................................................................37
3.6. Replacement Reserve Account...................................................................39
3.7. [Intentionally Omitted].......................................................................40
3.8. Loss Proceeds Account.........................................................................40
3.9. Unfunded Obligations Account..................................................................40
3.10. D&P Debt Service Reserve Account..............................................................42
3.11. Account Collateral............................................................................43
3.12. Permitted Investments.........................................................................43
3.13. Bankruptcy....................................................................................44
3.14. Return of Letter of Credit....................................................................44
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Organization..................................................................................45
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4.2. Authorization.................................................................................45
4.3. No Conflicts..................................................................................45
4.4. Consents......................................................................................45
4.5. Enforceable Obligations.......................................................................45
4.6. No Default....................................................................................45
4.7. Payment of Taxes..............................................................................46
4.8. Compliance with Law...........................................................................46
4.9. ERISA.........................................................................................46
4.10. Government Regulation.........................................................................47
4.11. No Bankruptcy Filing..........................................................................47
4.12. Other Debt....................................................................................47
4.13. Litigation....................................................................................47
4.14. Leases; Material Agreements...................................................................47
4.15. Full and Accurate Disclosure..................................................................48
4.16. Financial Condition...........................................................................48
4.17. Single-Purpose Requirements...................................................................48
4.18. Location of Chief Executive Offices...........................................................48
4.19. Not Foreign Person............................................................................48
4.20. Labor Matters.................................................................................48
4.21. Title.........................................................................................48
4.22. No Encroachments..............................................................................49
4.23. Physical Condition............................................................................49
4.24. Solvency......................................................................................49
4.25. Management....................................................................................50
4.26. Condemnation..................................................................................50
4.27. Utilities and Public Access...................................................................50
4.28. Environmental Matters.........................................................................50
4.29. Assessments...................................................................................51
4.30. No Joint Assessment...........................................................................51
4.31. Separate Lots.................................................................................51
4.32. Permits; Certificate of Occupancy.............................................................52
4.33. Flood Zone....................................................................................52
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4.34. Security Deposits.............................................................................52
4.35. Ground Lease..................................................................................52
4.36. Acquisition Documents.........................................................................53
4.37. Insurance.....................................................................................54
4.38. Use of Proceeds...............................................................................54
4.39. Survival......................................................................................54
ARTICLE V
AFFIRMATIVE COVENANTS
5.1. Existence.....................................................................................54
5.2. Maintenance of Property; Compliance with Legal Requirements...................................54
5.3. Impositions and Other Claims..................................................................55
5.4. Access to Property............................................................................55
5.5. Notice of Default.............................................................................55
5.6. Litigation....................................................................................56
5.7. Cooperate in Legal Proceedings................................................................56
5.8. Leases........................................................................................56
5.9. [Intentionally Omitted].......................................................................58
5.10. Further Assurances............................................................................58
5.11. Management of Collateral......................................................................59
5.12. Annual Financial Statements...................................................................59
5.13. Quarterly Financial Statements................................................................60
5.14. Monthly Financial Statements..................................................................60
5.15. Insurance.....................................................................................61
5.16. Casualty and Condemnation.....................................................................63
5.17. Annual Budget.................................................................................65
5.18. General Indemnity.............................................................................66
ARTICLE VI
NEGATIVE COVENANTS
6.1. Liens on the Property.........................................................................66
6.2. Ownership.....................................................................................66
6.3. Transfer......................................................................................66
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6.4. Debt..........................................................................................66
6.5. Dissolution; Merger or Consolidation..........................................................66
6.6. Change in Business............................................................................66
6.7. Debt Cancellation.............................................................................66
6.8. Affiliate Transactions........................................................................66
6.9. Misapplication of Funds.......................................................................66
6.10. Place of Business.............................................................................66
6.11. Modifications and Waivers.....................................................................66
6.12. ERISA.........................................................................................68
6.13. Alterations and Expansions....................................................................68
6.14. Advances and Investments......................................................................68
6.15. Single-Purpose Entity.........................................................................68
6.16. Zoning and Uses...............................................................................68
6.17. Waste.........................................................................................69
ARTICLE VII
DEFAULTS
7.1. Event of Default..............................................................................69
7.2. Remedies......................................................................................72
7.3. No Waiver.....................................................................................73
7.4. Application of Payments after an Event of Default.............................................73
ARTICLE VIII
CONDITIONS PRECEDENT
8.1. Conditions Precedent to Closing...............................................................73
ARTICLE IX
MISCELLANEOUS
9.1. Successors....................................................................................76
9.2. GOVERNING LAW.................................................................................76
9.3. Modification, Waiver in Writing...............................................................76
9.4. Notices.......................................................................................76
9.5. TRIAL BY JURY.................................................................................78
9.6. Headings......................................................................................78
9.7. Assignment and Participation..................................................................78
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9.8. Severability..................................................................................79
9.9. Preferences...................................................................................80
9.10. Remedies of Borrower..........................................................................80
9.11. Offsets, Counterclaims and Defenses...........................................................80
9.12. No Joint Venture..............................................................................80
9.13. Conflict; Construction of Documents...........................................................80
9.14. Brokers and Financial Advisors................................................................80
9.15. Counterparts..................................................................................81
9.16. Estoppel Certificates.........................................................................81
9.17. Payment of Expenses; Mortgage Recording Taxes.................................................81
9.18. No Third-Party Beneficiaries..................................................................82
9.19. Recourse......................................................................................82
9.20. Right of Set-Off..............................................................................85
9.21. Exculpation of Lender.........................................................................85
9.22. Servicer......................................................................................85
9.23. Prior Agreements..............................................................................85
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Exhibits
--------
Exhibit A.........Form of Tenant Notice
Exhibit B.........Form of Cash Management Agreement
Exhibit C.........Form of Qualified Letter of Credit
Exhibit D.........Form of Qualified Guarantee
Schedules
---------
Schedule A........Property
Schedule B........Exception Report
Schedule C........Nonconsolidation Opinion
Schedule D........Unfunded Obligations
Schedule E........Rent Roll
Schedule F........Material Agreements
Schedule G........[Intentionally Omitted]
Schedule H........Approved Asset Managers
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of July __, 2001, is between Xxxxxx
Financial Corporation, a Pennsylvania corporation having an address at 0000
Xxxxxxxxx Xxxxxx, Xxxxx 000 Xxxxx, Xxxxxxxx, XX 00000, as lender (together with
its successors and assigns, including any lawful holder of any portion of the
Indebtedness, as hereinafter defined, "Lender"), and Metropolitan 000 0xx Xxxxxx
LLC, a Delaware limited liability company having an address at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX, as borrower (together with its permitted successors
and assigns, "Borrower").
RECITALS
WHEREAS, Borrower desires to obtain from Lender the Loan (as
hereinafter defined) in connection with the financing of the property known as
000 Xxxxx Xxxxxx; and
WHEREAS, Lender is willing to make the Loan on the terms and conditions
hereof if Borrower joins in the execution and delivery of this Agreement, issues
the Note and executes and delivers the other Loan Documents which shall
establish the terms and conditions of the Loan;
NOW, THEREFORE, in consideration of the making of the Loan by Lender
and the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereby covenant, agree, represent and warrant as follows:
DEFINITIONS
(a) When used herein, the following capitalized terms shall have the
following meanings:
"Account Collateral" means, collectively, the Collateral Accounts and
all sums at any time held, deposited or invested therein, together with any
interest or other earnings thereon, and all proceeds thereof (including proceeds
of sales and other dispositions), whether accounts, general intangibles, chattel
paper, deposit accounts, instruments, documents or securities.
"Affiliate" of any specified Person means any other Person controlling,
controlled by or under common control with such specified Person. For the
purposes of this definition, "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 (determined in a manner analogous to the method for
determining beneficial ownership under Rule 13d-3 under the Securities Exchange
Act of 1934, as amended), by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Loan Agreement, as the same may from time to
time hereafter be modified or replaced.
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"Alteration" means any demolition, alteration, installation,
improvement or expansion of or to the Property or any portion thereof, other
than Tenant Improvements required under Leases.
"Annual Budget" means a capital and operating expenditure budget for
the Property prepared by Borrower, which shall include amounts sufficient to
operate and maintain the Property at a standard at least equal to that
maintained on the date hereof.
"Appraisal" means an as-is appraisal of the Property prepared by a
member of the American Institute of Real Estate Appraisers selected by Lender,
which appraisal shall meet the minimum appraisal standards for national banks
promulgated by the Comptroller of the Currency pursuant to Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended
(FIRREA) and shall comply with the Uniform Standards of Professional Appraisal
Practice (USPAP).
"Approved Annual Budget" has the meaning set forth in Section 5.17.
"Approved Asset Manager" means (i) each of the parties listed in
Schedule H hereto, provided that at the time its qualification first becomes
relevant, such party acts as asset manager, pension advisor or in a similar
capacity with respect to real estate assets with a value of not less than $3
billion, (ii) X.X. Xxxxxx Chase & Co. and/or X.X. Xxxxxx Investment Management
Inc., provided its qualification first becomes relevant prior to the first
anniversary of the Closing Date (but without limiting its ability to qualify
under another clause of this definition), and (iii) any asset manager, pension
advisory firm or similar entity which at the time its qualification first
becomes relevant acts as such with respect to real estate assets with a value of
not less than $5 billion.
"Approved Management Agreement" means that certain Property Management
Agreement, dated as of the date hereof, between Borrower and Reckson Management
Group, as such agreement may be modified or replaced in accordance herewith, and
any other management agreement with respect to which Lender receives Rating
Confirmation and to which Lender reasonably consents.
"Approved Property Manager" means RANY Management Group, Inc. or
Reckson Management Group, Inc. or any other reputable management company having
at least five years' experience in the management of commercial office
properties in New York City and with respect to which Lender receives Rating
Confirmation, in each case unless and until Lender requests the termination of
such management company during the continuance of an Event of Default pursuant
to Section 5.11(d).
"Assignment" has the meaning set forth in Section 9.7(b).
"Assignment of Contracts" means the collateral assignment of contracts,
licenses, permits, agreements, warranties and approvals executed by Borrower on
the date hereof, as the same may from time to time be modified or replaced in
accordance herewith.
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"Assignment of Letters of Credit" means the assignment to Lender of
Borrower's interest in the letters of credit delivered by Debevoise & Xxxxxxxx
and Xxxxxxx, Xxxx & Xxxxx, in the form executed by Borrower on the date hereof,
as the same may from time to time be modified or replaced in accordance
herewith, together with the related transfer agreements and the written consents
of the issuer of such letters of credit.
"Assignment of Rents and Leases" means the assignment of rents and
leases executed by Borrower on the date hereof, as the same may from time to
time be modified or replaced in accordance herewith.
"Assumption" has the meaning set forth in Section 2.2.
"Bankruptcy Code" has the meaning set forth in Section 7.1(d).
"Borrower" has the meaning provided in the first paragraph of this
agreement.
"Budgeted Capital Expenditures" means, with respect to any calendar
month, (i) an amount equal to the Capital Expenditures for such calendar month
in the Approved Annual Budget, or (ii) such greater amount as shall equal
Borrower's actual Capital Expenditures for such month, provided that during the
continuance of a Cash Trap Period such greater amount may in no event exceed
105% of the amount specified in clause (i) without the prior written consent of
Lender, not to be unreasonably withheld or delayed.
"Budgeted Operating Expenditures" means, with respect to any calendar
month, (i) an amount equal to the operating expenditures for such calendar month
in the Annual Budget or Approved Annual Budget, or (ii) such greater amount as
shall equal Borrower's actual operating expenditures for such month, provided
that during the continuance of a Cash Trap Period such greater amount may in no
event exceed 105% of the amount specified in clause (i) without the prior
written consent of Lender, not to be unreasonably withheld or delayed.
"Business Day" means any day other than (i) a Saturday and a Sunday and
(ii) a day on which federally insured depository institutions in the State of
New York or the states that Lender has notified Borrower in writing for purposes
of this definition are the states in which the offices of Lender, its trustee,
its Servicer or its Servicer's collection account are located, are authorized or
obligated by law, governmental decree or executive order to be closed.
"Capital Expenditure" means hard and soft costs incurred by Borrower
with respect to Alterations, replacements and capital repairs made to the
Property (including repairs to, and replacements of, structural components,
roofs, building systems, parking garages and parking lots), in each case to the
extent capitalized in accordance with GAAP.
"Cash Management Account" has the meaning set forth in Section 3.1(a).
"Cash Management Agreement" means a cash management agreement in
substantially the form of Exhibit B, as the same may from time to time be
modified or replaced in accordance herewith.
"Cash Management Bank" means The Chase Manhattan Bank or any other
depository institution selected by Borrower or Lender, as the case may be, from
time to time pursuant to Section 3.1(c) in which Eligible Accounts may be
maintained.
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"Cash Trap Period" means any period from (i) receipt by Lender of
Borrower's quarterly financial statement with respect to any Fiscal Quarter
(commencing with the Fiscal Quarter ending on September 30, 2001) which was the
last Fiscal Quarter of any Test Period for which DSCR is less than 1.1, to (ii)
the receipt by Lender of Borrower's quarterly financial statement evidencing the
conclusion of any two consecutive Fiscal Quarters thereafter each of which is
the last quarter of a Test Period for which DSCR is at least 1.2. If Borrower
does not deliver its quarterly financial statements with respect to any Fiscal
Quarter within the time period set forth in Section 5.13 and such failure is not
cured within five Business Days after notice from Lender thereof, DSCR for such
Fiscal Quarter shall be deemed to have been less than 1.1 until quarterly
financial statements demonstrating a greater DSCR have been delivered. Lender
shall deliver to Borrower written notice of the commencement of any Cash Trap
Period.
"Casualty" means a fire, explosion, flood, collapse or other casualty
affecting all or any portion of the Property.
"Certificates" means, collectively, any senior and/or subordinate
notes, debentures or pass-through certificates, or other evidence of
indebtedness, or debt or equity securities, or any combination of the foregoing,
representing a direct or beneficial interest, in whole or in part, in the Loan.
"Change of Control" means any event or series of events following which
one or more Qualified Equityholders do not collectively Control Borrower.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Collateral" means all assets pledged or assigned to Lender under the
Loan Documents including, without limitation, the Property, the Revenues and all
other tangible and intangible property (including any Defeasance Collateral) in
respect of which Lender is granted a Lien under the Loan Documents, and all
proceeds thereof. "Collateral" shall not include bank or other investment
accounts of Borrower (other than Collateral Accounts and amounts required to be
deposited into Collateral Accounts), claims against Borrower's members in
respect of capital contributions or other amounts to be funded by a member
pursuant to Borrower's operating agreement or amounts which Borrower is entitled
to receive from the Collateral Accounts pursuant to this Agreement.
"Collateral Accounts" means, collectively, the Cash Management Account,
the Low DSCR Reserve Account, the Tax, Insurance and Ground Rents Escrow
Account, the TI/LC Reserve Account, the Loss Proceeds Account, the Replacement
Reserve Account, the Unfunded Obligations Account and the D&P Debt Service
Reserve Account.
"Commercially Reasonable" means, with respect to the terms and
conditions of any proposed Lease, commercially reasonable when compared with
terms and conditions of Leases in similarly situated properties in similar
contexts at the time in question, taking into account, inter alia, the size,
creditworthiness and bargaining power of a prospective Tenant and, in the case
of a modification or renewal of an existing Lease, the terms and conditions of
such Lease.
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"Condemnation" means a taking or voluntary conveyance of all or part of
the Property or any interest therein or right accruing thereto or use thereof,
as the result of, or in settlement of, any condemnation or other eminent domain
proceeding by any Governmental Authority.
"Contingent Obligation" means any obligation of Borrower directly or
indirectly guaranteeing any Debt of any other Person in any manner.
"Control" of any entity means the ownership, directly or indirectly, of
51% or more of the equity interests in, and rights to distribution from, such
entity and the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such entity (although the
same may be subject to the approval of other partners, members or other
persons), whether through the ability to exercise voting power, by contract or
otherwise ("Controlled" has the meaning correlative thereto). For purposes of
determining the percentage of the equity interests in and rights to
distributions from Borrower owned by Sponsor (or its successors and assigns with
respect to its interest in Borrower, or any Person Controlling such Person) in
Borrower, the ownership interest and rights of 919 Member LLC, its successors
and assigns shall be credited to Sponsor (and such successors and assigns) so
long as the rights to distributions of, and the lack of control exercisable by,
919 Member LLC, its successors and assigns in respect of Borrower continue, in
all material respects, no greater than on the date hereof.
"Cooperation Agreement" means that certain Mortgage Loan Cooperation
Agreement, dated as of the date hereof, among Borrower, Lender and Sponsor, as
the same may from time to time be modified or replaced in accordance herewith.
"Damages" to a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including reasonable attorneys' fees whether or not suit is
brought), settlement costs and disbursements imposed on, incurred by or asserted
against such party.
"D&P Debt Service Reserve Amount" means $3,958,694.24.
"Debt" means, with respect to any Person, without duplication:
(i) all indebtedness of such Person to any other party, including
indebtedness for borrowed money or for the deferred purchase price of
property or services;
(ii) all letters of credit issued for the account of such Person and
all unreimbursed amounts drawn thereunder;
(iii) all indebtedness secured by a Lien on any property owned by such
Person (whether or not such indebtedness has been assumed) except
obligations for impositions which are not yet due and payable;
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(iv) all Contingent Obligations of such Person;
(v) all payment obligations of such Person under any interest rate
protection agreement (including any interest rate swaps, floors,
collars or similar agreements) and similar agreements; and
(vi) all contractual indemnity obligations of such Person other
than those entered into in the ordinary course of business in
connection with the ownership, improvement, repair, management,
operation or leasing of the Property.
"D&P Debt Service Reserve Account" has the meaning set forth in Section
3.10(a).
"Default" means the occurrence and uncured continuance 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, with respect to any Note, the greater of (x) 3%
per annum in excess of the interest rate otherwise applicable to such Note
hereunder and (y) 1% per annum in excess of the Prime Rate from time to time
(but if there is more than one Note, in no event shall the weighted average
Default Rate on all of the Notes exceed the Default Rate as would have existed
if the original Note had not been replaced).
"Defeasance Borrower" has the meaning set forth in Section 2.1(b).
"Defeasance Collateral" means direct, non-callable obligations of the
United States of America.
"Defeasance Pledge Agreement" has the meaning set forth in Section
2.1(a)(iii).
"Defease" means to deliver Defeasance Collateral as substitute
Collateral for the Loan in accordance with Section 2.1; and the terms "Defeased"
and "Defeasance" have meanings correlative to the foregoing.
"Depositary" means an insurance company, bank or trust company under
the supervision of the Insurance or Banking Department of the State of New York
or the Comptroller of the Currency of the United States, or an FDIC insured bank
or savings institution, having a capital and surplus (or its equivalent) of at
least $50,000,000.
"DSCR" means, with respect to any Test Period, the quotient of (i) two
times the Net Operating Income for such Test Period, divided by (ii) the product
of (x) the aggregate outstanding principal balance of the Loan as of the last
day of such period, times (y) 9.5%.
"Easement Areas" has the meaning set forth in Section 4.27.
"Eligible Account" means (i) a segregated account maintained with a
federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution and, in the case of the
Loss Proceeds Account, complies with the definition of Depositary, or (ii) a
segregated trust account or accounts maintained with the corporate trust
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department of a federal depository institution or state-chartered depository
institution subject to regulations regarding fiduciary funds on deposit under,
or similar to, Title 12 of the Code of Federal Regulations Section 9.10(b)
which, in either case, has corporate trust powers, acting in its fiduciary
capacity and, in the case of the Loss Proceeds Account, complies with the
definition of Depositary.
"Eligible Institution" means an institution (i) whose commercial paper,
short-term debt obligations or other short-term deposits are rated at least X-0,
Xxxxx-0 or F-1, as applicable, by each of the Rating Agencies and whose
long-term senior unsecured debt obligations are rated at least AA- or Aa3, as
applicable, by each of the Rating Agencies, and whose deposits are insured by
the FDIC or (ii) with respect to which Lender shall have received Rating
Confirmation.
"Engineering Report" means a structural and seismic engineering report
or reports with respect to the Property prepared by such independent engineer as
shall be approved by Lender and delivered to Lender in connection with the Loan,
and any amendments or supplements thereto delivered to Lender.
"Environmental Auditor" means ATC Group Services Inc. (dba ATC
Associates Inc.) or any other independent environmental auditor approved by
Lender.
"Environmental Claim" means any written notice, claim, proceeding,
investigation or demand by any Person or Governmental Authority alleging or
asserting liability with respect to Borrower or the Property arising out of,
based on or resulting from (i) the alleged presence, Use or Release of any
Hazardous Substance, (ii) any alleged violation of any Environmental Law, or
(iii) any alleged injury or threat of injury to property, health or safety or to
the environment caused by Hazardous Substances.
"Environmental Indemnity" the environmental indemnity agreement
executed by Borrower and the Sponsor on the date hereof, as the same may from
time to time be modified or replaced in accordance herewith.
"Environmental Laws" means any and all present and future federal,
state or local laws, statutes, ordinances or regulations, any judicial or
administrative orders, decrees or judgments thereunder, and any permits,
approvals, licenses, registrations, filings and authorizations, in each case as
now or hereafter in effect, relating to the pollution, protection or cleanup of
the environment, the impact of Hazardous Substances on property, health or
safety, or the Use or Release of Hazardous Substances.
"Environmental Reports" means a "Phase I Environmental Site Assessment"
as referred to in the ASTM Standards on Environmental Site Assessments for
Commercial Real Estate, E 1527-94 (and, if necessary, a "Phase II Environmental
Site Assessment"), prepared by an Environmental Auditor and delivered to Lender
and any amendments or supplements thereto delivered to Lender, and shall also
include any other environmental reports delivered to Lender pursuant to this
Agreement and the Environmental Indemnity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
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"ERISA Affiliate," at any time, means each trade or business (whether
or not incorporated) that would, at the time, be treated together with Borrower
as a single employer under Title IV or Section 302 of ERISA or Section 412 of
the Code.
"ERISA Event" means (i) the occurrence of a "reportable event"
described in Section 4043 of ERISA (other than a "reportable event" not subject
to the provision for 30-day notice to the PBGC) or (ii) the provision or filing
of a notice of intent to terminate a Plan other than in a standard termination
within the meaning of Section 4041 of ERISA or the treatment of a Plan amendment
as a distress termination under Section 4041 of ERISA, or (iii) the institution
of proceedings to terminate a Plan by the PBGC, or (iv) the existence of any
"accumulated funding deficiency" or "liquidity shortfall" (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, or (v)
the filing of an application pursuant to Section 412(e) of the Code or Section
304 of ERISA for any extension of an amortization period, or (vi) the occurrence
or existence of any other event or condition which might reasonably be expected
to constitute grounds for the termination of, or the appointment of a trustee to
administer, any Plan other than in a standard termination within the meaning of
Section 4041 of ERISA or the imposition of any lien on the assets of the
Borrower under ERISA, including as a result of the operation of Section 4069 of
ERISA.
"Escrow Period" means any period from (i) receipt by Lender of
Borrower's quarterly financial statement with respect to any Fiscal Quarter
(commencing with the Fiscal Quarter ending on September 30, 2001) which was the
last Fiscal Quarter of any Test Period for which DSCR is less than 1.2, to (ii)
the receipt by Lender of Borrower's quarterly financial statement evidencing the
conclusion of any two consecutive Fiscal Quarters thereafter each of which is
the last quarter of a Test Period for which DSCR is at least 1.2. If Borrower
does not deliver its quarterly financial statements with respect to any Fiscal
Quarter within the time period set forth in Section 5.13 and such failure is not
cured within five Business Days of notice from Lender, DSCR for such Fiscal
Quarter shall be deemed to have been less than 1.1 until quarterly financial
statements demonstrating a greater DSCR have been delivered. Lender shall
deliver to Borrower written notice of the commencement of any Escrow Period.
"Event of Default" has the meaning set forth in Section 7.1.
"Exception Report" means the report prepared by Borrower and attached
hereto as Schedule B, setting forth any exceptions to the representations and
warranties set forth in Article IV.
"Excusable Delay" means a delay due to acts of god, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion,
fire, casualty, strikes, work stoppages, shortages of labor or materials or
similar causes beyond the reasonable control of Borrower, but lack of funds in
and of itself shall not be deemed a cause beyond the control of Borrower.
"Fiscal Quarter" means the three-month period ending on March 31, June
30, September 30 and December 31 of each year, or such other fiscal quarter of
Borrower as Borrower may select from time to time with the prior consent of
Lender, such consent not to be unreasonably withheld.
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"Fiscal Year" means the 12-month period ending on December 31 of each
year, or such other fiscal year of Borrower as Borrower may select from time to
time with the prior consent of Lender, not to be unreasonably withheld.
"Fitch" means Fitch, Inc. and its successors.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
"Governmental Authority" means any federal, state, county or municipal
government, any bureau, department, agency or political subdivision thereof and
any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government (including
any court).
"Ground Lease" means that certain ground lease, dated August 28, 1967,
between Xxxxx X. Xxxxxx and Xxxxx Xxxxxxxx, as Trustees for the benefit of Xxxxx
X. Xxxxxx under the Last Will and Testament of Xxxxxx X. Xxxxxx, deceased; Xxxxx
X. Xxxxxx as trustee for the benefit of Xxxxxxx Xxxx Xxxxxx under the Last Will
and Testament of Xxxxxx X. Xxxxxx, deceased; Xxxxx X. Xxxxxx as trustee for the
benefit of Xxxxxx Xxxxxx Xxxxxx, under the Last Will and Testament of Xxxxxx X.
Xxxxxx, deceased; and Xxxx Xxxxx and Xxxxxxx X. Xxxxx as executors under the
Last Will and Testament of Xxxxxx Xxxxx, deceased, as lessors, and Ralno Corp.,
as lessee, as amended.
"Ground Leased Parcel" means the portion of the Property that is
subject to the Ground Lease.
"Ground Rent" means rent payable by Borrower pursuant to the Ground
Lease.
"Hazardous Substance" means petroleum and petroleum products, including
gasoline, diesel fuel and oil; explosives and flammable materials; radioactive
materials; polychlorinated biphenyls and compounds containing them; lead and
lead-based paint; asbestos or asbestos-containing materials in any form that is
or could become friable; underground or above-ground storage tanks, whether
empty or containing any substance; any substance the presence of which on the
Property is prohibited by any federal, state or local authority; any substance
that requires special handling; and any other material or substance now or in
the future defined as a "hazardous substance," "hazardous material," "hazardous
waste," "extremely hazardous waste," "toxic substance," "toxic pollutant,"
"contaminant," "pollutant" or other words of similar import within the meaning
of any Environmental Law, or that may have a negative impact on human health or
the environment, other than substances legally and customarily used by office
tenants in the ordinary course of business or otherwise ordinarily found in
class-A office buildings in Manhattan.
"Indebtedness" means the Principal Indebtedness, together with interest
and all other monetary obligations and liabilities of Borrower under the Loan
Documents, including all Transaction Costs and other amounts due to Lender
pursuant hereto, under the Notes or in accordance with any of the other Loan
Documents, Yield Maintenance Premiums (if applicable) and all other amounts,
sums and expenses reimbursable by Borrower to Lender hereunder or pursuant to
the Notes or any of the other Loan Documents, in each case only to the extent
then due or outstanding and unpaid.
9
"Indemnified Parties" has the meaning set forth in Section 5.18.
"Independent Director" of any limited liability company or corporation
means an individual who is duly appointed as a member of the board of directors
or board of managers thereof (or otherwise as a special member, special manager
or similar position) and who is not, and has never been, and will not while
serving as Independent Director, be any of the following:
(i) a member, partner, equityholder, manager, director, officer or
employee of Borrower or its members or Affiliates (other than as an
independent director or manager or similar position of an Affiliate of
Borrower or its members in order for such entity to be a single purpose
bankruptcy remote entity);
(ii) a creditor, supplier or service provider (including provider of
professional services) to Borrower or any of its members or Affiliates
(other than a company that provides professional independent directors and
which also provides other services to Borrower or any of its members or
Affiliates in the ordinary course of business);
(iii) a member of the immediate family of any such member, partner,
equityholder, manager, director, officer, employee, creditor, supplier or
service provider; or
(iv) a Person that controls (whether directly, indirectly or otherwise)
any of (i), (ii) or (iii) above.
"Initial Interest Rate" means 6.867% per annum.
"Initial Payment Date" means August 31, 2001.
"Insufficiency" means, at any time with respect to any Plan, the
amount, if any, of such Plan's unfunded benefit liabilities within the meaning
of Section 4001(a)(18) of ERISA.
"Insurance Requirements" means, collectively, (i) all material terms of
any insurance policy required pursuant to this Agreement and (ii) all material
regulations and then-current standards applicable to or affecting the Property
or any portion thereof or any use or condition thereof, which may, at any time,
be recommended by the board of fire underwriters, if any, having jurisdiction
over the Property, or any other body exercising similar functions.
"Interest Accrual Period" means, in connection with the calculation of
interest accrued with respect to any specified Payment Date, the calendar month
immediately preceding such Payment Date (or, if such Payment Date does not fall
on the first day of a month, the calendar month in which such Payment Date
falls); provided, however, that the first Interest Accrual Period shall commence
on and include the Closing Date.
"Interest Rate" means (i) with respect to the initial Note, the Initial
Interest Rate, and (ii) with respect to each Note resulting from the bifurcation
of the initial Note into multiple Notes pursuant to Section 1.1(c), the per
annum interest rate of such Note as determined by Lender in accordance with such
Section.
10
"Investment Management Agreement" means an investment management or
advisory agreement with an Approved Asset Manager (or other arrangement which
provide an Approved Asset Manager with substantially equivalent management
authority).
"Lease" means any lease, sublease, license, letting, concession,
occupancy agreement or other agreement (whether written or oral and whether now
or hereafter in effect) to which Borrower is a party as lessor or sublessor,
existing as of the date hereof or hereafter entered into by Borrower as lessor
or sublessor, in each case pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property, and every modification or amendment of such lease or sublease, and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.
"Leasing Commissions" means leasing commissions required to be paid by
Borrower in connection with the leasing of space to Tenants at the Property
pursuant to existing Leases or Leases hereafter entered into by Borrower in
accordance herewith and payable in accordance with third-party/arm's-length
brokerage agreements or the Approved Management Agreement.
"Legal Requirements" means:
(i) all governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
(including Environmental Laws) affecting either Borrower or the Property or
any portion thereof or the construction, ownership, use, alteration or
operation thereof, or any portion thereof (whether now or hereafter enacted
and in force);
(ii) all permits, licenses and authorizations and regulations relating
thereto; and
(iii) all covenants, conditions and restrictions contained in any
instruments at any time in force (whether or not involving Governmental
Authorities) affecting the Property or any portion thereof which, in the
case of this clause (iii), require repairs, modifications or alterations in
or to the Property or any portion thereof, or in any material way limit or
restrict the existing use and enjoyment thereof.
"Lender" has the meaning set forth in the first paragraph of this
Agreement and in Section 9.7.
"Lien" means (A) any mortgage, lien (statutory or other), pledge,
hypothecation, assignment, security interest, or any other encumbrance or charge
on or affecting any Collateral or any portion thereof, or any interest therein
(including, without limitation, any conditional sale or other title retention
agreement, any sale-leaseback, any financing lease or similar transaction having
substantially the same economic effect as any of the foregoing, the effective
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable
11
law of any other applicable jurisdiction, domestic or foreign, and mechanics',
materialmen's and other similar liens and encumbrances) and (B) any restriction
on transfer, option to purchase, right of first refusal or right of first offer,
in each case with respect to all or any portion of the Property, if such
restriction, option or right is senior to the Lien of the Mortgage.
"Loan" has the meaning set forth in Section 1.1(a).
"Loan Amount" means $250 million.
"Loan Documents" means this Agreement, the Notes, the Mortgage (and
related financing statements), the Assignment of Rents and Leases, the
Assignment of Contracts, the Environmental Indemnity, the Subordination of
Property Management Agreement, the Cash Management Agreement, the Cooperation
Agreement, any Qualified Letter of Credit, any Qualified Guarantee, any
Defeasance Pledge Agreement and all other agreements, instruments, certificates
and documents executed by Borrower or Sponsor and necessary to effectuate the
granting to Lender of first-priority Liens on the Collateral or otherwise in
satisfaction of the requirements of this Agreement or the other documents listed
above, as all of the aforesaid may be modified or replaced from time to time in
accordance herewith.
"Lockout Period" means the period from the Closing Date to but
excluding the first Payment Date following the earlier to occur of (i) the third
anniversary of the Closing Date and (ii) the second anniversary of the
Securitization.
"Loss Proceeds" means amounts, awards or payments payable to Borrower
or Lender in respect of all or any portion of the Property in connection with a
Casualty or Condemnation thereof (after the deduction therefrom and payment to
Borrower and Lender, respectively, of any and all reasonable expenses incurred
by Borrower and Lender in the recovery thereof, including all reasonable
attorneys' fees and disbursements, the reasonable fees of insurance experts and
adjusters and the reasonable costs incurred in any litigation or arbitration
with respect to such Casualty or Condemnation).
"Loss Proceeds Account" has the meaning set forth in Section 3.8.
"Low DSCR Reserve Account" has the meaning set forth in Section 3.3(a).
"Major Lease" means any Lease at the Property which (i) covers more
than 65,000 rentable square feet or contributes more than 5% of the base
contract rental revenue of the Property during the first 12-month period after
the expiration of any free or reduced rent period, or (ii) when aggregated with
all other leases at the Property with the same Tenant, and assuming the exercise
of all expansion rights and all preferential rights to lease additional space
contained in such lease, is expected to contribute more than 7.5% of the base
contract rental revenue of the Property during the first 12-month period after
the expiration of any free or reduced rent period or to cover more than 100,000
rentable square feet (except that such thresholds shall be reduced to 5% of the
base contract rental revenue of the Property and 65,000 rentable square feet
during the continuance of an Escrow Period or Cash Trap Period), or (iii)
contains an option or preferential right to purchase any portion of the
Property, or (iv) is with an Affiliate of Borrower as Tenant. Notwithstanding
the foregoing, a new Lease with a Tenant that is one of the six largest Tenants
in the Property (by square footage) on the Closing Date will not
12
itself constitute a Major Lease, so long as all such new Leases with such Tenant
which are not otherwise consented to by Lender in writing or required to be
entered into by Borrower pursuant to the Lease existing on the Closing Date (or
any amendment consented to by Lender) cover less than 65,000 square feet in the
aggregate.
"Material Adverse Effect" means a material adverse effect upon (i) the
ability of Borrower to perform, or of Lender to enforce, any material provision
of any Loan Document, or (ii) the value, use or enjoyment of the Property or the
operation thereof.
"Material Agreements" means each contract and agreement (other than
Leases, Loan Documents and Permitted Encumbrances) relating to the ownership,
management, development, use, operation, leasing, maintenance, repair or
improvement of the Property, or otherwise imposing obligations on Borrower,
under which Borrower would have the obligation to pay more than $250,000 per
annum (or, with respect to any contract or agreement which cannot be terminated
by Borrower without cause upon 90 days' notice or less, $50,000).
"Material Alteration" means any Alteration to be performed by or on
behalf of Borrower at the Property (other than an Alteration the cost of which a
Tenant is obligated to repay or reimburse Borrower and which Borrower reasonably
believes will be so reimbursed) which (a) is reasonably likely to have a
Material Adverse Effect, (b) is reasonably expected to cost in excess of
$7,000,000, as determined by an independent architect, or (c) is reasonably
expected to permit (or is reasonably likely to induce) Tenants whose Leases in
the aggregate cover more than 65,000 rentable square feet or contributed more
than 5% of the base contract rental revenue of the Property during the trailing
12-month period (after adjustment to eliminate the effect of free rent periods)
to terminate their Leases or receive a material abatement of rent.
"Maturity Date" means the Payment Date first following the 10th
anniversary of the Closing Date, or such earlier date as may result from
acceleration of the Loan in accordance with this Agreement.
"Monthly D&P Debt Service Reserve Amount" means $565,527.75.
"Monthly Low DSCR Replacement Reserve Amount" at any time means
$34,102.
"Monthly Low DSCR TI/LC Amount" at any time means $369,443.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Mortgage" means the mortgage of the Property executed by Borrower on
the date hereof, as the same may from time to time be modified or replaced in
accordance herewith.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Multiple Employer Plan" means an employee benefit plan
described in Section 4063 of ERISA.
13
"Net Operating Income" means the excess of Operating Income over
Operating Expenses.
"Nonconsolidation Opinion" means that certain opinion letter attached
hereto as Schedule C.
"Non-Material Lease Modifications" means any modification or amendment
of a Major Lease which in the good faith judgment of Borrower is Commercially
Reasonable and which:
(a) does not reduce the rent payable under such Major Lease in any
material respect;
(b) does not shorten the term of such Major Lease;
(c) does not extend the term of such Major Lease unless substantially
in accordance with a right contained in a Lease (except that an extension
that would not have been a Major Lease if it were a new Lease, taking into
account the provisions contained in the definition of "Major Lease"
regarding aggregation of Leases with the same Tenant, shall be a
Non-Material Lease Modification); and
(d) does not materially increase or decrease the space demised
thereunder (except that an increase in demised space that would not have
been a Major Lease if it were a new Lease, taking into account the
provisions contained in the definition of "Major Lease" regarding
aggregation of Leases with the same Tenant, shall be a Non-Material Lease
Modification).
"Note" means that certain promissory note made by Borrower to the order
of Lender as of the Closing Date to evidence the Loan, as such note may be
replaced by multiple Notes in accordance with Section 1.1(c) and as otherwise
modified, assigned (in whole or in part) and/or replaced from time to time in
accordance herewith.
"Officer's Certificate" means a certificate delivered to Lender which
is signed by an authorized officer of Borrower or its managing member and
certifies the information therein to the best of such officer's knowledge.
"Operating Expenses" means, for any period, all operating, renting,
administrative, management, legal and other ordinary expenses of Borrower during
such period, determined in accordance with GAAP; provided, however, that such
expenses shall not include (i) depreciation, amortization or other noncash items
(other than expenses that are due and payable but not yet paid), (ii) interest,
principal or any other sums due and owing with respect to the Loan (or, prior to
the Closing Date, any other mortgage debt or other loans or advances to
Borrower), (iii) franchise taxes, transfer taxes, income taxes or other taxes in
the nature of income taxes, (iv) Capital Expenditures, Tenant Improvements and
Leasing Commissions, (v) equity distributions, (vi) contributions to reserves,
(vii) expenses that would not be regarded as ordinary expenses under GAAP, and
(viii) Transaction Costs.
14
"Operating Income" means, for any period, all operating income of
Borrower from the Property during such period, determined in accordance with
GAAP (but without straight-lining of rents), other than (i) Loss Proceeds (but
Operating Income will include rental loss insurance proceeds to the extent
allocable to such period), (ii) any revenue attributable to a Lease to the
extent it is paid more than 30 days prior to the due date, (iii) any interest
income from any source, (iv) any repayments received from any third party of
principal loaned or advanced to such third party by Borrower, (v) any proceeds
resulting from the Transfer of all or any portion of the Property or the FF&E,
(vi) sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any government or governmental agency, and (vii)
any other extraordinary or non-recurring items. For purposes of calculating
DSCR, Operating Income shall include deemed rental payments from tenants under
leases in place on the date hereof during the continuance of any applicable free
rent period. In addition, if, upon the expiration of Xxxxxx Levin's current
Lease, the space currently occupied by Xxxxxx Xxxxx is leased to Xxxxxx Xxxxx or
Xxxxxxxxx & Xxxxxxxx and the related free rent period lasts for not longer than
six months, then for purposes of calculating DSCR, Operating Income shall also
include deemed rental payments from such Tenant during such free rent period.
"Origination Fee" means an irrevocable, non-refundable origination fee
paid by Borrower to Lender on the Closing Date in an amount equal to 0.75% of
the Loan Amount.
"Participation" has the meaning set forth in Section 9.7(b).
"Payment Date" means the first day of each month (or, if such first day
is not a Business Day, the first preceding Business Day).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Peg Balance" means (a) so long as Lender has not given the Cash
Management Bank notice of the continuance of an Escrow Period pursuant to clause
(b) below, zero (or such greater amount as the Cash Management Bank may
establish as the minimum balance in the Cash Management Account), and (b) during
the continuance of an Escrow Period, upon notice from Lender to the Cash
Management Bank of the continuance of an Escrow Period and the amount of the Peg
Balance, the aggregate amount of payments required to be made under Sections
3.2(b)(i) through (iv) on the next Payment Date, as specified in the most recent
notice from Lender to the Cash Management Bank pursuant to the Cash Management
Agreement.
"Permits" means all licenses, permits, variances and certificates used
in connection with the ownership, operation, use or occupancy of the Property
(including business licenses, state health department licenses, licenses to
conduct business and all such other permits, licenses and rights, obtained from
any Governmental Authority concerning ownership, operation, use or occupancy of
the Property).
"Permitted Debt" means:
(i) the Indebtedness;
15
(ii) Trade Payables not represented by a note, customarily paid by
Borrower within 60 days of incurrence and in fact not more than 60 days
outstanding, which are incurred in the ordinary course of Borrower's
ownership and operation of the Property, in amounts reasonable and
customary for similar properties and not exceeding an aggregate amount
equal to 2.0% of the Loan Amount;
(iii) financing leases and purchase money debt, in each case incurred
in the ordinary course of business in connection with the financing or
purchase of equipment and other personal property used on the Property,
provided that the aggregate capitalized amount of all such permitted
financing leases plus the aggregate amount of all such permitted purchase
money debt shall not exceed $1,000,000 at any time;
(iv) obligations of Borrower under the Ground Lease and the Leases;
(v) amounts secured by Permitted Encumbrances under clause (iv) of the
definition thereof; and
(vi) any other Debt which is hereafter approved in writing by Lender in
its sole discretion and with respect to which Lender shall have received
Rating Confirmation.
"Permitted Encumbrances" means:
(i) the Liens created by the Loan Documents;
(ii) all Liens and other matters specifically disclosed on Schedule B
of the Qualified Title Insurance Policies;
(iii) Liens, if any, for Taxes not yet delinquent;
(iv) mechanics', materialmen's or similar Liens, if any, and liens for
delinquent Taxes or impositions, in each case only if being contested in
good faith and by appropriate proceedings, provided that each of such Liens
is not in imminent danger of foreclosure and provided further that either
(a) each such Lien is released or discharged of record or fully insured
over by the title insurance company issuing the Qualified Title Insurance
Policies within 60 days of Borrower's receipt of notice of such Lien, or
(b) Borrower deposits with Lender, by the expiration of such 60-day period,
an amount equal to 125% of the dollar amount of such Lien or a bond in the
aforementioned amount from such surety, and upon such terms and conditions,
as shall be reasonably satisfactory to Lender, as security for the payment
or release of such Lien (such 60-day period shall be extended to 180 days
with respect to any such Lien that is caused by a Tenant and does not, in
the aggregate with any other such Liens, exceed $250,000, provided Borrower
exercises commercially reasonable efforts during such 180-day period to
cause such Tenant to remove such Lien or provide the bond described above);
(v) rights of existing and future Tenants and subtenants as tenants
only pursuant to written Leases existing on the date hereof or hereafter
entered into in conformity with the provisions of this Agreement;
16
(vi) subordination, nondisturbance and attornment agreements with
Tenants and subtenants;
(vii) Liens securing the Permitted Debt described in clause (iii) of
the definition thereof;
(viii) zoning restrictions, easements, rights-of-way, restrictions on
use of real property and other similar encumbrances incurred or entered
into in the ordinary course of business which do not have a Material
Adverse Effect; and
(ix) any other Liens which are hereafter approved in writing by Lender
in its sole discretion and with respect to which Lender shall have received
Rating Confirmation.
"Permitted Investments" means the following, subject to qualifications
hereinafter set forth:
(i) obligations of, or obligations guaranteed as to principal and
interest by, the U.S. government or any agency or instrumentality
thereof, when such obligations are backed by the full faith and credit
of the United States of America;
(ii) federal funds, unsecured certificates of deposit, time
deposits, banker's acceptances, and repurchase agreements having
maturities of not more than 365 days of any bank, the short-term debt
obligations of which are rated A-1+ (or the equivalent) by each of the
Rating Agencies;
(iii) investments that are fully insured by the Federal Deposit
Insurance Corp. (FDIC);
(iv) debt obligations that are rated AAA or higher (or the
equivalent) by each of the Rating Agencies;
(v) commercial paper rated A-1+ (or the equivalent) by each of the
Rating Agencies;
(vi) investment in money market funds rated AAAm or AAAm-G (or the
equivalent) by each of the Rating Agencies; and
(vii) such other investments as to which Lender shall have received
Rating Confirmation.
Notwithstanding the foregoing, "Permitted Investments" (i) shall exclude any
security with the Standard & Poor's "r" symbol (or any other Rating Agency's
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as well
as any mortgage-backed securities and any security of the type commonly known as
"strips"; (ii) shall not have maturities in excess of one year; (iii) shall be
limited to those instruments that have a predetermined fixed dollar of principal
due at maturity that cannot vary or change; and (iv) shall exclude any
investment where the right to receive principal and
17
interest derived from the underlying investment provide a yield to maturity in
excess of 120% of the yield to maturity at par of such underlying investment.
Interest may either be fixed or variable, and any variable interest must be tied
to a single interest rate index plus a single fixed spread (if any), and move
proportionately with that index. No investment shall be made which requires a
payment above par for an obligation if the obligation may be prepaid at the
option of the issuer thereof prior to its maturity. All investments shall mature
or be redeemable upon the option of the holder thereof on or prior to the
earlier of (x) three months from the date of their purchase or (y) the Business
Day preceding the day before the date such amounts are required to be applied
hereunder.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association or
Governmental Authority and any fiduciary acting in such capacity on behalf of
any of the foregoing.
"Plan" means an employee benefit plan, other than a Multiemployer Plan,
(i) which is maintained for employees of Borrower or any ERISA Affiliate and
which is subject to Title IV of ERISA or (ii) with respect to which Borrower or
any ERISA Affiliate could be subjected to any liability under Title IV of ERISA
(including Section 4069 of ERISA).
"Policies" has the meaning set forth in Section 5.15(b).
"Prime Rate" means the "prime rate" published in the "Money Rates"
section of The Wall Street Journal. If The Wall Street Journal ceases to publish
the "prime rate," then Lender shall select an equivalent publication that
publishes such "prime rate," and if such "prime rate" is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall reasonably select a comparable
interest rate index.
"Principal Indebtedness" means the principal balance of the Loan
outstanding from time to time.
"Property" means the fee and leasehold interests in the land and
improvements collectively known as 000 Xxxxx Xxxxxx in New York City, New York,
as such Property is more particularly described in Schedule A.
"Qualified Equityholder" means (i) Sponsor, ROP and/or RARC, (ii)
provided its qualification first becomes relevant prior to the first anniversary
of the Closing Date (but without limiting its ability to qualify under another
clause of this definition), the New York State Teachers' Retirement Fund, (iii)
any party with respect to which Rating Confirmation is received, and/or (iv) a
bank, saving and loan association, investment bank, insurance company, trust
company, commercial credit corporation, pension plan, pension fund or pension
advisory firm, mutual fund, government entity or plan, real estate company,
investment fund or an institution substantially similar to any of the foregoing,
provided in each case that at the time such Person's qualification first becomes
relevant, such Person (a) has total assets (in name or under management) in
excess of $3 billion, and (except with respect to a pension advisory firm or
similar fiduciary) capital/statutory surplus or shareholder's equity in excess
of $1.5 billion, and (b) controls more than 2.5 million square feet of office
space in major metropolitan areas
18
("control" by an entity for this purpose meaning such entity has primary
responsibility, directly or indirectly, to make or veto substantially all
material decisions with respect to the operation, management, disposition and
financing); provided, however, that if any pension fund, investment fund or
similar fund, or pension advisory firm or other fiduciary does not meet the
requirements of clause (b) above, but meets the requirements of clause (a)
above, it will still qualify as a "Qualified Equityholder" so long as the
Property, the owner thereof or its managing member or the equity investment of
such pension fund, investment fund, similar fund, pension advisory firm or other
fiduciary is the subject of an enforceable Investment Management Agreement with
an Approved Asset Manager (such party will no longer continue to qualify as a
"Qualified Equityholder" pursuant to the above proviso if upon the termination
of such Investment Management Agreement, it is not promptly replaced with
another enforceable Investment Management Agreement with an Approved Asset
Manager). Without limiting the generality of the foregoing, an entity which
qualifies as a Qualified Equityholder at the time it acquires more than a 40%
interest in Borrower shall be deemed to continue to qualify as an Qualified
Equityholder at any subsequent time at or after which, as a result of the
exercise of rights and remedies under the applicable organizational documents
(and related documents) which are of the type typically found in such documents
(such as buy-sell, squeeze-down, rights of first offer and rights of first
refusal), such entity holds a greater equity interest in Borrower.
"Qualified Guarantee" means a guarantee, in substantially in the form
of Exhibit D, from Reckson Operating Partnership, L.P. in favor of Lender,
provided that (i) such guarantee shall cease to be a Qualified Guarantee if at
any time Reckson Operating Partnership, L.P. fails to maintain credit ratings of
at least BBB- from each of S&P and Fitch and Baa3 from Xxxxx'x (after the
occurrence of a Securitization, the foregoing rating requirements shall apply
only with respect to the Rating Agencies that rate Certificates issued in the
Securitization), (ii) no more than 10% of the Principal Indebtedness may at any
time be guaranteed pursuant to Qualified Guarantees, and (iii) in order to
constitute a Qualified Guarantee, a guarantee delivered to Lender hereunder
shall be accompanied by a reasonably satisfactory opinion of counsel as to the
authorization, due execution and enforceability thereof.
"Qualified Letter of Credit" means a clean, irrevocable, unconditional,
transferable letter of credit in substantially the form of Exhibit C or
otherwise reasonably satisfactory to Lender with respect to which Borrower has
no reimbursement obligation, payable on sight draft only, in favor of Lender and
entitling Lender to draw thereon in New York, New York, issued by a domestic
bank or the U.S. agency or branch of a foreign bank the long-term unsecured debt
rating of which is not less than AA- (or the equivalent) from each of the Rating
Agencies. The following terms and conditions shall apply to each Qualified
Letter of Credit:
(i) Each such Qualified Letter of Credit shall expressly provide that
partial draws are permitted thereunder.
(ii) Each such Qualified Letter of Credit shall expressly provide that
it is freely transferable to any successor or assign of Lender.
(iii) Lender shall only be entitled to draw on any Qualified Letter of
Credit immediately and without further notice (a) upon the occurrence and
during the continuance of any Event of Default, (b) if Borrower shall not
have delivered to Lender,
19
no less than 30 days prior to the expiration date of such Qualified Letter
of Credit, if any (including any renewal or extension thereof), a renewal
or extension of such Qualified Letter of Credit or a replacement Qualified
Letter of Credit for a term of not less than one year (or through the date
that is 30 days beyond the Maturity Date, whichever is earlier), or
deposited into the applicable Collateral Account the amount that would have
been required to be contained therein had such Qualified Letter of Credit
not been delivered, or (c) if the credit rating or financial condition of
the issuing bank falls below the ratings set forth above in this definition
and Borrower fails to satisfy its obligations to replace same pursuant to
the applicable Section hereof..
"Qualified Successor Borrower" means a Single-Purpose Entity Controlled
by one or more Qualified Equityholders.
"Qualified Survey" means a current title survey of the Property,
certified to the title company issuing the Qualified Title Insurance Policies
and Lender and their respective successors and assigns, in form and substance
reasonably satisfactory to Lender.
"Qualified Title Insurance Policy" means a mortgagee's title insurance
policy in form and substance reasonably satisfactory to Lender.
"RARC" means Reckson Associates Realty Corp. and any successor by
merger or by acquisition of substantially all of its business and assets.
"Rating Agency" means (i) until a Securitization, S&P, Xxxxx'x and
Fitch, and (ii) from and after a Securitization, those of S&P, Xxxxx'x and Fitch
that rate the Certificates issued in the Securitization.
"Rating Confirmation" means, with respect to any proposed action,
confirmation in writing from each of the Rating Agencies that such action shall
not result, in and of itself, in a downgrade, withdrawal or qualification of any
rating then assigned to any outstanding Certificates; provided that if a
Securitization taking the form of a transaction rated by the Rating Agencies has
not occurred, then "Rating Confirmation" shall instead mean that the matter in
question shall be subject to the prior written approval of Lender in its
reasonable discretion (it being agreed that it shall be reasonable for Lender to
withhold consent if the proposed action is not in compliance with reasonably
prudent lending practices or the guidelines of the Rating Agencies). No Rating
Confirmation shall be regarded as having been received unless and until any
conditions imposed on its effectiveness by any Rating Agency shall have been
satisfied.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment (including the movement of Hazardous
Substances through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata).
"Rent Roll" has the meaning set forth in Section 4.14(a).
"Replacement Reserve Account" has the meaning set forth in Section 3.6.
20
"Revenues" means all rents, rent equivalents, moneys payable as damages
pursuant to a Lease or in lieu of rent or rent equivalents, royalties (including
all oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including security, utility and other deposits),
issues, profits, charges for services rendered, and other consideration of
whatever form or nature received by or paid to or for the account of or benefit
of Borrower from any and all sources including any obligations now existing or
hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant by Borrower of the right of the use and occupancy of
property or rendering of services by Borrower and proceeds, if any, from
business interruption or other loss of income insurance. "Revenues" shall not
include Loss Proceeds applied in accordance with Section 5.16 (other than the
proceeds of rental interruption insurance), interest income (other than interest
on amounts contained in the Collateral Accounts), equity contributions or other
amounts to be funded by a member pursuant to Borrower's operating agreement and
amounts which are received from the Collateral Accounts in accordance herewith
or are otherwise free of the Lien of the Loan Documents pursuant to the terms
hereof.
"ROP" means Reckson Operating Partnership L.P. and any successor by
merger or by acquisition of substantially all of its business and assets.
"S&P" means Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies, Inc., and its successors.
"Securitization" means a transaction in which all or any portion of the
Loan and the Loan Documents is deposited into one or more trusts which issue
Certificates to investors, or a similar transaction.
"Securitization Issuer" means the issuer of Certificates in a
Securitization.
"Service" means the Internal Revenue Service or any successor agency
thereto.
"Servicer" means the entity or entities appointed by Lender from time
to time to serve as servicer and/or special servicer of the Loan. If at any time
no entity shall be so appointed, the term "Servicer" shall be deemed to refer to
Lender.
"Single-Purpose Entity" means a Person which (a) was formed solely for
the purpose of acquiring, and owning and operating, the Property or, in the case
of a Single-Purpose Equityholder, holding an ownership interest in Borrower, (b)
has not and does not engage in any business unrelated to the Property or its
ownership interest in Borrower, (c) has not and does not have any assets other
than those related to its interest in the Property or Borrower, as the case may
be, and/or Defeasance Collateral, if applicable, and has not had any material
Debt other than Debt related to the Property, and will not have any Debt other
than Permitted Debt, (d) has maintained (in all respects material to the
conclusions in the Non-Consolidation Opinion) and will maintain books, records,
accounts, financial statements, stationery, invoices, checks or the like which
are separate and apart from those of any other Person (except that Borrower's or
the Single-Purpose Equityholder's financial position, assets, results of
operations and cash flows may be included in the consolidated financial
statements of an Affiliate of Borrower or such Single-Purpose Equityholder in
accordance with GAAP), (e) is subject to and complies with all
21
of the limitations on powers and separateness requirements set forth in the
organizational documentation of Borrower or the Single-Purpose Equityholder, as
the case may be, as of the Closing Date, (f) holds itself out as being a Person
separate and apart from each other Person, conducts its business in its own name
(except for services rendered under a management agreement with an Affiliate, so
long as the manager, or equivalent thereof, under such management agreement
holds itself out as an agent of Borrower), exercises reasonable efforts to
correct any known misunderstanding actually known to it regarding its separate
identity, maintains an arm's length relationship with its affiliates (except
with respect to the Approved Management Agreement) and, in each case, has done
so in all respects material to the conclusions reached in the Nonconsolidation
Opinion, (g) has paid and will pay its own liabilities out of its own funds and
reasonably allocates any overhead that is shared with an Affiliate, including,
but not limited to, paying for shared office space and services performed by any
officer or employee of an Affiliate, (h) maintains (or contracts with an
Affiliate or other party to provide) a sufficient number of employees in light
of its contemplated business operations, (i) conducts its business so that the
assumptions made with respect to it in the Nonconsolidation Opinion (which is
attached hereto as Schedule C), or any nonconsolidation opinion hereafter
delivered pursuant hereto, if applicable, shall at all times be true and correct
in all material respects, (j) in the case of a limited partnership, has observed
and observes all applicable limited partnership formalities in all material
respects, (k) in the case of a limited liability company, has observed and
observes all applicable limited liability company formalities in all material
respects, (l) has not and does not commingle its assets with those of any other
Person, (m) has not and does not guarantee or become obligated for the debts of
any other Person or hold out its credit as being available to satisfy the
obligations or securities of others, (n) has not and does not acquire
obligations or securities of its members, (o) has not and will not pledge its
assets for the benefit of any other Person (other than the Loan and previous
mortgage financings that have been repaid in full), and will not make any loans
or advances to any Person except for advances made to Tenants in accordance with
the Leases, (p) has maintained and will maintain adequate capital in light of
its contemplated business operations, and (q) (I) has at all times from and
after the date hereof while the Loan is outstanding (unless and until the Loan
is repaid or Borrower is otherwise released from its obligations hereunder in
accordance herewith) either (A) two Independent Directors on its board of
managers or board of directors or as a special manager or member (or similar
position) for the purposes set forth below, or (B) a Single-Purpose Equityholder
that has two Independent Directors on its board of managers or board of
directors or as a special manager or member (or similar position) for the
purposes set forth below, and (II) has an operating agreement or a limited
partnership agreement, as the case may be, which provides that for so long as
the Loan is outstanding (unless and until the Loan is repaid or Borrower is
otherwise released from its obligations hereunder in accordance herewith), the
limited liability company or the limited partnership, as the case may be, shall
not take or consent to any of the following actions except to the extent
expressly permitted in this Agreement and the other Loan Documents:
(i) the dissolution, liquidation, consolidation, merger or sale of all
or substantially all of its assets and, in the case of a Single-Purpose
Equityholder, the assets of Borrower;
(ii) engaging in any business unrelated to the Property or its
ownership interest in Borrower;
22
(iii) the filing, or consent to the filing, of a bankruptcy or
insolvency petition, any general assignment for the benefit of creditors or
the institution of any other insolvency proceeding, or the seeking or
consenting to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for Borrower or a
substantial portion of its properties, in respect of it and, in the case of
a Single-Purpose Equityholder, Borrower, without the approval of both of
its Independent Managers (or the approval of both of the Independent
Managers of the Single-Purpose Equityholder); and
(iv) the amendment or modification of any provision of its
organizational documents and, in the case of a Single-Purpose Equityholder,
the organizational documents of Borrower, relating to qualification as a
"Single-Purpose Entity".
"Single-Purpose Equityholder" means (i) with respect to a limited
partnership, a general partner of such limited partnership that is a
Single-Purpose Entity, and (ii) with respect to a limited liability company, a
member of such limited liability company that is a Single-Purpose Entity.
"Sponsor" means Metropolitan Operating Partnership, L.P. and any
successor by merger or by acquisition of substantially all of its business and
assets.
"Subordination of Property Management Agreement" means the
subordination of property management agreement executed by Borrower and the
Approved Property Manager on the date hereof, as the same may from time to time
be modified or replaced in accordance herewith.
"Tax, Insurance and Ground Rents Escrow Account" has the meaning set
forth in Section 3.4(a).
"Taxes" means all real estate and personal property taxes, assessments,
fees, taxes on rents or rentals, water rates or sewer rents, facilities and
other governmental, municipal and utility district charges or other similar
taxes or assessments now or hereafter levied or assessed or imposed against the
Property or Borrower with respect to the Property or rents therefrom or which
may become Liens upon the Property, without deduction for any amounts
reimbursable to Borrower by third parties.
"Tenant" means any Person liable by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) pursuant to a
Lease.
"Tenant Improvements" means, collectively, (i) tenant improvements to
be undertaken for any Tenant which are required to be completed by or on behalf
of Borrower pursuant to the terms of such Tenant's Lease, (ii) allowances to be
paid to a Tenant pursuant to such Tenant's Lease in connection with such
Tenant's construction of its tenant improvements (or equipping of its space) at
the Property, and (iii) other inducements to be paid to a Tenant in connection
with the leasing of its space.
"Tenant Notice" has the meaning set forth in Section 3.1(b).
23
"Termination Fee" has the meaning set forth in Section 3.5(d).
"Test Period" means each six-month period ending on the last day of a
Fiscal Quarter, commencing with the six-month period ending September 30, 2001.
"TI/LC Reserve Account" has the meaning set forth in Section 3.5.
"Trade Payables" means unsecured amounts payable by or on behalf of
Borrower for or in respect of the operation of the Property in the ordinary
course and which would under GAAP be regarded as ordinary expenses, including
amounts payable to suppliers, vendors, contractors, mechanics, materialmen or
other Persons providing property or services to the Property or Borrower.
"Transaction" means, collectively, the transaction contemplated by the
Loan Documents.
"Transaction Costs" means all reasonable costs and expenses incurred by
Lender and/or Borrower in connection with the origination of the Loan with
respect to which reasonably detailed invoices have been provided to Borrower
(but expressly excluding any costs and expenses of the Securitization),
including third-party origination costs, legal fees and disbursements,
accounting fees (excluding costs of agreed-upon procedures), third-party report
costs, recording fees, title insurance premiums, lien searches, survey costs and
the costs and expenses described in Section 9.17. Invoices shall be provided to
Borrower at least two Business Days prior to the Closing Date.
"Transfer" means the pledge, sale or other whole or partial conveyance
of all or any portion of the Property or any direct or indirect interest therein
to a third party (other than pledges, sales and conveyances of direct or
indirect equity interests in Borrower that are not otherwise prohibited
hereunder and the imposition of zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances incurred or
entered into in the ordinary course of business which do not have a Material
Adverse Effect), including granting of any purchase options, rights of first
refusal, rights of first offer or similar rights to purchase all or any portion
of the Property (other than such rights as have heretofore been granted and are
listed in the Exception Report and/or the Rent Rolls); provided that the
conveyance of a space lease at the Property in accordance herewith shall not
constitute a Transfer.
"Treasury Constant Yield" means the arithmetic mean of the rates
published as "Treasury Constant Maturities" as of 5:00 p.m., New York time, for
the five Business Days preceding the date on which acceleration has been
declared, as shown on the USD screen of the Telerate service, or if such service
is not available, the Bloomberg service, or if neither the Telerate nor the
Bloomberg service is available, under Section 504 in the weekly statistical
release designated H.15(519) (or any successor publication) published by the
Board of Governors of the Federal Reserve System, for "On the Run" U.S. Treasury
obligations corresponding to the scheduled Maturity Date. If no such maturity
shall so exactly correspond, yields for the two most closely corresponding
published maturities shall be calculated pursuant to the foregoing sentence and
the Treasury Constant Yield shall be interpolated or extrapolated (as
applicable) from such yields on a straight-line basis (rounding, in the case of
relevant periods, to the nearest month).
24
"Underfunding" means, with respect to any Plan, the excess, if any, of
the "projected benefit obligations" (within the meaning of Statement of
Financial Accounting Standards 87) under such Plan (determined using the
actuarial assumption used for financial statement disclosure in the most recent
financial statements of the Plan sponsor) over the fair market value of the
assets held under the Plan.
"Unfunded Obligations" means the items described in Schedule D.
"Unfunded Obligations Account" has the meaning set forth in Section
3.9(a).
"Unfunded Obligations Amount" means $11,553,773.60.
"Use" means, with respect to any Hazardous Substance, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Substance or transportation of such Hazardous
Substance.
"U.S. Person" means a United States person within the meaning of
Section 7701(a)(30) of the Code.
"U.S. Tax" means any present or future tax, assessment or other charge
or levy imposed by or on behalf of the United States of America or any taxing
authority thereof.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
"Yield Maintenance Premium" shall mean, with respect to any payment of
principal (or any portion thereof) during the continuance of an Event of
Default, the greater of (x) 1% of the amount prepaid and (y) the product of:
(A) a fraction whose numerator is the amount so paid and whose
denominator is the outstanding principal balance of the Loan before giving
effect to such payment, times
(B) the excess of (1) the sum of the respective present values,
computed as of the date of such prepayment, of the remaining scheduled
payments of principal and interest with respect to the Loan (assuming no
prepayments or acceleration of the Loan), determined by discounting such
payments to the date on which such payments are made at the Treasury
Constant Yield, over (2) the outstanding principal balance of the Loan on
such date immediately prior to such payment.
The calculation of the Yield Maintenance Premium shall be made by the Lender and
shall, absent manifest error, be final, conclusive and binding upon all parties.
(b) Rules of Construction. All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Agreement unless
otherwise specified. Unless
25
otherwise specified: (i) the words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, (ii) all meanings
attributed to defined terms herein shall be equally applicable to both the
singular and plural forms of the terms so defined, (iii) "including" means
"including, but not limited to", and (iv) "mortgage" means a mortgage, deed of
trust, deed to secure debt or similar instrument, as applicable, and "mortgagee"
means the secured party under a mortgage, deed of trust, deed to secure debt or
similar instrument. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP, as same may be modified herein.
ARTICLE I
GENERAL TERMS
-------------
1.1. The Loan.
---------
(a) On the Closing Date, subject to the terms and conditions of this
Agreement, Lender shall make a loan to Borrower (the "Loan") in an amount equal
to the Loan Amount. The Loan shall initially be represented by a single Note
which shall bear interest as described herein at a per annum rate equal to the
Initial Interest Rate.
(b) The Loan shall be secured by (i) the Property, pursuant to the
Mortgage and the Assignment of Rents and Leases, (ii) Borrower's contract
rights, pursuant to the Assignment of Contracts, (iii) the Account Collateral,
and (iv) the other security interests and Liens granted in the Loan Documents.
(c) Lender shall have the right at any time, at Lender's sole
discretion, in order to effect a Securitization, to replace the initial Note
with two or more replacement Notes. Each replacement Note shall be in the form
of the initial Note but for its principal amount and Interest Rate, except that
each replacement Note shall provide that it is being issued (together with the
other replacement Notes) in substitution for, and replacement of, the initial
Note and collectively evidence the same indebtedness evidenced thereby and shall
also contain such additional language as Borrower shall reasonably request to
minimize the risk of additional mortgage recording tax. The original Note, upon
execution of the replacement Notes, shall be marked in a manner reasonably
satisfactory to Borrower to indicate it has been replaced and is no longer in
effect, but that the indebtedness evidenced thereby has not been repaid or
discharged but is evidenced by the replacement Notes. The principal amount of
each Note shall be determined by Lender in its sole discretion, provided that
the sum of the principal amounts of the replacement Notes shall equal the then
Principal Indebtedness. The Interest Rate of each replacement Note shall be
determined by Lender in its sole discretion, provided that the weighted average
of such Interest Rates, weighted on the basis of the respective principal
balances of the Notes, shall at all times equal the Initial Interest Rate and
provided further that no change in Interest Rate shall be made if the same would
have the effect of causing Borrower or any of its direct or indirect
equityholders (or any affiliate thereof) to recognize a taxable gain or loss.
Notwithstanding anything to the contrary contained in this Loan Agreement or the
other Loan Documents, no application of payments of, or with respect to, the
Loan, including payments of principal, whether as a result of payments made by
Borrower, application of Article III hereof or
26
by reason of the exercise by Lender of any of its rights or remedies, shall be
made by Lender in such a manner that would result in the immediately preceding
sentence not being satisfied after such application, unless Borrower expressly
consents thereto. Borrower shall execute and return to Lender each such Note
reasonably promptly after Borrower's receipt of an execution copy thereof
(whereupon Lender shall return the original Note to Borrower). If requested by
Lender, Borrower shall deliver to Lender, together with such replacement Notes,
an opinion of counsel in substantially the form delivered to Lender on the
Closing Date solely with respect to the due authorization and enforceability of
such replacement Notes. Such opinions may contain additional assumptions or
exceptions appropriate to the circumstances, including, without limitation, any
exceptions (including with respect to usury) resulting from any Note not being
in an amount in excess of $2,500,000. If a Note is not in an amount in excess of
$2,500,000 and Lender requests an opinion with respect to usury, such opinion
shall be at Lender's sole cost and expense. From and after the Securitization of
the Loan, the provisions of this Section 1.1(c) shall be deemed of no further
force or effect.
1.2. Interest and Principal.
----------------------
(a) Commencing with the Initial Payment Date, and on each and every
Payment Date thereafter, Borrower shall pay to Lender a constant monthly payment
of $1,640,985.89, which amount shall be applied first toward the payment of
interest on each Note for the applicable Interest Accrual Period at the
applicable Interest Rate (except that in each case, interest shall be payable at
the Default Rate with respect to any portion of such Interest Accrual Period
falling during the continuance of an Event of Default), and the balance shall be
applied toward the reduction of the outstanding principal balances of the Notes
pro rata in accordance with their then outstanding principal balances. On the
Closing Date, Borrower shall pay interest from and including the Closing Date
through the end of the first Interest Accrual Period. Interest payable hereunder
shall be computed on the basis of a 360-day year and the actual number of days
elapsed in the related Interest Accrual Period.
(b) No prepayments of the Loan shall be permitted except for (i)
scheduled amortization as described in Section 1.2(a), (ii) prepayments
resulting from Casualty or Condemnation as described in Section 5.16(c), and
(iii) a prepayment of the Loan in whole (but not in part) on any Business Day
that is not earlier than the third Payment Date prior to the Maturity Date and
that is not less than 15 days following Lender's receipt of written notice of
Borrower's intent to prepay; provided that any prepayment under this clause
(iii) shall be accompanied by all interest accrued on the amount prepaid plus,
if such prepayment does not occur on the first day of a calendar month, the
amount of interest that would have accrued thereon if the Loan had remained
outstanding through the end of the Interest Accrual Period in which such
prepayment occurs, plus all other amounts then due under the Loan Documents. Any
amount prepaid under clause (iii) on any day that is not the first day of a
calendar month shall be held by Lender until the next succeeding Payment Date in
an interest-bearing account, and any interest earned thereon during such period
shall be remitted to Borrower on such Payment Date. If a prepayment notice is
delivered to Lender and such prepayment is not made within 30 days of the date
specified therein, (x) Borrower's notice of prepayment shall be deemed
rescinded, and (y) Borrower shall, at the end of such 30 day period, pay to
Lender all reasonable losses, costs and expenses suffered by Lender as a
consequence of such rescission. In addition, Defeasance shall be permitted after
the expiration of the Lockout Period as described in Section 2.2. The entire
outstanding principal balance of the Loan, together with interest accrued
thereon and all other amounts then due under the Loan Documents, shall be due
and payable by Borrower to Lender on the Maturity Date. No Yield Maintenance
Premium shall be due in connection with any payment described in this Section
1.2(b).
27
(c) If all or any portion of the Principal Indebtedness (other than
scheduled amortization as described in Section 1.2(a) and prepayments resulting
from Casualty or Condemnation as described in Section 5.16(c)) is paid to Lender
following acceleration of the Loan, Borrower shall pay to Lender an amount equal
to the applicable Yield Maintenance Premium. Amounts received in respect of the
Indebtedness during the continuance of an Event of Default shall be applied
toward interest, principal and other components of the Indebtedness (in such
order as Lender shall determine) before any such amounts are applied toward
payment of Yield Maintenance Premiums, with the result that Yield Maintenance
Premiums shall accrue as the Principal Indebtedness is prepaid but no amount
received from Borrower shall constitute payment of a Yield Maintenance Premium
until the remainder of the Indebtedness shall have been paid in full.
1.3. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments and prepayments under this Agreement and the Notes
(including any deposit into the Cash Management Account pursuant to Section
3.2(b)) shall be made to Lender not later than 1:00 p.m., New York City time, on
the date when due and shall be made in lawful money of the United States of
America by wire transfer in federal or other immediately available funds to the
account specified from time to time by Lender. Any funds received by Lender
after such time shall, for all purposes hereof, be deemed to have been paid on
the next succeeding Business Day. Lender shall notify Borrower in writing of any
changes in the account to which payments are to be made. During the continuance
of an Event of Default, all amounts received from Borrower shall be applied
toward the components of the Indebtedness (e.g., interest, principal and other
amounts payable hereunder), the Loan and the Notes in such sequence as Lender
shall elect in its sole discretion.
1.4. Taxes. Borrower agrees to indemnify Lender against any present or
future stamp, documentary or other similar or related taxes or other similar or
related charges now or hereafter imposed, levied, collected, withheld or
assessed by any United States Governmental Authority by reason of the execution
and delivery of the Loan Documents and any consents, waivers, amendments and
enforcement of rights under the Loan Documents.
1.5. Release. Upon payment of the Indebtedness in full when permitted
or required hereunder, Lender shall execute instruments prepared by Borrower and
reasonably satisfactory to Lender releasing and discharging, or assigning, all
Liens on (and where previously delivered to Lender or Servicer, or otherwise in
their possession, returning to Borrower) all Collateral securing payment of the
Indebtedness (subject to Borrower's obligation to pay any associated expenses),
including all balances in the Collateral Accounts (which at Borrower's election
may be applied toward the repayment of the Indebtedness), terminating the Loan
Documents and providing notice thereof to third parties, including the landlord
under the Ground Lease, the Cash Management Bank and Tenants.
28
ARTICLE II
DEFEASANCE AND ASSUMPTION
-------------------------
2.1. Defeasance.
----------
(a) On any date after the expiration of the Lockout Period, subject to
the notice requirement described in Section 2.1(c), Borrower may obtain the
release of the Collateral (other than the Defeasance Collateral) from the liens
created by the Loan Documents upon the payment to Lender of all sums then due
under the Loan Documents and the delivery of the following to Lender:
(i) Defeasance Collateral sufficient to provide payments on or prior
to, and in any event as close as possible to, all successive Payment Dates
through the third Payment Date prior to the Maturity Date in an amount
sufficient to make all payments of interest and principal due hereunder
(including the then outstanding Principal Indebtedness on the third Payment
Date prior to the Maturity Date), taking into account any income tax (if
any is anticipated to be payable by such entity, as opposed to by any
direct or indirect owner thereof, based on then current tax law) payable on
any net annual income of Borrower or the Defeasance Borrower, as applicable
(and to the extent any earnings exceed the amount required to fund such
payments, such excess shall be released to Borrower or its designees free
of the Lien of the Loan Documents);
(ii) written confirmation from an independent certified public
accounting firm reasonably satisfactory to Lender that such Defeasance
Collateral is sufficient to provide the payments described in clause (i)
above;
(iii) a security agreement, in form and substance reasonably
satisfactory to Lender, creating in favor of Lender a first priority
perfected security interest in such Defeasance Collateral (a "Defeasance
Pledge Agreement");
(iv) an opinion of counsel for Borrower, in form and substance
reasonably satisfactory to Lender and delivered by counsel reasonably
satisfactory to Lender, opining (1) that the Defeasance Pledge Agreement
has been duly authorized and is enforceable against Borrower in accordance
with its terms and that Lender has a perfected first priority security
interest in such Defeasance Collateral; and (2) that the Defeasance does
not constitute a "significant modification" of the Loan under Section 1001
of the Code or cause a tax to be imposed on the Securitization Vehicle,
other than as a result of a Securitization having occurred after the first
anniversary of the Closing Date (provided that Lender may waive any of the
foregoing opinions if each of the Rating Agencies, as evidenced by receipt
of the Rating Confirmation required pursuant to clause (vii), and Lender
determine in their sole and absolute discretion that such opinions are no
longer customary in connection with defeasances of securitized commercial
mortgage loans of comparable size and are not otherwise necessary or
advisable in connection with the Defeasance);
29
(v) instruments reasonably satisfactory to Lender releasing and
discharging or assigning to a third party Lender's Liens on the Collateral
(other than the Defeasance Collateral);
(vi) such other customary certificates, opinions, documents or
instruments as Lender and the Rating Agencies may reasonably request;
(vii) if a Securitization taking the form of a transaction rated by the
Rating Agencies has occurred and is then outstanding, receipt of Rating
Confirmation with respect to the satisfaction of the foregoing requirements
and the requirements set forth in Section 2.1(b); and
(viii) reimbursement for any reasonable third-party costs and expenses
incurred by Lender in connection with this Section 2.1 (including Rating
Agency and Servicer fees and expenses, reasonable fees and expenses of
legal counsel and any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection herewith).
Lender shall reasonably cooperate with Borrower to avoid the incurrence of
mortgage recording taxes in connection with a Defeasance, which cooperation may
include assigning the Note to a refinancing lender in consideration of receipt
of a new defeasance note and rights under the Defeasance Pledge Agreement.
(b) At the time of Defeasance, Borrower shall transfer and assign all
of its interest in the Property to a third party, which may be an affiliate of
the Borrower, unless the Loan is assumed by a bankruptcy-remote entity
reasonably satisfactory to Lender (if not in compliance in all material respects
with Rating Agency guidelines for bankruptcy remote entities) and satisfactory
to the Rating Agencies to which Borrower shall transfer all of the Defeasance
Collateral (a "Defeasance Borrower") and such Defeasance Borrower shall have
executed and delivered to Lender an assumption agreement in customary form or
otherwise in form and substance reasonably satisfactory to Lender, such Uniform
Commercial Code financing statements as may be reasonably requested by Lender
and legal opinions of counsel reasonably acceptable to Lender which are
substantially equivalent to the opinions delivered to Lender on the Closing
Date, to the extent applicable, including new nonconsolidation opinions
reasonably satisfactory to Lender and satisfactory to the Rating Agencies
(provided that Lender may waive any of the foregoing legal opinions if each of
the Rating Agencies, as evidenced by receipt of the Rating Confirmation required
pursuant to clause (vii) of Section 2.1(a), and Lender determine in their sole
and absolute discretion that such opinions are no longer customary in connection
with defeasances of securitized commercial mortgage loans of comparable size and
are not otherwise necessary or advisable in connection with the Defeasance); and
Borrower and the Defeasance Borrower shall have delivered such other customary
documents, certificates and legal opinions as Lender shall reasonably request,
in which event Borrower shall be completely released and relieved of all of its
obligations under the Loan Documents except those obligations which by their
terms survive the repayment of the Loan.
(c) Borrower must give Lender and each Rating Agency at least 15 days'
prior written notice of any Defeasance under this Section 2.1, specifying the
date on which the
30
Defeasance is expected to occur. If such Defeasance is not made within 30 days
of such date (x) Borrower's notice of Defeasance will be deemed rescinded, and
(y) Borrower shall at the end of such 30-day period pay to Lender all reasonable
losses, costs and expenses suffered by Lender as a consequence of such
rescission.
(d) Upon satisfaction of the requirements contained in this Section
2.1, Lender shall execute instruments prepared by Borrower and reasonably
satisfactory to Lender releasing and discharging, or assigning, all Liens on
(and where previously delivered to Lender or Servicer, or otherwise in their
possession, returning to Borrower) all Collateral securing payment of the
Indebtedness other than the Defeasance Collateral (subject to Borrower's
obligation to pay any associated expenses), including all balances in the
Collateral Accounts, terminating the Loan Documents and providing notice thereof
to third parties, including the landlord under the Ground Lease, the Cash
Management Bank and Tenants.
2.2. Assumption. The initial Borrower shall have the right at any time
to Transfer all of the Collateral to a Qualified Successor Borrower that will
contemporaneously assume all of the remaining obligations of Borrower hereunder
(an "Assumption"), provided no Event of Default or material monetary Default is
then continuing (unless the same would be cured by such Transfer) or would
result therefrom and the following conditions are met to the reasonable
satisfaction of Lender:
(i) such Qualified Successor Borrower shall have executed and delivered
to Lender an assumption agreement, in form and substance reasonably
acceptable to Lender, evidencing its agreement to abide and be bound by the
terms of the Loan Documents;
(ii) such Qualified Successor Borrower shall execute and deliver such
Uniform Commercial Code financing statements as may be reasonably requested
by Lender;
(iii) such Qualified Successor Borrower shall have delivered to Lender
legal opinions of counsel reasonably acceptable to Lender which are
reasonably equivalent to the opinions delivered to Lender on the Closing
Date, including new nonconsolidation opinions which are reasonably
satisfactory to Lender and satisfactory to each of the Rating Agencies
(provided that Lender may waive any of the foregoing opinions if each of
the Rating Agencies, as evidenced by receipt of the Rating Confirmation
required pursuant to clause (vi), and Lender determine in their sole and
absolute discretion that such opinions are no longer customary in
connection with assumptions of securitized commercial mortgage loans of
comparable size and are not otherwise necessary or advisable in connection
with the Assumption);
(iv) such Qualified Successor Borrower shall have delivered to Lender
all documents reasonably requested by it relating to the existence of such
Qualified Successor Borrower and the due authorization of the Qualified
Successor Borrower to assume the Loan and to execute and deliver the
documents described in this Section 2.2, each in form and substance
reasonably satisfactory to Lender, including, but not limited to, a
certified copy of the applicable resolutions from all appropriate persons,
certified copies of the certificate of formation and Operating Agreement
(or the equivalent) of the
31
Qualified Successor Borrower, together with all amendments thereto, and
certificates of good standing or existence for the Qualified Successor
Borrower issued as of a recent date by its state of organization and each
other state where such entity, by the nature of its business, is required
to qualify or register;
(v) the Qualified Title Insurance Policy shall have been properly
endorsed to reflect the Transfer of the Property to the Qualified Successor
Borrower or Borrower shall deliver a letter from the title insurer that
transfer does not affect validity of the Qualified Title Insurance Policy;
(vi) Rating Confirmation shall have been received with respect to the
legal structure of the successor borrower, the documentation of the
Assumption to be delivered as provided above and the related legal opinions
to be delivered as provided above; and
(vii) the Servicer shall have received upon request a $25,000
nonrefundable assumption fee and shall have received payment of all
reasonable out-of-pocket costs and expenses incurred by Lender and
Servicer, as applicable, in connection with such assumption (including
reasonable attorneys' fees and costs, the cost of an endorsement to the
Title Insurance Policy reflecting the conveyance of the Property to the
Qualified Successor Borrower, lien search and credit investigation expenses
and rating agency fees and expenses).
Upon request of Borrower and satisfaction of the above conditions, Lender shall
execute and deliver to Borrower such instrument(s), prepared by Borrower, as
Borrower may reasonably request to evidence that a Transfer was made in
accordance with this Section 2.2, that the Qualified Successor Borrower has
become the Borrower hereunder and under the other Loan Documents and that the
initial Borrower is released from any further obligations or liabilities
hereunder and, if applicable to such transaction, to provide the confirmation
described in Section 9.19(f) below. Upon request of Borrower and reasonable
advance notice, Lender shall, at Borrower's sole cost and expense, either attend
any closing of a proposed Transfer to a Qualified Successor Borrower or
cooperate with Borrower in the establishment of a reasonably satisfactory escrow
arrangement, and, provided the conditions set forth above have been satisfied at
or prior to such closing, Lender will unconditionally deliver to the initial
Borrower and the Qualified Successor Borrower at such closing, directly or
through release of such escrow, the instrument(s) described in the immediately
preceding sentence.
ARTICLE III
ACCOUNTS
--------
3.1. Cash Management Account.
-----------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with a depository institution satisfactory to Lender (the
"Cash Management Bank") an account for the collection of income from the
Property (the "Cash Management Account"). As a condition precedent to the
Closing Date, Borrower shall cause the Cash Management Bank to execute and
deliver a Cash Management Agreement which provides, inter alia, that no party
other than Lender and Servicer shall have the right to withdraw and disburse
funds from the Cash Management Account and that checks received in the related
lockbox shall be promptly deposited into the Cash Management Account (unless the
same is rejected by or at the direction of Borrower or its managing agent in the
case of a disputed or incorrect amount). The fees and expenses of the Cash
Management Bank shall be paid by Borrower.
32
(b) Within five Business Days following the Closing Date, Borrower
shall deliver to each Tenant in the Property a written notice (a "Tenant
Notice") in the form of Exhibit A instructing that (i) all payments under the
Leases (other than Tenant security deposits to be held in escrow accounts) shall
thereafter be transmitted by them directly to, the Cash Management Account
(which may be accomplished, in the case of payment by check, by delivery to a
lockbox address established by the Cash Management Bank) in order that such
payments be deposited directly into, the Cash Management Account and (ii) such
instruction may not be rescinded unless and until such Tenant receives from
Borrower or Lender a copy of Lender's written consent to such rescission or
Lender's written notice that the Loan has been repaid or Defeased. Borrower
shall send a copy of each such written notice to Lender and shall redeliver such
notices to each Tenant until such time as such Tenant complies therewith.
Borrower covenants to cause all cash Revenues relating to the Property and all
other money received by Borrower with respect to the Property (other than tenant
security deposits required to be held in escrow accounts) to be deposited in the
Cash Management Account by the end of the first Business Day following
Borrower's or the Property Manager's receipt thereof (unless the same is
rejected by or at the direction of Borrower or its managing agent in the case of
a disputed or incorrect amount); and Borrower shall be permitted to deposit in
the Cash Management Account such additional amounts as Borrower may elect.
(c) In the event that (i) at any time the Cash Management Bank ceases
to be an Eligible Institution (unless the Collateral Accounts are maintained, or
caused to be maintained reasonably promptly after receipt of written notice from
Lender thereof, as segregated trust accounts in accordance with clause (ii) of
the definition of Eligible Accounts), or (ii) the Cash Management Bank fails to
comply in any material respect with the Cash Management Agreement, Borrower
shall, at Lender's written request, replace the Cash Management Bank with any
other financial institution in which Eligible Accounts may be maintained,
provided such financial institution is reasonably satisfactory to Lender and
Borrower shall deliver appropriate Tenant Notices to all Tenants with respect to
such replacement and shall cause such financial institution to promptly execute
and deliver to Lender a Cash Management Agreement and Lender shall reasonably
cooperate with Borrower in the delivery of such Tenant Notices, the execution of
such Cash Management Agreement and the establishment of the replacement
Collateral Accounts resulting therefrom; provided that Lender shall have the
right to select such financial institution and cause such replacement (and
Borrower shall cooperate in connection therewith and shall deliver such Tenant
Notices and execute such Cash Management Agreement) during the continuance of an
Event of Default or Cash Trap Period or if Borrower fails to reasonably promptly
comply with this Section 3.1(c) following Borrower's receipt of the written
request from Lender described above.
(d) Provided no Event of Default or Cash Trap Period is continuing,
Borrower shall have the right at any time, and from time to time, during the
term of the Loan, at Borrower's sole cost and expense, to replace the Cash
Management Bank with any other
33
financial institution in which Eligible Accounts may be maintained, provided
such financial institution is reasonably satisfactory to Lender and executes and
delivers to Lender a Cash Management Agreement, provided Borrower delivers to
Lender reasonably acceptable legal opinions with respect to the Borrower's due
authorization, execution and delivery and the enforceability thereof and
delivers appropriate Tenant Notices to all Tenants, and Lender shall reasonably
cooperate with Borrower in the delivery of such Tenant Notices, the execution of
such Cash Management Agreement and the establishment of the replacement
Collateral Accounts resulting therefrom.
3.2. Distributions from Cash Management Account.
------------------------------------------
(a) The Cash Management Agreement shall provide that the Cash
Management Bank shall remit to an account specified by Borrower, at the end of
each Business Day, the amount, if any, by which amounts then contained in the
Cash Management Account exceed the Peg Balance (and Borrower shall receive the
same free of the Lien of the Loan Documents); provided, however, that Servicer
may terminate such remittances during the continuance of an Event of Default
upon notice to the Cash Management Bank. Servicer will reasonably promptly
notify the Cash Management Bank at any time of any change in the Peg Balance.
(b) On each Payment Date falling during the continuance of an Escrow
Period, provided no Event of Default has occurred and is continuing, the
Servicer shall transfer amounts from the Cash Management Account, to the extent
available therein, to make the following payments in the following order of
priority:
(i) to the Tax, Insurance and Ground Rents Escrow Account, the amounts
then required to be deposited therein pursuant to Section 3.4;
(ii) to Lender, the amount of all scheduled or delinquent interest and
principal on the Loan and all other amounts then due and payable under the
Loan Documents (with any amounts in respect of principal paid last);
(iii) to the Replacement Reserve Account, the amounts required to be
deposited therein pursuant to Section 3.6;
(iv) to the TI/LC Reserve Account, any amount required to be deposited
therein pursuant to Section 3.5;
(v) during the continuance of a Cash Trap Period, to Borrower, an
amount equal to the Budgeted Operating Expenditures for the month in which
such Payment Date occurs (ignoring for such purposes the preceding Business
Day convention), provided that the amounts disbursed to Borrower pursuant
to this clause (v) shall be used by Borrower solely to pay operating
expenses for such month (or, in the event such Budgeted Operating
Expenditures exceed the actual operating expenses for such month, such
excess amounts will be applied by Borrower to the immediately succeeding
month's operating expenses), and provided further that no amounts will be
disbursed to Borrower in respect of the fees of the Approved Property
Manager to the extent such fees exceed 1.5% of gross revenues; as well as
any additional amount reasonably requested by
34
Borrower in writing in respect of emergency and non-discretionary operating
expenses (other than management fees), which written request shall be
accompanied by a reasonably detailed description of the emergency or
non-discretionary operating expenses, as the case may be (any such request
in respect of non-discretionary operating expenses shall be delivered at
least 10 Business Days prior to such Payment Date, and Lender shall
reasonably cooperate with any request to remit funds from the Cash
Management Account on a date that is not a Payment Date if required due to
an emergency);
(vi) during the continuance of a Cash Trap Period, any additional
amount required to cause the amount in the Replacement Reserve Account to
equal the Budgeted Capital Expenditures for the month in which such Payment
Date occurs, as well as any additional amount reasonably requested by
Borrower in writing in respect of emergency Capital Expenditures, which
written request shall be accompanied by a reasonably detailed description
of the emergency;
(vii) during the continuance of a Cash Trap Period, all remaining
amounts to the Low DSCR Reserve Account (other than amounts, if any, that
remain solely as a result of Borrower's delivery of a Qualified Letter of
Credit with respect to the Tax, Insurance and Ground Rents Escrow Account,
the Replacement Reserve Account and/or the TI/LC Reserve Account); and
(viii) all remaining amounts, if any, to such accounts as Borrower may
direct, free of the Lien of the Loan Documents.
(c) If by 1:00 p.m., New York City time, on any Payment Date during the
continuance of an Escrow Period the amount in the Cash Management Account shall
be sufficient to make all of the payments and deposits described in Section
3.2(b)(i) through (iv), Borrower shall be deemed to have made such payments and
deposits on such Payment Date unless Lender is legally constrained from
transferring such amount in accordance with such Section by reason of any
insolvency related to Borrower or any other event.
(d) If on any Payment Date during the continuance of an Escrow Period
the amount in the Cash Management Account shall be insufficient to make all of
the transfers described in Section 3.2(b)(i) through (iv), Borrower shall
deposit into the Cash Management Account on such Payment Date the amount of such
deficiency. If Borrower shall fail to make such deposit, the same shall
constitute an Event of Default and, in addition to all other rights and remedies
provided for under the Loan Documents, Lender may disburse and apply the amounts
in the Cash Management Account toward the components of the Indebtedness (e.g.,
interest, principal and other amounts payable hereunder), the Loan and the Notes
in such sequence as Lender shall elect in its sole discretion.
3.3. Low DSCR Reserve Account.
------------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the deposit of
amounts required to be deposited therein in accordance with Section 3.2(b)(vi)
(the "Low DSCR Reserve Account").
35
(b) If on any Payment Date that falls during the continuance of a Cash
Trap Period but does not fall during the continuance of an Event of Default,
amounts contained in the Cash Management Account are insufficient to make the
transfer described in Section 3.2(b)(v), then Lender shall remit from the Low
DSCR Reserve Account to Borrower the lesser of (i) the amount of such deficiency
and (ii) the amount then contained in the Low DSCR Reserve Account.
(c) Provided no Event of Default is continuing, Borrower shall have the
right to receive amounts from the Low DSCR Reserve Account upon delivery to
Lender of a Qualified Letter of Credit in the amount so received, provided that
if the letter of credit delivered to Lender at any time ceases to be a Qualified
Letter of Credit, Borrower shall, within 10 days following the Borrowers'
receipt of written notice from Lender, either make a deposit into the Low DSCR
Reserve Account in the amount that would be contained therein had no Qualified
Letter of Credit been delivered or deliver to Lender a Qualified Letter of
Credit in such amount.
(d) Lender shall release to the Cash Management Account all amounts
then contained in the Low DSCR Reserve Account after Borrower delivers to Lender
evidence reasonably satisfactory to Lender establishing that no Cash Trap Period
is then continuing. Such a release shall not preclude the subsequent
commencement of a Cash Trap Period and the deposit of amounts into the Low DSCR
Reserve Account as set forth in Section 3.2(b)(vi).
3.4. Tax, Insurance and Ground Rents Escrow Account.
----------------------------------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving amounts payable by Borrower in respect of Taxes and insurance premiums
during each Escrow Period (the "Tax, Insurance and Ground Rents Escrow
Account").
(b) On the first Payment Date in each Escrow Period, the Tax, Insurance
and Ground Rents Escrow Account shall be funded in an amount equal to the sum of
(i) an amount sufficient to pay all Taxes by the 30th day prior to the date they
come due, assuming subsequent monthly fundings on Payment Dates of 1/12 of
projected annual Taxes, plus (ii) an amount sufficient to pay all insurance
premiums by the 30th day prior to the date they come due, assuming subsequent
monthly fundings on Payment Dates of 1/12 of projected insurance premiums, plus
(iii) an amount sufficient to pay all Ground Rents by the 30th day prior to the
date they come due, assuming subsequent monthly fundings on Payment Dates of
1/12 of projected annual Ground Rents.
(c) On each subsequent Payment Date during the continuance of an Escrow
Period, an additional deposit shall be made therein in an amount equal to the
sum of:
(A) 1/12 of the Taxes that Lender reasonably estimates, based on
information provided by Borrower, will be payable during the next ensuing
12 months, plus
(B) 1/12 of the insurance premiums that Lender reasonably estimates,
based on information provided by Borrower, will be payable during the next
ensuing 12 months; plus
36
(C) 1/12 of the Ground Rents that Lender reasonably estimates, based on
information provided by Borrower, will be payable during the next ensuing
12 months;
provided, however, that if at any time during the continuance of an Escrow
Period Lender reasonably determines that the amount in the Tax, Insurance and
Ground Rents Escrow Account will not be sufficient to accumulate (upon payment
of subsequent monthly amounts in accordance with the provisions hereof) the full
amount of all installments of Taxes, insurance premiums and Ground Rents by the
date on which such amounts come due, then Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments to the Tax,
Insurance and Ground Rents Escrow Account by the amount that Lender reasonably
estimates is sufficient to achieve such accumulation.
(d) Borrower shall have the right to deliver to Lender a Qualified
Letter of Credit in lieu of making the cash deposits described above, provided
that (i) the sum of the amount of such Qualified Letter of Credit and any amount
contained in the Tax, Insurance and Ground Rents Escrow Account shall at all
times be at least the amount that would then be required to be held in the Tax
and Insurance Escrow Account had such Qualified Letter of Credit not been
delivered, and (ii) if the letter of credit delivered to Lender at any time
ceases to be a Qualified Letter of Credit, Borrower shall, within 10 days
following the Borrowers' receipt of written notice from Lender, either make a
deposit into the Tax, Insurance and Ground Rents Escrow Account in the amount
that would be contained therein had no Qualified Letter of Credit been delivered
(and thereafter Borrower shall continue to make monthly deposits as provided
herein) or deliver to Lender a Qualified Letter of Credit satisfying the
requirements set forth in this Section 3.4(d).
(e) During the continuance of an Escrow Period, Borrower shall provide
Lender with copies of all tax and insurance bills relating to the Property
promptly after Borrower's receipt thereof. Lender will apply amounts in the Tax,
Insurance and Ground Rents Escrow Account toward the purposes for which such
amounts are deposited therein (and Borrower shall not be in default hereunder
for its failure to pay such amounts by reason of Lender's failure to make such
application). In connection with the making of any payment from the Tax,
Insurance and Ground Rents Escrow Account, Lender may cause such payment to be
made according to any xxxx, statement or estimate procured from the appropriate
public office, without inquiry into the accuracy of such xxxx, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien
or title or claim thereof unless given written advance notice by Borrower of
such inaccuracy, invalidity or other contest. Upon written request from
Borrower, Lender will make a payment under protest.
(f) Upon the termination of an Escrow Period, provided no Event of
Default is then continuing, Lender shall remit to Borrower the amount then
contained in the Tax, Insurance and Ground Rents Escrow Account.
3.5. TI/LC Reserve Account.
---------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving amounts in respect of Tenant Improvements and Leasing Commissions
during Escrow Periods (the "TI/LC Reserve Account").
37
(b) On each Payment Date during the continuance of an Escrow Period,
there shall be deposited into the TI/LC Reserve Account an amount equal to the
Monthly Low DSCR TI/LC Amount. Borrower may satisfy its obligations under the
preceding sentence by delivering to Lender a Qualified Letter of Credit,
provided that (i) the sum of the amount of such Qualified Letter of Credit and
any amount contained in the TI/LC Reserve Account shall at all times be at least
the amount that would then be required to be held in the TI/LC Reserve Account
had such Qualified Letter of Credit not been delivered, taking into account any
amounts that would have been permitted to be withdrawn therefrom in accordance
with Section 3.5(c), and (ii) if a letter of credit delivered to Lender under
this Section at any time ceases to be a Qualified Letter of Credit, then within
10 Business Days after receipt of notice from Lender Borrower shall either make
a deposit into the TI/LC Reserve Account in the amount that would be contained
therein had no Qualified Letter of Credit been delivered, taking into account
any amounts that would have been permitted to be withdrawn therefrom in
accordance with Section 3.5(c) (and thereafter Borrower shall continue to make
monthly deposits as provided herein) or deliver to Lender a Qualified Letter of
Credit satisfying the requirements set forth in this Section 3.5(b). Borrower
shall have the right at any time, so long as no Event of Default is continuing,
to require Lender to return to Borrower the amount then deposited in the TI/LC
Reserve Account (or any portion thereof) by delivery of a Qualified Letter of
Credit in the amount to be returned.
(c) If Borrower satisfies its obligation under Section 3.5(b) by making
deposits into the TI/LC Reserve Account, then, upon the request of Borrower at
any time that no Event of Default is continuing (but not more often than once
per calendar month), Lender shall cause disbursements to Borrower from the TI/LC
Reserve Account to reimburse Borrower for Leasing Commissions and Tenant
Improvement costs incurred by Borrower in connection with an existing Lease or a
new Lease (or Lease expansion, modification or extension) entered into in
accordance herewith, or, at Borrower's direction, to directly pay such costs,
provided that (1) Borrower shall deliver to Lender invoices (or other reasonably
satisfactory evidence) evidencing incurrence of the costs as to which such
disbursements are requested; (2) Borrower shall deliver to Lender an Officer's
Certificate confirming that all such costs have been previously paid by Borrower
or will be paid from the proceeds of the requested disbursement and that
Borrower has applied any amounts previously received by it in accordance with
this Section for the expenses to which specific draws made hereunder relate; and
(3) Lender may condition the making of a requested disbursement with respect to
any contract that exceeds $100,000 on Borrower's receipt of partial lien
releases and waivers from the contractors thereunder with respect to hard costs
under such contract for which Borrower has previously received disbursements
under this Section 3.5(c).
(d) Whenever a Major Lease is terminated early, whether by buy-out,
cancellation, default or otherwise (including any exercise by a Tenant of an
early termination right with respect to all or a portion of its space as
permitted under its Lease), and Borrower receives any payment, fee or penalty in
respect of such termination (a "Termination Fee"), Borrower shall promptly cause
such Termination Fee to be deposited into the TI/LC Reserve Account (except that
if such Termination Fee exceeds 125% of the Leasing Commissions, Tenant
Improvement costs and other Capital Expenditures reasonably required to enter
into a
38
replacement Lease in respect of the space covered by the terminated Lease, as
reasonably determined by the Lender (or 100% of such amounts if they are set
forth as a fixed dollar amount in executed agreements), Lender shall remit such
excess from the TI/LC Reserve Account into the Cash Management Account).
Provided no Event of Default has occurred and is continuing, Lender shall
disburse such Termination Fee to Borrower at the written request of Borrower in
respect of Leasing Commissions and Tenant Improvement costs incurred by Borrower
in connection with a replacement Lease or replacement Leases entered into in
accordance with the terms hereof in respect of the space covered by such
terminated Lease and the remainder of such Termination Fee, if any, shall be
remitted to the Cash Management Account after the space covered by such
terminated Lease has been relet and the replacement Tenant is in occupancy under
the replacement Lease.
(e) Upon the termination of an Escrow Period, provided no Event of
Default is then continuing, Lender shall remit to Borrower the amount then
contained in the TI/LC Reserve Account (other than amounts deposited therein
pursuant to Section 3.5(d)) or, if applicable, return to Borrower the Qualified
Letter of Credit delivered pursuant to Section 3.5(b).
3.6. Replacement Reserve Account.
---------------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving amounts in respect of Capital Expenditures during Escrow Periods (the
"Replacement Reserve Account").
(b) On each Payment Date during the continuance of an Escrow Period,
there shall be deposited into the Replacement Reserve Account an amount equal to
the Monthly Low DSCR Replacement Reserve Amount. Borrower may satisfy its
obligations under the preceding sentence by delivering to Lender a Qualified
Letter of Credit, provided that (i) the sum of the amount of such Qualified
Letter of Credit and any amount contained in the Replacement Reserve Account
shall at all times be at least the amount that would then be required to be held
in the Replacement Reserve Account had such Qualified Letter of Credit not been
delivered, taking into account any amounts that would have been permitted to be
withdrawn therefrom in accordance with Section 3.6(c), and (ii) if a letter of
credit delivered to Lender under this Section at any time ceases to be a
Qualified Letter of Credit, then within 10 Business Days after receipt of notice
from Lender Borrower shall either make a deposit into the Replacement Reserve
Account in the amount that would be contained therein had no Qualified Letter of
Credit been delivered, taking into account any amounts that would have been
permitted to be withdrawn therefrom in accordance with Section 3.6(c) (and
thereafter Borrower shall continue to make monthly deposits as provided herein)
or deliver to Lender a Qualified Letter of Credit satisfying the requirements
set forth in this Section 3.6(b). Borrower shall have the right at any time, so
long as no Event of Default is continuing, to require Lender to return to
Borrower the amount then deposited in the Replacement Reserve Account (or any
portion thereof) by delivery of a Qualified Letter of Credit in the amount to be
returned.
(c) If Borrower satisfies its obligation under Section 3.6(b) by making
deposits into the Replacement Reserve Account, then, upon the request of
Borrower at any time that no Event of Default is continuing (but not more often
that once per calendar month except in case of emergency), Lender will cause
disbursements to Borrower from the Replacement
39
Reserve Account to reimburse Borrower for Capital Expenditures, or, at
Borrower's direction, to directly pay such costs; provided that (1) Borrower
shall deliver to Lender invoices (or other reasonably satisfactory evidence)
evidencing incurrence of the costs as to which such disbursements are requested;
(2) Borrower shall deliver to Lender an Officer's Certificate confirming that
all such costs have been previously paid by Borrower or will be paid from the
proceeds of the requested disbursement and that Borrower has applied any amounts
previously received by it in accordance with this Section for the expenses to
which specific draws made hereunder relate; and (3) Lender may condition the
making of a requested disbursement with respect to any contract that exceeds
$100,000 on Borrower's receipt of partial lien releases and waivers from the
contractors thereunder with respect to hard costs under such contract for which
Borrower has previously received disbursements under this Section 3.6(c).
(d) Upon the termination of an Escrow Period, provided no Event of
Default is then continuing, Lender shall remit to Borrower the amount then
contained in the Replacement Reserve Account or, if applicable, return to
Borrower the Qualified Letter of Credit delivered pursuant to Section 3.6(b).
3.7. [Intentionally Omitted].
-----------------------
3.8. Loss Proceeds Account.
---------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
depositing any Loss Proceeds (the "Loss Proceeds Account").
(b) Provided no Event of Default is continuing, funds in the Loss
Proceeds account shall be applied in accordance with Section 5.16.
3.9. Unfunded Obligations Account.
----------------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving an amount in respect of the Unfunded Obligations (the "Unfunded
Obligations Account").
(b) On the Closing Date, Borrower shall either (x) deposit into the
Unfunded Obligations Account, from the proceeds of the Loan, an amount equal to
the Unfunded Obligations Amount, or (y) deliver to Lender a Qualified Letter of
Credit in such amount (provided that the amount so deposited or covered by such
Qualified Letter of Credit may be reduced by the portion of the Unfunded
Obligations Amount corresponding to obligations owed by Borrower to Debevoise &
Xxxxxxxx if Borrower delivers to Lender a Qualified Guaranty with respect
thereto).
(c) Borrower shall perform the Unfunded Obligations in a diligent,
workmanlike manner and shall complete the same within the respective time
periods set forth in Schedule D, subject to Excusable Delay and other exceptions
provided for in the applicable underlying agreements. Upon the request of
Borrower at any time that no Event of Default is continuing (but not more often
than twice per calendar month, except in case of emergency), Lender shall cause
disbursements to Borrower from the Unfunded Obligations Account to
40
reimburse Borrower for reasonable costs and expenses incurred in the performance
of Unfunded Obligations or, at Borrower's direction, to directly pay such costs
(or, if applicable, shall permit the reduction of the amount of the Qualified
Guaranty by the amount that would have been so disbursed), provided that
(i) Borrower shall deliver to Lender invoices (or other reasonably
satisfactory evidence) evidencing that the costs for which such
disbursements are requested are due and payable;
(ii) Borrower shall deliver to Lender an Officer's Certificate
confirming that all such costs have been previously paid by Borrower or
will be paid from the proceeds of the requested disbursement and that
Borrower has applied any amounts previously received by it in accordance
with this Section for the expenses to which specific draws made hereunder
relate; and
(iii) Lender may condition the making of a requested disbursement with
respect to any contract that exceeds $100,000 on (1) reasonable evidence
establishing that Borrower has applied any amounts previously received by
it in accordance with this Section for the expenses to which specific draws
made hereunder relate, (2) a reasonably satisfactory site inspection, and
(3) receipt of lien releases and waivers from the contractors thereunder
with respect to hard costs.
(d) If Borrower satisfies a portion of its obligation under Section
3.9(b) by providing a guaranty which at any time ceases to be a Qualified
Guaranty, Borrower shall, within 10 Business Days after written notice from
Lender, deposit into the Unfunded Obligations Account an amount equal to the
amount of such guaranty (as such amount may have been reduced pursuant to
Section 3.9(c)) or deliver to Lender a Qualified Letter of Credit in such
amount. If Borrower satisfies all or any portion of its obligation under Section
3.9(b) or this Section 3.9(d) by providing a letter of credit which at any time
ceases to be a Qualified Letter of Credit, Borrower shall, within 10 Business
Days after written notice from Lender, either (x) deliver to Lender a
replacement Qualified Letter of Credit or (y) deposit into the Unfunded
Obligations Account the amount that would be contained therein had Borrower
deposited the Unfunded Obligations Amount therein on the Closing Date (minus the
amount of any Qualified Guaranty delivered by Borrower pursuant to Section
3.9(b) and not subsequently replaced by cash or a Qualified Letter of Credit)
and subsequently withdrawn therefrom all amounts that would have been permitted
to be withdrawn therefrom pursuant to Section 3.9(c).
(e) Upon the satisfaction (as reasonably determined by Lender) of the
portion of the Unfunded Obligations identified on any line on Schedule D, and
provided no Event of Default is then continuing, the remainder of the portion of
the Unfunded Obligations Account held for such line item (as shown adjacent to
such line item on Schedule D) shall promptly be remitted to Borrower. Upon the
satisfaction of all Unfunded Obligations, provided no Event of Default is then
continuing, any amounts then remaining in the Unfunded Obligations Account shall
promptly be remitted to Borrower and the Unfunded Obligations Account will no
longer be maintained.
41
3.10. D&P Debt Service Reserve Account.
--------------------------------
(a) On or prior to the Closing Date, Borrower shall establish and
thereafter maintain with the Cash Management Bank an account for the purpose of
reserving the D&P Debt Service Reserve Amount (the "D&P Debt Service Reserve
Account").
(b) On the Closing Date, Borrower shall either (x) deposit into the D&P
Debt Service Reserve Account, from the proceeds of the Loan, an amount equal to
the D&P Debt Service Reserve Amount, or (y) deliver to Lender a Qualified
Guarantee.
(c) If Borrower satisfies its obligation under Section 3.9(b) by making
a deposit into the D&P Debt Service Reserve Account, then on each Payment Date
commencing with the Initial Payment Date while there is a positive balance in
the D&P Debt Service Reserve Account, whether or not an Event of Default shall
exist, Lender shall remit from the D&P Debt Service Reserve Account to the Cash
Management Account an amount equal to the Monthly D&P Debt Service Reserve
Amount or, if less, the actual balance contained in the D&P Debt Service Reserve
Account.
(d) If Borrower satisfies its obligation under Section 3.10(b) by
making a deposit into the D&P Debt Service Reserve Account, then provided no
Event of Default is continuing, Borrower shall have the right to have the amount
contained in the D&P Debt Service Reserve Account returned to Borrower upon
delivery to Lender of a Qualified Guaranty covering the remaining Payment Dates
through the March 2002 Payment Date or upon delivery of a Qualified Letter of
Credit in the amount being returned to Borrower.
(e) If a Qualified Letter of Credit is provided, the letter of credit
may be reduced each month after the applicable Payment Date for such month by
the Monthly D&P Debt Service Reserve Amount unless an Event of Default has
occurred and is then continuing. Lender shall cooperate with Borrower in
effectuating such reduction. If a Qualified Letter of Credit is drawn upon for
any reason, and whether or not an Event of Default shall then exist, the
proceeds shall be applied as follows: (x) there shall be deposited into the D&P
Debt Service Reserve Account, and Section 3.10(c) shall thereafter apply with
respect to such funds, an amount equal to the amount of cash that would have
been in such account if Borrower had never withdrawn the cash from the D&P Debt
Service Reserve Account pursuant to Section 3.10(d) and such cash in the D&P
Debt Service Reserve Account had been remitted on each Payment Date as provided
in Section 3.10(c), (y) there shall be remitted to the Cash Management Account,
with respect to each prior Payment Date during which an Event of Default existed
which was not cured, the aggregate amount that would have been remitted to the
Cash Management Account on each such Payment Date if there had been cash in the
D&P Debt Service Reserve Account, and (z) all remaining proceeds shall be
remitted to Borrower. If the Qualified Letter of Credit has not then been drawn
upon in full, the same shall be returned to Borrower within ten Business Days
after the Payment Date in March 2002.
(f) If Borrower provides a guaranty pursuant to this Section 3.10 which
at any time ceases to be a Qualified Guaranty, Borrower shall, within 10
Business Days after written notice from Lender, deposit into the D&P Debt
Service Reserve Account the amount that would then be contained in the D&P Debt
Service Reserve Account had Borrower deposited the Debt
42
Service Reserve Amount therein on the Closing Date and amounts had subsequently
been withdrawn therefrom as set forth in Section 3.10(c), or a Qualified Letter
of Credit in such amount. If Borrower provides a letter of credit pursuant to
this Section 3.10 which at any time ceases to be a Qualified Letter of Credit,
Borrower shall, within 10 Business Days after written notice from Lender, either
deliver to Lender a replacement Qualified Letter of Credit or make a deposit
into the D&P Debt Service Reserve Account, in each case in the amount set forth
in the preceding sentence, or deliver to Lender a Qualified Guaranty covering
the remaining Payment Dates through and including March 2002.
(g) Upon the termination of the free rent period under the Lease with
Debevoise & Xxxxxxxx, provided no Event of Default is then continuing, all
amounts then contained in the D&P Debt Service Reserve Account shall be remitted
to Borrower, any Qualified Letter of Credit delivered to Lender pursuant to this
Section 3.10 shall be returned to Borrower and the D&P Debt Service Reserve
Account shall no longer be maintained.
3.11. Account Collateral.
------------------
(a) Borrower hereby grants a perfected first-priority security interest
in favor of Lender in and to the Account Collateral as security for the
Indebtedness, together with all rights of a secured party with respect thereto.
Each Collateral Account shall be an Eligible Account under the sole dominion and
control of Lender and shall be in the name of Borrower, as pledgor, and Lender,
as pledgee. Borrower shall have no right to make withdrawals from any of the
Collateral Accounts. Funds in the Collateral Accounts shall not be commingled
with any other monies at any time. Borrower shall execute any additional
documents that Lender in its reasonable discretion may require and shall provide
all other evidence reasonably requested by Lender to evidence or perfect its
first-priority security interest in the Account Collateral.
(b) The insufficiency of amounts contained in the Collateral Accounts
shall not relieve Borrower from its obligation to fulfill all covenants
contained in the Loan Documents.
(c) During the continuance of an Event of Default, Lender may, in its
sole discretion, apply funds in the Collateral Accounts either toward the
components of the Indebtedness (e.g., interest, principal and other amounts
payable hereunder), the Loan and the Notes in such sequence as Lender shall
elect in its sole discretion or toward the payment of Taxes, Ground Rents,
operating expenses and Capital Expenditures.
3.12. Permitted Investments.
---------------------
(a) So long as no Event of Default shall be continuing, Borrower shall
be permitted to direct the investment of the funds from time to time held in the
Collateral Accounts in Permitted Investments and to sell or liquidate such
Permitted Investments and reinvest proceeds from such sale or liquidation in
other Permitted Investments (but Lender shall have no liability whatsoever in
respect of any failure by the Cash Management Bank to do so), with all such
proceeds and reinvestments to be held in the applicable Collateral Account;
provided, however, that the maturity of an adequate portion of the Permitted
Investments on deposit in the Collateral Accounts shall be no later than the
Business Day immediately preceding the date on
43
which such funds are required to be withdrawn therefrom pursuant to this
Agreement. During the continuance of an Escrow Period, no Permitted Investment
shall be liquidated at a loss at the direction of Borrower without the consent
of Lender, not to be unreasonably withheld, except to the extent necessary to
make a required payment to Lender on a Payment Date.
(b) All income and gains from the investment of funds in the Collateral
Accounts shall be retained in the Collateral Accounts from which they were
derived. As between Borrower and Lender, Borrower shall treat all income, gains
and losses from the investment of amounts in the Collateral Accounts as its
income or loss for federal, state and local income tax purposes.
(c) After the Loan and all other Indebtedness have been paid in full,
the Collateral Accounts shall be closed and the balances therein, if any, shall
be paid to Borrower.
3.13. Bankruptcy. Borrower and Lender hereby acknowledge and agree that
upon the filing of a bankruptcy petition by or against Borrower under the
Bankruptcy Code, the Account Collateral and the Revenues (whether then already
in the Collateral Accounts, or then due or becoming due thereafter) shall be
deemed not to be property of Borrower's bankruptcy estate within the meaning of
Section 541 of the Bankruptcy Code. In the event, however, that a court of
competent jurisdiction determines that, notwithstanding the foregoing
characterization of the Account Collateral and the Revenues by Borrower and
Lender, the Account Collateral and/or the Revenues do constitute property of
Borrower's bankruptcy estate, then Borrower and Lender hereby further
acknowledge and agree that all such Revenues, whether due and payable before or
after the filing of the petition, are and shall be cash collateral of Lender.
Borrower acknowledges that Lender does not consent to Borrower's use of such
cash collateral and that, in the event Lender elects (in its sole discretion) to
give such consent, such consent shall only be effective if given in writing
signed by Lender. Except as provided in the immediately preceding sentence,
Borrower shall not have the right to use or apply or require the use or
application of such cash collateral (i) unless Borrower shall have received a
court order authorizing the use of the same, and (ii) Borrower shall have
provided such adequate protection to Lender as shall be required by the
bankruptcy court in accordance with the Bankruptcy Code.
3.14. Return of Letter of Credit If pursuant to any of the provisions
of this Article III, Lender returns to Borrower any letter of credit provided by
Borrower to Lender, Lender shall deliver with the same a letter addressed to the
issuing bank authorizing the termination of the same. Lender shall also execute
and deliver to the issuing bank such additional documents as the issuing bank
may reasonably request in order to effectuate such termination free of any
rights of Lender with respect thereto.
44
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower hereby represents and warrants to Lender that, as of the
Closing Date, except as set forth in the Exception Report:
4.1. Organization.
------------
(a) Borrower is a limited liability company, validly existing and in
good standing under the laws of the State of Delaware, and is in good standing
as a foreign limited liability company in each other jurisdiction where
ownership of its properties or the conduct of its business requires it to be so,
and Borrower has all power and authority under such laws and its organizational
documents and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
(b) Borrower has no subsidiaries and does not own any equity interest
in any other Person.
4.2. Authorization. Borrower has the power and authority to enter into
this Agreement and the other Loan Documents, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated by the
Loan Documents and has by proper action duly authorized the execution and
delivery of the Loan Documents.
4.3. No Conflicts. Neither the execution and delivery of the Loan
Documents to which it is a party, nor the consummation of the transactions
contemplated therein, nor performance of and compliance with the terms and
provisions thereof will (i) violate or conflict with any provision of its
operating agreement, certificate of formation or other governance document, (ii)
violate any law, regulation (including Regulation U, Regulation X or Regulation
T), order, writ, judgment, injunction, decree or permit applicable to it, (iii)
violate or conflict with contractual provisions of, or cause an event of default
under, any indenture, loan agreement, mortgage, contract or other Material
Agreement to which Borrower or Sponsor is a party or by which Borrower or
Sponsor may be bound, or (iv) result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to
Borrower's properties in favor of any party other than Lender.
4.4. Consents. No consent, approval, authorization or order of, or
qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by Borrower of this
Agreement or the other Loan Documents, except for any of the foregoing which
have already been obtained.
4.5. Enforceable Obligations. This Agreement and the other Loan
Documents have been duly executed and delivered by Borrower and constitute
Borrower's legal, valid and binding obligations, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder, render the Loan Documents unenforceable.
4.6. No Default. No Default or Event of Default will exist immediately
following the making of the Loan.
45
4.7. Payment of Taxes. Borrower has filed, or caused to be filed, all
tax returns (federal, state, local and foreign) required to be filed and paid
all amounts of taxes due (including interest and penalties) and has paid or made
provision with the title company for payment of all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangible taxes) owing by it necessary to preserve
the Liens in favor of Lender, except for taxes which are not yet delinquent.
4.8. Compliance with Law. To Borrower's knowledge, Borrower, the
Property and the use thereof comply in all material respects with all applicable
Insurance Requirements and Legal Requirements, including building and zoning
ordinances and codes (and Borrower shall promptly correct any noncompliance
hereafter discovered). The Property is not an illegal use. Borrower is not in
default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority the violation of which could adversely affect the
Property or the condition (financial or otherwise) or business of Borrower.
There has not been committed by or on behalf of Borrower or, to the best of
Borrower's knowledge, any other person in occupancy of or involved with the
operation or use of the Property, any act or omission affording the federal
government or any state or local government the right of forfeiture as against
the Property or any portion thereof or any monies paid in performance of its
obligations under any of the Loan Documents. Borrower has not purchased any
portion of the Property with proceeds of any illegal activity.
4.9. ERISA.
------
(a) No ERISA Event has occurred, is planned or is reasonably expected
to occur with respect to any Plan and have a Material Adverse Effect and no
condition or event currently exists or currently is expected to occur that could
result in any such ERISA Event that could cause a Material Adverse Effect. No
amendment with respect to which security is required under Section 307 of ERISA
or Section 401(a)(29) of the Code has been made or is reasonably expected to be
made to any Plan. To Borrower's knowledge, the Borrower and each ERISA Affiliate
has made all contributions required to be made by such person to each Plan as
and when such contributions have become due. No Plan has any Underfunding that
is reasonably likely to have a Material Adverse Effect.
(b) Neither the Borrower nor any ERISA Affiliate has incurred any
unsatisfied, or is reasonably expected to incur any, Withdrawal Liability to any
Multiemployer Plan in an amount that could cause a Material Adverse Effect.
Neither the Borrower nor any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization or has been terminated, partitioned
or reorganized within the meaning of Title IV of ERISA, and, to the best of
Borrower's knowledge, no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, partitioned or reorganized within the
meaning of Title IV of ERISA, in either case if such event could result in a
liability to the Borrower in an amount that could cause a Material Adverse
Effect. If the Borrower and each ERISA Affiliate were to completely withdraw on
the date hereof from all Multiemployer Plans to which such entity is
contributing or has an obligation to contribute, the Borrower would not incur,
directly or indirectly, Withdrawal Liability to such Multiemployer Plans in an
amount that could cause a Material Adverse Effect.
(c) Neither the Borrower nor any ERISA Affiliate has incurred any
unsatisfied, or is reasonably expected to incur any, liability in an amount that
could cause a
46
Material Adverse Effect as a result of the withdrawal of the Borrower or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA or by reason
of the termination of a Multiple Employer Plan.
(d) The consummation of the transactions contemplated hereby will not
constitute or result in any transaction prohibited by Section 406 of ERISA or
Section 4975 of the Code.
4.10. Government Regulation. Borrower is not an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended.
4.11. No Bankruptcy Filing. Borrower is not contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of its assets or property.
Borrower does not have knowledge of any Person contemplating the filing of any
such petition against it.
4.12. Other Debt. Borrower does not have outstanding any Debt other
than Permitted Debt.
4.13. Litigation. There are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending,
and to the best of Borrower's knowledge there are no such actions, suits or
proceedings threatened against or affecting Borrower or the Property, which
actions, suits or proceedings, alone or in the aggregate, if determined against
it or the Property, could result in a Material Adverse Effect (and all such
actions, suits and proceedings, regardless of materiality, are listed in the
Exception Report).
4.14. Leases; Material Agreements.
---------------------------
(a) The rent roll attached hereto as Schedule E (the "Rent Roll") is
true and correct as of the date thereof. Except as indicated on the Rent Roll,
in Schedule D and/or in the estoppel letters delivered by Tenants to Lender in
connection with the Closing, (i) no Tenant under a Major Lease has any
extension, renewal or termination options (other than customary options relating
to Casualty, Condemnation and similar matters), (ii) no security deposits are
being held by Borrower, (iii) all material work to be performed by the landlord
under the Leases has been substantially performed, all material contributions to
be made by the landlord to the Tenants thereunder have been made, all other
conditions to each such Tenant's obligations thereunder to pay rent have been
satisfied and no Tenant has the right to require Borrower to perform or finance
material Tenant Improvements or Material Alterations, and (iv) no Tenant or
other party has any option, right of first refusal or similar preferential right
to purchase all or any portion of the Property, and no Tenant under a Major
Lease or any other party (other than Tenants under Leases that are not Major
Leases) has any option, right of first refusal or similar preferential right to
lease any space in the Property.
(b) Borrower has delivered to Lender true and complete copies of all
Leases. No person has any possessory interest in the Property or right to occupy
the same except under and pursuant to the provisions of the Leases or persons
claiming by, through or under any Lease.
47
(c) Except as indicated in the Rent Roll, no fixed rent has been paid
more than 30 days in advance of its due date and no payments of rent are more
than 30 days delinquent.
(d) There are no Material Agreements except as described in Schedule F.
Borrower has made available to Lender true and complete copies of all Material
Agreements. Each Material Agreement (other than the Approved Management
Agreement) has been entered into on market terms in the ordinary course of
business by or on behalf of Borrower.
(e) The Leases and the Material Agreements are in full force and effect
and there are no material defaults thereunder by Borrower or, to Borrower's
knowledge, any other party thereto. Borrower is not in default in any respect
which would have a Material Adverse Effect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
Permitted Encumbrance or any other agreement or instrument to which it is a
party or by which it or the Property is bound.
4.15. Full and Accurate Disclosure. To Borrower's actual knowledge, no
statement of fact heretofore delivered by Borrower to Lender in writing in
respect of the Property or the Borrower contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements
contained therein not misleading unless subsequently corrected. There is no fact
regarding the Property or Borrower presently actually known to Borrower which
has not been disclosed in writing to Lender or its consultants or advisors which
is reasonably likely to result in a Material Adverse Effect.
4.16. Financial Condition. All financial statements concerning Borrower
heretofore provided to Lender fairly presents in accordance with GAAP the
financial position of Borrower in all material respects, as of the date on which
it is made. Since the delivery of the most recent such financial statements,
except as otherwise disclosed in writing to Lender, there have occurred no
change in Borrower's financial circumstances which have had or are reasonably
likely to result in a Material Adverse Effect.
4.17. Single-Purpose Requirements. Borrower is a Single-Purpose Entity.
4.18. Location of Chief Executive Offices. The location of Borrower's
principal place of business and chief executive office is the address listed in
Section 9.4.
4.19. Not Foreign Person. Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.
4.20. Labor Matters. Borrower is not a party to any collective
bargaining agreements.
4.21. Title. Borrower owns good, marketable and indefeasible title to
the Property in fee (except for the Ground Leased Parcel, as to which Borrower
has good, marketable and indefeasible title to the leasehold estate therein),
and good title to the related personal property, in each case free and clear of
all Liens whatsoever except the Permitted Encumbrances. The Mortgage, together
with the Assignment of Rents and Leases, when properly recorded in the
appropriate records, and any Uniform Commercial Code financing statements
required to be filed in connection therewith, when properly filed in the
appropriate
48
offices, will create (i) valid, perfected first priority liens on the Property
or the leasehold interests therein, as the case may be, subject only to
Permitted Encumbrances, and (ii) perfected security interests in and to, and
perfected collateral assignments of, all personalty (including the Leases), to
the extent that perfection may occur by filing of a financial statement, all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances. The Permitted Encumbrances do not and will not
materially adversely affect or interfere with the value, or current use or
operation, of the Property, or the security intended to be provided by the
Mortgage or Borrower's ability to repay the Indebtedness in accordance with the
terms of the Loan Documents. The Assignment of Rents and Leases, when properly
recorded in the appropriate records, create a valid first priority assignment
of, or a valid first priority security interest in, certain rights under the
related Leases, subject only to the Permitted Encumbrances, including the
licenses granted therein to Borrower to exercise certain rights and to perform
certain obligations of the lessor under such Leases, including the right to
operate the related Property. No Person other than Borrower owns any interest in
any payments due under such Leases that is superior to or of equal priority with
Lender's interest therein (except for the Ground Lessor's right to payment of
Ground Rents under the circumstances described in the Ground Lease).
4.22. No Encroachments. Except as shown on the applicable Qualified
Survey or in the title policy, all of the improvements on the Property lie
wholly within the boundaries and building restriction lines of the Property, and
no improvements on adjoining property encroach upon the Property, and no
easements or other encumbrances upon the Property encroach upon any of the
improvements, so as, in any such case, to adversely affect the value or
marketability of the Property, except those which are insured against by a
Qualified Title Insurance Policy.
4.23. Physical Condition.
------------------
(a) To the knowledge of Borrower, except for matters set forth in the
Engineering Reports, the Property (including sidewalks, storm drainage system,
roof, plumbing system, HVAC system, fire protection system, electrical system,
equipment, elevators, exterior sidings and doors, irrigation system and all
structural components) is in good condition, order and repair in all respects
material to its use, operation or value.
(b) Borrower is not aware of any material structural or other material
defect or damages in the Property, whether latent or otherwise.
(c) Borrower has not received and is not aware of any other party's
receipt of notice from any insurance company or bonding company of any defects
or inadequacies in the Property which would, alone or in the aggregate,
adversely affect in any material respect the insurability of the same or cause
the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.
4.24. Solvency. On the Closing Date, the fair salable value of
Borrower's assets exceeds and will, immediately following the making of the Loan
and the use and disbursement of the proceeds thereof, exceed Borrower's
aggregate liabilities (including subordinated, unliquidated, disputed and
Contingent Obligations). The fair salable value of Borrower's
49
aggregate assets is and will, immediately following the making of the Loan and
the use and disbursement of the proceeds thereof, be greater than Borrower's
probable aggregate liabilities (including the maximum amount of its contingent
liabilities on its debts as such debts become absolute and matured). Borrower's
aggregate assets do not and, immediately following the making of the Loan and
the use and disbursement of the proceeds thereof 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).
4.25. Management. Except for any Approved Management Agreement, no
property management agreements are in effect with respect to the Property.
4.26. Condemnation. No Condemnation has been commenced or, to
Borrower's actual knowledge, is contemplated with respect to all or any material
portion of the Property or for the relocation of roadways providing access to
the Property.
4.27. Utilities and Public Access. The following statements are
accurate in all material respects:
(i) The Property has adequate rights of access to dedicated public ways
(and makes no material use of any means of access or egress that is not
pursuant to such dedicated public ways or recorded, irrevocable
rights-of-way or easements) and is served by water, electric, sewer,
sanitary sewer and storm drain facilities.
(ii) All public utilities necessary to the continued use and enjoyment
of the Property as presently used and enjoyed are located in the public
right-of-way abutting the premises or in areas ("Easement Areas") that are
the subject of recorded irrevocable easement agreements which benefit the
Property and which are listed in Schedule A of the applicable Qualified
Title Insurance Policy so as to be included in the coverage thereof.
(iii) All such utilities are connected so as to serve the Property
without passing over other property other than Easement Areas.
(iv) All roads necessary for the full utilization of the Property for
its current purpose have been completed and are either part of the Property
(by way of deed, easement or ground lease) or dedicated to public use and
accepted by all Governmental Authorities.
4.28. Environmental Matters. Except as disclosed in the Environmental
Reports:
(i) To Borrower's knowledge, the Property is in compliance in all
material respects with all Environmental Laws applicable to the Property
(which compliance includes, but is not limited to, the possession of, and
compliance with, all environmental, health and safety permits, approvals,
licenses, registrations and other governmental authorizations required in
connection with the ownership and operation of the Property under all
applicable Environmental Laws).
50
(ii) There is no Environmental Claim with respect to the Property
pending to which Borrower or, to Borrower's actual knowledge, any other
Person, is a party; and to the actual knowledge of Borrower, no such
Environmental Claim is threatened.
(iii) To Borrower's knowledge, there have not been and are no past,
present or threatened Releases of any Hazardous Substance from or at the
Property that are reasonably likely to form the basis of any Environmental
Claim, and there is no threat of any Release of any Hazardous Substance
migrating to the Property.
(iv) Without limiting the generality of the foregoing, to Borrower's
knowledge, there is not present at, on, in or under the Property, any
Hazardous Substances, PCB-containing equipment, asbestos or asbestos
containing materials, underground storage tanks or surface impoundments for
any Hazardous Substance, lead in drinking water or lead-based paint (except
in each case in concentrations that comply in all material respects with
all applicable Environmental Laws).
(v) No Liens are presently recorded with the appropriate land records
under or pursuant to any Environmental Law with respect to the Property
and, to Borrower's best knowledge, no Governmental Authority has been
taking any action to subject the Property to Liens under any Environmental
Law.
(vi) Borrower has not received written notice of any judicial
proceeding or governmental or administrative action pending or threatened,
under any Environmental Law to which the Borrower is named as a party, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental law with respect to the
Borrower or, to Borrower's knowledge, the Property.
(vii) The Borrower has not contractually assumed any liability of any
Person under any Environmental Law.
4.29. Assessments. There are no pending or, to Borrower's knowledge,
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments. No extension of
time for assessment or payment by Borrower of any federal, state or local tax is
in effect.
4.30. No Joint Assessment. Borrower has not suffered, permitted or
initiated the joint assessment of the Property (i) with any other real property
constituting a separate tax lot, or (ii) with any personal property, or any
other procedure whereby the lien of any Taxes which may be levied against such
other real property or personal property shall be assessed or levied or charged
to the Property as a single Lien.
4.31. Separate Lots. No portion of the Property is part of a tax lot
that also includes any real property that is not Collateral.
51
4.32. Permits; Certificate of Occupancy. Borrower has obtained all
Permits necessary for the use and operation of the Property. The uses being made
of the Property are in conformity in all material respects with the certificate
of occupancy and/or Permits for the Property and any other restrictions,
covenants or conditions binding on the Property.
4.33. Flood Zone. None of the Improvements on the Property is located
in an area identified by the Federal Emergency Management Agency or the Federal
Insurance Administration as having special flood hazards (Zone A), and, to the
extent that any portion of the Property is located in an area identified by the
Federal Emergency Management Agency as a "100 year flood plain," the Property is
covered by flood insurance meeting the requirements set forth in Section
5.15(a)(ii).
4.34. Security Deposits. Borrower is in compliance in all material
respects with all Legal Requirements relating to security deposits.
4.35. Ground Lease.
(a) a true and complete copy of the Ground Lease has been delivered to
Lender, and the Ground Lease or a memorandum thereof has been duly recorded;
(b) the Ground Lease permits the interest of the lessee thereunder to
be encumbered by the Mortgage and does not restrict the use of the Property by
such lessee, its successors or assigns in a manner that would cause a Material
Adverse Effect;
(c) the Ground Lease may not be amended, modified, cancelled or
terminated without the prior written consent of Lender, and any such action
without such consent is void;
(d) the Ground Lease has an original term (or an original term plus one
or more optional renewal terms) which extends not less than 30 years beyond the
Maturity Date;
(e) the base rental under the Ground Lease is not subject to increase
except as described therein;
(f) other than Permitted Encumbrances, the Ground Lease is not subject
to any liens or encumbrances superior to, or of equal priority with, the
Mortgage (other than the ground lessor's fee interest);
(g) other than Permitted Encumbrances, there is no Lien encumbering the
ground lessor's fee interest, and the Ground Lease shall remain prior to any
Lien (other than Permitted Encumbrances) upon the related fee interest that may
hereafter be granted;
(h) the Ground Lease is assignable by a holder of a mortgage
encumbering the lessee's interest therein upon a foreclosure of such mortgage
without the consent of the lessor thereunder;
(i) the Ground Lease is in full force and effect and no default has
occurred thereunder nor, to Borrower's knowledge, is there any existing
condition which, but for the passage of time or the giving of notice or both,
would result in a default under the terms of the Ground Lease;
52
(j) the Ground Lease requires the lessor thereunder, upon satisfaction
of certain notice requirements set forth in Article 18 of the Ground Lease, to
give notice of any default by the lessee to a holder of a mortgage encumbering
the lessee's interest therein;
(k) the Ground Lease contains no restrictions on the identity of a
leasehold mortgagee, except that certain rights of a leasehold mortgagee are
granted only to an entity that is "Institutional", defined as follows: any one
or more of the following whether acting for their own account, or in a fiduciary
or representative capacity (including, without limitation, as trustee or agent
under a mortgage, indenture, loan agreement or other loan document) for one or
more Persons which need not be Institutions: (i) a savings bank, savings and
loan association, a commercial bank or trust company, an insurance company, real
estate investment trust, a religious, educational or eleemosynary institution, a
union, federal, state, municipal, or other governmental or secular employee's
welfare, benefit pension or retirement fund, an investment banking, merchant
banking or brokerage firm, a Person engaged in the business of financing leases
or any Person (not an individual) regularly engaged in any aspect of the
financial services business, (ii) any department, agency or affiliate of any of
the foregoing, or (iii) any other Person approved by the lessor, which approval
shall not be unreasonably withheld or delayed;
(l) a holder of a mortgage encumbering the lessee's interest therein is
permitted at least 30 days in addition to Borrower's applicable cure period to
cure any default under the Ground Lease which is curable after the receipt of
notice of any such default (and, where necessary, is permitted the opportunity
to gain possession of the interest of the lessee under the Ground Lease through
legal proceedings or to take other action so long as such holder is proceeding
diligently);
(m) the Ground Lease does not permit the lessor thereunder to terminate
the Ground Lease under any circumstances (including a default thereunder by
Borrower after Borrower's receipt of notice and the expiration of any applicable
cure period);
(n) in the case of any termination of the existing Ground Lease for any
reason, the holder of a mortgage has the right to enter into a new ground lease
with the lessor on the same terms as the existing Ground Lease, and all rights
of the lessee under the Ground Lease may be exercised by or on behalf of such
holder;
(o) the Ground Lease does not impose any restrictions on subletting;
and
(p) under the terms of the Ground Lease, any insurance proceeds will be
applied to the repair or restoration of the Property, with the holder of a
mortgage having the right to hold the proceeds in excess of $100,000 in an
Eligible Account and disburse same as the repair or restoration progresses.
4.36. Acquisition Documents. Borrower has delivered to Lender true and
complete copies of all material agreements and instruments under which Borrower
or any of its Affiliates have material remaining rights or material obligations
in respect of Borrower's acquisition of the Property.
53
4.37. Insurance. Borrower has obtained insurance policies reflecting
the insurance coverages, amounts and other requirements set forth in this
Agreement. All premiums on such insurance policies required to be paid as of the
date hereof have been paid for the current policy period. No Person, including
Borrower, has done, by act or omission, anything which would impair the coverage
of any such policy.
4.38. Use of Proceeds. None of the proceeds of the Loan will be used
for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X or Regulation T or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
"margin stock" or for any other purpose which might constitute this transaction
a "purpose credit" within the meaning of Regulation U or Regulation X. As of the
Closing Date, Borrower does not own any "margin stock."
4.39. Survival. Borrower agrees that all of the representations and
warranties of Borrower set forth in this Agreement and in the other Loan
Documents shall survive for so long as any portion of the Indebtedness is
outstanding. All representations, warranties, covenants and agreements made by
Borrower 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. On the date of any Securitization, on
not less than five days' prior written notice, Borrower shall deliver to Lender
a certification (x) confirming that all of the representations and warranties
contained herein are true and correct as of the date of the Securitization, or
(y) otherwise specifying any changes in or qualifications to such
representations and warranties as of such date as may be necessary to make such
representations and warranties consistent with the facts as they exist on such
date. Borrower shall have no further obligation to update any representation or
warranty nor shall any representation or warranty be deemed to have been made on
any date other than the Closing Date or as of the date of any Securitization,
other than any affirmative disclosure obligation contained herein.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
5.1. Existence. Borrower shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence as
a limited liability company and all rights, licenses, Permits, franchises and
other agreements necessary for the continued use and operation of its business.
Borrower shall deliver to Lender a copy of each amendment or other modification
to any of its organizational documents promptly after the execution thereof.
5.2. Maintenance of Property; Compliance with Legal Requirements.
Borrower will keep the Property in good working order and repair, reasonable
wear and tear excepted. Subject to Section 6.13, Borrower shall from time to
time make, or cause to be made, all reasonably necessary and desirable repairs,
renewals, replacements, betterments and improvements thereto. Borrower shall
comply with, and shall cause the Property to be operated, maintained, repaired
and improved in compliance in all material respects with, all Legal Requirements
and Insurance Requirements (unless Borrower is in good faith, and by proper
legal proceedings, where appropriate, diligently contesting the validity, amount
or application thereof, provided that in each case, at the time of the
commencement of any such action or proceeding,
54
and during the pendency of such action or proceeding (i) no Event of Default
shall be continuing hereunder, (ii) Borrower shall keep Lender apprised of the
status of such contest, (iii) such contest is maintained and prosecuted
continuously and with diligence, and (v) in the case of any Insurance
Requirement, the failure of Borrower to comply therewith shall not impair the
validity of any insurance required to be maintained by Borrower hereunder or the
right to full payment of any claims thereunder. Notwithstanding the foregoing,
Borrower promptly shall comply with any contested Legal Requirement or Insurance
Requirement and compliance therewith shall not be deferred, if at any time the
Property or any portion thereof shall be, in Lender's reasonable judgment, in
imminent danger of being forfeited or lost or Lender is likely to be subject to
civil or criminal damages as a result thereof. If such action or proceeding is
terminated or discontinued adversely to Borrower, Borrower shall comply with,
and thereafter deliver to Lender reasonable evidence of Borrower's compliance
with, such contested Legal Requirements or Insurance Requirements, as the case
may be).
5.3. Impositions and Other Claims. Borrower shall pay and discharge all
taxes, assessments and governmental charges levied upon it, its income and its
assets no later than the last day the same may be paid without interest or
penalties, as well as all lawful claims for labor, materials and supplies or
otherwise, subject to any rights to contest contained in the definition of
Permitted Encumbrances. Borrower shall file all federal, state and local tax
returns and other reports that it is required by law to file. In the event of
the enactment after this date of any law or regulation applicable to Lender, any
Note, the Property or the Mortgage deducting from the value of property for the
purpose of taxation any lien or security interest thereon, or imposing upon
Lender the payment of the whole or any portion of the taxes or assessments or
charges or liens herein required to be paid by Borrower, or changing in any way
the laws or regulations relating to the taxation of mortgages or security
agreements or debts secured by mortgages or security agreements or the interest
of the mortgagee or secured party in the property covered thereby (other than
changes in taxes in the nature of income or franchise taxes), or the manner of
collection of such taxes, so as to affect the Mortgage, the Indebtedness or
Lender, then Borrower, upon demand by Lender, shall pay such taxes, assessments,
charges or liens, or reimburse Lender for any amounts paid by Lender; provided
that if in the opinion of Lender's counsel it might be unlawful to require
Borrower to make such payment or the making of such payment might result in the
imposition of interest beyond the maximum amount permitted by applicable Law,
Lender may elect to declare all of the Indebtedness to be due and payable 120
days from the giving of written notice by Lender to Borrower.
5.4. Access to Property. Subject to the rights of Tenants, Borrower
shall permit agents, representatives and employees of Lender and the Servicer to
inspect the Property or any portion thereof, and/or the books and records of
Borrower, at such reasonable times as may be requested by Lender upon reasonable
advance notice.
5.5. Notice of Default. Borrower shall promptly advise Lender of any
change in Borrower's condition, financial or otherwise, which is reasonably
likely to have a Material Adverse Effect, or of the occurrence to the best of
Borrower's knowledge of any Default or Event of Default.
55
5.6. Litigation. Borrower shall give prompt written notice to Lender of
any litigation or governmental proceedings pending or threatened in writing
against Borrower which is reasonably likely to have a Material Adverse Effect.
5.7. Cooperate in Legal Proceedings. Except with respect to any claim
by Borrower against Lender, Borrower shall cooperate fully with Lender with
respect to any proceedings before any Governmental Authority which may in any
way affect the rights of Lender hereunder or under any of the Loan Documents
and, in connection therewith, Lender may, at its election, participate or
designate a representative to participate in any such proceedings.
5.8. Leases.
------
(a) Borrower shall furnish Lender with executed copies of all Leases.
Borrower hereby covenants and agrees that all new Leases and renewals,
modifications or amendments of Leases shall be entered into on an arms-length
basis with Tenants whose identity and creditworthiness is, in the good faith
judgment of Borrower, appropriate for tenancy in a class A office building,
shall provide for rental rates and other economic terms which, taken as a whole,
are in the good faith judgment of Borrower at least equivalent to then-existing
market rates, based on the applicable market (but taking into account, in the
case of a renewal or modification, the effect on the rent for the remainder of
the original term), and shall contain terms and conditions that (taken as a
whole) are in the good faith judgment of Borrower Commercially Reasonable (in
each case, unless Lender consents to such Lease in its reasonable discretion).
To the extent that Borrower has a consent right with respect to any sublease or
sub-sublease or similar occupancy agreement between a Tenant and a third party,
Borrower shall not grant such consent unless the identity and creditworthiness
of the proposed subtenant or sub-subtenant is, in the good faith judgment of
Borrower, appropriate for tenancy in a Class A office building (unless Lender
consents to such sublease or sub-sublease in its reasonable discretion or
Borrower does not have the right under the applicable Lease to reject such
sublease on such grounds). Nothing herein is intended to restrict, and Borrower
shall be entitled without the consent of Lender, to enter into Leases (including
renewals and amendments) which Borrower is obligated to enter into under any
then existing Lease. All new Leases shall provide that they are subject and
subordinate to any current or future mortgage financing on the Property and that
the Tenant agrees to attorn to any foreclosing mortgagee at such mortgagee's
request, provided such mortgagee agrees not to disturb such Tenant's tenancy
except in accordance with its Lease.
(b) All new Major Leases, and all modifications or amendments (other
than Non-Material Lease Modifications), terminations and renewals of Major
Leases, and any surrender of rights under any Major Lease (unless required under
the applicable Leases (e.g., where a Tenant has an existing option to
terminate)), shall be subject to the prior written approval of Lender. In each
case where Lender's approval is required under the previous sentence, such
approval shall not be unreasonably withheld, conditioned or delayed and shall
not be withheld unless (i) the rent and other amounts payable under such Major
Lease is not at then existing market rates, taking into account the location of
the demised premises and the extent of any tenant improvements, allowances,
concessions and free rent (taken as a whole) and taking into account, in the
case of a renewal or modification, the effect on the rent for the remainder of
the original term, (ii) the proposed terms of such proposed Major Lease (taken
as a whole) are
56
not Commercially Reasonable, or (iii) the identity or creditworthiness of the
proposed Tenant (if not an existing Tenant under a Major Lease) is inappropriate
for tenancy in a class A office building. Nothing herein is intended to
restrict, and Borrower shall be entitled without the consent of Lender, to enter
into Leases (including renewals and amendments) which Borrower is obligated to
enter into under any then existing Lease. Each request for approval of a Major
Lease (or any other Lease, including any renewal, modification or termination,
where Lender's consent is required hereunder) which is submitted to Lender in an
envelope marked "URGENT - LENDER'S ATTENTION REQUIRED WITHIN 10 BUSINESS DAYS",
together with a copy of (x) the proposed Lease, a summary of the major economic
terms thereof and any non-customary termination options contained therein, and
copies of all written materials obtained by Borrower in connection with its
evaluation of the creditworthiness of the proposed Tenant or (y) with respect to
a proposed termination, a description of the reason therefor, shall be deemed
approved if Lender shall not have notified the Borrower in writing of its
disapproval and the reasons therefor within 10 Business Days after Lender's
receipt of such submission (provided, however, that if Lender requests
additional information during such 10-Business Day period, then such period
shall be extended through the 5th Business Day following Lender's receipt of
such additional information). Borrower may also request, pursuant to the
procedure described in the preceding sentence, Lender's approval of the rent and
other amounts payable under a proposed Major Lease and the identity of the
proposed Tenant even if the form of the proposed Major Lease is not yet
available for Lender's review, provided that the approval or deemed approval of
such items shall not constitute Lender's approval of such Major Lease, and when
the proposed Major Lease becomes available Borrower shall be required to submit
it for Lender's approval in accordance with the procedure described in the
preceding sentence. If Lender shall have previously consented or been deemed to
have consented to the rent and other amounts payable under such proposed Major
Lease and the identity of the proposed Tenant, Lender's approval of such
proposed Major Lease shall not be withheld unless the terms of such proposed
Major Lease, taken as a whole, are not Commercially Reasonable. Notwithstanding
anything to the contrary herein, no amendment, modification, termination or
renewal of the Lease of the garage space in the Property shall require Lender's
consent unless same will result in such space no longer being used as parking
garage. At Borrower's written request, Lender shall enter into a subordination,
non-disturbance and attornment agreement ("SNDA") with (i) any Tenant under a
Lease that has been approved or deemed approved by Lender, (ii) any Tenant whose
Lease was executed prior to the date hereof and (iii) any retail tenant whose
Lease is entered into in accordance with this Agreement. Each such SNDA shall be
on Lender's standard form, with such modifications as Lender may reasonably
approve, except that with respect to any Lease that was executed prior to the
date hereof and that contained a form of SNDA, Lender shall execute an SNDA in
such form. In determining whether changes are reasonable, Lender acknowledges
that revisions equivalent to those contained in existing SNDAs signed by Lender
are reasonable. Upon the written request of Borrower, Lender shall confirm in
writing whether any proposed Lease, modification, amendment, termination or
renewal of a Lease requires Lender's consent hereunder and Borrower and the
tenant under the Lease may rely thereon. Borrower shall include in its request
the reasons it believes consent is not required hereunder. Borrower shall in
connection therewith provide Lender with such additional information or
documents as Lender may reasonably require in order to make such determination.
(c) Borrower shall (i) deliver to each new Tenant a Tenant Notice upon
execution of such Tenant's Lease (unless the same is included in substance in
such Lease), and
57
promptly thereafter deliver to Lender a copy thereof and evidence of such
Tenant's receipt thereof; (ii) observe and perform all the material obligations
imposed upon the lessor under the Leases; (iii) enforce all of the material
terms, covenants and conditions contained in the Leases on the part of the
lessee thereunder to be observed or performed, short of termination thereof,
provided that Borrower may terminate any Lease following a material default
thereunder by the respective Tenant; (iv) not seek to collect any of the rents
thereunder more than one month in advance without the prior written consent of
Lender; (v) not execute any assignment of lessor's interest in the Leases or
associated rents other than the Mortgage or Assignment of Rents and Leases; and
(vi) during the continuance of an Escrow Period, not cancel or terminate any
guarantee of any of the Major Leases without the prior written consent of
Lender.
(d) Security deposits of Tenants under all Leases, whether held in cash
or any other form, shall not be commingled with any other funds of Borrower and,
if cash, shall be deposited by Borrower at such commercial or savings bank or
banks as may be reasonably satisfactory to Lender and pledged to Lender. Any
bond or other instrument which Borrower is permitted to hold in lieu of cash
security deposits under any applicable Legal Requirements shall be maintained in
full force and effect unless replaced by cash deposits as described above, shall
(if not prohibited by any Legal Requirements) name Lender as payee or mortgagee
thereunder (or at Lender's option, be fully assignable to Lender) or may name
Borrower as payee thereunder so long as such bond or other instrument is pledged
to Lender as security for the Indebtedness and shall, in all respects, comply
with any applicable Legal Requirements. Borrower shall, upon Lender's request,
provide Lender with evidence reasonably satisfactory to Lender of Borrower's
compliance with the foregoing. During the continuance of any Event of Default,
Borrower shall, upon Lender's request, deposit with Lender in an Eligible
Account pledged to and under the sole dominion and control of Lender an amount
equal to the aggregate security deposits of the Tenants (and any interest
theretofore earned on such security deposits and actually received by Borrower)
which Borrower received in cash and had not returned to the applicable Tenants
or applied in accordance with the terms of the applicable Lease, and Lender
shall hold such security deposits in a segregated account and apply or return
such security deposits and any accrued interest in accordance with the
applicable Leases.
5.9. [Intentionally Omitted].
-----------------------
5.10. Further Assurances. Borrower shall, at Borrower's sole cost and
expense, from time to time as reasonably requested by Lender, execute,
acknowledge, record, register, file and/or deliver to Lender such other
instruments, agreements, certificates and documents (including Uniform
Commercial Code financing statements and amended or replacement mortgages) as
Lender may reasonably request to evidence, confirm, perfect and maintain the
Liens securing or intended to secure the obligations of Borrower under the Loan
Documents or to facilitate a replacement of the Cash Management Bank pursuant to
Section 3.1(c) or a bifurcation of the Notes pursuant to Sections 1.1(c) and/or
9.7(a), in each case if requested by Lender, and do and execute all such further
lawful and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement and the
other Loan Documents as Lender shall reasonably request from time to time.
Borrower hereby authorizes and appoints Lender as its attorney-in-fact to
execute, acknowledge, record, register and/or file such instruments, agreements,
certificates and documents, and to do and execute such acts, conveyances and
assurances, should Borrower fail to do so itself in
58
violation of this Agreement within ten Business Days following written request
from Lender, in each case without the signature of Borrower. The foregoing grant
of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term of this Agreement. Borrower hereby
ratifies all actions that such attorney shall lawfully take or cause to be taken
in accordance with this Section 5.10. Lender shall provide Borrower with copies
of any instruments executed by Lender in accordance with this Section 5.10.
5.11. Management of Collateral.
------------------------
(a) The Property shall be managed at all times by an Approved Property
Manager pursuant to an Approved Management Agreement. Pursuant to the
Subordination of Property Management Agreement or Agreements, each Approved
Property Manager shall agree that its Approved Management Agreement, and all
fees thereunder (including any incentive fees) are subject and subordinate to
the Indebtedness and that during the continuance of a Cash Trap Period or Event
of Default, its management fees may not exceed 1.5% of Operating Income.
Borrower may from time to time appoint a successor manager, which successor
manager shall be an Approved Property Manager, to manage the Property pursuant
to an Approved Management Agreement, and such successor manager shall execute a
Subordination of Property Management Agreement for Lender's benefit.
(b) Borrower covenants and agrees that each Approved Property Manager
(including any successor Approved Property Manager) shall at all times while the
Loan is outstanding maintain worker's compensation insurance as required by
Governmental Authorities.
(c) Borrower shall notify Lender in writing of any "Event of Default"
under and as defined in the Approved Management Agreement of which Borrower has
actual knowledge.
(d) Upon the occurrence and during the continuance of an Event of
Default, Lender may, in its sole discretion, require Borrower to terminate any
or all of the Approved Management Agreements and engage an Approved Property
Managers selected by Lender to serve as replacement Approved Property Manager
pursuant to an Approved Management Agreement.
5.12. Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each Fiscal Year, Borrower shall furnish
to Lender, in hard copy and, if reasonably available, electronic format, a
balance sheet of Borrower as at the end of such Fiscal Year, together with
related statements of income and members' capital (or its equivalent for any
entity other than a limited liability company) for such Fiscal Year, audited by
Xxxx and Company or a "big five" independent certified public accounting firm,
or another independent certified public accounting firm satisfactory to Lender,
whose opinion shall be to the effect that such financial statements have been
prepared in accordance with GAAP applied on a consistent basis and shall not be
qualified as to the scope of the audit or as to the status of Borrower as a
going concern. Together with Borrower's annual financial statements, Borrower
shall furnish to Lender, in hard copy and, if reasonably available, electronic
format:
(i) a statement of cash flows;
59
(ii) then current rent rolls (including vacancies);
(iii) an annual report for the most recently completed Fiscal Year,
describing Capital Expenditures (stated separately with respect to any
project costing in excess of $100,000), Tenant Improvements and Leasing
Commissions; and
(iv) Borrower shall also deliver to Lender within a reasonable time
after request such other information as Lender shall reasonably request.
5.13. Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the end of each Fiscal Quarter, Borrower shall
furnish to Lender, in hard copy and electronic format (if reasonably available),
quarterly and year-to-date unaudited financial statements prepared for such
fiscal quarter with respect to Borrower, including a balance sheet and operating
statement as at the end of such Fiscal Quarter, together with related statements
of income, members' capital (or its equivalent for any entity other than a
limited liability company) and cash flows for such Fiscal Quarter and for the
portion of the Fiscal Year ending with such Fiscal Quarter, which statements
shall be accompanied by an Officer's Certificate certifying that the same are
true and correct and were prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from audit and normal year-end
audit adjustments. Each such quarterly report shall be accompanied by the
following, in hard copy and electronic format:
(i) a statement in reasonable detail which calculates Net Operating
Income for the trailing four Fiscal Quarters, in each case, ending at the
end of such Fiscal Quarter;
(ii) a summary of Leases signed during such quarter, which summary
shall include the Tenant's name, lease term, base rent, Tenant
Improvements, leasing commissions paid, free rent and other material tenant
concessions;
(iii) then current rent rolls (including vacancies); and
(iv) Borrower shall also deliver to Lender within a reasonable time
after request such other information as Lender shall reasonably request.
5.14. Monthly Financial Statements. Until the six-month anniversary of
the Closing Date or, if earlier, the date of a Securitization, Borrower shall
furnish within 45 days after the end of each calendar month, in hard copy and,
if reasonably available, electronic format, monthly and year-to-date unaudited
financial statements prepared for such month with respect to Borrower, including
a balance sheet and operating statement as at the end of such month, together
with related statements of income, members' capital and cash flows for such
month and for the portion of the Fiscal Year ending with such month, which
statements shall be accompanied by an Officer's Certificate certifying that the
same are true and correct and were prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from audit and normal year-end
audit adjustments. Each such monthly report shall be accompanied by the
following, in hard copy and, if reasonably available, electronic format:
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(i) a summary of Leases signed during such month, which summary shall
include the Tenant's name, lease term, base rent, escalations, Tenant
Improvements, leasing commissions paid, free rent and other concessions;
(ii) then current rent rolls (including vacancies); and
(iii) Borrower shall also deliver to Lender within a reasonable time
after request such other information as Lender shall reasonably request.
5.15. Insurance.
---------
(a) Borrower shall obtain and maintain with respect to the Property,
for the mutual benefit of Borrower and Lender at all times, the following
policies of insurance:
(i) insurance against loss or damage by standard perils included within
the classification "All Risks of Physical Loss". Such insurance shall be in
an aggregate amount equal to the then full replacement cost of the Property
and fixtures (without deduction for physical depreciation); shall have
reasonable and customary deductibles (but in no event in excess of
$500,000); shall be paid annually in advance; shall contain a "Replacement
Cost Endorsement" with a waiver of depreciation; and shall include an
ordinance or law coverage endorsement containing Coverage A: "Loss Due to
Operation of Law" (with a minimum liability equal to replacement cost),
Coverage B: "Demolition Cost" and Coverage C: "Increased Cost of
Construction" coverages;
(ii) flood insurance if any portion of the Property is located in an
area identified by the Federal Emergency Management Agency as a "100 year
flood plain", in an amount equal to the maximum limit of coverage available
with respect to the Property under such program;
(iii) commercial general liability insurance, including broad form
property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages and containing minimum limits per occurrence
of not less than $1,000,000 with not less than a $2,000,000 general
aggregate for any policy year. In addition, at least $50,000,000 excess
and/or umbrella liability insurance shall be obtained and maintained for
any and all claims, including all legal liability imposed upon Borrower and
all related court costs and attorneys' fees and disbursements;
(iv) rental loss and/or business interruption insurance in an annual
aggregate amount equal to the estimated gross revenues from the Property,
such insurance to cover losses for a period of at least 12 months following
the date on which the Property has been restored, as reasonably determined
by the applicable insurer. The amount of such insurance shall be increased
from time to time as and when the gross revenues from the Property
increase;
(v) insurance against loss or damage from (A) leakage of sprinkler
systems and (B) explosion of steam boilers, air conditioning equipment,
high pressure piping, machinery and equipment, pressure vessels or similar
apparatus now or hereafter installed in any of the Improvements (without
exclusion for explosions) and insurance against loss of occupancy or use
arising from any breakdown, in such amounts as are generally available at
reasonable premiums and are generally required by institutional lenders for
properties comparable to the Property;
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(vi) worker's compensation insurance with respect to all employees of
Borrower as and to the extent required by any Governmental Authority or
Legal Requirement and employer's liability coverage of at least $1,000,000;
(vii) during any period of repair or restoration, builder's "all risk"
insurance in an amount equal to not less than the full insurable value of
the Property against such risks (including fire and extended coverage and
collapse of the Improvements to agreed limits) as are customarily insured
against under such circumstances, as reasonably determined by Lender, in
form and substance reasonably acceptable to Lender;
(viii) coverage to fully compensate for the cost of demolition and the
increased cost of construction, renovation or alteration for the Property;
and
(ix) such other insurance as may from time to time be reasonably
requested by Lender.
(b) All policies of insurance (the "Policies") required pursuant to
this Section 5.15:
(i) shall be issued by an insurer which has a claims paying ability
rating of not less than AA- by S&P and Aa3 by Xxxxx'x (or, if any such
Rating Agency does not provide a claims paying ability rating to such
insurer, such insurer shall have been approved for these purposes by such
Rating Agency) and, if rated by Fitch, AA- by Fitch, or such other insurer
as shall have been reasonably approved in writing by Lender and with
respect to which Rating Confirmation shall have been received (after the
occurrence of a Securitization, the foregoing rating requirements shall
apply only with respect to the Rating Agencies that rate the Certificates
issued in the Securitization);
(ii) shall be maintained throughout the term of the Loan without cost
to Lender;
(iii) with respect to casualty policies, shall contain a standard
noncontributory mortgagee clause naming Lender and its successors and
assigns as first mortgagee and loss payee;
(iv) with respect to liability policies, shall name Lender and its
successors and assigns as additional insureds;
(v) with respect to rental or business interruption insurance policies,
shall name Lender and its successors and/or assigns as loss payee;
(vi) shall contain an endorsement providing that neither Borrower nor
Lender nor any other party shall be a co-insurer under said Policies and
that Lender shall receive at least 30 days' prior written notice of any
modification, reduction or cancellation;
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(vii) shall contain an endorsement providing that no act or negligence
of Borrower or of a Tenant or other occupant shall affect the validity or
enforceability of the insurance insofar as a mortgagee is concerned;
(viii) shall contain a waiver of subrogation against Lender;
(ix) shall contain deductibles no larger than is customary for similar
policies covering similar properties in the geographic market in which the
Property is located; and
(x) may be in the form of a blanket policy, provided that (i) aggregate
insurance limits will under no circumstance limit the amount that will be
paid in respect of the Property below the amounts required herein, and (ii)
during the continuance of an Escrow Period, Borrower shall provide evidence
satisfactory to Lender that the insurance premiums for the Property are
separately allocated under such Policy to the Property and that payment of
such allocated amount shall maintain the effectiveness of such Policy as to
the Property notwithstanding the failure of payment of any other portion of
premiums (or, if Borrower does not deliver such evidence, Borrower shall be
required upon written request from Lender to reserve in respect of
insurance premiums such amounts as Lender reasonably determines would be
the cost for Policies if they were maintained on the Property alone).
Any policies of insurance maintained by Borrower but not required hereunder
shall comply with clauses (iii), (iv), (v), (vi) and (viii) above.
(c) Borrower shall pay the premiums for all Policies as the same become
due and payable. Copies of such Policies, certified as true and correct by
Borrower, or certificates thereof (on XXXXX Form 27 where available), shall be
delivered to Lender promptly upon request. Not later than 10 Business Days prior
to the expiration date of each Policy, Borrower shall deliver to Lender
evidence, reasonably satisfactory to Lender, of its renewal.
5.16. Casualty and Condemnation.
-------------------------
(a) In the event of any Casualty or Condemnation, Borrower shall give
prompt notice thereof to Lender. Lender may (x) jointly with Borrower reasonably
settle and adjust any claims, (y) during the continuance of an Event of Default,
settle and adjust any claims without the consent or cooperation of Borrower, or
(z) allow Borrower to settle and adjust any claims; provided that if no Event of
Default has occurred and is continuing, Borrower may, without Lender, settle and
adjust claims aggregating not in excess of $4,000,000 if such settlement or
adjustment is carried out in a competent manner, but Lender shall be and hereby
is authorized to collect and receipt for any and all Loss Proceeds. The
reasonable expenses incurred by Lender in the adjustment and collection of Loss
Proceeds shall become part of the Indebtedness and shall be reimbursed by
Borrower to Lender within five days after demand therefor.
(b) All Loss Proceeds from any Casualty or Condemnation shall be
immediately deposited into the Loss Proceeds Account (monthly rental
loss/business interruption proceeds shall be initially deposited into the Loss
Proceeds Account and subsequently deposited into the Cash Management Account in
installments as and when the lost rental income covered by such proceeds would
have been payable, subject to the terms of the Ground Lease that require such
proceeds to be applied toward payment of Ground Rent). If any Condemnation or
Casualty occurs as to which, in the reasonable judgment of Lender:
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(i) the Condemnation or Casualty did not render untenantable more than
10% (in the case of a Condemnation) or 30% (in the case of a Casualty) of
the aggregate rentable area of the Property;
(ii) the Condemnation or Casualty did not result in the cancellation of
Leases contributing more than 30% of the Operating Income during the
12-month period immediately preceding such Condemnation or Casualty;
(iii) restoration of the Property is expected to be completed prior to
the expiration of rental interruption insurance and at least six months
prior to the Maturity Date; and
(iv) after such restoration, the fair market value of the Property will
equal at least the fair market value of the Property immediately prior to
such Condemnation or Casualty (assuming the affected portion of the
Property is relet);
or if restoration of the Property is required by the Ground Lease, or if Lender
otherwise elects to allow Borrower to restore the Property, then the Loss
Proceeds shall be held and disposed of pursuant to, and under the conditions set
forth in, Article 15 of the Ground Lease. To the extent not inconsistent with
Article 15 of the Ground Lease, the following terms shall apply: provided no
Event of Default is continuing, the Loss Proceeds after receipt thereof by
Lender and reimbursement of any reasonable expenses incurred by Lender in
connection therewith shall be applied to the cost of restoring, repairing,
replacing or rebuilding the Property or part thereof subject to the Casualty or
Condemnation, in the manner set forth below (and Borrower hereby covenants and
agrees to commence as promptly and diligently as practicable to prosecute such
restoring, repairing, replacing or rebuilding of the Property in a workmanlike
fashion and in accordance with applicable law to a status at least equivalent to
the quality and character of the Property immediately prior to the Condemnation
or Casualty). Provided that no Event of Default shall have occurred and be then
continuing, Lender shall disburse such proceeds to Borrower upon Lender's being
furnished with (i) evidence reasonably satisfactory to it of the estimated cost
of completion of the restoration, (ii) funds, or assurances reasonably
satisfactory to Lender that such funds are available and sufficient in addition
to the remaining Loss Proceeds, to complete the proposed restoration, and (iii)
such architect's certificates, waivers of lien, contractor's sworn statements,
title insurance endorsements, bonds, plats of survey and such other evidences of
cost, payment and performance as Lender may reasonably request; and Lender may,
in any event, require that all plans and specifications for restoration
reasonably estimated by Lender to exceed $7,000,000 be submitted to and approved
by Lender prior to commencement of work (which approval shall not be
unreasonably withheld). If Lender reasonably estimates that the cost to restore
will exceed $7,000,000, Lender may retain a local construction consultant to
inspect such work and review Borrower's request for payments and Borrower shall,
on demand by Lender, reimburse Lender for the reasonable fees and disbursements
of such consultant (which fees and expenses shall constitute Indebtedness). No
payment shall exceed 90% of the value of the work performed from time to time
until such time
64
as 50% of the restoration (calculated based on anticipated aggregate cost of the
work) has been completed, and amounts retained prior to completion of 50% of the
restoration shall not be paid prior to the final completion of the restoration
(or substantial completion if same is commercially reasonable). Funds other than
Loss Proceeds shall be disbursed prior to disbursement of such Loss Proceeds,
and at all times the undisbursed balance of such proceeds remaining in the Loss
Proceeds Account, together with any additional funds irrevocably and
unconditionally deposited therein or irrevocably and unconditionally committed
for that purpose, shall be at least sufficient in the reasonable judgment of
Lender to pay for the cost of completion of the restoration free and clear of
all liens or claims for lien. After the restoration of the Property has been
completed and all related payments have been made, provided no Event of Default
is continuing, any amounts remaining in the Loss Proceeds Account shall be
remitted to Borrower.
(c) Borrower shall cooperate with Lender in obtaining for Lender the
benefits of any Loss Proceeds lawfully or equitably payable to Lender in
connection with the Property. Lender shall be reimbursed for any expenses
reasonably incurred in connection therewith (including reasonable attorneys'
fees and disbursements, and, if reasonably necessary to collect such proceeds,
the expense of an Appraisal on behalf of Lender) out of such Loss Proceeds.
(d) If Borrower is not entitled to apply Loss Proceeds toward the
restoration of the Property pursuant to Section 5.16(b) and Lender elects not to
permit such Loss Proceeds to be so applied, such Loss Proceeds shall be applied
on the first Payment Date following such election to the prepayment of the Notes
in ascending order of interest rate (i.e., first to the Note with the lowest
interest rate until its outstanding principal balance has been reduced to zero,
then to the Note with the second lowest interest rate until its outstanding
principal balance has been reduced to zero, and so on), and shall be accompanied
by interest through the end of the applicable Interest Accrual Period. No Yield
Maintenance Premium shall be payable in respect of any prepayment made pursuant
to this Section 5.16(d).
5.17. Annual Budget. Borrower has previously delivered to Lender the
Annual Budget for the Property for the 2001 Fiscal Year. At least 30 days prior
to the commencement of each subsequent Fiscal Year during the term of the Loan,
Borrower shall deliver to Lender for informational purposes only an Annual
Budget for the Property for the ensuing Fiscal Year, and promptly after
preparation thereof, any subsequent material revisions to the Annual Budget.
During the continuance of any Cash Trap Period or Event of Default, such Annual
Budget and any such revisions shall be subject to Lender's approval, except with
respect to non-discretionary items such as insurance premiums and Taxes (the
Annual Budget, as so approved, the "Approved Annual Budget"); provided, however,
that (1) during the continuance of a Cash Trap Period, Borrower shall not amend
any Annual Budget more than once in any 60-day period, and (2) so long as no
Event of Default is continuing, the consent of Lender to any such Annual Budget
and any such revisions shall not be unreasonably withheld or delayed. Any Annual
Budget submitted for Lender's approval together with a letter that explicitly
refers to the deemed approval requirement contained in this Section shall be
deemed approved if Lender shall not have notified Borrower in writing of its
disapproval within 15 Business Days after receipt of such submission (provided,
however, that upon written request from Lender prior to the end of such
15-Business Day period, such 15-Business Day period shall be extended by an
additional five Business Days).
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5.18. General Indemnity.
-----------------
(a) Borrower shall indemnify, reimburse, defend and hold harmless
Lender and its officers, directors, employees and agents (collectively, the
"Indemnified Parties") for, from and against any and all Damages of the
Indemnified Parties, in any way relating to or arising out of the making or
holding or enforcement of the Loan by Lender or the administration of the
Transaction to the extent resulting, directly or indirectly, from any claim
(including any Environmental Claim) made (whether or not in connection with any
legal action, suit, or proceeding) by or on behalf of any Person; provided,
however, that no Indemnified Party shall have the right to be indemnified
hereunder for its own fraud, bad faith, gross negligence or willful misconduct.
(b) The applicable Indemnified Party shall promptly notify Borrower in
writing of any action, judgement, suit, claim or demand with respect to which
such Indemnified Party seeks the benefit of Section 5.18(a) and provide Borrower
the opportunity to defend same, and if such Indemnified Party fails to do so it
shall lose the benefit of Section 5.18(a) if and to the extent Borrower is
prejudiced thereby. So long as Borrower is resisting and defending in a prudent
and commercially reasonable manner any action, judgment, suit, claim or demand
that gives rise to Damages (or same is being defended by Borrower's insurer and
insurance is adequate for the reimbursement of such Damages), the Indemnified
Parties shall not be entitled to defend or settle same and claim the benefit of
Section 5.18(a) with respect thereto without the consent of Borrower.
Notwithstanding the foregoing, if the conditions set forth in the preceding
sentence are not being satisfied and Lender has provided Borrower with 30 days'
prior written notice, or shorter period if mandated by the requirements of
applicable law, and opportunity to correct such determination, Lender may in
good xxxxx xxxxxx such action, suit or proceeding and claim the benefit of this
Section 5.18 with respect thereto. The provisions of and undertakings and
indemnification set forth in this Section 5.18 shall survive the satisfaction
and payment in full of the Indebtedness and termination of this Agreement.
ARTICLE VI
NEGATIVE COVENANTS
------------------
6.1. Liens on the Property. Borrower shall not permit or suffer the
existence of any Lien on any of its assets, other than Permitted Encumbrances.
6.2. Ownership. Borrower shall not own any assets other than the
Property and related personal property and fixtures located therein or used in
connection therewith.
6.3. Transfer. Borrower shall not Transfer any Collateral other than in
compliance with Article II and other than the replacement or other disposition
of obsolete or non-useful personal property and fixtures in the ordinary course
of business, and Borrower shall not hereafter file a declaration of condominium
with respect to the Property without the consent of Lender, not to be
unreasonably withheld, and the receipt of Rating Confirmation.
6.4. Debt. Borrower shall not have any material Debt, other than
Permitted Debt. For purposes hereof, Debt is material if (i) all such Debt which
does not constitute Permitted Debt in the aggregate exceeds $250,000, or (ii)
any such Debt is secured, or (iii) any such Debt is evidenced by a note, or (iv)
any such Debt is not incurred in the ordinary course of operating the Property.
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6.5. Dissolution; Merger or Consolidation. Borrower shall not dissolve,
terminate, liquidate, merge with or consolidate into another Person without
first causing the Loan to be assumed by a Qualified Successor Borrower pursuant
to Section 2.2.
6.6. Change in Business. Borrower shall not 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.
6.7. Debt Cancellation. Borrower shall not cancel or otherwise forgive
or release any material claim or Debt owed to it by any Person, except for
adequate consideration or in the ordinary course of its business.
6.8. Affiliate Transactions. Borrower shall not enter into, or be a
party to, any transaction with any Affiliate of Borrower, except for (i) the
Approved Management Agreement and (ii) transactions which are on terms which are
no less favorable to Borrower than would be obtained in a comparable arm's
length transaction with an unrelated third party.
6.9. Misapplication of Funds. Borrower shall not distribute any Revenue
or Loss Proceeds in violation of the provisions of this Agreement, fail to remit
amounts to the Cash Management Account as required by Section 3.1(b), or
misappropriate any security deposit or portion thereof.
6.10. Place of Business. Borrower shall not change its chief executive
office or its principal place of business without giving Lender at least 30
days' prior written notice thereof and promptly providing Lender such
information and replacement Uniform Commercial Code financing statements as
Lender may reasonably request in connection therewith.
6.11. Modifications and Waivers. Unless otherwise consented to in
writing by Lender:
(i) Borrower shall not amend, modify, terminate, renew, or surrender
any rights or remedies under any Lease, or enter into any Lease, in a
manner that would violate Section 5.8;
(ii) Borrower shall not terminate the operating agreement or
certificate of formation of Borrower or amend or modify Section 3.1,
Section 3.2, Article V, the definition of "Independent Director", the
definition of "Loan" or the definition of "Loan Agreement" in the Operating
Agreement of Borrower or any other provision of the Operating Agreement or
certificate of formation of Borrower that would alter the single-purpose or
bankruptcy remoteness provisions contained therein;
(iii) Borrower shall not amend, modify, surrender or waive any material
rights or remedies under, or enter into or terminate, any Material
Agreement unless such action is commercially reasonable; and
67
(iv) Borrower shall not amend, modify, surrender or waive any material
rights or remedies under, or terminate, the Ground Lease without the
consent of Lender, not to be unreasonably withheld.
6.12. ERISA.
-----
(a) The Borrower shall not, and it shall not permit any ERISA Affiliate
to (i) permit the aggregate Underfunding with respect to all Plans which have
any Underfunding to be an amount that could cause a Material Adverse Effect or
(ii) make any amendment to any Plan that would give rise to an obligation to
provide security under Section 307 of ERISA or Section 401(a)(29) of the Code.
(b) Borrower shall not engage in a non-exempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code, as such sections
relate to Borrower, or in any transaction that would cause any obligation or
action taken or to be taken hereunder (or the exercise by Lender of any of its
rights under the Notes, this Agreement, the Mortgage or any other Loan Document)
to be a non-exempt prohibited transaction under ERISA.
6.13. Alterations and Expansions. Unless required by law or as a result
of a Casualty (but subject to compliance with Section 5.16), Borrower shall not
perform or contract to perform any Material Alteration without the prior written
consent of Lender, which consent (in the absence of an Event of Default) shall
not be unreasonably withheld. If Lender's consent is requested hereunder with
respect to a Material Alteration, Lender may retain a construction consultant to
review such request and, if such request is granted, Lender may retain a
construction consultant to inspect the work from time to time. Borrower shall,
on demand by Lender, reimburse Lender for the reasonable fees and disbursements
of such consultant.
6.14. Advances and Investments. Borrower shall not lend money or make
advances to any Person (other than Tenant concessions contained in Leases), or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person, except for
Permitted Investments and amounts contained in accounts maintained by Borrower
in the ordinary course of business in connection with the ownership or operation
of the Property.
6.15. Single-Purpose Entity. Borrower shall not cease to be a
Single-Purpose Entity.
6.16. Zoning and Uses. Borrower shall not do any of the following:
(i) initiate or support any limiting change in the permitted uses of
the Property (or to the extent applicable, zoning reclassification of the
Property) or any portion thereof, seek any material variance under existing
land use restrictions, laws, rules or regulations (or, to the extent
applicable, zoning ordinances) applicable to the Property, or use or permit
the use of the Property in a manner that would result in the use of the
Property becoming a nonconforming use in any material respect under
applicable land-use restrictions or zoning ordinances or that would violate
in any material respect the terms of any Major Lease, Borrower's operating
agreement, Legal Requirement or Permitted Encumbrance;
68
(ii) consent to any modification, amendment or supplement to any of the
terms of any Permitted Encumbrance in a manner adverse to the interests of
Lender;
(iii) impose or consent to the imposition of any restrictive covenants,
easements or encumbrances upon the Property in any manner that adversely
affects in any material respect its value, utility or transferability; or
(iv) execute or file any subdivision plat affecting the Property, or
institute, or permit the institution of, proceedings to alter any tax lot
comprising the Property.
6.17. Waste. Borrower shall not commit or permit any waste on the
Property, nor take any actions that might invalidate any insurance carried on
the Property.
ARTICLE VII
DEFAULTS
--------
7.1. Event of Default. The occurrence of any one or more of the
following events shall be, and shall constitute the commencement of, an "Event
of Default" hereunder:
(a) Payment.
-------
Borrower shall default in the payment when due of any principal or interest
owing hereunder or under the Notes (including any mandatory prepayment required
hereunder), subject to Lender's right in its sole and absolute discretion to
provide, by written notice to Borrower, a grace period through no later than the
second Business Day before the date on which such amounts are payable to
investors in a Securitization; or
Borrower shall default, and such default shall continue for at least five
Business Days after notice to Borrower that such amounts are owing, in the
payment when due of fees, expenses or other amounts owing hereunder, under the
Notes or under any of the other Loan Documents.
(b) Representations. Any representation or warranty made by Borrower in
any of the Loan Documents shall have been false or misleading in any material
respect (or, with respect to any representation or warranty which itself
contains a materiality qualifier, in any respect) as of the date such
representation or warranty was made, which failure is reasonably likely to have
a Material Adverse Effect and, if unintentional and capable of being cured or
remedied, has not been cured or remedied within 15 days after written notice to
Borrower of such failure.
(c) Other Loan Documents. Any Loan Document shall fail to be in full
force and effect or to convey the material liens, rights, powers and privileges
purported to be created thereby; or a default shall occur under any of the other
Loan Documents or under the Ground Lease beyond the expiration of any applicable
cure period.
69
(d) Bankruptcy, etc.
---------------
(i) Borrower shall commence a voluntary case concerning itself under
Title 11 of the United States Code (as amended, modified, succeeded or
replaced, from time to time, the "Bankruptcy Code");
(ii) Borrower shall commence any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of creditors,
dissolution, insolvency or similar law of any jurisdiction whether now or
hereafter in effect relating to Borrower;
(iii) there shall be commenced against Borrower an involuntary case
under the Bankruptcy Code, or any such other proceeding, which remains
undismissed for a period of 90 days after commencement;
(iv) Borrower shall be adjudicated insolvent or bankrupt;
(v) any order of relief or other order approving any such case or
proceeding shall be entered;
(vi) Borrower shall suffer appointment of any custodian or the like for
it or for any substantial portion of its property and such appointment
continues unchanged or unstayed for a period of 90 days after commencement
of such appointment; or
(vii) Borrower shall make a general assignment for the benefit of
creditors.
(e) Change of Control.
(i) A Change of Control shall occur; or
(ii) any party other than Borrower's current equityholder shall obtain
49% or more of the direct equity interests in Borrower (even if not
constituting a Change of Control) and Borrower shall fail to deliver to
Lender with respect to such new equityholder a new non-consolidation
opinion satisfactory to (A) prior to any Securitization, Lender (Lender's
approval of any such non-consolidation opinion which is in substantially
the form of the Nonconsolidation Opinion shall not be unreasonably
withheld) or (B) after any Securitization, each of the Rating Agencies.
(f) Equity Pledge. Any direct or indirect interest in Borrower shall be
subject to a pledge in favor of any Person, other than the following:
(i) pledges of direct or indirect equity interests in Sponsor, ROP,
RARC and/or any Qualified Equityholder;
(ii) pledges between partners or members of any entity to secure in a
customary manner obligations arising under the organizational documents
(and related documentation) if the pledgee is a Qualified Equityholder (or
is Controlled by a Qualified Equityholder, so long as foreclosure on such
pledge would not result in a Change of Control);
(iii) pledges of direct or indirect interests by minority
equityholders; and
70
(iv) pledges of indirect interests in Borrower to secure debt (i) which
is fully recourse to RARC or ROP (provided, in the case of a successor to
either such entity by merger or by acquisition of substantially all of its
business and assets, that on the day of such succession, after giving
effect thereto, such successor is a Qualified Equityholder), (ii) which is
not recourse to Borrower or any direct equityholder in Borrower and is not
recourse to any indirect equityholder in Borrower below the level of
Sponsor, (iii) the credit support for which is not primarily the equity in
the Property, and (iv) the collateral securing which also includes the
equity in at least 66-2/3%, by value at the time of incurrence of such
pledge, of all property interests directly or indirectly owned by RARC or
ROP, as the case may be, which are not then encumbered by mortgages which
have been securitized in rated transactions.
(g) Insurance. Borrower shall fail to maintain in full force and effect
all Policies required hereunder.
(h) Negative Covenants. A default shall occur in the due performance or
observance by Borrower of any term, covenant or agreement contained in Article
VI, provided that except with respect to a default under Section 6.3, if such
default is susceptible of being cured, such default shall not constitute an
Event of Default unless and until it shall remain uncured for 30 days after
Borrower receives written notice thereof.
(i) Other Covenants. A default shall occur in the due performance or
observance by Borrower of any term, covenant or agreement (other than those
referred to in subsections (a) through (h), inclusive, of this Section 7.1)
contained in this Agreement or in any of the other Loan Documents, provided that
if such default referred to in this subsection (i) is susceptible of being
cured, such default shall not constitute an Event of Default unless and until it
shall remain uncured for 10 days after Borrower receives written notice thereof,
for a default which can be cured by the payment of money, or for two Business
Days after Borrower receives written notice thereof, for a default in Borrower's
obligations under Section 1.1(c), or for 30 days after Borrower receives written
notice thereof, for a default which cannot be cured by the payment of money;
provided, however, that if a default which cannot be cured by the payment of
money is susceptible of cure but cannot reasonably be cured within such 30-day
period and Borrower shall have commenced to cure such default within such 30-day
period and thereafter diligently and expeditiously proceeds to cure the same,
Borrower shall have such additional time as is reasonably necessary to effect
such cure, but in no event in excess of 90 days from the original notice.
(j) ERISA.
-----
(i) Any ERISA Event with respect to a Plan shall have occurred and the
same shall have a Material Adverse Effect;
(ii) The Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount which, when aggregated
with all other Withdrawal Liabilities incurred by the Borrower or any ERISA
Affiliate (determined as of the date of such notification) has or is
reasonably likely to have a Material Adverse Effect;
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(iii) The Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, partitioned or reorganized, within
the meaning of Title IV of ERISA, if liability of the Borrower and its
ERISA Affiliates resulting from such reorganization, termination,
partitioning or reorganization has or is reasonably likely to have a
Material Adverse Effect; or
(iv) The Borrower or any ERISA Affiliate incur aggregate liabilities in
connection with a withdrawal from a Multiple Employer Plan or the
termination of a Multiple Employer Plan that have or are reasonably likely
to have a Material Adverse Effect.
7.2. Remedies.
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(a) Upon the occurrence of an Event of Default and at any time
thereafter when such Event of Default is continuing, Lender may by written
notice to Borrower, in addition to any other rights or remedies available
pursuant to this Agreement, the Notes, the Mortgage and the other Loan
Documents, at law or in equity, declare by written notice to Borrower all or any
portion of the Indebtedness to be immediately due and payable, whereupon all or
such portion of the Indebtedness shall so become due and payable, and may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower and the Property (including all rights or remedies
available at law or in equity); provided, however, that, notwithstanding the
foregoing, if an Event of Default specified in paragraph 7.1(d) shall occur,
then the Indebtedness shall immediately become due and payable without the
giving of any notice or other action by Lender. Any actions taken by Lender
shall be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents.
(b) In the event of the foreclosure or other action by Lender to
enforce its remedies in connection with all or any portion of the Property,
Lender shall apply all net proceeds of such foreclosure received to repay the
Indebtedness, the Indebtedness shall be reduced to the extent of such net
proceeds and the remaining portion of the Indebtedness shall remain outstanding,
it being understood and agreed by Borrower that Borrower is liable for the
repayment of all the Indebtedness; provided, however, that at the election of
Lender, the Notes shall be deemed to have been accelerated only to the extent of
the net proceeds actually received by Lender with respect to the Property and
applied in reduction of the Indebtedness.
(c) During the continuance of any Event of Default, Lender may, but
without any obligation to do so and without notice to or demand on Borrower and
without releasing Borrower from any obligation hereunder, take any action to
cure such Event of Default. Lender may enter upon any or all of the Property
upon reasonable notice to Borrower for such purposes or appear in, defend, or
bring any action or proceeding to protect its interests and the interests of
Lender in the Property or to foreclose the Mortgage or collect the Indebtedness.
The costs and expenses incurred by Lender in exercising rights under this
paragraph (including reasonable
72
attorneys' fees), with interest at the Default Rate for the period after notice
from Lender that such costs or expenses were incurred to the date of payment to
Lender, shall constitute a portion of the Indebtedness, shall be secured by the
Mortgage and other Loan Documents and shall be due and payable to Lender upon
demand therefor.
(d) Interest shall accrue on any judgment obtained by Lender in
connection with its enforcement of the Loan at a rate of interest equal to the
Default Rate.
7.3. No Waiver. 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 by Lender
to be 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.
7.4. Application of Payments after an Event of Default. During the
continuance of an Event of Default, all amounts received by Lender in respect of
the Loan shall be applied toward the components of the Indebtedness (e.g.,
Lender's expenses in enforcing the Loan, interest, principal and other amounts
payable hereunder), the Loan and the Notes in such sequence as Lender shall
elect in its sole discretion.
ARTICLE VIII
CONDITIONS PRECEDENT
--------------------
8.1. Conditions Precedent to Closing. This Agreement shall become
effective on the date that all of the following conditions shall have been
satisfied (or waived by Lender, it being agreed that Lender's funding of the
Loan shall constitute Lender's agreement that such conditions have been
satisfied or waived unless the parties shall have otherwise agreed in writing):
(a) Loan Documents. Lender shall have received a duly executed copy of
each Loan Document. Each Loan Document which is to be recorded in the public
records shall be in form suitable for recording.
(b) Origination Fee. Borrower shall have made a payment to Lender in an
amount equal to the Origination Fee (or provided for the direct payment thereof
from the proceeds of the Loan).
(c) Collateral Accounts. Each of the Collateral Accounts shall have
been established with the Cash Management Bank and funded to the extent required
under Article III.
(d) Opinions of Counsel. Lender shall have received legal opinions
satisfactory to Lender.
(e) Organizational Documents. Lender shall have received all documents
reasonably requested by Lender relating to the existence of Borrower, the
validity of the Loan Documents and other matters relating thereto, in form and
substance satisfactory to Lender, including, but not limited to:
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(i) Authorizing Resolutions. A certified copy of the resolutions of its
board of managers approving and adopting the Loan Documents to be executed
by Borrower and authorizing the execution and delivery thereof.
(ii) Operating Agreement. Certified copies of the certificate of
formation and the operating agreement of Borrower, in each case together
with all amendments thereto.
(iii) Certificates of Good Standing or Existence. Certificates of good
standing or existence for Borrower issued as of a recent date by its state
of organization and by the state in which the Property is located.
(f) Lease; Material Agreements. Lender shall have received true and
complete copies of all Leases and all Material Agreements. Lien Search Reports.
Lender shall have received satisfactory reports of Uniform Commercial Code, tax
lien and judgment searches conducted by a search firm acceptable to Lender with
respect to the Property and Borrower, such searches to be conducted in such
locations as Lender shall have requested.
(g) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date either before or after the
execution and delivery of this Agreement.
(h) No Injunction. No Legal Requirement shall exist, and no litigation
shall be pending or threatened, which in the good faith judgment of Lender would
enjoin, prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, the making or repayment of the Loan or the
consummation of the Transaction.
(i) Representations and Warranties. The representations and warranties
herein and in the other Loan Documents shall be true and correct on and as of
the Closing Date with the same effect as if made on such date.
(j) Tenant Estoppel Letters. Lender shall have received estoppel
letters in form and substance satisfactory to Lender from Tenants occupying not
less than 85% of the aggregate occupied rentable square feet in the Property,
which estoppel letters shall include estoppel letters from the Tenants under
each Major Lease.
(k) No Material Adverse Effect. No event or series of events shall have
occurred which Lender reasonably believes has had or is reasonably likely to
have a Material Adverse Effect.
(l) Transaction Costs. Borrower shall have paid all Transaction Costs
(or provided for the direct payment of such Transaction Costs by Lender from the
proceeds of the Loan).
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(m) Insurance. Lender shall have received certificates of insurance on
XXXXX Form 27, demonstrating insurance coverage in respect of the Property of
types, in amounts, with insurers and otherwise in compliance with the terms,
provisions and conditions set forth herein. Such certificates shall indicate
that Lender is named as additional insured on each liability policy, and that
each casualty policy and rental interruption policy contains a loss payee
endorsement in favor of Lender.
(n) Title. Lender shall have received a marked, signed commitment to
issue, or a pro-forma version of, a Qualified Title Insurance Policy in respect
of the Property, listing only such exceptions as are reasonably satisfactory to
Lender.
(o) Zoning. Lender shall have received evidence reasonably satisfactory
to Lender that the Property is in compliance with all applicable zoning
requirements.
(p) Permits; Certificate of Occupancy. Lender shall have received a
copy of all Permits necessary for the use and operation of the Property and the
certificate(s) of occupancy, if required, for the Property, all of which shall
be in form and substance reasonably satisfactory to Lender.
(q) Engineering Report. Lender shall have received a current
Engineering Report with respect to the Property, which report shall be in form
and substance reasonably satisfactory to Lender.
(r) Environmental Report. Lender shall have received an Environmental
Report (not more than six months old) with respect to the Property which
discloses no material environmental contingencies with respect to the Property.
(s) Qualified Survey. Lender shall have received a Qualified Survey
with respect to the Property in form and substance reasonably satisfactory to
Lender.
(t) Appraisal. Lender shall have obtained an Appraisal of the Property
satisfactory to Lender.
(u) Consents, Licenses, Approvals, etc. 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 validity and
enforceability, of the Loan Documents, and such consents, licenses and approvals
shall be in full force and effect.
(v) Financial Information. Lender shall have received such financial
information with respect to Borrower and the Property as Lender shall have
reasonably requested.
(w) Annual Budget. Lender shall have received the 2001 Annual Budget
with respect to the Property.
(x) Additional Matters. Lender shall have received such other
certificates, opinions, documents and instruments relating to the Loan as may
have been reasonably requested by Lender. All corporate and other proceedings,
all other documents (including all documents referred to herein and not
appearing as exhibits hereto) and all legal matters in connection with the Loan
shall be reasonably satisfactory in form and substance to Lender.
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ARTICLE IX
MISCELLANEOUS
-------------
9.1. Successors. Except as otherwise provided in this Agreement,
whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted 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 Lender and its
successors and assigns.
9.2. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR THE
SPONSOR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT OF THE CREATION, PERFECTION OR
ENFORCEMENT OF A LIEN OR SECURITY INTEREST CREATED PURSUANT TO ANY LOAN
DOCUMENTS NOT GOVERNED BY THE LAWS OF THE STATE OF NEW YORK) MAY BE INSTITUTED
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK. BORROWER AND THE SPONSOR
HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, AND (ii) IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING.
9.3. Modification, Waiver in Writing. Neither this Agreement nor any
other Loan Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated, nor shall any consent or approval of
Lender be granted hereunder, unless such amendment, change, waiver, discharge,
termination, consent or approval is in writing signed by Lender.
9.4. Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
by expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of delivery or attempted delivery, addressed as follows (or
at such other address and person as shall be designated from time to time by any
party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section). ANY NOTICE OF DEFAULT UNDER
ARTICLE VII OR ANY SIMILAR PROVISION OF ANY OF THE OTHER LOAN
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DOCUMENTS MUST PROVIDE, IN ORDER TO BE EFFECTIVE AS A NOTICE THEREUNDER, THAT IT
IS BEING GIVEN AS A NOTICE OF DEFAULT WHICH IF NOT CURED WITHIN THE GRACE PERIOD
CONTAINED IN THE LOAN DOCUMENTS WILL RESULT IN AN EVENT OF DEFAULT. A notice
shall be deemed to have been given when delivered or upon refusal to accept
delivery.
If to Lender:
Xxxxxx Financial Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000 Xxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx
with copies to:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxx
and
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx, Esq.
If to Borrower:
c/o Reckson Associates Realty Corp.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxx Xxxxxxxx
with copies to:
Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
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and
Fried Xxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxxx, Esq.
9.5. TRIAL BY JURY. BORROWER AND THE SPONSOR, TO THE FULLEST EXTENT
THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER AND THE SPONSOR AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER
AND THE SPONSOR.
9.6. 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.
9.7. Assignment and Participation.
----------------------------
(a) Except as explicitly set forth in Sections 2.1 and 2.2, Borrower
may not sell, assign or transfer any interest in the Loan Documents or any
portion thereof (including Borrower's rights, title, interests, remedies, powers
and duties hereunder and thereunder).
(b) Lender and each assignee of all or a portion of the Loan shall have
the right from time to time in its discretion to sell one or more of the Notes
or any interest therein (an "Assignment") and/or sell a participation interest
in one or more of the Notes (a "Participation"). Borrower agrees reasonably to
cooperate with Lender, at Lender's request and at Lender's sole expense, in
order to effectuate any such Assignment or Participation, such cooperation to be
provided in the same manner, and subject to the same limitations, as is set
forth in the Cooperation Agreement with respect to a Securitization. In the case
of an Assignment, (i) each assignee shall have, to the extent of such Assignment
(but subject to clause (iii)), the rights, benefits and obligations of the
assigning Lender as a "Lender" hereunder and under the other Loan Documents,
(ii) the assigning Lender shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to an Assignment, relinquish its
rights and be released from its obligations under this Agreement, (iii) one
Lender shall at all times serve as agent for all Lenders and shall be the sole
Lender to whom notices, requests and other communications shall be addressed and
the sole party authorized to grant or withhold consents or waivers or give
notices hereunder on behalf of the Lenders (including default notices and other
notices relating to enforcement of the Loan Documents), subject, in each case,
to appointment of
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a Servicer, pursuant to Section 9.22, to receive such notices, requests and
other communications and/or to grant or withhold consents or waivers and give
such notices, as the case may be, and to be the sole Lender to designate the
account to which payments shall be made by Borrower to the Lenders hereunder
(and Borrower may fully rely thereon, notwithstanding any contrary notice from
any other Lender), and (iv) any assigning Lender that no longer holds any
portion of the Loan shall deliver any Collateral held by it to the other Lenders
and, if requested by Borrower, shall deliver notices (prepared by Borrower and
reasonably satisfactory to such assigning Lender) to Tenants, the ground lessor
and/or the Cash Management Bank confirming such assignment. Xxxxxxx Xxxxx
Mortgage Company shall maintain, or cause to be maintained, as agent for the
Borrower, a register at 00 Xxxxx Xxxxxx or such other address as it shall notify
Borrower in writing, on which it shall enter the name or names of the registered
owner or owners from time to time of the Notes. Borrower agrees that upon
effectiveness of any Assignment of any Note in part, Borrower will promptly
provide to the assignor and the assignee separate promissory notes in the amount
of their respective interests (but, if applicable, with a notation thereon that
it is given in substitution for and replacement of an original Note or any
replacement thereof), and otherwise in the form of such Note (and with such
other changes as may be reasonably required to reflect that such Note evidences
only a portion of the Loan and the provisions of clause (iii) above), upon
return of the Note then being replaced. Each replacement Note shall provide that
it is being issued (together with the other replacement Notes) in substitution
for, and replacement of, the initial Note and collectively evidence the same
indebtedness evidenced thereby, and shall also contain such additional language
as Borrower shall reasonably request to minimize the risk of additional mortgage
recording tax. The original Note, upon execution of the replacement Notes, shall
be marked in a manner reasonably satisfactory to Borrower to indicate that it
has been replaced and is no longer in effect, but that the indebtedness
evidenced thereby has not been repaid or discharged and is evidenced by the
replacement Notes. The assigning Lender shall notify in writing each of the
other Lenders of any Assignment. Each potential assignee and potential
participant (until it becomes clear that such potential assignee or potential
participant is not to become an actual assignee or participant), and each actual
assignee and participant, and each rating agency or potential investor in
connection with a Securitization, shall be entitled to receive from the existing
Lender or Servicer all information received by Lender under this Agreement.
Reasonably promptly following the effectiveness of any Assignment, the party
conveying the Assignment shall provide notice to Borrower of the identity and
address of the assignee and the amount so assigned. Notwithstanding anything in
this Agreement to the contrary, after an Assignment, the assigning Lender (in
addition to the assignee) shall continue to have the benefits of any
indemnifications contained herein which such assigning Lender had prior to such
assignment with respect to matters occurring prior to the date of such
assignment. Lender shall be solely responsible for its own costs and expenses,
and any reasonable out-of-pocket costs and expenses incurred by Borrower at
Lender's request, in connection with any Assignment or Participation.
9.8. 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.
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9.9. 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 Notes or any
other Loan Document. During the continuance of an Event of Default, 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
and under the Loan Documents. To the extent Borrower makes a payment or payments
to Lender, which payment or proceeds or any portion 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 portion 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.
9.10. Remedies of Borrower. In the event that a claim or adjudication
is made that Lender or any of its agents has unreasonably delayed acting or
acted unreasonably in any case where by law or under this Agreement, the Note,
the Mortgage or the other Loan Documents, any of such Persons has an obligation
to act promptly or reasonably, Borrower agrees that no such Person shall be
liable for any monetary damages, and Borrower's sole remedies shall be limited
to commencing an action seeking specific performance, injunctive relief and/or
declaratory judgment, except in any instance in which it has been finally
determined that Lender's action, delay or inaction has constituted gross
negligence, willful misconduct or an illegal act.
9.11. Offsets, Counterclaims and Defenses. All payments made by
Borrower hereunder or under the other Loan Documents shall be made irrespective
of, and without any deduction for, any setoffs or counterclaims. Borrower hereby
waives the right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender arising
out of or in any way connected with the Notes, this Agreement, the other Loan
Documents or the Indebtedness. Any assignee of Lender's interest in a Loan shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to the Loan.
9.12. No Joint Venture. Nothing in this Agreement is intended to create
a joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between Borrower and Lender, nor to grant Lender any interest in the Property
other than that of mortgagee or lender.
9.13. Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and the provisions of the Notes, the
Mortgage or any of the other Loan Documents, the provisions of this Agreement
shall prevail.
9.14. Brokers and Financial Advisors. Borrower and Sponsor each 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 (other than affiliates of Xxxxxxx,
Xxxxx & Co.). Borrower and Sponsor each hereby agree, jointly and severally, 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 (other than affiliates of Xxxxxxx, Sachs & Co.) that
such Person acted on behalf of Borrower in connection with the transactions
contemplated herein. The provisions of this Section 9.14 shall survive the
expiration and termination of this Agreement and the repayment of the
Indebtedness.
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9.15. 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.
9.16. Estoppel Certificates. Borrower and Lender each hereby agree at
any time and from time to time, upon not less than 10 days' prior written notice
by Borrower or Lender, as applicable, to execute, acknowledge and deliver to the
party specified in such notice a statement, in writing, specifying the unpaid
principal balance of the Note, certifying that each of the Loan Documents is in
full force and effect and has not been modified (or if there have been
modifications, that the same, as modified, is in full force and effect and
stating the modifications hereto), stating whether or not, to the knowledge of
such certifying party, any Event of Default has occurred and is then continuing
or any written notice has been delivered with respect to a Default that has not
yet been cured, and, if so, specifying each such Default or Event of Default,
and specifying the date installments of interest and/or principal were last
paid. In addition, any such written statement from Borrower shall specify (A)
whether, to the knowledge of Borrower, there exist any offsets or defenses to
the payment of the Indebtedness, (B) that the Note, this Agreement, the
Mortgages and the other Loan Documents are valid, legal and binding obligations,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and general equitable principles, and (C) such other matters
related to the status of the Loan as Lender may reasonably request. In addition,
any such written statement from Lender shall specify whether Lender is currently
contemplating the delivery of a Default notice. Any actual or prospective
purchaser or holder of any interest in a Loan or any actual or prospective
purchaser or holder of any direct or indirect interests in Borrower shall be
permitted to rely on such certificates.
9.17. Payment of Expenses; Mortgage Recording Taxes. Borrower covenants
and agrees to reimburse Lender upon receipt of written notice from Lender for
all (i) Transaction Costs, including all origination costs and all reasonable
out-of-pocket expenses (but excluding costs incurred by Lender or any of its
Affiliates after the Closing in connection with any Securitization, including
within such exclusion any Rating Agency fees in connection with the origination
and/or Securitization of the Loan); (ii) reasonable out-of-pocket costs and
expenses incurred by Lender in connection with (A) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower; (C) filing and recording fees and
expenses, title insurance and reasonable fees and disbursements of counsel for
providing to Lender all legal opinions required to be delivered hereunder, and
other similar expenses incurred in creating and perfecting the Liens in favor of
Lender pursuant to this Agreement and the other Loan Documents; (D) the cost of
any transfer to the Securitization Issuer, or other purchaser of the Loan, of
any Qualified Letter of Credit, and the cost of obtaining the written consents
required to perfect Lender's Lien under the Assignment of Letters of Credit and
to continue such perfection in connection with any such transfer; (E) enforcing
or preserving any rights in response to third party claims, or the defending of
any action or proceeding or other litigation (subject to Section 5.18(b)), in
each case against, under or affecting Borrower, this
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Agreement, the other Loan Documents or any other security given for the Loan or
the Property; (F) obtaining any Rating Confirmation required hereunder; and (F)
enforcing any obligations of or collecting any payments due from Borrower under
this Agreement and/or the other Loan Documents. Except as otherwise set forth
herein, and except for expenses for which Lender would be reimbursed hereunder
if incurred by Lender, the fees and expenses of the Servicer shall be paid by
Lender.
9.18. No Third-Party Beneficiaries. This Agreement and the other Loan
Documents are solely for the benefit of Lender and Borrower, and nothing
contained in this Agreement or the other Loan Documents shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender, and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof, and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender's sole discretion, Lender deems it advisable or desirable
to do so.
9.19. Recourse.
--------
(a) Except as set forth in Section 9.19(b) with respect to Borrower and
Sponsor only, in the Environmental Indemnity, in the Cooperation Agreement and
in Section 9.14, no recourse shall be had for the Indebtedness or otherwise
under or in connection with the Loan or the Loan Documents, against any
Affiliate of Borrower or any officer, director, partner, member, shareholder or
agent of Borrower or any such Affiliate or any of their respective assets, and
recourse to Borrower shall be limited to Borrower's interest in the Property and
the other Collateral.
(b) Borrower and the Sponsor (as evidenced by the Sponsor's signature
below) hereby agree to jointly and severally indemnify Lender and hold Lender
harmless from and against any and all actual Damages to Lender (including the
legal and other expenses of enforcing the obligations of the Sponsor under this
Section 9.19) resulting from or arising out of any of the following (the
"Indemnified Liabilities"):
(i) any intentional physical waste with respect to the Property
committed or expressly permitted by Borrower, the Sponsor or any of their
respective Affiliates;
(ii) any fraud or intentional misrepresentation committed by Borrower
or the Sponsor;
(iii) the misappropriation or misapplication by Borrower, the Sponsor
or any of their respective Affiliates of any funds (including
misappropriation or misapplication of Revenues, security deposits and/or
Loss Proceeds and the violation of the last sentence of Section 5.8(d));
82
(iv) any Transfer of Collateral or Change of Control which is
prohibited hereunder;
(v) with respect to Borrower only, and not Sponsor (who shall not be
jointly and severally liable for any Damages resulting from this clause
(v)), any breach by Borrower of any representation or covenant regarding
environmental matters contained herein or in the Environmental Indemnity
Agreement;
(vi) any consolidation of the assets of Borrower into the bankruptcy
estate of any of its affiliates if such consolidation results from a
failure of the representation contained in Section 4.17 to be true in all
material respects;
(vii) any requirement by Debevoise & Xxxxxxxx that Lender perform
obligations set forth in the subordination and non-disturbance agreement of
record on the date hereof by reason of any failure by Borrower to complete
the "Landlord Improvement Obligations" under and as defined in the Lease
with Debevoise & Xxxxxxxx, unless due to the failure of Lender to apply
funds held in the Unfunded Obligations Account for the purposes set forth
in Schedule D to the extent Schedule D provides that such funds are to be
applied toward such "Landlord Improvement Obligations" (including Lender
having applied the same for a different purpose after an Event of Default),
it being agreed that the provisions of this clause (vii) shall be of no
further force or effect after delivery of a subordination and
non-disturbance agreement from Debevoise & Xxxxxxxx in substantially the
form of Exhibit A-3 to the Lease with Debevoise & Xxxxxxxx (except with
respect to any requirements imposed by Debevoise & Xxxxxxxx prior to such
delivery);
(viii) any filing by Borrower under the Bankruptcy Code or any joining
or colluding by Borrower in the filing of an involuntary case in respect of
Borrower under the Bankruptcy Code (provided that the Sponsor shall have no
liability under this clause (vi)); and
(ix) a bankruptcy of Borrower which results from the Sponsor's filing
or colluding in the filing of an involuntary case in respect of Borrower
under the Bankruptcy Code.
To the extent that the Indemnified Liabilities result from any action, judgment,
suit, claim or demand by a third party, Borrower and Sponsor shall have the
right to settle same to the same extent set forth in Section 5.18(b) and
Lender's right to collect Damages under this Section 9.19(b) shall be subject to
the same.
(c) The liability of the Sponsor and the Borrower under Section 9.19(b)
shall be direct and immediate and not conditional or contingent upon the pursuit
of any remedies against Borrower or any other Person, nor against the
Collateral, and shall not be impaired or limited by any event, including the
following events, in each case whether occurring with or without notice to the
Sponsor or with or without consideration:
(i) any extensions of time for performance required by any of the Loan
Documents or any extension or renewal of the Notes;
83
(ii) any sale, assignment or foreclosure of the Notes, the Mortgage or
any of the other Loan Documents or any sale or transfer of any or all of
the Property;
(iii) any Assumption or any other change in the composition of Borrower
including the withdrawal or removal of the Sponsor from any current or
future position of ownership, management or control of Borrower, unless a
party reasonably acceptable to Lender assumes the obligations and
liabilities of Sponsor hereunder pursuant to an assumption agreement
reasonably satisfactory to Lender;
(iv) the accuracy or inaccuracy of the representations and warranties
made by Borrower in any of the Loan Documents;
(v) the release of Borrower or of any other Person from performance or
observance of any of the agreements, covenants, terms or conditions
contained in any of the Loan Documents by operation of law, Lender's
voluntary act or otherwise;
(vi) the modification of the terms of any one or more of the Loan
Documents (except that if Sponsor no longer Controls Borrower and Lender
has been advised thereof in writing, no modification shall be effective to
expand Sponsor's liabilities beyond the liability that would have existed
prior to such modification); or
(vii) any circumstances which might constitute a defense available to,
or a discharge of, Borrower in respect of the obligations of the Sponsor
hereunder.
The Sponsor hereby acknowledges that Lender would not make the Loan but for the
personal liability undertaken by the Sponsor herein. The Sponsor agrees that it
shall not demand or accept any payment from Borrower in respect of any amounts
owing or paid by the Sponsor hereunder until one year and one day after such
time as the Indebtedness shall have been paid in full.
(d) Notwithstanding anything herein or in the other Loan Documents to
the contrary, Lender shall not be deemed to have waived any right which Lender
may have under Sections 506(a), 506(b), 1111(b) or any other provision of the
Bankruptcy Code to file a claim for the full amount of the Indebtedness or to
require that all Collateral shall continue to secure the Indebtedness in
accordance with the Loan Documents.
(e) The Sponsor hereby represents and warrants that as of the date
hereof, it is able to pay its debts as they become due, including Contingent
Obligations reasonably likely to become due, and the capital that it has as of
the date hereof is expected to be sufficient for the business it proposes to
engage in.
(f) Sponsor shall remain liable hereunder unless and until all of the
following conditions are satisfied: (i) Sponsor no longer Controls Borrower as a
result of a permitted transfer of equity, (ii) another creditworthy party
agrees, in an agreement reasonably satisfactory to Lender, to assume the
obligations of Sponsor hereunder for events occuring on or after the date of
such assumption and (iii) Rating Confirmation is received with respect thereto.
Following the satisfaction of the foregoing conditions, Sponsor shall be liable
only for events occurring prior to the date of such assumption. At Borrower's
written request, Lender shall confirm to Borrower in writing whether the
conditions described in clauses (ii) and (iii) of the preceding sentence have
been satisfied.
84
9.20. Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, Lender may from time to time, without presentment, demand, protest or
other notice of any kind (all of which rights being hereby expressly waived),
set-off and appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by Lender (including branches,
agencies or Affiliates of Lender wherever located) to or for the credit or the
account of Borrower against the obligations and liabilities of Borrower to
Lender hereunder, under the Notes, the other Loan Documents or otherwise,
irrespective of whether Lender shall have made any demand hereunder and although
such obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of Lender subsequent thereto.
9.21. Exculpation of Lender. Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of (a) the existence, quality, adequacy or suitability of Appraisals of
the Property or other Collateral, (b) any environmental report, or (c) any other
matters or items, including, but not limited to, engineering, soils and seismic
reports which are contemplated in the Loan Documents. Any such selection,
review, inspection, examination and the like, and any other due diligence
conducted by Lender, is solely for the purpose of protecting Lender's rights
under the Loan Documents, and shall not render Lender liable to Borrower or any
third party for the existence, sufficiency, accuracy, completeness or legality
thereof.
9.22. Servicer. Lender may delegate any and all rights and obligations
of Lender hereunder and under the other Loan Documents to the Servicer upon
notice by Lender to Borrower, whereupon any notice or consent from the Servicer
to Borrower, and any action by Servicer on Lender's behalf, shall have the same
force and effect as if Servicer were Lender.
9.23. Prior Agreements. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONTAIN THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS AMONG OR
BETWEEN SUCH PARTIES, WHETHER ORAL OR WRITTEN, INCLUDING ANY TERM SHEETS AND
COMMITMENT LETTERS, ARE SUPERSEDED BY THE TERMS OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
85
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
LENDER:
XXXXXX FINANCIAL CORPORATION
By:
---------------------------------
Authorized Signatory
BORROWER:
METROPOLITAN 000 0XX XXXXXX LLC, a Delaware
limited liability company
By: Metropolitan 919 MM LLC, a Delaware
limited liability company, its managing
member
By: Metropolitan 919 Manager LLC,
a Delaware limited liability company, its
managing member
By: Metropolitan Operating Partnership, L.P., a
Delaware limited partnership, its sole
member
By: Metropolitan Partners LLC, a
Delaware limited liability company, its
general partner
By:
----------------------------------------
Name:
Title:
86
SPONSOR (for purposes of Sections 9.2, 9.5, 9.14 and 9.19):
METROPOLITAN OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership
By: Metropolitan Partners LLC, a
Delaware limited liability company, its
general partner
By:
--------------------------------
Name:
Title:
87
EXHIBIT A
Form of Tenant Notice
---------------------
[BORROWER'S LETTERHEAD]
___________, 20__
Re: Lease dated ________ between __________________,
as Landlord, and _________________, as Tenant,
concerning premises known as 000 Xxxxx Xxxxxx (the "Building").
Dear Tenant:
The undersigned hereby directs and authorizes you to make all rental
payments and other amounts payable by you pursuant to your lease (other than any
security deposits) as follows:
(x) If payment is made by wire transfer:
Bank:
Account Name:
Account No.:
ABA No.:
Contact:
(y) If payment is made by check, you shall continue to deliver your
payment to the following address: Metropolitan 000 0xx Xxxxxx LLC XXX Xxx 00000,
Xxx Xxxx, XX 00000-0000.
THE INSTRUCTIONS SET FORTH HEREIN ARE IRREVOCABLE AND ARE NOT SUBJECT
TO MODIFICATION BY US IN ANY MANNER. ONLY [NAME OF THEN-CURRENT LENDER], OR ITS
SUCCESSORS AND ASSIGNS, MAY BY WRITTEN NOTICE TO YOU RESCIND OR MODIFY THE
INSTRUCTIONS CONTAINED HEREIN (WRITTEN NOTICE FROM SUCH PARTY ACKNOWLEDGING THAT
THE LOAN HAS BEEN REPAID OR DEFEASED IN FULL SHALL CONSTITUTE NOTICE OF
RESCISSION OF SUCH INSTRUCTIONS, IN WHICH EVENT LANDLORD SHALL BE ENTITLED TO
DIRECT YOU AS TO WHERE PAYMENT IS TO BE MADE).
Thank you in advance for your cooperation and if you have any
questions, please call _________ at (___) ____-__________.
Very truly yours,
1
EXHIBIT B
Form of Cash Management Agreement
---------------------------------
1
EXHIBIT C
Form of Qualified Letter of Credit
----------------------------------
1
EXHIBIT D
Form of Qualified Guaranty
--------------------------
1
SCHEDULE A
Property
--------
1
SCHEDULE B
Exception Report
----------------
1
SCHEDULE C
Nonconsolidation Opinion
------------------------
1
SCHEDULE D
Unfunded Obligations
--------------------
1
SCHEDULE E
Rent Roll
---------
1
SCHEDULE F
Material Agreements
-------------------
1
SCHEDULE G
[Intentionally Omitted]
---------------------
1
SCHEDULE H
Approved Asset Managers
-----------------------
1
