LOAN AGREEMENT (Mezzanine Loan) Dated as of March 15, 2005 Between MP - WATERIDGE PLAZA MEZZANINE, LLC, as Borrower and NOMURA CREDIT & CAPITAL, INC., as Lender Property Wateridge Plaza 10201, 10221 and 10241 Wateridge Circle San Diego, California
Exhibit
99.19
(Mezzanine
Loan)
Dated as
of March 15, 2005
Between
MP
- WATERIDGE PLAZA MEZZANINE, LLC,
as
Borrower
and
NOMURA
CREDIT & CAPITAL, INC.,
as
Lender
Property
Wateridge
Plaza
10201,
10221 and 00000 Xxxxxxxxx Xxxxxx
Xxx
Xxxxx, Xxxxxxxxxx
TABLE
OF CONTENTS
|
Page | ||
|
I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION |
2 | |
|
Section
1.1. Definitions |
2 | |
|
Section
1.2. Principles of Construction |
27 | |
|
II.
GENERAL TERMS |
28 | |
|
Section
2.1. Loan Commitment; Disbursement to Borrower. |
28 | |
|
Section
2.2. Interest Rate. |
28 | |
|
Section
2.3. Loan Payment. |
34 | |
|
Section
2.4. Prepayments. |
35 | |
|
Section
2.5. Release of Collateral |
37 | |
|
Section
2.6. Cash Management. |
37 | |
|
Section
2.7. Extension of Maturity Date. |
41 | |
|
III.
CONDITIONS PRECEDENT |
45 | |
|
Section
3.1. Conditions Precedent to Closing |
45 | |
|
IV.
REPRESENTATIONS AND WARRANTIES |
50 | |
|
Section
4.1. Borrower Representations |
50 | |
|
Section
4.2. Survival of Representations |
58 | |
|
V.
BORROWER COVENANTS |
58 | |
|
Section
5.1. Affirmative Covenants |
58 | |
|
Section
5.2. Negative Covenants |
69 | |
|
VI.
INSURANCE; CASUALTY; CONDEMNATION |
77 | |
|
Section
6.1. Insurance |
77 | |
|
Section
6.2. Casualty and Condemnation. |
77 | |
|
VII.
RESERVE FUNDS |
78 | |
|
Section
7.1. Intentionally Omitted. |
78 | |
|
Section
7.2. Tax and Insurance Escrow Funds |
78 | |
|
Section
7.3. Intentionally Omitted. |
80 | |
|
Section
7.4. Rollover Reserve Funds |
80 | |
|
Section
7.5. Alaris Reserve Funds |
80 | |
|
Section
7.6. Reserve Funds, Generally |
80 | |
|
Section
7.7. Transfer of Reserve Funds Under Mortgage Loan |
81 | |
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-
|
VIII.
DEFAULTS |
82 | |
|
Section
8.1. Event of Default |
82 | |
|
Section
8.2. Remedies |
84 | |
|
IX.
SPECIAL PROVISIONS |
86 | |
|
Section
9.1. Sale of Note and Securitization |
86 | |
|
Section
9.2. Securitization Indemnification |
88 | |
|
Section
9.3. Intentionally Omitted. |
91 | |
|
Section
9.4. Exculpation |
91 | |
|
Section
9.5. Matters Concerning Manager |
94 | |
|
Section
9.6. Servicer |
94 | |
|
Section
9.7. Restructuring of Loan |
94 | |
|
X.
MISCELLANEOUS |
95 | |
|
Section
10.1. Survival |
95 | |
|
Section
10.2. Lender’s Discretion |
95 | |
|
Section
10.3. Governing Law |
95 | |
|
Section
10.4. Modification, Waiver in Writing |
97 | |
|
Section
10.5. Delay Not a Waiver |
97 | |
|
Section
10.6. Notices |
97 | |
|
Section
10.7. Trial by Jury |
98 | |
|
Section
10.8. Headings |
98 | |
|
Section
10.9. Severability |
98 | |
|
Section
10.10. Preferences |
98 | |
|
Section
10.11. Waiver of Notice |
99 | |
|
Section
10.12. Remedies of Borrower |
99 | |
|
Section
10.13. Expenses; Indemnity |
99 | |
|
Section
10.14. Schedules Incorporated |
100 | |
|
Section
10.15. Offsets, Counterclaims and Defenses |
100 | |
|
Section
10.16. No Joint Venture or Partnership; No Third Party Beneficiaries
|
101 | |
|
Section
10.17. Publicity |
101 | |
|
Section
10.18. Waiver of Marshalling of Assets |
101 | |
|
Section
10.19. Waiver of Counterclaim |
101 | |
|
Section
10.20. Conflict; Construction of Documents; Reliance |
101 | |
|
Section
10.21. Brokers and Financial Advisors |
102 | |
|
Section
10.22. Prior Agreements |
102 | |
|
Section
10.23. Certain Additional Rights of Lender (VCOC) |
102 | |
|
Section
10.24. Intercreditor Agreement |
103 | |
- ii
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(Mezzanine
Loan)
THIS
LOAN AGREEMENT, dated
as of March 15, 2005 (as amended, restated, replaced, supplemented or otherwise
modified from time to time, this “Agreement”),
between NOMURA
CREDIT & CAPITAL, INC., a
Delaware corporation, having an address at Two World Financial Center, New
York, New York 10281 (together with its successors and assigns, “Lender”) and
MP
- WATERIDGE PLAZA MEZZANINE, LLC, a
Delaware limited liability company, having its principal place of business at
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (“Borrower”).
W I T N E S S E T H:
WHEREAS, Nomura
Credit & Capital, Inc., a Delaware corporation (“Mortgage
Lender”), is
making a loan in the principal amount of Fifty Seven Million Eight Hundred
Eighty Thousand and No/100 Dollars ($57,880,000.00) (the “Mortgage
Loan”) to
Xxxxxxx Properties - Wateridge Plaza, LLC, a Delaware limited liability company
(“Mortgage
Borrower”)
pursuant to that certain Loan Agreement, dated as of the date hereof (as the
same may be amended, supplemented, replaced or otherwise modified from time to
time, the “Mortgage
Loan Agreement”), which
Mortgage Loan is evidenced by that certain Promissory Note, dated as of the date
hereof (as the same may be amended, supplemented, replaced or otherwise modified
from time to time, the “Mortgage
Note”), made
by Mortgage Borrower to Mortgage Lender and secured by, among other things, that
certain first priority Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing dated as of the date hereof (as the same may be
amended, supplemented, replaced or otherwise modified from time to time,
collectively, the “Mortgage”) given
by Mortgage Borrower in favor of Mortgage Lender pursuant to which Mortgage
Borrower has granted Mortgage Lender a first priority mortgage on, among other
things, the Property and other collateral as more fully described in the
Mortgage;
WHEREAS,
Borrower is the legal and beneficial owner of one hundred percent (100%) of the
ownership interests in Mortgage Borrower (the “Pledged
Company Interests”)
consisting of a 100% limited liability company interest therein;
WHEREAS,
Borrower desires to obtain the Loan (as hereinafter defined) from
Lender;
WHEREAS, as a
condition precedent to the obligation of Lender to make the Loan to Borrower,
Borrower has entered into that certain Pledge and Security Agreement, dated as
of the date hereof, in favor of Lender (as amended, supplemented or otherwise
modified from time to time, the “Pledge
Agreement”),
pursuant to which Borrower has granted to Lender a first priority security
interest in the Pledged Company Interests and the other Collateral (as defined
in the Pledge Agreement) as collateral security for the Debt (as hereinafter
defined); and
WHEREAS, Lender
is willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents (as hereinafter
defined).
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 hereto
hereby covenant, agree, represent and warrant as follows:
I. DEFINITIONS;
PRINCIPLES OF CONSTRUCTION.
Section
1.1. Definitions. For all
purposes of this Agreement, except as otherwise expressly required or unless the
context clearly indicates a contrary intent:
“Acceptable
Counterparty” shall
mean any counterparty to the Interest Rate Cap Agreement that (a) as of the date
of the Interest Rate Cap Agreement, has a long-term unsecured debt rating (or,
if such counterparty does not have a long-term unsecured debt rating, has a
“counterparty rating”) of at least “AA” by S&P and “Aa2” from Xxxxx’x, which
rating shall not include a “t” or otherwise reflect a termination risk, and
(b) until the expiration of the applicable Interest Rate Cap Agreement,
shall maintain a long-term unsecured debt rating or “counterparty rating”, as
applicable, of at least “AA-” by S&P and “Aa3” from Xxxxx’x, which rating
shall not include a “t” or otherwise reflect a termination risk.
“Additional
Insolvency Opinion” shall
have the meaning set forth in Section 4.1.30(c)
hereof.
“Additional
Extension Conditions” shall
mean that either (a) the Alaris Long Term Lease Extension Date shall have
occurred or (b) the Alaris Replacement Lease Requirements shall have been
satisfied.
“Adjustment
Date” shall
have the meaning set forth in Section
3.1.19(a)
hereof.
“Affiliate” shall
mean, as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by or is under common control with such Person or is a
director or officer of such Person or of an Affiliate of such Person. As used in
this definition, the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction, management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
“Affiliated
Loans” shall
mean a loan made by Lender to an Affiliate of Borrower or
Guarantor.
“Affiliated
Manager” shall
mean any Manager in which Borrower, Principal, Mortgage Borrower or Guarantor
has, directly or indirectly, any legal, beneficial or economic
interest.
“Aggregate
Outstanding Principal Balance” shall
mean, as of any date, the sum of the Outstanding Principal Balance and the
Mortgage Loan Outstanding Principal Balance.
“Alaris” shall
mean ALARIS Medical Systems, Inc., a Delaware corporation.
“Alaris
Lease” shall
mean that certain Lease for the Alaris Space between Alaris and The California
Public Employees Retirement System, Borrower’s predecessor in interest,
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dated as
of December 1, 1995, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Alaris
Lease Fee” shall
have the meaning set forth in Section
2.3.7 hereof.
“Alaris
Long Term Lease Extension” shall
mean, if the Alaris Short Term Lease Extension occurs, a further extension of
the term of the Alaris Lease for all of the Alaris Space for a term commencing
on February 28, 2008 and ending not earlier than February 28, 2013 at a minimum
rental rate of $28.64 per leasable square foot of the Alaris Space for the
first year of the Alaris Long Term Lease Extension term (for a total annual base
rent of $5,294,991.84), increasing at the rate of three (3%) percent per year,
plus reimbursement for a proportionate share of Taxes, Insurance Premiums and
any other costs and expenses of owning, operating and maintaining the Property
allocable to the Alaris Space and on such other terms and conditions as Lender
shall approve in its reasonable discretion.
“Alaris
Long Term Lease Extension Date” shall
mean the date on which Borrower shall have submitted to Lender evidence
reasonably satisfactory to Lender that the Alaris Long Term Lease Extension has
occurred, including without limitation an amendment of the Alaris Lease fully
executed by Mortgage Borrower and Alaris reflecting the Alaris Long Term Lease
Extension, and an estoppel certificate from Alaris confirming the Alaris Long
Term Lease Extension and that the Alaris Lease, as so modified is in full force
and effect with no defaults by Borrower or Alaris thereunder, each in form and
substance reasonably satisfactory to Lender.
“Alaris
Replacement Lease Requirements” shall
mean that Borrower shall have submitted to Lender evidence satisfactory to
Lender that (a) substantially all of the Alaris Space, as reasonably determined
by Lender, has been leased to one or more tenants approved by Lender in its
reasonable discretion pursuant to Leases providing for a term of not less than
five years commencing following the scheduled expiration date of the Alaris
Lease (2/28/06) with a minimum rent of $27.00 per leasable square foot of the
Alaris Space for the first lease year (for a total annual base rent of not less
than $4,991,787), and increasing 3% per annum and that the tenant thereunder
shall pay its pro-rata share of Taxes, Insurance Premiums and any other costs
and other expenses of owning, operating and maintaining the Property and
otherwise acceptable to Lender in its sole discretion, (b) such tenants are in
occupancy of the Alaris Space and paying full and unabated Full Service Gross
Rent, and (c) Lender has received an estoppel certificate from such tenants in
form and substance reasonably satisfactory to Lender
“Alaris
Reserve Account” shall
have the meaning set forth in Section
7.5
hereof.
“Alaris
Reserve Funds” shall
have the meaning set forth in Section
7.5 hereof.
“Alaris
Short Term Lease Extension” shall
mean an extension of the term of the Alaris Lease for all of the Alaris Space
for a term ending not earlier than February 29, 2008 at a minimum rental rate
of $27.00 per leasable square foot of the Alaris Space for the period from
March 1, 2006 through February 28, 2007 (for a total annual base rent of
$4,991,787), and $27.81 per leaseable square foot of the Alaris Space for the
period from March 1, 2007 through February 29, 2008 (for a total annual base
rent of not less than $5,141,540), plus reimbursement
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for a
proportionate share of Taxes, Insurance Premiums and any other costs and
expenses of owning, operating and maintaining the Property allocable to the
Alaris Space, and otherwise in accordance with the terms and conditions set
forth in that certain letter of intent dated January 26, 2005 from CommonWealth
Partners Management Services, L.P. to Xxxxxxx Real Estate Services,
Inc..
“Alaris
Short Term Lease Extension Date” shall
mean the date on which Borrower shall have submitted to Lender evidence
reasonably satisfactory to Lender that the Alaris Short Term Lease Extension has
occurred, including without limitation an amendment of the Alaris Lease fully
executed by Mortgage Borrower and Alaris reflecting the Alaris Short Term Lease
Extension, and an estoppel certificate from Alaris confirming the Alaris Short
Term Lease Extension and that the Alaris Lease, as so modified is in full force
and effect with no defaults by Borrower or Alaris thereunder, each in form and
substance reasonably satisfactory to Lender.
“Alaris
Space” shall
mean the approximately 184,881 leasable square feet of space at the Property
leased by Alaris pursuant to the Alaris Lease.
“Alaris
Sweep Period” shall
mean the period of time from and after an Alaris Trigger Event until the
occurrence of an Alaris Sweep Termination.
“Alaris
Sweep Termination” shall
have the meaning set forth in the Mortgage Loan Agreement.
“Alaris
Trigger Event” shall
have the meaning set forth in the Mortgage Loan Agreement.
“ALTA” shall
mean American Land Title Association, or any successor thereto.
“Annual
Budget” shall
mean the operating budget, including all planned Capital Expenditures, for the
Property prepared by Borrower for the applicable Fiscal Year or other period,
except that Lender acknowledges that, for up to sixty (60) days after the
Closing Date, the most recent budget for the Property prepared by CommonWealth
Pacific, LLC or its Affiliates may be used by Borrower for operating the
Property.
“Applicable
Interest Rate” shall
mean the rate or rates at which the Outstanding Principal Balance bears interest
from time to time in accordance with the provisions of Section 2.2.3
hereof.
“Applicable
Spread” shall
mean
(i) two and
twenty-five one-hundredths percent (2.25%) for the period from the Closing Date
until the earlier to occur of the first Payment Date after the Alaris Short Term
Lease Extension shall have occurred or the first Payment Date after September 1,
2005,
(ii) two and
seventy-five one-hundredths percent (2.75%) from the first Payment Date after
September 1, 2005 to the Maturity Date, including, without limitation, during
the First Extension Term, the Second Extension Term and the Third Extension
Term, if the
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Alaris
Short Term Lease Extension Date shall not have occurred on or prior to September
1, 2005;
(iii) one and
seventy-five one-hundredths percent (1.75%) for the period from the first
Payment Date after the Alaris Short Term Lease Extension Date shall have
occurred until the Initial Maturity Date, if the Alaris Short Term Lease
Extension Date shall have occurred on or prior to September 1,
2005;
(iv) one and
seventy-five one-hundredths percent (1.75%) during the First Extension Term, the
Second Extension Term and the Third Extension Term in the event that the Alaris
Short Term Leave Extension shall have occurred on or prior to September 1, 2005
and the Additional Extension Conditions shall have been satisfied prior to the
Initial Maturity Date; and
(v) two and
seventy-five one-hundredths percent (2.75%) during the First Extension Term, the
Second Extension Term and the Third Extension Term in the event that the Alaris
Short Term Lease Extension shall have occurred on or prior to September 1, 2005
but the Additional Extension Conditions shall not have been satisfied prior to
the Initial Maturity Date.
“Approved
Annual Budget” shall
have the meaning set forth in Section 5.1.11(d) hereof.
“Approved
Leasing Expenses” shall
mean actual out-of-pocket expenses incurred by Mortgage Borrower in leasing
space at the Property pursuant to Leases entered into in accordance with the
Loan Documents, including brokerage commissions and tenant improvements, which
expenses (i) are (A) specifically approved by Lender in connection with
approving the applicable Lease, (B) incurred in the ordinary course of business
and on market terms and conditions in connection with Leases which do not
require Lender’s approval under the Loan Documents, and Lender shall have
received and approved a budget for such tenant improvement costs and a schedule
of leasing commissions payments payable in connection therewith, or (C)
otherwise approved by Lender in its reasonable discretion, and (ii) are
substantiated by executed Lease documents and brokerage agreements.
“Assignment
of Leases” shall
mean that certain first priority Assignment of Leases and Rents, dated as of the
date hereof, from Mortgage Borrower, as assignor, to Mortgage Lender, as
assignee, assigning to Mortgage Lender all of Mortgage Borrower’s interest in
and to the Leases and Rents as security for the Mortgage Loan, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
“Assignment
of Management Agreement” shall
mean that certain Assignment of Management Agreement and Consent and Agreement
of Manager (Mezzanine Loan), dated as
of the date hereof, among Lender, Borrower, Mortgage Borrower and Manager, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
“Award” shall
mean any compensation paid by any Governmental Authority in connection with a
Condemnation.
“Bankruptcy
Action” shall
mean with respect to any Person (a) such Person filing a voluntary petition
under the Bankruptcy Code or any other Federal or state bankruptcy or
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insolvency
law; (b) the filing of an involuntary petition against such Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or soliciting or causing to be solicited petitioning creditors for any
involuntary petition against such Person; (c) such Person filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or soliciting or causing to be
solicited petitioning creditors for any involuntary petition from any Person;
(d) such Person seeking, consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee, or examiner
for such Person or any portion of the Property; or (e) such Person making
an assignment for the benefit of creditors, or admitting, in writing or in any
legal proceeding, its insolvency or inability to pay its debts as they become
due.
“Bankruptcy
Code” shall
mean 11 U.S.C. § 101 et
seq., as the
same may be amended from time to time.
“Basic
Carrying Costs” shall
mean, for any period, the sum of the following costs: (a) Taxes,
(b) Other Charges, and (c) Insurance Premiums.
“Borrower” shall
have the meaning set forth in the introductory paragraph hereto together with
its successors and permitted assigns.
“Borrower
Parties” shall
have the meaning set forth in Section
9.4
hereof.
“Breakage
Costs” shall
have the meaning set forth in Section 2.2.3(h)
hereof.
“Business
Day” shall
mean any day other than a Saturday, Sunday or any other day on which national
banks in the State of New York or the State of California are not open for
business.
“Capital
Expenditures” shall
mean, for any period, the amount expended for items capitalized under GAAP
(including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements).
“Cash
Expenses” shall
mean, for any period, the Operating Expenses for the operation of the Property
as approved by Lender in its sole discretion or as set forth in a then effective
Approved Annual Budget, if applicable, to the extent that such expenses are
actually incurred by Mortgage Borrower minus any payments into the Tax and
Insurance Escrow Funds.
“Cash
Management Account” shall
have the meaning set forth in Section 2.6.2(a)
hereof.
“Cash
Management Agreement” shall
mean that certain Cash Management Agreement, dated as of the date hereof, by and
among Mortgage Borrower, Manager and Mortgage Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
“Casualty” shall
have the meaning set forth in Section 6.2
hereof.
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“Closing
Date” shall
mean the date of the funding of the Loan.
“Code” shall
mean the Internal Revenue Code of 1986, as amended, as it may be further amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or final
form.
“Collateral” shall
have the meaning set forth in the Pledge Agreement.
“Collateral
Assignment of Interest Rate Cap Agreement” shall
mean that certain Collateral Assignment of Interest Rate Cap Agreement
(Mezzanine Loan), dated as of the date hereof, executed by Borrower in
connection with the Loan for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to
time.
“Condemnation” shall
mean a temporary or permanent taking by any Governmental Authority as the result
or in lieu or in anticipation of the exercise of the right of condemnation or
eminent domain, of all or any part of the Property, or any interest therein or
right accruing thereto, including any right of access thereto or any change of
grade affecting the Property or any part thereof.
“Condemnation
Proceeds” shall
have the meaning set forth in the Mortgage Loan Agreement.
“Contractual
Obligation” shall
mean as to any Person, any provision of any security issued by such Person or of
any agreement, instrument or undertaking to which such Person is a party or by
which it or any of its property is bound, or any provision of the
foregoing.
“Counterparty” shall
mean, with respect to the Interest Rate Cap Agreement, SMBC Derivative Products
Limited, and with respect to any Replacement Interest Rate Cap Agreement, any
substitute Acceptable Counterparty.
“Covered
Disclosure Information” shall
have the meaning set forth in Section 9.2(b)
hereof.
“Debt” shall
mean the Outstanding Principal Balance together with all interest accrued and
unpaid thereon and all other sums (including, if applicable, the Alaris Lease
Fee and any Prepayment Premium) due to Lender in respect of the Loan under the
Note, this Agreement, the Pledge Agreement and the other Loan
Documents.
“Debt
Service” shall
mean, with respect to any particular period of time, scheduled principal and/or
interest payments due under this Agreement and the Note.
“Debt
Service Coverage Ratio” shall
mean a ratio for the applicable twelve (12) full calendar month period in
which:
(a) the
numerator is the Net Operating Income for such period, based upon the then
current Rent payable by tenants under Leases at the Property that are in
occupancy and
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paying
current, unabated Rent (excluding interest on credit accounts) as set forth in
the financial statements required hereunder; and
(b) the
denominator is the assumed aggregate debt service for (i) the Loan for such
period calculated on the basis of a six and sixty-five one-hundredths percent
(6.65%) debt service constant and (ii) the Mortgage Loan for such period
calculated on the basis of a six and sixty-five one-hundredths percent
(6.65%) debt service constant.
“Default” shall
mean the occurrence of any event hereunder or under any other Loan Document
which, but for the giving of notice or passage of time, or both, would be an
Event of Default.
“Default
Rate” shall
mean a rate per annum equal to the lesser of (a) the Maximum Legal Rate and
(b) five percent (5%) above the Applicable Interest Rate.
“Deficient
NCF Amount” shall
mean, as of any date of determination, an annual amount (but not less than zero)
which, when added to the Underwritten Net Operating Income of the Property
determined as of such date of determination for the preceding twelve (12) full
calendar month period, would result in an Underwritten Debt Service Coverage
Ratio equal to 1.10:1.0, excluding, for purposes of this calculation, the Rent
payable under the Vacant Space Master Lease.
“Determination
Date” shall
mean, with respect to any Interest Accrual Period, the date that is two (2)
London Business Days prior to the fifteenth (15th) day of
the calendar month in which such Interest Accrual Period commences; provided
that the first Determination Date shall be the Closing Date.
“Disclosure
Document” shall
mean a prospectus, prospectus supplement, private placement memorandum, offering
memorandum, offering circular, term sheet, road show presentation materials or
other offering documents or marketing materials, in each case in preliminary or
final form, used to offer Securities in connection with a
Securitization.
“Eligible
Account” shall
mean a separate and identifiable account from all other funds held by the
holding institution that is either (a) an account or accounts maintained
with a federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated
trust account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary capacity which,
in the case of a state chartered depository institution or trust company, is
subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in
either case a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by federal and state authority. An Eligible
Account will not be evidenced by a certificate of deposit, passbook or other
instrument.
“Eligible
Institution” shall
mean a depository institution or trust company, the short term unsecured debt
obligations or commercial paper of which are rated at least “A-1+” by S&P,
“P-1” by Xxxxx’x and “F-1+” by Fitch in the case of accounts in which funds are
held for thirty (30) days or less (or, in the case of accounts in which funds
are held for more than thirty
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(30)
days, the long term unsecured debt obligations of which are rated at least “AA”
by Fitch and S&P and “Aa2” by Xxxxx’x).
“Embargoed
Person” shall
have the meaning set forth in Section 4.1.35
hereof.
“Environmental
Indemnity” shall
mean that certain Environmental Indemnity Agreement, dated as of the date
hereof, executed by Borrower and Guarantor in connection with the Loan for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
“Event
of Default” shall
have the meaning set forth in Section 8.1(a)
hereof.
“Excess
Cash Flow” shall
have the meaning set forth in Section
2.6.4(b)(vii)
hereof.
“Excess
Cash Flow Principal Payment” shall
have the meaning set forth in Section
2.6.4(b)(viii)
hereof.
“Exchange
Act” shall
have the meaning set forth in Section 9.2(a)
hereof.
“Extraordinary
Expense” shall
have the meaning set forth in Section 5.1.11(e)
hereof.
“First
Extended Maturity Date” shall
mean April 9, 2008.
“First
Extension Option” shall
have the meaning set forth in Section
2.7.1
hereof.
“First
Extension Term” shall
have the meaning set forth in Section
2.7.1
hereof.
“Fiscal
Year” shall
mean each twelve (12) month period commencing on January 1 and ending
on December 31 during each year of the term of the Loan.
“Fitch” shall
mean Fitch, Inc.
“Fixed
Maturity Date” shall
mean either (a) the Initial Maturity Date, (b) if Borrower shall have
properly exercised the First Extension Option, the First Extended Maturity Date,
(c) if Borrower shall have properly exercised the First Extension Option
and the Second Extension Option, the Second Extended Maturity Date, or (d) if
Borrower shall have properly exercised the First Extension Option, the Second
Extension Option and the Third Extension Option, the Third Extended Maturity
Date.
“Foreign
Taxes” shall
have the meaning set forth in Section 2.2.3(e)
hereof.
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“Full
Service Gross Rent” shall
mean base Rent plus any reimbursements payable for Taxes, Insurance Premiums,
utility expenses and costs and expenses of operating and maintaining the
Property.
“GAAP” shall
mean generally accepted accounting principles in the United States of America as
of the date of the applicable financial report.
“Governmental
Authority” shall
mean any court, board, agency, commission, office or other authority of any
nature whatsoever for any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx,
xxxxxxxxx, xxxx or otherwise) whether now or hereafter in
existence.
“Gross
Income from Operations” shall
mean, for any period, all income, computed in accordance with GAAP, derived from
the ownership and operation of the Property from whatever source during such
period, including, but not limited to, Rents, utility charges, escalations,
forfeited security deposits, interest on credit accounts, service fees or
charges, license fees, parking fees, rent concessions or credits, and other
pass-through or reimbursements paid by tenants under the Leases of any nature,
including Rents payable under the Vacant Space Master Lease, but excluding any
Rents from month to month tenants or tenants that are included in any Bankruptcy
Action, sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, proceeds from the sale of furniture, fixtures and
equipment, Insurance Proceeds and Condemnation Proceeds (other than business
interruption or other loss of income insurance), and any disbursements to
Borrower from the Tax and Insurance Escrow Funds, the Alaris Reserve Funds, the
Rollover Reserve Funds or any other escrow fund established by the Loan
Documents.
“Guarantor” shall
mean Xxxxxxx Properties, L.P., a Maryland limited partnership, and any other
Person hereafter executing a separate guaranty or indemnity agreement in favor
of Lender in connection with the Loan.
“Guaranty” shall
mean that certain Guaranty Agreement, dated as of the date hereof, from
Guarantor in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Improvements” shall
have the meaning set forth in the granting clause of the Mortgage.
“Indebtedness” shall
mean for any Person, on a particular date, the sum (without duplication) at such
date of (a) all indebtedness or liability of such Person (including,
without limitation, amounts for borrowed money and indebtedness in the form of
mezzanine debt and preferred equity); (b) obligations evidenced by bonds,
debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under
acceptance facilities; (f) all guaranties, endorsements (other than for
collection or deposit in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds, to
invest in any Person or entity, or otherwise to assure a creditor against loss;
and (g) obligations secured by any Liens, whether or not the obligations
have been assumed.
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“Indemnified
Liabilities” shall
have the meaning set forth in Section
10.13(b)
hereof.
“Indemnified
Person” and
“Indemnified
Persons” shall
have the meaning set forth in Section 9.2(b)
hereof.
“Indemnifying
Person” shall
mean each of Borrower, Principal and Guarantor.
“Independent
Director” or
“Independent
Manager” shall
mean a natural person who is not at the time of initial appointment, or at any
time while serving as a director or manager, as applicable, and has not been at
any time during the preceding five (5) years: (a) a stockholder,
director or manager (with the exception of serving as the Independent Director
or Independent Manager), officer, employee, partner, member, attorney or counsel
of Principal, Borrower or any Affiliate of either of them; (b) a customer,
supplier or other Person who derives any of its purchases or revenues from its
activities with Principal, Borrower or any Affiliate of either of them;
(c) a person controlling or under common control with any such stockholder,
director, manager officer, partner, member, customer, supplier or other Person;
or (d) a member of the immediate family of any such stockholder, director,
manager, officer, employee, partner, member, customer, supplier or other Person.
As used in this definition, the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of management,
policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise.
“Initial
Blanket Insurance Premium Installment” shall
have the meaning set forth in Section 7.2(a)
hereof.
“Initial
Maturity Date” shall
mean April 9, 2007.
“Insolvency
Opinion” shall
mean that certain non-consolidation opinion letter dated the date hereof
delivered by Xxxxxxxxx & Xxxxxx, Professional Corporation in connection with
the Loan.
“Insurance
Premiums” shall
have the meaning set forth in the Mortgage Loan Agreement.
“Insurance
Proceeds” shall
have the meaning set forth in the Mortgage Loan Agreement.
“Intercreditor
Agreement” shall
mean that certain Intercreditor Agreement dated as of the date hereof by and
between Lender and Mortgage Lender.
“Interest
Accrual Period” shall
mean, with respect to any Payment Date, the period commencing on the ninth
(9th) day of
the preceding calendar month and terminating on and including the eighth
(8th) day of
the calendar month in which such Payment Date occurs; provided,
however, that no
Interest Accrual Period shall end later than the Maturity Date (other than for
purposes of calculating interest at the Default Rate), and the initial Interest
Accrual Period shall begin on and include the Closing Date and shall end on and
include the immediately following eighth (8th) day of
the calendar month.
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“Interest
Rate Cap Agreement” shall
mean, as applicable, an Interest Rate Cap Agreement (together with the
confirmation and schedules relating thereto) in form and substance reasonably
satisfactory to Lender between Borrower and an Acceptable Counterparty or a
Replacement Interest Rate Cap Agreement.
“Investment
Grade Rating” shall
mean a long term unsecured debt rating of not less than “BBB-” (or its
equivalent) from (i) prior to a Securitization of the Mortgage Loan, S&P and
(ii) after a Securitization of the Mortgage Loan, any one of Xxxxx’x, S&P,
Fitch or any other nationally-recognized statistical rating agency rating the
Securities.
“Lease” shall
mean any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
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, including the
Vacant Space Master Lease, and (a) every modification, amendment or other
agreement relating to such lease, sublease, subsublease, or other agreement
entered into in connection with such lease, sublease, subsublease, or other
agreement and (b) every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.
“Legal
Requirements” shall
mean all federal, state, county, municipal and other governmental statutes,
laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions
of Governmental Authorities affecting the Property or any part thereof, or the
construction, use, alteration or operation thereof, or any part thereof, whether
now or hereafter enacted and in force, including, without limitation, the
Americans with Disabilities Act of 1990, as amended, and all permits, licenses
and authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Borrower, at any time in force affecting the Property or
any part thereof, including, without limitation, any which may (a) require
repairs, modifications or alterations in or to the Property or any part thereof,
or (b) in any way limit the use and enjoyment thereof.
“Lender” shall
have the meaning set forth in the introductory paragraph hereto, together with
its successors and assigns.
“Liabilities” shall
have the meaning set forth in Section 9.2(b)
hereof.
“LIBOR” shall
mean, with respect to each Interest Accrual Period, the rate (expressed as a
percentage per annum and rounded upward, if necessary, to the next nearest 1/8
of 1%) for deposits in U.S. dollars, for a one-month period, that appears on
Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London
time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on such
Determination Date, LIBOR shall be the arithmetic mean of the offered rates
(expressed as a percentage per annum) for deposits in U.S. dollars for a
one-month period that appear on the Reuters Screen Libor Page as of
11:00 a.m., London time, on such Determination Date, if at least two such
offered rates so appear. If fewer than two such offered rates appear on the
Reuters Screen Libor Page as of 11:00 a.m., London time, on such
Determination Date, Lender shall request the principal London office of any four
major reference banks in the London interbank market selected by Lender to
provide such bank’s offered quotation (expressed as a percentage
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per
annum) to prime banks in the London interbank market for deposits in U.S.
dollars for a one-month period as of 11:00 a.m., London time, on such
Determination Date for amounts of not less than U.S. $1,000,000. If at least two
such offered quotations are so provided, LIBOR shall be the arithmetic mean of
such quotations. If fewer than two such quotations are so provided, Lender shall
request any three major banks in New York City selected by Lender to provide
such bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars
to leading European banks for a one-month period as of approximately
11:00 a.m., New York City time on the applicable Determination Date for
amounts of not less than U.S. $1,000,000. If at least two such rates are so
provided, LIBOR shall be the arithmetic mean of such rates. LIBOR shall be
determined conclusively by Lender or its agent absent manifest error.
“LIBOR
Loan” shall
mean the Loan at such time as interest thereon accrues at a rate of interest
based upon LIBOR.
“Lien” shall
mean any mortgage, deed of trust, lien, pledge, hypothecation, easement,
restrictive covenant, preference, assignment, security interest, or any other
encumbrance, charge or transfer of, or any agreement to enter into or create,
any of the foregoing, on or affecting Borrower, Mortgage Borrower, the
Collateral, the Property, or any portion thereof or any interest therein, or any
direct or indirect interest in Borrower or Principal, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s
and other similar liens and encumbrances.
“Liquidation
Event” shall
have the meaning set forth in Section 2.4.4
hereof.
“Loan” shall
mean the loan in the principal amount of Five Million and No/100 Dollars
($5,000,000.00), made by Lender to Borrower pursuant to this
Agreement.
“Loan
Documents” shall
mean, collectively, this Agreement, the Note, the Pledge Agreement, the
Environmental Indemnity, the Assignment of Management Agreement, the Guaranty,
the Mezzanine Cash Management Agreement, the Collateral Assignment of Interest
Rate Cap Agreement, and all other documents executed and/or delivered in
connection with the Loan.
“Loan
to Value Ratio” shall
mean the ratio, as of a particular date, the numerator of which is an amount
equal to the Aggregate Outstanding Principal Balance as of such date and the
denominator of which is an amount equal to the appraised value of the Property
as of such date as determined by Lender in its sole discretion.
“Lockbox
Account” shall
have the meaning set forth in Section 2.6.1(a)
hereof.
“Lockbox
Bank” shall
mean Bank of the West or any successor or permitted assigns
thereof.
“Lockout
Determination Date” shall
mean the Payment Date that is the earliest to occur of (i) the first Payment
Date following the Alaris Short Term Lease Extension Date (or, the Alaris Short
Term Lease Extension Date, if such date is a Payment Date),
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(ii) September 9, 2005
or (iii) such earlier Payment Date as shall be determined by Lender in its sole
discretion.
“Lockout
Release Date” shall
mean the third (3rd) Payment
Date after the Lockout Determination Date.
“London
Business Day” shall
mean any day other than a Saturday, Sunday or any other day on which commercial
banks in London, England are not open for business.
“Major
Lease” shall
mean any Lease which, either individually or when taken together with any other
Lease with the same tenant or its Affiliates, demises in excess of 14,000 square
feet in the Improvements.
“Management
Agreement” shall
mean the management agreement entered into by and between Mortgage Borrower and
Manager, pursuant to which Manager is to provide management and other services
with respect to the Property, or, if the context requires, the Replacement
Management Agreement.
“Manager” shall
mean Xxxxxxx Properties, L.P., or, if the context requires, a Qualified Manager
who is managing the Property in accordance with the terms and provisions of this
Agreement.
“Maturity
Date” shall
mean (a) the Fixed Maturity Date or (b) such other date on which the final
payment of principal of the Note becomes due and payable as therein or herein
provided, whether at such stated maturity date, by declaration of acceleration,
or otherwise.
“Maximum
Legal Rate” shall
mean the maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Note and as provided for herein or the other Loan
Documents, under the laws of such state or states whose laws are held by any
court of competent jurisdiction to govern the interest rate provisions of the
Loan.
“Mezzanine
Cash Management Account” shall
have the meaning set forth in Section 2.6.3
hereof.
“Mezzanine
Cash Management Agreement” shall
mean that certain Mezzanine Cash Management Agreement, dated as of the date
hereof, among Borrower, Lender and Mortgage Borrower, together with any
extensions, renewals, amendments or modifications thereof.
“Minimum
Extension Interest Rate” shall
mean an annual rate equal to five and fifty-six one-hundredths percent
(5.56%).
“Monthly
Interest Payment” shall
have the meaning set forth in Section
2.3.1
hereof.
“Moody’s” shall
mean Xxxxx’x Investors Service, Inc.
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-
“Mortgage” shall
have the meaning set forth in the Recitals to this Agreement.
“Mortgage
Borrower” shall
have the meaning set forth in the Recitals to this Agreement, together with its
successors and permitted assigns.
“Mortgage
Borrower Company Agreement” shall
mean the Limited Liability Company Agreement for Mortgage Borrower, dated as of
March 15, 2005, between Borrower, as member, and Xxxxxx
X. Xxxx and Xxxxxxx X. Xxxxx; as
special members and Independent Managers (as defined therein).
“Mortgage
Lender” shall
have the meaning set forth in the Recitals to this Agreement, together with its
successors and assigns.
“Mortgage
Loan” shall
have the meaning set forth in the Recitals to this Agreement.
“Mortgage
Loan Agreement” shall
have the meaning set forth in the Recitals to this Agreement.
“Mortgage
Loan Default” shall
mean a “Default” under and as defined in the Mortgage Loan
Agreement.
“Mortgage
Loan Documents” shall
mean, collectively, the Mortgage Note, the Mortgage Loan Agreement, the
Mortgage, the Assignment of Leases and Rents, the Cash Management Agreement, and
any and all other documents defined as “Loan Documents” in the Mortgage Loan
Agreement, as amended, restated, replaced, supplemented or otherwise modified
from time to time.
“Mortgage
Loan Event of Default” shall
mean an “Event of Default” under and as defined in the Mortgage Loan
Agreement.
“Mortgage
Loan Outstanding Principal Balance” shall
mean, as of any date, the outstanding principal balance of the Mortgage
Loan.
“Mortgage
Loan Reserve Funds” shall
mean the “Reserve Funds” as defined in the Mortgage Loan Agreement.
“Mortgage
Note” shall
have the meaning set forth in the Recitals to this Agreement.
“Net
Cash Flow” shall
mean, for any period, the amount obtained by subtracting Operating Expenses and
Capital Expenditures for such period from Gross Income from Operations for such
period.
“Net
Cash Flow Schedule” shall
have the meaning set forth in Section 5.1.11(b)
hereof.
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-
“Net
Liquidation Proceeds After Debt Service” shall
mean, with respect to any Liquidation Event, all amounts paid to or received by
or on behalf of Mortgage Borrower in connection with such Liquidation Event,
including, without limitation, proceeds of any sale, refinancing or other
disposition or liquidation, less (a) Lender’s and/or Mortgage Lender’s
reasonable costs incurred in connection with the recovery thereof, (b) the
costs incurred by Mortgage Borrower in connection with a Restoration of all or
any portion of the Property made in accordance with the Mortgage Loan Documents,
(c) amounts required or permitted to be deducted therefrom and amounts paid
pursuant to the Mortgage Loan Documents to Mortgage Lender, (d) in the case
of a foreclosure sale, disposition or Transfer of the Property in connection
with realization thereon following an Event of Default under the Mortgage Loan,
such reasonable and customary costs and expenses of sale or other disposition
(including attorneys’ fees and brokerage commissions), (e) in the case of a
foreclosure sale, such costs and expenses incurred by Mortgage Lender under the
Mortgage Loan Documents as Mortgage Lender shall be entitled to receive
reimbursement for under the terms of the Mortgage Loan Documents, (f) in
the case of a refinancing of the Mortgage Loan, such costs and expenses
(including attorneys’ fees) of such refinancing as shall be reasonably approved
by Lender, and (g) the amount of any prepayments required pursuant to the
Mortgage Loan Documents, and/or the Loan Documents, in connection with any such
Liquidation Event.
“Net
Operating Income” shall
mean, for any period, the amount obtained by subtracting Operating Expenses for
such period from Gross Income from Operations for such period.
“New
Alaris Space Lease” shall
have the meaning set forth in Section
3.1.19(b) hereof.
“New
Mezzanine Loan” shall
have the meaning set forth in Section
9.7
hereof.
“New
Vacant Space Lease” shall
have the meaning set forth in Section
3.1.19(a) hereof.
“Note” shall
mean that certain Promissory Note dated of even date herewith in the principal
amount of Five Million and No/100 Dollars ($5,000,000.00), made by Borrower to
the order of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“Notice” shall
have the meaning set forth in Section
10.6
hereof.
“Obligations” shall
mean, collectively, Borrower’s obligations for the payment of the Debt and the
performance of the Other Obligations.
“Officer’s
Certificate” shall
mean a certificate delivered to Lender by Borrower that is signed by an
authorized senior officer of the general partner or managing member of Borrower,
as applicable.
“Operating
Expenses” shall
mean, for any period, the total of all expenditures, computed in accordance with
GAAP, of whatever kind relating to the operation, maintenance and management of
the Property, which expenditures are incurred on a regular monthly or other
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-
periodic
basis, including without limitation, utilities, ordinary repairs and maintenance
(which ordinary repairs and maintenance for the purposes of this definition
shall be no less than an assumed expense of $33,000.00 per month), insurance,
license fees, property taxes and assessments, advertising expenses, management
fees, payroll and related taxes, computer processing charges, tenant
improvements and leasing commissions (which tenant improvements and leasing
commissions for the purposes of this definition shall be no less than an assumed
expense of $33,525.58 per month) operational equipment or other lease payments
as approved by Lender and Mortgage Lender, and other similar costs, but
excluding depreciation, Debt Service, Capital Expenditures, and contributions to
the Tax and Insurance Escrow Funds, the Alaris Reserve Funds, the Rollover
Reserve Funds and any other reserves required under the Loan
Documents.
“Operating
Partnership” shall
mean Xxxxxxx Properties, L.P., a Maryland limited partnership, which is the
operating partnership of the REIT.
“Other
Charges” shall
mean all ground rents, maintenance charges, impositions other than Taxes, and
any other charges, including, without limitation, vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Property, now or
hereafter levied or assessed or imposed against the Property or any part
thereof.
“Other
Obligations” shall
mean (a) the performance of all obligations of Borrower contained herein; (b)
the performance of each obligation of Borrower contained in any other Loan
Document; and (c) the performance of each obligation of Borrower contained in
any renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of this Agreement, the Note or
any other Loan Documents.
“Outstanding
Principal Balance” shall
mean, as of any date, the outstanding principal balance of the
Loan.
“Payment
Date” shall
mean the ninth (9th) day of
each calendar month during the term of the Loan or, if such day is not a
Business Day, the immediately preceding Business Day.
“Permitted
Encumbrances” shall
mean, collectively, (a) the Liens and security interests created by the
Loan Documents and the Mortgage Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the Title Insurance Policy, (c) Liens, if
any, for Taxes imposed by any Governmental Authority not yet due or delinquent,
and (d) such other title and survey exceptions as Lender has approved or
may approve in writing in Lender’s sole discretion.
“Permitted
Investments” shall
have the meaning set forth in the Cash Management Agreement.
“Person” shall
mean any individual, corporation, partnership, joint venture, limited liability
company, estate, trust, unincorporated association, any Governmental Authority
and any fiduciary acting in such capacity on behalf of any of the
foregoing.
“Personal
Property” shall
have the meaning set forth in the granting clause of the Mortgage.
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-
“Physical
Conditions Report” shall
mean a report prepared by a company satisfactory to Lender regarding the
physical condition of the Property, satisfactory in form and substance to Lender
in its sole discretion.
“Pledge
Agreement” shall
have the meaning set forth in the Recitals to this Agreement.
“Pledged
Company Interests” shall
have the meaning set forth in the Recitals to this Agreement.
“Pledgor” shall
have the meaning as set forth in the Pledge Agreement.
“Policies” shall
have the meaning set forth in the Mortgage Loan Agreement.
“Prepayment
Premium” shall
mean if the prepayment occurs on or after the Lockout Release Date and prior to
the eighteenth (18th) Payment
Date following the Lockout Determination Date, an amount equal to the Spread
Maintenance Premium. If a prepayment occurs on or after the eighteenth
(18th) Payment
Date following the Lockout Determination Date, no Prepayment Premium will be
payable.
“Prime
Rate” shall
mean the annual rate of interest publicly announced by Citibank, N.A. in New
York, New York, as its base rate, as such rate shall change from time to time.
If Citibank, N.A. ceases to announce a base rate, Prime Rate shall mean the rate
of interest published in The
Wall Street Journal from
time to time as the “Prime Rate.” If more than one “Prime Rate” is published in
The
Wall Street Journal for a
day, the average of such “Prime Rates” shall be used, and such average shall be
rounded up to the nearest one-eighth of one percent (0.125%). If The
Wall Street Journal ceases
to publish the “Prime Rate,” Lender shall select an equivalent publication that
publishes such “Prime Rate,” and if such “Prime Rates” are no longer generally
published or are limited, regulated or administered by a governmental or quasi
governmental body, then Lender shall select a comparable interest rate
index.
“Prime
Rate Loan” shall
mean the Loan at such time as interest thereon accrues at a rate of interest
based upon the Prime Rate.
“Prime
Rate Spread” shall
mean the difference (expressed as the number of basis points) between
(a) LIBOR plus the Applicable Spread on the date LIBOR was last applicable
to the Loan and (b) the Prime Rate on the date that LIBOR was last
applicable to the Loan; provided,
however, that in
no event shall such difference be a negative number.
“Principal” shall
mean the sole member of Borrower.
“Property” shall
mean each parcel of real property, the Improvements thereon and all personal
property owned by Mortgage Borrower and encumbered by the Mortgage, together
with all rights pertaining to such property and Improvements, as more
particularly described in the granting clause of the Mortgage and referred to
therein as the “Property”.
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-
“Provided
Information” shall
mean any and all financial and other information provided at any time by, or on
behalf of, any Indemnifying Person with respect to the Property, the Collateral,
Borrower, Principal, Mortgage Borrower, Guarantor and/or Manager.
“Qualified
Manager” shall
mean either (a) Manager or (b) in the reasonable judgment of Lender, a
reputable and experienced management organization (which may be an Affiliate of
Borrower) possessing experience in managing properties similar in size, scope,
use and value as the Property, provided that
Borrower shall have obtained prior written confirmation from the applicable
Rating Agencies that management of the Property by such Person will not cause a
downgrade, withdrawal or qualification of the then current ratings of the
Securities or any class thereof.
"Qualifying
Income” shall
mean Gross Income from Operations actually collected by Mortgage Borrower for
the last full calendar month prior to the date of the calculation, but excluding
Rents from (a) tenants that are more than thirty (30) days delinquent in the
payment of Rent, (b) tenants whose Leases are expiring within six (6) months
from the date of any calculation of Qualifying Income, or (c) tenants that are
not occupying their leased space or have given notice of their intention to
vacate (unless any such tenant has an Investment Grade Rating or such tenant has
sublet all of its leased space for a term equal to the lesser of three years
from the date of any calculation or the remaining term of such Lease at a Full
Service Gross Rent that is not less than eighty percent (80%) of the Full
Service Gross Rent payable by such tenant under its Lease and the Rent from such
sublease is payable to the Lockbox Account pursuant to the terms of the Cash
Management Agreement).
“Quintiles
Space” shall
have the meaning set forth in Section 2.7.1(e) hereof.
“Rating
Agencies” shall
mean each of S&P, Xxxxx’x and Fitch, or any other nationally recognized
statistical rating agency which has been approved by Lender.
“REIT” shall
mean Xxxxxxx Properties, Inc., a Maryland corporation.
“REMIC
Trust” shall
mean a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds the Mortgage Note.
“Rents” shall
mean all rents (including, without limitation, percentage rents), rent
equivalents, moneys payable as damages (including payments by reason of the
rejection of a Lease in a Bankruptcy Action) or in lieu of rent or rent
equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other payments and
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Mortgage Borrower or any of its agents or employees
from any and all sources arising from or attributable to the Property and the
Improvements, including all revenues from telephone services, laundry, vending,
television and all receivables, customer obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and occupancy of the Property or rendering
of services by Mortgage Borrower, Manager or any of their respective
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agents or
employees and proceeds, if any, from business interruption or other loss of
income insurance.
“Replacement
Interest Rate Cap Agreement” shall
mean an interest rate cap agreement from an Acceptable Counterparty with terms
substantially the same as the Interest Rate Cap Agreement except that the same
shall be effective in connection with replacement of the Interest Rate Cap
Agreement (a) on the Payment Date occurring in September, 2005 if the
Alaris Short Term Lease Extension Date shall not have occurred prior to
September 1, 2005, (b) on extension of the maturity date thereof in
connection with the extension of the Fixed Maturity Date, and/or
(c) following a downgrade, withdrawal or qualification of the long-term
unsecured debt rating of the Counterparty; provided that to
the extent any such interest rate cap agreement does not meet the foregoing
requirements, a “Replacement Interest Rate Cap Agreement” shall be such interest
rate cap agreement approved in writing by each of the Rating Agencies with
respect thereto.
“Replacement
Management Agreement” shall
mean, collectively, (a) either (i) a management agreement with a
Qualified Manager substantially in the same form and substance as the Management
Agreement, or (ii) a management agreement with a Qualified Manager, which
management agreement shall be reasonably acceptable to Lender in form and
substance, provided
that, with
respect to this subclause (ii), Lender,
at its option, may require that Borrower obtain confirmation from the applicable
Rating Agencies that such management agreement will not cause a downgrade,
withdrawal or qualification of the then current ratings of the Securities or any
class thereof; and (b) an assignment of management agreement and consent
and agreement of manager substantially in the form then used by Lender (or of
such other form and substance reasonably acceptable to Lender), executed and
delivered to Lender by Borrower and such Qualified Manager at Borrower’s
expense.
“Reserve
Funds” shall
mean, collectively, the Tax and Insurance Escrow Funds, the Rollover Reserve
Funds, the Alaris Reserve Funds and any other escrow fund established pursuant
to the Loan Documents.
“Restoration” shall
mean the repair and restoration of the Property after a Casualty or Condemnation
as nearly as possible to the condition the Property was in immediately prior to
such Casualty or Condemnation, with such alterations as may be reasonably
approved by Lender.
“Restricted
Party” shall
mean, collectively (a) Borrower, Principal, Mortgage Borrower, Guarantor
and any Affiliated Manager and (b) any shareholder, partner, member,
non-member manager, direct or indirect legal or beneficial owner, agent or
employee of Borrower, Principal, Mortgage Borrower, Guarantor, any Affiliated
Manager or any non-member manager.
“RICO” shall
mean the Racketeer Influenced and Corrupt Organizations Act.
“Rollover
Reserve Account” shall
have the meaning set forth in Section
7.4
hereof.
“Rollover
Reserve Funds” shall
have the meaning set forth in Section
7.4
hereof.
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“S&P” shall
mean Standard & Poor’s Ratings Group, a division of The XxXxxx-Xxxx
Companies.
“Sale
or Pledge” shall
mean a voluntary or involuntary sale, conveyance, assignment, transfer,
encumbrance or pledge of a legal or beneficial interest.
“Second
Extended Maturity Date” shall
mean April 9, 2009.
“Second
Extension Option” shall
have the meaning set forth in Section
2.7.2
hereof.
“Second
Extension Term” shall
have the meaning set forth in Section
2.7.2
hereof.
“Securities” shall
have the meaning set forth in Section 9.1
hereof.
“Securities
Act” shall
have the meaning set forth in Section 9.2(a)
hereof.
“Securitization” shall
have the meaning set forth in Section 9.1
hereof.
“Servicer” shall
have the meaning set forth in Section 9.6
hereof.
“Servicing
Agreement” shall
have the meaning set forth in Section 9.6
hereof.
“Severed
Loan Documents” shall
have the meaning set forth in Section 8.2(c)
hereof.
“Special
Purpose Entity”
shall mean
a corporation, limited partnership or limited liability company that at all
times prior to, on and after the date hereof:
(a) was, is
and will be organized solely for the purpose of (i) acquiring, owning, holding,
selling, transferring, exchanging, managing and operating the Collateral,
entering into this Agreement with Lender, refinancing the Collateral in
connection with a permitted repayment of the Loan, and transacting lawful
business that is incident, necessary and appropriate to accomplish the
foregoing; or (ii) acting as the general partner of the limited partnership that
owns the Collateral or as the sole member of the limited liability company that
owns the Collateral;
(b) has not
been, is not, and will not be engaged in any business unrelated to (i) the
ownership of the Collateral, (ii) acting as the general partner of the limited
partnership that owns the Collateral, or (iii) acting as the sole member of the
limited liability company that owns the Collateral, as applicable;
(c) has not
had, does not have and will not have any assets other than those related to the
Collateral or its partnership interest in the limited partnership or the limited
liability company interest in the limited liability company that owns the
Collateral or acts as the general partner or the sole member thereof, as
applicable;
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(d) has not
engaged, sought or consented to, and will not engage in, seek or consent to, (i)
any dissolution, winding up, liquidation, consolidation, merger, sale of all or
substantially all of its assets, (ii) except as permitted under the terms of
this Agreement, any transfer of partnership or limited liability company
interests (if such entity is a general partner in a limited partnership or a
member in a limited liability company), or (iii) any amendment of its limited
partnership agreement, articles of incorporation, articles of organization,
certificate of formation or operating agreement (as applicable) with respect to
the matters set forth in this definition without the written consent of
Lender;
(e) if such
entity is a limited partnership, has, had, now has, and will have as its only
general partners, Special Purpose Entities that are corporations, limited
partnerships or limited liability companies;
(f) if such
entity is a corporation, has had, now has and will have at least two (2)
Independent Directors, and has not caused or allowed, and will not cause or
allow, the board of directors of such entity to take any Bankruptcy Action or
any other action requiring the unanimous affirmative vote of one hundred percent
(100%) of the members of its board of directors unless two (2) Independent
Directors shall have participated in such vote;
(g) if such
entity is a limited liability company with more than one member, has had, now
has and will have at least one member that is a Special Purpose Entity that is a
corporation that has at least two (2) Independent Directors and that owns at
least one percent (1.0%) of the equity of the limited liability
company;
(h) if such
entity is a limited liability company with only one member, has been, now is,
and will be a limited liability company organized in the State of Delaware that
has (i) as its only member a managing member, (ii) at least two (2) Independent
Managers and has not caused or allowed, and will not cause or allow, the board
of managers of such entity to take any Bankruptcy Action or any other action
requiring the unanimous affirmative vote of one hundred percent (100%) of the
managers pursuant to the terms of the limited liability company agreement of
Borrower (as in effect as of the date hereof) unless two (2) Independent
Managers have participated in such vote, and (iii) at least one person acting as
Independent Manager who shall become the sole member of such entity upon the
dissolution of the existing member;
(i) if such
entity is (i) a limited liability company, has had, now has, and will have
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, (ii) a limited partnership, has had, now has, and will
have a limited partnership agreement, or (iii) a corporation, has had, now has,
and will have a certificate of incorporation that, in each of the foregoing
cases, provides that such entity will not, as long as any portion of the Debt
remains outstanding: (A) dissolve, merge, liquidate or consolidate; (B) except
as permitted under the terms of this Agreement, sell all or substantially all of
its assets or the assets of Borrower (as applicable); (C) engage in any other
business activity or amend its organizational documents with respect to the
matters set forth in this definition without the written consent of Lender; or
(D) without the affirmative vote of two (2) Independent Directors or Independent
Managers, as applicable, and of all other directors or managers of such entity
take any Bankruptcy Action with respect to itself or any other entity in which
it has a direct or indirect legal or beneficial ownership interest;
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(j) has been,
is and intends to remain solvent and has paid and intends to continue to pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) from its assets as the same have or shall become due, and has
maintained, is maintaining and intends to maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;
(k) has not
failed, and will not fail, to correct any known misunderstanding regarding the
separate identity of such entity;
(l) has
maintained and will maintain its accounts, books and records separate from any
other Person and has filed and will file its own tax returns, except to the
extent that it has been or is required to file consolidated tax returns by
law;
(m) has
maintained and will maintain its own records, books, resolutions and
agreements;
(n) other
than as provided in the Mezzanine Cash Management Agreement, (i) has not
commingled, and will not commingle, its funds or assets with those of any other
Person and (ii) has not participated and will not participate in any cash
management system with any other Person;
(o) has held
and will hold its assets in its own name;
(p) has
conducted and will conduct its business in its name or in a name franchised or
licensed to it by an entity other than an Affiliate of Borrower, except for
services rendered under a business management services agreement with an
Affiliate that complies with the terms contained in Subsection (dd) below, so
long as the manager, or equivalent thereof, under such business management
services agreement holds itself out as an agent of Borrower;
(q) has
maintained and will maintain its financial statements, accounting records and
other entity documents separate from any other Person and has not permitted, and
will not permit, its assets to be listed as assets on the financial statement of
any other entity except as required by GAAP; provided,
however, that
any such consolidated financial statement shall contain a note indicating that
its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated
entity;
(r) has paid
and will pay its own liabilities and expenses, including the salaries of its own
employees, out of its own funds and assets, and has maintained and will maintain
a sufficient number of employees in light of its contemplated business
operations;
(s) has
observed and will observe all partnership, corporate or limited liability
company formalities, as applicable;
(t) has had
no and will have no Indebtedness other than (i) the Loan, (ii) unsecured trade
and operational debt incurred in the ordinary course of business relating to the
ownership and operation of the Collateral and the routine administration of
Borrower, in amounts not to exceed $25,000.00, which liabilities are not more
than sixty (60) days past the date
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incurred,
are not evidenced by a note and are paid when due, and which amounts are normal
and reasonable under the circumstances, and (iii) such other liabilities as are
permitted pursuant to this Agreement;
(u) has not
assumed or guaranteed or become obligated for, and will not assume or guarantee
or become obligated for, the debts of any other Person and has not held out and
will not hold out its credit as being available to satisfy the obligations of
any other Person except as permitted pursuant to this Agreement;
(v) has not
acquired and will not acquire obligations or securities of its partners, members
or shareholders or any other Affiliate;
(w) has
allocated and will allocate, fairly and reasonably, any overhead expenses that
are shared with any Affiliate, including, but not limited to, paying for shared
office space and services performed by any employee of an
Affiliate;
(x) has
maintained and used, now maintains and uses, and will maintain and use, separate
stationery, invoices and checks bearing its name. The stationery, invoices, and
checks utilized by the Special Purpose Entity or utilized to collect its funds
or pay its expenses have borne and shall bear its own name and have not borne
and shall not bear the name of any other entity unless such entity is clearly
designated as being the Special Purpose Entity’s agent;
(y) has not
pledged and will not pledge its assets for the benefit of any other
Person;
(z) has held
itself out and identified itself, and will hold itself out and identify itself,
as a separate and distinct entity under its own name or in a name franchised or
licensed to it by an entity other than an Affiliate of Borrower and not as a
division or part of any other Person, except for services rendered under a
business management services agreement with an Affiliate that complies with the
terms contained in Subsection (dd) below, so long as the manager, or equivalent
thereof, under such business management services agreement holds itself out as
an agent of Borrower;
(aa) has
maintained and will maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any other Person;
(bb) has not
made and will not make loans to any Person or hold evidence of indebtedness
issued by any other Person or entity (other than cash and investment-grade
securities issued by an entity that is not an Affiliate of or subject to common
ownership with such entity);
(cc) has not
identified and will not identify its partners, members or shareholders, or any
Affiliate of any of them, as a division or part of it, and has not identified
itself, and shall not identify itself, as a division of any other
Person;
(dd) has not
entered into or been a party to, and will not enter into or be a party to, any
transaction with its partners, members, shareholders or Affiliates except (i) in
the
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ordinary
course of its business and on terms which are intrinsically fair, commercially
reasonable and are no less favorable to it than would be obtained in a
comparable arm’s-length transaction with an unrelated third party, and (ii) in
connection with this Agreement;
(ee) has not
had and will not have any obligation to indemnify, and has not indemnified and
will not indemnify, its partners, officers, directors or members, as the case
may be, unless such an obligation was and is fully subordinated to the
Obligations and will not constitute a claim against the Obligations in the event
that cash flow in excess of the amount required to pay the Obligations is
insufficient to pay such obligation;
(ff) if such
entity is a corporation, it has considered and shall consider the interests of
its creditors in connection with all corporate actions;
(gg) except as
provided in the Loan documents, does not and will not have any of its
obligations guaranteed by any Affiliate; and
(hh) has
complied and will comply with all of the terms and provisions contained in its
organizational documents. The statement of facts contained in its organizational
documents are true and correct and will remain true and correct.
“Spread
Maintenance Premium” shall
mean an amount equal to the product of (a) the Outstanding Principal
Balance being prepaid, multiplied by (b) the applicable percentage set
forth on Schedule
III attached
hereto with respect to the Payment Date on which the prepayment occurs, or, if
the prepayment is not made on a Payment Date, the following Payment Date, based
upon the Applicable Spread in effect on the date of the prepayment.
“State” shall
mean the State or Commonwealth in which the Property or any part thereof is
located.
“Strike
Price” shall
mean, as applicable:
(a) with
respect to the period commencing on the Closing Date through and including the
Initial Maturity Date, four and seventy-five one-hundredths percent (4.75%) per
annum; provided, however, that if the Alaris Short Term Lease Extension Date has
not occurred on or prior to September 1, 2005, the Strike Price shall be three
and nine-tenths percent (3.90%) per annum for the period, commencing on the
Payment Date occurring in September, 2005 through and including the Initial
Maturity Date;
(b) with
respect to the First Extension Term, a rate (expressed as a percentage per
annum) equal to the difference between:
(i) the
quotient obtained by dividing (x) the Net Cash Flow as of the first day of the
First Extension Term, by (y) the Aggregate Outstanding Principal Balance as of
such date, and then dividing such resulting quotient by (z) 1.05, and
(ii) the
Applicable Spread;
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(c) with
respect to the Second Extension Term, a rate (expressed as a percentage per
annum) equal to the difference between:
(i) the
quotient obtained by dividing (x) the Net Cash Flow as of the first day of the
Second Extension Term, by (y) the Aggregate Outstanding Principal Balance as of
such date, and then dividing such resulting quotient by (z) 1.05, and
(ii) the
Applicable Spread; and
(d) with
respect to the Third Extension Term, a rate (expressed as a percentage per
annum) equal to the difference between:
(i) the
quotient obtained by dividing (x) the Net Cash Flow as of the first day of the
Third Extension Term, by (y) the Aggregate Outstanding Principal Balance as of
such date, and then dividing such resulting quotient by (z) 1.05,
and
(ii) the
Applicable Spread.
“Survey” shall
mean a survey of the Property prepared pursuant to the requirements contained in
Section 3.1.3(c)
hereof.
“Tax
and Insurance Escrow Account” shall
have the meaning set forth in Section
7.2
hereof.
“Tax
and Insurance Escrow Funds” shall
have the meaning set forth in Section
7.2
hereof.
“Taxes” shall
mean all real estate and personal property taxes, assessments, water rates or
sewer rents, now or hereafter levied or assessed or imposed against the Property
or part thereof, together with all interest and penalties thereon.
“Third
Extended Maturity Date” shall
mean April 9, 2010.
“Third
Extension Option” shall
have the meaning set forth in Section
2.7.3
hereof.
“Third
Extension Term” shall
have the meaning set forth in Section
2.7.3
hereof.
“Threshold
Amount” shall
have the meaning set forth in Section 5.1.21
hereof.
“Title
Insurance Policy” shall
mean an ALTA mortgagee title insurance policy in a form acceptable to Lender
(or, if the Property is in a State which does not permit the issuance of such
ALTA policy, such form as shall be permitted in such State and acceptable to
Lender) issued with respect to the Property and insuring the lien of the
Mortgage.
“Transfer” shall
have the meaning set forth in Section 5.2.10(b)
hereof.
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“UCC” or
“Uniform
Commercial Code” shall
mean the Uniform Commercial Code as in effect in the State.
“UCC
Title Insurance Policy” shall
have the meaning set forth in Section 3.1.3(b)
hereof.
“Underwritten
Debt Service Coverage Ratio” shall
mean a ratio for the applicable twelve (12) full calendar month period in
which:
(a) the
numerator is the Underwritten Net Operating Income for such period;
and
(b) the
denominator is the greater of (i) the aggregate amount of (x) the debt service
due and payable on the Loan for such period (net of any payments made to
Borrower pursuant to any Interest Rate Cap Agreement) and (y) the Debt Service
due and payable on the Mortgage Loan for such period (net of any payments made
to Mortgage Borrower pursuant to any interest rate cap agreement), or (ii) an
assumed aggregate debt service for (1) the Loan for such period calculated on
the basis of a six and sixty-five one-hundredths percent (6.65%) debt service
constant and (2) the Mortgage Loan for such period calculated on the basis of a
six and sixty-five one-hundredths percent (6.65%) debt service
constant.
“Underwritten
Net Operating Income” shall
mean, for any twelve (12) full calendar month period, the underwritten Net Cash
Flow of the Property determined by Lender in its reasonable discretion in
accordance with Lender’s then current underwriting standards for loans of this
type and the then current underwriting standards of the Rating Agencies, based
upon (i) Qualifying Income actually collected by Mortgage Borrower for the last
full calendar month prior to the date of the calculation, annualized, less (ii)
Operating Expenses (other than expenses for tenant improvements and leasing
commissions), for the trailing twelve full calendar month period and (iii)
Capital Expenditures at the annual rate of $0.10 per leasable square foot of
space at the Property.
“U.S.
Obligations” shall
mean non-redeemable securities evidencing an obligation to timely pay principal
and/or interest in a full and timely manner that are direct obligations of the
United States of America for the payment of which its full faith and credit is
pledged.
“Vacant
Space Master Lease” shall
have the meaning set forth in Section
3.1.19(a) hereof.
“Vacant
Space” shall
have the meaning set forth in Section
3.1.19(a) hereof.
“Vacant
Space Rent” shall
have the meaning set forth in Section
3.1.19(a) hereof.
Section
1.2. Principles
of Construction. All
references to sections and schedules are to sections and schedules in or to this
Agreement unless otherwise specified. All uses of the word “including” shall
mean “including, without limitation” unless the context shall indicate
otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder”
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and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally
applicable to both the singular and plural forms of the terms so
defined.
II. GENERAL
TERMS
Section
2.1. Loan
Commitment; Disbursement to Borrower.
2.1.1 Agreement
to Lend and Borrow. Subject
to and upon the terms and conditions set forth herein, Lender hereby agrees to
make, and Borrower hereby agrees to borrow, the Loan on the Closing
Date.
2.1.2 Single
Disbursement to Borrower. Borrower
may request and receive only one disbursement hereunder in respect of the Loan
and any amount borrowed and repaid hereunder in respect of the Loan may not be
reborrowed.
2.1.3 The
Note, Pledge Agreement and Loan Documents. The Loan
shall be evidenced by the Note and secured by the Pledge Agreement and the other
Loan Documents.
2.1.4 Use
of Proceeds. Borrower
shall use the proceeds of the Loan solely to (a) make an equity
contribution to Mortgage Borrower in order to cause Mortgage Borrower to use
such amounts for any use permitted pursuant to Section 2.1.4 of the
Mortgage Loan Agreement, (b) pay costs and expenses incurred in connection
with the closing of the Loan, as approved by Lender and (c) retain the
balance, if any, and/or make upstream distributions to the Operating
Partnership.
Section
2.2. Interest
Rate.
2.2.1 Interest
Generally. Subject
to the provisions of Section
2.2.5 hereof
and without limiting the terms thereof, interest on the Outstanding Principal
Balance shall accrue from the Closing Date to but excluding the Maturity Date at
the Applicable Interest Rate, and thereafter, if not paid in full, at the
Default Rate.
2.2.2 Interest
Calculation. Interest
on the Outstanding Principal Balance shall be calculated by multiplying
(a) the actual number of days elapsed in the period for which the
calculation is being made by (b) a daily rate based on a three hundred
sixty (360) day year by (c) the Outstanding Principal
Balance.
2.2.3 Determination
of Interest Rate.
(a) The Applicable Interest Rate with respect to the Loan shall be:
(i) LIBOR plus the Applicable Spread with respect to the applicable
Interest Accrual Period for a LIBOR Loan or (ii) the Prime Rate plus the
Prime Rate Spread for a Prime Rate Loan if the Loan is converted to a Prime Rate
Loan pursuant to the provisions of Section 2.2.3(c) or
(f).
(b) Subject
to the terms and conditions of this Section 2.2.3, the
Loan shall be a LIBOR Loan and Borrower shall pay interest on the Outstanding
Principal Balance at LIBOR plus the Applicable Spread for the applicable
Interest Accrual Period. Any change in the rate of
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interest
hereunder due to a change in the Applicable Interest Rate shall become effective
as of the opening of business on the first day on which such change in the
Applicable Interest Rate shall become effective, with the understanding that
LIBOR shall change only on a Determination Date as set forth in the definition
of LIBOR. Each determination by Lender of the Applicable Interest Rate shall be
conclusive and binding for all purposes, absent manifest error.
(c) In the
event that Lender shall have determined (which determination shall be conclusive
and binding upon Borrower absent manifest error) that by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining LIBOR, then Lender shall forthwith give notice by
telephone of such determination, confirmed in writing, to Borrower at least
one (1) day prior to the last day of the related Interest Accrual Period.
If such notice is given, the related outstanding LIBOR Loan shall be converted,
on the last day of the then current Interest Accrual Period, to a Prime Rate
Loan.
(d) If,
pursuant to the terms of this Agreement, any portion of the Loan has been
converted to a Prime Rate Loan and Lender shall determine (which determination
shall be conclusive and binding upon Borrower absent manifest error) that the
event(s) or circumstance(s) which resulted in such conversion shall no longer be
applicable, Lender shall give notice by telephone of such determination,
confirmed in writing, to Borrower at least one (1) day prior to the last day of
the related Interest Accrual Period. If such notice is given, the related
outstanding Prime Rate Loan shall be converted to a LIBOR Loan on the last day
of the then current Interest Accrual Period.
(e) With
respect to a LIBOR Loan, all payments made by Borrower hereunder shall be made
free and clear of, and without reduction for or on account of, income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions, reserves or
withholdings imposed, levied, collected, withheld or assessed by any
Governmental Authority, which are imposed, enacted or become effective after the
date hereof (such non-excluded taxes being referred to collectively as
“Foreign
Taxes”),
excluding income and franchise taxes of the United States of America or any
political subdivision or taxing authority thereof or therein (including Puerto
Rico). If any Foreign Taxes are required to be withheld from any amounts payable
to Lender hereunder, the amounts so payable to Lender shall be increased to the
extent necessary to yield to Lender (after payment of all Foreign Taxes)
interest or any such other amounts payable hereunder at the rate or in the
amounts specified hereunder. Whenever any Foreign Tax is payable pursuant to
applicable law by Borrower, as promptly as possible thereafter, Borrower shall
send to Lender an original official receipt, if available, or certified copy
thereof showing payment of such Foreign Tax. Borrower hereby indemnifies Lender
for any incremental taxes, interest or penalties that may become payable by
Lender which may result from any failure by Borrower to pay any such Foreign Tax
when due to the appropriate taxing authority or any failure by Borrower to remit
to Lender the required receipts or other required documentary
evidence.
(f) If any
requirement of law or any change therein or in the interpretation or application
thereof, shall hereafter make it unlawful for Lender to make or maintain a LIBOR
Loan as contemplated hereunder (i) the obligation of Lender hereunder to
make a LIBOR Loan or to convert a Prime Rate Loan to a LIBOR Loan shall be
canceled forthwith and (ii) any outstanding LIBOR Loan shall be converted
automatically to a Prime Rate Loan on the next
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succeeding
Payment Date or within such earlier period as required by law. Borrower hereby
agrees promptly to pay Lender, upon demand, any additional amounts necessary to
compensate Lender for any costs incurred by Lender in making any conversion in
accordance with this Agreement, including, without limitation, any interest or
fees payable by Lender to lenders of funds obtained by it in order to make or
maintain the LIBOR Loan hereunder. Lender’s notice of such costs, as certified
to Borrower, shall be conclusive absent manifest error.
(g) In the
event that any change in any requirement of law or in the interpretation or
application thereof, or compliance by Lender with any request or directive
(whether or not having the force of law) hereafter issued from any central bank
or other Governmental Authority:
(i) shall
hereafter impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of Lender
which is not otherwise included in the determination of LIBOR
hereunder;
(ii) shall
hereafter have the effect of reducing the rate of return on Lender’s capital as
a consequence of its obligations hereunder to a level below that which Lender
could have achieved but for such adoption, change or compliance (taking into
consideration Lender’s policies with respect to capital adequacy) by any amount
deemed by Lender to be material; or
(iii) shall
hereafter impose on Lender any other condition and the result of any of the
foregoing is to increase the cost to Lender of making, renewing or maintaining
loans or extensions of credit or to reduce any amount receivable
hereunder;
then, in
any such case, Borrower shall promptly pay Lender, upon demand, any additional
amounts necessary to compensate Lender for such additional cost or reduced
amount receivable which Lender deems to be material as determined by Lender. If
Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.2.3(g), Lender
shall provide Borrower with not less than ninety (90) days’ notice
specifying in reasonable detail the event by reason of which it has become so
entitled and the additional amount required to fully compensate Lender for such
additional cost or reduced amount. A certificate as to any additional costs or
amounts payable pursuant to the foregoing sentence submitted by Lender to
Borrower shall be conclusive in the absence of manifest error. This provision
shall survive payment of the Note and the satisfaction of all other obligations
of Borrower under this Agreement and the Loan Documents.
(h) Borrower
agrees to indemnify Lender and to hold Lender harmless from any loss or expense
which Lender sustains or incurs as a consequence of (i) any default by
Borrower in payment of the principal of or interest on a LIBOR Loan, including,
without limitation, any such loss or expense arising from interest or fees
payable by Lender to lenders of funds obtained by it in order to maintain a
LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or mandatory)
of the LIBOR Loan on a day that (A) is not the Payment Date immediately
following the last day of an Interest Accrual Period with respect thereto or
(B) is the Payment Date immediately following the last day of an Interest
Accrual Period with respect
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thereto
if Borrower did not give the prior notice of such prepayment required pursuant
to the terms of this Agreement, including, without limitation, such loss or
expense arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain the LIBOR Loan hereunder and (iii) the
conversion (for any reason whatsoever, whether voluntary or involuntary) of the
Applicable Interest Rate from LIBOR plus the Applicable Spread to the Prime Rate
plus the Prime Rate Spread with respect to any portion of the Outstanding
Principal Balance then bearing interest at LIBOR plus the Applicable Spread on a
date other than the Payment Date immediately following the last day of an
Interest Accrual Period, including, without limitation, such loss or expenses
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain a LIBOR Loan hereunder (the amounts referred to in the
preceding clauses (i), (ii) and (iii) are herein referred to collectively
as the “Breakage
Costs”);
provided,
however, that
Borrower shall not indemnify Lender from any loss or expense arising from
Lender’s willful misconduct or gross negligence. This provision shall survive
payment of the Note in full and the satisfaction of all other obligations of
Borrower under this Agreement and the other Loan Documents.
(i) Lender
shall not be entitled to claim compensation pursuant to this Section 2.2.3 for any
Foreign Taxes, increased cost or reduction in amounts received or receivable
hereunder, or any reduced rate of return, which was incurred or which accrued
more than ninety (90) days before the date Lender notified Borrower of the
change in law or other circumstance on which such claim of compensation is based
and delivered to Borrower a written statement setting forth in reasonable detail
the basis for calculating the additional amounts owed to Lender under this
Section 2.2.3, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.2.4 Additional
Costs. Lender
will use reasonable efforts (consistent with legal and regulatory restrictions)
to maintain the availability of the LIBOR Loan and to avoid or reduce any
increased or additional costs payable by Borrower under Section 2.2.3,
including, if requested by Borrower, a transfer or assignment of the Loan to a
branch, office or Affiliate of Lender in another jurisdiction, or a
redesignation of its lending office with respect to the Loan, in order to
maintain the availability of the LIBOR Loan or to avoid or reduce such increased
or additional costs, provided that the transfer or assignment or redesignation
(a) would not result in any additional costs, expenses or risk to Lender
that are not reimbursed by Borrower and (b) would not be disadvantageous in
any other respect to Lender as determined by Lender in its sole
discretion.
2.2.5 Default
Rate. In the
event that, and for so long as, any Event of Default shall have occurred and be
continuing, the Outstanding Principal Balance and, to the extent permitted by
law, all accrued and unpaid interest in respect of the Loan and any other
amounts due pursuant to the Loan Documents, shall accrue interest at the Default
Rate, calculated from the date such payment was due without regard to any grace
or cure periods contained herein.
2.2.6 Usury
Savings. This
Agreement, the Note and the other Loan Documents are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the Outstanding Principal Balance at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to
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pay
interest on the Outstanding Principal Balance at a rate in excess of the Maximum
Legal Rate, the Applicable Interest Rate or the Default Rate, as the case may
be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all
previous payments in excess of the Maximum Legal Rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
2.2.7 Interest
Rate Cap Agreement.
(a) Prior to or contemporaneously with the Closing Date, Borrower
shall enter into an Interest Rate Cap Agreement with a LIBOR strike price equal
to the Strike Price. The Interest Rate Cap Agreement (i) shall be in a form
and substance reasonably acceptable to Lender, (ii) shall be with an
Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to
deposit directly into the Mezzanine Cash Management Account any amounts due
Borrower under such Interest Rate Cap Agreement so long as any portion of the
Debt exists, provided that the Debt shall be deemed to exist if the Collateral
is transferred by secured party sale or otherwise, (iv) shall be for a
period equal to the term of the Loan and (v) shall have an initial notional
amount equal to the principal balance of the Loan. Borrower shall collaterally
assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap
Agreement, all of its right, title and interest to receive any and all payments
under the Interest Rate Cap Agreement, and shall deliver to Lender an executed
counterpart of such Interest Rate Cap Agreement (which shall, by its terms,
authorize the assignment to Lender and require that payments be deposited
directly into the Mezzanine Cash Management Account).
(b) Borrower
shall comply with all of its obligations under the terms and provisions of the
Interest Rate Cap Agreement. All amounts paid by the Counterparty under the
Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately
into the Mezzanine Cash Management Account. Borrower shall take all actions
reasonably requested by Lender to enforce Lender’s rights under the Interest
Rate Cap Agreement in the event of a default by the Counterparty and shall not
waive, amend or otherwise modify any of its rights thereunder.
(c) In the
event that (i) the Strike Price is modified pursuant to clause (a) of the
definition of Strike Price, or (ii) Borrower exercises the First Extension
Option, the Second Extension Option or the Third Extension Option, or
(iii) Lender notifies Borrower that the Counterparty no longer qualifies as
an Acceptable Counterparty, Borrower shall replace, or shall cause the
Counterparty to replace, the Interest Rate Cap Agreement with a Replacement
Interest Rate Cap Agreement with a LIBOR strike price equal to the applicable
Strike Price, (A) which Replacement Interest Rate Cap Agreement shall
modify the strike price under the Interest Rate Cap Agreement to the applicable
Strike Price in effect on such date (with respect to foregoing clause (i)), (B)
which Replacement Interest Rate Cap Agreement shall extend the maturity date set
forth in the Interest Rate Cap Agreement to the Fixed Maturity Date (with
respect to the foregoing clause (ii)) prior
to or on the commencement date of the First Extension Term, the Second Extension
Term or the Third Extension Term, as the case may be, or (C) as required
due to the occurrence of any of the events listed in the foregoing clause (iii), not
later than thirty (30)
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days
following receipt of notice from Lender of such downgrade, withdrawal or
qualification. With respect to each Replacement Interest Rate Cap Agreement,
Borrower shall deliver to Lender a Collateral Assignment of Interest Rate Cap
Agreement in a form comparable to the Collateral Assignment of Interest Rate Cap
Agreement entered into by Borrower as of the date of this Agreement and that has
been acknowledged by the Acceptable Counterparty providing the Replacement
Interest Rate Cap Agreement.
(d) In the
event that Borrower fails to purchase and deliver to Lender the Interest Rate
Cap Agreement or fails to maintain the Interest Rate Cap Agreement in accordance
with the terms and provisions of this Agreement, after two (2) Business Days
prior written notice to Borrower if the Interest Rate Cap Agreement is being
replaced pursuant to Section
2.2.7(c)(iii) hereof,
Lender may purchase the Interest Rate Cap Agreement and the cost incurred by
Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower
to Lender with interest thereon at the Default Rate from the date such cost was
incurred by Lender until such cost is reimbursed by Borrower to
Lender.
(e) In
connection with the Interest Rate Cap Agreement, Borrower shall obtain and
deliver to Lender an opinion from counsel (which counsel may be in-house counsel
for the Counterparty) for the Counterparty (upon which Lender and its successors
and assigns may rely) which shall provide, in relevant part, that:
(i) the
Counterparty is duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and has the organizational power and
authority to execute and deliver, and to perform its obligations under, the
Interest Rate Cap Agreement;
(ii) the
execution and delivery of the Interest Rate Cap Agreement by the Counterparty,
and any other agreement which the Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder have been
and remain duly authorized by all necessary action and do not contravene any
provision of its certificate of incorporation or by-laws (or equivalent
organizational documents) or any law, regulation or contractual restriction
binding on or affecting it or its property;
(iii) all
consents, authorizations and approvals required for the execution and delivery
by the Counterparty of the Interest Rate Cap Agreement, and any other agreement
which the Counterparty has executed and delivered pursuant thereto, and the
performance of its obligations thereunder have been obtained and remain in full
force and effect, all conditions thereof have been duly complied with, and no
other action by, and no notice to or filing with any governmental authority or
regulatory body is required for such execution, delivery or performance;
and
(iv) the
Interest Rate Cap Agreement, and any other agreement which the Counterparty has
executed and delivered pursuant thereto, has been duly executed and delivered by
the Counterparty and constitutes the legal, valid and binding obligation of the
Counterparty, enforceable against the Counterparty in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights
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generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at
law).
Section
2.3. Loan
Payment.
2.3.1 Interest
Payments. Borrower
shall pay to Lender (a) on the date hereof, an amount equal to interest only at
the Applicable Interest Rate on the Outstanding Principal Balance from the
Closing Date up to but not including the first Payment Date following the
Closing Date, and (b) on each Payment Date thereafter up to and including the
Maturity Date, an amount equal to interest only at the Applicable Interest Rate
on the Outstanding Principal Balance for the applicable Interest Accrual Period
(the “Monthly
Interest Payment”).
2.3.2 Payments
of Principal. In the
event that the Alaris Long Term Extension Date shall not have occurred prior to
the Initial Maturity Date and if the Mortgage Loan shall have been paid in full,
commencing on April 9, 2007 and on each Payment Date thereafter, Borrower shall
pay to Lender the Excess Cash Flow Principal Payment.
2.3.3 Payment
on Maturity Date. Borrower
shall pay to Lender on the Maturity Date the Outstanding Principal Balance, all
accrued and unpaid interest and all other amounts due hereunder and under the
Note and the other Loan Documents.
2.3.4 Late
Payment Charge. If any
principal, interest or any other sums due under the Loan Documents is not paid
by Borrower by the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or
the maximum amount permitted by applicable law, in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Any such
late payment charge shall be secured by the Pledge Agreement and the other Loan
Documents to the extent permitted by applicable law.
2.3.5 Method
and Place of Payment. Except as
otherwise specifically provided herein, all payments and prepayments under this
Agreement and the Note 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 in immediately available funds at Lender’s office or as
otherwise directed by Lender, and 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.
2.3.6 Payments
Generally. For
purposes of making payments hereunder, but not for purposes of calculating
Interest Accrual Periods, if the day on which such payment is due is not a
Business Day, then amounts due on such date shall be due on the immediately
preceding Business Day. Lender shall have the right from time to time, in its
sole discretion, upon not less than thirty (30) days prior written notice to
Borrower, to change the Payment Date to a different calendar day each month
which is not more than five (5) days earlier nor more than five (5) days later
than the ninth day of each calendar month; provided, however, that if Lender
shall have elected to change the Payment Date as aforesaid, Lender shall have
the option, but not the obligation, to adjust the Interest Accrual Period
accordingly. All amounts due pursuant to this
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Agreement
and the other Loan Documents shall be payable without setoff, counterclaim,
defense or any other deduction whatsoever.
2.3.7 Alaris
Lease Fee. If the
Alaris Short Term Lease Extension Date shall not have occurred on or prior to
September 1, 2005, Borrower shall pay to Lender on the Payment Date occurring in
September, 2005, a fee in an amount equal to one percent (1%) of the original
principal balance of the Loan (the “Alaris
Lease Fee”), which
Alaris Lease Fee shall not be applied to the payment of the Outstanding
Principal Balance of the Loan.
Section
2.4. Prepayments.
2.4.1 Voluntary
Prepayments. Prior
to the Lockout Release Date, the Outstanding Principal Balance may not be
prepaid in whole or in part. On any Payment Date occurring on or after the
Lockout Release Date, Borrower may, at its option and upon thirty (30) days
prior written notice to Lender, prepay the Debt in whole but not in part (except
for prepayment in part from any Net Liquidation Proceeds after Debt Service;
provided, however, that any such
prepayment is
accompanied by (a) all interest which would have accrued on the amount of
the Loan to be
paid
through and including the last
day of
the
Interest Accrual Period related to the Payment Date next occurring following the
date of such prepayment, or, if such prepayment occurs on a Payment Date,
through and including the last day of the Interest Accrual Period related to
such Payment Date; (b) the
Prepayment Premium, if applicable; and (c) all other sums
due and
payable under
this
Agreement, the Note and
the other Loan
Documents, including, but not limited to, the Breakage Costs, if any, and, if an
Event of Default has occurred, any late fees and default interest required to be
paid by Borrower hereunder as a result thereof and all of Lender’s costs and
expenses (including, without limitation, reasonable attorney’s fees and
disbursements) incurred by Lender in connection with such prepayment.
Notwithstanding anything to the contrary set forth in this Agreement, no
prepayment shall be permitted from and including the day following any Payment
Date through and including the next Determination Date succeeding such day.
If the
Prepayment Premium is due to Lender, Lender shall not be obligated to accept any
prepayment unless it is accompanied by the Prepayment Premium due in connection
therewith. Borrower shall have the right to revoke or rescind in writing any
notice of prepayment any time on or before the prepayment date set forth in
Borrower’s notice of prepayment provided that Borrower pays to Lender
concurrently with each such revocation or rescission the sum of (i) all
actual out-of-pocket costs and expenses incurred by Lender in connection with or
as a result of such revocation or rescission, plus (ii) a fee in the amount
of $25,000.00.
2.4.2 California
Waiver. To the
extent applicable, Borrower acknowledges that California Civil Code, Section
2954.10 provides, in part, as follows:
“An
obligee which accelerates the maturity date of the principal and accrued
interest, pursuant to contract, on any loan secured by a . . . deed of trust on
real property . . ., upon the conveyance of any right, title or interest in that
property, may not claim, exact or collect any charge, fee, or penalty for any
prepayment resulting from that acceleration.”
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“The
provisions of this section shall not apply to [any] loan . . . in which the
obligor has expressly waived, in writing, the right to repay in whole or part
without penalty, or has expressly agreed, in writing, to the payment of a
penalty for prepayment upon acceleration. For any loan executed on or after
January 1, 1984, this waiver or agreement shall be separately signed or
initialed by the obligor and its enforcement shall be supported by evidence of a
course of conduct by the obligee of individual weight to the consideration in
that transaction for the waiver or agreement.”
Borrower
hereby waives any and all rights of Borrower under California Civil Code,
Section 2954.10, as amended from time to time, including the right to
prepay the principal owing under the Note or this Agreement without penalty
prior to the Maturity Date and the right to raise California Civil Code,
Section 2954.10 as a defense to Lender claiming, exacting and collecting
any prepayment fee or prepayment premium or any other amount owing by Borrower
under the Note, this Agreement, the Pledge Agreement or any other Loan
Documents.
DEL
Borrower’s
Initials
2.4.3 Prepayments
After Default. If after
the occurrence and during the continuance of an Event of Default, payment of all
or any part of the Debt is tendered by Borrower or otherwise recovered by Lender
(including through application of any Reserve Funds), such tender or recovery
shall be deemed (a) to have been made on the next occurring Payment Date
together with the monthly Debt Service amount calculated at the Default Rate,
and (b) if such tender or recovery occurs prior to the Lockout Release
Date, a voluntary prepayment by Borrower in violation of the prohibition against
prepayment set forth in Section 2.4.1 and
Borrower shall pay, in addition to the Debt, an amount equal to five percent
(5%) of the Outstanding Principal Balance to be prepaid or
satisfied.
2.4.4 Liquidation
Events.
(a) In the event of (i) any Casualty to all or any all or any
portion of the Property, (ii) any Condemnation of all or any portion of the
Property, (iii) a Transfer of the Property, other than a Transfer in
accordance with Section
5.2.10(f) pursuant
to which the Loan is assumed by the transferee, (iv) any refinancing of the
Property or the Mortgage Loan, or (v) the receipt by Mortgage Borrower of any
excess proceeds realized under its owner’s title insurance policy after
application of such proceeds by Mortgage Borrower to cure any title defect
(each, a “Liquidation
Event”),
Borrower shall cause the related Net Liquidation Proceeds After Debt Service to
be deposited directly into the Mezzanine Cash Management Account. On each date
on which Lender actually receives a distribution of Net Liquidation Proceeds
After Debt Service, Borrower shall prepay the Outstanding Principal Balance in
an amount equal to one hundred percent (100%) of such Net Liquidation Proceeds
After Debt Service, together with interest that would have accrued on such
amount through the next Payment Date. Any amounts of Net Liquidation Proceeds
After Debt Service in excess of the Debt shall be paid to Borrower. Any
prepayment received by Lender pursuant to this Section 2.4.4(a) on a
date other than a Payment Date shall be held by Lender as collateral security
for the Loan in an interest bearing account, with such interest accruing to the
benefit of Borrower, and shall be applied by Lender on the next Payment Date.
Other than following an
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Event of
Default, no Prepayment Premium shall be due in connection with any prepayment
made pursuant to this Section 2.4.4(a)(i)
or (ii).
(b) Borrower
shall immediately notify Lender of any Liquidation Event once Borrower has
knowledge of such event. Borrower shall be deemed to have knowledge of
(i) a sale (other than a foreclosure sale) of the Property on the date on
which a contract of sale for such sale is entered into, and a foreclosure sale,
on the date notice of such foreclosure sale is given, and (ii) a
refinancing of the Property, on the date on which a commitment for such
refinancing has been entered into. The provisions of this Section 2.4.4 shall
not be construed to contravene in any manner the restrictions and other
provisions regarding refinancing of the Mortgage Loan or Transfer of the
Property set forth in this Agreement, the other Loan Documents and the Mortgage
Loan Documents.
Section
2.5. Release
of Collateral.
(a) Except as set forth in this Section 2.5, no
repayment or prepayment of all or any portion of the Note shall cause, give rise
to a right to require, or otherwise result in, the release or assignment of any
Lien of the Pledge Agreement on the Collateral.
(b) Lender
shall, upon the written request and at the expense of Borrower, upon payment in
full of all principal and interest due on the Loan and all other amounts due and
payable under the Loan Documents in accordance with the terms and provisions of
the Note, this Agreement and the other Loan Documents, release the Lien of the
Pledge Agreement on the Collateral or assign the Note and Pledge Agreement, each
without recourse, covenant or warranty of any nature, express or implied, to a
new lender designated by Borrower.
(c) In
connection with the release of the Lien of the Pledge Agreement and all other
Collateral, Borrower shall submit to Lender, not less than thirty (30) days
prior to the Payment Date on which Borrower intends to pay the Loan in full, a
release of Lien (and related Loan Documents) for the Collateral for execution by
Lender. Such release shall be in a form appropriate in each jurisdiction in
which the Collateral is located and that would be satisfactory to a prudent
lender.
Section
2.6. Cash
Management.
2.6.1 Lockbox
Account.
(a) During the term of the Loan, Borrower shall cause Mortgage
Borrower to establish and maintain an account (the “Lockbox
Account”) with
Lockbox Bank in trust for the benefit of Mortgage Lender, which Lockbox Account
shall be under the sole dominion and control of Mortgage Lender pursuant to and
in accordance with the Mortgage Loan Documents.
(b) Borrower
shall cause Mortgage Borrower and/or Manager to, deliver irrevocable written
instructions to all tenants under Leases to deliver all Rents payable thereunder
directly to the Lockbox Account. Borrower shall cause Mortgage Borrower and
Manager to, deposit all amounts received by Mortgage Borrower or Manager
constituting Rents into the Lockbox Account within one (1) Business Day
after receipt thereof.
(c) Borrower
shall cause Mortgage Borrower to obtain from Lockbox Bank its agreement that
Lockbox Bank shall transfer to the Cash Management Account in immediately
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available
funds by federal wire transfer all amounts on deposit in the Lockbox Account
once every Business Day.
(d) The
Lockbox Account shall be an Eligible Account and shall not be commingled with
other monies held by Mortgage Borrower or Lockbox Bank.
(e) Borrower
shall not permit or cause Mortgage Borrower to further pledge, assign or grant
any security interest in the Lockbox Account or the monies deposited therein or
permit any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC-1 Financing Statements, except those naming Mortgage Lender
as the secured party, to be filed with respect thereto.
2.6.2 Cash
Management Account. During
the term of the Loan, Borrower shall cause Mortgage Borrower to establish and
maintain a segregated Eligible Account (the “Cash
Management Account”)
pursuant to the Mortgage Loan Documents to be held by and in trust for the
benefit of Mortgage Lender, which Cash Management Account shall be under the
sole dominion and control of Mortgage Lender. Borrower shall not cause or permit
Mortgage Borrower in any way to alter or modify the Cash Management Account and
will notify Lender of the account number thereof. Mortgage Lender shall have the
sole right to make withdrawals from the Cash Management Account to be applied in
accordance with the Mortgage Loan Documents. All costs and expenses for
establishing and maintaining the Cash Management Account shall be paid by
Mortgage Borrower. So long as the Mortgage Loan is outstanding, on each Payment
Date, Borrower shall cause Mortgage Borrower to enforce the cash distribution
priorities and procedures set forth in Section 2.6.2 of the Mortgage Loan
Agreement. Borrower shall direct or cause Mortgage Borrower to direct that all
cash distributions from the Cash Management Account to be paid to Mortgage
Borrower in accordance with the Cash Management Agreement (including the Net
Liquidation Proceeds After Debt Service) be deposited into the Mezzanine Cash
Management Account.
2.6.3 Mezzanine
Cash Management Account.
(a) During the term of the Loan, Borrower shall establish and
maintain a segregated Eligible Account (the “Mezzanine
Cash Management Account”) to be
held in trust and for the benefit of Lender, which Mezzanine Cash Management
Account shall be under the sole dominion and control of Lender. The Mezzanine
Cash Management Account shall be entitled “MP - Wateridge Plaza Mezzanine, LLC
as Borrower for the benefit of Nomura Credit & Capital, Inc., its successors
and assigns, as Lender, pursuant to Loan Agreement dated as of March 15, 2005 -
Mezzanine Cash Management Account”. Borrower hereby grants to Lender a first
priority security interest in the Mezzanine Cash Management Account and all
deposits at any time contained therein and the proceeds thereof and will take
all actions necessary to maintain in favor of Lender a perfected first priority
security interest in the Mezzanine Cash Management Account, including, without
limitation, executing and filing UCC-1 Financing Statements and continuations
thereof. Borrower will not in any way alter or modify the Mezzanine Cash
Management Account. Lender shall have the sole right to make withdrawals from
the Mezzanine Cash Management Account and all costs and expenses for
establishing and maintaining the Mezzanine Cash Management Account shall be paid
by Borrower.
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(b) The
insufficiency of funds on deposit in the Mezzanine Cash Management Account shall
not relieve Borrower from the obligation to make any payments, as and when due
pursuant to this Agreement and the other Loan Documents, and such obligations
shall be separate and independent, and not conditioned on any event or
circumstance whatsoever.
2.6.4 Disbursements
from Mezzanine Cash Management Account.
(a) So long
as the Mortgage Loan is outstanding and provided no Event of Default shall have
occurred and be continuing, on each Payment Date (or if such Payment Date is not
a Business Day, on the immediately preceding Business Day) all funds on deposit
in the Mezzanine Cash Management Account shall be applied by Lender to the
payment of the following items in the order indicated, in each case to the
extent sufficient funds remain therefor:
(i) First, to
Lender to pay the Monthly Interest Payment payable on such Payment Date and all
then delinquent interest on the Loan computed at the Applicable Interest
Rate;
(ii) Second,
to Lender to pay all other amounts then due and payable under the Loan Documents
other than the Excess Cash Flow Principal Payment; and
(iii) Third,
amounts remaining in the Mezzanine Cash Management Account, if any, on any
Payment Date after making the distributions set forth in Section
2.6.4(a)(i) and
(ii) hereof
shall be disbursed on the second Business Day following such Payment Date to
Borrower.
(b) Upon
repayment in full of the Mortgage Loan, if the Loan or any portion thereof is
outstanding, Borrower shall cause Mortgage Borrower to amend the agreement with
the Lockbox Bank to provide that the Lockbox Bank shall transfer to the
Mezzanine Cash Management Account (rather than the Mortgage Cash Management
Account) in immediately available funds by federal wire transfer all amounts on
deposit in the Lockbox Account on the last Business Day of each week throughout
the term of the Loan. In addition, in such event, all sums on deposit in the
Mortgage Cash Management Account shall be transferred to the Mezzanine Cash
Management Account, whereupon any such funds constituting Mortgage Loan Reserve
Funds shall be deposited in the corresponding Reserve Fund established pursuant
to this Agreement, with any other funds being disbursed as hereinafter provided.
In such event, provided no Event of Default shall have occurred and be
continuing, on each Payment Date (or if such Payment Date is not a Business Day,
on the immediately preceding Business Day) all funds on deposit in the Mezzanine
Cash Management Account shall be applied by Lender to the payment of the
following items in the order indicated, in each case to the extent sufficient
funds remain therefor:
(i) First,
payments in respect of the Tax and Insurance Escrow Funds in accordance with the
terms and conditions of Section
7.2
hereof;
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(ii) Second,
to Lender to pay the Monthly Interest Payment payable on such Payment Date and
all then delinquent interest on the Loan computed at the Applicable Interest
Rate;
(iii) Third,
payment to Lender of (or reimbursement of Lender for) any reasonable
miscellaneous fees or expenses (including, without limitation, any “protective
advances” made by Lender in respect of the Loan) then due and payable pursuant
to the terms of the Loan Documents;
(iv) Fourth,
to Lender to pay all other amounts then due and payable under the Loan
Documents, other than the Excess Cash Flow Principal Payment;
(v) Fifth,
payments for monthly Cash Expenses incurred (A) until such time as there shall
exist an applicable Approved Annual Budget, pursuant to a written request for
payment submitted by Borrower to Lender specifying the individual Cash Expenses,
which request and the requested Cash Expenses shall be in form and substance
reasonably acceptable to Lender in its sole discretion or (B) after such time as
there shall exist an Approved Annual Budget, in accordance with the Approved
Annual Budget pursuant to a written request for payment submitted by Borrower to
Lender specifying the individual Cash Expenses, which request shall be in a form
reasonably acceptable to Lender;
(vi) Sixth,
payments for Extraordinary Expenses reasonably approved by Lender, if
any;
(vii) Seventh,
during the existence of an Alaris Sweep Period, but after the Initial Maturity
Date, only if the Additional Extension Conditions shall have been satisfied
prior to the Initial Maturity Date, payment of all amounts remaining in the
Mezzanine Cash Management Account after payment of amounts required to fully
fund items
(i) through
(vi) above
(the “Excess
Cash Flow”) into
the Alaris Reserve Account;
(viii) Eighth,
in the event that the Additional Extension Conditions have not been satisfied
prior to the Initial Maturity Date, and whether or not such Additional Extension
Conditions shall have been satisfied thereafter, all Excess Cash Flow (“the
“Excess
Cash Flow Principal Payment”) shall
be applied throughout the First Extension Term, the Second Extension Term and
the Third Extension Term to prepay the Outstanding Principal Balance of the
Loan.; and
(ix) Ninth,
amounts remaining in the Mezzanine Cash Management Account, if any, on any
Payment Date after making the distributions set forth in Section
2.6.4(b)(i) through
(viii) hereof
shall be disbursed on the second Business Day following such Payment Date to
Borrower.
(c) Notwithstanding
the foregoing, following the occurrence and during the continuance of an Event
of Default, all funds on deposit in the Mezzanine Cash Management Account may be
applied by Lender in such order and priority as Lender shall
determine.
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(d) Notwithstanding
anything to the contrary contained in this Agreement and the other Loan
Documents, and provided no Event of Default has occurred and is continuing,
Borrower’s obligations with respect to the monthly payment of Debt Service and
amounts due for the Tax and Insurance Escrow Funds and any other payment
reserves established pursuant to this Agreement or any other Loan Document shall
be deemed satisfied to the extent sufficient amounts are deposited in the
Mezzanine Cash Management Account to satisfy such obligations on the dates each
such payment is required, regardless of whether any of such amounts are so
applied by Lender.
Section
2.7. Extension
of Maturity Date.
2.7.1 First
Extension Option.
Borrower shall have the right to extend the Initial Maturity Date to the First
Extended Maturity Date (the “First
Extension Option”; and
the period commencing on the Initial Maturity Date and ending on the First
Extended Maturity Date being referred to herein as the “First
Extension Term”),
provided that all
of the following requirements are satisfied:
(a) Borrower
delivers written irrevocable notice to Lender not more than ninety (90) days and
not less than thirty (30) days prior to the Initial Maturity Date advising that
Borrower is exercising the First Extension Option;
(b) No
Default, Mortgage Loan Default, Event of Default or Mortgage Loan Event of
Default exists as of the date Borrower exercises the First Extension Option and
as of the commencement date of the First Extension Term;
(c) If the
Interest Rate Cap Agreement is scheduled to mature prior to the First Extended
Maturity Date, Borrower shall obtain, deliver and assign the benefit thereof to
Lender not later than one (1) Business Day immediately preceding the first day
of the First Extension Term, one or more Replacement Interest Rate Cap
Agreements from an Acceptable Counterparty, which Replacement Interest Rate Cap
Agreement shall (i) be effective commencing on the first day of the First
Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike
Price, and (iii) have a maturity date not earlier than the First Extended
Maturity Date;
(d) Borrower
shall have extended the term of the Mortgage Loan, if the Mortgage Loan is still
outstanding, to a maturity date not earlier than the First Extended Maturity
Date in accordance with the terms of the Mortgage Loan Agreement;
(e) Both
(i) the Additional Extension Conditions shall have been satisfied (except
as set forth in clause
(h) below),
and (ii) substantially all of the 51,519 square feet of space currently leased
to Quintiles, Inc. (the "Quintiles
Space") has
been leased to tenants approved by Lender in its reasonable discretion pursuant
to Leases approved by Lender in its reasonable discretion for a minimum of two
(2) years beyond the First Extended Maturity Date, and Lender has received
evidence reasonably acceptable to Lender (which evidence shall include tenant
estoppel certificates executed by the applicable tenants addressing, among other
things, the following matters in form and substance reasonably acceptable to
Lender, that (A) such
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Lease is
in full force and effect and no default by the landlord or the tenant is
continuing under any such Lease, and (B) such tenants are in occupancy of
their demised premises, and have commenced paying full unabated Rent);
provided,
however, that
the foregoing condition set forth in this clause (e)(ii) (but not
clause (e)(i)) shall
be deemed satisfied if, as of the Initial Maturity Date, the Underwritten Debt
Service Coverage Ratio (which shall be calculated excluding Rents payable under
the Vacant Space Master Lease) is greater than 1.10:1.0;
(f) Borrower
executes and delivers to Lender an amendment to this Agreement, reasonably
acceptable to Lender in all respects, which confirms the date to which the
Initial Maturity Date has been extended (without any other amendments or
confirmations);
(g) Borrower
reimburses Lender for all costs and expenses reasonably incurred by Lender in
processing the extension request, including, without limitation, reasonable
legal fees and expenses; and
(h) In the
event that the Additional Extension Conditions have not been satisfied prior to
the Initial Maturity Date, the following additional terms and conditions shall
apply:
(i) Borrower
shall pay to Lender on the Initial Maturity Date, an extension fee equal to
three-eighths of one percent (0.375%) of the Outstanding Principal Balance of
the Loan;
(ii) the
Applicable Interest Rate for the First Extension Term shall be the greater of
the Applicable Interest Rate determined in accordance with Section
2.2.3 hereof
or the Minimum Extension Interest Rate;
(iii) all
Excess Cash Flow during the First Extension Term shall be applied to pay the
Outstanding Principal Balance of the Loan in accordance with the provisions of
Section
2.6.4(b)(viii); and
(iv) the
Vacant Space Master Lease shall be in full force and effect and shall demise the
Alaris Space to the Operating Partnership in accordance with the terms and
conditions of Sections
3.1.19(a) and
(b) hereof.
2.7.2 Second
Extension Option.
Provided Borrower has properly exercised the First Extension Option, Borrower
shall have the right to extend the First Extended Maturity Date to the Second
Extended Maturity Date (the “Second
Extension Option”; and
the period commencing on the First Extended Maturity Date and ending on the
Second Extended Maturity Date being referred to herein as the “Second
Extension Term”),
provided that all of the following requirements are satisfied:
(a) Borrower
delivers written irrevocable notice to Lender not more than ninety (90) days and
not less than thirty (30) days prior to the First Extended Maturity Date
advising that Borrower is exercising the Second Extension Option;
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(b) No
Default, Mortgage Loan Default, Event of Default or Mortgage Loan Event of
Default exists as of the date Borrower exercises the Second Extension Option and
as of the commencement date of the Second Extension Term;
(c) If the
Interest Rate Cap Agreement is scheduled to mature prior to the Second Extended
Maturity Date, Borrower shall obtain, deliver and assign the benefits thereof to
Lender not later than one (1) Business Day immediately preceding the first day
of the Second Extension Term, one or more Replacement Interest Rate Cap
Agreements from an Acceptable Counterparty, which Replacement Interest Rate Cap
Agreement shall (i) be effective commencing on the first day of the Second
Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike
Price, and (iii) have a maturity date not earlier than the Second Extended
Maturity Date;
(d) Borrower
shall have extended the term of the Mortgage Loan to a maturity date not earlier
than the Second Extended Maturity Date in accordance with the terms of the
Mortgage Loan Agreement;
(e) Both
(i) the Additional Extension Conditions shall have been satisfied (except
as set forth in clause
(h) below)
and (ii) substantially all of the Quintiles Space has been leased to tenants
approved by Lender in its reasonable discretion pursuant to Leases and otherwise
approved by Lender in its reasonable discretion for a minimum of two (2) years
beyond the Second Extended Maturity Date, and Lender has received evidence
reasonable acceptable to Lender (which evidence shall include tenant estoppel
certificates executed by the applicable tenants addressing, among other things,
the following matters in form and substance reasonably acceptable to Lender),
that (A) such Lease is in full force and effects and no default by the
landlord or the tenant is continuing under any such Lease, and (B) such
tenants are in occupancy of their demised premises, and have commenced paying
full unabated Rent; provided,
however, that
the foregoing condition set forth in this clause (e)(ii) (but not
clause (e)(i)) shall
be deemed satisfied if, as of the First Extended Maturity Date, the Underwritten
Debt Service Coverage Ratio (which shall be calculated excluding Rents payable
under the Vacant Space Master Lease) is greater than 1.10:1.0;
(f) Borrower
executes and delivers to Lender an amendment to this Agreement, reasonably
acceptable to Lender in all respects, which confirms the date to which the First
Extended Maturity Date has been extended (without any other amendments or
confirmations);
(g) Borrower
reimburses Lender for all costs and expenses reasonably incurred by Lender in
processing the extension request, including, without limitation, reasonable
legal fees and expenses; and
(h) In the
event that the Additional Extension Conditions have not been satisfied prior to
the Initial Maturity Date, the following additional terms and conditions shall
apply:
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(i) Borrower
shall pay to Lender on the First Extended Maturity Date, an extension fee equal
to three-eighths of one percent (0.375%) of the Outstanding Principal Balance of
the Loan;
(ii) the
Applicable Interest Rate for the Second Extension Term shall be the greater of
the Applicable Interest Rate determined in accordance with Section
2.2.3 hereof
or the Minimum Extension Interest Rate;
(iii) all
Excess Cash Flow during the Second Extension Term shall be applied to pay the
Outstanding Principal Balance of the Loan in accordance with the provisions of
Section
2.6.4(b)(viii); and
(iv) the
Vacant Space Master Lease shall be in full force and effect and shall demise the
Alaris Space to the Operating Partnership in accordance with the terms and
conditions of Sections
3.1.19(a) and
(b) hereof.
2.7.3 Third
Extension Option.
Provided Borrower has properly exercised the First Extension Option and the
Second Extension Option, Borrower shall have the right to extend the Second
Extended Maturity Date to the Third Extended Maturity Date (the “Third
Extension Option”; and
the period commencing on the Second Extended Maturity Date and ending on the
Third Extended Maturity Date being referred to herein as the “Third
Extension Term”),
provided that all of the following requirements are satisfied:
(a) Borrower
delivers written irrevocable notice to Lender not more than ninety (90) days and
not less than thirty (30) days prior to the Second Extended Maturity Date
advising that Borrower is exercising the Third Extension Option;
(b) No
Default, Mortgage Loan Default, Event of Default or Mortgage Loan Event of
Default exists as of the date Borrower exercises the Third Extension Option and
as of the commencement date of the Third Extension Term;
(c) If the
Interest Rate Cap Agreement is scheduled to mature prior to the Third Extended
Maturity Date, Borrower shall obtain, deliver and assign the benefits thereof to
Lender not later than one (1) Business Day immediately preceding the first day
of the Third Extension Term, one or more Replacement Interest Rate Cap
Agreements from an Acceptable Counterparty, which Replacement Interest Rate Cap
Agreement shall (i) be effective commencing on the first day of the Third
Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike
Price, and (iii) have a maturity date not earlier than the Third Extended
Maturity Date;
(d) Borrower
shall have extended the term of the Mortgage Loan to a maturity date not earlier
than the Third Extended Maturity Date in accordance with the terms of the
Mortgage Loan Agreement;
(e) Both
(i) the Additional Extension Conditions shall have been satisfied (except
as set forth in clause
(h) below),
and (ii) substantially all of the Quintiles Space has been leased to tenants
approved by Lender in its reasonable discretion pursuant to Leases approved by
Lender in its reasonable discretion for a minimum of two (2) years beyond the
Third Extended
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Maturity
Date, and Lender has received evidence reasonable acceptable to Lender (which
evidence shall include tenant estoppel certificates executed by the applicable
tenants addressing, among other things, the following matters in form and
substance reasonably acceptable to Lender) that (A) such Lease is in full
force and effects and no default by the landlord or the tenant is continuing
under any such Lease, and (B) such tenants are in occupancy of their
demised premises and have commenced paying full unabated Rent; provided,
however, that
the foregoing condition set forth in clause (e)(ii) (but not
clause
(e)(i)) shall
be deemed satisfied if, as of the Second Extended Maturity Date, the
Underwritten Debt Service Coverage Ratio (which shall be calculated excluding
Rents payable under the Vacant Space Master Lease) is greater than
1.10:1.0;
(f) Borrower
executes and delivers to Lender an amendment to this Agreement, reasonably
acceptable to Lender in all respects, which confirms the date to which the
Second Extended Maturity Date has been extended (without any other amendments or
confirmations);
(g) Borrower
reimburses Lender for all costs and expenses reasonably incurred by Lender in
processing the extension request, including, without limitation, reasonable
legal fees and expenses; and
(h) In the
event that the Additional Extension Conditions have not been satisfied prior to
the Initial Maturity Date, the following additional terms and conditions shall
apply:
(i) Borrower
shall pay to Lender on the Second Extended Maturity Date, an extension fee equal
to three-eighths of one percent (0.375%) of the Outstanding Principal Balance of
the Loan;
(ii) the
Applicable Interest Rate for the Third Extension Term shall be the greater of
the Applicable Interest Rate determined in accordance with Section
2.2.3 hereof
or the Minimum Extension Interest Rate;
(iii) all
Excess Cash Flow during the Third Extension Term shall be applied to pay the
Outstanding Principal Balance of the Loan in accordance with the provisions of
Section
2.6.4(b)(viii); and
(iv) the
Vacant Space Master Lease shall be in full force and effect and shall demise the
Alaris Space to the Operating Partnership in accordance with the terms and
conditions of Sections
3.1.19(a) and
(b) hereof.
III. CONDITIONS
PRECEDENT
Section
3.1. Conditions
Precedent to Closing.
The
obligation of Lender to make the Loan hereunder is subject to the fulfillment by
Borrower or waiver by Lender of the following conditions precedent no later than
the Closing Date (all of which conditions shall be deemed satisfied or waived by
Lender’s funding of the Loan, unless Borrower has specifically agreed in writing
to cause such condition to occur after the Closing Date):
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3.1.1 Representations
and Warranties; Compliance with Conditions. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.
3.1.2 Loan
Agreement and Note. Lender
shall have received a copy of this Agreement and the Note, in each case, duly
executed and delivered on behalf of Borrower.
3.1.3 Delivery
of Loan Documents; Title Insurance; Reports; Leases.
(a) Pledge
Agreement. Lender
shall have received from Borrower fully executed and acknowledged counterparts
of the Pledge Agreement and delivery of the Pledged Company Interests, the UCC
Financing Statements and such other documents required pursuant to the Pledge
Agreement, in the reasonable judgment of Lender, so as to effectively create
valid and enforceable Liens upon the Collateral, of the requisite priority, in
favor of Lender, subject only to the Permitted Encumbrances and such other Liens
as are permitted pursuant to the Loan Documents. Lender shall have also received
from Borrower fully executed counterparts of the other Loan
Documents.
(b) Title
Insurance.
Lender
shall have received a UCC Title Insurance Policy (the “UCC
Title Insurance Policy”) issued
by a title company acceptable to Lender and dated as of the Closing Date, with
reinsurance and direct access agreements acceptable to Lender. Such UCC Title
Insurance Policy shall (i) provide coverage in amounts satisfactory to
Lender, (ii) insure Lender that the Pledge Agreement and the documents
executed and delivered in connection therewith create a valid lien on the
Collateral of the requisite priority, free and clear of all exceptions from
coverage other than Permitted Encumbrances and standard exceptions and
exclusions from coverage (as modified by the terms of any endorsements),
(iii) contain such endorsements and affirmative coverages as Lender may
reasonably request, and (iv) name Lender as the insured. The UCC Title
Insurance Policy shall be assignable. Lender also shall have received evidence
that all premiums in respect of such UCC Title Insurance Policy have been
paid.
(c) Survey.
Lender
shall have received a current Survey, certified to the title company and Lender
and their successors and assigns, in form and content satisfactory to Lender and
prepared by a professional and properly licensed land surveyor satisfactory to
Lender in accordance with the Accuracy Standards for ALTA/ACSM Land Title
Surveys as adopted by ALTA, American Congress on Surveying & Mapping and
National Society of Professional Surveyors in 1999. The Survey shall reflect the
same legal description contained in the Title Insurance Policy. The surveyor’s
seal shall be affixed to the Survey and the surveyor shall provide a
certification for the Survey in form and substance acceptable to
Lender.
(d) Insurance.
Lender
shall have received valid certificates of insurance for the Policies required
hereunder, satisfactory to Lender in its sole discretion. Lender shall be
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included
as an “additional insured” under such Policies and Lender shall have received
evidence of the payment of all Insurance Premiums payable for the existing
policy period.
(e) Environmental
Reports.
Lender
shall have received a Phase I environmental report (and, if recommended by the
Phase I environmental report, a Phase II environmental report) in respect of the
Property, satisfactory in form and substance to Lender.
(f) Mortgage
Loan Documents. The
Mortgage Loan Documents shall have been duly authorized, executed and delivered
by all parties thereto, the Mortgage Loan shall have been contemporaneously
funded and Lender shall have received and approved certified copies thereof. All
of the conditions precedent set forth in Article III of the Mortgage Loan
Agreement shall have been satisfied and the Mortgage Loan shall have closed and
been fully advanced in accordance therewith.
(g) Encumbrances.
Borrower
shall have taken or caused to be taken such actions in such a manner so that
Lender has a valid and perfected first priority Lien as of the Closing Date on
the Collateral and with respect to the Pledge Agreement and Lender shall have
received satisfactory evidence thereof.
3.1.4 Related
Documents. Each
additional document not specifically referenced herein, but relating to the
transactions contemplated herein, shall be in form and substance reasonably
satisfactory to Lender, and shall have been duly authorized, executed and
delivered by all parties thereto and Lender shall have received and approved
certified copies thereof.
3.1.5 Delivery
of Organizational Documents. Borrower
shall deliver or cause to be delivered to Lender copies certified by Borrower of
all organizational documentation related to Borrower, Mortgage Borrower and
Principal and/or their formation, structure, existence, good standing and/or
qualification to do business, as Lender may request in its sole discretion,
including, without limitation, good standing certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and Mortgage Loan, as applicable, and incumbency certificates
as may be reasonably requested by Lender.
3.1.6 Opinions
of Borrower’s Counsel. Lender
shall have received opinions from Borrower’s counsel (a) with respect to
non-consolidation as set forth in the Insolvency Opinion, (b) with respect
to perfection of the Collateral and (c) with respect to the due execution,
authority, enforceability of the Loan Documents and such other matters as Lender
may reasonably require, all such opinions in form, scope and substance
satisfactory to Lender and Lender’s counsel in their reasonable
discretion.
3.1.7 Budgets. Borrower
shall have delivered, and Lender shall have approved, the Annual Budget for the
current Fiscal Year.
3.1.8 Basic
Carrying Costs. Borrower
shall have caused Mortgage Borrower to have paid all Basic Carrying Costs
relating to the Property which are in arrears, including without limitation,
(a) accrued but unpaid Insurance Premiums, (b) currently due Taxes
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(including
any in arrears) and (c) currently due Other Charges, which amounts shall be
funded with proceeds of the Loan.
3.1.9 Completion
of Proceedings. All
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated by this Agreement and the other Loan Documents and all
documents incidental thereto shall be satisfactory in form and substance to
Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably
request.
3.1.10 Payments. All
payments, deposits or escrows required to be made or established by Borrower
under this Agreement, the Note and the other Loan Documents on or before the
Closing Date shall have been paid.
3.1.11 Tenant
Estoppels. Lender
shall have received certified copies of the executed tenant estoppel letters
required to be delivered in connection with the Mortgage Loan.
3.1.12 Transaction
Costs. Borrower
shall have paid or reimbursed Lender for all UCC Title Insurance Policy
premiums, recording and filing fees, costs of environmental reports, Physical
Conditions Reports, appraisals and other reports, the fees and costs of Lender’s
counsel and all other third party out-of-pocket expenses incurred in connection
with the origination of the Loan to the extent such costs and expenses relating
to third party costs have not already been paid or reimbursed by Mortgage
Borrower to Mortgage Lender.
3.1.13 Material
Adverse Change. There
shall have been no material adverse change in the financial condition or
business condition of Borrower, Mortgage Borrower, Principal, Guarantor, the
Collateral or the Property since the date of the most recent financial
statements delivered to Lender. The income and expenses of the Property, the
occupancy thereof, and all other features of the transaction shall be as
represented to Lender without material adverse change. None of Borrower,
Mortgage Borrower, Principal, Guarantor or any of their respective constituent
Persons shall be the subject of any Bankruptcy Action.
3.1.14 Leases
and Rent Roll. Lender
shall have received copies of all Leases and certified copies of any Leases as
requested by Lender. Lender shall have received a current certified rent roll of
the Property, reasonably satisfactory in form and substance to
Lender.
3.1.15 Physical
Conditions Report. Lender
shall have received a Physical Conditions Report, which report shall be
satisfactory in form and substance to Lender.
3.1.16 Management
Agreement. Lender
shall have received a copy of the Management Agreement, which shall be
satisfactory in form and substance to Lender. The fee payable to Manager shall
not exceed three and one-half percent (3.5%) of Gross Income from Operations per
annum (excluding any Rents payable under the Vacant Space Master Lease). The
Management Agreement shall also provide that all of Manager’s rights under the
Management Agreement are subordinate to the Lien of the Pledge Agreement and the
rights of Lender.
3.1.17 Appraisal. Lender
shall have received an appraisal of the Property, which shall be satisfactory in
form and substance to Lender.
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3.1.18 Financial
Statements. Lender
shall have received a balance sheet with respect to the Property for the
two (2) most recent Fiscal Years and statements of income and statements of
cash flows with respect to the Property for the three (3) most recent
Fiscal Years, each in form and substance satisfactory to Lender.
3.1.19 Vacant
Space Master Lease. (a)
Mortgage Borrower shall have entered into a Lease (the “Vacant
Space Master Lease”) with
the Operating Partnership for the 21,678 square feet of vacant space (the
“Vacant
Space”) at the
Property, which Vacant Space Master Lease shall provide for the payment of an
annual Full Service Gross Rent of $616,522.32 (the “Vacant
Space Rent”)
(payable in monthly installments), provides for a term expiring on April 9, 2006
and is otherwise in form and substance satisfactory to Lender. Lender will
consent to a reduction of the Rent payable by the Operating Partnership under
the Vacant Space Master Lease for the Vacant Space on the first day of each
calendar quarter commencing on July 1, 2005 (each such quarterly date, an
“Adjustment
Date”) to the
extent of the Rents payable under Leases executed by Mortgage Borrower since the
preceding Adjustment Date (or, with respect to the first Adjustment Date, since
the Closing Date), if such Leases (i) demise the Vacant Space (or portions
thereof), (ii) have a term of not less than least five (5) years,
(iii) are with tenants approved by Lender in its reasonable discretion who
are in occupancy of their premises and paying full unabated Rent, (iv) are
not in default, and (v) comply with the terms and provisions of
Section
5.1.20 hereof
and are otherwise approved by Lender in its reasonable discretion, all as
evidenced to the reasonable satisfaction of Lender (such evidence to include a
copy of the applicable Lease and tenant estoppel certificates executed by the
applicable tenants in form and substance reasonably acceptable to Lender). Any
Lease meeting the requirements of the preceding sentence is referred to herein
as a “New
Vacant Space Lease”. At
such time as Mortgage Borrower has entered into New Vacant Space Leases
providing for the payment of Full Service Gross Rent in an amount equal to or
greater than the Vacant Space Rent and has satisfied each of the conditions set
forth above in this Section with respect to each such New Vacant Space Lease,
Lender shall consent to the termination of the Vacant Space Master
Lease.
(b) The
Vacant Space Master Lease shall also provide that (i) in the event that the
Alaris Short Term Lease Extension Date has not occurred on or prior to September
1, 2005, the Vacant Space Master Lease shall demise the Alaris Space to the
Operating Partnership for a term commencing on September 1, 2005 and expiring on
March 1, 2011 and (ii) in the event that the Alaris Short Term Lease Extension
Date shall have occurred on or prior to September 1, 2005, but on the Initial
Maturity Date, the Additional Extension Conditions have not been satisfied, the
Vacant Space Master Lease shall demise the Alaris Space to the Operating
Partnership for a term commencing on the first day following the expiration of
the Alaris Lease and expiring on March 1, 2011. The annual Rent payable by the
Operating Partnership under the Vacant Space Master Lease with respect to the
Alaris Space shall be the greater of (A) an amount equal to the base Rent set
forth on Schedule
IV attached
hereto for the corresponding year of the Lease, plus a pro-rata shares of Taxes,
Insurance Premiums and any other costs and expenses of owning, operating and
maintaining the Property, payable in equal monthly installments on the first
(1st) day of
each calendar month commencing with the first day of September, 2005, or (B) an
amount equal to the Deficient NCF Amount, payable in equal monthly installments
on the first (1st) day of
each calendar month commencing on September 1, 2005 (in the case of a Vacant
Space Master Lease arising under clause(i), above)
or on March 1, 2008 (in the case of a Vacant Space Master Lease arising under
clause
(ii), above).
During the
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period
from September 1, 2005 to February 28, 2006, all Rent payable under both the
Alaris Lease and the Vacant Space Master Lease with respect to the Alaris Space
shall be deposited in the Lockbox Account and applied in accordance with the
provision of this Agreement and the Cash Management Agreement. On each
Adjustment Date occurring after October 1, 2005, Lender will consent to a
reduction of the Rent payable by the Operating Partnership under the Vacant
Space Master Lease for the Alaris Space calculated pursuant to clause
(A) above,
to the extent of the Rents payable under Leases executed by Mortgage Borrower
since the preceding Adjustment Date (or, with respect to the first Adjustment
Date, since the Closing Date), which Leases (1) demise the Alaris Space (or
portions thereof), (2) have a term of not less than five (5) years and
provide for base Rents and reimbursements for Taxes, Insurance Premiums and
costs of owning, maintaining and operating the Property equal to or greater than
the base Rent and reimbursements payable under the Vacant Space Master Lease for
the Alaris Space, (3) are with tenants approved by Lender in its reasonable
discretion who are in occupancy of their premises and paying full unabated Rent,
(4) are not in default, and (5) have otherwise been approved by Lender
in its reasonable discretion, all as evidenced to the reasonable satisfaction of
Lender (such evidence to include a copy of the applicable Lease and tenant
estoppel certificates executed by the applicable tenants in form and substance
reasonably acceptable to Lender), and the annual Rent payable by the Operating
Partnership under the Vacant Space Master Lease with respect to the Alaris Space
pursuant to clause
(B) above
shall be increased or decreased, as applicable, to the then current Deficient
NCF Amount. Any Lease meeting the requirements of the preceding sentence is
referred to herein as a “New
Alaris Space Lease”. At
such time, if ever, as Mortgage Borrower has entered into New Alaris Space
Leases providing for the payment of base Rents and reimbursements in an amount
equal to or greater than the Alaris Space Rent and has satisfied each of the
conditions set forth above in this Section with respect to each such New Alaris
Space Lease, Lender shall consent to the termination of the Vacant Space Master
Lease with respect to the Alaris Space.
3.1.20 Further
Documents. Lender
or its counsel shall have received such other and further approvals, opinions,
documents and information as Lender or its counsel may have reasonably requested
including the Loan Documents in form and substance satisfactory to Lender and
its counsel.
IV. REPRESENTATIONS
AND WARRANTIES
Section
4.1. Borrower
Representations.
Borrower
represents and warrants as of the date hereof and as of the Closing Date
that:
4.1.1 Organization. Borrower
has been duly organized and is validly existing and in good standing with
requisite power and authority to own its properties and to transact the
businesses in which it is now engaged. Borrower is duly qualified to do business
and is in good standing in each jurisdiction where it is required to be so
qualified in connection with its properties, businesses and operations. Borrower
possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged, and the sole business of Borrower is the
ownership, management and operation of Mortgage Borrower. The ownership
interests of Borrower are as set forth on the organizational chart attached
hereto as Schedule
II.
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4.1.2 Proceedings. Borrower
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the other Loan Documents. This Agreement and
the other Loan Documents have been duly executed and delivered by or on behalf
of Borrower and constitute the legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms, subject
only to applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
4.1.3 No
Conflicts. The
execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance (other than pursuant to the
Loan Documents) upon any of the property or assets of Borrower pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement, partnership
agreement, management agreement or other agreement or instrument to which
Borrower is a party or by which any of Borrower’s property or assets is subject,
nor will such action result in any violation of the provisions of any statute or
any order, rule or regulation of any Governmental Authority having jurisdiction
over Borrower or any of Borrower’s properties or assets, and any consent,
approval, authorization, order, registration or qualification of or with any
such Governmental Authority required for the execution, delivery and performance
by Borrower of this Agreement or any other Loan Documents has been obtained and
is in full force and effect.
4.1.4 Litigation. There are
no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or threatened against or
affecting Borrower, Mortgage Borrower, Principal, Guarantor or the Property,
which actions, suits or proceedings, if determined against Borrower, Mortgage
Borrower, Principal, Guarantor or the Property, might materially adversely
affect the condition (financial or otherwise) or business of Borrower, Principal
or Guarantor or the condition or ownership of the Property.
4.1.5 Agreements. Borrower
is not a party to any agreement or instrument or subject to any restriction
which might materially and adversely affect Borrower, Mortgage Borrower, the
Property or the Collateral, Mortgage Borrower or Borrower’s business, properties
or assets, operations or condition, financial or otherwise. Neither Borrower nor
Mortgage Borrower is in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party or by which
Borrower, Mortgage Borrower, the Collateral or the Property are bound. Neither
Borrower nor Mortgage Borrower has any material financial obligation under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Borrower or Mortgage Borrower is a party or by which
Borrower, Mortgage Borrower, the Collateral or the Property is otherwise bound,
other than (a) obligations incurred in the ordinary course of the operation
of the Property as permitted pursuant to clause
(t) of the
definition of “Special
Purpose Entity” set
forth in Section 1.1 hereof
and (b) obligations under the Loan Documents and the Mortgage Loan
Documents, as applicable.
4.1.6 Title. The
Pledgor under the Pledge Agreement is the record and beneficial owner of, and
Borrower has good and marketable title to the Collateral, free and clear
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of all
Liens whatsoever except the Liens created by the Loan Documents. The Permitted
Encumbrances in the aggregate do not materially and adversely affect the value,
operation or use of the Property (as currently used) or Borrower’s ability to
repay the Loan. The Pledge Agreement, together with the UCC Financing Statements
relating to the Collateral, will create a valid lien on, and security interest
in and to, the Collateral, all in accordance with the terms thereof. To
Borrower’s knowledge, there are no claims for payment for work, labor or
materials affecting the Property which are or may become a Lien prior to, or of
equal priority with, the Liens created by the Mortgage Loan
Documents.
4.1.7 Solvency. Borrower
has (a) not entered into the transaction contemplated by this Agreement or
executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under such Loan Documents.
Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds
and will, immediately following the making of the Loan, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. The fair saleable value of Borrower’s assets is and
will, immediately following the making of the Loan, be greater than Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Borrower’s assets do not
and, immediately following the making of the Loan 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 liabilities and other
commitments) beyond its ability to pay such debts and liabilities as they mature
(taking into account the timing and amounts of cash to be received by Borrower
and the amounts to be payable on or in respect of the obligations of Borrower).
No petition in bankruptcy has been filed against Borrower, Mortgage Borrower,
Principal, Guarantor or any of their respective constituent Persons, and none of
Borrower, Mortgage Borrower, Principal, Guarantor or any of their respective
constituent Persons has ever made an assignment for the benefit of creditors or
taken advantage of any insolvency act for the benefit of debtors. None of
Borrower, Mortgage Borrower, Principal, Guarantor or any of their respective
constituent Persons is 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 properties, and Borrower has no knowledge of
any Person contemplating the filing of any such petition against it, Mortgage
Borrower, Principal, Guarantor or any of their respective constituent
Persons.
4.1.8 Full
and Accurate Disclosure. No
statement of fact made by Borrower in this Agreement or in any of the other Loan
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no material fact presently known to Borrower which has not
been disclosed to Lender which adversely affects, nor as far as Borrower can
foresee, might adversely affect, Borrower, the Collateral, Mortgage Borrower,
Principal, Guarantor, the Property or the business, operations or condition
(financial or otherwise) of Borrower.
4.1.9 No
Plan Assets. Borrower
does not sponsor, is not obligated to contribute to and is not itself an
“employee benefit plan,” as defined in Section 3(3) of ERISA, subject to
Title I of ERISA, and none of the assets of Borrower constitutes or will
constitute “plan assets” of one or more such plans within the meaning of
29 C.F.R. Section 2510.3-101. In addition,
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(a) Borrower
is not a “governmental plan” within the meaning of Section 3(32) of ERISA
and (b) transactions by or with Borrower are not subject to any state
statute regulating investments of, or fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code currently in effect, which prohibit or otherwise
restrict the transactions contemplated by this Agreement, including, but not
limited to the exercise by Lender of any of its rights under the Loan
Documents.
4.1.10 Compliance. Borrower
and, to Borrower’s knowledge, the Property (including the use thereof) comply in
all material respects with all applicable Legal Requirements, including, without
limitation, building and zoning ordinances and codes. Borrower is not in default
or violation of any order, writ, injunction, decree or demand of any
Governmental Authority. There has not been committed by Borrower, or any other
Person in occupancy of or involved with the operation or use of the Property,
any act or omission affording any Governmental Authority the right of forfeiture
as against the Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents.
4.1.11 Financial
Information. All
financial data, including, without limitation, the statements of cash flow and
income and operating expense, that have been delivered to Lender in respect of
Borrower, the Collateral, Mortgage Borrower or the Property in connection with
the Loan (a) are true, complete and correct in all material respects,
(b) accurately represent the financial condition of the Property as of the
date of such reports, and (c) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP throughout the periods covered, except as disclosed therein. Except
for Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on Borrower, the
Collateral, Mortgage Borrower or the Property or the operation thereof as an
office building, except as referred to or reflected in said financial
statements. Since the date of such financial statements, there has been no
material adverse change in the financial condition, operation or business of
Mortgage Borrower or Borrower from that set forth in said financial
statements.
4.1.12 Condemnation. No
Condemnation or other proceeding has been commenced or, to Borrower’s best
knowledge, is threatened or contemplated with respect to all or any portion of
the Property or for the relocation of any roadway providing access to the
Property.
4.1.13 Federal
Reserve Regulations. No part
of the proceeds of the Loan will be used for the purpose of purchasing or
acquiring any “margin stock” within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System or for any other purpose which
would be inconsistent with such Regulation U or any other Regulations of
such Board of Governors, or for any purposes prohibited by any Legal
Requirements or by the terms and conditions of this Agreement or the other Loan
Documents.
4.1.14 Intentionally
Omitted.
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4.1.15 Not
a Foreign Person. Borrower
is not a “foreign person” within the meaning of §1445(f)(3) of the
Code.
4.1.16 Intentionally
Omitted.
4.1.17 Enforceability. The Loan
Documents are not subject to any right of rescission, set-off, counterclaim or
defense by Borrower, Principal or Guarantor, including, without limitation, the
defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable (subject to principles of equity and bankruptcy, insolvency and
other laws generally affecting creditors’ rights and the enforcement of debtors’
obligations), and none of Borrower, Principal or Guarantor has asserted any
right of rescission, set-off, counterclaim or defense with respect
thereto.
4.1.18 No
Prior Assignment. There are
no prior assignments of the Leases or any portion of the Rents due and payable
or to become due and payable which are presently outstanding. There are no prior
assignments of the Collateral that are presently outstanding except in
accordance with the Loan Documents.
4.1.19 Insurance. Borrower
has obtained and has delivered to Lender certificates for all Policies required
hereunder, with all premiums currently payable paid thereunder, reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement.
No claims have been made under any such Policies, and no Person, including
Borrower and Mortgage Borrower, has done, by act or omission, anything that
would impair the coverage of any such Policies.
4.1.20 Mortgage
Loan Representations and Warranties. All of
the representations and warranties contained in the Mortgage Loan Documents are
hereby incorporated into this Agreement and deemed made hereunder as and when
made thereunder and shall remain incorporated without regard to any waiver
amendment or other modification thereof by the Mortgage Lender or to whether the
related Mortgage Loan Document has been terminated, unless otherwise consented
to in writing by Lender.
4.1.21 Equity
Contribution.
Guarantor has made or caused to be made a contribution of cash equity to
Mortgage Borrower in an amount equal to no less than Ten Thousand Dollars
($10,000.00), which amount shall not be distributed to any constituent Person of
Mortgage Borrower.
4.1.22 No
Contractual Obligations. Other
than the Loan Documents, as of the date of this Agreement, Borrower is not
subject to any Contractual Obligations and has not entered into any agreement,
instrument or undertaking by which it or its assets are bound, or has incurred
any Indebtedness, and prior to the date of this Agreement neither Borrower nor
any of its Affiliates has entered into any Contractual Obligation, or any
agreement, instrument or undertaking by which it or its assets are bound or
incurred any Indebtedness.
4.1.23 Affiliates.
Effective as of the consummation of the transactions contemplated by this
Agreement, the sole member of Borrower is Xxxxxxx Properties Holdings
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II, LLC,
which owns one hundred percent (100%) of the limited liability company interests
in Borrower. Borrower does not have any subsidiaries except as set forth in
Schedule
II.
4.1.24 Operating
Company Status. Borrower
qualifies as an “operating company,” as such term is defined in the regulation
issued by the U.S. Department of Labor known as the “plan assets regulation,” 29
C.F.R. §2510.3-101 and, as long as the Loan is outstanding, Borrower will remain
at all times an operating company, as so defined.
4.1.25 Intentionally
Omitted.
4.1.26 Leases. The
Property is not subject to any Leases other than the Leases described in
Schedule I attached
hereto and made a part hereof. Mortgage Borrower is the owner of the landlord’s
interest in the 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. The current Leases are in full force and effect and there are no
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute defaults
thereunder. The copies of the Leases delivered to Lender are true and complete,
and there are no oral agreements with respect thereto. No Rent (excluding
security deposits) has been paid more than one (1) month in advance of its due
date. All work to be performed by Mortgage Borrower under each Lease has been
performed as required in such Lease and has been accepted by the applicable
tenant, and any payments, free rent, partial rent, rebate of rent or other
payments, credits, allowances or abatements required to be given by Borrower to
any tenant has already been received by such tenant. There has been no prior
sale, transfer or assignment, hypothecation or pledge of any Lease or of the
Rents received therein which is still in effect. Except as provided in Schedule
I attached hereto, no tenant listed on Schedule I attached
hereto has assigned its Lease or sublet all or any portion of the premises
demised thereby, no such tenant holds its leased premises under assignment or
sublease, nor does anyone except such tenant and its employees occupy such
leased premises. No tenant under any Lease has a right or option pursuant to
such Lease or otherwise to purchase all or any part of the Property of which the
leased premises are a part. No tenant under any Lease has any right or option
for additional space in the Improvements.
4.1.27 Intentionally
Omitted.
4.1.28 Principal
Place of Business; State of Organization.
Borrower’s principal place of business as of the Closing Date is the address set
forth in the introductory paragraph of this Agreement. Borrower is organized
under the laws of the State of Delaware.
4.1.29 Filing
and Recording Taxes. All
transfer taxes, deed stamps, intangible taxes or other amounts in the nature of
transfer taxes required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the transfer of the
Collateral to Borrower have been paid. All recording, stamp, intangible or other
similar tax required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Pledge Agreement, have been paid
or are being paid simultaneously herewith, and, under current Legal
Requirements, the Loan Documents are enforceable in accordance with their
respective terms by
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Lender
(or any subsequent holder thereof), subject to principles of equity and
bankruptcy, insolvency and other laws generally applicable to creditors’ rights
and the enforcement of debtors’ obligations.
4.1.30 Special
Purpose Entity/Separateness.
(a) Until the Debt has been paid in full, Borrower hereby represents,
warrants and covenants that (i) Borrower is, shall be and shall continue to
be a Special Purpose Entity, (ii) Mortgage Borrower is, shall be and shall
continue to be a Special Purpose Entity, and (iii) Principal is, shall be and
shall continue to be a Special Purpose Entity.
(b) The
representations, warranties and covenants set forth in Section 4.1.30(a) shall
survive for so long as any amount remains payable to Lender under this Agreement
or any other Loan Document.
(c) All of
the assumptions made in the Insolvency Opinion, including, but not limited to,
any exhibits attached thereto, are true and correct in all respects and any
assumptions made in any subsequent non-consolidation opinion required to be
delivered in connection with the Loan Documents (an “Additional
Insolvency Opinion”),
including, but not limited to, any exhibits attached thereto, will have been and
shall be true and correct in all respects. Borrower has complied and will comply
with, and Mortgage Borrower and Principal have complied and Borrower will cause
Mortgage Borrower and Principal to comply with, all of the assumptions made with
respect to Borrower, Mortgage Borrower and Principal in the Insolvency Opinion.
Borrower will have complied and will comply with, Mortgage Borrower and
Principal will have complied with, and Borrower shall cause Mortgage Borrower
and Principal to comply with, all of the assumptions made with respect to
Borrower, Mortgage Borrower and Principal in any Additional Insolvency Opinion.
Each entity other than Borrower, Mortgage Borrower and Principal with respect to
which an assumption shall be made in the Insolvency Opinion or in any Additional
Insolvency Opinion will have complied and will comply with all of the
assumptions made with respect to it in the Insolvency Opinion or any such
Additional Insolvency Opinion.
4.1.31 Management
Agreement. The
Management Agreement is in full force and effect and there is no default
thereunder by any party thereto and no event has occurred that, with the passage
of time and/or the giving of notice would constitute a default
thereunder.
4.1.32 Illegal
Activity. No
portion of the Property or the Collateral has been or will be purchased with
proceeds of any illegal activity.
4.1.33 No
Change in Facts or Circumstances; Disclosure. All
information submitted by Borrower to Lender including, but not limited to, all
financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan or in satisfaction of the terms thereof
and all statements of fact made by Borrower in this Agreement or in any other
Loan Document, are accurate, complete and correct in all material respects.
There has been no material adverse change in any condition, fact, circumstance
or event that would make any such information inaccurate, incomplete or
otherwise misleading in any material respect or that otherwise materially and
adversely affects or might materially and adversely affect the use, operation or
value of the Property or the business operations and/or the financial condition
of Mortgage Borrower or Borrower. Borrower has disclosed to Lender all material
facts and has
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not
failed to disclose any material fact that could cause any Provided Information
or representation or warranty made herein to be materially
misleading.
4.1.34 Investment
Company Act. Borrower
is not (a) an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (b) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or (c) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.
4.1.35 Embargoed
Person. At all
times throughout the term of the Loan, including after giving effect to any
Transfers permitted pursuant to the Loan Documents, (a) none of the funds
or other assets of Borrower, Principal or Guarantor shall constitute property
of, or shall be beneficially owned, directly or indirectly, by any Person
subject to trade restrictions under United States law, including, but not
limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701
et
seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and
any Executive Orders or regulations promulgated under any such United States
laws, with the result that the investment in Mortgage Borrower, Borrower,
Principal or Guarantor, as applicable (whether directly or indirectly), is or
would be prohibited by law (each, an “Embargoed
Person”) or the
Loan made by Lender is or would be in violation of law, (b) no Embargoed Person
shall have any interest of any nature whatsoever in Mortgage Borrower, Borrower,
Principal or Guarantor, as applicable, with the result that the investment in
Mortgage Borrower, Borrower, Principal or Guarantor, as applicable (whether
directly or indirectly), is or would be prohibited by law or the Loan is or
would be in violation of law, and (c) none of the funds of Mortgage Borrower,
Borrower, Principal or Guarantor, as applicable, shall be derived from any
unlawful activity with the result that the investment in Mortgage Borrower,
Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly), is or would be prohibited by law or the Loan is or would be in
violation of law.
4.1.36 Mezzanine
Cash Management Account.
(a) This Agreement, together with the other Loan Documents, creates a
valid and continuing security interest (as defined in the Uniform Commercial
Code of the State of New York) in the Mezzanine Cash Management Account in favor
of Lender, which security interest is prior to all other Liens and is
enforceable as such against creditors of and purchasers from Borrower. Other
than in connection with the Loan Documents, Borrower has not sold or otherwise
conveyed the Mezzanine Cash Management Account.
(b) The
Mezzanine Cash Management Account constitutes a “deposit account” within the
meaning of the Uniform Commercial Code of the State of New York.
(c) The
Mezzanine Cash Management Account is in the name of Borrower, as pledgor, or
Lender, as pledgee.
4.1.37 Vacant
Space Master Lease. The
Vacant Space Master Lease is in full force and effect and there are no uncured
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute
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defaults
thereunder. The copy of the Vacant Space Master Lease delivered to Lender is
true and complete, and there are no oral agreements with respect
thereto.
Section
4.2. Survival
of Representations.
Borrower
agrees that all of the representations and warranties of Borrower set forth in
Section 4.1 hereof
and elsewhere in this Agreement and in the other Loan Documents shall survive
for so long as any amount remains owing to Lender under this Agreement or any of
the other Loan Documents by Borrower. All representations, warranties, covenants
and agreements made in this Agreement or in the other Loan Documents by Borrower
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its
behalf.
V. BORROWER
COVENANTS
Section
5.1. Affirmative
Covenants.
From the
date hereof and until payment and performance in full of all Obligations, or the
earlier release of the Lien of the Pledge Agreement (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
5.1.1 Existence;
Compliance with Legal Requirements. Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
and cause Mortgage Borrower to comply with all Legal Requirements applicable to
Borrower, Mortgage Borrower, the Collateral and the Property. There shall never
be committed by Borrower and Borrower shall not permit Mortgage Borrower to
permit any other Person in occupancy of or involved with the operation or use of
the Property or the Collateral to commit any act or omission affording the
federal government or any state or local government the right of forfeiture
against the Collateral, the Property or any part thereof or any monies paid in
performance of Borrower’s obligations under any of the Loan Documents. Borrower
hereby covenants and agrees not to permit or cause Mortgage Borrower to commit,
permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times cause Mortgage Borrower to maintain,
preserve and protect all franchises and trade names and preserve all the
remainder of its property used or useful in the conduct of its business and
shall keep or cause Mortgage Borrower to keep the Property in good working order
and repair, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as more fully provided in the Mortgage. Borrower shall keep or cause
Mortgage Borrower to keep the Property insured at all times by financially sound
and reputable insurers, to such extent and against such risks, and maintain
liability and such other insurance, as is more fully provided in this Agreement.
After prior notice to Lender, Borrower, at its own expense, may contest (or
cause Mortgage Borrower to contest) by appropriate legal proceeding promptly
initiated and conducted in good faith and with due diligence, the validity of
any Legal Requirement, the applicability of any Legal Requirement to Mortgage
Borrower, Borrower, any Person or the Property or any alleged violation of any
Legal Requirement, provided that: (a) no Default or Event of Default has
occurred and remains uncured; (b) Borrower is permitted to do so under the
provisions of any mortgage or deed of trust superior in lien to the Mortgage;
(c) such proceeding shall be permitted under, and be conducted in
accordance with, the provisions of any instrument to which Mortgage Borrower or
Borrower is subject and shall not constitute a default thereunder; (d) such
proceeding shall be conducted in accordance with all applicable statutes, laws
and
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ordinances;
(e) neither the Property nor the Collateral nor any part thereof or
interest therein will be in danger of being sold, forfeited, terminated,
cancelled or lost as a result of such contest; (f) Borrower shall, upon
final determination thereof, promptly comply with any such Legal Requirement
determined to be valid or applicable or cure any violation of any Legal
Requirement; (g) such proceeding shall suspend the enforcement of the
contested Legal Requirement against Mortgage Borrower, Borrower and the
Collateral or the Property; and (h) Borrower shall furnish such security as
may be required in the proceeding, or as may be reasonably requested by Lender,
to insure compliance with such Legal Requirement, together with all interest and
penalties payable in connection therewith. Lender may apply any such security,
as necessary to cause compliance with such Legal Requirement at any time when,
in the reasonable judgment of Lender, the validity, applicability or violation
of such Legal Requirement is finally established or the Property or the
Collateral (or any part thereof or interest therein) shall be in danger of being
sold, forfeited, terminated, cancelled or lost.
5.1.2 Taxes
and Other Charges. Borrower
shall pay or shall cause Mortgage Borrower to pay all Taxes and Other Charges
now or hereafter levied or assessed or imposed against the Property, or any part
thereof, as the same become due and payable; provided,
however, that
Borrower’s obligation to cause Mortgage Borrower to directly pay Taxes shall be
suspended for so long as Borrower complies with the terms and provisions of
Section 7.2 hereof.
Borrower will deliver or cause to be delivered to Lender receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges have been
so paid or are not then delinquent no later than ten (10) days prior to the date
on which the Taxes and/or Other Charges would otherwise be delinquent if not
paid. Borrower shall furnish or cause to be furnished to Lender receipts for the
payment of the Taxes and the Other Charges prior to the date the same shall
become delinquent provided,
however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 7.2 hereof.
Borrower shall not suffer, and shall not permit Mortgage Borrower to suffer, and
shall promptly cause Mortgage Borrower to promptly be paid and discharged any
Lien or charge whatsoever which may be or become a Lien or charge against the
Property, and shall promptly pay for all utility services provided to the
Property. After prior notice to Lender, Borrower, at its own expense, may
contest (or cause Mortgage Borrower to contest) by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (a) no Default or Event of Default has occurred and
remains uncured; (b) Borrower is permitted to contest same under the
provisions of any mortgage or deed of trust superior in lien to the Mortgage;
(c) such proceeding shall be permitted under, and be conducted in
accordance with, the provisions of any other instrument to which Borrower and
Mortgage Borrower is subject and shall not constitute a default thereunder; (d)
such proceeding shall be conducted in accordance with all applicable statutes,
laws and ordinances; (e) neither the Collateral, Property nor any part
thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost as a result of such contest; (f) Borrower
shall or shall cause Mortgage Borrower to promptly upon final determination
thereof pay the amount of any such Taxes or Other Charges, together with all
costs, interest and penalties which may be payable in connection therewith;
(g) such proceeding shall suspend the collection of such contested Taxes or
Other Charges from the Property; and (h) Borrower shall or shall cause
Mortgage Borrower to furnish such security as may be required in the proceeding,
or as may be requested by Lender, to insure the payment of any such Taxes or
Other Charges, together with all
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interest
and penalties thereon. Lender may pay over any such cash deposit or part thereof
held by Lender to the claimant entitled thereto at any time when, in the
reasonable judgment of Lender, the entitlement of such claimant is established
or the Property (or any part thereof or interest therein) shall be in danger of
being sold, forfeited, terminated, cancelled or lost or there shall be any
danger of the Lien of the Mortgage being primed by any related
Lien.
5.1.3 Litigation. Borrower
shall give prompt written notice to Lender of any litigation or governmental
proceedings pending or threatened against Borrower, Mortgage Borrower, the
Property, the Collateral, Principal and/or Guarantor which might materially
adversely affect Borrower’s, Mortgage Borrower’s, Principal’s or Guarantor’s
condition (financial or otherwise) or business or the Property.
5.1.4 Access
to Property. Borrower
shall cause Mortgage Borrower to permit agents, representatives and employees of
Lender to inspect the Property or any part thereof at reasonable hours upon
reasonable advance notice (which may be given verbally), subject to the rights
of tenants under their respective Leases.
5.1.5 Notice
of Default. Borrower
shall promptly advise Lender of any material adverse change in Borrower’s,
Mortgage Borrower’s, Principal’s or Guarantor’s condition, financial or
otherwise, or of the occurrence of any Default or Event of Default of which
Borrower has knowledge, including any Mortgage Loan Default or Mortgage Loan
Event of Default.
5.1.6 Cooperate
in Legal Proceedings. Borrower
shall cooperate fully with Lender with respect to any proceedings before any
court, board or other Governmental Authority which may in any way affect the
rights of Lender hereunder or any rights obtained by Lender under any of the
other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
5.1.7 Perform
Loan Documents. Borrower
shall observe, perform and satisfy all the terms, provisions, covenants and
conditions of, and shall pay when due all costs, fees and expenses to the extent
required under the Loan Documents executed and delivered by, or applicable to,
Borrower. Payment of the costs and expenses associated with any of the foregoing
shall be in accordance with the terms and provisions of this Agreement,
including, without limitation, the provisions of Section
10.13
hereof.
5.1.8 Award
and Insurance Benefits. Subject
to the rights of Mortgage Lender, Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully
or equitably payable in connection with the Property, and Lender shall be
reimbursed for any expenses incurred in connection therewith (including, without
limitation, attorneys’ fees and disbursements, and the payment by Borrower of
the expense of an appraisal on behalf of Lender in case of Casualty or
Condemnation affecting the Property or any part thereof) out of such Insurance
Proceeds.
5.1.9 Further
Assurances. Borrower
shall, at Borrower’s sole cost and expense:
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(a) furnish
to Lender all instruments, documents, boundary surveys, footing or foundation
surveys, certificates, plans and specifications, appraisals, title and other
insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished by Borrower
pursuant to the terms of the Loan Documents or which are reasonably requested by
Lender in connection therewith;
(b) execute
and deliver to Lender such documents, instruments, certificates, assignments and
other writings, and do such other acts necessary or desirable, to evidence,
preserve and/or protect the collateral at any time securing or intended to
secure the Obligations under the Loan Documents, as Lender may reasonably
require; and
(c) do and
execute all and 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 require from time to time.
5.1.10 Mortgage
Taxes. Borrower
represents that it has caused Mortgage Borrower to pay all state, county and
municipal recording and all other taxes imposed upon the execution and
recordation of the Mortgage.
5.1.11 Financial
Reporting. (a) Borrower
will keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP (or such other accounting basis acceptable to
Lender), proper and accurate books, records and accounts reflecting all of the
financial affairs of Borrower and all items of income and expense in connection
with the operation of the Property. Lender shall have the right from time to
time at all times during normal business hours upon reasonable notice (which may
be verbal) to examine such books, records and accounts at the office of Borrower
or any other Person maintaining such books, records and accounts and to make
such copies or extracts thereof as Lender shall desire. After the occurrence and
during the continuance of an Event of Default, Borrower shall pay any costs and
expenses incurred by Lender to examine Borrower’s accounting records with
respect to the Property, as Lender shall determine to be necessary or
appropriate in the protection of Lender’s interest.
(b) Borrower
will furnish and cause to be furnished to Lender annually, within ninety (90)
days following the end of each Fiscal Year of Borrower, a complete copy of
Mortgage Borrower’s and Borrower’s annual financial statements audited by a “Big
Four” accounting firm or other independent certified public accountant
acceptable to Lender in accordance with GAAP (or such other accounting basis
acceptable to Lender) covering the Property for such Fiscal Year and containing
statements of profit and loss for Borrower, Mortgage Borrower and the Property
and a balance sheet for Borrower and Mortgage Borrower. Such statements shall
set forth the financial condition and the results of operations for the Property
for such Fiscal Year, and shall include, but not be limited to, amounts
representing annual Net Cash Flow, Net Operating Income, Gross Income from
Operations and Operating Expenses of Mortgage Borrower and the Property.
Borrower’s annual financial statements shall be accompanied by (i) a
comparison of the budgeted income and expenses and the actual income and
expenses for the prior Fiscal Year, (ii) an unqualified opinion of a “Big
Four” accounting firm or other independent certified public accountant
reasonably acceptable to Lender, (iii) a list
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of
tenants, if any, occupying more than twenty percent (20%) of the total floor
area of the Improvements, (iv) a breakdown showing the year in which each
Lease then in effect expires and the percentage of total floor area of the
Improvements and the percentage of base rent with respect to which Leases shall
expire in each such year, each such percentage to be expressed on both a per
year and cumulative basis, (v) a schedule audited by such independent
certified public accountant reconciling Net Operating Income to Net Cash Flow
(the “Net
Cash Flow Schedule”), which
shall itemize all adjustments made to Net Operating Income to arrive at Net Cash
Flow deemed material by such independent certified public accountant and
(vi) an Officer’s Certificate certifying that each annual financial
statement fairly presents the financial condition and the results of operations
of Borrower, Mortgage Borrower and the Property being reported upon, and that
such financial statements have been prepared in accordance with GAAP and as of
the date thereof whether there exists an event or circumstance which constitutes
a Default or Event of Default under the Loan Documents executed and delivered
by, or applicable to, Borrower, and if such Default or Event of Default exists,
the nature thereof, the period of time it has existed and the action then being
taken to remedy the same.
(c) Borrower
will furnish, or cause to be furnished, to Lender on or before thirty-five (35)
days after the end of each calendar month the following items, accompanied by an
Officer’s Certificate stating that such items are true, correct, accurate, and
complete and fairly present the financial condition and results of the
operations of Borrower, Mortgage Borrower and the Property (subject to normal
year-end adjustments): (i) a rent roll for the subject month;
(ii) monthly and year-to-date operating statements (including Capital
Expenditures) prepared for each calendar month, noting Net Operating Income,
Gross Income from Operations, and Operating Expenses, and, upon Lender’s
request, other information necessary and sufficient to fairly represent the
financial position and results of operation of the Property during such calendar
month, and containing a comparison of budgeted income and expenses and the
actual income and expenses together with a detailed explanation of any variances
of five percent (5%) or more between budgeted and actual amounts for such
periods, all in form satisfactory to Lender; (iii) a calculation reflecting
the annual Debt Service Coverage Ratio for the immediately preceding twelve (12)
month period as of the last day of such month; and (iv) a Net Cash Flow
Schedule. In addition, such Officer’s Certificate shall also state that the
representations and warranties of Borrower set forth in Section 4.1.30 are true
and correct as of the date of such certificate and that there are no trade
payables outstanding for more than sixty (60) days.
(d) No later
than sixty (60) days after the Closing Date, Borrower shall submit to Lender an
Annual Budget for the Fiscal Year ending on December 31, 2005, in form
reasonably satisfactory to Lender. For the period from the Closing Date until
there is an Approved Annual Budget in accordance with the terms hereof, the most
recent budget prepared by CommonWealth Pacific, LLC or its Affiliates shall be
used by Borrower to operate the Property and by Lender to make disbursements of
Operating Expenses to Borrower in accordance with the terms of this Agreement.
Not later than sixty (60) days prior to the commencement of each Fiscal Year
thereafter, Borrower shall submit to Lender an Annual Budget in form reasonably
satisfactory to Lender. The Annual Budget shall be subject to Lender’s approval
(each such Annual Budget approved by Lender being referred to herein as an
“Approved
Annual Budget”). In
the event that Lender objects to a proposed Annual Budget submitted by Borrower
which requires the approval of Lender hereunder, Lender shall advise Borrower of
such objections within fifteen (15) days after receipt thereof (and deliver
to
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Borrower
a reasonably detailed description of such objections) and Borrower shall
promptly revise such Annual Budget and resubmit the same to Lender. Lender shall
advise Borrower of any objections to such revised Annual Budget within
ten (10) days after receipt thereof (and deliver to Borrower a reasonably
detailed description of such objections) and Borrower shall promptly revise the
same in accordance with the process described in this subsection until
Lender approves the Annual Budget. Until such time that Lender approves a
proposed Annual Budget that requires the approval of Lender hereunder, the most
recently Approved Annual Budget shall apply; provided that
such Approved Annual Budget shall be adjusted to reflect actual increases in
Taxes, Insurance Premiums and utilities expenses.
(e) In the
event that Mortgage Borrower or Borrower must incur an extraordinary Operating
Expense or Capital Expenditure not set forth in the Approved Annual Budget
(each, an “Extraordinary
Expense”), then
Borrower shall promptly deliver to Lender a reasonably detailed explanation of
such proposed Extraordinary Expense for Lender’s approval, which approval shall
not be unreasonably withheld if such Extraordinary Expense is necessary to
prevent material damage to the Property or injury to Persons.
(f) Any
reports, statements or other information required to be delivered under this
Agreement shall be delivered (i) in paper form, (ii) on a diskette,
and (iii) if requested by Lender and within the capabilities of Borrower’s
data systems without change or modification thereto, in electronic form and
prepared using Microsoft Word for Windows or WordPerfect for Windows files
(which files may be prepared using a spreadsheet program and saved as word
processing files). Borrower agrees that Lender may disclose information
regarding the Property, the Collateral, Mortgage Borrower and Borrower that is
provided to Lender pursuant to this Section
5.1.11 in
connection with the Securitization to such parties requesting such information
in connection with such Securitization.
5.1.12 Business
and Operations.
Borrower will cause Mortgage Borrower to continue to be engaged in the
businesses presently conducted by it as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Property.
Borrower shall cause Mortgage Borrower to qualify to do business and will remain
in good standing under the laws of each jurisdiction as and to the extent the
same are required for the ownership, maintenance, management and operation of
the Property. Borrower shall cause Mortgage Borrower at all times during the
term of the Loan to continue to own all Equipment, Fixtures and Personal
Property (each as defined in the Mortgage) which are necessary to operate the
Property in the manner required hereunder and in the manner in which it is
currently operated.
5.1.13 Title
to the Property. Borrower
will cause Mortgage Borrower to warrant and defend (a) the title to the
Property and every part thereof, subject only to Liens permitted hereunder
(including Permitted Encumbrances) and (b) the validity and priority of the
Lien of the Mortgage and the Assignment of Leases, subject only to Liens
permitted hereunder (including Permitted Encumbrances), in each case against the
claims of all Persons whomsoever. Borrower shall reimburse Lender for any
losses, costs, damages or expenses (including reasonable attorneys’ fees and
court costs) incurred by Lender if an interest in the Property, other than as
permitted hereunder, is claimed by another Person.
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5.1.14 Costs
of Enforcement. In the
event (a) that the Mortgage is foreclosed in whole or in part or that the
Mortgage is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent
to the Mortgage in which proceeding Lender exercises any or all of its rights or
remedies under the Pledge Agreement or any other Loan Documents as and when
permitted thereby, or (c) of the bankruptcy, insolvency, rehabilitation or
other similar proceeding in respect of Borrower, Mortgage Borrower or any of
their constituent Persons or an assignment by Borrower, Mortgage Borrower or any
of their constituent Persons for the benefit of its creditors, Borrower, its
successors or assigns, shall be chargeable with and agrees to pay all costs of
collection and defense, including, without limitation, attorneys’ fees and
costs, incurred by Lender or Borrower in connection therewith and in connection
with any appellate proceeding or post-judgment action involved therein, together
with all required service or use taxes.
5.1.15 Estoppel
Statement. (a) After
request by Lender, Borrower shall within ten (10) days furnish Lender with a
statement, duly acknowledged and certified, setting forth (i) the original
principal amount of the Loan, (ii) the Outstanding Principal Balance, (iii) the
Applicable Interest Rate of the Loan, (iv) the date installments of interest
and/or principal were last paid, (v) any offsets or defenses to the performance
of the Obligations, if any, and (vi) that the Note, this Agreement, the Pledge
Agreement and the other Loan Documents are valid, legal and binding obligations
of Borrower and have not been modified or if modified, giving particulars of
such modification.
(b) Borrower
shall deliver to Lender on the Closing Date, and thereafter upon request, (and,
in the case of the Alaris Lease and Quintiles Lease, within the time limits
provided in the Alaris Lease or the Quintiles Lease, as applicable), tenant
estoppel certificates from each commercial tenant leasing space at the Property
in form and substance reasonably satisfactory to Lender, provided that
Borrower shall not be required to deliver such certificates more frequently than
two (2) times in any calendar year or, in the case of the Alaris Lease, as
provided in the Alaris Lease or in the case of the Quintiles Lease as provided
in the Quintiles Lease.
(c) After
request by Lender, Borrower shall within ten (10) days furnish Lender with a
statement, duly acknowledged and certified, setting forth (i) the original
principal amount of the Mortgage Loan, (ii) the unpaid principal amount of the
Mortgage Loan, (iii) the interest rate of the Mortgage Loan, (iv) the date
installments of interest and/or principal were last paid on the Mortgage Loan,
(v) any offsets or defenses to the payment of the Mortgage Loan, if any, and
(vi) that the Mortgage Loan Documents are valid, legal and binding obligations
of Mortgage Borrower and have not been modified or if modified, giving
particulars of such modification.
5.1.16 Loan
Proceeds. Borrower
shall use the proceeds of the Loan received by it on the Closing Date only for
the purposes set forth in Section 2.1.4
hereof.
5.1.17 Performance
by Borrower. Borrower
shall in a timely manner observe, perform and fulfill each and every covenant,
term and provision of each Loan Document executed and delivered by, or
applicable to, Borrower, and shall not enter into or otherwise suffer or permit
any amendment, waiver, supplement, termination or other modification of any Loan
Document executed and delivered by, or applicable to, Borrower without the prior
consent of
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Lender.
Borrower shall cause Mortgage Borrower, in a timely manner, to observe, perform
and fulfill each and every covenant, term and provision of each Mortgage Loan
Document executed and delivered by, or applicable to, Mortgage Borrower, and
shall not cause or permit Mortgage Borrower to enter into or otherwise suffer or
permit any amendment, waiver, supplement, termination or other modification of
any Mortgage Loan Document executed and delivered by, or applicable to, Mortgage
Borrower without the prior written consent of Lender.
5.1.18 Confirmation
of Representations. Borrower
shall deliver, in connection with any Securitization, (a) one or more
Officer’s Certificates certifying as to the accuracy of all representations made
by Borrower in the Loan Documents as of the date of the closing of such
Securitization in all relevant jurisdictions, and (b) certificates of the
relevant Governmental Authorities in all relevant jurisdictions indicating the
good standing and qualification of Borrower and Principal as of the date of the
Securitization.
5.1.19 Intentionally
Omitted.
5.1.20 Leasing
Matters. Any Major
Lease executed after the Closing Date shall be approved by Lender, which
approval shall not be unreasonably withheld. Upon request, Borrower shall cause
Mortgage Borrower to furnish Lender with executed copies of all Leases. All
renewals of Leases and all proposed Leases shall provide for rental rates
comparable to existing local market rates. All proposed Leases shall be on
commercially reasonable terms and shall not contain any terms that would
materially affect Lender’s rights under the Loan Documents. All Leases executed
after the date hereof shall provide that they are subordinate to the Mortgage
and that the lessee agrees to attorn to Mortgage Lender or any purchaser at a
sale by foreclosure or power of sale. Borrower shall cause Mortgage Borrower to
(a) shall observe and perform the obligations imposed upon the lessor under
the Leases in a commercially reasonable manner; (b) shall enforce and may
amend or terminate the terms, covenants and conditions contained in the Leases
upon the part of the lessee thereunder to be observed or performed in a
commercially reasonable manner and in a manner not to impair the value of the
Property involved except that no termination by Mortgage Borrower or acceptance
of surrender by a tenant of any Leases shall be permitted unless by reason of a
tenant default and then only in a commercially reasonable manner to preserve and
protect the Property, provided,
however, that no
such amendment, termination or surrender of any Major Lease will be permitted
without the written consent of Lender; (c) shall not collect any of the
rents more than one (1) month in advance (other than security deposits);
(d) shall not execute any other assignment of lessor’s interest in the
Leases or the Rents (except as contemplated by the Loan Documents);
(e) shall neither alter, modify or change the terms of any Lease in a
manner inconsistent with the provisions of the Loan Documents nor alter, modify
or change the terms of any Major Leases or the Vacant Space Master Lease without
the prior written consent of Lender; (f) shall execute and deliver at the
request of Lender all such further assurances, confirmations and assignments in
connection with the Leases as Lender shall from time to time reasonably require;
and (g) shall not amend, modify, terminate, cancel or accept a surrender of the
Alaris Lease, or permit the assignment or subletting of the Alaris Lease to any
other tenant or subtenant, without Lender’s prior written consent.
Notwithstanding anything to the contrary contained herein, Borrower shall not
enter into a Lease of all or substantially all of the Property without Lender’s
prior written consent.
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5.1.21 Alterations. Borrower
shall obtain Lender’s prior consent to any alterations to any Improvements,
which consent shall not be unreasonably withheld, conditioned or delayed except
with respect to any alterations to any Improvements which may have a material
adverse effect on Borrower’s financial condition, the value of the Property or
the Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall
not be required in connection with any alterations that will not have a material
adverse effect on Borrower’s or Mortgage Borrower’s financial condition, the
value of the Property or the Net Operating Income, provided that such
alterations (a) are made in connection with tenant improvement work
performed pursuant to, or alterations permitted without Borrower’s consent by,
the terms of any Lease approved by Lender pursuant to the terms of this
Agreement, (b) do not adversely affect any structural component of any
Improvements, any utility or HVAC system contained in any Improvements or the
exterior of any building constituting a part of any Improvements and the
aggregate cost thereof does not exceed One Million and 00/100 Dollars
($1,000,000.00), or (c) are performed in connection with Restoration after
the occurrence of a Casualty in accordance with the terms and provisions of the
Mortgage Loan Agreement. If the total unpaid amounts due and payable with
respect to alterations to the Improvements at the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases or by disbursements
from the Rollover Reserve Funds) shall at any time exceed Five Hundred Thousand
and 00/100 Dollars ($500,000.00) (the “Threshold
Amount”),
Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for the Obligations any of the following: (i)
cash, (ii) U.S. Obligations, (iii) other securities having a rating acceptable
to Lender and that the applicable Rating Agencies have confirmed in writing will
not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or any
class thereof in connection with any Securitization, or (iv) a completion and
performance bond or an irrevocable letter of credit (payable on sight draft
only) issued by a financial institution (A) having a rating by S&P of not
less than “A-1+” if the term of such bond or letter of credit is no longer than
three (3) months or, if such term is in excess of three (3) months, issued by a
financial institution having a rating that is acceptable to Lender, and (B) that
the applicable Rating Agencies have confirmed in writing will not, in and of
itself, result in a downgrade, withdrawal or qualification of the initial, or,
if higher, then current ratings assigned to any Securities or any class thereof
in connection with any Securitization. Such security shall be in an amount equal
to the excess of the total unpaid amounts with respect to alterations to the
Improvements on the Property (other than such amounts to be paid or reimbursed
by tenants under the Leases or by disbursements from the Rollover Reserve Funds)
over the Threshold Amount and Lender may apply such security from time to time
at the option of Lender to pay for such alterations.
5.1.22 Operation
of Property.
(a) Borrower shall cause Mortgage Borrower to operate the Property,
in all material respects, in accordance with the Management Agreement or
Replacement Management Agreement, as applicable. In the event that the
Management Agreement expires or is terminated (without limiting any obligation
of Borrower to obtain Lender’s consent to any termination or modification of the
Management Agreement in accordance with the terms and provisions of this
Agreement), Borrower shall promptly cause Mortgage Borrower to enter into a
Replacement Management Agreement with Manager or another Qualified Manager, as
applicable.
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(b) Borrower
shall: (i) cause Mortgage Borrower to promptly perform and/or observe, in
all material respects, all of the covenants and agreements required to be
performed and observed by it under the Management Agreement and do all things
necessary to preserve and to keep unimpaired its material rights thereunder;
(ii) promptly notify Lender of any material default under the Management
Agreement of which it is aware; (iii) promptly deliver to Lender a copy of
each financial statement, business plan, capital expenditures plan, notice,
report and estimate received by it under the Management Agreement (which is not
covered by the financial reporting requirements of Section
5.1.11); and
(iv) cause Mortgage Borrower to enforce the performance and observance of
all of the covenants and agreements required to be performed and/or observed by
Manager under the Management Agreement, in a commercially reasonable
manner.
5.1.23 Representations
and Warranties. Subject
to the rights of Borrower under this Agreement, for the period after the Closing
Date until the date on which the Debt is repaid in full, Borrower covenants to
cause the statements set forth in Sections
4.1.1 through
4.1.3,
4.1.5,
4.1.6,
4.1.8,
4.1.9,
4.1.13 through
4.1.16, and
4.1.19 through
4.1.34 to
remain true and correct.
5.1.24 Mortgage
Loan Reserve Funds.
Borrower shall cause Mortgage Borrower to deposit and maintain each of the
Mortgage Loan Reserve Funds as more particularly set forth in Article VII
of the Mortgage Loan Agreement and to perform and comply with all the terms and
provisions relating thereto. Borrower grants to Lender a first-priority
perfected security interest in Borrower’s interest in each of the Mortgage Loan
Reserve Funds, if any, subject to the prior rights of Mortgage Lender, and any
and all monies now or hereafter deposited in each Mortgage Loan Reserve Fund as
additional security for payment of the Debt to the extent Borrower has an
interest in same. Subject to the qualifications regarding Mortgage Lender’s
interest in the Mortgage Loan Reserve Funds, if any, until expended or applied
in accordance with the Mortgage Loan Documents or the Loan Documents, Borrower’s
interest in the Mortgage Loan Reserve Funds shall constitute additional security
for the Debt and upon the occurrence of an Event of Default, Lender may, in
addition to any and all other remedies available to Lender, apply any sums then
present in any or all of the Mortgage Loan Reserve Funds to the payment of the
Debt in any order in its sole discretion.
5.1.25 Notices. Borrower
shall give notice, or cause notice to be given to Lender promptly upon the
occurrence and during the continuance of an Event of Default and upon any and
all the following:
(a) any
Default, Mortgage Loan Default or Mortgage Loan Event of Default;
(b) any
default or event of default under any Contractual Obligation of Borrower, or, to
the knowledge of Borrower, Mortgage Borrower, Principal or Guarantor that could
reasonably be expected to have a material adverse effect on Borrower, Mortgage
Borrower, the ability of Borrower to perform under the Loan Documents, the
ability of Mortgage Borrower to perform under the Mortgage Loan Documents or the
rights and remedies of Lender under the Loan Documents;
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(c) any
litigation or proceeding affecting Borrower, or, to the knowledge of Borrower,
affecting any of Mortgage Borrower, Principal or Guarantor; or
(d) a change
in the business, operations, property or financial or other condition or
prospects of Borrower, or, to the knowledge of Borrower, Mortgage Borrower,
Principal or Guarantor which could reasonably be expected to have a material
adverse effect on Borrower, Mortgage Borrower, the ability of Borrower to
perform under the Loan Documents, the ability of Mortgage Borrower to perform
under the Mortgage Loan Documents or the rights and remedies of Lender under the
Loan Documents.
5.1.26 Special
Distributions. On each
date on which amounts are required to be disbursed to the Mezzanine Cash
Management Account pursuant to the terms of the Cash Management Agreement or are
required to be paid to Lender under any of the Loan Documents, Borrower shall
exercise its rights under the Mortgage Borrower Company Agreement to cause
Mortgage Borrower to make to Borrower a distribution in an aggregate amount such
that Lender shall receive the amount required to be disbursed to the Mezzanine
Cash Management Account or otherwise paid to Lender on such date.
5.1.27 Curing. Lender
shall have the right, but shall not have the obligation, to exercise Borrower’s
rights under the Mortgage Borrower Company Agreements (a) to cure any Mortgage
Loan Default or any Mortgage Loan Event of Default and (b) to satisfy any Liens,
claims or judgments against the Property (except for Liens permitted by the
Mortgage Loan Documents), in the case of either clause
(a) or
clause
(b), unless
Borrower or Mortgage Borrower shall be diligently pursuing remedies to cure the
same to Lender’s sole satisfaction. Borrower shall reimburse Lender on demand
for any and all costs incurred by Lender in connection with curing any such
Mortgage Loan Default or Mortgage Loan Event of Default or satisfying any Liens,
claims or judgments against the Property, together with interest thereon at the
Default Rate from the date incurred by Lender until paid by
Borrower.
5.1.28 Compliance
With Mortgage Loan Documents.
(a) Borrower
shall cause Mortgage Borrower to comply with all of the terms, covenants and
conditions set forth in the Mortgage Loan Documents. Borrower acknowledges that
the obligation to comply with this covenant is separate from, and may be
enforced independently from, the obligations of Mortgage Borrower under the
Mortgage Loan Documents.
(b) Without
limiting the generality of the other provisions of this Agreement, and without
waiving or releasing Borrower from any of the Obligations, if there shall occur
and be continuing any Mortgage Loan Event of Default, Borrower hereby expressly
agrees that Lender shall have the immediate right, without prior notice to
Borrower, but shall be under no obligation: (i) to pay all or any part of the
Mortgage Loan and any other sums that are then due and payable, and to perform
any act or take any action on behalf of Borrower and/or Mortgage Borrower as may
be appropriate, to cause all of the terms, covenants and conditions of the
Mortgage Loan Documents on the part of Mortgage Borrower to be performed or
observed thereunder to be promptly performed or observed; and (ii) to pay
any other amounts and take any other action as Lender, in its sole and absolute
discretion, shall deem advisable to protect or
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preserve
the rights and interests of Lender in the Loan and/or the Collateral. All sums
so paid and the costs and expenses incurred by Lender in exercising such rights
(including, without limitation, reasonable attorneys’ fees) (i) shall constitute
additional advances of the Loan to Borrower, (ii) shall increase the then
unpaid principal amount of the Loan by the amount of such sums, costs and
expenses, (iii) shall bear interest at the Default Rate for the period from the
date that such sums, costs or expenses were incurred to the date of payment to
Lender, (iv) shall constitute a portion of the Debt, and (v) shall be
secured by the Pledge Agreement and the other Loan Documents.
(c) Borrower
hereby indemnifies Lender from and against all liabilities, obligations, losses,
damages, penalties, assessments, actions, causes of action, judgments, suits,
claims, demands, costs, expenses (including, without limitation, reasonable
attorneys’ and other professional fees, whether or not suit is brought, and
settlement costs) and disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against Lender as a result of the actions
described in the foregoing Section
5.1.28(b), except
to the extent caused by Lender’s gross negligence or willful misconduct. Lender
shall have no obligation to Borrower or any of its Affiliates or any other party
to make any such payment or performance. Borrower shall not, and Borrower shall
not permit Mortgage Borrower to, impede, interfere with, hinder or delay any
effort or action on the part of Lender to cure any Mortgage Loan Event of
Default or asserted Mortgage Loan Event of Default, or to otherwise protect or
preserve Lender’s interests in the Loan and the Collateral following a Mortgage
Loan Event of Default or asserted Mortgage Loan Event of Default.
(d) Any
Mortgage Loan Event of Default shall constitute an Event of Default, without
regard to any subsequent payment or performance of any such obligations by
Lender. Borrower (on behalf of itself and on behalf of each Mortgage Borrower)
hereby grants Lender and any Person designated by Lender the right to enter upon
the Property at any time following the occurrence and during the continuance of
any Mortgage Loan Event of Default, or the assertion by Mortgage Lender that a
Mortgage Loan Event of Default has occurred, for the purpose of taking any such
action or to appear in, defend or bring any action or proceeding to protect
Borrower’s and/or Lender’s interest in the Loan and/or the Collateral. Lender
may take such action as Lender deems reasonably necessary or desirable to carry
out the intents and purposes of this subsection (including communicating with
Mortgage Lender with respect to any Mortgage Loan Default), without prior notice
to or consent from Borrower. Lender shall have no obligation to complete any
cure or attempted cure undertaken or commenced by Lender.
Section
5.2. Negative
Covenants.
From the
date hereof until payment and performance in full of the Obligations or the
earlier release of the Collateral in accordance with the terms of this Agreement
and the other Loan Documents, Borrower covenants and agrees with Lender that it
will not do, directly or indirectly, any of the following:
5.2.1 Operation
of Property.
(a) Borrower
shall not, without Lender’s prior consent (which consent shall not be
unreasonably withheld) cause or permit Mortgage Borrower to: (i) surrender,
terminate or cancel the Management Agreement; provided, that Borrower may, or
may cause Mortgage Borrower to, without Lender’s consent, replace Manager so
long as the replacement manager is a Qualified Manager pursuant to a Replacement
Management Agreement; (ii) reduce or consent to the reduction of the term
of the Management Agreement;
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(iii) increase
or consent to the increase of the amount of any charges or fees under the
Management Agreement; or (iv) otherwise modify, change, supplement, alter
or amend, or waive or release any of its rights and remedies under, the
Management Agreement in any material respect.
(b) Following
the occurrence and during the continuance of an Event of Default, Borrower shall
not cause or permit Mortgage Borrower to exercise any rights, make any
decisions, grant any approvals or otherwise take any action under the Management
Agreement without the prior consent of Lender, which consent may be withheld in
Lender’s sole discretion.
5.2.2 Liens.
Borrower shall not permit or cause Mortgage Borrower to create, incur, assume or
suffer to exist any Lien on any portion of the Property or the Collateral or
permit any such action to be taken, except: (a) Permitted Encumbrances;
(b) Liens created by or permitted pursuant to the Loan Documents or the
Mortgage Loan Documents; and (c) Liens for Taxes or Other Charges not yet
due.
5.2.3 Dissolution. Borrower
shall not (a) engage in any dissolution, liquidation, consolidation or
merger with or into any other business entity, (b) engage in any business
activity not related to the ownership of the Collateral, (c) transfer,
lease or sell, in one transaction or any combination of transactions, the assets
or all or substantially all of the properties or assets of Borrower except to
the extent permitted by the Loan Documents, (d) modify, amend, waive or
terminate its organizational documents or its qualification and good standing in
any jurisdiction or (e) cause Principal or Mortgage Borrower to
(i) dissolve, wind up or liquidate or take any action, or omit to take any
action, as a result of which Principal or Mortgage Borrower would be dissolved,
wound up or liquidated in whole or in part, or (ii) amend, modify, waive or
terminate the certificate of formation or operating agreement of Principal or
Mortgage Borrower, in each case, without obtaining the prior written consent of
Lender.
5.2.4 Change
in Business. Borrower
shall not cause Mortgage Borrower to enter into any line of business other than
the ownership and operation of the Property, or make any material change in the
scope or nature of its business objectives, purposes or operations, or undertake
or participate in activities other than the continuance of its present business.
In addition, Borrower shall not permit or cause Mortgage Borrower to cancel or
otherwise forgive or release any material claim or debt (other than termination
of Leases in accordance herewith) owed to Mortgage Borrower by any Person,
except for adequate consideration and in the ordinary cause of Mortgage
Borrower’s business. Borrower shall not enter into any line of business other
than the ownership of the Collateral, or make any material change in the scope
or nature of its business objectives, purposes or operations, or undertake or
participate in activities other than the continuance of its present
business.
5.2.5 Debt
Cancellation. Borrower
shall not cancel or otherwise forgive or release any claim or debt (other than
termination of Leases in accordance herewith) owed to Borrower by any Person,
except for adequate consideration and in the ordinary course of Borrower’s
business. In addition, Borrower shall not permit or cause Mortgage Borrower to
cancel or otherwise forgive or release any claim or debt (other than termination
of Leases in accordance herewith) owed to Mortgage Borrower by any Person,
except for adequate consideration and in the ordinary course of Mortgage
Borrower’s business.
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5.2.6 Zoning. Borrower
shall not initiate or cause Mortgage Borrower to initiate or consent to any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, in each case, without the prior consent of
Lender.
5.2.7 No
Joint Assessment.
Borrower shall not cause or permit Mortgage Borrower to suffer, permit or
initiate the joint assessment of all or any portion of the Property with
(a) any other real property constituting a tax lot separate from the
Property, or (b) any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the Lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property.
5.2.8 Principal
Place of Business and Organization. Borrower
shall not change its principal place of business set forth in the introductory
paragraph of this Agreement without first giving Lender at least thirty (30)
days prior notice. Borrower shall not change the place of its organization as
set forth in Section 4.1.28 without
the consent of Lender, which consent shall not be unreasonably withheld. Upon
Lender’s request, Borrower shall execute and deliver additional financing
statements, security agreements and other instruments which may be necessary to
effectively evidence or perfect Lender’s security interest in the Property as a
result of such change of principal place of business or place of
organization.
5.2.9 ERISA. (a) Borrower
shall not engage 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 Note, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under ERISA.
(b) Borrower
further covenants and agrees to deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as requested by
Lender in its sole discretion, that (i) Borrower is not an “employee
benefit plan” as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, or a “governmental plan” within the meaning of
Section 3(32) of ERISA; (ii) Borrower is not subject to any state
statute regulating investments of, or fiduciary obligations with respect to,
governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity
interests in Borrower are publicly offered securities, within the meaning of 29
C.F.R. §2510.3-101(b)(2);
(B) Less than
twenty-five percent (25%) of each outstanding class of equity interests in
Borrower is held by “benefit plan investors” within the meaning of 29 C.F.R.
§2510.3-101(f)(2); or
(C) Borrower
qualifies as an “operating company” or a “real estate operating company” within
the meaning of 29 C.F.R. §2510.3-101(c) or (e).
5.2.10 Transfers.
(a) Borrower acknowledges that Lender has examined and relied on the
experience of Borrower and its general partners, members, principals and (if
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Borrower
is a trust) beneficial owners, as applicable, in owning the Collateral in
agreeing to make the Loan, and will continue to rely on Borrower’s ownership of
the Collateral as a means of maintaining the value of the Collateral as security
for repayment of the Debt and the performance of the Other Obligations. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Collateral so as to ensure that, should Borrower default in the repayment of the
Debt or the performance of the Other Obligations contained in the Loan
Documents, Lender can recover the Debt by a sale of the Collateral.
(b) Without
the prior written consent of Lender and except to the extent otherwise set forth
in this Section 5.2.10,
Borrower shall not, and shall not permit any Restricted Party to, (i) sell,
convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with
respect to, or otherwise transfer or dispose of (directly or indirectly,
voluntarily or involuntarily, by operation of law or otherwise, and whether or
not for consideration or of record) the Collateral, the Property or any part
thereof or any legal or beneficial interest therein, or (ii) permit a Sale
or Pledge of an interest in any Restricted Party ((i) and (ii) collectively, a
“Transfer”), other
than pursuant to Leases of space in the Improvements to tenants in accordance
with the provisions of Section 5.1.20
hereof.
(c) A
Transfer shall include, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Collateral or any part thereof for
a price to be paid in installments; (ii) an agreement by Mortgage Borrower
leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Mortgage Borrower’s right, title and
interest in and to any Leases or any Rents; (iii) if a Restricted Party is
a corporation, any merger, consolidation or Sale or Pledge of such corporation’s
stock or the creation or issuance of new stock; (iv) if a Restricted Party
is a limited or general partnership or joint venture, any merger or
consolidation or the change, removal, resignation or addition of a general
partner or the Sale or Pledge of the partnership interest of any general partner
or any profits or proceeds relating to such partnership interest, or the Sale or
Pledge of limited partnership interests or any profits or proceeds relating to
such limited partnership interest or the creation or issuance of new limited
partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the limited liability company interest of a
managing member (or if no managing member, any member) or any profits or
proceeds relating to such limited liability company interest, or the Sale or
Pledge of non-managing limited liability company interests or the creation or
issuance of new non-managing limited liability company interests; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; or (vii) the
removal or the resignation of the managing agent (including, without limitation,
an Affiliated Manager) other than in accordance with Section 5.1.22
hereof.
(d) Notwithstanding
the provisions of this Section
5.2.10, the
following transfers shall not be deemed to be a Transfer and shall not require
Lender’s consent: (i) the sale or transfer, in one or a series of
transactions, of not more than forty-nine percent (49%) of the stock in a
Restricted Party; (ii) the sale or transfer, directly or indirectly, in one
or a series of transactions, of not more than forty-nine percent (49%) of the
limited partnership interests or
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non-managing
limited liability company interests (as the case may be) in a Restricted Party;
provided,
however, that
with respect to each such sale or transfer (A) no such sales or transfers
shall result in the change of voting control in the Restricted Party,
(B) as a condition to each such sale or transfer, Lender shall receive not
less than thirty (30) days prior notice of such proposed sale or transfer,
(C) no such sale or transfer of any direct ownership interests in Borrower
or Mortgage Borrower shall be permitted, (D) Borrower shall pay or cause to
be paid any and all costs imposed or incurred as a result of any such sale or
transfer, including, without limitation, any transfer taxes, and (E) if
after giving effect to any such sale or transfer, more than forty-nine percent
(49%) in the aggregate of direct or indirect interests in a Restricted Party are
owned by any Person and its Affiliates that owned less than forty-nine percent
(49%) direct or indirect interest in such Restricted Party as of the Closing
Date, Borrower shall deliver to Lender an Additional Insolvency Opinion
acceptable to Lender and the Rating Agencies; and (iii) the execution by
Mortgage Borrower of a license agreement and related documents for the operation
of a health club on the Property with a wholly owned taxable reit subsidiary of
the Operating Partnership provided that Mortgage Borrower delivers to Lender an
executed copy of such license agreement and related documents and all fees
payable to Mortgage Borrower arising from such license are deposited into the
Lockbox Account. In addition to the requirements of this Section
5.2.10(d), except
following transfers of the Property permitted pursuant to Section
5.2.10(f), at all
times during the term of the Loan, the Operating Partnership must continue to
control Borrower, Mortgage Borrower and Affiliated Manager and own, directly or
indirectly, at least a fifty-one percent (51%) interest in Borrower, Mortgage
Borrower and Affiliated Manager. The sale, transfer or issuance of stock in the
REIT shall not be deemed a transfer hereunder provided the stock of the REIT is
listed and traded on the New York Stock Exchange or such other nationally
recognized stock exchange.
(e) Lender
shall not be required to demonstrate any actual impairment of its security or
any increased risk of default hereunder in order to declare the Debt immediately
due and payable upon a Transfer without Lender’s written consent. This provision
shall apply to every Transfer regardless of whether voluntary or not, or whether
or not Lender has consented to any previous Transfer.
(f) Notwithstanding
anything to the contrary contained herein, and without limiting any Transfers or
rights under Section
5.2.10(g) hereof,
Lender agrees that it shall not unreasonably withhold its consent to a Transfer
(or to an unlimited number of Transfers) of the Property by Mortgage Borrower
(or the then owner of the Property), provided that the
following terms and conditions are satisfied: (i) Borrower (or the then owner of
the Property) shall have given at least thirty (30) days prior written notice to
Lender of the proposed Transfer and the proposed Transfer shall not be effective
earlier than the date that is twelve (12) months after the first Payment Date,
(ii) no Default, Mortgage Loan Default or Event of Default shall have occurred
or be continuing; (iii) an express assumption of this Agreement, the Note, and
the other Loan Documents by the principals of the proposed transferee of the
Property, and a pledge by the principals of the proposed transferee of all of
their equity interest in the transferee of the Property as security for the Loan
in form and substance satisfactory to Lender, in each case subject to the
provisions of Section
9.4 hereof;
(iv) payment of all of fees and expenses incurred in connection with such
Transfer, including, without limitation, the cost of any third party reports,
legal fees and expenses, Rating Agency fees and expenses or required legal
opinions; (v) payment of a non-refundable $5,000 application fee and an
assumption fee equal to one-quarter of one percent
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(0.25%)
of the Outstanding Principal Balance with respect to the initial transfer and
one-half of one percent (0.50%) of the Outstanding Principal Balance with
respect to each transfer thereafter; (vi) the delivery of an Additional
Insolvency Opinion reflecting the proposed Transfer reasonably satisfactory in
form and substance to Lender; (vii) the proposed transferee’s compliance with
the representations and covenants set forth in Section
4.1.30 and
Section
5.2.9 hereof;
(viii) the delivery of evidence satisfactory to Lender that the single purpose
nature and bankruptcy remoteness of the proposed transferee, and its
shareholders, partners or members, as the case may be, following such Transfer
is in accordance with the then current standards of Lender and the Rating
Agencies; (ix) prior to any release of Guarantor, a substitute guarantor
acceptable to Lender in its sole discretion shall have assumed the Guaranty
executed by Guarantor or executed a replacement guaranty reasonably satisfactory
to Lender; (x) Lender shall have received confirmation in writing from the
Rating Agencies to the effect that such Transfer will not result in a
re-qualification, reduction or withdrawal of the then current rating assigned to
the Securities or any class thereof in any applicable Securitization; (xi) the
satisfaction of all of the conditions set forth in Section 5.2.10(f) of the
Mortgage Loan Agreement; and (xii) the satisfaction of such other conditions as
Lender shall determine in its reasonable discretion to be in the interest of
Lender, including, without limitation, the creditworthiness, reputation and
qualifications of the transferee with respect to the Loan, the Mortgage Loan and
the Property.
(g) A
Transfer that occurs by inheritance, devise or bequest or by operation of law
upon the death or disability of a natural person who holds an indirect interest
in Mortgage Borrower and a Transfer by a natural person of indirect interests in
Mortgage Borrower for estate planning purposes shall not require the consent of
Lender and no transfer fee shall be payable in connection therewith, provided
that, in each case, such Transfer is to a non-minor member of the immediate
family of the holder of such interest, or a trust established for the benefit of
a member of the immediate family of the holder of such interest, and provided
further that, in each case, each of the following transfer conditions are
satisfied:
(i) no Event
of Default shall have occurred and remain uncured;
(ii) Borrower
shall give Lender notice of such Transfer together with copies of all
instruments effecting such transfer not less than ten (10) days prior to the
date of such Transfer, or in the event that any such Transfer or series of
Transfers shall result in any Person that does not own more than a 20% direct or
indirect interest in Mortgage Borrower as of the date hereof owning more than a
20% direct or indirect interest in Mortgage Borrower, Borrower shall give Lender
thirty (30) days prior written notice of such Transfer and Lender shall have an
opportunity to perform its customary credit and background searches with respect
to such transferee, except in the case of the death or disability of an interest
holder, in which event Borrower shall give Lender notice of such Transfer within
ten (10) Business Days after such Transfer;
(iii) no such
Transfer of interest shall result in a change of control of Mortgage Borrower or
Borrower (or its managing member or general partner) or the day to day
operations of the Property, or, if such Transfer would result in a change of
control of Mortgage Borrower or Borrower (or its managing member or general
partner) or the day to day operations of the Property as a result of the death
or disability of an interest holder that is a natural person, Lender
shall have approved in good faith the Person that
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will
control Mortgage
Borrower or Borrower and/or
the day to day operations of the Property;
(iv) the legal
and financial structure of Mortgage Borrower and Borrower and their
shareholders, partners or members, and the single purpose nature and bankruptcy
remoteness of Mortgage Borrower and Borrower and its shareholders, partners or
members, after such Transfer shall satisfy Lender’s then current applicable
underwriting criteria and requirements;
(v) if, after
taking into account any prior Transfers pursuant to this Section
5.2.10(g), whether
to the proposed transferee or otherwise, such Transfer (or series of Transfers)
shall result in (A) the proposed transferee, together with all members of
his/her immediate family or any affiliates thereof, owning in the aggregate
(directly, indirectly or beneficially) more than 49% of the interests in
Mortgage Borrower (or any entity directly or indirectly holding an interest in
Mortgage Borrower), or (B) a Transfer in the aggregate of more than 49% of the
interests in Mortgage Borrower or Borrower as of the date hereof, Borrower shall
deliver to Lender, (y) an Additional Insolvency Opinion reasonable satisfactory
to Lender, and (z) at the request of Lender, written confirmations from the
Rating Agencies that such Transfer or series of Transfers will not result in a
qualification, downgrade or withdrawal of the then applicable ratings of the
Securities; and
(vi) Borrower
shall pay all fees and expenses incurred by Lender in connection with such
Transfer, including, without limitation, the cost of any third party reports,
legal fees and expenses, Rating Agency fees and expenses and required legal
opinions.
(h) Notwithstanding
anything to the contrary contained herein, Operating Partnership, or its
Affiliates, shall have the right to, and may, pledge, without Lender’s consent,
its indirect equity interests in Borrower, other
than any direct interests in Borrower or Mortgage Borrower, to secure (i) a loan
facility or loan facilities to Operating Partnership or its Affiliates
other
than Borrower or Mortgage Borrower, from a group of lenders for which Credit
Suisse First Boston acting through its New York branch will act as initial
administrative and collateral agent and (ii)
related hedging arrangements in connection therewith without Lender’s consent;
provided,
however, that in either case, Operating Partnership or its Affiliates (other
than Borrower or Mortgage Borrower) pledges, directly or indirectly, its equity
interests in substantially all of the property owning subsidiaries in which
Operating Partnership holds a direct or indirect interest, and provided further
that any enforcement action taken pursuant to such pledge shall constitute a
Transfer that is prohibited pursuant to the terms of this Section
5.2.10 and the
holder of such pledge shall be required to comply with all of the applicable
provisions of this Section
5.2.10.
5.2.11 Limitations
on Distributions.
Following the occurrence and during the continuance of an Event of Default,
Borrower shall not make any distributions to its member.
5.2.12 Vacant
Space Master Lease.
Notwithstanding anything to the contrary contained herein, Borrower shall give
to Lender copies of all notices given to Borrower or
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received
by Borrower with respect to the Vacant Space Master Lease. Borrower shall not,
and shall cause Mortgage Borrower to not (i) waive any rights under the Vacant
Space Master Lease, (ii) modify the Rent or other amounts payable under the
Vacant Space Master Lease (except as specifically provided in Section
3.1.19 hereof),
or extend any period for the payment of rent or other amounts under the Vacant
Space Master Lease, or (iii) terminate, cancel accept a surrender of or
otherwise amend or modify the Vacant Space Master Lease, except as specifically
provided in Section
3.1.19 hereof,
without, in each case, the prior written consent of Lender, which consent may be
granted or withheld by Lender in Lender sole discretion.
5.2.13 Intentionally
Omitted.
5.2.14 Other
Limitations. Prior to
the payment in full of the Debt, neither Borrower nor any of its Affiliates
shall, without the prior written consent of Lender (which may be furnished or
withheld at its sole and absolute discretion), give its consent or approval to
any of the following actions or items:
(a) except as
permitted by Lender herein (i) any refinance of the Mortgage Loan,
(ii) any prepayment in full or in part of the Mortgage Loan, (iii) any
Transfer of any or all of the Property or any portion thereof, or (iv) any
action in connection with or in furtherance of the foregoing;
(b) creating,
incurring, assuming or suffering to exist any additional Liens on any portion of
the Property except for Permitted Encumbrances;
(c) any
modification, amendment, consolidation, spread, restatement, waiver or
termination of any of the Mortgage Loan Documents;
(d) approve
the terms of any Annual Budget;
(e) the
distribution to the partners, members or shareholders of Mortgage Borrower of
property other than cash;
(f) except as
set forth in an Approved Annual Budget, any (i) improvement, renovation or
refurbishment of all or any part of the Property to a materially higher standard
or level than that of comparable properties in the same market segment and in
the same geographical area as the Property, (ii) removal, demolition or
material alteration of the improvements or equipment on the Property or
(iii) material increase in the square footage or gross leasable area of the
improvements on the Property if a material portion of any of the expenses in
connection therewith are paid or incurred by Mortgage Borrower;
(g) any
material change in the method of conduct of the business of Borrower or any of
its Affiliates (including the entering into of an operating lease with respect
to any hotel), such consent to be given in the sole discretion of
Lender;
(h) the
settlement of any claim against Borrower or any of its Affiliates, other than a
fully insured third party claim, in any amount greater than $10,000.00 (in the
case of Borrower) or $100,000.00 (in the case of Mortgage Borrower), such
consent to be given in the sole discretion of Lender; or
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(i) except as
required by the Mortgage Loan Documents, any determination to restore the
Property after a Casualty or Condemnation.
5.2.15 Contractual
Obligations. Other
than the Loan Documents, the Mortgage Borrower Company Agreement (and the
initial limited liability company interests in Mortgage Borrower issued pursuant
thereto), neither Borrower nor any of its assets shall be subject to any
Contractual Obligations, and Borrower shall not enter into any agreement,
instrument or undertaking by which it or its assets are bound, except for such
liabilities, not material in the aggregate, that are incidental to its
activities as a regular member of Mortgage Borrower.
5.2.16 Refinancing.
Borrower shall not consent to or permit a refinancing of the Mortgage Loan
unless it obtains the prior consent of Lender, unless the Loan shall be paid in
full in connection with such refinancing and in accordance with this
Agreement.
VI. INSURANCE;
CASUALTY; CONDEMNATION
Section
6.1. Insurance.
(a) Borrower
shall obtain, or for so long as the Mortgage Loan is outstanding, cause
Mortgagor Borrower to maintain, at all times during the term of the Loan the
Policies required under Section 6.1 of the Mortgage Loan Agreement,
including, without limitation, meeting all insurer requirements thereunder,
regardless of whether the Mortgage Loan is outstanding or has been paid in full.
In addition, Borrower shall cause Lender to be named as an additional named
insured under each of the Policies described in Sections 6.1(a)(ii), (v),
(vii), (viii), (ix) and (x) of the Mortgage Loan Agreement. In addition,
Borrower shall cause Lender to be named as a named insured together with
Mortgage Lender, as their interest may appear, under the Policies required under
Sections 6.1(a)(i), (iii), (iv) and (vi) of the Mortgage Loan Agreement.
Borrower shall also cause all insurance policies required under this
Section 6.1 to
provide for at least thirty (30) days prior notice to Lender in the event of
policy cancellation or material changes. Borrower shall provide Lender with
evidence of all such insurance required hereunder on or before the date on which
Mortgage Borrower is required to provide such evidence to Mortgage
Lender.
(b) If at any
time Lender is not in receipt of written evidence that all insurance required
hereunder is in full force and effect, Lender shall have the right, without
notice to Borrower, to take such action as Lender deems necessary to protect its
interest in the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate and all
premiums incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon
demand and shall bear interest at the Default Rate.
Section
6.2. Casualty
and Condemnation.
6.2.1 Casualty. If the
Property shall be damaged or destroyed, in whole or in part, by fire or other
casualty (a “Casualty”),
Borrower shall give prompt notice of such damage to Lender and shall cause
Mortgage Borrower to promptly commence and diligently prosecute the completion
of Restoration so that the Property resembles, as nearly as possible, the
condition the Property was in immediately prior to such Casualty, with such
alterations as may be reasonably approved by Lender and otherwise in accordance
with Section 6.4 of the Mortgage
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Loan
Agreement. Borrower shall pay all costs of such Restoration whether or not such
costs are covered by insurance. Lender may, but shall not be obligated to make
proof of loss if not made promptly by Borrower. In addition, Lender may
participate in any settlement discussions with any insurance companies (and
shall approve any final settlement) with respect to any Casualty in which the
Net Proceeds or the costs of completing Restoration are equal to or greater than
One Million and No/100 Dollars ($1,000,000.00) and Borrower shall deliver to
Lender all instruments reasonably required by Lender to permit such
participation.
6.2.2 Condemnation. Borrower
shall promptly give Lender notice of the actual or threatened commencement of
any proceeding in respect of Condemnation, and shall cause Mortgage Borrower to
deliver to Lender copies of any and all papers served in connection with such
proceedings. Lender may participate in any such proceedings, and Borrower shall
from time to time deliver to Lender all instruments requested by Lender to
permit such participation. Borrower shall, at its expense, diligently prosecute
any such proceedings, and shall consult with Lender, its attorneys and experts,
and cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority through
Condemnation or otherwise (including, but not limited to, any transfer made in
lieu of or in anticipation of the exercise of such taking), Borrower shall
continue to pay the Debt at the time and in the manner provided for its payment
in the Note and in this Agreement and the Debt shall not be reduced until any
Award shall have been actually received and applied by Lender, after the
deduction of expenses of collection, to the reduction or discharge of the Debt.
Lender shall not be limited to the interest paid on the Award by the applicable
Governmental Authority but shall be entitled to receive out of the Award
interest at the rate or rates provided herein or in the Note. If the Property or
any portion thereof is taken by a Governmental Authority, Borrower shall cause
Mortgage Borrower to promptly commence and diligently prosecute Restoration and
otherwise comply with the provisions of Section 6.4 of the Mortgage Loan
Agreement. If the Property is sold, through foreclosure or otherwise, prior to
the receipt by Lender of the Award, Lender shall have the right, whether or not
a deficiency judgment on the Note shall have been sought, recovered or denied,
to receive the Award, or a portion thereof sufficient to pay the Debt.
6.2.3 Restoration.
Borrower
shall, or shall cause Mortgage Borrower to, deliver to Lender all reports,
plans, specifications, documents and other materials that are delivered to
Mortgage Lender under Section 6.4 of the Mortgage Loan Agreement in
connection with the Restoration of the Property after a Casualty or
Condemnation.
VII. RESERVE
FUNDS
Section
7.1. Intentionally
Omitted.
Section
7.2. Tax
and Insurance Escrow Funds.
(a)
Borrower shall pay to Lender (i) on each Payment Date, one-twelfth of the
Taxes that Lender estimates will be payable during the next ensuing twelve (12)
months in order to accumulate with Lender sufficient funds to pay all such Taxes
at least thirty (30) days prior to their delinquency date, and
(ii) (A) on the Closing Date, an amount equal to $61,103.77 (the
“Initial
Blanket Insurance Premium Installment”) and
(B) (1) for so long as the applicable Blanket Insurance Premium
Financing Arrangement (as defined in the Mortgage Loan Agreement) remains in
full force and effect, on each Payment Date, the Financing Installment (as
defined in the Mortgage Loan Agreement for
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the next
occurring payment under the applicable Blanket Insurance Premium Financing
Arrangement and/or (2) with respect to any Insurance Premiums not covered
by a Blanket Insurance Premium Financing Arrangement, on each Payment Date,
one-twelfth of the Insurance Premiums that Lender estimates will be payable for
the renewal of the coverage afforded by the Policies for an annual period upon
the expiration thereof in order to accumulate with Lender sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in the preceding clauses
(i) and
(ii) being
hereinafter called the “Tax
and Insurance Escrow Funds”). Such
amounts will be transferred by Lender to an account held by Lender (the
“Tax
and Insurance Escrow Account”). The
Tax and Insurance Escrow Funds and the Monthly Interest Payment shall be added
together and shall be paid as an aggregate sum by Borrower to Lender. Provided
no Event of Default shall exist, Lender will apply the Tax and Insurance Escrow
Funds to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections
5.1.2 and
6.1 hereof
and/or to payments due to the applicable finance company under the applicable
Blanket Insurance Premium Financing Arrangement, as applicable. In making any
payment relating to the Tax and Insurance Escrow Funds, Lender may do so
according to any xxxx, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums), 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. If the amount of the Tax and Insurance Escrow
Funds shall exceed the amounts due for Taxes and Insurance Premiums pursuant to
Sections
5.1.2 and
6.1 hereof,
Lender shall credit such excess against future payments to be made to the Tax
and Insurance Escrow Funds. Any amount remaining in the Tax and Insurance Escrow
Funds after the Debt has been paid in full shall be returned to Borrower. In
allocating such excess, Lender may deal with the Person shown on the records of
Lender to be the owner of the Property. If at any time Lender determines that
the Tax and Insurance Escrow Funds are not or will not be sufficient to pay the
items set forth in clauses
(i) and
(ii) above,
Lender shall notify Borrower of such determination and Borrower shall increase
its monthly payments to Lender by the amount that Lender estimates is sufficient
to make up the deficiency at least thirty (30) days prior to delinquency of the
Taxes and/or expiration of the Policies, as the case may be. All earnings of
interest on the Tax and Insurance Escrow Funds shall become part of the Tax and
Insurance Escrow Funds and shall be disbursed in accordance with this
Section
7.2. If
Lender so elects at any time, Borrower shall provide, at Borrower’s expense, a
tax service contract for the Term issued by a tax reporting agency acceptable to
Lender. If Lender does not so elect, Borrower shall reimburse Lender for the
cost of making annual tax searches throughout the Term.
(b) Notwithstanding
anything to the contrary contained in this Section
7.2, with
respect to the Initial Blanket Insurance Premium Deposit, and the required
monthly payments required under clause (ii) above through the end of the current
policy year, the parties agree as follows: for the period from the date hereof
through August 1, 2005, the Property will be covered by a blanket insurance
policy as described in Section 6.1(c) of the Mortgage Loan Agreement, but
instead of participating in the Blanket Insurance Premium Financing Arrangement,
Borrower will pay its allocable share of the Insurance Premiums in a single
installment, due approximately thirty (30) days after the date hereof.
Borrower’s allocable share of the annual Insurance Premiums for the blanket
policy for the period from the date hereof through August 1, 2005 is the Initial
Blanket Insurance Premium Deposit. Borrower has deposited the Initial Blanket
Insurance Premium Deposit in the Tax and Insurance Escrow Funds
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on the
date hereof (as set forth in clause
(ii)(A) in the
immediately preceding paragraph). Borrower will notify Lender in writing at
least ten (10) days in advance of the date when such Insurance Premium is due,
whereupon Lender will apply such amount to the payment of Borrower’s allocable
share of the blanket policy Insurance Premium. On the Payment Dates in April,
May, June and July of 2005, Borrower will pay to Lender for deposit in the Tax
and Insurance Escrow Funds the sum of $14,380.23 per month. On each Payment Date
commencing with the Payment Date occurring in August, 2005, Borrower shall make
payments into the Tax and Insurance Escrow Funds as set forth in the preceding
paragraph.
(c) Borrower
shall be relieved of its obligation to make deposits of Tax and Insurance Escrow
Funds under Section 7.2 above,
provided that (i) Mortgage Borrower is required to and does make monthly
deposits to a tax escrow account under the Mortgage Loan, and (ii) Lender
receives evidence acceptable to it of the making of such deposits and of the
payment of all such Taxes.
Section
7.3. Intentionally
Omitted.
Section
7.4. Rollover
Reserve Funds.
In the
event that Rollover Reserve Funds (as defined the Mortgage Loan Agreement) are
transferred to Lender pursuant to Section
7.7 of this
Agreement or Section 3.1(b) of the Mezzanine Cash Management Agreement, the
amounts so transferred shall be held and disbursed by Lender and Borrower shall
make additional contributions to the Rollover Reserve Funds in accordance with
the provisions of Section 7.4 of the Mortgage Loan Agreement, as in effect on
the Closing Date, whether on not the Mortgage Loan Agreement has been
terminated. All such amounts so deposited shall hereinafter be referred to as
“Rollover
Reserve Funds” and the
account in which such amounts are held shall hereinafter be referred to as the
“Rollover
Reserve Account”.
Section
7.5. Alaris
Reserve Funds.
In the
event that Alaris Reserve Funds (as defined the Mortgage Loan Agreement) are
transferred to Lender pursuant to Section
7.7 of this
Agreement or Section 3.1(b) of the Mezzanine Cash Management Agreement, the
amounts so transferred shall be held and disbursed by Lender and Borrower shall
make additional contributions to the Alaris Reserve Funds in accordance with the
provisions of Section 7.5 of the Mortgage Loan Agreement, as in effect on the
Closing Date, whether on not the Mortgage Loan Agreement has been terminated,
provided,
however, that
for purposes of such Section 7.5, the term “Excess Cash Flow” used therein shall
mean Excess Cash Flow as defined in this Agreement. All such amounts so
deposited shall hereinafter be referred to as “Alaris
Reserve
Funds” and the
account in which such amounts are held shall hereinafter be referred to as the
“Alaris
Reserve Account”.
Section
7.6. Reserve
Funds, Generally.
(a) Borrower
grants to Lender a first-priority perfected security interest in all of the
Reserve Funds and any and all monies now or hereafter deposited in each reserve
account as additional security for payment of the Debt. Until expended or
applied in accordance herewith, the Reserve Funds shall constitute additional
security for the Debt. Upon the occurrence and during the continuance of an
Event of Default, Lender may, in addition to any and all other rights and
remedies available to Lender, apply any sums then present in any or all of the
Reserve Funds to the payment of the Debt in any order in
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its sole
discretion. The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender.
(b) Borrower
shall not, without obtaining the prior consent of Lender, further pledge, assign
or grant any security interest in any Reserve Fund or the monies deposited
therein or permit any lien or encumbrance to attach thereto, or any levy to be
made thereon, or any UCC-1 Financing Statements, except those naming Lender as
the secured party, to be filed with respect thereto.
(c) The
Reserve Funds shall be held in an Eligible Account and shall bear interest at a
money market rate selected by Lender. Provided that no Event of Default shall
have occurred and be continuing, all interest or other earnings on any of the
Reserve Funds (with the exception of the Tax and Insurance Escrow Funds, which
shall belong to Lender) shall be added to and become a part of such Reserve
Funds and shall be disbursed in the same manner as other monies comprising such
Reserve Funds. Borrower
shall have the right to direct Lender to invest sums on deposit in the Eligible
Account in Permitted Investments provided that
(i) such investments are then regularly offered by Lender for accounts of
this size, category and type, (ii) such investments are permitted by
applicable federal, state and local rules, regulations and laws, (iii) the
maturity date of the Permitted Investment is not later than the date on which
the applicable Reserve Funds are required for payment of an obligation for which
such Reserve Funds were created, and (iv) no Event of Default shall have
occurred and be continuing. Borrower shall be responsible for payment of any
federal, state or local income or other tax applicable to the interest or income
earned on the Reserve Funds. No other investments of the Reserve Funds shall be
permitted except as set forth in this Section 7.6.
Borrower shall bear all reasonable costs associated with the investment of the
sums in the account in Permitted Investments. Such costs shall be deducted from
the income or earnings on such investment, if any, and to the extent such income
or earnings shall not be sufficient to pay such costs, such costs shall be paid
by Borrower promptly on demand by Lender. Lender shall have no liability for the
rate of return earned or losses incurred on the investment of the sums in
Permitted Investments.
(d) Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and
costs and expenses (including, without limitation, litigation costs and
reasonable attorneys fees and expenses) arising from or in any way connected
with the Reserve Funds or the performance of the obligations for which the
Reserve Funds were established. Borrower shall assign to Lender all rights and
claims Borrower may have against all Persons supplying labor, materials or other
services which are to be paid from or secured by the Reserve Funds; provided,
however, that
Lender may not pursue any such right or claim unless an Event of Default has
occurred and remains uncured.
Section
7.7. Transfer
of Reserve Funds Under Mortgage Loan. If
Mortgage Lender waives any reserves or escrow accounts required in accordance
with the terms of the Mortgage Loan Agreement which reserves or escrow accounts
are also required in accordance with the terms of this Article VII, or if
the Mortgage Loan is refinanced or paid off in full (without a prepayment of the
Loan) and Reserve Funds that are required hereunder are not required under the
new mortgage loan, if any, then Borrower shall cause any amounts that would
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have been
deposited into any reserves or escrow accounts in accordance with the terms of
the Mortgage Loan Agreement to be transferred to and deposited with Lender in
accordance with the terms of this Article VII (and
Borrower shall enter into a cash management and lockbox agreement for the
benefit of Lender substantially similar to the arrangement entered into between
Mortgage Borrower and Mortgage Lender at the time of the closing of the Mortgage
Loan), and, if any letters of credit have been substituted by Mortgage Borrower
for any such reserves or escrows as may be specifically permitted by the
Mortgage Loan Agreement, then Borrower shall also cause such letters of credit
to be transferred to Lender to be held by Lender upon the same terms and
provisions as set forth in the Mortgage Loan Agreement.
VIII. DEFAULTS
Section
8.1. Event
of Default.
(a) Each
of the following events shall constitute an event of default hereunder (an
“Event
of Default”):
(i) if any
portion of the Debt is not paid when due;
(ii) subject
to Borrower’s right to contest as provided herein, if any of the Taxes or Other
Charges are not paid when the same are due and payable, unless, with respect to
the payment of Taxes (a) sums equaling the amount of the Taxes then payable have
been delivered to Lender in accordance with Section
7.2, (b) no
Event of Default shall have occurred and be continuing, and (c) there is no
restriction of Lender’s release of the Tax and Insurance Escrow
Funds;
(iii) if the
Policies are not kept in full force and effect, or if certified copies of the
Policies are not delivered to Lender upon request;
(iv) if
Borrower Transfers or otherwise encumbers any portion of the Property or the
Collateral without Lender’s prior written consent in violation of the provisions
of this Agreement or the Pledge Agreement or any other Loan Document or any
Transfer is made in violation of the provisions of Section 5.2.10
hereof;
(v) if any
representation or warranty made by Borrower herein or in any other Loan
Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made;
(vi) if
Mortgage Borrower, Borrower, Principal or Guarantor shall make an assignment for
the benefit of creditors;
(vii) if a
receiver, liquidator or trustee shall be appointed for Mortgage Borrower,
Borrower, Principal or Guarantor, or if Mortgage Borrower, Borrower, Principal
or Guarantor shall be adjudicated bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by Mortgage Borrower, Borrower, Principal or Guarantor, or if any
proceeding for the dissolution or liquidation of Mortgage Borrower, Borrower,
Principal or Guarantor shall
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be
instituted; provided,
however, that if
such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Mortgage Borrower, Borrower, Principal or Guarantor, the same
shall constitute an Event of Default hereunder only upon the same not being
discharged, stayed or dismissed within sixty (60) days;
(viii) if
Borrower attempts to assign its rights under this Agreement or any of the other
Loan Documents or any interest herein or therein in contravention of the Loan
Documents;
(ix) if
Borrower breaches any of its respective negative covenants contained in
Section 5.2 or any
covenant contained in Section 4.1.30 or
Section 5.1.11
hereof;
(x) with
respect to any term, covenant or provision set forth herein which specifically
contains a notice requirement or grace period, if Borrower shall be in default
under such term, covenant or condition after the giving of such notice or the
expiration of such grace period;
(xi) if any of
the assumptions contained in the Insolvency Opinion delivered to Lender in
connection with the Loan, or in any Additional Insolvency Opinion delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect;
(xii) if a
material default has occurred and continues beyond any applicable cure period
under the Management Agreement (or any Replacement Management Agreement), which
default permits Manager thereunder to terminate or cancel the Management
Agreement (or any Replacement Management Agreement);
(xiii) if,
pursuant to the terms of this Agreement, Borrower is required to deliver a
Replacement Interest Rate Cap Agreement to Lender and fails to deliver a
confirmation evidencing the purchase of such Replacement Interest Rate Cap
Agreement not later than the date on which such Replacement Interest Rate Cap
was required to be purchased;
(xiv) if
Borrower shall continue to be in Default under any of the Other Obligations not
specified in subsections (i) through
(xiii) above,
for ten (10) days after notice to Borrower from Lender, in the case of any
Default which can be cured by the payment of a sum of money, or for thirty (30)
days after notice from Lender in the case of any other Default; provided,
however, that if
such non-monetary Default is susceptible of cure but cannot reasonably be cured
within such thirty (30) day period and, provided further, that
Borrower shall have commenced to cure such Default within such thirty (30) day
period and thereafter diligently and expeditiously proceeds to cure the same,
such thirty (30) day period shall be extended for such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed sixty (60) days;
(xv) if there
shall be default under any of the other Loan Documents beyond any applicable
cure periods contained in such documents, whether as to Borrower
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or any of
the Collateral, or if any other such event shall occur or condition shall exist,
if the effect of such event or condition is to accelerate the maturity of any
portion of the Debt or to permit Lender to accelerate the maturity of all or any
portion of the Debt;
(xvi) if the
Liens created pursuant to any Loan Document shall cease to be a fully perfected
enforceable first priority security interest or any portion of the Collateral is
Transferred without Lender’s prior written consent;
(xvii) if there
shall exist an event of default under the Vacant Space Master Lease beyond any
applicable notice and/or cure period contained therein, if the Vacant Space
Master Lease shall have been amended or modified without Lender’s prior written
consent, except as specifically provided in Section 3.1.19 hereof, if the Vacant
Space Master Lease shall have been terminated, cancelled or surrendered without
Lender’s prior written consent, or if the Operating Partnership is the subject
of a Bankruptcy Action; or
(xviii) if a
Mortgage Loan Event of Default shall occur.
(b) Upon the
occurrence of an Event of Default (other than an Event of Default described in
clauses (vi), (vii) or (viii) above) and at any time thereafter, in
addition to any other rights or remedies available to it pursuant to this
Agreement and the other Loan Documents or at law or in equity, Lender may take
such action, without notice or demand, that Lender deems advisable to protect
and enforce its rights against Borrower and in and to the Collateral, including,
without limitation, declaring the Debt to be immediately due and payable, and
Lender may enforce or avail itself of any or all rights or remedies provided in
the Loan Documents and may exercise all the rights and remedies of a secured
party under the Uniform Commercial Code, as adopted and enacted by the State or
States where any of the Collateral is located against Borrower and the
Collateral, including, without limitation, all rights or remedies available at
law or in equity; and upon the occurrence of any Event of Default described in
clauses (vi), (vii) or (viii) above, the Debt and all Other Obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
Section
8.2. Remedies.
(a) Upon the occurrence of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to all or any of the Collateral. Any such actions taken by Lender shall
be cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is
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continuing,
to the extent permitted by applicable law, (i) Lender shall not be subject
to any “one action” or “election of remedies” law or rule, and (ii) all
liens and other rights, remedies or privileges provided to Lender shall remain
in full force and effect until Lender has exhausted all of its remedies against
the Collateral and the Collateral has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Debt or the Debt has been paid in
full.
(b) With
respect to Borrower and the Collateral, nothing contained herein or in any other
Loan Document shall be construed as requiring Lender to resort to any portion of
the Collateral for the satisfaction of any of the Debt in any preference or
priority to any other portion of the Collateral, and Lender may seek
satisfaction out of all of the Collateral or any part thereof, in its absolute
discretion in respect of the Debt. Lender shall have the right from time to time
to partially foreclose upon the Collateral in any manner and for any amounts
secured by the Pledge Agreement then due and payable as determined by Lender in
its sole discretion including, without limitation, the following circumstances:
(i) in the event Borrower defaults beyond any applicable grace period in
the payment of one or more scheduled payments of principal and interest, Lender
may foreclose upon the Collateral to recover such delinquent payments or
(ii) in the event Lender elects to accelerate less than the entire
Outstanding Principal Balance, Lender may foreclose upon the Collateral to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Collateral as Lender may elect.
Notwithstanding one or more partial foreclosures, the Collateral shall remain
subject to the Pledge Agreement and the other Loan Documents to secure payment
of sums secured by the Pledge Agreement and the other Loan Documents and not
previously recovered.
(c) Lender
shall have the right from time to time to sever the Note and the other Loan
Documents into one or more separate notes, pledges and other security documents
(the “Severed
Loan Documents”) in
such denominations as Lender shall determine in its sole discretion for purposes
of evidencing and enforcing its rights and remedies provided hereunder. Borrower
shall execute and deliver to Lender from time to time, promptly after the
request of Lender, a severance agreement and such other documents as Lender
shall request in order to effect the severance described in the preceding
sentence, all in form and substance reasonably satisfactory to Lender. Borrower
hereby absolutely and irrevocably appoints Lender as its true and lawful
attorney, coupled with an interest, in its name and stead to make and execute
all documents necessary or desirable to effect the aforesaid severance, Borrower
ratifying all that its said attorney shall do by virtue thereof; provided,
however, Lender
shall not make or execute any such documents under such power until three (3)
days after notice has been given to Borrower by Lender of Lender’s intent to
exercise its rights under such power. Except as may be required in connection
with a Securitization pursuant to Section 9.1 hereof,
(i) Borrower shall not be obligated to pay any costs or expenses incurred
in connection with the preparation, execution, recording or filing of the
Severed Loan Documents, and (ii) the Severed Loan Documents shall not
contain any representations, warranties or covenants not contained in the Loan
Documents and any such representations and warranties contained in the Severed
Loan Documents will be given by Borrower only as of the Closing
Date.
(d) Any
amounts recovered from the Collateral after an Event of Default may be applied
by Lender toward the payment of any interest and/or principal of the Loan and/or
any other amounts due under the Loan Documents in such order, priority and
proportions as Lender in its sole discretion shall determine.
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(e) 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 or being
deemed to have cured any Event of Default hereunder, make, do or perform any
obligation of Borrower hereunder in such manner and to such extent as Lender may
deem necessary. Borrower shall cause Mortgage Borrower to permit Lender to enter
upon the Property for such purposes, or appear in, defend, or bring any action
or proceeding to protect its interest in the Property for such purposes, and the
cost and expense thereof (including reasonable attorneys’ fees to the extent
permitted by law), with interest as provided in this Section 8.2, shall
constitute a portion of the Debt and shall be due and payable to Lender upon
demand. All such costs and expenses incurred by Lender in remedying such Event
of Default or such failed payment or act or in appearing in, defending, or
bringing any action or proceeding shall bear interest at the Default Rate, for
the period after such cost or expense was incurred into the date of payment to
Lender. All such costs and expenses incurred by Lender together with interest
thereon calculated at the Default Rate shall be deemed to constitute a portion
of the Debt and be secured by the liens, claims and security interests provided
to Lender under the Loan Documents and shall be immediately due and payable upon
demand by Lender therefore.
(f) The
rights, powers and remedies of Lender under this Agreement shall be cumulative
and not exclusive of any other right, power or remedy which Lender may have
against Borrower pursuant to this Agreement or the other Loan Documents, or
existing at law or in equity or otherwise. Lender’s rights, powers and remedies
may be pursued singularly, concurrently or otherwise, at such time and in such
order as Lender may determine in Lender’s sole discretion. No delay or omission
to exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or Event of
Default with respect to Borrower shall not be construed to be a waiver of any
subsequent Default or Event of Default by Borrower or to impair any remedy,
right or power consequent thereon.
(g) For the
purpose of carrying out the provisions and exercising the rights, powers and
privileges granted in this Section 8.2,
Borrower hereby irrevocably constitutes and appoints Lender its true and lawful
attorney-in-fact to execute, acknowledge and deliver any instruments and do and
perform any acts such as are referred to in this subsection in the name and on
behalf of Borrower. This power of attorney is a power coupled with an interest
and cannot be revoked.
IX. SPECIAL
PROVISIONS
Section
9.1. Sale
of Note and Securitization. (a)
Borrower acknowledges and agrees that Lender may sell all or any portion of the
Loan and the Loan Documents, or issue one or more participations therein, or
consummate one or more private or public securitizations of rated single- or
multi-class securities (the “Securities”)
secured by or evidencing ownership interests in all or any portion of the Loan
and the Loan Documents or a pool of assets that include the Loan and the Loan
Documents (such sales, participations and/or securitizations, collectively, a
“Securitization”). At
the request of Lender, and to the extent not already required to be provided by
Borrower under this Agreement, Borrower shall use reasonable efforts to provide
information not in the possession of Lender or which may be reasonably required
by
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Lender in
order to satisfy the market standards to which Lender customarily adheres or
which may be reasonably required by prospective investors and/or the Rating
Agencies in connection with any such Securitization including, without
limitation, to:
(i) provide
or cause Mortgage Borrower to provide additional and/or updated Provided
Information, together with appropriate verification and/or consents related to
the Provided Information through letters of auditors or opinions of counsel of
independent attorneys reasonably acceptable to Lender and the Rating
Agencies;
(ii) assist in
preparing descriptive materials for presentations to any or all of the Rating
Agencies, and work with, and if requested, supervise, third-party service
providers engaged by Borrower, Principal and their respective affiliates to
obtain, collect, and deliver information requested or required by Lender or the
Rating Agencies;
(iii) deliver
(A) updated opinions of counsel as to non-consolidation, due execution and
enforceability with respect to the Property, Mortgage Borrower, Borrower,
Principal, Guarantor and their respective Affiliates and the Loan Documents, and
(B) revised organizational documents for Borrower, which counsel opinions
and organizational documents shall be reasonably satisfactory to Lender and the
Rating Agencies;
(iv) if
required by any Rating Agency, use commercially reasonable efforts to deliver
such additional tenant estoppel letters, subordination agreements or other
agreements from parties to agreements that affect the Property, which estoppel
letters, subordination agreements or other agreements shall be reasonably
satisfactory to Lender and the Rating Agencies;
(v) make such
representations and warranties as of the closing date of the Securitization with
respect to the Collateral, Borrower, Principal, Guarantor, Mortgage Borrower,
the Property and the Loan Documents as may be reasonably requested by Lender or
the Rating Agencies and consistent with the facts covered by such
representations and warranties as they exist on the date thereof, including the
representations and warranties made in the Loan Documents;
(vi) execute
such amendments to the Loan Documents as may be requested by Lender or the
Rating Agencies to effect the Securitization and/or deliver one or more new
component notes to replace the original Note or modify the original Note, this
Agreement and the other Loan Documents to reflect multiple components of the
Loan (and such new notes or modified Note shall have the same initial weighted
average coupon of the original Note and provide for the same total amortization
payments, but each such new notes or modified Note may have different interest
rates and provide for varying amortization payments), and modify the Cash
Management Agreement with respect to the newly created components such that the
pricing and marketability of the Securities and the size of each class of
Securities and the rating assigned to each such class by the Rating Agencies
shall provide the most favorable rating levels and achieve the optimum rating
levels for the Loan; provided,
however, that
Borrower shall not be required to modify any of the Loan Documents if such
modification or amendment would
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(i) have
a material adverse economic effect on Borrower or (ii) modify or amend the Loan
term, amortization or any other economic term of the Loan or otherwise
materially adversely increase the obligations or materially decrease the rights
of Borrower under the Loan Documents, including, without limitation, modifying
the transfer, recourse, prepayment, events of default, or remedy provisions, or
the organizational documents of Borrower or its Affiliates;
(vii) if
requested by Lender, review any information regarding the Property, Borrower,
Principal, Guarantor, Manager, Mortgage Borrower, the Collateral and the Loan
which is contained in a preliminary or final private placement memorandum,
prospectus, prospectus supplement (including any amendment or supplement to
either thereof), or other disclosure document to be used by Lender or any
affiliate thereof; and
(viii) supply to
Lender such documentation, financial statements and reports as may be in the
possession or control of Borrower or its Affiliates in form and substance
required in order to comply with any applicable securities laws.
(b) All
reasonable third party costs and expenses incurred by Borrower in connection
with Borrower complying with requests made under this Section
9.1
(including, without limitation, the fees and expenses of the Rating Agencies)
shall be paid by Borrower, except that Lender shall reimburse Borrower for all
such costs and expenses in excess of $25,000.00.
Section
9.2. Securitization
Indemnification.
(a) Borrower understands that certain of the Provided Information may
be included in Disclosure Documents in connection with the Securitization and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the “Securities
Act”), or
the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects.
(b) The
Indemnifying Persons agree to provide, in connection with the Securitization, an
indemnification agreement (i) certifying that (A) the Indemnifying Persons
have carefully examined such sections of the Disclosure Documents regarding the
Property, Borrower, Manager and/or the Loan (to the extent such information
relates to or includes any Provided Information) (collectively with the Provided
Information, the “Covered
Disclosure Information”) and (B)
that the Covered Disclosure Information does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, (ii) jointly and severally indemnifying Lender, any Affiliate of
Lender that has filed any registration statement relating to the Securitization
or has acted as the sponsor or depositor in connection with the Securitization,
any Affiliate of Lender that acts as an underwriter, placement agent or initial
purchaser of Securities issued in the Securitization, any other co-underwriters,
co-
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placement
agents or co-initial purchasers of Securities issued in the Securitization, and
each of their respective officers, directors, partners, employees,
representatives, agents and Affiliates and each Person or entity who controls
any such Person within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, an “Indemnified
Person” and
collectively, the
“Indemnified
Persons”), for
any losses, claims, damages, liabilities, costs or expenses (including, without
limitation, legal fees and expenses for enforcement of these obligations
(collectively, the “Liabilities”) to
which any such Indemnified Person may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any of the Disclosure Documents, but only to
the extent based upon Provided Information, and which untrue statement or
alleged untrue statement is not expressly disclosed to Lender by Borrower after
Borrower has had an opportunity to review the Disclosure Document, or arise out
of or are based upon the omission or alleged omission to state in the Provided
Information a material fact required to be stated therein or necessary in order
to make the statements in the Provided Information, in light of the
circumstances under which they were made, not misleading, and (iii) agreeing to
reimburse each Indemnified Person for any legal or other expenses incurred by
such Indemnified Person, as they are incurred, in connection with investigating
or defending the Liabilities. This indemnity agreement will be in addition to
any liability which Borrower may otherwise have. Moreover, the indemnification
provided for in clauses (ii) and (iii) above shall be effective whether or not a
separate indemnification agreement described in clause (i) above is
provided.
(c) In
connection with filings under the Exchange Act, the Indemnifying Persons jointly
and severally agree to indemnify (i) the Indemnified Persons for Liabilities to
which any such Indemnified Person may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact in the Provided Information, or the omission or alleged
omission to state in the Provided Information a material fact required to be
stated therein or necessary in order to make the statements in the Provided
Information, in light of the circumstances under which they were made, not
misleading, and which untrue statement or alleged untrue statement is not
expressly disclosed to Lender by Borrower after Borrower has had an opportunity
to review such filing under the Exchange Act, and (ii) to reimburse each
Indemnified Person for any reasonable legal or other expenses incurred by such
Indemnified Persons, as they are incurred, in connection with defending or
investigating the Liabilities.
(d) Promptly
after receipt by an Indemnified Person of notice of any claim or the
commencement of any action, the Indemnified Person shall, if a claim in respect
thereof is to be made against any Indemnifying Person, notify such Indemnifying
Person in writing of the claim or the commencement of that action; provided,
however, that
the failure to notify such Indemnifying Person shall not relieve it from any
liability which it may have under the indemnification provisions of this
Section 9.2 except
to the extent that it has been materially prejudiced by such failure and,
provided
further that the
failure to notify such Indemnifying Person shall not relieve it from any
liability which it may have to an Indemnified Person otherwise than under the
provisions of this Section 9.2. If any
such claim or action shall be brought against an Indemnified Person, and it
shall notify any Indemnifying Person thereof, such Indemnifying Person shall be
entitled to participate therein and, to the extent that it wishes, assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Person.
After notice from any Indemnifying Person to the Indemnified Person of its
election to assume
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the
defense of such claim or action, such Indemnifying Person shall not be liable to
the Indemnified Person for any legal or other expenses subsequently incurred by
the Indemnified Person in connection with the defense thereof except as provided
in the following sentence; provided, however, if the defendants in any such
action include both an Indemnifying Person, on the one hand, and one or more
Indemnified Persons on the other hand, and an Indemnified Person shall have
reasonably concluded that there are any legal defenses available to it and/or
other Indemnified Persons that are different or in addition to those available
to the Indemnifying Person, the Indemnified Person or Persons shall have the
right to select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Person
or Persons. The Indemnified Person shall instruct its counsel to maintain
reasonably detailed billing records for fees and disbursements for which such
Indemnified Person is seeking reimbursement hereunder and shall submit copies of
such detailed billing records to substantiate that such counsel’s fees and
disbursements are solely related to the defense of a claim for which the
Indemnifying Person is required hereunder to indemnify such Indemnified Person.
No Indemnifying Person shall be liable for the expenses of more than one (1)
such separate counsel unless such Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to another Indemnified
Person.
(e) Without
the prior consent of Lender (which consent shall not be unreasonably withheld),
no Indemnifying Person shall settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless the Indemnifying Person shall have given Lender reasonable
prior notice thereof and shall have obtained an unconditional release of each
Indemnified Person hereunder from all liability arising out of such claim,
action, suit or proceeding. As long as an Indemnifying Person has complied with
its obligations to defend and indemnify hereunder, such Indemnifying Person
shall not be liable for any settlement made by any Indemnified Person without
the consent of such Indemnifying Person (which consent shall not be unreasonably
withheld).
(f) The
Indemnifying Persons agree that if any indemnification or reimbursement sought
pursuant to this Section 9.2 is
finally judicially determined to be unavailable for any reason or is
insufficient to hold any Indemnified Person harmless (with respect only to the
Liabilities that are the subject of this Section 9.2), then
the Indemnifying Persons, on the one hand, and such Indemnified Person, on the
other hand, shall contribute to the Liabilities for which such indemnification
or reimbursement is held unavailable or is insufficient: (x) in such
proportion as is appropriate to reflect the relative benefits to the
Indemnifying Persons, on the one hand, and such Indemnified Person, on the other
hand, from the transactions to which such indemnification or reimbursement
relates; or (y) if the allocation provided by clause (x) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (x) but also the relative
faults of the Indemnifying Persons, on the one hand, and all Indemnified
Persons, on the other hand, as well as any other equitable considerations.
Notwithstanding the provisions of this Section 9.2,
(A) no party found liable for a fraudulent misrepresentation shall be
entitled to contribution from any other party who is not also found liable for
such fraudulent misrepresentation, and (B) the Indemnifying Persons agree
that in no event shall the amount to be contributed by the
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Indemnified
Persons collectively pursuant to this paragraph exceed the amount of the fees
(by underwriting discount or otherwise) actually received by the Indemnified
Persons in connection with the closing of the Loan or the
Securitization.
(g) The
Indemnifying Persons agree that the indemnification, contribution and
reimbursement obligations set forth in this Section 9.2 shall
apply whether or not any Indemnified Person is a formal party to any lawsuits,
claims or other proceedings. The Indemnifying Persons further agree that the
Indemnified Persons are intended third party beneficiaries under this
Section 9.2.
(h) The
rights, liabilities and obligations of the Indemnified Persons and the
Indemnifying Persons under this Section 9.2 shall
survive the termination of this Agreement and the satisfaction and discharge of
the Debt.
(i) Notwithstanding
anything to the contrary contained herein, Borrower shall have no obligation to
act as depositor with respect to the Loan or an issuer or registrant with
respect to the Securities issued in any Securitization.
Section
9.3. Intentionally
Omitted.
Section
9.4. Exculpation.
Subject
to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower (or any of Borrower’s members, managers, partners,
shareholders, or Affiliates, whether direct or indirect, collectively, the
“Borrower
Parties”) to
perform and observe the obligations contained in the Note, this Agreement, the
Pledge Agreement or the other Loan Documents by any action or proceeding wherein
a money judgment shall be sought against Borrower, except that Lender may bring
a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Pledge Agreement and the other
Loan Documents, or in the Collateral, or any other collateral given to Lender
pursuant to the Loan Documents; provided,
however, that,
except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Borrower or the Borrower Parties only to
the extent of Borrower’s or the Borrower Parties’ interest in the Collateral and
in any other collateral given to Lender, and Lender, by accepting the Note, this
Agreement, the Pledge Agreement and the other Loan Documents, agrees that it
shall not xxx for, seek or demand any deficiency judgment against Borrower or
the Borrower Parties in any such action or proceeding under, or by reason of, or
in connection with, the Note, this Agreement, the Pledge Agreement or the other
Loan Documents. The provisions of this Section shall not, however,
(a) constitute a waiver, release or impairment of any obligation evidenced
or secured by any of the Loan Documents; (b) impair the right of Lender to
name Borrower as a party defendant in any action or suit for foreclosure and
sale under the Pledge Agreement; (c) affect the validity or enforceability
of or any guaranty made in connection with the Loan or any of the rights and
remedies of Lender thereunder; (d) impair the right of Lender to obtain the
appointment of a receiver; (e) constitute a prohibition against Lender to
seek a deficiency judgment against Borrower in order to fully realize the
security granted by the Pledge Agreement or to commence any other appropriate
action or proceeding in order for Lender to exercise its remedies against the
Collateral; (f) impair the enforcement of the Assignment of Leases and
Rents; or (g) constitute a waiver of the right of Lender to enforce the
liability and
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obligation
of Borrower, by money judgment or otherwise, to the extent of any actual loss,
damage, cost, expense, liability, claim or other obligation incurred by Lender
(including, without limitation, attorneys’ fees and costs reasonably incurred),
arising out of or in connection with the following:
(i) fraud or
intentional misrepresentation by Borrower or Guarantor in connection with the
Loan, including by reason of any claim under RICO;
(ii) the gross
negligence or willful misconduct of Borrower, Mortgage Borrower, Guarantor,
Principal or any other Restricted Party;
(iii) the
breach of any representation, warranty, covenant or indemnification provision in
the Environmental Indemnity concerning environmental laws, hazardous substances
or asbestos and any indemnification of Lender with respect thereto in any Loan
Document;
(iv) wrongful
removal or destruction by Borrower or any Affiliate of Borrower, of any portion
of the Property or the Collateral after the occurrence of an Event of Default or
any intentional physical waste of the Property by Borrower of any Affiliate
thereof, provided,
however, that
such physical waste shall exclude wear and tear to the Property that occurs in
the ordinary course of business of the Property;
(v) any Legal
Requirement (including RICO) mandating the forfeiture by Borrower or Mortgage
Borrower of the Property or the Collateral, or any portion thereof, because of
the conduct or purported conduct of criminal activity by Borrower or any
Restricted Party in connection therewith;
(vi) any
misrepresentation, miscertification or breach of warranty by Borrower or
Guarantor with respect to any representation, warranty or certification
contained in this Agreement or any other Loan Document or in any document
executed in connection therewith, pursuant to any of the Loan Documents or
otherwise to induce Lender to make the Loan, or any advance thereof, or to
release monies from any account held by Lender (including any reserve or escrow)
or to take other action with respect to the Collateral (as defined in the
Mortgage);
(vii) the
misappropriation or conversion by Borrower or Mortgage Borrower of (A) any
Net Liquidation Proceeds or Insurance Proceeds, (B) any Awards received in
connection with a Condemnation, (C) any Rents following an Event of Default
or any Rents paid more than one (1) month in advance; or (D) any
distribution or other payments made in connection with any part of the
Collateral provided such amounts are not applied to the payment of the Loan or
the Operating Expenses of the Property;
(viii) failure
to pay charges for labor or materials or other charges that can create Liens on
any portion of the Property that are superior to the Lien of the Mortgage,
unless such charges are being contested in accordance herewith;
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(ix) any
security deposits, advance deposits or any other deposits collected by Borrower,
Mortgage Borrower or any Affiliate thereof with respect to the Property which
are not delivered to Lender upon a foreclosure of the Property or action in lieu
thereof, except to the extent any such security deposits were applied in
accordance with the terms and conditions of any of the Leases prior to the
occurrence of the Event of Default that gave rise to such foreclosure or action
in lieu thereof;
(x) any
breach of any representation, warrant or covenant contained in Section 3 of
the Pledge Agreement;
(xi) if
Borrower or Mortgage Borrower fails to permit on-site inspections of the
Property, fails to provide financial information specifically required by this
Agreement or fails to appoint a new property manager upon the request of Lender,
each as required by, and in accordance with the terms and provisions of this
Agreement or the other Loan Documents; or
(xii) if the
Operating Partnership shall default under the Vacant Space Master Lease beyond
any applicable notice and/or cure period contained therein, if the Vacant Space
Master Lease shall have been amended or modified (except as specifically
provided in Section
3.1.19 hereof),
without Lender’s prior written consent or if the Vacant Space Master Lease shall
have been terminated, cancelled or surrendered (except as specified in
Section
3.1.19 hereof)
without Lender’s prior written consent, or if the Operating Partnership is the
subject of a Bankruptcy Action, other than an involuntary Bankruptcy Action
which is dismissed within ninety (90) days.
Notwithstanding
anything to the contrary in this Agreement, the Note or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Debt secured by the Pledge Agreement or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan
Documents, and (B) Borrower shall be personally liable for the payment of
the Debt (1) in the event of: (a) Borrower or Mortgage Borrower filing
a voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) Borrower or Mortgage Borrower filing an
answer consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other Person under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, or soliciting or causing to
be solicited petitioning creditors for any involuntary petition from any Person;
(c) Borrower or Mortgage Borrower consenting to or acquiescing in or
joining in an application for the appointment of a custodian, receiver, trustee,
or examiner for Borrower or Mortgage Borrower or any portion of the Property or
the Collateral; or (d) Borrower or Mortgage Borrower making an assignment
for the benefit of creditors, or admitting, in writing or in any legal
proceeding, its insolvency or inability to pay its debts as they become due;
(2) if the first Monthly Interest Payment is not paid when due; (3) if
Borrower or Mortgage Borrower fails to maintain its status as a Special Purpose
Entity as required by and in accordance with the terms of this Agreement and
there is a substantive consolidation of Borrower or Mortgage Borrower with any
other Person; (4) if Borrower fails to obtain Lender’s prior consent to any
Indebtedness or voluntary Lien encumbering the Property as
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required
by this Agreement; or (5) if Borrower fails to obtain Lender’s prior
consent to any Transfer as required by this Agreement or the
Mortgage.
Section
9.5. Matters
Concerning Manager. If
(a) an Event of Default occurs and is continuing, (b) Manager shall
become bankrupt or insolvent or (c) a material default occurs under the
Management Agreement beyond any applicable grace and cure periods, Borrower
shall, at the request of Lender, terminate the Management Agreement and replace
Manager with a manager approved by Lender on terms and conditions satisfactory
to Lender, it being understood and agreed that the management fee for such
replacement manager shall not exceed then prevailing market rates.
Section
9.6. Servicer.
At the
option of Lender, the Loan may be serviced by a servicer/trustee (the
“Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing
Agreement”)
between Lender and Servicer. Borrower shall not be responsible for any set-up
fees or any other initial costs relating to or arising under the Servicing
Agreement or for the payment of the monthly servicing fee due to the Servicer
under the Servicing Agreement.
Section
9.7. Restructuring
of Loan.
At any
time prior to the Securitization of the entire Loan, Lender, without in any way
limiting Lender’s other rights hereunder, in its sole and absolute discretion,
shall have the right at any time to require Borrower to restructure the Loan
into multiple notes (which may include component notes and/or senior and junior
notes) and/or to create participation interests in the Loan, which restructuring
may include reallocation of principal amounts of the Loan to the Mortgage Loan
or the New Mezzanine Loan or the restructuring of a portion of the Loan to
either the Mortgage Loan or an additional mezzanine loan (the “New
Mezzanine Loan”) to the
owners of the equity interests in Borrower, secured by a pledge of such
interests, and/or the reallocation of a portion of the Mortgage Loan to the Loan
and/or the New Mezzanine Loan or the establishment of different interest rates,
floor interest rates and debt service payments for the Loan, the Mortgage Loan
and the New Mezzanine Loan and the payment of the Loan, the Mortgage Loan and
the New Mezzanine Loan in such order of priority as may be designated by Lender;
provided, that (i) the total amounts of the Loan, the Mortgage Loan and the New
Mezzanine Loan shall equal the amount of the Loan and the Mortgage Loan
immediately prior to the restructuring and the economic terms of the Loan, the
Mezzanine Loan and the New Mezzanine Loan shall be the same as the economic
terms of the Loan and the Mortgage Loan prior to such Restructuring, (ii) except
in the case of an Event of Default under the Loan, the Mortgage Loan and/or the
New Mezzanine Loan, the weighted average interest rate of the Loan, the Mortgage
Loan and the New Mezzanine Loan, if any, shall, at the time of the
restructuring, equal the weighted average interest rate of the Loan and the
Mortgage Loan, and (iii) except in the case of an Event of Default or a
prepayment of the Loan, the Mortgage Loan and/or the New Mezzanine Loan, the
debt service payments on the Loan, the Mortgage Loan and the New Mezzanine Loan
shall equal the debt service payments which would have been payable under the
Loan and the Mortgage Loan had the restructuring not occurred. Borrower shall
cooperate with all reasonable requests of Lender in order to restructure the
Loan and the Mortgage Loan and create a New Mezzanine Loan, if applicable, and
shall, upon ten (10) Business Days written notice from Lender, which notice
shall include the forms of
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documents
for which Lender is requesting execution and delivery, (A) execute and deliver
such documents, including, without limitation in the case of any New Mezzanine
Loan, a mezzanine note, a mezzanine loan agreement, a pledge and security
agreement, and a mezzanine deposit account agreement, (B) cause Borrower’s
counsel to deliver such legal opinions and (C) create such bankruptcy remote
borrower under the New Mezzanine Loan as, in each of the case of clauses
(A),
(B) and
(C) above,
shall be reasonably required by Lender or required by any Rating Agency in
connection therewith, all in form and substance reasonably satisfactory to
Lender, including, without limitation, the severance of this Agreement, the
Mortgage and other Loan Documents if requested. Except as may be required in
connection with a Securitization pursuant to Section
9.1 hereof,
Borrower shall not be obligated to pay any costs or expenses incurred in
connection with any such restructuring as set forth in this Section
9.7.
Borrower’s failure to comply with its obligation under this Section
9.7 within
ten (10) Business Days after Borrower’s receipt of notice of such failure shall
constitute an Event of Default under this Agreement.
X. MISCELLANEOUS
Section
10.1. Survival.
This
Agreement and all covenants, agreements, representations and warranties made
herein and in the certificates delivered pursuant hereto shall survive the
making by Lender of the Loan and the execution and delivery to Lender of the
Note, and shall continue in full force and effect so long as all or any of the
Debt is outstanding and unpaid unless a longer period is expressly set forth
herein or in the other Loan Documents. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
Section
10.2. Lender’s
Discretion.
Whenever
pursuant to this Agreement, Lender exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to Lender, the
decision of Lender to approve or disapprove or to decide whether arrangements or
terms are satisfactory or not satisfactory shall (except as is otherwise
specifically herein provided) be in the sole discretion of Lender and shall be
final and conclusive. Whenever this Agreement expressly provides that Lender may
not withhold its consent or its approval of an arrangement or term, such
provisions shall also be deemed to prohibit Lender from delaying or conditioning
such consent or approval.
Section
10.3. Governing
Law. (A)
THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY
LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF
THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND/OR THE OTHER LOAN
DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE
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(WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED
STATES OF AMERICA, IT BEING UNDERSTOOD THAT THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS
AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST
EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE
AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX
XXX XXXX, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT:
Corporation
Trust Company
000
Xxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
AS
ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND
ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS
UPON SAID AGENT AT SAID ADDRESS AND NOTICE OF SAID SERVICE MAILED OR DELIVERED
TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE
TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF
LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
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BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN
ANY OTHER JURISDICTION.
Section
10.4. Modification,
Waiver in Writing.
No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, or of the Note, or of any other Loan Document, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.
Section
10.5. Delay
Not a Waiver.
Neither
any failure nor any delay on the part of Lender in insisting upon strict
performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder, or under the Note or under any
other Loan Document, or under any other instrument given as security therefor,
shall operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other
amount
Section
10.6. Notices.
All
notices, consents, approvals and requests required or permitted hereunder or
under any other Loan Document shall be given in writing and shall be effective
for all purposes if hand delivered or sent by (a) certified or registered
United States mail, postage prepaid, return receipt requested or
(b) expedited prepaid delivery service, either commercial or United States
Postal Service, with proof of attempted delivery, and by telecopier (with answer
back acknowledged), 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 notice to the other parties hereto in the manner provided for in this
Section 10.6):
|
If
to Lender: |
Nomura
Credit & Capital, Inc. |
|
Xxx
Xxxxx Xxxxxxxxx Xxxxxx | |
|
Xxx
Xxxx, Xxx Xxxx 00000 | |
|
Attention:
Xxxxxxx Xxxxxxxx | |
|
Facsimile
No.: (000) 000-0000 | |
|
with
a copy to: |
Xxxxx
Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP |
|
000
Xxxxx Xxxxxx | |
|
Xxx
Xxxx, Xxx Xxxx 00000 | |
|
Attention:
Xxxxxxx X. Xxxxxxx, Esq. | |
|
Facsimile
No.: (000) 000-0000 |
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|
If
to Borrower: |
MP
- Wateridge Plaza Mezzanine, LLC |
|
000
Xxxxx Xxxxx Xxxxxx, Xxxxx 000 | |
|
Xxx
Xxxxxxx, Xxxxxxxxxx 00000 | |
|
Attention:
Xxxxxx X. Xxxxxxx III | |
|
Facsimile
No.: (000) 000-0000 | |
|
with
a copy to: |
Xxxxxxxxx
& Xxxxxx, Professional Corporation |
|
Wilshire
Palisades Building | |
|
0000
Xxxxx Xxxxxx, Xxxxx 000 | |
|
Xxxxx
Xxxxxx, Xxxxxxxxxx 00000 | |
|
Attention:
Xxxx X. Xxxxxx, Esq. | |
|
Facsimile
No.: (000) 000-0000 |
A notice
shall be deemed to have been given: in the case of hand delivery, at the time of
delivery; in the case of registered or certified mail, when delivered or the
first attempted delivery on a Business Day; or in the case of expedited prepaid
delivery and telecopy, upon the first attempted delivery on a Business Day; or
in the case of telecopy, upon sender’s receipt of a machine-generated
confirmation of successful transmission after advice by telephone to recipient
that a telecopy notice is forthcoming.
Section
10.7. Trial
by Jury.
BORROWER AND LENDER 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 LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER.
Section
10.8. Headings.
The
Article and/or Section headings and the Table of Contents in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section
10.9. Severability.
Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section
10.10. Preferences.
Lender
shall have the continuing and exclusive right to apply or reverse and reapply
any and all payments by Borrower to any portion of the Debt. To the extent
Borrower makes a payment or payments to Lender, which payment or proceeds or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or
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required
to be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the Obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.
Section
10.11. Waiver
of Notice.
Borrower
hereby expressly waives, and shall not be entitled to, any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice.
Section
10.12. Remedies
of Borrower.
In the
event that a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where by law or under
this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment.
Section
10.13. Expenses;
Indemnity.
(a) Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
upon receipt of notice from Lender for all reasonable costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by Lender in
connection with (i) the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby and thereby and all the costs of furnishing all
opinions by counsel for Borrower (including without limitation any opinions
reasonably requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Property);
(ii) except as expressly provided under the terms of this Agreement or the
other Loan Documents, Borrower’s ongoing performance of and compliance with
Borrower’s respective agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) except as expressly
provided under the terms of this Agreement or the other Loan Documents, Lender’s
ongoing performance and compliance with all agreements and conditions contained
in this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (iv) except as expressly provided
under the terms of this Agreement and the other Loan Documents, the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications to this Agreement and/or the other Loan Documents
and any other documents or matters requested by Lender; (v) securing
Borrower’s compliance with any requests made pursuant to the provisions of this
Agreement and the other Loan Documents; (vi) the filing and recording fees
and expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (vii) enforcing or preserving
any rights, either in
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response
to third party claims or in prosecuting or defending any action or proceeding or
other litigation, in each case against, under or affecting Borrower, this
Agreement, the other Loan Documents, the Property, or any other security given
for the Loan; and (viii) enforcing any Obligations of or collecting any
payments due from Borrower under this Agreement, the other Loan Documents or
with respect to the Property or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a “work-out” or of any insolvency or bankruptcy proceedings;
provided,
however, that
Borrower shall not be liable for the payment of any such costs and expenses to
the extent the same arise by reason of the gross negligence, illegal acts, fraud
or willful misconduct of Lender or its agents or which arise by reason of acts
that first occur after Lender or its designee has taken title to the Collateral
or the Property. Any cost and expenses due and payable to Lender may be paid
from any amounts in the Mezzanine Cash Management Account.
(b) Borrower
shall indemnify, defend and hold harmless Lender from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for Lender in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not Lender shall be
designated a party thereto), that may be imposed on, incurred by, or asserted
against Lender in any manner relating to or arising out of (i) any breach
by Borrower of its Obligations under, or any material misrepresentation by
Borrower contained in, this Agreement or the other Loan Documents, or
(ii) the use or intended use of the proceeds of the Loan (collectively, the
“Indemnified
Liabilities”);
provided,
however, that
Borrower shall not have any obligation to Lender hereunder to the extent that
such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful misconduct of Lender or its agents or which arise by reason of
acts that first occur after Lender or its designee has taken title to the
Collateral or the Property. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.
(c) Borrower
covenants and agrees to pay for or, if Borrower fails to pay, to reimburse
Lender for, any fees and expenses incurred by any Rating Agency in connection
with any Rating Agency review of the Loan, the Loan Documents or any transaction
contemplated thereby or any consent, approval, waiver or confirmation obtained
from such Rating Agency pursuant to the terms and conditions of this Agreement
or any other Loan Document and Lender shall be entitled to require payment of
such fees and expenses as a condition precedent to the obtaining of any such
consent, approval, waiver or confirmation.
Section
10.14. Schedules
Incorporated.
The
Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.
Section
10.15. Offsets,
Counterclaims and Defenses.
Any
assignee of Lender’s interest in and to this Agreement, the Note and the other
Loan Documents shall take the same free and clear of all offsets, counterclaims
or defenses which are unrelated to such documents
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which
Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower in
any action or proceeding brought by any such assignee upon such documents and
any such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by
Borrower.
Section
10.16. No
Joint Venture or Partnership; No Third Party
Beneficiaries.
(a) Borrower
and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender. Nothing herein or therein
is intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy relationship between Borrower and Lender or to grant Lender any interest
in the Property other than that of mortgagee, beneficiary or
lender.
(b) This
Agreement and the other Loan Documents are solely for the benefit of Lender and
Borrower and nothing contained in this Agreement or the other Loan Documents
shall be deemed to confer upon anyone other than Lender and Borrower any right
to insist upon or to enforce the performance or observance of any of the
Obligations contained herein or therein. All conditions to the obligations of
Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.
Section
10.17. Publicity.
All news
releases, publicity or advertising by Borrower or their Affiliates through any
media intended to reach the general public which refers to the Loan Documents or
the financing evidenced by the Loan Documents, to Lender, or to any of their
Affiliates, shall be subject to the prior approval of Lender.
Section
10.18. Waiver
of Marshalling of Assets.
To the
fullest extent permitted by law, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower,
Borrower’s partners and others with interests in Borrower, and of the Property,
or to a sale in inverse order of alienation in the event of foreclosure of the
Mortgage, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.
Section
10.19. Waiver
of Counterclaim.
Borrower
hereby waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or its
agents.
Section
10.20. Conflict;
Construction of Documents; Reliance.
In the
event of any conflict between the provisions of this Agreement and any of the
other Loan Documents, the
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provisions
of this Agreement shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Loan Documents and that such Loan Documents shall not be
subject to the principle of construing their meaning against the party which
drafted same. Borrower acknowledges that, with respect to the Loan, Borrower
shall rely solely on its own judgment and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or Affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by it
or any parent, subsidiary or Affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.
Section
10.21. Brokers
and Financial Advisors.
Borrower
hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including, without limitation,
Lender’s attorneys’ fees and expenses) in any way relating to or arising from a
claim by any Person that such Person acted on behalf of Borrower or Lender in
connection with the transactions contemplated herein. The provisions of this
Section 10.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.
Section
10.22. 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, without limitation, the Floating Rate CMBS Term
Sheet dated March 1, 2005 between Borrower and Lender, are superseded by the
terms of this Agreement and the other Loan Documents.
Section
10.23. Certain
Additional Rights of Lender (VCOC).
Notwithstanding
anything that may be contained in this Agreement to the contrary, Lender shall
have:
(a) the right
to routinely consult with Borrower’s management regarding the significant
business activities and business and financial developments of Borrower,
provided, however, that such consultations shall not include discussions of
environmental compliance programs or disposal of hazardous substances.
Consultation meetings should occur at Lender’s request on a regular basis (no
less frequently than quarterly) with Lender having the right to call special
meetings at any reasonable times and upon reasonable advance
notice;
(b) the
right, in accordance with the terms of this Agreement, to examine the books and
records of Borrower at any time upon reasonable notice;
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(c) the
right, without restricting any other rights of Lender under this Agreement
(including any similar right), to approve any acquisition by Borrower of any
other significant property (other than personal property required for the day to
day operation of the Property);
(d) the
right, in accordance with the terms of this Agreement, including, without
limitation, Section
5.1.11 hereof,
to receive monthly, quarterly and year end financial reports, including balance
sheets, statements of income, shareholder’s equity and cash flow, a management
report and schedules of outstanding indebtedness; and
The
rights described above may be exercised by any entity that owns and controls,
directly or indirectly, substantially all of the interests in
Lender.
Section
10.24. Intercreditor
Agreement. Borrower
hereby acknowledges and agrees that any intercreditor agreement entered into
between Lender and Mortgage Lender will be solely for the benefit of Lender and
Mortgage Lender, and that neither Borrower nor Mortgage Borrower shall be
intended third-party beneficiaries of any of the provisions therein, shall have
no rights thereunder and shall not be entitled to rely on any of the provisions
contained therein. Lender and Mortgage Lender shall have no obligation to
disclose to Borrower the contents of the intercreditor agreement. Borrower’s
obligations hereunder are and will be independent of such intercreditor
agreement and shall remain unmodified by the terms and provisions
thereof.
[NO
FURTHER TEXT ON THIS PAGE]
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IN
WITNESS WHEREOF, the parties hereto have caused this Loan Agreement (Mezzanine
Loan) to be duly executed by their duly authorized representatives, all as of
the day and year first above written.
|
MEZZANINE
BORROWER: | ||
|
MP-WATERIDGE
PLAZA MEZZANINE, LLC, | ||
|
a
Delaware limited liability company | ||
|
By: |
/s/
Xxxxxx X. Xxxxx | |
|
Name:
Xxxxxx X. Xxxxx | ||
|
Title:
Executive Vice President and CFO | ||
|
MEZZANINE
LENDER: | ||
|
NOMURA
CREDIT & CAPITAL, INC., | ||
|
a
Delaware corporation | ||
|
By: |
/s/
Xxxx Xxxxxx | |
|
Name:
Xxxx Xxxxxx | ||
|
Title:
Executive Officer | ||
