Exhibit 10.36
FORM OF
MEZZANINE LOAN AGREEMENT
Dated as of June , 2003
Among
XXXXXXX PROPERTIES - 555 W. FIFTH MEZZANINE, LLC
AND
XXXXXXX PROPERTIES - 808 S. OLIVE MEZZANINE, LLC
collectively,
as Borrower
and
BANK OF AMERICA, N.A.,
as Lender
TABLE OF CONTENTS
(To be finalized upon completion of document)
ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION........................... 2
Section 1.1. Definitions............................................. 2
Section 1.2. Principles of Construction.............................. 15
ARTICLE II GENERAL TERMS.................................................... 16
Section 2.1. Loan Commitment; Disbursement to Borrower............... 16
Section 2.2. Interest Rate Protection Agreement...................... 16
Section 2.3. Loan Payments........................................... 18
Section 2.4. Late Payment Charge..................................... 19
Section 2.5. Prepayment.............................................. 19
Section 2.6. Payments after Default.................................. 21
Section 2.7. Intentionally Deleted................................... 21
Section 2.8. Usury Savings........................................... 21
Section 2.9. Unavailability of Rate; Foreign Taxes; Increased Costs.. 22
Section 2.10. Extension............................................... 25
Section 2.11. Additional Payment Provisions........................... 25
ARTICLE III CONDITIONS PRECEDENT............................................ 26
Section 3.1. Representations and Warranties; Compliance with
Conditions ........................................... 26
Section 3.2. Delivery of Loan Documents; Title Policies.............. 27
Section 3.3. Related Documents....................................... 28
Section 3.4. Organizational Documents................................ 28
Section 3.5. Opinions of Borrower's Counsel.......................... 28
Section 3.6. Annual Budget........................................... 29
Section 3.7. Taxes and Other Charges................................. 29
Section 3.8. Completion of Proceedings............................... 29
Section 3.9. Payments................................................ 29
Section 3.10. Transaction Costs....................................... 29
Section 3.11. No Material Adverse Change.............................. 29
Section 3.12. Leases and Rent Roll.................................... 29
Section 3.13. Tenant Estoppels........................................ 29
Section 3.14. [Intentionally omitted]................................. 30
Section 3.15. Subordination and Attornment............................ 30
Section 3.16. Tax Lot................................................. 30
Section 3.17. Physical Conditions Report.............................. 30
Section 3.18. Management Agreement.................................... 30
Section 3.19. Appraisal............................................... 30
Section 3.20. Financial Statements.................................... 30
Section 3.21. [Intentionally Deleted]................................. 30
Section 3.22. Further Documents....................................... 30
Section 3.23. Mortgage Loan........................................... 30
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Section 3.24. Opinion Letter.......................................... 30
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................... 31
Section 4.1. Organization............................................ 31
Section 4.2. Status of Borrower...................................... 31
Section 4.3. Validity of Documents................................... 31
Section 4.4. No Conflicts............................................ 32
Section 4.5. Litigation.............................................. 32
Section 4.6. Agreements.............................................. 32
Section 4.7. Solvency................................................ 33
Section 4.8. Full and Accurate Disclosure............................ 33
Section 4.9. No Plan Assets.......................................... 33
Section 4.10. Not a Foreign Person.................................... 33
Section 4.11. Enforceability.......................................... 33
Section 4.12. Business Purposes....................................... 34
Section 4.13. Compliance.............................................. 34
Section 4.14. Financial Information................................... 34
Section 4.15. Illegal Activity........................................ 34
Section 4.16. Permitted Encumbrances.................................. 34
Section 4.17. Federal Reserve Regulations............................. 35
Section 4.18. Investment Company Act.................................. 35
Section 4.19. No Change in Facts or Circumstances; Disclosure......... 35
Section 4.20. Special Purpose Entity.................................. 35
Section 4.21. Assumptions............................................. 35
Section 4.22. Intellectual Property................................... 35
Section 4.22. others.................................................. 36
Section 4.23. Embargoed Person........................................ 36
Section 4.24. Patriot Act............................................. 36
Section 4.25. Mortgage Loan Representations........................... 37
Section 4.26. No Contractual Obligations.............................. 37
Section 4.27. Subsidiaries............................................ 37
Section 4.28. Pledged Company Interests............................... 37
Section 4.29. Survival................................................ 37
ARTICLE V BORROWER COVENANTS................................................ 38
Section 5.1. Existence; Compliance With Legal Requirements........... 38
Section 5.2. Maintenance and Use of Property......................... 38
Section 5.3. Waste................................................... 39
Section 5.4. Taxes and Other Charges................................. 39
Section 5.5. Litigation.............................................. 39
Section 5.6. Access to the Property.................................. 40
Section 5.7. Notice of Default....................................... 40
Section 5.8. Cooperate in Legal Proceedings.......................... 40
Section 5.9. Performance by Borrower................................. 40
Section 5.10. Awards; Insurance Proceeds.............................. 40
Section 5.11. Financial Reporting..................................... 40
Section 5.12. Estoppel Statement...................................... 43
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Section 5.13. Leasing Matters......................................... 43
Section 5.14. Property Management..................................... 45
Section 5.15. Liens................................................... 46
Section 5.16. Debt Cancellation....................................... 46
Section 5.17. Zoning.................................................. 46
Section 5.18. ERISA................................................... 46
Section 5.19. No Joint Assessment..................................... 47
Section 5.20. Alterations............................................. 47
Section 5.21. [Intentionally Deleted.]................................ 47
Section 5.22. Reciprocal Easement Agreement........................... 47
Section 5.23. [Intentionally Deleted.]................................ 48
Section 5.24. Notices................................................. 48
Section 5.25. Special Distributions................................... 48
Section 5.26. Curing.................................................. 48
Section 5.27. Liens................................................... 48
Section 5.28. Limitation on Securities Issuances...................... 49
Section 5.29. Limitations on Distributions............................ 49
Section 5.30. Other Limitations....................................... 49
Section 5.31. Contractual Obligations................................. 50
Section 5.32. Refinancing............................................. 50
ARTICLE VI ENTITY COVENANTS................................................. 51
Section 6.1. Single Purpose Entity/Separateness...................... 51
Section 6.2. Change of Name, Identity or Structure................... 55
Section 6.3. Business and Operations................................. 55
Section 6.4. Independent Managers.................................... 55
ARTICLE VII NO SALE OR ENCUMBRANCE.......................................... 56
Section 7.1. Transfer Definitions.................................... 56
Section 7.2. No Sale/Encumbrance..................................... 56
Section 7.3. Permitted Transfers..................................... 57
Section 7.4. Lender's Rights......................................... 57
Section 7.5. Assumption.............................................. 58
ARTICLE VIII INSURANCE; CASUALTY; CONDEMNATION; RESTORATION................. 60
Section 8.1. Insurance............................................... 60
Section 8.2. Casualty................................................ 64
Section 8.3. Condemnation............................................ 65
Section 8.4. Restoration............................................. 65
ARTICLE IX RESERVE FUNDS.................................................... 69
ARTICLE X CASH MANAGEMENT................................................... 70
ARTICLE XI EVENTS OF DEFAULT; REMEDIES...................................... 70
Section 11.1. Event of Default........................................ 70
Section 11.2. Remedies................................................ 73
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ARTICLE XII ENVIRONMENTAL PROVISIONS........................................ 73
Section 12.1. Environmental Representations and Warranties............ 73
Section 12.2. Environmental Covenants................................. 74
Section 12.3. Lender's Rights......................................... 75
Section 12.4. Operations and Maintenance Programs..................... 75
Section 12.5. Environmental Definitions............................... 75
Section 12.6. Indemnification......................................... 76
ARTICLE XIII SECONDARY MARKET............................................... 77
Section 13.1. Transfer of Loan........................................ 77
Section 13.2. Delegation of Servicing................................. 77
Section 13.3. Dissemination of Information............................ 77
Section 13.4. Cooperation............................................. 78
Section 13.5. Securitization Indemnification.......................... 80
Section 13.6. [Intentionally Deleted]................................. 82
Section 13.7. Servicer................................................ 82
Section 13.8. Mortgage Loan Securitization............................ 82
ARTICLE XIV INDEMNIFICATIONS................................................ 83
Section 14.1. General Indemnification................................. 83
Section 14.2. Intangible Tax Indemnification.......................... 83
Section 14.3. ERISA Indemnification................................... 83
Section 14.4. Survival................................................ 83
ARTICLE XV EXCULPATION...................................................... 84
Section 15.1. Exculpation............................................. 84
ARTICLE XVI NOTICES......................................................... 86
Section 16.1. Notices................................................. 86
ARTICLE XVII FURTHER ASSURANCES............................................. 87
Section 17.1. Replacement Documents................................... 87
Section 17.2. Intentionally Omitted................................... 87
Section 17.3. Further Acts, Etc....................................... 87
Section 17.4. Changes in Tax, Debt, Credit and Documentary Stamp Laws. 88
Section 17.5. Expenses................................................ 88
ARTICLE XVIII WAIVERS....................................................... 89
Section 18.1. Remedies Cumulative; Waivers............................ 89
Section 18.2. Modification, Waiver in Writing......................... 89
Section 18.3. Delay Not a Waiver...................................... 90
Section 18.4. Trial by Jury........................................... 90
Section 18.5. Waiver of Notice........................................ 90
Section 18.6. Remedies of Borrower.................................... 91
Section 18.7. Waiver of Marshalling of Assets......................... 91
Section 18.8. Waiver of Statute of Limitations........................ 91
Section 18.9. Waiver of Counterclaim.................................. 91
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Section 18.10. Gradsky Waivers ....................................... 91
ARTICLE XIX GOVERNING LAW................................................... 92
Section 19.1. Choice of Law........................................... 92
Section 19.2. Severability............................................ 92
Section 19.3. Preferences............................................. 93
ARTICLE XX MISCELLANEOUS.................................................... 93
Section 20.1. Survival................................................ 93
Section 20.2. Lender's Discretion..................................... 93
Section 20.3. Headings................................................ 93
Section 20.4. Cost of Enforcement..................................... 94
Section 20.5. Schedules Incorporated.................................. 94
Section 20.6. Offsets, Counterclaims and Defenses..................... 94
Section 20.7. No Joint Venture or Partnership; No Third Party
Beneficiaries......................................... 94
Section 20.8. Publicity............................................... 95
Section 20.9. Conflict; Construction of Documents; Reliance........... 96
Section 20.10. Entire Agreement ...................................... 96
Section 20.11. Certain Additional Rights of Lender (VCOC) ............ 96
Section 20.12. Liability ............................................. 97
Section 20.13. Contribution .......................................... 97
EXHIBITS
Exhibit A - Annual Budget
Exhibit B - Borrower Organizational Structure
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MEZZANINE LOAN AGREEMENT
THIS MEZZANINE LOAN AGREEMENT, dated as of June , 2003 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this "AGREEMENT"), between BANK OF AMERICA, N.A., a national banking
association, having an address at Bank of America Corporate Center, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (together with its successors
and/or assigns, "LENDER") and XXXXXXX PROPERTIES - 555 W. FIFTH MEZZANINE, LLC,
a Delaware limited liability company, having an address at c/x Xxxxxxx
Properties, Inc., 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("WEST
FIFTH") and XXXXXXX PROPERTIES - 808 S. OLIVE MEZZANINE, LLC, a Delaware limited
liability company, having an address at c/x Xxxxxxx Properties, Inc., 000 Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("SOUTH OLIVE", and collectively
with West Fifth, together with their respective successors and/or assigns,
"BORROWER").
RECITALS:
Bank of America, N.A., a national banking association, as mortgage
lender ("MORTGAGE LENDER"), has made a loan in the original principal amount of
[ AND NO/100 DOLLARS ($ )] ("MORTGAGE LOAN") to Xxxxxxx
Properties - 555 W. Fifth, LLC and Xxxxxxx Properties - 808 S. Olive, LLC
(collectively, "MORTGAGE BORROWER") pursuant to a certain Loan Agreement, dated
of even date herewith, between Mortgage Borrower and Mortgage Lender (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, the "MORTGAGE LOAN AGREEMENT"), which Mortgage Loan is evidenced by a
Promissory Note, dated of even date herewith, made by Mortgage Borrower to
Mortgage Lender (as amended, restated, replaced, consolidated or otherwise
modified from time to time, the "MORTGAGE NOTE") and secured by, among other
things, that certain Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated of even date herewith granted by Mortgage
Borrower in favor of Mortgage Lender (as amended, restated, replaced,
supplemented or otherwise modified from time to time, the "MORTGAGE"), pursuant
to which Mortgage Borrower has granted to Mortgage Lender a first priority
mortgage on, among other things, the real property and other collateral as more
fully described in the Mortgage (collectively, the "PROPERTY");
Borrower is the legal and beneficial owner of all of the membership
interests in Mortgage Borrower, consisting of a one hundred percent (100%)
membership interest therein (the "PLEDGED COMPANY INTERESTS");
Borrower has requested Lender to make a loan to it in the aggregate
principal amount of [ AND NO/100 DOLLARS ($ )] ("LOAN") ;
and
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 of even date herewith, in favor of Lender (as amended,
restated, replaced, supplemented or otherwise modified from time to time,
"PLEDGE AGREEMENT"), pursuant to which Borrower has granted to Lender a first
priority security interest in the Collateral (as defined in the Pledge
Agreement) as collateral security for the Debt (as defined below);
In consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:
"ACCEPTABLE ACCOUNTANT" shall mean a "Big Four" accounting firm or
other independent certified public accountant acceptable to Lender.
"ACCEPTABLE COUNTERPARTY" shall mean any counterparty to the
Interest Rate Protection Agreement that has, as of the date hereof, and shall
maintain until the expiration of the applicable Interest Rate Protection
Agreement a credit rating of not less than "AA-" from S&P and not less than Aa3
from Xxxxx'x.
"ACT" shall have the meaning set forth in Section 6.1(c) hereof.
"AFFILIATE" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
"AFFILIATED LOANS" shall mean a loan made by Lender to a parent,
subsidiary or such other entity affiliated with Borrower or Borrower Principal.
"AFFILIATED MANAGER" shall have the meaning set forth in Section 7.1
hereof.
"ALTERATION THRESHOLD" shall mean $1,000,000.00.
"ANNUAL BUDGET" shall mean the operating budget, including all
planned capital expenditures, for the Property approved by Lender in accordance
with Section 5.11(a)(iv) hereof for the applicable calendar year or other
period.
"ASSIGNMENTS OF MANAGEMENT AGREEMENT" shall mean, collectively, that
certain Assignment and Subordination of Management Agreement dated the date
hereof among Lender, West Fifth and Manager, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, with
respect to the Tower Parcel and that certain Assignment and Subordination of
Management Agreement dated the date hereof among Lender, South Olive and
Manager, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, with respect to the Garage Parcel.
"AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of the
Property.
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"BASE MANAGEMENT FEE" shall mean a monthly amount equal to $83,333.
"BORROWER OPERATING AGREEMENT" shall mean, collectively, the Limited
Liability Company Operating Agreement for West Fifth and the Limited Liability
Company Operating Agreement for South Olive.
"BORROWER PRINCIPAL" shall mean Xxxxxxx Properties, L.P., a
Maryland limited partnership.
"BORROWER PRINCIPAL OBLIGATIONS" shall have the meaning set forth in
Section 18.10(c).
"BREAKAGE COSTS" shall have the meaning set forth in Section 2.9(e)
hereof.
"BUSINESS DAY shall mean a day on which Lender is open for the
conduct of substantially all of its banking business at its office in the city
in which the Note is payable (excluding Saturdays and Sundays), except that when
used with respect to the determination of LIBOR, "Business Day" shall mean a day
on which commercial banks are open for international business (including
dealings in U.S. Dollar deposits) in London, England.
"CASUALTY" shall have the meaning set forth in Section 8.2 hereof.
"CLOSING DATE" shall mean the date of the funding of the Loan.
"COLLATERAL" shall have the meaning set forth in the Pledge
Agreement.
"COLLATERAL ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT" shall
mean that certain Collateral Assignment of Interest Rate Protection Agreement,
dated as of the date hereof, executed by Borrower in connection with the Loan
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental Authority as the result, in lieu or in anticipation, of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
"CONSEQUENTIAL LOSS" shall have the meaning set forth in Section
2.3(f)(i) hereof.
"CONTRACTUAL OBLIGATION" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound, or any provision of the foregoing.
"CONTROL" shall have the meaning set forth in Section 7.1 hereof.
"CREDITORS RIGHTS LAWS" shall mean with respect to any Person any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency,
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reorganization, conservatorship, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to its debts
or debtors.
"DEBT" shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Pledge Agreement or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular period of
time, scheduled principal and/or interest payments under the Note.
"DEFAULT" shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate per
annum equal to the lesser of (a) the maximum rate permitted by applicable law,
or (b) four percent (4%) above the Note Rate.
"DETERMINATION DATE" shall mean (a) with respect to any Interest
Period prior to the Interest Period that commences in the month during which the
Securitization Closing Date occurs, two (2) Business Days prior to the start of
the applicable Interest Period; (b) with respect to the Interest Period that
commences in the month during which the Securitization Closing Date occurs, the
date that is two (2) Business Days prior to the Securitization Closing Date and
(c) with respect to each Interest Period thereafter, the date that is two (2)
Business Days prior to the beginning of such Interest Period.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in Section
13.5 hereof.
"ELIGIBILITY REQUIREMENTS" means, with respect to any Person, that
such Person (i) has total assets (in name or under management) in excess of
$600,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder's equity of $250,000,000 and
(ii) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial mortgage properties.
"EMBARGOED PERSON" shall have the meaning set forth in Section 4.23
hereof.
"ENVIRONMENTAL INDEMNITY" shall mean that certain Mezzanine
Environmental Indemnity Agreement, dated as of the date hereof, executed by
Borrower and Borrower Principal in connection with the Loan for the benefit of
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"ENVIRONMENTAL LAW" shall have the meaning set forth in Section 12.5
hereof.
"ENVIRONMENTAL LIENS" shall have the meaning set forth in Section
12.5 hereof.
"ENVIRONMENTAL REPORT" shall have the meaning set forth in Section
12.5 hereof.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statutes thereto and
applicable regulations issued pursuant thereto in temporary or final form.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 11.1
hereof.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934,
as amended.
"EXCHANGE ACT FILING" shall have the meaning set forth in Section
5.11(c) hereof.
"FACTORY MUTUAL" shall have the meaning set forth in Section 8.1(b)
hereof.
"FITCH" shall mean Fitch, Inc.
"FOREIGN TAXES" shall have the meaning set forth in Section
2.9(b)(i).
"FOURTH ANNIVERSARY" shall mean , 2007.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
"GARAGE PARCEL" shall mean the parking garage and other improvements
located at 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more particularly
described in the Mortgage.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
department, commission, office or other authority of any nature whatsoever for
any governmental unit (federal, state, county, municipal, city, town, special
district or otherwise) in the United States whether now or hereafter in
existence.
"HAZARDOUS MATERIALS" shall have the meaning set forth in Section
12.5 hereof.
"IMPROVEMENTS" shall have the meaning set forth in the granting
clause of the Mortgage.
"INDEMNIFIED LIABILITIES" shall have the meaning set forth in
Section 14.1 hereof.
"INDEMNIFIED PARTIES" shall mean (a) Lender, (b) any prior owner or
holder of the Loan or Participations in the Loan, (c) any Investor or prior
Investor of the Loan, (d) any Investor or prior Investor in any Securities, (e)
any trustees, custodians or other fiduciaries who hold or who have held a full
or partial interest in the Loan for the benefit of any Investor or other third
party, (f) any receiver or other fiduciary appointed in a foreclosure or other
Creditors Rights Laws proceeding, (g) any officers, directors, shareholders,
partners, members, employees, agents, representatives, affiliates or
subsidiaries of any and all of the foregoing, and (h) the heirs, legal
representatives, successors and assigns of any and all of the foregoing
(including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion
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of the Indemnified Parties' assets and business), in all cases whether during
the term of the Loan or as part of or following a foreclosure of the Mortgage.
"INDEPENDENT MANAGER" shall have the meaning set forth in Section
6.4(a) hereof.
"INSURANCE PREMIUMS" shall have the meaning set forth in Section
8.1(b) hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in Section
8.4(b) hereof.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement,
dated of even date herewith, between Lender and Mortgage Lender.
"INTEREST PERIOD" shall mean (a) with respect to the initial period
for the accrual of interest due under this Agreement, the period from and
including the Closing Date through but excluding the Selected Day first
occurring after the Closing Date, and (b) with respect to the Payment Date
occurring in [ ], 2003 and each Payment Date thereafter, the period
from and including the Selected Day immediately preceding the applicable Payment
Date through but excluding the Selected Day next occurring after the applicable
Payment Date. Notwithstanding the foregoing clause (b), if Lender so elects at
any time, the "Interest Period" shall be the calendar month preceding each
Payment Date.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, as applicable (A)
an interest rate cap with a maturity date of the Maturity Date entered into with
an Acceptable Counterparty with a notional amount equal to the Loan Amount for
the term of the Loan and a LIBOR strike price not greater than
percent ( %) [9% MINUS THE SPREAD]; provided, however, that in the event the
rating assigned by any Rating Agency to the counterparty to any Interest Rate
Protection Agreement is downgraded, such Interest Rate Protection Agreement will
be replaced by an Interest Rate Protection Agreement in the same form and
substance as the Interest Rate Protection Agreement delivered by the Borrower in
connection with the closing of the Loan or in a form otherwise approved by
Lender in its reasonable discretion and shall be obtained from a counterparty
with a credit rating meeting the requirements of an Acceptable Counterparty; and
provided, that, each Interest Rate Protection Agreement shall provide for (i)
the calculation of interest, (ii) the determination of the interest rate, (iii)
the modification of the Interest Period and (iv) the distribution of payments
thereunder to be identical to the definition of Interest Period set forth
herein, and (B) a Replacement Interest Rate Protection Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, as it may be further amended from time to time, and any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.
"INVESTOR" shall have the meaning set forth in Section 13.3 hereof.
"ISSUER GROUP" shall have the meaning set forth in Section 13.5(b)
hereof.
"ISSUER PERSON" shall have the meaning set forth in Section 13.5(b)
hereof.
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"JUNIOR SUBORDINATED MANAGEMENT FEE" shall mean a monthly amount
equal to (a) 3.0% of all Project Income (as defined in the Management Agreement)
for such month, minus (b) the Base Management Fee.
"LEASE" shall have the meaning set forth in the Mortgage.
"LEGAL REQUIREMENTS" shall mean all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting Borrower, Borrower Principal, Mortgage Borrower (or any of
their respective Affiliates), the Collateral or the Property or any part
thereof, or the construction, use, alteration or operation thereof, whether now
or hereafter enacted and in force, and all permits, licenses, authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to Borrower
or Mortgage Borrower, at any time in force affecting Borrower, Borrower
Principal, Mortgage Borrower (or any of their respective Affiliates), the
Collateral or the Property or any part thereof, including, without limitation,
any which may (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) in any way limit the use and enjoyment
thereof.
"LETTER OF CREDIT" shall mean a clean, irrevocable and unconditional
letter of credit in form and substance acceptable to Lender (a) that is issued
by a commercial bank, the long term unsecured obligations of which are rated no
less than AA- (or the equivalent) by the Rating Agencies, (b) that is payable
upon presentation of sight draft only in New York, New York or Los Angeles,
California to the order of Lender, (c) that has an initial expiration date of
not less than one (1) year from the date of issuance and is automatically
renewable, at least thirty (30) days prior to expiration, for successive one (1)
year periods, (d) that is transferable by Lender without the consent of the
issuing bank and (e) for which neither Borrower nor Mortgage Borrower have any
reimbursement or payment obligations.
"LIBOR" shall mean, with respect to each Interest Period, a rate of
interest per annum obtained by dividing
(a) shall mean, with respect to each Interest Period, the rate for
deposits in U.S. Dollars, for a period equal to one month, which appears on the
Telerate Page 3750 as of 11:00 a.m., London time, on the related Determination
Date; provided, however, if more than one rate is specified on Reuters Screen
LIBOR Page, the LIBOR Rate shall be the arithmetic mean of all rates. Lender
shall determine the LIBOR Rate for each Interest Period and the determination of
the LIBOR Rate by Lender shall be binding upon Borrower absent manifest error,
by
(b) a percentage equal to 100% minus the applicable Reserve
Percentage then in effect.
LIBOR may or may not be the lowest rate based upon the market for
U.S. Dollar deposits in the London Interbank Eurodollar Market at which Lender
prices loans on the date which LIBOR is determined by Lender as set forth above.
"LIBOR LOAN" shall mean the Loan at such time as interest thereon
accrues at the LIBOR Rate.
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"LIBOR MARGIN" shall mean [ PERCENT ( %)].
"LIBOR RATE" shall mean, for any applicable Interest Period, a rate
per annum equal to the sum of (i) LIBOR plus (ii) the LIBOR Margin.
"LIEN" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting, Borrower, Mortgage Borrower, the Collateral,
the Property, any portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic's, materialmen's
and other similar liens and encumbrances.
"LIQUIDATION EVENT" shall have the meaning set forth in Section
2.5(g)(i).
"LLC AGREEMENT" shall have the meaning set forth in Section 6.1(c).
"LOAN" shall have the meaning set forth in the Recitals.
"LOAN AMOUNT" shall mean the outstanding principal balance of the
Loan.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note,
the Pledge Agreement, the Collateral Assignment of Interest Rate Protection
Agreement, the Intercreditor Agreement, the Subordination of Management
Agreement and any and all other documents, agreements and certificates executed
and/or delivered in connection with the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"LOCKOUT PERIOD" shall mean the period commencing on the date hereof
and ending on the date immediately preceding the 37th Payment Date.
"LOCKOUT PREPAYMENT PREMIUM" shall mean an amount equal to five
percent (5%) of the then outstanding principal amount of the Loan.
"LOSSES" shall mean any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, judgments, awards, amounts paid in settlement of whatever kind or nature
(including but not limited to legal fees and other costs of defense).
"MAJOR DECISIONS" shall mean (i) the sale of all or a substantial
portion of the Property, (ii) the approval of the Annual Budget, (iii) the
execution of any Lease which does not substantially comply with leasing
guidelines then in effect with respect to the Property; (iv) any material
modification of the leasing guidelines then in effect; (v) any material
modification of any Loan Documents requested by Borrower; (vi) any material
modification or refinancing of the Permitted Mezzanine Financing; (vii) any
merger or consolidation of Borrower with any other entity, or the liquidation or
dissolution of Borrower other than in accordance with the terms of the
Borrower's operating agreement; (viii) any proposed settlement or compromise of
any claim, litigation or other legal proceeding by or against Borrower for more
than $1,000,000 (net of
- 8 -
insurance coverage); (ix) any petition in bankruptcy or reorganization or
instituting any other type of bankruptcy, reorganization or insolvency
proceeding with respect to Borrower, the admission in writing by Borrower of its
inability to pay its debts generally as they become due or the making by
Borrower of a general assignment for the benefit of its creditors; (x) except
for the Management Agreement, any material agreement between Borrower and any
Affiliate of Borrower and (xi) such other items similar in scope to the
foregoing which (A) are consistent with veto rights typically held by
institutional investors holding majority but non-managing, non-controlling
interests in an entity, but (B) would not reasonably be deemed to constitute a
change in Control with respect to such entity.
"MAJOR LEASE" shall mean as to the Property (i) any Lease which,
individually or when aggregated with all other leases at the Property with the
same Tenant or its Affiliate, either (A) demises in the aggregate more than one
(1) full occupied floor of the Property, or (B) covers seventy-five (75) or more
parking spaces, (ii) any Lease which contains any option, offer, right of first
refusal or other similar entitlement to acquire all or any portion of the
Property, or (iii) any instrument guaranteeing or providing credit support for
any Lease meeting the requirements of (i) or (ii) above.
"MANAGEMENT AGREEMENT" shall mean the management agreement entered
into by and between West Fifth and Manager with respect to the Tower Parcel, and
the management agreement entered into between South Olive and Manager with
respect to the Garage Parcel, pursuant to which Manager is to provide management
and other services with respect to the Property, together with the sub-contract
entered into between Manager and Xxxxxxx Properties Services, Inc., as the
foregoing documents may be amended, restated, replaced, supplemented or
otherwise modified in accordance with the terms of this Agreement.
"MANAGER" shall mean Xxxxxxx Properties L.P., a Maryland limited
partnership or such other entity selected as the manager of the Property in
accordance with the terms of this Agreement.
"MATERIAL ADVERSE CHANGE" shall mean any event that is reasonably
likely to cause a material and adverse impact on a party's financial condition,
or the business of the Property, or the Collateral or could be anticipated to
prevent any person from complying with its material obligations under the Loan
Documents to which it is a party.
"MATURITY DATE" shall mean [ , 2008].
"MAXIMUM LEGAL RATE" shall mean the maximum non-usurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the Note
and as provided for herein or the other Loan Documents, under the laws of such
state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.
"MEMBER" shall have the meaning set forth in Section 6.1(c) hereof.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
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"MORTGAGE BORROWER COMPANY AGREEMENT" shall mean, collectively, each
Limited Liability Company Operating Agreement of the Mortgage Borrower.
"MORTGAGE LOAN DEFAULT" shall mean a "Default" under and as defined
in the Mortgage Loan Agreement.
"MORTGAGE LOAN DOCUMENTS" shall mean, collectively, the Mortgage
Loan Agreement, the Mortgage Note, the Mortgage, and any and all other documents
defined as the "Loan Documents" in the Mortgage Loan Agreement, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
"MORTGAGE LOAN EVENT OF DEFAULT" shall mean an "Event of Default"
under and as defined in the Mortgage Loan Agreement.
"MORTGAGE RESERVE ACCOUNTS" shall mean the "Reserve Accounts" as
defined in the Mortgage Loan Agreement.
"NET LIQUIDATION PROCEEDS AFTER DEBT SERVICE" with respect to any
Liquidation Event, all amounts paid or payable to or received by or on behalf of
Mortgage Borrower in connection with such Liquidation Event, less amounts
required or permitted to be deducted therefrom pursuant to the Mortgage Loan
Documents and amounts paid pursuant to the Mortgage Loan Documents to Mortgage
Lender, including, without limitation, proceeds of any sale, refinancing or
other disposition or liquidation, the amount of any award or payment incurred in
connection with any condemnation or taking by eminent domain, and the amount of
any insurance proceeds paid in connection with any casualty loss, as applicable,
other than, in the case of a casualty loss or condemnation award, amounts
required or permitted by the terms of the Mortgage Loan Documents to be applied
to the restoration or repair of the Mortgaged Property, less (i) in the case of
a foreclosure sale or transfer of the Property in connection with realization
thereon following an Event of Default under the Mortgage Loan or other
disposition, such reasonable and customary costs and expenses of sale or other
disposition (including attorneys' fees and brokerage commissions), (ii) in the
case of a foreclosure sale, such costs and expenses incurred by Mortgage Lender
under the Mortgage Loan Documents as Mortgage Lender shall be entitled to
receive reimbursement for under the terms of the Mortgage Loan Documents, (iii)
in the case of a casualty loss or condemnation, such costs and expenses of
collection (including attorneys' fees) of the related insurance proceeds or
condemnation award as shall be approved by Mortgage Lender pursuant to the terms
of the Mortgage Loan Documents, or if the Mortgage Loan has been paid in full,
by Lender, and (iv) in the case of a refinancing of the Mortgage Loan or the
Property, such costs and expenses (including attorneys' fees) of such
refinancing as shall be reasonably approved by Lender.
"NET PROCEEDS" shall have the meaning set forth in Section 8.4(b)
hereof.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 8.4(b)(vi) hereof.
"NOTE" shall mean that certain promissory note of even date herewith
in the original principal amount of $[ ], made by Borrower in favor
of Lender, as the
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same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
"NOTE RATE" shall mean (a) from and including the Closing Date
through the last day of the calendar month in which the Closing Date occurs, an
interest rate per annum equal to [ ]%; and (b) from and including the first
calendar day of the first Interest Period through and including the Maturity
Date, an interest rate per annum equal to (i) the LIBOR Rate (in all cases where
clause (ii) below does not apply), or (ii) the Static LIBOR Rate, to the extent
provided in accordance with the provisions of Section 2.2(b).
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to Lender
by Borrower which is signed by an authorized senior officer of Borrower or an
entity authorized to act on behalf of Borrower.
"OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"OWNER'S TITLE INSURANCE POLICY" shall mean that certain ALTA
owner's title insurance policy issued to Borrower with respect to the Property.
"PARTICIPATIONS" shall have the meaning set forth in Section 13.1
hereof.
"PAYMENT DATE" shall mean the day that is six (6) Business Days
prior to the Selected Day.
"PERMITTED ENCUMBRANCES" shall mean, with respect to the Property,
collectively, (a) the Liens and security interests created by the Mortgage Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy (as defined in the Mortgage Loan Agreement), (c) Liens, if any,
for Taxes imposed by any Governmental Authority not yet delinquent, and (d) such
other title and survey exceptions as Lender has approved or may approve in
writing in Lender's sole discretion.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"PERSONAL PROPERTY" shall have the meaning set forth in the granting
clause of the Mortgage.
"PHYSICAL CONDITIONS REPORT" shall mean a report regarding the
physical condition of the Property prepared by Certified Environments, Inc. or a
company otherwise satisfactory to Lender, in form and substance satisfactory to
Lender in its sole discretion.
"PLEDGE AGREEMENT" shall have the meaning set forth in the Recitals.
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"PLEDGED COMPANY INTERESTS" shall have the meaning set forth in the
Recitals.
"POLICIES" shall have the meaning set forth in Section 8.1(b)
hereof.
"POLICY" shall have the meaning set forth in Section 8.1(b) hereof.
"PROHIBITED TRANSFER" shall have the meaning set forth in Section
7.2(a) hereof.
"PROVIDED INFORMATION" shall have the meaning set forth in Section
13.4(a) hereof.
"QUALIFIED INVESTOR" shall mean one or more of the following:
(A) a real estate investment trust, bank, saving and loan
association, investment bank, insurance company, trust company, commercial
credit corporation, pension plan, pension fund or pension advisory firm,
mutual fund, government entity or plan, provided that any such Person
referred to in this clause (A) satisfies the Eligibility Requirements;
(B) an investment company, money management firm or "qualified
institutional buyer" within the meaning of Rule 144A under the Securities
Act of 1933, as amended, or an institutional "accredited investor" within
the meaning of Regulation D under the Securities Act of 1933, as amended,
provided that any such Person referred to in this clause (B) satisfies the
Eligibility Requirements;
(C) an institution substantially similar to any of the foregoing
entities described in clauses (ii)(A) or (ii)(B) that satisfies the
Eligibility Requirements;
(D) any entity Controlled by any of the entities described in clause
(i) or clauses (ii)(A) or (ii)(C) above.
For purposes of this definition of Qualified Investor, "Control"
means the ownership, directly or indirectly, in the aggregate of more than fifty
percent (50%) of the beneficial ownership interests of an entity and the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise. "Controlled by,"
"controlling" and "under common control with" shall have the respective
correlative meaning thereto.
"QUALIFIED MANAGER" shall mean Manager or a reputable and
experienced professional management organization (a) which manages, together
with its affiliates, at least five (5) first class office buildings totaling at
least 2,500,000 square feet of gross leasable area, exclusive of the Property
and (b) approved by Lender, which approval shall not have been unreasonably
withheld and for which Mortgage Lender and Lender shall have received a Rating
Confirmation.
"RATING AGENCY" shall mean each of S&P, Xxxxx'x and Fitch, or any
other nationally-recognized statistical rating agency which has been approved by
Lender.
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"RATING CONFIRMATION" with respect to the transaction or matter in
question, shall mean: (i) if all or any portion of the Mortgage Loan or the
Loan, by itself or together with other loans, has been the subject of a
Securitization, then each applicable Rating Agency shall have confirmed in
writing that such transaction or matter shall not result in a downgrade,
qualification, or withdrawal of any rating then in effect for any class of
certificates or other securities issued in connection with such Securitization;
and (ii) if the Mortgage Loan and the Loan or any portion thereof has not been
the subject of a Securitization, (a) the applicable Rating Agency shall have
confirmed in writing that such transaction or matter shall not result in a
downgrade, qualification, or withdrawal of any shadow rating or other rating
provided to the Loan or any portion thereof not the subject of a Securitization,
and (b) Lender shall have determined in its reasonable discretion (taking into
consideration such factors as Lender may determine, including the attributes of
the loan pool in which the Loan might reasonably be expected to be securitized)
that no rating for any certificate or other securities that would be issued in
connection with Securitization of such portion of the Mortgage Loan or the Loan
would be downgraded, qualified, or withheld by reason of such transaction or
matter.
"REA" shall mean that certain Reciprocal Easement Agreement dated as
of June 1, 1989, recorded April 5, 1990 as Instrument No. 90-655583 Official
Records executed by Pacific Xxxx, American Telephone and Telegraph and Xxxxxxx
Xxxxxx Partners-Fifth & Grand, Ltd. (predecessor to Borrower) and that certain
Parking Easement Agreement dated December 13, 2000, a memorandum of which was
recorded December 27, 2000 as Instrument No. 00-2009212 Official Records
executed by Xxxxxxx Xxxxxx Partners-Xxxxxxx Development Company and Xxxxxxx
Xxxxxx Partners-Fifth & Grand, Ltd.
"RELEASE" shall have the meaning set forth in Section 12.5 hereof.
"RENEWAL LEASE" shall have the meaning set forth in Section 5.13
hereof.
"RENT ROLL" shall have the meaning set forth in the Mortgage Loan
Documents.
"RENTS" shall have the meaning set forth in the Mortgage.
"REP & WARRANTY BREACH" shall have the meaning set forth in Section
11.1(e).
"REPLACEMENT INTEREST RATE PROTECTION AGREEMENT" shall mean an
interest rate cap from an Acceptable Counterparty with terms identical to the
Interest Rate Protection Agreement.
"RESERVE PERCENTAGE" shall mean, with respect to any day of any
Interest Period, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor), for determining the maximum reserve requirement (including
basic, supplemental, emergency, special and marginal reserves) generally
applicable to financial institutions regulated by the Federal Reserve Board
comparable in size and type to Lender in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on the Loan is determined), whether or not
Lender has any Eurocurrency liabilities or such requirement otherwise in fact
applies to Lender. The LIBOR Rate shall be adjusted automatically as of the
effective date of each change in the Reserve Percentage. As of the date
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hereof, the Reserve Percentage is zero, however, there can be no assurance as to
what such amount may be in the future.
"RESTORATION" shall mean, following the occurrence of a Casualty or
a Condemnation which is of a type necessitating the repair of the Property, the
completion of the repair and restoration of the Property as nearly as possible
to the condition the Property was in immediately prior to such Casualty or
Condemnation, with such alterations as may be reasonably approved by Lender.
"RESTORATION CONSULTANT" shall have the meaning set forth in Section
8.4(b)(iii) hereof.
"RESTORATION RETAINAGE" shall have the meaning set forth in Section
8.4(b)(iv) hereof.
"RESTRICTED PARTY" shall have the meaning set forth in Section 7.1
hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
the XxXxxx-Xxxx Companies, Inc.
"SALE OR PLEDGE" shall have the meaning set forth in Section 7.1
hereof.
"SECURITIES" shall have the meaning set forth in Section 13.1
hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES LIABILITIES" shall have the meaning set forth in Section
13.5(b) hereof.
"SECURITIZATION" shall have the meaning set forth in Section 13.1
hereof.
"SECURITIZATION CLOSING DATE" shall mean a date selected by Lender
in its sole discretion by providing not less than twenty-four (24) hours prior
notice to Borrower.
"SELECTED DAY" means the fifteenth (15th) day of each calendar month
or if such day is not a Business Day, the immediately succeeding Business Day,
or such other date as determined by Lender pursuant to Section 2.3(g) hereof.
"SERVICER" shall have the meaning set forth in Section 13.2 hereof.
"SPECIAL MEMBER" shall have the meaning set forth in Section 6.1(c)
hereof.
"SPONSOR" shall mean Xxxxxxx Properties, Inc.
"STATE" shall mean, with respect to the Property, the State or
Commonwealth in which the Property or any part thereof is located.
"STATIC LIBOR RATE" shall have the meaning set forth in Section
2.2(b) hereof.
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"STATIC LIBOR RATE LOAN" shall have the meaning set forth in Section
2.3(f)(iii) hereof.
"SUBORDINATION OF MANAGEMENT AGREEMENT" shall mean that certain
Subordination of Management Agreement dated the date hereof among Lender,
Borrower and Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"SUBSIDIARY" shall mean any corporation, partnership, limited
liability company or other entity in which a Person holds an equity interest
which is more than ten (10%) of the equity classes issued by such entity.
"SYNDICATION" shall have the meaning set forth in Section 13.1
hereof.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property (or any part thereof) or the Collateral (or any
part thereof).
"TENANT" shall mean any Person leasing, subleasing or otherwise
occupying any portion of the Property under a Lease or other occupancy agreement
with Mortgage Borrower (including, without limitation, any Major Lease).
"TOWER PARCEL" shall mean Gas Company Tower, located at 000 Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more particularly described in the
Mortgage.
"TRIBUNAL" shall mean any state, commonwealth, federal, foreign,
territorial or other court or governmental department, commission, board,
bureau, district, authority, agency, central bank, or instrumentality or any
arbitration authority.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial
Code as in effect in the State of Delaware.
"UCC-9 TITLE POLICY" shall mean that certain UCC-9 title policy
issued with respect to the Collateral and insuring the lien of the Pledge
Agreement encumbering such Collateral.
"UNDERWRITER GROUP" shall have the meaning set forth in Section
13.5(b) hereof.
Section 1.2. PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. All uses of the
word "including" shall mean "including, without limitation" unless the context
shall indicate otherwise. Unless otherwise specified, the words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.
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ARTICLE II
GENERAL TERMS
Section 2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER.
(a) Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.
(b) Borrower may request and receive only one borrowing in respect
of the Loan and any amount borrowed and repaid in respect of the Loan may not be
re-borrowed.
(c) The Loan shall be evidenced by the Note and secured by the
Pledge Agreement and the other Loan Documents.
(d) Borrower shall use the proceeds of the Loan to (i) make an
equity contribution to the Mortgage Borrower in order to cause the Mortgage
Borrower to use such amounts for any use permitted pursuant to Section 2.1(d) of
the Mortgage Loan Agreement, (ii) pay costs and expenses incurred in connection
with the closing of the Loan, as approved by Lender and (iii) distribute the
balance, if any, to its members.
Section 2.2. INTEREST RATE PROTECTION AGREEMENT. (a) Prior to or
contemporaneously with the Closing Date, Borrower shall have obtained the
Interest Rate Protection Agreement, which shall be coterminous with, or extend
beyond, the initial term of the Loan and have a notional amount which shall not
at any time be less than the outstanding principal balance of the Loan. The
Interest Rate Protection Agreement shall be maintained throughout the term of
the Loan with an Acceptable Counterparty. If the provider of the Interest Rate
Protection Agreement ceases to be an Acceptable Counterparty, Borrower shall
obtain a Replacement Interest Rate Protection Agreement from an Acceptable
Counterparty within ten (10) Business Days of receipt of notice from Lender or
Borrower's obtaining knowledge that the then-current counterparty under the
Interest Rate Protection Agreement is no longer an Acceptable Counterparty;
provided, however, in the event that the Interest Rate Protection Agreement
counterparty is Bank of America, N.A., the provisions of this sentence shall not
apply.
(b) Borrower shall collaterally assign to Lender pursuant to the
Collateral Assignment of Interest Rate Protection Agreement all of its right,
title and interest to receive any and all payments under the Interest Rate
Protection Agreement (and any related guarantee, if any) and shall deliver to
Lender counterparts of such Collateral Assignment of Interest Rate Protection
Agreement executed by the Borrower and by the Acceptable Counterparty and notify
the Acceptable Counterparty of such collateral assignment (either in such
Interest Rate Protection Agreement or by separate instrument). At such time as
the Loan is repaid in full, all of Lender's right, title and interest in the
Interest Rate Protection Agreement shall terminate and Lender shall execute and
deliver at Borrower's sole cost and expense, such documents as may be required
to evidence Lender's release of the Interest Rate Protection Agreement and to
notify the Acceptable Counterparty of such release.
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(c) Borrower shall comply with all of its obligations under the
terms and provisions of the Interest Rate Protection Agreement. All amounts paid
by the Acceptable Counterparty under the Interest Rate Protection Agreement to
Borrower or Lender shall be deposited immediately with Lender. Borrower shall
take all actions reasonably requested by Lender to enforce Lender's rights under
the Interest Rate Protection Agreement in the event of a default by the
Acceptable Counterparty and shall not waive, amend or otherwise modify any of
its rights thereunder.
(d) In the event that Borrower fails to purchase, maintain and / or
deliver to Lender the Interest Rate Protection Agreement in accordance with the
terms and provisions of this Agreement, Lender may purchase the Interest Rate
Protection Agreement and the cost incurred by Lender in purchasing the Interest
Rate Protection Agreement shall be paid by Borrower to Lender with interest
thereon at the Default Rate from the date such cost was incurred by Lender until
such cost is reimbursed by Borrower to Lender.
(e) In connection with the Interest Rate Protection Agreement and
any Replacement Interest Rate Protection Agreement, Borrower shall obtain and
deliver to Lender an opinion from counsel (which counsel may be in-house counsel
for the Acceptable Counterparty) for the Acceptable Counterparty (upon which
Lender and its successors and assigns may rely) which shall provide, in relevant
part, that:
(i) the Acceptable Counterparty is duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation and has the organizational power and authority to execute
and deliver, and to perform its obligations under, the Interest Rate
Protection Agreement;
(ii) the execution and delivery of the Interest Rate
Protection Agreement by the Acceptable Counterparty, and any other
agreement which the Acceptable Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder have
been and remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or by-laws
(or equivalent organizational documents) or any law, regulation or
contractual restriction binding on or affecting it or its property;
(iii) all consents, authorizations and approvals required for
the execution and delivery by the Acceptable Counterparty of the Interest
Rate Protection Agreement, and any other agreement which the Acceptable
Counterparty has executed and delivered pursuant thereto, and the
performance of its obligations thereunder have been obtained and remain in
full force and effect, all conditions thereof have been duly complied
with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance; and
(iv) the Interest Rate Protection Agreement, and any other
agreement which the Acceptable Counterparty has executed and delivered
pursuant thereto, has been duly executed and delivered by the Acceptable
Counterparty and constitutes the legal, valid and binding obligation of
the Acceptable Counterparty, enforceable against the Acceptable
Counterparty in accordance with its terms, subject to applicable
bankruptcy,
- 17 -
insolvency and similar laws affecting creditors' rights generally, and
subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
Section 2.3. LOAN PAYMENTS
(a) The Loan shall bear interest at a rate per annum equal to the
LIBOR Rate or the Static LIBOR Rate, as applicable (the "NOTE RATE"). Interest
shall be computed based on the daily rate produced assuming a three hundred
sixty (360) day year, multiplied by the actual number of days elapsed. Except as
otherwise set forth in this Agreement, interest shall be paid in arrears.
(b) Borrower hereby agrees to pay sums due under the Note as
follows: An initial payment of $ is due on the Closing Date for
interest from the Closing Date through and including , 2003.
Thereafter, except as may be adjusted in accordance with Section 2.3(c),
consecutive monthly installments of interest calculated at the applicable Note
Rate for the applicable Interest Period shall be payable pursuant to the terms
of Section 2.3(d) (the "MONTHLY PAYMENT AMOUNT") on each Payment Date. Borrower
shall pay to Lender on the Maturity Date the outstanding principal balance, all
accrued and unpaid interest and all other amounts due hereunder and under the
Note, the Mortgage and other Loan Documents. The accrued and unpaid interest due
on the Maturity Date shall be calculated for the full final Interest Period,
notwithstanding that such Interest Period may extend beyond the Maturity Date.
(c) All interest shall be computed on the basis of a three hundred
sixty (360) day year and paid for the actual number of days elapsed in an
Interest Period (including the first day but excluding the last day of an
Interest Period). Lender shall determine the Note Rate applicable to the Debt in
accordance with this Agreement and its determination thereof shall be conclusive
in the absence of manifest error. The books and records of Lender shall be prima
facie evidence of all sums owing to Lender from time to time under this
Agreement, but the failure to record any such information shall not limit or
affect the obligations of Borrower under the Loan Documents.
(d) Each payment by Borrower hereunder or under the Note shall be
payable at X.X. Xxx 000000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, Attn: Commercial
Mortgage Loan Servicing #1777, or at such other place as the Lender may
designate from time to time in writing, on the date such payment is due, to
Lender by deposit to such account as Lender may designate by written notice to
Borrower. Each payment by Borrower hereunder or under the Note shall be made in
funds settled through the New York Clearing House Interbank Payments System or
other funds immediately available to Lender by 2:00 p.m., New York City time, on
the date such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any payment hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the first Business Day preceding such scheduled due
date.
(e) Prior to the occurrence of an Event of Default, all monthly
payments made as scheduled under this Agreement and the Note shall be applied to
the payment of interest
- 18 -
computed at the Note Rate. All voluntary and involuntary prepayments on the Note
shall be applied, to the extent thereof, to accrued but unpaid interest on the
amount prepaid, to the remaining principal amount, and any other sums due and
unpaid to Lender in connection with the Loan, in such manner and order as Lender
may elect in its sole and absolute discretion. Following the occurrence of an
Event of Default, any payment made on the Note shall be applied to accrued but
unpaid interest, late charges, accrued fees, the unpaid principal amount of the
Note, and any other sums due and unpaid to Lender in connection with the Loan,
in such manner and order as Lender may elect in its sole and absolute
discretion.
(f) All payments made by Borrower hereunder or under the Note or the
other Loan Documents shall be made irrespective of, and without any deduction
for, any setoff, defense or counterclaims.
(g) Borrower acknowledges that in connection with a Securitization
of the Loan and/or the Mortgage Loan, Lender may in its sole discretion change
the day of the month that constitutes the Selected Day.
Section 2.4. LATE PAYMENT CHARGE
Except for the payment due on the Maturity Date, if any principal or
interest payment is not paid by Borrower on or before the date on which same is
due, Borrower shall pay to Lender upon demand an amount equal to the lesser of
four percent (4%) of such unpaid sum or the maximum amount permitted by
applicable law in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Any such amount shall be secured by the Mortgage
and the other Loan Documents to the extent permitted by applicable law.
Section 2.5. PREPAYMENT
Except as otherwise expressly permitted by this Section 2.5 no
voluntary prepayments, whether in whole or in part, of the Loan or any other
amount at any time due and owing under the Note can be made by Borrower or any
other Person without the express written consent of Lender.
(a) Lockout Period. Borrower has no right to make, and Lender shall
have no obligation to accept, any voluntary prepayment, whether in whole or in
part, of the Loan during the Lockout Period. Notwithstanding the foregoing, if
either (i) Lender, in its sole and absolute discretion, accepts a full or
partial voluntary prepayment during the Lockout Period or (ii) there is an
involuntary prepayment during the Lockout Period, then, in either case, Borrower
shall, in addition to any portion of the Loan prepaid (together with all
interest accrued and unpaid thereon), pay to Lender a prepayment premium in an
amount calculated in accordance with Section 2.5(c) hereof.
(b) Intentionally omitted.
(c) Involuntary Prepayment During the Lockout Period. If, during the
Lockout Period, payment of all or any part of the Debt is tendered by Borrower
or otherwise recovered by Lender in the exercise of its remedies under the Loan
Documents, such tender or
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recovery shall be (i) made on the next occurring Payment Date together with the
Monthly Payment Amount and (ii) deemed a voluntary prepayment by Borrower in
violation of the prohibition against prepayment set forth in this Section 2.5
and Borrower shall pay, in addition to the Debt, (x) an amount equal to the
Lockout Yield Maintenance Premium and (y) the accrued and unpaid interest
calculated for the full Interest Period in which such voluntary prepayment
occurs.
(d) Insurance and Condemnation Proceeds; Excess Interest.
Notwithstanding any other provision herein to the contrary, and provided no
Event of Default exists, Borrower shall not be required to pay any prepayment
premium in connection with any prepayment occurring solely as a result of (i)
the application of Insurance Proceeds or Condemnation Proceeds pursuant to the
terms of the Loan Documents, or (ii) the application of any interest in excess
of the maximum rate permitted by applicable law to the reduction of the Loan.
(e) After the Lockout Period. Commencing on the day after the
expiration of the Lockout Period, and upon giving Lender at least sixty (60)
days (but not more than ninety (90) days) prior written notice, Borrower may
voluntarily prepay (without premium) the Note in whole (but not in part) on a
Payment Date. Lender shall accept a prepayment pursuant to this Section 2.5(e)
on a day other than a Payment Date provided that, in addition to payment of the
full outstanding principal balance of the Note, Borrower pays to Lender a sum
equal to the amount of interest which would have accrued on the Note if such
prepayment occurred on the next Payment Date.
(f) Limitation on Partial Prepayments. In no event shall Lender have
any obligation to accept a partial prepayment.
(g) Liquidation Events.
(i) In the event of (A) any Casualty to the Property or any
material portion thereof, (B) any Condemnation of the Property or any
material portion thereof, (C) any transfer of the Property in connection
with a realization thereon following a Mortgage Event of Default,
including, without limitation, a foreclosure sale, or (D) any refinancing
of the Property or the Mortgage Loan (each, a "LIQUIDATION EVENT"),
Borrower shall cause the related Net Liquidation Proceeds After Debt
Service to be deposited directly into the Mezzanine Debt Service Account.
On each date on which Lender actually receives a distribution of Net
Liquidation Proceeds After Debt Service, Borrower shall prepay the
outstanding principal balance of the Note in an amount equal to one
hundred percent (100%) of such Net Liquidation Proceeds After Debt
Service, together with interest which would have accrued on such amount
through the next Payment Date. Any amounts of Net Liquidation Proceeds
After Debt Service in excess of the Debt shall be paid to Borrower. Any
prepayment received by Lender pursuant to this Section 2.4(g)(i) on a date
other than a Payment Date shall be held by Lender as collateral security
for the Loan in an interest bearing account, with such interest accruing
to the benefit of Borrower, and shall be applied by Lender on the next
Payment Date.
(ii) Borrower shall notify Lender of any Liquidation Event no
later than one (1) Business Day following the first date on which Borrower
has knowledge of such
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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(g)(ii) shall not be
construed to contravene in any manner the restrictions and other
provisions regarding refinancing of the Mortgage Loan or the Sale or
Pledge of the Property set forth in this Agreement and the other Loan
Documents.
(h) Prepayment of Mortgage Loan/Mortgage Borrower's Failure to
Extend Mortgage Loan. Except as provided in Section 5.32 hereof, in the event
that (i) the Mortgage Loan is paid in full at any time prior to the then
Maturity Date of the Loan or (ii) the Mortgage Borrower does not exercise its
right to extend the Mortgage Loan pursuant to Section 2.10 of the Mortgage Loan
Agreement, the Debt shall then be immediately due and payable regardless of the
Maturity Date of the Loan.
Section 2.6. PAYMENTS AFTER DEFAULT
Upon the occurrence and during the continuance of an Event of
Default, interest on the outstanding principal balance of the Loan and, to the
extent permitted by law, overdue interest and other amounts due in respect of
the Loan, (a) shall accrue at the Default Rate, and (b) Lender shall be entitled
to receive and Borrower shall pay or cause to be paid to Lender all cash flow
from the Property in accordance with the terms of Article 10 of the Mortgage
Loan Agreement, such amount to be applied by Lender to the payment of the Debt
in such order as Lender shall determine in its sole discretion, including,
without limitation, alternating applications thereof between interest and
principal. Interest at the Default Rate shall be computed from the occurrence of
the Event of Default until the earlier of (i) the actual receipt and collection
of the Debt (or that portion thereof that is then due) and (ii) the cure of such
Event of Default. To the extent permitted by applicable law, interest at the
Default Rate shall be added to the Debt, shall itself accrue interest at the
same rate as the Loan and shall be secured by the Pledge Agreement. This
paragraph shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Lender by reason of the occurrence of any Event of Default; the
acceptance of any payment from Borrower shall not be deemed to cure or
constitute a waiver of any Event of Default; and Lender retains its rights under
this Agreement to accelerate and to continue to demand payment of the Debt upon
the happening of and during the continuance any Event of Default, despite any
payment by Borrower to Lender.
Section 2.7. INTENTIONALLY DELETED
Section 2.8. USURY SAVINGS
This Agreement and the Note are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower
is at any time required or obligated to pay interest on the principal balance
due hereunder at a rate in excess of the Maximum Legal Rate, the Note Rate or
the Default Rate, as
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the case may be, shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be
deemed to have been payments in reduction of principal and not on account of the
interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the
Loan for so long as the Loan is outstanding.
Section 2.9. UNAVAILABILITY OF RATE; FOREIGN TAXES; INCREASED COSTS.
In the event that Lender shall have determined in its reasonable discretion that
none of the methods set forth in the definition of "LIBOR" herein are available,
then Lender shall forthwith give notice by telephone of such determination,
confirmed in writing, to Borrower at least one (1) day prior to the last day of
the related Interest Period. If such notice is given, the Note Rate, commencing
with such related Interest Period shall be the LIBOR Rate in effect for the most
recent Interest Period (the "STATIC LIBOR RATE").
(a) If, pursuant to the terms of this Agreement, the Loan has been
converted to the Static LIBOR Rate and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice thereof to Borrower, and
the Loan will be converted from the Static LIBOR Rate to the LIBOR Rate
effective on the first day of the next succeeding Interest Period.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Borrower have the right to elect to convert from the LIBOR Rate to the
Static LIBOR Rate.
(b) (i) All payments made by Borrower hereunder shall be made free
and clear of, and without reduction for or on account of, income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions, reserves or
withholdings imposed, levied, collected, withheld or assessed by any
Governmental Authorities, which are imposed, enacted or become effective on or
after the Closing Date (such non-excluded taxes being referred to collectively
as "FOREIGN TAXES"), excluding income and franchise taxes of the United States
of America or any political subdivision or taxing authority thereof or therein.
If any Foreign Taxes are required to be withheld from any amounts payable to
Lender hereunder and such Foreign Taxes are not a result of activities of Lender
unrelated to the Loan or Borrower, the amounts so payable to Lender shall be
increased to the extent necessary to yield to Lender (after payment of all
Foreign Taxes) interest or any such other amounts payable hereunder at the rate
or in the amounts specified hereunder. Whenever any Foreign Taxes are payable
pursuant to applicable law by Borrower, as promptly as possible thereafter,
Borrower shall send to Lender an original official receipt, if available, or
certified copy thereof showing payment of such Foreign Taxes. Borrower hereby
indemnifies Lender for any incremental taxes, interest or penalties that may
become payable by Lender which may result from any failure by Borrower to pay
any such Foreign Taxes when due to the appropriate taxing authority of which
Lender shall have provided Borrower with prior written notice, if possible, or
any failure by Borrower to remit to Lender the required receipts or other
required documentary evidence. Lender's inability to notify Borrower of any such
Foreign Taxes in accordance with the immediately preceding sentence shall in no
way relieve Borrower of its obligations under this Section 2.9(b). (ii) A Lender
that is entitled to
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an exemption from or reduction of any Foreign Taxes, with respect to payments
under this Agreement shall deliver to the Borrower, at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
In addition, at Borrower's request, Lender shall provide to Borrower its
understanding as to whether any Foreign Taxes will be applicable to any
forthcoming payments due under the Loan Documents. Lender shall not be entitled
to claim compensation pursuant to this Section 2.9(b) for any Foreign Taxes to
the extent that such Foreign Taxes result from a failure to comply with the
requirements of this paragraph. (iii) If Lender determines in good faith that a
reasonable basis exists for contesting any Foreign Taxes for which
indemnification has been demanded hereunder, Lender shall cooperate with
Borrower in challenging such Taxes at Borrower's expense if so requested by
Borrower. If Lender receives a refund of Foreign Taxes for which a payment has
been made by Borrower pursuant to this Agreement, which refund in the good faith
judgment of Lender is attributable to such payment made by Borrower, then Lender
shall reimburse Borrower for such amount (together with any interest received
thereon) as Lender determines to be the proportion of the refund as will leave
it, after such reimbursement, in no better or worse position than it would have
been in if the payment had not been required. (iv) If the Borrower is required
to pay additional amounts to or for the account of any Lender pursuant to this
Section 2.9(b) as a result of a change in law or treaty occurring after such
Lender first became a party to this Agreement, then such Lender will, at the
request of the Borrower, change the jurisdiction of its applicable lending
office if such change (x) will eliminate or reduce any such additional payment
which may thereafter accrue and (y) is, in such Lender's sole, reasonable
discretion, determined not to be materially disadvantageous or cause
unreasonable hardship to such Lender, provided that fees, charges, costs or
expenses that are related to such change shall be borne by the Borrower on
behalf of a Lender, and the mere existence of such expenses, fees or costs shall
not be deemed to be materially disadvantageous or cause undue hardship to the
Lender. Lender agrees that it will (A) take all reasonable actions reasonably
requested by the Borrower in writing that are without material risk and cost to
Lender and consistent with the internal policies of such Lender and applicable
legal and regulatory restrictions (as the case may be) to maintain all
exemptions, if any, available to it from withholding taxes (whether available by
treaty or existing administrative waiver) and (B) to the extent reasonable and
without material risk and cost to it, otherwise cooperate with the Borrower to
minimize any amounts payable by the Borrower under this Section 2.9(b);
provided, however, that in each case, any cost relating to such action or
cooperation requested by the Borrower shall be borne by the Borrower.
(c) If any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender to make or maintain a Loan with the Note Rate being based on LIBOR as
contemplated hereunder, (i) the obligation of Lender hereunder to make or
continue the Loan based on LIBOR or to convert the Loan from the Static LIBOR
Rate to the LIBOR Rate shall be canceled forthwith and (ii) any outstanding
LIBOR Loan shall be converted automatically to a loan bearing interest at the
Static LIBOR Rate (the "STATIC LIBOR RATE LOAN") on the next succeeding Payment
Date or within such earlier period as required by law. Borrower hereby agrees
promptly to pay Lender, upon demand, any additional amounts necessary to
compensate Lender for any costs incurred by Lender in making any conversion in
accordance with this Agreement, including, without limitation, any interest or
fees payable by Lender to lenders of funds obtained by it in order to make or
maintain the
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LIBOR Loan hereunder. If Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.9(c), Lender shall provide Borrower with not less
than ninety (90) days written notice specifying in reasonable detail the event
by reason of which it has become so entitled and the additional amount required
to fully compensate Lender for such additional costs. Lender's notice of such
costs, as certified to Borrower, shall be conclusive absent manifest error.
(d) In the event that any change in any requirement of law or in the
interpretation or application thereof, or compliance by Lender with any request
or directive (whether or not having the force of law) hereafter issued from any
central bank or other Governmental Authority:
(i) shall hereafter impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of Lender which is not otherwise
included in the determination of the LIBOR Rate hereunder;
(ii) shall hereafter have the effect of reducing the rate of
return on Lender's capital as a consequence of its obligations hereunder
to a level below that which Lender could have achieved but for such
adoption, change or compliance (taking into consideration Lender's
policies with respect to capital adequacy) by any amount deemed by Lender
to be material; or
(iii) shall hereafter impose on Lender any other condition and
the result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining loans or extensions of credit or to reduce
any amount receivable hereunder other than with respect to taxes; then, in
any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost
or reduced amount receivable which Lender deems to be material as
determined by Lender. If Lender becomes entitled to claim any additional
amounts pursuant to this Section 2.9(d), Lender shall provide Borrower
with not less than ninety (90) days written notice specifying in
reasonable detail the event by reason of which it has become so entitled
and the additional amount required to fully compensate Lender for such
additional cost or reduced amount. A certificate (together with such
supporting documentation as Lender shall provide) as to any additional
costs or amounts payable pursuant to the foregoing sentence submitted by
Lender to Borrower shall be conclusive in the absence of error. This
provision shall survive payment of the Note and the satisfaction of all
other obligations of Borrower under this Agreement and the Loan Documents.
(e) Borrower agrees to indemnify Lender and to hold Lender harmless
from any loss or expense which Lender sustains or incurs as a consequence of (i)
any default by Borrower in payment of the principal of or interest on a LIBOR
Loan, including, without limitation, any such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain a LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or
mandatory) of the LIBOR Loan that did not include all interest which had accrued
(or would have accrued) at the Note Rate through the end of the related Interest
Period,
- 24 -
including, without limitation, such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the LIBOR Loan hereunder, and (iii) the conversion (for any reason whatsoever,
whether voluntary or involuntary) of the Note Rate from the LIBOR Rate to the
Static LIBOR Rate with respect to any portion of the outstanding principal
amount of the Loan then bearing interest at the LIBOR Rate on a date other than
the Payment Date immediately following the last day of an Interest Period,
including, without limitation, such loss or expenses arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain a
LIBOR Loan hereunder (the amounts referred to in clauses (i), (ii) and (iii) are
herein referred to collectively as the "BREAKAGE COSTS"); provided, however,
Borrower shall not indemnify Lender from any loss or expense arising from
Lender's gross negligence or willful misconduct. This provision shall survive
payment of the Note in full and the satisfaction of all other obligations of
Borrower under this Agreement and the other Loan Documents.
Lender shall not be entitled to claim compensation pursuant to this
Section 2.9(e) for any Foreign Taxes, increased cost or reduction in amounts
received or receivable hereunder, or any reduced rate of return, which was
incurred or which accrued more than ninety (90) days before the date Lender
notified Borrower of the change in law or other circumstance on which such claim
of compensation is based and delivered to Borrower a written statement setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section 2.9(e), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
Section 2.10. EXTENSION. In the event that Mortgage Borrower for any
reason does not extend the Maturity Date of the Mortgage Loan pursuant to
Section 2.10 of the Mortgage Loan Agreement, Borrower shall prepay the Loan
(without payment of any prepayment fee or penalty) on the Fourth Anniversary, as
if such date were the Maturity Date.
Section 2.11. ADDITIONAL PAYMENT PROVISIONS.
(a) Within fifteen (15) days after request by Lender (or at the time
of any prepayment), Borrower shall pay to Lender such amount or amounts as will
compensate Lender for any loss, cost, expense, penalty, claim or liability,
including any loss incurred in obtaining, prepaying, liquidating or employing
deposits or other funds from third parties and any loss of yield, as determined
by Lender in its judgment reasonably exercised incurred by it with respect to
the Loan as a result of the payment or prepayment of any amount on a date other
than the date such amount is required or permitted to be paid or prepaid;
provided that Lender delivers to Borrower a certificate as to the amounts of
such costs described herein, which certificate shall be conclusive in the
absence of manifest error. Lender shall have no obligation to purchase, sell
and/or match funds in connection with the funding or maintaining of the Loan or
any portion thereof. The obligations of Borrower under this Section shall
survive any termination of the Loan Documents and payment of the Note and shall
not be waived by any delay by Lender in seeking such compensation.
(b) All payments made by Borrower hereunder or under the other Loan
Documents shall be made irrespective of, and without any deduction for, any
setoff, defense or counterclaims.
- 25 -
(c) Remittances in payment of any part of the Loan in less than
the required amount in immediately available U.S. funds shall not, regardless of
any receipt or credit issued therefor, constitute payment until the required
amount is actually received by the holder hereof in immediately available U.S.
funds and shall be made and accepted subject to the condition that any check or
draft may be handled for collection in accordance with the practices of the
collecting bank or banks.
(d) If at any time after the date hereof, Lender (which shall
include, for purposes of this Section, any corporation controlling Lender)
reasonably determines that due to the adoption or modification of any Legal
Requirement regarding taxation, Lender's required levels of reserves, deposits,
Federal Deposit Insurance Corporation insurance or capital (including any
allocation of capital requirements or conditions), or similar requirements, or
any interpretation or administration thereof by any Tribunal or compliance of
Lender with any of such requirements, has or would have the effect of (a)
increasing Lender's costs relating to the Loan, or (b) reducing the yield or
rate of return of Lender on the Loan, to a level below that which Lender could
have achieved but for the adoption or modification of any such Legal
Requirements, Borrower shall, within fifteen (15) days of any request by Lender,
pay to Lender such additional amounts as (in Lender's sole judgment, after good
faith and reasonable computation) will compensate Lender for such increase in
costs or reduction in yield or rate of return of Lender (a "CONSEQUENTIAL
LOSS"). No failure by Lender to immediately demand payment of any additional
amounts payable hereunder shall constitute a waiver of Lender's right to demand
payment of such amounts at any subsequent time. Nothing herein contained shall
be construed or so operate as to require Borrower to pay any interest, fees,
costs or charges greater than is permitted by applicable Law. If a change in the
applicable lending office of Lender would eliminate any Consequential Loss,
Lender shall use its best efforts to change such office, so long as such change
would not be materially disadvantageous or cause unreasonable hardship to
Lender.
(e) Any demand for payment pursuant to this Section 2.11 shall be
accompanied by an acknowledgement from Lender that it is applying these
provisions generally with respect to similar loan transactions and borrowers.
ARTICLE III
CONDITIONS PRECEDENT
The obligation of Lender to make the Loan hereunder is subject to
the fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date.
Section 3.1. REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH
CONDITIONS. The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, and Lender shall have determined that no Default or an Event of
Default shall have occurred and be continuing nor will any Default or Event of
Default occur immediately following the Closing Date and Borrower shall be in
-26-
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Loan Document on its part to be observed or
performed.
Section 3.2. DELIVERY OF LOAN DOCUMENTS; TITLE POLICIES.
(a) Pledge Agreement, Loan Agreement and Note. Lender shall have
received from Borrower fully executed and acknowledged counterparts of the
Pledge Agreement and evidence that the Uniform Commercial Code financing
statements have been delivered to the title company for recording and/or filing,
in the reasonable judgment of Lender, so as to effectively create upon such
recording and/or filing valid and enforceable Liens upon the Collateral, of
first priority, in favor of Lender (or such other trustee as may be required or
desired under local law). Lender shall have also received from Borrower fully
executed counterparts of this Agreement, the Note, the Collateral Assignment of
Interest Rate Protection Agreement and all other Loan Documents.
(b) Owner's Title Policy; UCC-9 Title Policy.
(i) Lender shall have received an Owner's Title Insurance
Policy issued by a title company acceptable to Lender and dated as of the
Closing Date. Such Title Insurance Policy shall (i) provide such coverage as may
be reasonably acceptable to Lender, free and clear of all exceptions from
coverage other than Permitted Encumbrances and standard exceptions and
exclusions from coverage (as modified by the terms of any endorsements), (ii)
contain such endorsements and affirmative coverages as Lender may reasonably
request (including, without limitation, the mezzanine financing endorsement),
and (iii) name Mortgage Borrower as the insured. The Owner's Title Insurance
Policy shall be assignable. Lender also shall have received evidence that all
premiums in respect of such Owner's Title Insurance Policy have been paid.
(ii) Lender shall have received a UCC-9 Title Policy with
respect to the Collateral issued by a title company acceptable to Lender and
dated as of the Closing Date. Such UCC-9 Title Policy shall (i) provide coverage
in the Loan Amount or such other amount as required by Lender, (ii) insure
Lender that the Pledge Agreement insured by such UCC-9 Title Policy creates a
valid, perfected lien on the Collateral of the requisite priority and that
Borrower is the sole owner of the Collateral, free and clear of all exceptions
from coverage other than the standard exceptions and exclusions from coverage,
(iii) contain such endorsements and affirmative coverages as Lender may
reasonably request, and (iv) name Lender as the insured. The UCC-9 Title Policy
shall be assignable. Lender also shall have received evidence that all premiums
in respect of such UCC-9 Title Policy have been paid.
(c) Survey. Lender shall have received a current title survey for
the Property, certified to the title company and Lender and their successors and
assigns, in form and content satisfactory to Lender and prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. The survey shall meet the classification of an "Urban Survey" and
the following additional items from the list of "Optional Survey
Responsibilities and Specifications" (Table A) should be added to each survey:
2, 3, 4, 6, 8, 9, 10, 11 and 13. Such survey shall reflect the same legal
description contained in the Title Insurance Policy
-27-
referred to in subsection (b) above and shall include, among other things, a
metes and bounds description of the real property comprising part of the
Property reasonably satisfactory to Lender. The surveyor's seal shall be affixed
to the survey and the surveyor shall provide a certification for the survey in
form and substance acceptable to Lender.
(d) Insurance. Lender shall have received copies of the Policies
required hereunder, satisfactory to Lender in its sole discretion, and evidence
of the payment of all Insurance Premiums payable for the existing policy period.
(e) Environmental Reports. Lender shall have received an
Environmental Report in respect of the Property satisfactory to Lender.
(f) Zoning/Building Code. Lender shall have received evidence of
compliance with zoning and building ordinances and codes with respect to the
Property, including, without limitation, required certificates of occupancy,
reasonably acceptable to Lender.
(g) Encumbrances. Borrower shall have taken or caused to be taken
such actions in such a manner so that Lender has a valid and perfected first
Lien as of the Closing Date on the Collateral, subject only to applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents, and Lender shall have received satisfactory evidence thereof.
(h) Lien Searches. Borrower shall have delivered to Lender
certified search results pertaining to Borrower, Borrower Principal and such
other Persons as reasonably required by Lender for state and federal tax liens,
bankruptcy, judgment, litigation and state and local UCC filings.
Section 3.3. RELATED DOCUMENTS. Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and at Lender's written request, Lender shall have received and approved
certified copies thereof.
Section 3.4. ORGANIZATIONAL DOCUMENTS. On or before the Closing
Date, Borrower shall deliver or cause to be delivered to Lender (a) copies
certified by Borrower of all organizational documentation related to Borrower
and Borrower Principal which must be acceptable to Lender in its sole
discretion, and (b) such other evidence of the formation, structure, existence,
good standing and/or qualification to do business of the Borrower and Borrower
Principal, as Lender may request in its sole discretion, including, without
limitation, good standing or existence certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and incumbency certificates as may be requested by Lender.
Section 3.5. OPINIONS OF BORROWER'S COUNSEL. Lender shall have
received opinions of Borrower's counsel (a) with respect to non-consolidation
issues, and (b) with respect to due execution, authority, enforceability of the
Loan Documents and such other matters as Lender may require, and (c) with
respect to the perfection of Lender's security interest in the
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Collateral, all such opinions in form, scope and substance satisfactory to
Lender and Lender's counsel in their sole discretion.
Section 3.6. ANNUAL BUDGET. Borrower shall have delivered, and
Lender shall have approved, the Annual Budget for the current fiscal year, a
copy of which is attached as Exhibit A hereto.
Section 3.7. TAXES AND OTHER CHARGES. Mortgage Borrower shall have
paid all Taxes and Other Charges (including any in arrears) relating to the
Property, which amounts shall be funded with proceeds of the Mortgage Loan and
Loan.
Section 3.8. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.
Section 3.9. PAYMENTS. All payments, deposits or escrows required to
be made or established by Borrower under this Agreement, the Note and the other
Loan Documents on or before the Closing Date shall have been paid.
Section 3.10. TRANSACTION COSTS. Except as otherwise expressly
provided herein, Borrower shall have paid or reimbursed Lender for all out of
pocket expenses in connection with the underwriting, negotiation, and closing of
the Loan, including title insurance premiums and other title company charges;
registration, filing and similar fees, taxes and charges; transfer, deed, stamp
or documentary taxes or similar fees or charges; costs of third-party reports,
including without limitation, environmental studies, credit reports, seismic
reports, engineer's reports, appraisals and surveys; underwriting and
origination expenses; and all actual, reasonable legal fees and expenses charged
by counsel to Lender.
Section 3.11. NO MATERIAL ADVERSE CHANGE. There shall have been no
Material Adverse Change in the financial condition or business condition of the
Property, Mortgage Borrower, Borrower, Borrower Principal, Manager or any other
person or party contributing to the operating income and operations of the
Property since the date of the most recent financial statements and/or other
information delivered to Lender. The income and expenses of the Property, the
occupancy and leases thereof, and all other features of the transaction shall be
as represented to Lender without material adverse change. None of Borrower,
Mortgage Borrower, Borrower Principal, or Affiliated Manager shall be the
subject of any bankruptcy, reorganization, or insolvency proceeding.
Section 3.12. LEASES AND RENT ROLL. Lender shall have received
copies of all Leases affecting the Property, which shall be satisfactory in form
and substance to Lender. Lender shall have received a current certified rent
roll of the Property, reasonably satisfactory in form and substance to Lender.
Section 3.13. TENANT ESTOPPELS. Borrower shall have delivered to
Lender copies of the executed tenant estoppel letters delivered to Mortgage
Lender, which shall be in form and substance satisfactory to Lender, from (a)
each Tenant under a Major Lease and (b)
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disregarding the area leased by those Tenants described in clause (a) herein,
Tenants leasing, in the aggregate, not less than seventy-five percent (75%) of
the remaining gross leasable area of the Property.
Section 3.14. [INTENTIONALLY OMITTED]
Section 3.15. SUBORDINATION AND ATTORNMENT. Borrower shall deliver
to Lender copies of the executed instruments delivered to Mortgage Lender
subordinating to the Mortgage all of the Leases previously designated by
Mortgage Lender.
Section 3.16. TAX LOT. Lender shall have received evidence that the
Property constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.
Section 3.17. PHYSICAL CONDITIONS REPORT. Lender shall have received
a Physical Conditions Report with respect to the Property, which report shall be
reasonably satisfactory in form and substance to Lender.
Section 3.18. MANAGEMENT AGREEMENT. Lender shall have received a
certified copy of the Management Agreement, which shall be satisfactory in form
and substance to Lender.
Section 3.19. APPRAISAL. Lender shall have received an appraisal for
the Property, which shall be satisfactory in form and substance to Lender.
Section 3.20. FINANCIAL STATEMENTS. Lender shall have received
financial statements and related information in form and substance satisfactory
to Lender and in compliance with any Legal Requirements promulgated by the
Securities and Exchange Commission, including, without limitation, a balance
sheet, income and expense statement and statement of cash flows with respect to
Borrower and an operating statement with respect to the Property for the
year-to-date 2003, 2002, 2001, and 2000, audited (except with respect to the
year-to-date 2003) by an Acceptable Accountant and together with an unqualified
opinion of such Acceptable Accountant that such statements have been prepared in
accordance with GAAP applied on a consistent basis.
Section 3.21. [INTENTIONALLY DELETED].
Section 3.22. FURTHER DOCUMENTS. Lender or its counsel shall have
received such other and further approvals, opinions, documents and information
as Lender or its counsel may have reasonably requested including the Loan
Documents in form and substance satisfactory to Lender and its counsel.
Section 3.23. MORTGAGE LOAN. The Mortgage Loan shall have closed and
Lender shall have approved all terms and conditions thereof.
Section 3.24. OPINION LETTER. Borrower shall deliver to Lender on
the Closing Date an opinion letter from counsel relating to Lender's security
interest being perfected by the
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delivery of certificates evidencing equity interests or by the filing of the
UCC-1 Financing Statement with the Delaware Secretary of State.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of Borrower and, where specifically indicated, Borrower
Principal represents and warrants to Lender as of the Closing Date that:
Section 4.1. ORGANIZATION. Borrower, Mortgage Borrower and Borrower
Principal (when not an individual) (a) has been duly organized and is validly
existing and in good standing with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged, (b) is
duly qualified to do business and is in good standing in each jurisdiction where
it is required to be so qualified in connection with its properties, businesses
and operations, (c) possesses all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
Borrower is the ownership and management of Mortgage Borrower, and (d) in the
case of Borrower, has full power, authority and legal right to grant, bargain,
sell, pledge, assign, warrant, transfer and convey the Collateral pursuant to
the terms of the Loan Documents, and in the case of Borrower, Mortgage Borrower
and Borrower Principal, has full power, authority and legal right to keep and
observe all of the terms of the Loan Documents or Mortgage Loan Documents (as
applicable) to which it is a party. Borrower and Borrower Principal represent
and warrant that the chart attached hereto as Exhibit B sets forth an accurate
listing of the direct and indirect owners of the equity interests in Borrower
and Borrower Principal (when not an individual), to the extent such entity is
not publicly traded.
Section 4.2. STATUS OF BORROWER. Borrower's exact legal name is
correctly set forth on the first page of this Agreement, on the Pledge
Agreement, and on any UCC-1 Financing Statements filed in connection with the
Loan. Borrower is an organization of the type specified on the first page of
this Agreement. Borrower is incorporated in or organized under the laws of the
state of Delaware. Borrower's principal place of business and chief executive
office, and the place where Borrower keeps its books and records, including
recorded data of any kind or nature, regardless of the medium of recording,
including software, writings, plans, specifications and schematics, has been for
the preceding four months (or, if less, the entire period of the existence of
Borrower) the address of Borrower set forth on the first page of this Agreement.
West Fifth's organizational identification number assigned by the state of
incorporation or organization is 3658034, and South Olive's organizational
identification number assigned by the state of incorporation or organization is
3658032.
Section 4.3. VALIDITY OF DOCUMENTS. Borrower, Mortgage Borrower and
Borrower Principal have taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents and
Mortgage Loan Documents to which they are parties. This Agreement, the other
Loan Documents and the Mortgage Loan Documents have been duly executed and
delivered by or on behalf of Borrower, Mortgage Borrower and Borrower Principal
(as applicable) and constitute the legal, valid and binding
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obligations of Borrower, Mortgage Borrower and Borrower Principal (as
applicable) enforceable against Borrower, Mortgage Borrower and Borrower
Principal (as applicable) in accordance with their respective terms, subject
only to applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
Section 4.4. NO CONFLICTS. The execution, delivery and performance
of this Agreement and the other Loan Documents and the Mortgage Loan Documents
by Borrower, Mortgage Borrower and Borrower Principal, to the extent such Person
is a party thereto, will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance (other than pursuant to the
Loan Documents or Mortgage Loan Documents) upon any of the property or assets of
Borrower, Mortgage Borrower or Borrower Principal pursuant to the terms of any
agreement or instrument to which Borrower, Mortgage Borrower or Borrower
Principal is a party or by which any of Borrower's, Mortgage Borrower's or
Borrower Principal's property or assets is subject, nor will such action result
in any violation of the provisions of any statute or any order, rule or
regulation of any Governmental Authority having jurisdiction over Borrower,
Mortgage Borrower or Borrower Principal or any of Borrower's, Mortgage
Borrower's or Borrower Principal's properties or assets, and any consent,
approval, authorization, order, registration or qualification of or with any
Governmental Authority required for the execution, delivery and performance by
Borrower, Mortgage Borrower or Borrower Principal of this Agreement or any of
the other Loan Documents or any of the Mortgage Loan Documents has been obtained
and is in full force and effect.
Section 4.5. LITIGATION. Except as disclosed on Schedule 4.5
attached hereto, there are no actions, suits or proceedings at law or in equity
by or before any Governmental Authority or other agency now pending for which
Borrower or an Affiliate of Borrower has been served or, to Borrower's or
Borrower Principal's knowledge, threatened in writing against or affecting
Borrower, Mortgage Borrower or Borrower Principal, which actions, suits or
proceedings, if determined against Borrower, Mortgage Borrower or Borrower
Principal, would materially adversely affect the condition (financial or
otherwise) or business of Borrower, Mortgage Borrower or Borrower Principal or
the condition or ownership of the Collateral or the Property (as applicable).
Section 4.6. AGREEMENTS. Neither Borrower nor Mortgage Borrower is a
party to any agreement or instrument or subject to any restriction which would
materially and adversely affect Borrower, Mortgage Borrower, the Property or the
Collateral, or Borrower's or Mortgage Borrower's business, properties or assets,
operations or condition, financial or otherwise. Neither Borrower nor Mortgage
Borrower is in default in any material respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party or by which Borrower, Mortgage
Borrower, the Property or the Collateral is bound. Neither Borrower nor Mortgage
Borrower has any material financial obligation under any agreement or instrument
to which Borrower or Mortgage Borrower is a party or by which Borrower, Mortgage
Borrower, the Property or the Collateral is otherwise bound, other than (a)
obligations incurred in the ordinary course of the ownership of the Collateral
or the Property (as applicable) and (b) obligations under the Loan Documents or
Mortgage Loan Documents (as applicable).
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Section 4.7. SOLVENCY. Except as disclosed on Schedule 4.7 attached
hereto, Borrower and Borrower Principal have (a) not entered into the
transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received
reasonably equivalent value in exchange for their obligations under such Loan
Documents. Giving effect to the Loan, the fair saleable value of the assets of
Borrower and Borrower Principal exceeds and will, immediately following the
making of the Loan, exceed the total liabilities of Borrower and Borrower
Principal, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. No petition in bankruptcy has been filed against
Borrower, Borrower Principal, or Affiliated Manager in the last ten (10) years,
and neither Borrower nor Borrower Principal, or Affiliated Manager in the last
ten (10) years has made an assignment for the benefit of creditors or taken
advantage of any Creditors Rights Laws. Neither Borrower nor Borrower Principal,
or Affiliated Manager is contemplating either the filing of a petition by it
under any Creditors Rights Laws or the liquidation of all or a major portion of
Borrower's assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against Borrower or Borrower
Principal, or Affiliated Manager.
Section 4.8. FULL AND ACCURATE DISCLOSURE. No statement of fact made
by or on behalf of Borrower, Mortgage Borrower or Borrower Principal in this
Agreement or in any of the other Loan Documents or in any other document or
certificate delivered by Borrower, Mortgage Borrower or Borrower Principal or
any Affiliate thereof or, to Borrower's knowledge, in any third party reports
delivered on behalf of Borrower, Mortgage Borrower or Borrower Principal
contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading.
There is no material fact presently known to Borrower or Borrower Principal
which has not been disclosed to Lender which adversely affects, nor as far as
Borrower or Borrower Principal can reasonably foresee, might adversely affect,
the Collateral or the Property or the business, operations or condition
(financial or otherwise) of Borrower, Mortgage Borrower or Borrower Principal.
Section 4.9. NO PLAN ASSETS. Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Borrower constitutes or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code currently in effect, which prohibit
or otherwise restrict the transactions contemplated by this Agreement.
Section 4.10. NOT A FOREIGN PERSON. Neither Borrower nor Borrower
Principal is a "foreign person" within the meaning of Section 1445(f)(3) of the
Internal Revenue Code.
Section 4.11. ENFORCEABILITY. The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable as a whole, and Borrower has not asserted
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any right of rescission, set-off, counterclaim or defense with respect thereto.
No Default or Event of Default exists under or with respect to any Loan
Document.
Section 4.12. BUSINESS PURPOSES. The Loan is solely for the business
purpose of Borrower (including distributions to Borrower's constituent entity
and all subsequent upstream distributions), and is not for personal, family,
household, or agricultural purposes.
Section 4.13. COMPLIANCE. Borrower, Mortgage Borrower and the
Property, and the use and operation of the Property, comply in all material
respects with all Legal Requirements, including, without limitation, building
and zoning ordinances and codes and the Americans with Disabilities Act. To
Borrower's knowledge, neither Borrower nor Mortgage Borrower is in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority and Borrower has received no written notice of any such default or
violation. There has not been committed by Borrower, Mortgage Borrower or, to
Borrower's knowledge, any other Person in occupancy of or involved with the
operation or use of the Property any act or omission affording any Governmental
Authority the right of forfeiture as against the Property or any part thereof or
any monies paid in performance of Borrower's obligations under any of the Loan
Documents.
Section 4.14. FINANCIAL INFORMATION. All financial data, including,
without limitation, the balance sheets, statements of cash flow, statements of
income and operating expense and rent rolls, that have been delivered to Lender
in respect of Borrower, Mortgage Borrower, Borrower Principal and/or the
Property (a) are true, complete and correct in all material respects, (b)
accurately represent in all material respects the financial condition of
Borrower, Mortgage Borrower, Borrower Principal or the Property, as applicable,
as of the date of such reports, and (c) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP throughout the periods covered, except as disclosed therein. Neither
Borrower nor Mortgage Borrower has any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower or Mortgage
Borrower and reasonably likely to have a material adverse effect on the Property
or the current and/or intended operation thereof, except as referred to or
reflected in said financial statements. Since the date of such financial
statements, there has been no materially adverse change in the financial
condition, operations or business of Borrower, Mortgage Borrower or Borrower
Principal from that set forth in said financial statements.
Section 4.15. ILLEGAL ACTIVITY. No portion of the Collateral or the
Property has been or will be purchased with proceeds of any illegal activity,
and no part of the proceeds of the Loan will be used in connection with any
illegal activity.
Section 4.16. PERMITTED ENCUMBRANCES. None of the Permitted
Encumbrances, individually or in the aggregate, materially interferes with the
benefits of the security intended to be provided by the Mortgage Loan Documents,
materially and adversely affects the value of the Property, impairs the use or
the operation of the Property or impairs Mortgage Borrower's or Borrower's
ability to pay its obligations in a timely manner.
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Section 4.17. FEDERAL RESERVE REGULATIONS. Borrower will use the
proceeds of the Loan for the purposes set forth in Section 2.1(d) hereof and not
for any illegal activity. No part of the proceeds of the Loan will be used for
the purpose of purchasing or acquiring any "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System or for any
other purpose which would be inconsistent with such Regulation U or any other
Regulations of such Board of Governors, or for any purposes prohibited by Legal
Requirements or prohibited by the terms and conditions of this Agreement or the
other Loan Documents.
Section 4.18. INVESTMENT COMPANY ACT. Borrower is not (a) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
Section 4.19. NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. All
information submitted by Borrower, Mortgage Borrower or their respective agents
to Lender and in all financial statements, rent rolls, reports, certificates and
other documents submitted in connection with the Loan or in satisfaction of the
terms thereof and all statements of fact made by Borrower, Borrower Principal
and Mortgage Borrower in this Agreement, in any other Loan Document or in the
Mortgage Loan Documents, as may be updated by Borrower prior to the closing of
the Loan, are accurate and correct in all material respects and sufficiently
complete as to not be misleading in any material respect. To the best of
Borrower's knowledge, there has been no material adverse change in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely affects or might materially and adversely
affect the Collateral, the Property or the business operations or the financial
condition of Borrower, Borrower Principal or Mortgage Borrower. Borrower and
Mortgage Borrower have each disclosed to Lender all material facts and have not
failed to disclose any material fact that could cause any representation or
warranty made herein or in any other documents delivered to Lender by Borrower,
Mortgage Borrower or any of their respective Affiliates or agents to be
materially misleading.
Section 4.20. SPECIAL PURPOSE ENTITY. Borrower meets all of the
requirements of Article 6 hereof as of the Closing Date.
Section 4.21. ASSUMPTIONS. Each of the assumptions contained in the
opinion related to issues of substantive consolidation delivered by Borrower to
Lender on the date hereof are true and accurate.
Section 4.22. INTELLECTUAL PROPERTY. All trademarks, trade names and
service marks necessary to the business of Borrower as presently conducted or as
Borrower contemplates conducting its business are in good standing and, to the
extent of Borrower's actual knowledge, uncontested. Borrower has not infringed,
is not infringing, and has not received notice of infringement with respect to
asserted trademarks, trade names and service marks of
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others. To Borrower's knowledge, there is no infringement by others of
trademarks, trade names and service marks of Borrower.
Section 4.23. EMBARGOED PERSON. To the best of Borrower's knowledge,
as of the date hereof and at all times throughout the term of the Loan,
including after giving effect to any transfers of interests permitted pursuant
to the Loan Documents, (a) none of the funds or other assets of Borrower and
Borrower Principal constitute property of, or are beneficially owned, directly
or indirectly, by any person, entity or government subject to trade restrictions
under U.S. law, including but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. Sections 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder with the result that the investment in Borrower or
Borrower Principal, as applicable (whether directly or indirectly), is
prohibited by law or the Loan made by Lender is in violation of law ("EMBARGOED
PERSON"); (b) no Embargoed Person has any interest of any nature whatsoever in
Borrower or Borrower Principal, as applicable, with the result that the
investment in Borrower or Borrower Principal, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of Borrower or Borrower Principal, as applicable, have been
derived from any unlawful activity with the result that the investment in
Borrower or Borrower Principal, as applicable (whether directly or indirectly),
is prohibited by law or the Loan is in violation of law.
Section 4.24. PATRIOT ACT. All capitalized words and phrases and all
defined terms used in the USA Patriot Act of 2001, 107 Public Law 56 (October
26, 2001) and in other statutes and all orders, rules and regulations of the
United States government and its various executive departments, agencies and
offices related to the subject matter of the Patriot Act, including Executive
Order 13224 effective September 24, 2001 (collectively referred to in this
Section only as the "PATRIOT ACT") and are incorporated into this Section. Each
of Borrower and Borrower Principal hereby represents and warrants that Borrower
and Borrower Principal and each and every Person affiliated with Borrower or
Borrower Principal or that to Borrower's knowledge has an economic interest in
Borrower, or, to Borrower's knowledge, that has or will have an interest in the
transaction contemplated by this Agreement or in the Property or will
participate, in any manner whatsoever, in the Loan, is: (i) not a "blocked"
person listed in the Annex to Executive Order Nos. 12947, 13099 and 13224 and
all modifications thereto or thereof (as used in this Section only, the
"ANNEX"); (ii) in full compliance with the requirements of the Patriot Act and
all other requirements contained in the rules and regulations of the Office of
Foreign Assets Control, Department of the Treasury (as used in this Section
only, "OFAC"); (iii) operated under policies, procedures and practices, if any,
that are in compliance with the Patriot Act and available to Lender for Lender's
review and inspection during normal business hours and upon reasonable prior
notice; (iv) not in receipt of any notice from the Secretary of State or the
Attorney General of the United States or any other department, agency or office
of the United States claiming a violation or possible violation of the Patriot
Act; (v) not listed as a Specially Designated Terrorist or as a "blocked" person
on any lists maintained by the OFAC pursuant to the Patriot Act or any other
list of terrorists or terrorist organizations maintained pursuant to any of the
rules and regulations of the OFAC issued pursuant to the Patriot Act or on any
other list of terrorists or terrorist organizations maintained pursuant to the
Patriot Act; (vi) not a person who has been determined by competent authority to
be subject to any of the prohibitions contained in the Patriot Act; and (vii)
not owned or controlled by or now acting and or will in the future act
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for or on behalf of any person named in the Annex or any other list promulgated
under the Patriot Act or any other person who has been determined to be subject
to the prohibitions contained in the Patriot Act. Borrower covenants and agrees
that in the event Borrower receives any notice that Borrower Principal or
Borrower (or any of its beneficial owners or affiliates or participants) become
listed on the Annex or any other list promulgated under the Patriot Act or is
indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Borrower shall immediately
notify Lender. It shall be an Event of Default hereunder if Borrower, Borrower
Principal or any other party to any Loan Document becomes listed on any list
promulgated under the Patriot Act or is indicted, arraigned or custodially
detained on charges involving money laundering or predicate crimes to money
laundering.
Section 4.25. MORTGAGE LOAN REPRESENTATIONS. All of the
representations and warranties contained in the Mortgage Loan Documents are
hereby incorporated into this Agreement and deemed made by Borrower hereunder
and are true and correct as of the Closing Date and shall remain incorporated
without regard to any waiver, amendment or other modification thereof by the
Mortgage Lender or to whether the related Mortgage Loan Document has been
repaid, defeased or otherwise terminated, unless otherwise consented to in
writing by Lender.
Section 4.26. NO CONTRACTUAL OBLIGATIONS. Except in connection with
its activities as the sole member of Mortgage Borrower and other than the Loan
Documents, the Borrower Operating Agreement and the Mortgage Borrower Operating
Agreement, as of the date of this Agreement, Borrower is not subject to any
Contractual Obligations and has not entered into any agreement, instrument or
undertaking by which it or its assets are bound, or has incurred any
indebtedness (other than the Loan), and prior to the date of this Agreement,
neither Borrower nor any of its Subsidiaries has entered into any Contractual
Obligation, or any agreement, instrument or undertaking by which it or its
assets are bound or incurred any indebtedness (other than the Loan or the
Mortgage Loan (as applicable)).
Section 4.27. SUBSIDIARIES. Effective as of the consummation of the
transactions contemplated by this Agreement, one hundred percent (100%) of the
membership interests in Borrower is owned by Borrower Principal free and clear
of all Liens (other than the Liens created by the Loan Documents). Borrower does
not have any Subsidiaries except the Mortgage Borrower. Borrower does not own
any equity interests other than the Pledged Company Interests.
Section 4.28. PLEDGED COMPANY INTERESTS. There are no Liens on the
Pledged Company Interests (other than the Liens created by the Loan Documents).
Section 4.29. SURVIVAL. Borrower agrees that, unless expressly
provided otherwise, all of the representations and warranties of Borrower set
forth in this Agreement and in the other Loan Documents shall survive for so
long as any portion of the Debt remains owing to Lender. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
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ARTICLE V
BORROWER COVENANTS
From the date hereof and until repayment of the Debt in full and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Pledge Agreement (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
Section 5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS. (a)
Borrower and Mortgage Borrower shall do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply in all material respects with all
Legal Requirements applicable to it, Mortgage Borrower and the Property.
Borrower hereby covenants and agrees not to commit, permit or suffer to exist
any act or omission affording any Governmental Authority the right of forfeiture
as against the Collateral, the Property or any part thereof or any monies paid
in performance of Borrower's obligations under any of the Loan Documents.
Borrower shall at all times maintain, preserve and protect all franchises and
trade names used in connection with the operation of the Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may permit Mortgage Borrower to contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the Legal Requirements affecting the Property, provided that (i) no
Default or Event of Default has occurred and is continuing; (ii) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower, Mortgage Borrower or the Property is
subject and shall not constitute a default thereunder; (iii) neither the
Property, any part thereof or interest therein, any of the tenants or occupants
thereof, nor Mortgage Borrower, nor Borrower shall be affected in any material
adverse way as a result of such proceeding; (iv) non-compliance with the Legal
Requirements shall not impose civil or criminal liability on Borrower, Mortgage
Borrower or Lender; (v) Borrower shall have furnished, or shall have caused
Mortgage Borrower to furnish, the security as may be required in the proceeding
or by Lender to ensure compliance by Borrower and Mortgage Borrower with the
Legal Requirements; and (vi) Borrower shall have furnished, or shall caused
Mortgage Borrower to furnish, to Lender all other items reasonably requested by
Lender.
Section 5.2. MAINTENANCE AND USE OF PROPERTY. Borrower shall cause
Mortgage Borrower to maintain the Property in a good and safe condition and
repair. The Improvements and the Personal Property shall not be removed,
demolished or, other than in accordance with the provisions of Section 5.20,
materially altered (except for normal replacement or disposal of the Personal
Property in the ordinary course of Borrower's or Mortgage Borrower's business)
without the prior written consent of Lender, not to be unreasonably withheld,
conditioned or delayed. If under applicable zoning provisions the use of all or
any portion of the Property is or shall become a nonconforming use, Borrower
will not cause or permit the nonconforming use to be discontinued or the
nonconforming Improvement to be abandoned without the express written consent of
Lender.
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Section 5.3. WASTE. Borrower shall not commit or suffer, and shall
not cause Mortgage Borrower to commit or suffer, any physical or actual waste of
the Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security
for the Loan. Borrower will not, without the prior written consent of Lender,
permit any drilling or exploration for or extraction, removal, or production of
any minerals from the surface or the subsurface of the Property, regardless of
the depth thereof or the method of mining or extraction thereof.
Section 5.4. TAXES AND OTHER CHARGES. (a) Borrower shall cause
Mortgage Borrower to pay all Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Property or any part thereof prior to
delinquency; provided, however, Borrower's obligation to cause Mortgage Borrower
to directly pay Taxes shall be suspended for so long as Mortgage Borrower
complies with the terms and provisions of Section 9.6 of the Mortgage Loan
Agreement. Borrower shall cause Mortgage Borrower to furnish to Lender receipts
for the payment of the Taxes and the Other Charges prior to the date the same
shall become delinquent (provided, however, that Borrower is not required to
cause Mortgage Borrower to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Mortgage Lender pursuant to Section 9.6
of the Mortgage Loan Agreement). Subject to Section 5.4(b), Borrower shall cause
Mortgage Borrower to not suffer and shall promptly cause Mortgage Borrower to
pay and discharge any Lien or charge whatsoever which may be or become a Lien or
charge against the Property, and shall cause Mortgage Borrower to promptly pay
for all utility services provided to the Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may permit Mortgage Borrower to contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes, Other Charges or any Liens, provided that (i) no Default or Event of
Default has occurred and remains uncured; (ii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable Legal Requirements; (iii) neither the Property nor any part thereof
or interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower shall cause Mortgage Borrower to promptly upon
final determination thereof pay the amount of any such Taxes, Other Charges or
any Liens, together with all costs, interest and penalties which may be payable
in connection therewith; (v) such proceeding shall suspend the collection of
such contested Taxes, Other Charges or any Liens from the Property; and (vi)
Borrower shall deliver evidence to Lender that Mortgage Borrower shall have
furnished Mortgage Lender with such security as may be required in the
proceeding, or shall have delivered to Mortgage Lender such reserve deposits as
may be requested by Mortgage Lender, to insure the payment of any such Taxes,
Other Charges or any Liens, together with all interest and penalties thereon
(unless Mortgage Borrower has paid all of the Taxes, Other Charges or any Liens
under protest).
Section 5.5. LITIGATION. Borrower shall give prompt written notice
to Lender of any litigation or governmental proceedings pending or threatened in
writing against Borrower,
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Borrower Principal or Mortgage Borrower which might materially adversely affect
Borrower's, Borrower Principal's or Mortgage Borrower's condition (financial or
otherwise) or business or the Property.
Section 5.6. ACCESS TO THE PROPERTY. Borrower shall cause Mortgage
Borrower to permit agents, representatives and employees of Lender to inspect
the Property or any part thereof at reasonable hours upon reasonable advance
notice, provided Lender shall use reasonable efforts to minimize interference
with the business of any tenants.
Section 5.7. NOTICE OF DEFAULT. Borrower shall promptly advise
Lender of any Material Adverse Change in the condition (financial or otherwise)
of Borrower, Mortgage Borrower, Borrower Principal, the Property or of the
occurrence of any Default or Event of Default hereunder or any Mortgage Loan
Event of Default (or any event which, but for the giving of notice or passage of
time, or both, would be a Mortgage Loan Event of Default) of which Borrower has
knowledge.
Section 5.8. COOPERATE IN LEGAL PROCEEDINGS. Borrower shall at
Borrower's expense cooperate fully with Lender with respect to any proceedings
before any court, board or other Governmental Authority which may in any way
affect the rights of Lender hereunder or any rights obtained by Lender under any
of the other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
Section 5.9. PERFORMANCE BY BORROWER. Borrower shall in a timely
manner observe, perform and fulfill each and every covenant, term and provision
to be observed and performed by Borrower under this Agreement and the other Loan
Documents and any other material agreement or instrument affecting or pertaining
to the Collateral and any amendments, modifications or changes thereto.
Section 5.10. AWARDS; INSURANCE PROCEEDS. Borrower shall, and shall
cause Mortgage Borrower to, cooperate with Lender in obtaining for Lender the
benefits of any Awards or Insurance Proceeds lawfully or equitably payable in
connection with the Property, and Lender shall be reimbursed for any expenses
incurred in connection therewith (including reasonable, actual attorneys' fees
and disbursements and the payment by Borrower of the expense of an appraisal on
behalf of Lender in case of a Casualty or Condemnation affecting the Property or
any part thereof) out of such Awards or Insurance Proceeds.
Section 5.11. FINANCIAL REPORTING.
(a) Borrower and Borrower Principal shall, and shall cause
Mortgage Borrower to, keep adequate books and records of account in accordance
with GAAP, consistently applied and shall furnish or cause to be furnished to
Lender:
(i) monthly (if required by Lender), quarterly, and annual
certified rent rolls signed and dated by Borrower and Mortgage Borrower,
detailing the names of all Tenants of the Improvements, the portion of
Improvements (in terms of square footage) occupied by each Tenant, the
base rent, additional rent and any other charges payable under each Lease
(including annual store sales required to be reported by Tenant under any
Lease), and the term of each Lease, including the commencement and
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expiration dates and any tenant extension, expansion or renewal options,
the extent to which any Tenant is in default under any Lease, and any
other information as is reasonably required by Lender, within thirty (30)
days after the end of each calendar month, forty-five (45) days after the
end of each fiscal quarter or ninety (90) days after the close of each
fiscal year of Borrower and Mortgage Borrower, as applicable;
(ii) monthly (if required by Lender), quarterly, and annual
operating statements of the Property, prepared and certified by the chief
financial officer of Borrower and Mortgage Borrower in form acceptable to
Lender in its reasonable discretion (with the annual operating statement
prepared and audited by an Acceptable Accountant), detailing the revenues
received, the expenses incurred and the net operating income before and
after debt service (principal and interest) and major capital improvements
for the period of calculation and containing appropriate year-to-date
information, within thirty (30) days after the end of each calendar month,
forty-five (45) days after the end of each fiscal quarter or ninety (90)
days after the close of each fiscal year of Borrower and Mortgage
Borrower, as applicable;
(iii) quarterly and annual balance sheets, profit and loss
statements, statements of cash flows, and statements of change in
financial position of Borrower, Mortgage Borrower and Borrower Principal
in form reasonably acceptable to Lender (with the annual financial
statements prepared and audited by an Acceptable Accountant), within
forty-five (45) days after the end of each fiscal quarter or ninety (90)
days after the close of each fiscal year of Borrower, Mortgage Borrower
and Borrower Principal, as applicable, as the case may be; and
(iv) an Annual Budget not later than thirty (30) days prior
to the commencement of each fiscal year of Borrower and Mortgage Borrower
in form reasonably satisfactory to Lender. In the event that Lender
objects to a proposed Annual Budget submitted by or on behalf of Borrower,
Lender shall advise Borrower of such objections within fifteen (15) days
after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall promptly revise such
Annual Budget and resubmit the same to Lender. Lender shall advise
Borrower in writing of any objections to such revised Annual Budget within
ten (10) days after receipt thereof (and deliver to Borrower a reasonably
detailed description of such objections) and Borrower shall promptly
revise the same in accordance with the process described in this
subsection until Lender approves the Annual Budget. Lender shall have a
period of thirty (30) days from receipt of such Annual Budget, together
with any other related documentation reasonably requested by Lender, in
which to approve or reject such Annual Budget, provided that such Annual
Budget is accompanied by a written request from Borrower marked in bold
lettering with the following language: "LENDER'S RESPONSE IS REQUIRED
WITHIN THIRTY (30) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF
A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER" and the envelope
containing the request must be marked "PRIORITY - LENDER'S RESPONSE
REQUIRED IN THIRTY (30) DAYS." In the event that Lender fails to approve
or reject such Annual Budget in such period of time, Lender's consent to
such Annual Budget shall be deemed given. Until such time that Lender
approves a proposed Annual Budget, which approval shall not be
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unreasonably withheld, conditioned or delayed, the most recent Annual
Budget shall apply; provided that, such approved Annual Budget shall be
adjusted to reflect actual increases in Taxes, Insurance Premiums,
utilities expenses and expenses under the Management Agreement. Without
the prior written consent of Lender, Borrower shall not approve or consent
to Mortgage Borrower entering into any contracts or other agreements or
expending any funds not provided for in the approved Annual Budget, other
than expenditures required to be made by reason of the occurrence of any
emergency (i.e., an unexpected event which threatens imminent harm to
persons or property at the Property) and with respect to which it would be
impracticable, under the circumstances, to obtain Lender's prior consent
thereto. Borrower shall notify Lender as promptly as practicable with
respect to any such emergency expenditures made with respect to the
Property. At the request of Lender, Borrower agrees to cause Mortgage
Borrower to deliver evidence in a form satisfactory to Lender that amounts
allocated to budgeted expenses have been paid in accordance with the
approved Annual Budget.
(b) Upon request from Lender, Borrower shall promptly furnish or
cause to be furnished to Lender:
(i) a property management report for the Property,
containing a list of prospective tenants and any other information
requested by Lender, in reasonable detail and certified by Borrower and
Mortgage Borrower under penalty of perjury to be true and complete, but no
more frequently than quarterly;
(ii) an accounting of all security deposits held in
connection with any Lease of any part of the Property, including the name
and identification number of the accounts in which such security deposits
are held, the name and address of the financial institutions in which such
security deposits are held and the name of the Person to contact at such
financial institution, along with any authority or release necessary for
Lender to obtain information regarding such accounts directly from such
financial institutions; and
(iii) a report of all letters of credit provided by any Tenant
in connection with any Lease of any part of the Property, including the
account numbers of such letters of credit, the names and addresses of the
financial institutions that issued such letters of credit and the names of
the Persons to contact at such financial institutions, along with any
authority or release necessary for Lender to obtain information regarding
such letters of credit directly from such financial institutions.
(c) Borrower and Borrower Principal shall furnish Lender (or cause
Mortgage Borrower to furnish to Lender) with such other additional financial or
management information (including state and federal tax returns) as may, from
time to time, be reasonably required by Lender in form and substance
satisfactory to Lender (including, without limitation, any financial reports
required to be delivered by any Tenant or any guarantor of any Lease pursuant to
the terms of such Lease), and shall furnish to Lender and its agents convenient
facilities for the examination and audit of any such books and records.
(d) All items requiring the certification of Borrower or Mortgage
Borrower shall, except where Borrower or Mortgage Borrower is an individual,
require a certificate
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executed by the general partner, managing member or chief executive officer of
Borrower or Mortgage Borrower, as applicable (and the same rules shall apply to
any sole shareholder, general partner or managing member which is not an
individual).
Section 5.12. ESTOPPEL STATEMENT. (a) After request by Lender,
Borrower shall within ten (10) Business Days furnish Lender with a statement,
duly acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the rate of interest on the Note, (iii) the
unpaid principal amount of the Note, (iv) the date installments of interest
and/or principal were last paid, (v) any offsets or defenses to the payment of
the Debt, if any, and (vi) that the Note, this Agreement, the Pledge Agreement
and the other Loan Documents are valid, legal and binding obligations and have
not been modified or if modified, giving particulars of such modification.
(b) After request by Borrower, Lender shall promptly deliver to
Borrower a beneficiary's statement on Lender's (or its servicer's) then current
form of such document, which shall include the balance of the Loan and the then
applicable interest rate. In a separate writing, Lender shall provide to
Borrower, to the extent true, a statement that Lender has not delivered any
notices of default to Borrower.
(c) Borrower shall use its best efforts to deliver (or cause
Mortgage Borrower to deliver) to Lender, promptly upon request, duly executed
estoppel certificates from any one or more Tenants as required by Lender
attesting to such facts regarding the related Lease as Lender may require,
including, but not limited to attestations that each Lease covered thereby is in
full force and effect with no defaults thereunder on the part of any party, that
none of the Rents have been paid more than one month in advance, except as
security, and that the Tenant claims no defense or offset against the full and
timely performance of its obligations under the Lease. Other than in connection
with a Securitization, Borrower shall not be required to use its best efforts to
deliver such estoppel certificates more than once per year so long as no Event
of Default exists.
Section 5.13. LEASING MATTERS. (a) Borrower may permit Mortgage
Borrower to enter into a proposed Lease (including the renewal or extension of
an existing Lease (a "RENEWAL LEASE")) without the prior written consent of
Lender, provided such proposed Lease or Renewal Lease (i) provides for rental
rates and terms comparable to existing local market rates and terms (taking into
account the type and quality of the tenant) as of the date such Lease is
executed by Mortgage Borrower (unless, in the case of a Renewal Lease, the rent
payable during such renewal, or a formula or other method to compute such rent,
is provided for in the original Lease), (ii) is an arm's-length transaction with
a bona fide, independent third party tenant, (iii) does not have a materially
adverse effect on the value of the Property taken as a whole, (iv) is subject
and subordinate to the Mortgage and the Tenant thereunder agrees to attorn to
Lender, either by the terms of such Renewal Lease or pursuant to a
subordination, non-disturbance and attornment agreement on Lender's then current
form (v) does not contain any option, offer, right of first refusal, or other
similar right to acquire all or any portion of the Property, (vi) has a base
term of less than fifteen (15) years including options to renew, (vii) has no
rent, credits, free rents or concessions granted thereunder, other than as
consistent with then market standards for prudent institutional owners of Class
A office buildings in the sub-market where the Property is located, and (viii)
is written on the standard form of lease approved by
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Lender and attached hereto as Exhibit C, subject to tenant specific negotiated
changes which do not, individually or in the aggregate, cause a Material Adverse
Change with respect to the Property or the financial condition of Borrower. All
proposed Leases which do not satisfy the requirements set forth in this
subsection shall be at Borrower's expense and subject to the prior approval of
Lender and its counsel, not to be unreasonably withheld or delayed. Borrower
shall cause Mortgage Borrower to promptly deliver to Lender copies of all Leases
which are entered into pursuant to this subsection together with Borrower's
certification that it has satisfied all of the conditions of this Section.
(b) Borrower (i) shall cause Mortgage Borrower to observe and
perform all the obligations imposed upon the landlord under the Leases (or
refrain from such observance or performance to the extent the same is in
accordance with prudent institutional ownership practices for properties similar
to and in the same sub-market as Property) and shall not do or permit to be done
anything to impair the value of any of the Leases as security for the Debt; (ii)
shall cause Mortgage Borrower to promptly send copies to Lender of all notices
of default which Mortgage Borrower shall send or receive thereunder; (iii) shall
cause Mortgage Borrower to enforce all of the material terms, covenants and
conditions contained in the Leases upon the part of the tenant thereunder to be
observed or performed unless Borrower, in accordance with prudent institutional
ownership practices for properties similar and in the same sub-market as the
Property, elects not to enforce any such term, covenant or condition; (iv) shall
not permit Mortgage Borrower to collect any of the Rents more than one (1) month
in advance (except security deposits shall not be deemed Rents collected in
advance); (v) shall not permit Mortgage Borrower to execute any other assignment
of the landlord's interest in any of the Leases or the Rents; and (vi) shall not
permit Mortgage Borrower to consent to any assignment of or subletting under any
Leases not in accordance with their terms, without the prior written consent of
Lender, such consent not to be unreasonably withheld, conditioned or delayed.
(c) Borrower may, without the prior written consent of Lender,
permit Mortgage Borrower to amend, modify or waive the provisions of any Lease
or terminate, reduce Rents under, accept a surrender of space under, or shorten
the term of, any Lease (including any guaranty, letter of credit or other credit
support with respect thereto) provided that such action (taking into account, in
the case of a termination, reduction in rent, surrender of space or shortening
of term, the planned alternative use of the affected space) does not have a
materially adverse effect on the value of the Property taken as a whole, and
provided that such Lease, as amended, modified or waived, is otherwise in
compliance with the requirements of this Agreement and any subordination
agreement binding upon Lender with respect to such Lease. A termination of a
Lease with a tenant who is in default beyond applicable notice and grace periods
shall not be considered an action which has a materially adverse effect on the
value of the Property taken as a whole. Any amendment, modification, waiver,
termination, rent reduction, space surrender or term shortening which does not
satisfy the requirements set forth in this subsection shall be subject to the
prior approval of Lender and its counsel, at Borrower's expense. Borrower shall
cause Mortgage Borrower to promptly deliver to Lender copies of amendments,
modifications and waivers which are entered into pursuant to this subsection
together with Borrower's certification that it has satisfied all of the
conditions of this subsection.
(d) Notwithstanding anything contained herein to the contrary,
Borrower shall not permit Mortgage Borrower, without the prior written consent
of Lender, to enter into, renew,
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extend, amend, modify, waive any material provisions of, terminate, reduce Rents
under, accept a surrender of space under, or shorten the term of any Major
Lease.
(e) Notwithstanding anything to the contrary contained herein, to
the extent Lender's prior approval is required for any leasing matters set forth
in this Section 5.13, Lender shall have ten (10) Business Days from receipt of
written request and all required information and documentation relating thereto
in which to approve or disapprove such matter, provided that such request to
Lender is marked in capitalized bold lettering with the following language:
"LENDER'S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND
LENDER" and the envelope containing the request must be marked "PRIORITY -
LENDER'S RESPONSE REQUIRED IN TEN (10) BUSINESS DAYS." In the event that Lender
fails to respond to the leasing matter in question within such time, Lender's
approval shall be deemed given for all purposes. Borrower shall provide Lender
with such information and documentation as may be reasonably required by Lender,
including, without limitation, lease comparables and other market information as
required by Lender.
Section 5.14. PROPERTY MANAGEMENT.
(a) Borrower shall cause Mortgage Borrower to (i) promptly perform
and observe all of the covenants required to be performed and observed by it
under the Management Agreement and do all things necessary to preserve and to
keep unimpaired its material rights thereunder; (ii) promptly notify Lender of
any default under the Management Agreement of which it is aware; (iii) promptly
deliver to Lender a copy of any notice of default or other material notice
received by Mortgage Borrower under the Management Agreement; (iv) promptly give
notice to Lender of any notice or information that Borrower receives which
indicates that Manager is terminating the Management Agreement or that Manager
is otherwise discontinuing its management of the Property; and (v) promptly
enforce the performance and observance of all of the covenants required to be
performed and observed by Manager under the Management Agreement.
(b) If at any time, (i) Manager shall become insolvent or a debtor
in a bankruptcy proceeding, (ii) an Event of Default has occurred and is
continuing, or (iii) a default has occurred and is continuing beyond applicable
cure periods under the Management Agreement, Borrower shall, at the request of
Lender, cause Mortgage Borrower to terminate the Management Agreement upon sixty
(60) days prior notice to Manager and replace Manager with a Qualified Manager
reasonably approved by Lender in accordance with the terms and conditions
satisfactory to Lender, it being understood and agreed that the management fee
for such replacement manager shall not exceed then prevailing market rates.
(c) In addition to the foregoing, in the event that Lender, in
Lender's reasonable discretion, at any time prior to the termination of the
Subordination of Management Agreement, determines that the Property is not being
managed in accordance with generally accepted management practices for projects
similarly situated, Lender may deliver written notice thereof to Borrower,
Mortgage Borrower and Manager, which notice shall specify with particularity the
grounds for Lender's determination. If Lender reasonably determines that the
conditions specified in Lender's notice are not remedied to Lender's reasonable
satisfaction by
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Borrower, Mortgage Borrower or Manager within sixty (60) days from the date of
such notice or that Borrower or Manager have failed to diligently undertake
correcting such conditions within such sixty (60) day period, Lender may direct
Borrower to terminate the Management Agreement, provided Borrower has the right
to do so pursuant to the terms of the Management Agreement, and to replace
Manager with a Qualified Manager approved by Lender on terms and conditions
satisfactory to Lender, it being understood and agreed that the management fee
for such replacement manager shall not exceed then prevailing market rates.
(d) Borrower shall not permit Mortgage Borrower, without the prior
written consent of Lender (which consent shall not be unreasonably withheld,
conditioned or delayed) to (i) surrender, terminate or cancel the Management
Agreement or otherwise replace Manager or enter into any other management
agreement with respect to the Property; (ii) reduce or consent to the reduction
of the term of the Management Agreement; (iii) increase or consent to the
increase of the amount of any charges under the Management Agreement; or (iv)
otherwise modify, change, supplement, alter or amend, or waive or release any of
its rights and remedies under, the Management Agreement in any material respect.
In the event that Borrower replaces Manager at any time during the term of Loan
pursuant to this subsection, such Manager shall be a Qualified Manager.
Section 5.15. LIENS. Borrower shall not permit Mortgage Borrower,
without the prior written consent of Lender, to create, incur, assume or suffer
to exist any Lien on any portion of the Property or permit any such action to be
taken, except Permitted Encumbrances. Borrower shall not create, incur, assume
or suffer to exist any Lien on any portion of the Collateral or permit any such
action to be taken.
Section 5.16. DEBT CANCELLATION. Borrower shall not cancel or
otherwise forgive or release any claim or debt owed to Borrower by any Person,
except for adequate consideration and in the ordinary course of Borrower's
business. Borrower shall not permit Mortgage Borrower to cancel or otherwise
forgive or release any claim or debt (other than termination of Leases in
accordance herewith) owed to Mortgage Borrower by any Person, except for
adequate consideration and in the ordinary course of Mortgage Borrower's
business.
Section 5.17. ZONING. Borrower shall not permit Mortgage Borrower
to, initiate or consent to any zoning reclassification of any portion of the
Property or seek any variance under any existing zoning ordinance or use or
permit the use of any portion of the Property in any manner that could result in
such use becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation, without the prior consent of
Lender.
Section 5.18. ERISA.
(a) Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
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(b) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term of
the Loan, as requested by Lender in its sole discretion, that (i) Borrower is
not and does not maintain an "employee benefit plan" as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a "governmental plan" within
the meaning of Section 3(3) of ERISA; (ii) Borrower is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(B) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2);
or
(c) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R.Section 2510.3-101(c) or (e).
Section 5.19. NO JOINT ASSESSMENT. Borrower shall not permit
Mortgage Borrower to suffer, permit or initiate the joint assessment of the
Property with (a) any other real property constituting a tax lot separate from
the Property, or (b) any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the Lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property.
Section 5.20. ALTERATIONS. Lender's prior approval (not to be
unreasonably withheld) shall be required in connection with any alterations to
any Improvements, exclusive of alterations to tenant spaces required under any
Lease, (a) that may have a material adverse effect on the Property, (b) that
affect the structure of the applicable building or (c) that, together with any
other alterations undertaken at the same time (including any related
alterations, improvements or replacements), are reasonably anticipated to have a
cost in excess of the Alteration Threshold. If the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements shall at
any time exceed the Alteration Threshold, Borrower shall promptly deliver to
Lender as security for the payment of such amounts and as additional security
for Borrower's obligations under the Loan Documents any of the following: (i)
cash, (ii) direct non-callable obligations of the United States of America or
other obligations which are "government securities" within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, to the extent acceptable
to Lender, (iii) other securities acceptable to Lender, or (iv) a completion
bond, provided that such completion bond is acceptable to Lender. Such security
shall be in an amount equal to the excess of the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements over the
Alteration Threshold.
Section 5.21. [INTENTIONALLY DELETED.]
Section 5.22. RECIPROCAL EASEMENT AGREEMENT. Borrower shall not
permit Mortgage Borrower to enter into, terminate or modify any REA without
Lender's prior written
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consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Borrower shall cause Mortgage Borrower to enforce, comply with, and
cause each of the parties to an REA to comply with all of the material economic
terms and conditions contained in such REA.
Section 5.23. [INTENTIONALLY DELETED.]
Section 5.24. [INTENTIONALLY DELETED.]
Section 5.25. SPECIAL DISTRIBUTIONS. On each date on which amounts
are required to be disbursed to Lender pursuant to the terms of Section 10.2 of
the Mortgage Loan Agreement or are required to be paid to Lender under any of
the Loan Documents, Borrower shall exercise its rights under the Mortgage
Borrower Company Agreement to cause Mortgage Borrower to make to Borrower a
distribution in an aggregate amount such that Lender shall receive the amount
required to be disbursed or otherwise paid to Lender on such date.
Section 5.26. CURING. Lender shall have the right, but shall not
have the obligation, to exercise Borrower's rights under the Mortgage Borrower
Company Agreement (a) to cure a Mortgage Loan Default or Mortgage Loan Event of
Default and (b) to satisfy any Liens, claims or judgments against the Property
(except for Liens permitted by the Mortgage Loan Documents), in the case of
either (a) or (b), unless Borrower or Mortgage Borrower shall be diligently
pursuing remedies to cure to Lender's sole satisfaction. Borrower shall
reimburse Lender on demand for any and all costs incurred by Lender in
connection with curing any such Mortgage Loan Default or Mortgage Loan Event of
Default or satisfying any Liens, claims or judgments against the Property.
Section 5.27. LIENS. Neither Borrower nor any of its Subsidiaries
shall take any action that would impair the Lien created under this Agreement,
the Pledge Agreement or any other Loan Document.
Section 5.28. LIMITATION ON SECURITIES ISSUANCES. None of Borrower
or any of its Subsidiaries shall issue any membership interests or other
securities, other than those that have been issued as of the Closing Date.
Section 5.29. LIMITATIONS ON DISTRIBUTIONS. Following the occurrence
and during the continuance of an Event of Default, Borrower shall not make any
distributions to its members.
Section 5.30. OTHER LIMITATIONS. Prior to the payment in full of the
Debt, Borrower shall not, without the prior written consent of Lender (which may
be furnished or withheld at its sole and absolute discretion), give its consent
or approval to any of the following actions or items:
(a) except as permitted by the Mortgage Loan Documents and the
Loan Documents (i) any refinance of the Mortgage Loan, (ii) any prepayment in
full of the Mortgage Loan, (iii) any Sale or Pledge of the Property or any
portion thereof, or (iv) any action in connection with or in furtherance of the
foregoing;
(b) intentionally deleted;
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(c) any material modification, amendment, consolidation, spread,
restatement, waiver or termination of any of the Mortgage Loan Documents;
(d) the distribution to the partners, members or shareholders of
Mortgage Borrower of property other than cash, except in accordance with the
provisions of Mortgage Borrower's organizational documents;
(e) except as set forth in an approved Annual Budget or as
permitted under the Mortgage Loan Documents, any (i) material improvement,
renovation or refurbishment of all or any part of the Property to a materially
higher standard or level than that of comparable properties in the same market
segment and in the same geographical area as the Property, except in connection
with Tenant Improvements undertaken in accordance with the terms of the Mortgage
Loan Agreement (ii) except in connection with Tenant Improvements undertaken in
accordance with the terms of the Mortgage Loan Agreement, removal, demolition or
material alteration of the improvements or equipment on the Property or (iii)
material increase in the square footage or gross leasable area of the
improvements on the Property if a material portion of any of the expenses in
connection therewith are paid or incurred by Mortgage Borrower;
(f) any material change in the method of conduct of the business
of Borrower or any of its Subsidiaries, such consent to be given in the sole
discretion of Lender;
(g) except as required by the Mortgage Loan Documents, any
determination to restore the Property after a Casualty or Condemnation.
Section 5.31. [INTENTIONALLY DELETED.]
Section 5.32. REFINANCING. Borrower shall not consent to or permit a
refinancing of the Mortgage Loan unless it obtains the prior consent of Lender,
provided that Lender shall consent to a refinancing in full of the Mortgage Loan
if, after considering the following factors, Lender determines in its reasonable
discretion that such factors have been satisfied:
(a) no Event of Default or event which with the giving of notice
and/or lapse of time would constitute an Event of Default under this Agreement
shall have occurred and be continuing;
(b) the new mortgage loan ("NEW MORTGAGE LOAN") shall have (i) an
interest rate that is no higher than the then current interest rate for the
Mortgage Loan, as determined by Lender in its sole discretion (and shall provide
for an interest rate cap substantially identical to the Interest Rate Protection
Agreement), (ii) a principal balance that is no more than the balance of the
Mortgage Loan on the date of the refinancing, (iii) if the New Mortgage Loan
provides for amortization, an amortization schedule that provides for repayment
in monthly installments each of which is no greater than the monthly payments
due under the Mortgage Note, and (iv) a maturity date that is no earlier than
that provided for under the Mortgage Loan at the time of the closing thereof;
(c) the terms of the New Mortgage Loan shall permit the Loan,
shall provide the same express rights to Lender as the Mortgage Loan and shall
not conflict with the terms of
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the Loan and the new mortgage lender shall enter into an intercreditor agreement
with Lender no less favorable to Lender than the Intercreditor Agreement;
(d) no portion of the Property may not be transferred in
connection with such refinancing except pursuant to a Sale or Pledge made in
accordance with Article VII of this Agreement;
(e) Borrower shall pay all costs and expenses of Lender incurred
in connection with any such refinancing, including, without limitation,
reasonable fees and expenses of Lender's counsel;
(f) Borrower shall execute and deliver such amendments to this
Agreement and the other Loan Documents as Lender may request in connection with
such New Mortgage Loan; and
(g) Lender shall have received such settlement statements, pay-off
letters, opinions and other documentation as it shall reasonably request in
connection with such refinancing.
Upon the satisfaction of the foregoing, Borrower may permit or
consent to a refinancing of the Mortgage Loan, whereupon such New Mortgage Loan
shall be deemed to be the Mortgage Loan as defined herein.
ARTICLE VI
ENTITY COVENANTS
Section 6.1. SINGLE PURPOSE ENTITY/SEPARATENESS. Until the Debt has
been paid in full, Borrower represents, warrants and covenants as follows:
(a) Borrower has not and will not, and will not permit Mortgage
Borrower to:
(i) (x) with respect to Borrower, engage in any business or
activity other than the ownership of the Pledged Company Interests and the
Collateral and any activities incidental thereto or (y) with respect to
the Mortgage Borrower, engage in any business or activity other than the
than the ownership, operation and maintenance of the Property, and any
activities incidental thereto;
(ii) (x) with respect to Borrower, acquire or own any assets
other than (A) the Pledged Company Interests or the Collateral, and (B)
such incidental Personal Property as may be necessary for the ownership of
the Pledged Company Interests and the Collateral or (y) with respect to
the Mortgage Borrower, acquire or own any assets other than (A) the
Property, and (B) such incidental Personal Property as may be necessary
for the operation of the Property;
(iii) merge into or consolidate with any Person, or dissolve,
terminate, liquidate in whole or in part, transfer or otherwise dispose of
all or substantially all of its assets or change its legal structure;
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(iv) fail to observe all organizational formalities or fail
to preserve its existence as an entity duly organized, validly existing
and in good standing (if applicable) under the applicable Legal
Requirements of the jurisdiction of its organization or formation, or
amend, modify, terminate or fail to comply with the provisions of its
organizational documents;
(v) own any Subsidiary, or make any investment in, any
Person;
(vi) commingle its assets with the assets of any other
Person;
(vii) (x) with respect to Borrower, incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation) or
(y) with respect to Mortgage Borrower, incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation),
other than (A) the Debt (as defined in the Mortgage Loan Agreement), (B)
trade and operational indebtedness incurred in the ordinary course of
business with trade creditors, provided such indebtedness is (1)
unsecured, (2) not evidenced by a note, (3) on commercially reasonable
terms and conditions, and (4) due not more than sixty (60) days past the
date incurred and paid on or prior to such date, and/or (C) financing
leases and purchase money indebtedness incurred in the ordinary course of
business relating to Personal Property on commercially reasonable terms
and conditions; provided however, the aggregate amount of the indebtedness
described in (B) and (C) shall not exceed at any time three percent (3%)
of the outstanding principal amount of the Mortgage Note;
(viii) fail to maintain its records, books of account, bank
accounts, financial statements, accounting records and other entity
documents separate and apart from those of any other Person; except that
Borrower's and Mortgage Borrower's financial position, assets,
liabilities, net worth and operating results may be included in the
consolidated financial statements of an Affiliate, provided that such
consolidated financial statements contain a footnote indicating that
Borrower and Mortgage Borrower are separate legal entities and that they
maintain separate books and records;
(ix) enter into any contract or agreement with any general
partner, member, shareholder, principal, guarantor of the obligations of
Borrower or of Mortgage Borrower, or any Affiliate of the foregoing,
except upon terms and conditions that are intrinsically fair, commercially
reasonable and substantially similar to those that would be available on
an arm's-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be
costly or difficult to segregate, ascertain or identify its individual
assets from those of any other Person;
(xi) (A) assume or guaranty the debts of any other Person,
hold itself out to be responsible for the debts of any other Person, or
otherwise pledge its assets for the benefit of any other Person or hold
out its credit as being available to satisfy the obligations of any other
Person or (B) other than with respect to (I) the obligations of Borrower
or Mortgage Borrower guaranteed by Borrower Principal pursuant to the
terms
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of the Loan Documents, (II) reimbursement obligations, if any, of Borrower
Principal or its Affiliates (other than Mortgage Borrower or Borrower) to
the Issuing Bank with respect to the Reserve Letters of Credit (as such
terms are defined in the Mortgage Loan Agreement) or (III) the Principals
Guaranty, permit any of its partners, members, shareholders or other
Affiliates to guarantee, become obligated for or hold its credit out to be
responsible for any of the debts or obligations of Borrower or Mortgage
Borrower;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns or file a consolidated
federal income tax return with any Person (unless prohibited or required,
as the case may be, by applicable Legal Requirements);
(xiv) identify itself as a division of an Affiliate or fail
either to hold itself out to the public as a legal entity separate and
distinct from any other Person or to conduct its business solely in its
own name or fail to correct any known misunderstanding regarding its
separate identity;
(xv) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations;
(xvi) without the unanimous written consent of all of its
members, and the written consent of 100% of the managers of Borrower or
Mortgage Borrower, as applicable, including, without limitation, each
Independent Manager, (a) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any Creditors Rights
Laws, (b) seek or consent to the appointment of a receiver, liquidator or
any similar official, (c) take any action that might cause such entity to
become insolvent, or (d) make an assignment for the benefit of creditors;
(xvii) fail to allocate, fairly and reasonably, shared
expenses (including, without limitation, shared office space and services
performed by an employee of an Affiliate) among the Persons sharing such
expenses and to use separate stationery, invoices and checks;
(xviii) fail to remain solvent or pay its own liabilities
(including, without limitation, salaries of its own employees) only from
its own funds;
(xix) acquire obligations or securities of its partners,
members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made
with respect to Borrower, Mortgage Borrower and their principals in any
opinion letter pertaining to substantive consolidation delivered to Lender
in connection with the Loan;
(xxi) fail to maintain a sufficient number of employees in
light of its contemplated business operations;
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(xxii) form, acquire, or hold any Subsidiary (other than
Mortgage Borrower);
(xxiii) permit any Affiliate independent access to its bank
accounts other than with respect to the Manager in its capacity as manager
of the Property pursuant to the Management Agreement;
(xxiv) fail to maintain the resolutions, agreements and other
instruments regarding the transactions contemplated by the Loan as
official records; or
(xxv) fail to make all oral and written communication,
including, without limitation, letters, invoices, purchase orders,
contracts, statements, and applications solely in the name of Borrower.
(b) Borrower shall have as its sole member the Borrower Principal.
Borrower shall maintain its status as a single member Delaware limited liability
company.
(c) The limited liability company agreement of Borrower (the "LLC
AGREEMENT") shall provide that (i) upon the occurrence of any event that causes
the sole member of Borrower ("MEMBER") to cease to be the member of Borrower
(other than (A) upon an assignment by Member of all of its limited liability
company interest in Borrower and the admission of the transferee in accordance
with the Loan Documents and the LLC Agreement, or (B) the resignation of Member
and the admission of an additional member of Borrower in accordance with the
terms of the Loan Documents and the LLC Agreement), any person acting as
Independent Manager of Borrower shall, without any action of any other Person
and simultaneously with the Member ceasing to be the member of Borrower,
automatically be admitted to Borrower ("SPECIAL MEMBER") and shall continue
Borrower without dissolution and (ii) Special Member may not resign from
Borrower or transfer its rights as Special Member unless (A) a successor Special
Member has been admitted to Borrower as Special Member in accordance with
requirements of Delaware law and (B) such successor Special Member has also
accepted its appointment as an Independent Manager. The LLC Agreement shall
further provide that (i) Special Member shall automatically cease to be a member
of Borrower upon the admission to Borrower of a substitute Member, (ii) Special
Member shall be a member of Borrower that has no interest in the profits, losses
and capital of Borrower and has no right to receive any distributions of
Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited
Liability Company Act (the "ACT"), Special Member shall not be required to make
any capital contributions to Borrower and shall not receive a limited liability
company interest in Borrower, (iv) Special Member, in its capacity as Special
Member, may not bind Borrower and (v) except as required by any mandatory
provision of the Act, Special Member, in its capacity as Special Member, shall
have no right to vote on, approve or otherwise consent to any action by, or
matter relating to, Borrower, including, without limitation, the merger,
consolidation or conversion of Borrower; provided, however, such prohibition
shall not limit the obligations of Special Member, in its capacity as
Independent Manager, to vote on such matters required by the Loan Documents or
the LLC Agreement. In order to implement the admission to Borrower of Special
Member, Special Member shall execute a counterpart to the LLC Agreement. Prior
to its admission to Borrower as Special Member, Special Member shall not be a
member of Borrower.
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Upon the occurrence of any event that causes the Member to cease to
be a member of Borrower, to the fullest extent permitted by law, the personal
representative of Member shall, within ninety (90) days after the occurrence of
the event that terminated the continued membership of Member in Borrower, agree
in writing (i) to continue Borrower and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute
member of Borrower, effective as of the occurrence of the event that terminated
the continued membership of Member of Borrower in Borrower. Any action initiated
by or brought against Member or Special Member under any Creditors Rights Laws
shall not cause Member or Special Member to cease to be a member of Borrower and
upon the occurrence of such an event, the business of Borrower shall continue
without dissolution. The LLC Agreement shall provide that each of Member and
Special Member waives any right it might have to agree in writing to dissolve
Borrower upon the occurrence of any action initiated by or brought against
Member or Special Member under any Creditors Rights Laws, or the occurrence of
an event that causes Member or Special Member to cease to be a member of
Borrower.
Section 6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower shall
not change or permit to be changed (a) Borrower's name, (b) Borrower's identity
(including its trade name or names), (c) Borrower's principal place of business
set forth on the first page of this Agreement, (d) the corporate, partnership or
other organizational structure of Borrower, (e) Borrower's state of
organization, or (f) Borrower's organizational identification number, without in
each case notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in
Borrower's structure, without first obtaining the prior written consent of
Lender. In addition, Borrower shall not change or permit to be changed any
organizational documents of Borrower if such change would adversely impact the
covenants set forth in Sections 6.1 and 6.4 hereof. Borrower authorizes Lender
to file any financing statement or financing statement amendment required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the request of Lender, Borrower shall
execute a certificate in form satisfactory to Lender listing the trade names
under which Borrower intends to operate under, and representing and warranting
that Borrower does business under no other trade name with respect to the
Property. If Borrower does not now have an organizational identification number
and later obtains one, or if the organizational identification number assigned
to Borrower subsequently changes, Borrower shall promptly notify Lender of such
organizational identification number or change.
Section 6.3. BUSINESS AND OPERATIONS. (a) Borrower will qualify to
do business and will remain in good standing under the laws of the State as and
to the extent the same are required for the ownership, maintenance, management
and operation of the Pledged Company Interests and the Collateral. Borrower
shall not enter into any line of business other than the ownership of the
Pledged Company Interests and the Collateral, or make any material change in the
scope or nature of its business objectives, purposes or operations, or undertake
or participate in activities other than the continuance of its present business.
(b) Borrower will cause Mortgage Borrower to qualify to do
business and to remain in good standing under the laws of each State as and to
the extent the same are required for the ownership, maintenance, management and
operation of the Property. Borrower shall not permit Mortgage Borrower to enter
into any line of business other than the ownership of the Property, or make any
material change in the scope or nature of its business objectives, purposes
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or operations, or undertake or participate in activities other than the
continuance of its present business.
Section 6.4. INDEPENDENT MANAGERS.
(a) The organizational documents of Borrower shall provide that at
all times there shall be, and Borrower shall cause there to be, at least two
duly appointed Independent Managers of Borrower reasonably satisfactory to
Lender each of whom are not at the time of such individual's initial
appointment, and shall not have been at any time during the preceding five (5)
years, and shall not be at any time while serving as a director of Borrower,
either (i) a shareholder (or other equity owner) of, or an officer, director,
partner, manager, member (other than as a Special Member in the case of single
member Delaware limited liability companies), employee, attorney or counsel of,
Borrower, or any of their respective shareholders, partners, members,
subsidiaries or affiliates; (ii) a customer or creditor of, or supplier to,
Borrower or any of its respective shareholders, partners, members, subsidiaries
or affiliates who derives any of its purchases or revenue from its activities
with Borrower or any Affiliate of any of them; (iii) a Person who Controls or is
under common Control with any such shareholder, officer, director, partner,
manager, member, employee, supplier, creditor or customer; or (iv) a member of
the immediate family of any such shareholder, officer, director, partner,
manager, member, employee, supplier, creditor or customer.
(b) The organizational documents of Borrower shall provide that
the board of managers of Borrower shall not take any action which, under the
terms of any certificate of incorporation, by-laws, articles of organization,
operating agreement or any voting trust agreement with respect to any common
stock or membership interest (as applicable), requires a unanimous vote of the
board of managers of Borrower unless at the time of such action there shall be
at least two members of the board of managers who are Independent Managers.
Borrower will not, without the unanimous written consent of its board of
managers including each Independent Manager, on behalf of itself or Mortgage
Borrower (as applicable) (i) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any applicable Creditors
Rights Laws; (ii) seek or consent to the appointment of a receiver, liquidator
or any similar official; (iii) take any action that might cause such entity to
become insolvent; or (iv) make an assignment for the benefit of creditors.
ARTICLE VII
NO SALE OR ENCUMBRANCE
Section 7.1. TRANSFER DEFINITIONS. For purposes of this Article 7,
an "AFFILIATED MANAGER" shall mean any managing agent of the Property, other
than Borrower Principal, in which Mortgage Borrower, Borrower, Borrower
Principal or any affiliate of such entities has, directly or indirectly, any
Controlling legal, beneficial or economic interest; "CONTROL" shall mean the
power to direct the management and policies of a Restricted Party, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interests, by contract or otherwise; "RESTRICTED PARTY" shall mean
Mortgage Borrower, Borrower, Borrower Principal, any Affiliated Manager, or any
shareholder, partner, member or non-member manager, or any direct or indirect
legal or beneficial owner of Mortgage Borrower,
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Borrower, Borrower Principal, any Affiliated Manager or any non-member manager,
provided, however, that no direct or indirect owners of Borrower Principal,
other than Sponsor, shall be included within the definition of a Restricted
Party; and a "SALE OR PLEDGE" shall mean a voluntary or involuntary sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of
any options with respect to, or any other transfer or disposition of (directly
or indirectly, voluntarily or involuntarily, by operation of law or otherwise,
and whether or not for consideration or of record) of a legal or beneficial
interest, except for Permitted Encumbrances.
Section 7.2. NO SALE/ENCUMBRANCE.
(a) Except as provided in Section 7.3 below, Borrower shall not
cause or permit a Sale or Pledge of the Collateral or the Property or any part
thereof or any legal or beneficial interest therein nor permit a Sale or Pledge
of an interest in any Restricted Party (in each case, a "PROHIBITED TRANSFER"),
other than pursuant to Leases of space in the Improvements to Tenants in
accordance with the provisions of Section 5.13, without the prior written
consent of Lender.
(b) A Prohibited Transfer shall include, but not be limited to,
(i) an installment sales agreement wherein Mortgage Borrower agrees to sell the
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Mortgage Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Mortgage Borrower's right, title and interest in and to any Leases or any Rents;
(iii) if a Restricted Party is a corporation, any merger, consolidation or Sale
or Pledge of such corporation's stock or the creation or issuance of new stock
in one or a series of transactions; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general or limited partner or any profits or
proceeds relating to such partnership interests or the creation or issuance of
new partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of any member or
any profits or proceeds relating to such membership interest; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; (vii) the removal or
the resignation of a Manager (including, without limitation, an Affiliated
Manager) other than in accordance with Section 5.14.
Section 7.3. PERMITTED TRANSFERS. Notwithstanding the provisions of
Section 7.2, the following transfers shall not be deemed to be a Prohibited
Transfer: (a) a transfer by devise or descent or by operation of law upon the
death of a member, partner or shareholder of a Restricted Party; (b) the Sale or
Pledge, in one or a series of transactions, of not more than forty-nine percent
(49%) of the stock, partnership interests or membership interests (as the case
may be) in a Restricted Party other than Mortgage Borrower; provided, however,
no such transfers shall result in a change in Control in Borrower, Mortgage
Borrower or Borrower Principal or a change in the Manager, and as a condition to
each transfer of direct interests in Borrower (to the
-56-
extent otherwise permitted hereunder), Lender shall receive not less than thirty
(30) days prior written notice of such proposed transfer, (c) the transfer of
interests held by Sponsor and its Affiliates in any Restricted Party other than
Borrower or Mortgage Borrower in connection with the purchase, sale and/or
financing of the ownership interests in other properties owned by Sponsor,
provided that (i) no such transfers shall result in a change in Control in
Borrower or Mortgage Borrower or a change in Control of the Manager (ii) Sponsor
remains at all times the general partner of Borrower Principal, and (iii)
Sponsor continues to own no less than twenty-five percent (25%) of the direct or
indirect interests in Borrower, (d) transfers of direct or indirect interests in
Borrower Principal, provided that (i) no such transfers shall result in a change
in Control in Borrower, Mortgage Borrower or Manager, (ii) Sponsor remains at
all times the general partner of Borrower Principal, and (iii) Sponsor continues
to own no less than twenty-five (25%) of the direct or indirect interests in
Borrower, (e) so long as Sponsor is a publicly traded company, the pledge of
Sponsor's interests in any Restricted Party other than Borrower or Mortgage
Borrower to secure an operating debt facility of Sponsor, provided that (i) such
operating debt facility is secured by a pledge of interests in entities having a
direct or indirect interest in substantially all of the properties directly or
indirectly owned by Sponsor and (ii) the beneficiary of such pledge shall be a
major financial institution with significant real estate experience involving
properties similar to the Property, (f) Sponsor and its Affiliates may sell (but
not pledge) to a Qualified Investor up to 75% of the direct or indirect,
non-managing membership interests in Borrower, provided that (i) Sponsor at all
times maintains Control of the Borrower and Mortgage Borrower (subject to the
veto rights, if any, of such Qualified Investor with respect to Major Decisions,
provided that no such veto right shall be construed to affect any rights or
remedies of Lender under the Loan Documents) and Borrower (ii) Sponsor shall at
all times own, directly or indirectly, at least 25% of the ownership interests
in Borrower and Mortgage Borrower and (iii) the Property shall at all times be
managed by a Qualified Manager, (g) transfers of ownership interests in Sponsor
so long as Sponsor is a publicly traded entity, (h) the merger of Sponsor with
or into another entity, provided that (x) the surviving entity is publicly
traded and (y) such merger does not result in a change of Control in Borrower,
Mortgage Borrower or Borrower Principal, (i) encumbrances of the Tower Parcel
portion of the Property with 365 parking covenants for the benefit of the
property located at 000 Xxxxx Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx pursuant to
the terms of the Mortgage Loan Agreement, or (j) with respect to the Garage
Parcel, the execution of a parking covenant agreement pursuant to the terms of
the Mortgage Loan Agreement. Notwithstanding anything to the contrary contained
in this Section 7.3, if any Sale or Pledge permitted under this Section 7.3
results in any Person and its Affiliates owning in excess of forty-nine percent
(49%) of the ownership interests in Borrower, Mortgage Borrower or Borrower
Principal, Borrower shall, prior to such transfer, and in addition to any other
requirement for Lender consent contained herein, deliver a revised substantive
non-consolidation opinion to Lender reflecting such transfer, which opinion
shall be in form, scope and substance acceptable in all respects to Lender and
the Rating Agencies.
Section 7.4. LENDER'S RIGHTS. Lender reserves the right to condition
the consent to a Prohibited Transfer requested hereunder upon (a) a modification
of the terms hereof and an assumption of the Note and the other Loan Documents
as so modified by the proposed Prohibited Transfer, (b) receipt of payment of a
transfer fee equal to one half of one percent (0.5%) of the outstanding
principal balance of the Loan and all of Lender's expenses incurred in
connection with such Prohibited Transfer, (c) the proposed transferee's
continued compliance with the covenants set forth in this Agreement (including,
without limitation, the covenants in
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Article 6) and the other Loan Documents, (d) to the extent that a Prohibited
Transfer would result in a change of Control of Borrower or Mortgage Borrower, a
new manager for the Property and a new management agreement satisfactory to
Lender, (e) the satisfaction of all conditions set forth in Section 7.4 of the
Mortgage Loan Agreement, and (f) the satisfaction of such other conditions
and/or legal opinions as Lender shall determine in its reasonable discretion to
be in the interest of Lender. All expenses incurred by Lender shall be payable
by Borrower whether or not Lender consents to the Prohibited Transfer. Lender
shall not be required to demonstrate any actual impairment of its security or
any increased risk of default hereunder in order to declare the Debt immediately
due and payable upon a Prohibited Transfer made without Lender's consent. This
provision shall apply to each and every Prohibited Transfer, whether or not
Lender has consented to any previous Prohibited Transfer. Notwithstanding
anything to the contrary contained in this Section 7.4, if any Sale or Pledge
results in any Person and its Affiliates owning in excess of forty-nine percent
(49%) of the ownership interests in a Restricted Party, Borrower shall, prior to
such transfer, and in addition to any other requirement for Lender consent
contained herein, deliver a revised substantive non-consolidation opinion to
Lender reflecting such Prohibited Transfer, which opinion shall be in form,
scope and substance acceptable in all respects to Lender.
Section 7.5. ASSUMPTION.
(a) In the event Mortgage Borrower obtains the consent of Mortgage
Lender to a Transfer of the Property subject to, and assuming, the Mortgage Loan
Documents to another Person (a "TRANSFEREE MORTGAGE BORROWER"), such Transfer
shall nevertheless not be permitted hereunder unless (1) the sole holder of 100%
of the equity interests in the Transferee Mortgage Borrower (the "TRANSFEREE
MEZZANINE BORROWER") pledges its entire equity interest in the Transferee
Mortgage Borrower to Lender pursuant to a pledge agreement in the form of the
Pledge Agreement or otherwise acceptable to Lender in its sole discretion, (2)
the Transferee Mezzanine Borrower is substituted for and assumes all of
Borrower's obligations under the Loan Documents, and replacement guarantors and
indemnitors assume all of the obligations of Borrower Principal under the Loan
Documents (collectively, a "TRANSFER AND ASSUMPTION"), and (3) Lender approves
such Transfer and Assumption (including without limitation the creditworthiness
of the proposed "Transferee Mezzanine Borrower") in Lender's reasonable
discretion. Borrower may make a written application to Lender for Lender's
consent to the Transfer and Assumption, subject to the conditions set forth in
paragraphs (i) and (ii) of this Section below. Together with such written
application, Borrower will pay to Lender the reasonable review fee, not to
exceed $25,000, then required by Lender. Borrower also shall pay on demand all
of the costs and expenses incurred by Lender, including reasonable attorneys'
fees and expenses, and including the fees and expenses of Rating Agencies, if
applicable, and other outside entities, in connection with considering any
proposed Transfer and Assumption, whether or not the same is permitted or
occurs.
(b) Lender may grant or withhold its consent to a Transfer and
Assumption in its reasonable discretion, subject, however, to
satisfaction of the following conditions:
(i) No Default or Event of Default shall have occurred and
be continuing;
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(ii) Borrower shall have submitted to Lender true, correct
and complete copies of any and all information and documents of any kind
reasonably requested by Lender concerning the Property, Transferee
Mezzanine Borrower, replacement guarantors and indemnitors;
(iii) Evidence satisfactory to Lender shall have been provided
showing that the Transferee Mezzanine Borrower and such of its Affiliates
as shall be designated by Lender comply and will comply with Article 6, as
those provisions may be modified by Lender taking into account the
ownership structure of Transferee Mezzanine Borrower and its Affiliates;
(iv) Borrower shall have obtained (and delivered to Lender) a
Rating Confirmation with respect to the Transfer and Assumption and all
related transactions;
(v) Borrower shall have paid all of Lender's costs and
expenses in connection with considering the Transfer and Assumption, and
shall have paid the amount requested by Lender as a deposit against
Lender's costs and expenses in connection with effecting the Transfer and
Assumption;
(vi) Borrower, the Transferee Mezzanine Borrower, and the
replacement guarantors and indemnitors shall have indicated in writing in
form and substance reasonably satisfactory to Lender their readiness and
ability to satisfy the conditions set forth in Subsection (c) below; and
(vii) The identity, experience, and financial condition of the
Transferee Mezzanine Borrower and the replacement guarantors and
indemnitors shall be satisfactory to Lender in its sole and absolute
discretion, exercised in good faith.
(c) If Lender consents to the Transfer and Assumption, the
Transferee Mezzanine Borrower and/or Borrower, as the case may be, shall deliver
the following to Lender:
(i) Borrower (or Transferee Mezzanine Borrower) shall
deliver to Lender an assumption fee in the amount of 1.0% of the then
unpaid principal balance of the Loan at the closing of the Transfer and
Assumption;
(ii) Borrower, Transferee Mezzanine Borrower, the original
and replacement guarantors and indemnitors shall execute and deliver any
and all documents reasonably required by Lender, in form and substance
reasonably required by Lender, to evidence the Transfer and Assumption,
including Loan Document modifications reasonably appropriate in light of
such Transfer and Assumption (modifying documentation if Lender requires
to address variations in the ownership structure of the Transferee
Mezzanine Borrower from that of the Borrower, for example, so long as such
modifications do not alter the economics of the Loan or materially
increase the Borrower's obligations thereunder);
(iii) Counsel to the Transferee Mezzanine Borrower and
replacement guarantors and indemnitors shall deliver to Lender opinions in
form and substance satisfactory to Lender as to such matters as Lender and
the Rating Agencies, if
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applicable, shall require, which may include opinions as to substantially
the same matters as were required in connection with the origination of
the Loan including, without limitation, a bankruptcy non-consolidation
opinion and a perfection opinion;
(iv) Borrower shall cause to be delivered to Lender, (A) an
endorsement (relating to the change in the identity of the vestee and
execution and delivery of the Transfer and Assumption documents) to the
Owner's Policy of Title Insurance, and (B) a new UCC Title Policy, each in
form and substance acceptable to Lender, in Lender's reasonable
discretion;
(v) Borrower shall deliver to Lender a payment in the amount
of all remaining unpaid costs incurred by Lender in connection with the
Transfer and Assumption, including but not limited to, Lender's reasonable
attorneys fees and expenses, all recording fees, and all fees payable to
the title company in connection with the Transfer and Assumption; and
(vi) If required by Lender, the Loan shall either be repaid
in full or shall be assumed by the new member of the Transferee Mezzanine
Borrower pursuant to an assumption permitted and approved by the Lender
under the Loan Documents.
Upon completion of a Transfer and Assumption approved in writing by Lender
and permitted hereunder and execution of replacement guaranties by replacement
guarantors as provided in (c) above, and provided that Lender has approved the
replacement guarantors as substitutes for the original Borrower Principal as
provided in (b) above, Borrower and any original Borrower Principal shall, as
part of the documentation executed at the closing of the Transfer and
Assumption, be released from liability under the Loan Documents accruing from
and after the completion of the Transfer and Assumption, but not from any
liabilities for acts and occurrences taking place prior to such Transfer and
Assumption or under the Environmental Indemnity Agreement.
ARTICLE VIII
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
Section 8.1. INSURANCE.
(a) Borrower shall cause Mortgage Borrower to obtain and maintain,
at all times insurance for Mortgage Borrower and for the Property providing at
least the following coverages:
(i) comprehensive "all risk" insurance on the Improvements
and the Personal Property, in each case (A) in an amount equal to one
hundred percent (100%) of the "Full Replacement Cost," which for purposes
of this Agreement shall mean actual replacement value (exclusive of costs
of excavations, foundations, underground utilities and footings) with a
waiver of depreciation; (B) containing an agreed amount endorsement with
respect to the Improvements and Personal Property waiving all co-insurance
provisions; (C) providing for no deductible in excess of $100,000 for all
such insurance coverage; and (D) if any of the Improvements or the use of
the Property shall
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at any time constitute legal non-conforming structures or uses, providing
coverage for contingent liability from Operation of Building Laws,
Demolition Costs and Increased Cost of Construction Endorsements and
containing an "Ordinance or Law Coverage" or "Enforcement" endorsement. In
addition, Borrower shall obtain: (y) if any portion of the Improvements is
currently or at any time in the future located in a "special flood hazard
area" designated by the Federal Emergency Management Agency, flood hazard
insurance in an amount equal to the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act
of 1994, as each may be amended; and (z) earthquake insurance in amounts
and in form and substance reasonably satisfactory to Lender in the event
the Property is located in an area with a high degree of seismic risk,
provided that the insurance pursuant to clauses (y) and (z) hereof shall
be on terms consistent with the comprehensive all risk insurance policy
required under this subsection (i), provided, further, that the insurance
pursuant to clause (z) hereof shall provide for no deductible in excess of
5% of the total insurable value (which includes annual rental value) of
the properties insured under the applicable policy;
(ii) Commercial General Liability insurance against claims
for personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, with such insurance (A) to be on the
so-called "occurrence" form with a general aggregate limit of not less
than $2,000,000 and a per occurrence limit of not less than $1,000,000;
(B) to continue at not less than the aforesaid limit until required to be
changed by Lender in writing by reason of changed economic conditions
making such protection inadequate; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and completed
operations; (3) independent contractors; (4) blanket contractual
liability; and (5) contractual liability covering the indemnities
contained in Article 12 and Article 14 hereof to the extent the same is
available;
(iii) loss of rents insurance or business income insurance, as
applicable, (A) with loss payable to Lender, subject to the terms of the
Mortgage Loan Agreement; (B) covering all risks required to be covered by
the insurance provided for in subsection (i) above; and (C) which provides
that after the physical loss to the Improvements and Personal Property
occurs, the loss of rents or income, as applicable, will be insured until
such rents or income, as applicable, either return to the same level that
existed prior to the loss, or the expiration of twenty-four (24) months,
whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period; and (D) which contains an extended period
of indemnity endorsement which provides that after the physical loss to
the Improvements and Personal Property has been repaired, the continued
loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of twelve (12)
months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that
the policy may expire prior to the end of such period. The amount of such
loss of rents or business income insurance, as applicable, shall be
determined prior to the date hereof and at least once each year thereafter
based on Borrower's reasonable estimate of the gross income from the
Property for the succeeding period of coverage required above. All
proceeds payable to Lender pursuant to this subsection shall be held by
Lender and shall be applied to the obligations secured by the Loan
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Documents from time to time due and payable hereunder and under the Note;
provided, however, that nothing herein contained shall be deemed to
relieve Borrower of its obligations to pay the obligations secured by the
Loan Documents on the respective dates of payment provided for in the
Note, this Agreement and the other Loan Documents except to the extent
such amounts are actually paid out of the proceeds of such loss of rents
or business income insurance, as applicable;
(iv) at all times during which material structural
construction, repairs or alterations are being made with respect to the
Improvements, and only if the Property coverage form does not otherwise
apply, (A) owner's contingent or protective liability insurance covering
claims not covered by or under the terms or provisions of the above
mentioned commercial general liability insurance policy; and (B) the
insurance provided for in subsection (i) above written in a so-called
Builder's Risk Completed Value form (1) on a non-reporting basis, (2)
against "all risks" insured against pursuant to subsection (i) above, (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits
of the State, and employer's liability insurance in respect of any work or
operations on or about the Property, or in connection with the Property or
its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on terms
consistent with the commercial property insurance policy required under
subsection (i) above;
(vii) excess liability insurance in an amount not less than
$50,000,000 per occurrence on terms consistent with the commercial general
liability insurance required under subsection (ii) above; and
(viii) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time to
time may reasonably request against such other insurable hazards which at
the time are commonly insured against for property similar to the Property
located in or around the region in which the Property is located.
The Policies required to be maintained pursuant to clauses (i)
through (viii) above shall contain no exclusion for Losses resulting from acts
of terrorism as certified under the Terrorism Risk Insurance Act of 2002, as the
same may be amended from time to time.
(b) All insurance provided for in Section 8.1(a) shall be obtained
under valid and enforceable policies (collectively, the "POLICIES" or in the
singular, the "POLICY"), and shall be subject to the approval of Lender as to
insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of "AA-" or better by at least two Rating Agencies, one of which
must be S&P or such other Rating Agencies approved by Lender, provided, however,
that if Borrower elects to have its insurance coverage provided by a syndicate
of insurers, then (i) if such syndicate consists of 5 or more
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members, (A) at least 75% of the insurance coverage (and 100% of the first layer
of such coverage) shall be provided by insurance companies having a claims
paying ability rating of "AA" or better by at least two Rating Agencies, one of
which must be S&P, and (B) of the remaining 25% of the coverage, (I) 15% (of the
total syndicate) shall be provided by insurance companies having a claims paying
ability rating of "BBB-" or better by at least two Rating Agencies, one of which
must be S&P, and (II) the remaining 10% (of the total syndicate) shall be
provided by insurance carriers having a general policy rating of "A" or better
and a financial class of "XII" or better by A.M. Best Company, Inc.
Notwithstanding anything to the contrary contained herein, Lender shall accept
an "all-risk" Policy issued by Factory Mutual Insurance Company ("Factory
Mutual"), provided that (I) Factory Mutual maintains a general policy rating of
"A" or better and a financial class of "XII" or better by A.M. Best Company,
Inc. and a claims paying ability rating of "A+" or better by Fitch, and (II) in
connection with a Securitization, Lender confirms that, in Lender's reasonable
determination based on information from the Rating Agencies, the ratings
assigned to the portion or the Securitization represented by the Loan will not
be adversely affected as a result of the "all-risk" Policy being issued by
Factory Mutual. The Policies described in Section 8.1(a) shall designate Lender
and its successors and assigns as a "Named Insured." Not less than ten (10) days
prior to the expiration dates of the Policies theretofore furnished to Lender,
renewal Policies accompanied by evidence satisfactory to Lender of payment of
the premiums due thereunder (the "INSURANCE PREMIUMS") shall be delivered by
Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 8.1(a).
(d) All Policies provided for or contemplated by Section 8.1(a),
except for the Policy referenced in Section 8.1(a)(v), shall name Mortgage
Borrower as the insured, Lender as a "Named Insured," and Mortgage Lender as an
additional insured, as their interests may appear, and in the case of property
damage, boiler and machinery, flood and earthquake insurance, shall provide that
the loss thereunder shall be payable to Mortgagee Lender, as mortgagee and loss
payee, and Lender, as their interests may appear.
(e) All Policies provided for in Section 8.1(a) shall contain
clauses or endorsements to the effect that:
(i) no act or negligence of Mortgage Borrower, or anyone
acting for Mortgage Borrower, or of any Tenant or other occupant, or
failure to comply with the provisions of any Policy, which might otherwise
result in a forfeiture of the insurance or
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any part thereof, shall in any way affect the validity or enforceability
of the insurance insofar as Lender is concerned;
(ii) the Policies shall not be materially changed (other than
to increase the coverage provided thereby) or canceled without at least
thirty (30) days' prior written notice to Lender;
(iii) the issuers thereof shall give written notice to Lender
if the Policies have not been renewed thirty (30) days prior to its
expiration;
(iv) Lender shall not be liable for (A) any Insurance Premiums
thereon or subject to any assessments thereunder or (B) any reporting
requirements under such Policies; and
(v) any claim or defense the insurance company may have
against Borrower or Mortgage Borrower to deny payment of any claim by
Borrower or Mortgage Borrower thereunder shall not be effective against
Lender (and affirmatively providing that the insurance company will pay
the proceeds of such Policies to Lender notwithstanding any claim or
defense of the insurance company against Lender) and such Policies shall
contain an endorsement to such effect.
(f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Property, including, without
limitation, obtaining such insurance coverage as Lender in its sole discretion
deems appropriate. All premiums incurred by Lender in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and shall bear interest at the Default Rate.
Section 8.2. CASUALTY. If the Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a "CASUALTY"),
Borrower shall give prompt notice of such damage to Lender and shall cause
Mortgage Borrower to promptly commence and diligently prosecute the Restoration
of the Property in accordance with Section 8.4 of this Agreement and Section 8.4
of the Mortgage Loan Agreement, whether or not Mortgage Lender or Lender makes
any Net Proceeds available pursuant to Section 8.4 of the Mortgage Loan
Agreement or Section 8.4 hereof (as applicable)(unless Borrower has satisfied
all conditions set forth in Section 8.4 and Lender does not disburse the Net
Proceeds, in which case Borrower shall have no obligation under this Agreement
to restore the Property). Borrower shall cause Mortgage Borrower to pay all
costs of such Restoration whether or not such costs are covered by insurance.
Lender may, but shall not be obligated to make proof of loss if not made
promptly by Borrower, subject to the rights and obligations of Mortgage Lender
and Mortgage Borrower under the Mortgage Loan Documents. Borrower shall cause
Mortgage Borrower to adjust all claims for Insurance Proceeds in consultation
with, and approval of, Lender; provided, however, if an Event of Default has
occurred and is continuing, Lender shall have the exclusive right to participate
in the adjustment of all claims for Insurance Proceeds.
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Section 8.3. CONDEMNATION. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the
Condemnation of the Property of which Borrower has knowledge and shall cause
Mortgage Borrower to deliver to Lender copies of any and all papers served in
connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall cause
Mortgage Borrower to, at its expense, diligently prosecute any such proceedings,
and shall consult with Lender, its attorneys and experts, and cooperate with
them in the carrying on or defense of any such proceedings. Notwithstanding any
taking by any public or quasi-public authority through Condemnation or otherwise
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of such taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by a
condemning authority, Borrower shall cause Mortgage Borrower to promptly
commence and diligently prosecute the Restoration of the Property and otherwise
comply with the provisions of Section 8.4 hereof and Section 8.4 of the Mortgage
Loan Agreement, whether or not Lender or Mortgage Lender makes any Net Proceeds
available pursuant to Section 8.4 hereof or Section 8.4 of the Mortgage Loan
Agreement (as applicable). Subject to the terms and provisions of the Mortgage
Loan Documents, if the Collateral is sold, through foreclosure or otherwise,
prior to the receipt by Lender of the Award, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.
Section 8.4. RESTORATION. Subject to the rights of Mortgage Lender
and the obligations of Mortgage Borrower under the Mortgage Loan Documents, the
following provisions shall apply in connection with the Restoration of the
Property:
(a) If the Net Proceeds shall be less than $2,500,000 and the costs
of completing the Restoration shall be less than $2,500,000, the Net Proceeds
will be disbursed by Lender to Borrower or Mortgage Borrower upon receipt,
provided that all of the conditions set forth in Section 8.4(b)(i) below and
those conditions set forth in Section 8.4(b)(i) of the Mortgage Loan Agreement
are each met and Borrower delivers to Lender a written undertaking by Mortgage
Borrower to expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Agreement and the
Mortgage Loan Agreement.
(b) If the Net Proceeds are equal to or greater than $2,500,000 or
the costs of completing the Restoration are equal to or greater than $2,500,000,
Lender shall make the Net Proceeds available for the Restoration in accordance
with the provisions of this Section 8.4. The term "NET PROCEEDS" for purposes of
this Section 8.4 shall mean: (i) the net amount of all insurance proceeds
received by Lender pursuant to Section 8.1(a)(i), (iv), (vi) and (vii) as a
result of a Casualty, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
the same ("INSURANCE PROCEEDS"), or (ii) the net amount of the Award as a result
of a Condemnation, after deduction of its reasonable costs and
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expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting the same ("CONDEMNATION PROCEEDS"), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower or
Mortgage Borrower for Restoration provided that each of the following
conditions are met:
(A) Mortgage Lender is permitting such Net Proceeds to be
applied toward the Restoration of the Property in accordance with
the Mortgage Loan Documents;
(B) no Event of Default shall have occurred and be continuing;
(C) (1) in the event the Net Proceeds are Insurance Proceeds,
less than thirty percent (30%) of the total floor area of the
Improvements on the Property has been damaged, destroyed or rendered
unusable as a result of a Casualty or (2) in the event the Net
Proceeds are Condemnation Proceeds, less than fifteen percent (15%)
of the land constituting the Property is taken, such land is located
along the perimeter or periphery of the Property, and no portion of
the Improvements is located on such land;
(D) Leases covering in the aggregate at least seventy-five
percent (75%) of the total rentable space in the Property which has
been demised under executed and delivered Leases in effect as of the
date of the occurrence of such Casualty or Condemnation, whichever
the case may be, and each Major Lease in effect as of such date
shall remain in full force and effect during and after the
completion of the Restoration without abatement of rent beyond the
time required for Restoration;
(E) Borrower shall commence or cause Mortgage Borrower to
commence the Restoration as soon as reasonably practicable (but in
no event later than ninety (90) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion, with
commencement defined for purposes hereof to mean the filing of the
requisite applications and ancillary paperwork necessary to receive
building permits;
(F) Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest under the
Note, which will be incurred with respect to the Property as a
result of the occurrence of any such Casualty or Condemnation,
whichever the case may be, will be covered out of the insurance
coverage referred to in Section 8.1(a)(iii) above;
(G) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months
prior to the Maturity Date, (2) the earliest date required for such
completion under the terms of any Leases or material agreements
affecting the Property, (3) such time as may be required
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under applicable zoning law, ordinance, rule or regulation, or (4)
the expiration of the insurance coverage referred to in Section
8.1(a)(iii);
(H) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all Legal
Requirements;
(I) the Restoration shall be done and completed by Borrower or
Mortgage Borrower, as applicable, in an expeditious and diligent
fashion and in compliance with all applicable Legal Requirements;
(J) such Casualty or Condemnation, as applicable, does not
result in the loss of access to the Property or the Improvements,
which access is otherwise not replaced via new improvements to the
Property or an access easement (respectively);
(K) Borrower shall deliver, or cause to be delivered, to
Lender a signed detailed budget approved in writing by Mortgage
Borrower's architect or engineer stating the estimated entire cost
of completing the Restoration, which budget shall be reasonable
acceptable to Lender; and
(L) the Net Proceeds together with any cash or cash equivalent
deposited by Borrower or Mortgage Borrower with Lender are
sufficient in Lender's reasonable judgment to cover the cost of the
Restoration.
(ii) Subject to the terms and provisions of the Mortgage Loan
Documents, the Net Proceeds shall be held by Lender until disbursements
commence, and, until disbursed in accordance with the provisions of this
Section 8.4, shall constitute additional security for the Debt and other
obligations under the Loan Documents. The Net Proceeds shall be disbursed
by Lender to, or as directed by, Borrower from time to time during the
course of the Restoration, upon receipt of evidence satisfactory to Lender
that (A) all the conditions precedent to such advance, including those set
forth in Section 8.4(b)(i), have been satisfied, (B) all materials
installed and work and labor performed (except to the extent that they are
to be paid for out of the requested disbursement) in connection with the
related Restoration item have been paid for in full, and (C) there exist
no notices of pendency, stop orders, mechanic's or materialman's liens or
notices of intention to file same, or any other liens or encumbrances of
any nature whatsoever on the Property which have not either been fully
bonded to the satisfaction of Lender (and in accordance with applicable
Legal Requirements) and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the
Title Insurance Policy (as defined in the Mortgage Loan Agreement).
Notwithstanding the foregoing, Insurance Proceeds from the Policies
required to be maintained by Borrower pursuant to Section 8.1(a)(iii)
shall be controlled by Lender at all times, shall not be subject to the
provisions of this Section 8.4 and shall be used solely for the payment of
the obligations under the Loan Documents and Operating Expenses.
(iii) All plans and specifications required in connection with
the Restoration shall be subject to prior review and acceptance in all
respects by Lender and
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by an independent consulting engineer selected by Lender (the "RESTORATION
CONSULTANT"). Lender shall have the use of the plans and specifications
and all permits, licenses and approvals required or obtained in connection
with the Restoration. The identity of the contractors, subcontractors and
materialmen engaged in the Restoration, as well as the contracts in excess
of $250,000 under which they have been engaged, shall be subject to prior
review and acceptance by Lender and the Restoration Consultant. All costs
and expenses incurred by Lender in connection with making the Net Proceeds
available for the Restoration, including, without limitation, reasonable
counsel fees and disbursements and the Restoration Consultant's fees,
shall be paid by Borrower or Mortgage Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the
costs actually incurred from time to time for work in place as part of the
Restoration, as certified by the Restoration Consultant, minus the
Restoration Retainage. The term "Restoration Retainage" shall mean an
amount equal to ten percent (10%) of the costs actually incurred for work
in place as part of the Restoration, as certified by the Restoration
Consultant, until the Restoration has been completed. The Restoration
Retainage shall be reduced to five percent (5%) of the costs incurred upon
receipt by Lender of satisfactory evidence that fifty percent (50%) of the
Restoration has been completed. The Restoration Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in
this Section 8.4(b), be less than the amount actually held back by
Borrower or Mortgage Borrower, as applicable, from contractors,
subcontractors and materialmen engaged in the Restoration. The Restoration
Retainage shall not be released until the Restoration Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 8.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all
appropriate Governmental Authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been paid in
full or will be paid in full out of the Restoration Retainage; provided,
however, that Lender will release the portion of the Restoration Retainage
being held with respect to any contractor, subcontractor or materialman
engaged in the Restoration as of the date upon which the Restoration
Consultant certifies to Lender that the contractor, subcontractor or
materialman has satisfactorily completed all work and has supplied all
materials in accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, the contractor, subcontractor
or materialman delivers the lien waivers and evidence of payment in full
of all sums due to the contractor, subcontractor or materialman as may be
reasonably requested by Lender or by the title company issuing the Title
Insurance Policy, and Lender receives an endorsement to the Title
Insurance Policy insuring the continued priority of the lien of the
Mortgage and evidence of payment of any premium payable for such
endorsement. If required by Lender, the release of any such portion of the
Restoration Retainage shall be approved by the surety company, if any,
which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
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(vi) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the reasonable opinion of Lender in
consultation with the Restoration Consultant, be sufficient to pay in full
the balance of the costs which are estimated by the Restoration Consultant
to be incurred in connection with the completion of the Restoration,
Borrower or Mortgage Borrower shall deposit the deficiency (the "NET
PROCEEDS DEFICIENCY") with Lender before any further disbursement of the
Net Proceeds shall be made. The Net Proceeds Deficiency deposited with
Lender shall be held by Lender and shall be disbursed for costs actually
incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Section 8.4(b) shall constitute additional security for
the Debt and other obligations under the Loan Documents.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited with
Lender after the Restoration Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of this
Section 8.4(b) and Section 8.4(b) of the Mortgage Loan Agreement, and the
receipt by Lender of evidence satisfactory to Lender that all costs
incurred in connection with the Restoration have been paid in full, shall
be remitted by Lender to Borrower (or as directed by Borrower), provided
no Event of Default shall have occurred and shall be continuing under the
Note, this Agreement or any of the other Loan Documents.
(c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 8.4(b)(vii) above may (x) be retained and applied by Lender toward
the payment of the Debt whether or not then due and payable in such order,
priority and proportions as Lender in its sole discretion shall deem proper, or,
(y) at the sole discretion of Lender, the same may be paid, either in whole or
in part, to Borrower for such purposes and upon such conditions as Lender shall
designate.
(d) Notwithstanding anything herein to the contrary, in the event
that the Property is being restored by Mortgage Borrower pursuant to the
Mortgage Loan Documents, Lender shall agree to the release of the Net Proceeds
for Restoration of the Property pursuant to the terms and provisions of the
Mortgage Loan Documents, subject to Lender's rights to receive and approve in
its discretion all deliverables set forth in this Section 8.4.
ARTICLE IX
RESERVE FUNDS
Borrower shall cause Mortgage Borrower to comply with all of its
obligations under Article IX of the Mortgage Loan Agreement. Notwithstanding
anything to the contrary contained in this Agreement, if at any time and for any
reason (including, without limitation, the satisfaction of the Mortgage Loan),
Mortgage Borrower is no longer maintaining any of the Reserve Accounts (as
defined in the Mortgage Loan Agreement) in accordance with the terms of the
Mortgage Loan Documents or, with respect to the Replacement Reserve Funds, the
Reserve Letter of Credit in lieu thereof in accordance with the terms of the
Mortgage Loan Agreement, (i) Borrower shall be required to promptly establish
and maintain with Lender and for the benefit of
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Lender reserves in replacement and substitution thereof, which substitute
reserves shall be subject to all of the same terms and conditions applicable
under the Mortgage Loan Documents with respect to the Reserve Accounts being
replaced (including, but not limited to, Article X of the Mortgage Loan
Agreement relating to cash management and Borrower shall, and shall cause
Mortgage Borrower to, acknowledge and agree to the amendments to this Agreement
relating to such substitution to cash management provided such amendments are
substantially similar to Article X of the Mortgage Loan Agreement), and (ii) to
the extent not prohibited by Mortgage Lender under the Mortgage Loan Documents,
Borrower shall or shall cause Mortgage Lender to remit to Lender any funds from
Reserve Accounts that were remaining in such reserves at the time of the
termination of such reserves for the purpose of funding the equivalent
substitute reserves.
ARTICLE X
CASH MANAGEMENT
Borrower and Lender acknowledge and agree that all Rent and other
income from the Property will be deposited and disbursed in accordance with
Article X of the Mortgage Loan Agreement entitled "Cash Management."
Notwithstanding anything to the contrary contained in this Agreement, if at any
time and for any reason (including, without limitation, the satisfaction of the
Mortgage Loan), Mortgage Borrower is no longer maintaining the accounts
established pursuant to Article X of the Mortgage Loan Agreement or if the cash
management arrangement referred to in the Mortgage Loan Agreement is no longer
in full force and effect, Borrower shall promptly enter into a substitute cash
management agreement and related lockbox agreement with Agent (as defined in the
Mortgage Loan Agreement) (or such other depository institution as Lender shall
direct, or another agent selected by Borrower and reasonably acceptable to
Lender) on substantially the same terms as the agreements entered into as of the
date hereof in connection with the related Mortgage Loan.
ARTICLE XI
EVENTS OF DEFAULT; REMEDIES
Section 11.1. EVENT OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "EVENT OF DEFAULT":
(a) if any regularly scheduled portion of the Debt is not paid on or
prior to the date the same is due or if the entire Debt is not paid on or before
the Maturity Date or if any other portion of the Debt is not paid within five
(5) days of the date the same is due;
(b) intentionally omitted;
(c) if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender as provided in
Section 8.1;
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(d) if Borrower breaches any covenant contained in Article 6 or any
covenant contained in Article 7 hereof;
(e) if any representation or warranty of, or with respect to,
Borrower, Mortgage Borrower, Borrower Principal, or any member, general partner,
principal or beneficial owner of any of the foregoing, made herein, in any other
Loan Document, or in any certificate, report, financial statement or other
instrument or document furnished to Lender at the time of the closing of the
Loan or during the term of the Loan shall have been false or misleading in any
material respect when made (a "REP & WARRANTY BREACH"), unless (i) Borrower
notifies Lender of such Rep & Warranty Breach promptly upon becoming aware of it
and (ii) such Rep & Warranty Breach (A) was unintentional, (B) is immaterial and
(iii) if capable of being cured, is cured within thirty (30) days following
notice from Lender;
(f) if (i) Borrower or Mortgage Borrower shall commence any case,
proceeding or other action (A) under any Creditors Rights Laws, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, or (B) seeking appointment of
a receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or Borrower or Mortgage Borrower
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Borrower or Mortgage any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of sixty (60) days;
or (iii) there shall be commenced against Borrower or Mortgage any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of any order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or (iv) Borrower or Mortgage
Borrower shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) Borrower or Mortgage shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due;
(g) if Borrower shall be in default beyond applicable notice and
grace periods under any other pledge agreement or other security agreement
covering any part of the Collateral, whether it be superior or junior in lien to
the Pledge Agreement;
(h) intentionally omitted;
(i) if any federal tax lien is filed against Borrower, any member or
general partner of Borrower, Borrower Principal, the Collateral or the Property
and same is not discharged of record within thirty (30) days after same is
filed;
(j) if a judgment is filed against the Borrower in excess of $50,000
which is not fully covered by insurance or which is not vacated or discharged
within 90 days;
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(k) if any default occurs under any guaranty or indemnity executed
in connection herewith and such default continues after the expiration of
applicable grace periods, if any;
(l) if Borrower or Mortgage Borrower shall permit any event within
its control to occur that would cause any REA to terminate without notice or
action by any party thereto or would entitle any party to terminate any REA and
the term thereof by giving notice to Borrower or Mortgage Borrower; or any REA
shall be surrendered, terminated or canceled for any reason or under any
circumstance whatsoever except as provided for in such REA; or any term of any
REA shall be modified or supplemented without Lender's prior written consent; or
Borrower or Mortgage Borrower shall fail, within ten (10) Business Days after
demand by Lender, to exercise its option to renew or extend the term of any REA
or shall fail or neglect to pursue diligently all actions necessary to exercise
such renewal rights pursuant to such REA except as provided for in such REA;
(m) if any of the assumptions contained in any opinion relating to
issues of substantive consolidation delivered to Lender in connection with the
Loan, or in any other opinion relating to substantive consolidation delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect;
(n) If any of Borrower or its Subsidiaries shall breach any of the
terms of:
(i) Section 2.5(g) (Payments upon a Liquidation Event);
(ii) Section 5.15 (Liens);
(iii) intentionally deleted;
(iv) Section 5.25 (Special Distributions);
(v) Section 5.28 (Limitations on Securities Issuances);
(vi) Section 5.29 (Limitations on Distributions);
(vii) Section 5.30 (Other Limitations);
(viii) intentionally deleted;
(ix) Section 5.32 (Refinancing);
(o) if a Mortgage Loan Event of Default occurs; or
(p) if Borrower shall continue to be in default under any other
term, covenant or condition of this Agreement or any of the Loan Documents for
more than ten (10) days after notice from Lender in the case of any default
which can be cured by the payment of a sum of money or for thirty (30) days
after notice from Lender in the case of any other default, provided that if such
default cannot reasonably be cured within such thirty (30) day period and
Borrower shall have commenced to cure such default within such thirty (30) day
period and thereafter
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diligently and expeditiously proceeds to cure the same, such thirty (30) day
period shall be extended for so long as it shall require Borrower in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of sixty (60) days.
Section 11.2. REMEDIES.
(a) Upon the occurrence of an Event of Default (other than an Event
of Default described in Section 11.1(f) above) and at any time thereafter Lender
may, in addition to any other rights or remedies available to it pursuant to
this Agreement and the other Loan Documents or at law or in equity, take such
action, without notice or demand, that Lender deems advisable to protect and
enforce its rights against Borrower and in the Collateral, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents and may exercise all the rights and remedies of a secured party under
the UCC, as adopted and enacted by the State of Delaware or States where any of
the Collateral is located, against Borrower and the Collateral, including,
without limitation, all rights or remedies available at law or in equity; and
upon any Event of Default described in Section 11.1(f) above, the Debt and all
other obligations of Borrower hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Collateral. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singularly, successively,
together or otherwise, at such time and in such order as Lender may determine in
its sole discretion, to the fullest extent permitted by law, without impairing
or otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
ARTICLE XII
ENVIRONMENTAL PROVISIONS
Section 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants, based upon the Environmental
Report of the Property and information that Borrower knows or should reasonably
have known, that: (a) there are no Hazardous Materials or underground storage
tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws and with permits issued pursuant thereto (if
such permits are required), if any, and (ii) either (A) in the case of Hazardous
Materials, in amounts not in excess of that necessary to operate the Property
for the purposes set
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forth herein or (B) fully disclosed to and approved by Lender in writing
pursuant to the Environmental Report; (b) there are no past, present or
threatened Releases of Hazardous Materials in violation of any Environmental Law
or which would require remediation by a Governmental Authority in, on, under or
from the Property except as described in the Environmental Report; (c) there is
no threat of any Release of Hazardous Materials migrating to the Property except
as described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(e) Borrower does not know of, and has not received, any written or oral notice
or other communication from any Person relating to Hazardous Materials in, on,
under or from the Property; and (f) Borrower has truthfully and fully provided
to Lender, in writing, any and all information relating to environmental
conditions in, on, under or from the Property known to Borrower or contained in
Borrower's files and records, including but not limited to any reports relating
to Hazardous Materials in, on, under or migrating to or from the Property and/or
to the environmental condition of the Property.
Section 12.2. ENVIRONMENTAL COVENANTS.
Borrower covenants and agrees that so long as Mortgage Borrower
owns, manages, is in possession of, or otherwise controls the operation of the
Property: (a) all uses and operations on or of the Property, whether by Mortgage
Borrower or any other Person, shall be in compliance with all Environmental Laws
and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous
Materials in, on, under or from the Property; (c) there shall be no Hazardous
Materials in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto,
if and to the extent required, and (ii) (A) in amounts not in excess of that
necessary to operate the Property for the purposes set forth herein or (B) fully
disclosed to and approved by Lender in writing; (d) cause Mortgage Borrower to
keep the Property free and clear of all Environmental Liens; (e) cause Mortgage
Borrower to, at its sole cost and expense, fully and expeditiously cooperate in
all activities pursuant to Section 12.4 below, including but not limited to
providing all relevant information and making knowledgeable persons available
for interviews; (f) Borrower shall cause Mortgage Borrower, at its sole cost and
expense, to perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender, upon Lender's reasonable belief that the
Property is not in full compliance with all Environmental Laws and share with
Lender the reports and other results thereof, and Lender and other Indemnified
Parties shall be entitled to rely on such reports and other results thereof; (g)
Borrower shall or shall cause Mortgage Borrower to, at its sole cost and
expense, comply with all reasonable written requests of Lender to (i) reasonably
effectuate remediation of any Hazardous Materials in, on, under or from the
Property that are found to be in violation of Environmental Law; and (ii) comply
with any Environmental Law; (h) Borrower shall not allow Mortgage Borrower, any
tenant or other user of the Property to violate any Environmental Law; and (i)
Borrower shall immediately notify Lender in writing after it has become aware of
(A) any presence or Release or threatened Release of Hazardous Materials in, on,
under, from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or
potential Environmental Lien against the Property; (D) any required or proposed
remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other
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communication of which Borrower becomes aware from any source whatsoever
(including but not limited to a Governmental Authority) relating in any way to
Hazardous Materials. Any failure of Borrower to perform its obligations pursuant
to this Section 12.2 shall constitute bad faith waste with respect to the
Property.
Section 12.3. LENDER'S RIGHTS.
Lender and any other Person designated by Lender, including but not
limited to any representative of a Governmental Authority, and any environmental
consultant, and any receiver appointed by any court of competent jurisdiction,
shall have the right, but not the obligation, to enter upon the Property at all
reasonable times to assess any and all aspects of the environmental condition of
the Property and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be determined in
Lender's sole discretion) and taking samples of soil, groundwater or other
water, air, or building materials, and conducting other invasive testing. To the
extent that any such Person is an agent of Lender, Lender shall require that
such Person is bonded and insured. Provided Lender gives Borrower at least 2
days advance notice and agrees to use reasonable efforts to minimize
interference with any tenants, Borrower shall cooperate with and provide (or
cause Mortgage Borrower to provide) access to Lender and any such person or
entity designated by Lender. Other than in connection with what Lender
determines to be an emergency situation, Lender agrees not to conduct any
invasive testing.
Section 12.4. OPERATIONS AND MAINTENANCE PROGRAMS.
If recommended by the Environmental Report or any other
environmental assessment or audit of the Property, Borrower shall cause Mortgage
Borrower to establish and comply with an operations and maintenance program with
respect to the Property, in form and substance reasonably acceptable to Lender,
prepared by an environmental consultant reasonably acceptable to Lender, which
program shall address any asbestos-containing material or lead based paint that
may now or in the future be detected at or on the Property. Without limiting the
generality of the preceding sentence, Lender may require (a) periodic notices or
reports to Lender with regard to Borrower's operations and maintenance programs
in form, substance and at such intervals as Lender may specify, (b) an amendment
to such operations and maintenance program to address changing circumstances,
laws or other matters, (c) at Borrower's sole expense, supplemental examination
of the Property by consultants specified by Lender, (d) provided Lender gives
Borrower at least 2 days advance notice and agrees to use reasonable efforts to
minimize interference with any tenants, access to the Property by Lender, its
agents or servicer, to review and assess the environmental condition of the
Property and Mortgage Borrower's compliance with any operations and maintenance
program, and (e) variation of the operations and maintenance program in response
to the reports provided by any such consultants.
Section 12.5. ENVIRONMENTAL DEFINITIONS.
"ENVIRONMENTAL LAW" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations, standards, policies and
other government directives or requirements, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act and the
Resource Conservation and Recovery Act, that apply to
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Borrower or the Property and relate to Hazardous Materials or protection of
human health or the environment. "ENVIRONMENTAL LIENS" means all Liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other Person. "ENVIRONMENTAL REPORT" means the
written reports resulting from the environmental site assessments of the
Property delivered to Lender in connection with the Loan. "HAZARDOUS MATERIALS"
shall mean petroleum and petroleum products and compounds containing them,
including gasoline, diesel fuel and oil; explosives, flammable materials;
radioactive materials; polychlorinated biphenyls and compounds containing them;
lead and lead-based paint; asbestos or asbestos-containing materials in any form
that is or could become friable; underground or above-ground storage tanks,
whether empty or containing any substance; any substance the presence of which
on the Property is prohibited by any federal, state or local authority; any
substance that requires special handling; and any other material or substance
now or in the future defined as a "hazardous substance," "hazardous material",
"hazardous waste", "toxic substance", "toxic pollutant", "contaminant", or
"pollutant" within the meaning of any Environmental Law. "RELEASE" of any
Hazardous Materials includes but is not limited to any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Materials.
ARTICLE XIII
SECONDARY MARKET
Section 13.1. TRANSFER OF LOAN. Lender may, at any time, sell,
transfer or assign the Loan Documents, or grant participations therein
("PARTICIPATIONS") or syndicate the Loan ("SYNDICATION") or issue mortgage
pass-through certificates or other securities evidencing a beneficial interest
in a rated or unrated public offering or private placement ("SECURITIES") (the
Syndication or the issuance of Participations and/or Securities, a
"SECURITIZATION").
Section 13.2. DELEGATION OF SERVICING. At the option of Lender, the
Loan may be serviced by a servicer/trustee selected by Lender ("Servicer") and
Lender may delegate all or any portion of its responsibilities under this
Agreement and the other Loan Documents to such servicer/trustee pursuant to a
servicing agreement between Lender and such servicer/trustee.
Section 13.3. DISSEMINATION OF INFORMATION. Lender may forward to
each purchaser, transferee, assignee, or servicer of, and each participant, or
investor in, the Loan, or any Participations and/or Securities or any of their
respective successors (collectively, the "INVESTOR") or any Rating Agency rating
the Loan, or any Participations and/or Securities, each prospective Investor,
and any organization maintaining databases on the underwriting and performance
of commercial mortgage loans, all documents and information which Lender now has
or may hereafter acquire relating to the Debt and to Borrower, Mortgage
Borrower, any managing member or general partner thereof, Borrower Principal,
and the Property, including financial statements, whether furnished by Borrower
or otherwise, as Lender determines necessary or desirable. Borrower irrevocably
waives any and all rights it may have under applicable Legal Requirements to
prohibit such disclosure, including but not limited to any right of privacy.
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Section 13.4. COOPERATION. At the request of the holder of the Note
and, to the extent not already required to be provided by Borrower under this
Agreement, Borrower and Borrower Principal shall use reasonable efforts to
provide information not in the possession of the holder of the Note in order to
satisfy the market standards to which the holder of the Note customarily adheres
or which may be reasonably required in the marketplace or by the Rating Agencies
in connection with such sales or transfers, including, without limitation, to:
(a) provide, or cause Mortgage Borrower to provide, (i) updated
financial, budget and other information with respect to the Property, the
Collateral, Borrower, Mortgage Borrower, Sponsor, Borrower Principal and Manager
and (ii) modifications and/or updates to the appraisals, market studies,
environmental reviews and reports (Phase I reports and, if appropriate, Phase II
reports) and engineering reports of the Property obtained in connection with the
making of the Loan (all of the foregoing being referred to as the "PROVIDED
INFORMATION"), together, if customary, with appropriate verification and/or
consents of the Provided Information through letters of auditors or opinions of
counsel of independent attorneys acceptable to Lender and the Rating Agencies;
(b) make changes to the organizational documents of Borrower or
Mortgage;
(c) at Borrower's expense, cause counsel to render or update
existing opinion letters as to enforceability and non-consolidation, which may
be relied upon by the holder of the Note, the Rating Agencies and their
respective counsel, which shall be dated as of the closing date of the
Securitization;
(d) provided Lender gives at least 2 days advance notice and agrees
to use reasonable efforts to minimize interference with any tenants, permit site
inspections, appraisals, market studies and other due diligence investigations
of the Property, as may be reasonably requested by the holder of the Note or the
Rating Agencies or as may be necessary or appropriate in connection with the
Securitization;
(e) make the representations and warranties with respect to the
Property, the Collateral, Borrower, Mortgage Borrower, Borrower Principal,
Manager and the Loan Documents as Borrower has made in the Loan Documents and,
subject to such knowledge or diligence qualifiers as may be necessary, such
other representations and warranties with respect to Borrower, Mortgage
Borrower, the Property, the Collateral and Manager, as may be reasonably
requested by the holder of the Note or the Rating Agencies;
(f) execute such amendments to the Loan Documents as may be
requested by the holder of the Note or the Rating Agencies or otherwise to
effect the Securitization including, without limitation, bifurcation of the Loan
into two or more components and/or separate notes and/or creating a
senior/subordinate note structure; provided, however, that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) change the interest rate, the stated maturity or the amortization of
principal set forth in the Note, except in connection with a bifurcation of the
Loan which may result in varying fixed interest rates and amortization
schedules, but which shall have the same initial weighted average coupon of the
original Note, or (ii) in the reasonable judgment of Borrower, modify or amend
any other material economic term of the Loan, or (iii) in the reasonable
judgment of Borrower,
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materially increase Borrower's obligations and liabilities, or materially
decrease Borrower's rights, under the Loan Documents. Borrower acknowledges that
in connection with a Securitization, Lender may change the Selected Day in its
sole discretion, but in no event to earlier than the fifth (5th) of each month.
(g) deliver to Lender and/or any Rating Agency, (i) one or more
certificates executed by an officer of Borrower certifying as to the accuracy,
as of the closing date of the Securitization, of all representations made by
Borrower in the Loan Documents as of the Closing Date in all relevant
jurisdictions or, if such representations are no longer accurate, certifying as
to what modifications to the representations would be required to make such
representations accurate as of the closing date of the Securitization, and (ii)
certificates of the relevant Governmental Authorities in all relevant
jurisdictions indicating the good standing and qualification of Borrower as of
the date of the closing date of the Securitization;
(h) have reasonably appropriate personnel participate in a bank
meeting and/or presentation for the Rating Agencies or Investors; and
(i) cooperate with and assist Lender in obtaining ratings of the
Securities from two (2) or more of the Rating Agencies.
Borrower shall pay all costs and expenses incurred by Borrower in
connection with the compliance of Borrower and, if applicable, Mortgage Borrower
and Borrower Principal, with requests made under this Section 13.4, including,
without limitation, any additional costs and expenses payable in connection with
the substitution for Factory Mutual of an acceptable insurer pursuant to Section
8.1 hereof; provided, however, that Borrower shall not be responsible for the
payment of any costs or expenses incurred by or on behalf of Lender, or any
Rating Agency fees, in connection with a Securitization.
In the event that Borrower requests any consent or approval
hereunder and the provisions of this Agreement or any Loan Documents require the
receipt of written confirmation from each Rating Agency with respect to the
rating on the Securities, or, in accordance with the terms of the transaction
documents relating to a Securitization, such a rating confirmation is required
in order for the consent of Lender to be given, Borrower shall pay all of the
costs and expenses of Lender, Lender's servicer and each Rating Agency in
connection therewith, and, if applicable, shall pay any fees imposed by any
Rating Agency as a condition to the delivery of such confirmation.
Section 13.5. SECURITIZATION INDEMNIFICATION.
(a) Borrower and Borrower Principal understand that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement, offering memorandum or private placement memorandum (each, a
"DISCLOSURE DOCUMENT") and may also be included in filings with the Securities
and Exchange Commission pursuant to the Securities Act or the Exchange Act, or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities,
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Borrower and Borrower Principal will cooperate with the holder of the Note in
updating the Disclosure Document by providing all current information necessary
to keep the Disclosure Document accurate and complete in all material respects.
(b) Borrower and Borrower Principal agree to provide in connection
with each of (i) a preliminary and a final offering memorandum or private
placement memorandum or similar document (including any Investor or Rating
Agency "term sheets" or presentations relating to the Property and/or the Loan)
or (ii) a preliminary and final prospectus or prospectus supplement, as
applicable, which are delivered to Borrower and Borrower Principal for review,
an indemnification certificate (A) certifying that (I) Borrower and Borrower
Principal have carefully examined such memorandum or prospectus or other
document actually delivered by or on behalf of Lender (including any Investor or
Rating Agency "term sheets" or presentations relating to the Property and/or the
Loan), as applicable, including without limitation, the sections entitled
"Special Considerations," and/or "Risk Factors," and "Certain Legal Aspects of
the Mortgage Loan," or similar sections, and all sections relating to Borrower,
Borrower Principal, Manager, their Affiliates, the Loan, the Loan Documents and
the Property, and any risks or special considerations relating thereto, and any
other sections reasonably requested by Lender (all such sections, collectively,
the "DISCLOSED MATERIALS"), and (II) to the best of Borrower's knowledge except
as specifically identified by Borrower, the Disclosed Materials do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 13.5, Lender hereunder shall include
its officers and directors) and the Affiliate of Lender that (i) has filed the
registration statement, if any, relating to the Securitization and/or (ii) which
is acting as issuer, depositor, sponsor and/or a similar capacity with respect
to the Securitization (any Person described in (i) or (ii), an "ISSUER PERSON"),
and each director and officer of any Issuer Person, and each Person or entity
who controls any Issuer Person within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the "ISSUER
GROUP"), and each Person which is acting as an underwriter, manager, placement
agent, initial purchaser or similar capacity with respect to the Securitization,
each of its directors and officers and each Person who controls any such Person
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the "UNDERWRITER GROUP") for any Losses to which
Lender, the Issuer Group or the Underwriter Group may become subject insofar as
the Losses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Disclosed Materials or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated in the Disclosed Materials or necessary in
order to make the statements in the Disclosed Materials or in light of the
circumstances under which they were made, not misleading (collectively the
"SECURITIES LIABILITIES") and (C) agreeing to reimburse Lender, the Issuer Group
and the Underwriter Group for any legal or other expenses reasonably incurred by
Lender and Issuer Group in connection with investigating or defending the
Securities Liabilities; provided, however, that Borrower will be liable in any
such case under clauses (B) or (C) above only to the extent that any such
Securities Liabilities arise out of or is based upon any such untrue statement
or omission made therein in reliance upon the Disclosed Materials or any reports
delivered by or on behalf of Borrower or Borrower Principal in connection with
the underwriting of the Loan, including, without limitation, financial
statements of Borrower or Borrower Principal, operating statements, rent rolls,
environmental site assessment reports and Property condition reports with
respect to the Property. This indemnity
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agreement will be in addition to any liability which Borrower and Borrower
Principal may otherwise have. Moreover, the indemnification provided for in
Clauses (B) and (C) above shall be effective whether or not an indemnification
certificate described in (A) above is provided and, if Borrower or Borrower
Principal do not provide the indemnification certificate, shall be applicable
based on information previously provided by Borrower and Borrower Principal or
their Affiliates.
(c) In connection with filings under the Exchange Act or any
information provided to holders of Securities on an ongoing basis, Borrower and
Borrower Principal agree to indemnify (i) Lender, the Issuer Group and the
Underwriter Group for Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Securities Liabilities arise
out of or are based upon the omission or alleged omission to state in the
Provided Information a material fact required to be stated in the Provided
Information in order to make the statements in the Provided Information, in
light of the circumstances under which they were made not misleading and (ii)
reimburse Lender, the Issuer Group or the Underwriter Group for any legal or
other expenses reasonably incurred by Lender, the Issuer Group or the
Underwriter Group in connection with defending or investigating the Securities
Liabilities.
(d) Promptly after receipt by an indemnified party under this
Section 13.5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 13.5, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party under this Section 13.5 the indemnifying party shall
be responsible for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there are any legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party shall not be
liable for the expenses of more than one such separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 13.5(c)
or Section 13.5(d) is or are for any reason held to be unenforceable by an
indemnified party in respect of any losses, claims,
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damages or liabilities (or action in respect thereof) referred to therein which
would otherwise be indemnifiable under Section 13.5(c) or Section 13.5(d), the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
action in respect thereof); provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, the following factors
shall be considered: (i) the indemnified party's, Borrower's and Borrower
Principal's relative knowledge and access to information concerning the matter
with respect to which claim was asserted; (ii) the opportunity to correct and
prevent any statement or omission; and (iii) any other equitable considerations
appropriate in the circumstances. Lender, Borrower and Borrower Principal hereby
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation.
(f) The liabilities and obligations of Borrower, Borrower Principal
and Lender under this Section 13.5 shall survive the satisfaction of this
Agreement and the satisfaction and discharge of the Debt.
Section 13.6. [INTENTIONALLY OMITTED].
Section 13.7. INTENTIONALLY OMITTED].
Section 13.8. MORTGAGE LOAN SECURITIZATION. Borrower also agrees to
cooperate with Mortgage Lender in connection with the Securitization of the
Mortgage Loan as set forth in Section 13.4 of the Mortgage Loan Agreement and,
to the extent set forth therein, at Borrower's expense.
ARTICLE XIV
INDEMNIFICATIONS
Section 14.1. GENERAL INDEMNIFICATION. Borrower shall indemnify,
defend and hold harmless the Indemnified Parties from and against any and all
Losses imposed upon or incurred by or asserted against any Indemnified Parties
and directly or indirectly arising out of or in any way relating to any one or
more of the following: (a) any accident, injury to or death of persons or loss
of or damage to property occurring in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (b) any use, nonuse or condition in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (c) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (d) any failure of the Property or
the Collateral to be in compliance with any applicable Legal Requirements; (e)
any and all claims and demands whatsoever which may be asserted against Lender
by reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any Lease; (f)
the holding or investing of the Mortgage Reserve Accounts or the performance of
the Required Work (as defined in the Mortgage Loan Agreement), or (g) the
payment of any commission, charge or brokerage fee to anyone which may be
payable in
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connection with the funding of the Loan (collectively, the "INDEMNIFIED
LIABILITIES"); provided, however, that Borrower shall not have any obligation to
Lender hereunder to the extent that such Indemnified Liabilities arise from the
gross negligence, illegal acts, fraud or willful misconduct of Lender. To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Lender.
Section 14.2. INTANGIBLE TAX INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making of the Pledge
Agreement, the Note or any of the other Loan Documents, but excluding any
income, franchise or other similar taxes.
Section 14.3. ERISA INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Section 4.9 or Section 5.18 of this Agreement.
Section 14.4. SURVIVAL. The obligations and liabilities of Borrower
and Borrower Principal under this Article 14 shall fully survive indefinitely
notwithstanding any termination, satisfaction, or assignment of the Pledge
Agreement. Notwithstanding the foregoing, if the Loan is paid off in full on the
Maturity Date, Borrower shall have no further liability under this Article 14
with respect to any event that occurs subsequent to the Maturity Date.
ARTICLE XV
EXCULPATION
Section 15.1. EXCULPATION.
(a) Except as otherwise provided herein or in the other Loan
Documents, Lender shall not enforce the liability and obligation of Borrower or
Borrower Principal, as applicable, to perform and observe the obligations
contained herein or in the other Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring an action under the UCC, an action for specific performance or any
other appropriate action or proceeding to enable Lender to enforce and realize
upon this Agreement, the Note, the Pledge Agreement and the other Loan
Documents, and the interest in the Collateral and any other collateral given to
Lender created by this Agreement, the Note, the Pledge Agreement and the other
Loan Documents; provided, however, that, except as specifically provided herein,
any judgment in any such action or proceeding shall
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be enforceable against Borrower or Borrower Principal, as applicable, only to
the extent of Borrower's or Borrower Principal's interest in the Collateral and
in any other collateral given to Lender. Lender, by accepting this Agreement,
the Note, the Pledge Agreement and the other Loan Documents, agrees that it
shall not, except as otherwise provided in this Section 15.1, xxx for, seek or
demand any deficiency judgment against Borrower or Borrower Principal in any
such action or proceeding, under or by reason of or under or in connection with
this Agreement, the Note, the Pledge Agreement or the other Loan Documents. The
provisions of this Section 15.1 shall not, however, (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by this Agreement,
the Note, the Pledge Agreement or the other Loan Documents; (ii) impair the
right of Lender to name Borrower as a party defendant in any action or suit for
judicial foreclosure and sale under this Agreement and the Pledge Agreement;
(iii) affect the validity or enforceability of any indemnity (including, without
limitation, those contained in Section 13.5 and Article 14 of this Agreement and
the Environmental Indemnity), guaranty, master lease or similar instrument made
in connection with this Agreement, the Note, the Pledge Agreement and the other
Loan Documents; (iv) impair the right of Lender to obtain the appointment of a
receiver; (v) impair the enforcement of the assignment of leases provisions
contained in the Pledge Agreement; or (vi) impair the right of Lender to obtain
a deficiency judgment or other judgment on the Note against Borrower or Borrower
Principal if necessary to obtain any Insurance Proceeds or Awards to which
Lender would otherwise be entitled under this Agreement; provided however,
Lender shall only enforce such judgment to the extent of the Insurance Proceeds
and/or Awards.
(b) Notwithstanding the provisions of this Section 15.1 to the
contrary, Borrower and Borrower Principal shall be personally liable to Lender
on a joint and several basis for Losses due to:
(i) fraud or intentional misrepresentation by Borrower,
Borrower Principal or any other Affiliate of Borrower or Borrower
Principal in connection with the execution and the delivery of this
Agreement, the Note, the Pledge Agreement, any of the other Loan
Documents, or any certificate, report, financial statement or other
instrument or document furnished to Lender at the time of the closing of
the Loan or during the term of the Loan;
(ii) Mortgage Borrower's or Borrower's misapplication or
misappropriation of Rents received by Mortgage Borrower or Borrower after
the occurrence of an Event of Default;
(iii) Mortgage Borrower's or Borrower's misapplication or
misappropriation of tenant security deposits or Rents collected in
advance;
(iv) the misapplication or the misappropriation of Insurance
Proceeds or Awards;
(v) Borrower's or Mortgage Borrower's failure to pay Taxes,
Other Charges (except to the extent that sums sufficient to pay such
amounts have been deposited in escrow with Mortgage Lender pursuant to the
terms of the Mortgage Loan Agreement or with Lender pursuant to the terms
hereof and there exists no impediment to
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Mortgage Lender's or Lender's utilization thereof), charges for labor or
materials or other charges that can create liens on the Property beyond
any applicable notice and cure periods specified herein;
(vi) Borrower or Mortgage Borrower's failure to return or to
reimburse Lender for all Personal Property taken from the Property by or
on behalf of Mortgage Borrower or Borrower and not replaced with Personal
Property of the same utility and of the same or greater value;
(vii) the misappropriation by Mortgage Borrower or Borrower of
any Net Liquidation Proceeds or other amounts due to Lender;
(viii) any act of intentional waste or arson by Mortgage
Borrower, Borrower, any principal, Affiliate, member or general partner
thereof or by Borrower Principal, any principal, Affiliate, member or
general partner thereof; or
(ix) Borrower's gross negligence or willful misconduct.
(c) Notwithstanding the foregoing, the agreement of Lender not to
pursue recourse liability against Borrower and Borrower Principal as set forth
in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further
force and effect and the Debt shall be fully recourse to Borrower and Borrower
Principal jointly and severally in the event of (i) a default by Borrower or
Borrower Principal of any of the covenants set forth in Article 6, or a breach
by Mortgage Borrower under Article 6 of the Mortgage Loan Agreement, provided,
however, that a breach of the covenants set forth in Article 6 of this Agreement
or the Mortgage Loan Agreement, as applicable, shall not result in recourse
liability hereunder unless such breach was material and, within fifteen (15)
days of notice from Lender, Borrower fails to cure such breach and fails to
deliver to Lender a new or revised substantive non-consolidation opinion, in
form and substance and from counsel reasonably satisfactory to Lender in
accordance with the Rating Agency standards for the same, to the effect that
such failure does not negate/impair the opinion previously delivered to Lender,
(ii) a default by Borrower, Borrower Principal or of any of the covenants set
forth in Article 7 hereof, or (iii) if (A) a voluntary bankruptcy or insolvency
proceeding is commenced by Borrower or Mortgage Borrower, or (B) an involuntary
bankruptcy or insolvency proceeding is commenced against Borrower or Mortgage
Borrower which is not dismissed within ninety (90) days of filing (provided,
however, that Borrower and Borrower Principal shall not have recourse liability
hereunder in connection with any involuntary bankruptcy or insolvency proceeding
unless such involuntary proceeding is solicited, procured, consented to or
acquiesced in by Borrower, Mortgage Borrower, Borrower Principal or any
Affiliate of the foregoing in bad faith collusion with an intent to circumvent
the prohibition on recourse liability against the Borrower or Borrower Principal
set forth herein).
(d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the Pledge Agreement or to require that all collateral shall continue
to secure all of the indebtedness owing to Lender in accordance with this
Agreement, the Note, the Pledge Agreement or the other Loan Documents.
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(e) Notwithstanding any provisions of this Article 15 to the
contrary, in no event shall Borrower's failure to pay Operating Expenses in the
event cash flow is insufficient to pay such expenses be considered an act of
waste.
(f) Notwithstanding any other provision hereof, in the event that of
a foreclosure under the Pledge Agreement, and the subsequent transfer of
interests in Mortgage Borrower to Lender, Borrower Principal shall be released
from its liabilities under this Article 15 with respect to any matters arising
from events occurring subsequent to the date of such transfer, as of the
effective date of such transfer of interests in Mortgage Borrower.
ARTICLE XVI
NOTICES
Section 16.1. NOTICES.
All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested, (b)
expedited prepaid overnight delivery service, either commercial or United States
Postal Service, with proof of attempted delivery, or by (c) telecopier (with
answer back acknowledged provided an additional notice is given pursuant to
subsection (b) above), addressed as follows (or at such other address and Person
as shall be designated from time to time by any party hereto, as the case may
be, in a written notice to the other parties hereto in the manner provided for
in this Section):
If to Lender: Bank of America, N.A.
Capital Markets Servicing Group
000 Xxxxx Xxxxxx Xxxxxx
6th Floor
CA9-706-06-42
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Servicing Manager
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Bank of America Legal Department
GCIB/CMBS
NC1-007-20-01
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower: Xxxxxxx Properties - 555 W. Fifth Mezzanine, LLC/
Xxxxxxx Properties - 808 S. Olive Mezzanine, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
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Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Lammas, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower: Xxxxxxx Properties - 555 W. Fifth, LLC/
Principal Xxxxxxx Properties - 808 S. Olive, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Lammas, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.
ARTICLE XVII
FURTHER ASSURANCES
Section 17.1. REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of
an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any other Loan Document which is not of public record: (i) with respect
to any Loan Document other than the Note, Borrower will issue, in lieu thereof,
a replacement of such other Loan Document, dated the date of such lost, stolen,
destroyed or mutilated Loan Document in the same principal amount thereof and
otherwise of like tenor and (ii) with respect to the Note, (a) Borrower will
execute a reaffirmation of the Debt as evidenced by such Note acknowledging that
Lender has informed Borrower that the Note was lost, stolen destroyed or
mutilated and that such Debt continues to be an obligation and liability of the
Borrower as set forth in the Note, a copy of which shall be attached to such
reaffirmation and (b) if requested by Lender, Borrower will execute a
replacement note and Lender or Lender's custodian (at Lender's option) shall
provide to Borrower Lender's (or Lender's custodian's) then standard form of
lost note affidavit and indemnity, which such form shall be reasonably
acceptable to Borrower.
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Section 17.2. INTENTIONALLY OMITTED.
Section 17.3. FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every further acts, deeds, conveyances, deeds of trust, mortgages,
assignments, security agreements, control agreements, notices of assignments,
transfers and assurances as Lender shall, from time to time, reasonably require,
for the better assuring, conveying, assigning, transferring, and confirming unto
Lender the property and rights hereby mortgaged, deeded, granted, bargained,
sold, conveyed, confirmed, pledged, assigned, warranted and transferred or
intended now or hereafter so to be, or which Borrower may be or may hereafter
become bound to convey or assign to Lender, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing or
registering of the Pledge Agreement, or for complying with all Legal
Requirements. Borrower, on demand, will execute and deliver, and in the event it
shall fail to so execute and deliver, hereby authorizes Lender to execute in the
name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements and financing statement
amendments to evidence more effectively, perfect and maintain the priority of
the security interest of Lender in the Collateral. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender at
law and in equity, including without limitation, such rights and remedies
available to Lender pursuant to this Section 17.3.
Section 17.4. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP
LAWS. (a) If any law is enacted or adopted or amended after the date of this
Agreement which imposes a tax, either directly or indirectly, on the Debt or
Lender's interest in the Property or the Collateral, Borrower will pay the tax,
with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Borrower would be unlawful or taxable to
Lender or unenforceable or provide the basis for a defense of usury then Lender
shall have the option by written notice of not less than one hundred twenty
(120) days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit
or credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property or the Collateral, or any part thereof which
imposes a tax either directly or indirectly on the Debt or Lender's interest in
the Property or the Collateral, and no deduction shall otherwise be made or
claimed from the assessed value of the Property or the Collateral, or any part
thereof, for real estate or personal property tax purposes by reason of the
Mortgage, the Pledge Agreement or the Debt. If such claim, credit or deduction
shall be required by law, Lender shall have the option, by written notice of not
less than one hundred twenty (120) days, to declare the Debt immediately due and
payable.
If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, the Pledge Agreement, or any of the other Loan Documents or
impose any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
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Section 17.5. EXPENSES.
Borrower covenants and agrees to pay or, if Borrower fails to pay,
to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable, actual attorneys' fees and
disbursements and the allocated costs of internal legal services and all actual
disbursements of internal counsel) reasonably incurred by Lender in accordance
with this Agreement in connection with (a) the underwriting and closing of the
Loan, including, without limitation, expenses related to Lender's legal
representation, underwriting, third party reports, travel and site inspections,
interest rate hedging and other customary items (except with respect to a
Securitization, any costs and expenses related to which that are payable by
Borrower shall be as set forth in Article 13 hereof) and all the costs of
furnishing all opinions by counsel for Borrower (including without limitation
any opinions requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Property or the
Collateral); (b) Borrower's ongoing performance of and compliance with
Borrower's respective agreements and covenants contained in this Agreement, the
Pledge Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (c) following a
request by Borrower, Lender's ongoing performance and compliance with all
agreements and conditions contained in this Agreement, the Pledge Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (d) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
requested by Lender; (e) securing Borrower's compliance with any requests made
pursuant to the provisions of this Agreement; (f) the filing and recording fees
and expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to this
Agreement, the Pledge Agreement and the other Loan Documents; (g) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, this Agreement, the other Loan Documents, the
Collateral, or any other security given for the Loan; and (h) enforcing any
obligations of or collecting any payments due from Borrower under this
Agreement, the other Loan Documents or with respect to the Property or the
Collateral or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings; provided, however, that Borrower shall
not be liable for the payment of any such costs and expenses to the extent the
same arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Lender.
ARTICLE XVIII
WAIVERS
Section 18.1. REMEDIES CUMULATIVE; WAIVERS.
The rights, powers and remedies of Lender under this Agreement shall
be cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower or Borrower Principal pursuant to this Agreement or
the other Loan
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Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singularly, concurrently or otherwise, at such time
and in such order as Lender may determine in Lender's sole discretion. No delay
or omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.
Section 18.2. MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement, or of the Note, or of any other Loan
Document, nor consent to any departure by Borrower 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 18.3. DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under the Note or
under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
Section 18.4. TRIAL BY JURY.
BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF
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LENDER, BORROWER PRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER, BORROWER PRINCIPAL AND LENDER.
Section 18.5. WAIVER OF NOTICE.
Borrower 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. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
Section 18.6. REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case where
by law or under this 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 (except to the extent that Borrower can prove Lender's bad
faith or willful misconduct), 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. Lender agrees that, in such event, it shall cooperate in expediting
any action seeking injunctive relief or declaratory judgment.
Section 18.7. WAIVER OF MARSHALLING OF ASSETS.
To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Mortgage Borrower and other Persons with interests in Borrower or
Mortgage Borrower, and of the Property and the Collateral, and agrees not to
assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Collateral
for the collection of the Debt without any prior or different resort for
collection or of the right of Lender to the payment of the Debt out of the net
proceeds of the Collateral in preference to every other claimant whatsoever.
Section 18.8. WAIVER OF STATUTE OF LIMITATIONS.
Borrower hereby expressly waives and releases, to the fullest extent
permitted by law, the pleading of any statute of limitations as a defense to
payment of the Debt or performance of its other obligations set forth in the
Loan Documents.
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Section 18.9. 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 18.10. GRADSKY WAIVERS.
Borrower Principal hereby waives each of the following:
(a) Any rights of Borrower Principal of subrogation, reimbursement,
indemnification, and/or contribution against Borrower or any other person or
entity, and any other rights and defenses that are or may become available to
Borrower Principal or any other person or entity by reasons of Sections
2787-2855, inclusive of the California Civil Code;
(b) Any rights or defenses that may be available by reason of any
election of remedies by Lender (including, without limitation, any such election
which in any manner impairs, effects, reduces, releases, destroys or
extinguishes Borrower Principal's subrogation rights, rights to proceed against
Borrower for reimbursement, or any other rights of Borrower Principal to proceed
against any other person, entity or security, including but not limited to any
defense based upon an election of remedies by Lender under the provisions of
Section 580(d) of the California Code of Civil Procedure or any similar law of
California or of any other State or of the United Sates); and
(c) Any rights or defenses Borrower Principal may have because its
obligations under this Agreement (the "Borrower Principal Obligations") are
secured by the Collateral. These rights or defenses include, but are not limited
to, any rights or defenses that are based upon, directly or indirectly, the
application of Section 580a, Section 580b, Section 580d or Section 726 of the
California Code of Civil Procedure to the Borrower Principal Obligations.
The provisions of this subsection (c) mean, among other things:
(y) Lender may collect from Borrower Principal without first
foreclosing on the Collateral; and
(z) If Lender forecloses on the Collateral:
(1) The Borrower Principal Obligations shall not be
reduced by the price for which the Collateral is sold at the
foreclosure sale or the value of the Collateral at the time of
the sale.
(2) Lender may collect from Borrower Principal even if
Lender, by foreclosing on the Collateral, has destroyed any
right of Borrower Principal to collect from Borrower. Further,
the provisions of this Agreement constitute an unconditional
and irrevocable waiver of any rights and defenses Borrower
Principal may have because Borrower's obligations are secured
by the Collateral. These rights and defenses, include, but are
not limited to, any rights or defenses based upon Section
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580a, Section 580b, Section 580d or Section 726 of the
California Code of Civil Procedure.
ARTICLE XIX
GOVERNING LAW
Section 19.1. CHOICE OF LAW.
This Agreement shall be deemed to be a contract entered into
pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State of New York.
Section 19.2. SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
Section 19.3. PREFERENCES.
Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
Creditors Rights Laws, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.
ARTICLE XX
MISCELLANEOUS
Section 20.1. SURVIVAL.
This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
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Section 20.2. LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.
Section 20.3. HEADINGS.
The Article and/or Section headings and the Table of Contents in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 20.4. COST OF ENFORCEMENT.
In the event (a) that the Pledge Agreement is foreclosed in whole or
in part, (b) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Mortgage Borrower or Borrower or any of its constituent
Persons or an assignment by Mortgage Borrower or Borrower or any of its
constituent Persons for the benefit of its creditors, or (c) Lender exercises
any of its other remedies under this Agreement or any of the other Loan
Documents, Borrower shall be chargeable with and agrees to pay all costs of
collection and defense, including attorneys' fees and costs, incurred by Lender
or Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.
Section 20.5. SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as a
part of this Agreement with the same effect as if set forth in the body hereof.
Section 20.6. OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement, the Note
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 20.7. NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy
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