SENIOR LOAN AGREEMENT
BETWEEN
DMB/REMEDIATION LLC
AS BORROWER
AND
PPA FUNDING CORP.,
AS SENIOR LENDER
MARCH 11, 1997
TABLE OF CONTENTS
Page No.
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. . . . . . . . 2
ARTICLE 2
LOAN TERMS
Section 2.1 The Loan; Advances; Not a Revolving Credit
Loan . . . . . . . . . . . . 19
Section 2.2 Interest Rate; Late Charge . . . 24
Section 2.3 Terms of Payment . . . . . . . . 24
Section 2.4 Security . . . . . . . . . . . . 27
Section 2.5 LTV Test.. . . . . . . . . . . . 28
Section 2.6 Retained Earnings Reserve. . . . 28
Section 2.7 Pool Acquisitions. . . . . . . . 29
Section 2.8 Delayed Mortgage Acquisitions. . 30
Section 2.9 Subsidiary Structuring Conditions30
ARTICLE 3
INSURANCE, CONDEMNATION, AND IMPOUNDS
Section 3.1 Insurance. . . . . . . . . . . . 32
Section 3.2 Use and Application of Insurance
Proceeds . . . . . . . . . . 34
Section 3.3 Condemnation Awards. . . . . . . 35
Section 3.4 Impounds . . . . . . . . . . . . 35
ARTICLE 4
ENVIRONMENTAL MATTERS
Section 4.1 Certain Definitions. . . . . . . 36
Section 4.2 Representations and Warranties on
Environmental Matters. . . . 37
Section 4.3 Covenants on Environmental
Matters . . . . . . . . . . . 37
Section 4.4 Allocation of Risks and
Indemnity . . . . . . . . . . 39
Section 4.5 No Waiver. . . . . . . . . . . . 40
ARTICLE 5
LEASING MATTERS
Section 5.1 Representations and Warranties
on Leases . . . . . . . . . . 40
Section 5.2 Standard Lease Form; Approval
Rights . . . . . . . . . . . 41
Section 5.3 Covenants. . . . . . . . . . . . 41
Section 5.4 Tenant Estoppel Certificates . . 42
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Section 6.1 Organization and Power . . . . . 42
Section 6.2 Validity of Senior Loan
Documents . . . . . . . . . . 42
Section 6.3 Liabilities; Litigation. . . . . 42
Section 6.4 Taxes and Assessments. . . . . . 43
Section 6.5 Other Agreements; Defaults . . . 43
Section 6.6 Title Matters. . . . . . . . . . 43
Section 6.7 Compliance with Law; Status of
Properties . . . . . . . . . 44
Section 6.8 Location of Borrower . . . . . . 44
Section 6.9 Material Agreements. . . . . . . 44
Section 6.10 ERISA. . . . . . . . . . . . . . 45
Section 6.11 Financial Statements . . . . . . 45
Section 6.12 Usury. . . . . . . . . . . . . . 45
Section 6.13 Margin Stock . . . . . . . . . . 45
Section 6.14 Investment Company Act . . . . . 45
Section 6.15 Tax Filings. . . . . . . . . . . 46
Section 6.16 Solvency . . . . . . . . . . . . 46
Section 6.17 Full and Accurate Disclosure . . 46
Section 6.18 Opinion Authorization. . . . . . 46
ARTICLE 7
FINANCIAL REPORTING
Section 7.1 Financial Statements . . . . . . 47
Section 7.2 Accounting Principles. . . . . . 48
Section 7.3 Other Information. . . . . . . . 48
Section 7.4 Annual Budget; Modifications;
Progress Reports . . . . . . 48
Section 7.5 Audits . . . . . . . . . . . . . 48
ARTICLE 8
COVENANTS
Section 8.1 Due on Sale and Encumbrance;
Transfers of Interests . . . 48
Section 8.2 Taxes; Charges . . . . . . . . . 50
Section 8.3 Control; Management. . . . . . . 51
Section 8.4 Operation; Maintenance;
Inspection . . . . . . . . . 51
Section 8.5 Taxes on Security. . . . . . . . 51
Section 8.6 Legal Existence; Name, Etc.. . . 51
Section 8.7 Affiliate Transactions . . . . . 52
Section 8.8 Limitation on Other Debt . . . . 52
Section 8.9 Further Assurances . . . . . . . 52
Section 8.10 Estoppel Certificates. . . . . . 52
Section 8.11 Notice of Certain Events . . . . 52
Section 8.12 Indemnification. . . . . . . . . 53
Section 8.13 Limited Purpose Entities . . . . 53
Section 8.14 Conduct of Business
ARTICLE 9
EVENTS OF DEFAULT
Section 9.1 Payments . . . . . . . . . . . . 53
Section 9.2 Insurance. . . . . . . . . . . . 54
Section 9.3 Sale, Encumbrance, Etc.. . . . . 54
Section 9.4 Covenants. . . . . . . . . . . . 54
Section 9.5 Representations and Warranties . 54
Section 9.6 Other Encumbrances . . . . . . . 54
Section 9.7 Involuntary Bankruptcy or Other
Proceeding 54
Section 9.8 Voluntary Petitions, etc.. . . . 55
Section 9.9 Cleanup Contractor Default.. . . 55
Section 9.10 Subsidiary Non-Compliance. . . . 55
Section 10.1 Remedies - Insolvency Events . . 56
Section 10.2 Remedies - Other Events. . . . . 56
Section 10.3 Senior Lender's Right to Perform
the Obligations . . . . . . . 56
Section 10.4 Senior Lender's Right to Complete
Remediation . . . . . . . . . 57
ARTICLE 11
MISCELLANEOUS
Section 11.1 Notices. . . . . . . . . . . . . 57
Section 11.2 Amendments and Waivers . . . . . 59
Section 11.3 Limitation on Interest . . . . . 59
Section 11.4 Invalid Provisions . . . . . . . 59
Section 11.5 Reimbursement of Expenses. . . . 60
Section 11.6 Approvals; Third Parties;
Conditions . . . . . . . . . 60
Section 11.7 Senior Lender Not in Control; No
Partnership/Membership; Not a
Permitted Sponsor; Affiliation
with Subordinated Lender . . 60
Section 11.8 Time of the Essence. . . . . . . 61
Section 11.9 Assignment . . . . . . . . . . . 61
Section 11.10 Renewal, Extension or
Rearrangement . . . . . . . . 62
Section 11.11 Waivers. . . . . . . . . . . . . 62
Section 11.12 Cumulative Rights. . . . . . . . 62
Section 11.13 Singular and Plural. . . . . . . 62
Section 11.14 Phrases. . . . . . . . . . . . . 62
Section 11.15 Exhibits and Schedules . . . . . 63
Section 11.16 Titles of Articles, Sections and
Subsections . . . . . . . . . 63
Section 11.17 Promotional Material . . . . . . 63
Section 11.18 Survival . . . . . . . . . . . . 63
SECTION 11.19 WAIVER OF JURY TRIAL . . . . . . 63
Section 11.20 Waiver of Punitive or
Consequential Damages . . . . 64
Section 11.21 Governing Law. . . . . . . . . . 64
Section 11.22 Entire Agreement . . . . . . . . 64
Section 11.23 Counterparts . . . . . . . . . . 64
Section 11.24 Knowledge of Borrower. . . . . . 64
Exhibit A - Legal Description of Initial Property
Exhibit B -1 Contents of Initial Property Loan Application
Exhibit B -2 Initial Property Criteria
Exhibit C - Additional Property Assignment of Rents and Leases (Form)
Exhibit D - GMP Agreement (Form)
Exhibit E -1 Additional Property Mortgage (Form)
Exhibit E -2 Additional Property Deed of Trust (Form)
Exhibit F - Pledge Agreement (Form)
Exhibit G - Assignment of Contracts and Documents (Form)
Exhibit H - Collateral Assignment of Acquisition Contract and Mortgage
(Form)
Exhibit I - Pre-Acquisition Remediation Seller's Estoppel Certificate
(Form)
Exhibit J - Subsidiary Note (Form)
Exhibit K - Standard Disposition Agreement
Exhibit L - Senior Loan Joinder (Form)
Exhibit M - Environmental Insurance Policy (Form)
Exhibit N - Risk Categories
Exhibit O - Initial Property Approved Advance Conditions
SENIOR LOAN AGREEMENT
This Senior Loan Agreement (this "Agreement") is entered into as of
March 11, 1997 (the "Closing Date"), by and among PPA FUNDING CORP., a
Delaware corporation whose address is Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("Senior Lender"), and DMB/REMEDIATION LLC, a Delaware limited
liability company, whose address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower") and each of the subsidiaries of Borrower
that may now or hereafter execute a joinder attached hereto.
RECITALS
WHEREAS, Borrower, a wholly owned subsidiary of Dames & ▇▇▇▇▇/Brookhill,
L.L.C., a Delaware limited liability company ("DMB") was formed pursuant to
an Operating Agreement entered into as of the Closing Date for the purpose
of Acquiring (hereinafter defined), Developing (hereinafter defined),
Remediating (hereinafter defined) and disposing of environmentally
distressed commercial real estate properties and mortgages and/or other
security instruments encumbering such properties;
WHEREAS, such Acquisition, Development, Remediation and disposition
shall only be carried out by certain wholly owned subsidiaries of Borrower
to be formed from time to time by Borrower;
WHEREAS, from time to time, each Subsidiary (hereinafter defined) shall
enter into a GMP Agreement (hereinafter defined) with the Cleanup Contractor
(hereinafter defined) pursuant to which the Cleanup Contractor shall perform
on behalf of such Subsidiary certain cleanup or remediation work for the
Properties (hereinafter defined) prior to or subsequent to the acquisition
of fee title to such Properties by the applicable Subsidiary;
WHEREAS, Borrower desires to obtain (for Borrower's Subsidiaries) from
Senior Lender, and Senior Lender desires to make available to such
Subsidiaries (or, where applicable, Borrower), certain financing for the
Acquisition, Development, Remediation and disposition of the Properties and
mortgages and/or security instruments encumbering such properties, as
applicable, up to a maximum aggregate principal amount of $150,000,000 (the
"Maximum Loan Amount");
WHEREAS, the Loan (hereinafter defined) shall be secured by, among
other things, one or more deeds of trust, deeds to secure debt or mortgages
encumbering the Subsidiaries' fee estate in the Properties, or Mortgage
Hypothecation Documents, as applicable;
WHEREAS, to evidence the Loan, simultaneously with the execution of
this Agreement, Borrower shall execute and deliver to Senior Lender the
Senior Note (hereinafter defined);
WHEREAS, each Subsidiary shall execute and deliver a Subsidiary Note
(hereinafter defined) and a Senior Loan Joinder with respect to each Approved
Advance (hereinafter defined) under the Loan allocable to such Subsidiary;
and
WHEREAS, Borrower and Senior Lender desire to set forth the terms and
conditions of the Loan and of each Advance (hereinafter defined) made
hereunder;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and the payment of $10 and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Senior Lender
and Borrower agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. As used herein, the following terms
have the meanings indicated:
(1) "Acquiring" or "Acquisition" means, with respect
to a Property, the acquisition of fee title to such Property by a Subsidiary
pursuant to a Purchase and Sale Agreement, Pre-Acquisition Remediation
Purchase and Sale Agreement or through a Mortgage Acquisition or otherwise in
compliance with the terms of this Agreement.
(2) "Acquisition Cost" means, collectively, the sum of
(a) the purchase price for a Property (including any good faith, security or
similar deposit previously paid by Borrower or a Subsidiary pursuant to the
applicable Purchase and Sale Agreement or agreement for a Mortgage
Acquisition), (b) any items required to be paid in respect of the Property
or Mortgage Acquisition that are necessary for the Subsidiary to obtain good
and insurable title to such Property, free and clear of all liens, charges
and encumbrances but are not required to be paid by the seller of such
property under the applicable Purchase and Sale Agreement or Pre-Acquisition
Remediation Purchase and Sale Agreement, as applicable, including, without
limitation, property taxes, insurance premiums, title insurance premiums
closing adjustments, and/or (in the case of a Mortgage Acquisition) costs of
foreclosure, including legal fees, court costs, costs of advertisement, and
process and filings fees; (c) the amount necessary to establish any reserves
or escrows including reserves or escrows for taxes, capital improvements,
tenant expenses or deferred maintenance, as required by Senior Lender in
accordance with the Mortgages, (d) any items required to be paid in
connection with the filing and/or recording of the Senior Loan Documents
and (e) any other costs, fees and expenses that are necessary in connection
with the acquisition of such Property and the closing of the related
Approved Advance (including any costs associated with any Mortgage
Acquisition) and are normal, reasonable and customary or approved in writing
by Senior Lender in its sole discretion.
(3) "Additional Property" means each Property acquired
or to be acquired by a Subsidiary pursuant to the terms of this Agreement
after the Closing Date, which Properties shall meet the criteria of either
"Category II-Moderate Risk" or "Category III-Low Risk" as more particularly
set forth in Table 1 attached hereto as Exhibit N, in the substantial
majority of cases and are collectively referred to herein as the "Additional
Properties".
(4) "Additional Property Approved Advance" means, the
Approved Advance with respect to any Additional Property.
(5) "Additional Property Assignment of Rents and
Leases" means those certain assignments of rents and leases, executed by a
Subsidiary for the benefit of Senior Lender with respect to the Additional
Properties, as the same may hereafter be amended, supplemented, modified or
restated from time to time, all in the form attached hereto as Exhibit C.
(6) "Additional Property Loan Application" has the
meaning set forth in Section 2.1 hereof.
(7) "Additional Property Mortgage" means those certain
mortgages, deeds of trust, assignment of rents and leases, security agreement
and fixture filing, executed by a Subsidiary in favor of Senior Lender,
encumbering the Additional Properties, as the same may hereafter be amended,
supplemented, modified or restated from time to time, all in the form
attached hereto as Exhibit E-1 or Exhibit E-2 as applicable, but subject to
such modifications or amendments to accommodate requirements of local law,
as reasonably required by Senior Lender based on consultation with local
counsel.
(8) "Advance" means each advance of an Approved
Advance made by Senior Lender to the applicable Subsidiary (or, where
applicable, Borrower) in accordance with the applicable approved Loan
Application, including, without limitation, any advances of the Initial
Property Approved Advance and the Additional Property Approved Advances,
which advances shall not exceed in the aggregate the Maximum Loan Amount
and are collectively referred to herein as "Advances".
(9) "Advance Conditions" has the meaning set forth in
Section 2.1(3) hereof.
(10) "Affiliate" means, with respect to any Person, any
other Person (a) that owns more than 10% of the voting interests in such
Person; or (b) in which such Person owns more than 10% of the voting
interests; or (c) in which more than 10% of the voting interests are owned
by a Person that has a relationship with such Person as described in clause
"a" or "b" above or that otherwise controls, is controlled by, or is under
common control with, such Person. For purposes of this definition, the term
"controls," "is controlled by," or "is under common control with" shall mean
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person or entity, whether
through the ownership of voting securities, by contract or otherwise.
(11) "Agreement" means this Senior Loan Agreement,
together with all Exhibits and Schedules, as the same may hereafter be
amended, supplemented, modified or restated from time to time.
(12) "Appraisal" means an appraisal, if required by
Senior Lender under this Agreement, conducted with respect to a Property or
the Properties, as applicable, prepared at the sole cost and expense of
Borrower by an Appraiser in accordance with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation and in compliance
with the requirements of Title 4 of the Financial Institutions Reform,
Recovery and Enforcement Act and utilizing customary valuation methods such
as the income, sales/market or cost approaches, as any of the same may be
updated by recertification from time to time by the Appraiser performing such
Appraisal. The costs of any Appraisal may be paid for out of the proceeds
of an Approved Advance so long as such costs are set forth in the applicable
Loan Application or operating budget approved by Senior Lender.
(13) "Appraiser" means any nationally recognized
independent MAI appraiser selected by Borrower and approved by Senior Lender
in its reasonable discretion.
(14) "Approved Advance" means, subject to the terms of
Section 2.1 hereof, with respect to any Property, seventy-five percent (75%)
of the sum of all applicable Project Costs.
(15) "Assignment of Contracts and Documents" means, with
respect to each Property, a collateral assignment of all documents, contracts
and agreements relating directly or indirectly to the development,
renovation, rehabilitation, maintenance or use of any Property including, any
applicable GMP Agreement, executed by the applicable Subsidiary for the
benefit of the Senior Lender (together with the consent of the Cleanup
Contractor thereto), all in the form attached hereto as Exhibit G.
(16) "Assignment of Rents and Leases" means collectively,
the Additional Property Assignments of Rents and Leases and the Initial
Property Assignment of Rents and Leases, executed by a Subsidiary for the
benefit of Senior Lender.
(17) "Bankruptcy Proceeding" means, with respect to any
Person, any bankruptcy, insolvency, reorganization, composition, assignment
for the benefit of creditors, appointment of trustee, or any similar action
or proceeding affecting such Person or any of its property that is either (a)
initiated by such Person or by any Affiliate of such Person or (b) if not
described in clause "a," then not dismissed within ninety (90) days after
commencement.
(18) "Borrower Party" means any and all Subsidiaries
and/or any managing member of Borrower.
(19) "Borrower Release Shortfall Obligation" has the
meaning set forth in Section 2.6(3) hereof.
(20) "Borrower's Certificate" has the meaning set forth
in Exhibit "O" attached hereto.
(21) "Business Day" means any day other than a Saturday
or Sunday and a day on which federally insured depository institutions in
the State of New York are authorized or obligated by law, governmental
decree or executive order to be closed.
(22) "Cleanup Contractor" shall mean Dames & ▇▇▇▇▇,
Inc., a Delaware corporation having an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. To the extent that Borrower replaces Cleanup
Contractor with a Satisfactory Replacement Cleanup Contractor (as to any one
or more Property(ies)), such Satisfactory Replacement Cleanup Contractor
shall then constitute "Cleanup Contractor" as to the affected Properties.
(23) "Clearance" shall mean, with respect to any
Remediation, the completion of such Remediation in accordance with the
requirements of all applicable Governmental Authorities as set forth in the
applicable Loan Application (and subject to changes in Law), as evidenced by
the issuance of all applicable written confirmations, approvals, clearances,
releases, covenants not to ▇▇▇, prospective purchaser agreements, and other
similar documentation, including any land use restriction agreements or
covenants required by such Governmental Authority.
(24) "Collateral Assignment of Acquisition Contract and
Mortgage" means with respect to each Property to be acquired after
Remediation is completed, a collateral assignment of the Pre-Acquisition
Remediation Purchase and Sale Agreement and Pre-Acquisition Remediation
Mortgage for such Property, all in the form attached hereto as Exhibit H.
(25) "Contract Rate" means a rate of interest equal to
two hundred and seventy-five (275) basis points in excess of the Libor Rate.
(26) "Damaged Property" has the meaning set forth in
Section 3.2 hereof.
(27) "Damages" means all damages, and includes, without
limitation, punitive damages, liabilities, costs, losses, diminutions in
value, fines, penalties, demands, claims, cost recovery actions, lawsuits,
administrative proceedings, orders, response action costs, compliance
costs, investigation expenses, consultant fees, attorneys' and paralegals'
fees and litigation expenses.
(28) "Debt" means, for any Person, without duplication:
(a) all indebtedness of such Person for borrowed money, for amounts drawn
under a letter of credit, or for the deferred purchase price of property for
which such Person or its assets is liable, (b) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for which
such Person would be liable, if such amounts were advanced under the credit
facility, (c) all amounts required to be paid by such Person as a guaranteed
payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests, (d) all indebtedness guaranteed
by such Person, directly or indirectly, (e) all obligations under leases
that constitute capital leases for which such Person is liable, and (f) all
obligations of such Person under interest rate swaps, caps, floors,
collars and other interest hedge agreements, in each case whether such
Person is liable contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise assures
a creditor against loss.
(29) "Debt Service" means the aggregate interest, fixed
principal, and other payments due under the Loan, and on any other
outstanding permitted Debt relating to the Properties, if any, approved by
Senior Lender for the period of time for which calculated, but excluding
the Subordinated Debt and any payments applied to (a) reduction of principal
and (b) escrows or reserves required by Senior Lender in accordance with
the Mortgages.
(30) "Default Rate" means the lesser of (a) the maximum
rate of interest allowed by applicable law, and (b) five percent (5%) per
annum in excess of the Contract Rate.
(31) "Develop" and any derivative thereof such as
"Development" means, as to any Property, to develop, alter, renovate,
operate, and redevelop such Property, including, without limitation, site
work, the filing of any necessary applications for building permits, zoning
approval, and other permits and approvals not related to Remediation, and
any demolition of existing improvements contemplated by the applicable Loan
Application. Costs of Development shall also include reasonable and
customary carrying costs and operating losses incurred during Development.
(32) "DMB" has the meaning set forth in the recitals.
(33) "DMB Affiliated Financing" means unsecured loans
obtained from time to time by Borrower from DMB or any Affiliate of DMB,
provided that:
o Permitted Amount. The amount of any such loan
shall not exceed, and the proceeds of any such
loan shall be applied only in lieu of and
in substitution for, DMB's share of any
additional capital contribution to Borrower
required because costs of Remediation,
Development or budgeted carrying costs exceed
those set forth in the applicable Loan
Application.
o Subordination. The lender providing such loan
shall have unconditionally subordinated all of
its rights with respect to such loan (including
as to timing, right, and priority of payment)
to the prior payment in full of the Loan, all
pursuant to documentation satisfactory to
Senior Lender in its sole and absolute
discretion.
o Loan Status. No Event of Default shall have
occurred and is continuing.
o Compliance. Borrower shall have complied with
all covenants, requirements and conditions of
this Agreement with respect to such DMB
Affiliated Financing.
(34) "DMB Mortgage Proposal" has the meaning set forth
in Section 2.8 hereof.
(35) "Environmental Claims" means, with respect to any
Property, any investigation, notice, violation, demand, allegation, action,
suit, injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding or claim (whether administrative, judicial or private in nature)
arising (a) pursuant to, or in connection with an actual or alleged violation
of, any Environmental Law, by Borrower, any Subsidiary, DMB, or Cleanup
Contractor, (b) in connection with any Hazardous Material or actual or
alleged Hazardous Material Activity, or (c) from any abatement, removal,
remedial, corrective or other response action in connection with a
Hazardous Material, Environmental Law or other order of a Governmental
Authority, including the actions or omissions of Cleanup Contractor,
Borrower, any Subsidiary, and DMB.
(36) "Environmental Indemnitors" means DMB and Borrower.
(37) "Environmental Insurance Policy" shall mean for
each Property one or more insurance policy(ies) (or certificates or other
evidences of insurance, issued pursuant to a master policy, with a specific
amount of coverage reserved for such Property), to be purchased by
Borrower, in substantially the form of Exhibit "M" (or as otherwise approved
by Senior Lender pursuant to a Loan Application), providing insurance
protection against all Latent Environmental Risks of such Property. Any
Environmental Insurance Policy shall contain a waiver of any right
of subrogation against all Borrower Parties, Subordinated Lender and Senior
Lender. Any Environmental Insurance Policy shall identify Senior Lender as
an additional insured and shall be issued in favor of Borrower.
(38) "Environmental Laws" has the meaning set forth in
Article 4.
(39) "Environmental Risks" means any Damages that may
be suffered by a Person as a result of any Environmental Claim relating to a
Property, or any condition or circumstance that may give rise to an
Environmental Claim, or potential Damages to any Person as a result of any
actual or potential Environmental Claim relating to or arising from a
Property. Sums payable to Cleanup Contractor to perform Remediation as
required by a GMP Agreement shall not constitute Environmental Risks.
(40) "Eurodollar Business Day" means any day on which
banks in the City of London are generally open for interbank or foreign
exchange transactions.
(41) "Event of Default" has the meaning set forth in
Article 9.
(42) "Excess Mortgage Taxes" has the meaning set forth in
Section 11.10 hereof.
(43) "Exit Date" means, as to any Property, the date
when Borrower shall have completed all Remediation and Development, and
shall have disposed, of such Property.
(44) "Exit Strategy" has the meaning set forth in Section
2.3(3) hereof.
(45) "Extended Maturity Date" has the meaning set forth
in Section 2.3(3) hereof.
(46) "Extension Notice" has the meaning set forth in
Section 2.3(3) hereof.
(47) "Extension Option" has the meaning set forth in
Section 2.3(3) hereof.
(48) "Force Majeure" means any circumstance beyond
Borrower's reasonable control, provided that, (a) such circumstance cannot
reasonably be cured by the payment of money; (b) Borrower provides Senior
Lender with reasonably prompt notice of such circumstance; and (c) Borrower
endeavors with reasonable diligence and continuity to proceed with the
performance of Borrower's obligations hereunder notwithstanding such
circumstance, to the extent reasonably possible under the circumstances.
(49) "GMP Agreement" means an agreement between Cleanup
Contractor and a Subsidiary, in the form attached hereto as Exhibit D, by
which Cleanup Contractor agrees to Remediate all Environmental Risks to the
extent provided in the Loan Application (as approved by Subordinated Lender)
for the Property affected by such GMP Agreement, which agreement and plan
shall provide for a guaranteed maximum price, a scheduled completion date
(but no liquidated damages for delay), and such other terms and conditions
as Senior Lender may reasonably require.
(50) "Good Faith Guarantor" means ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, an
individual having an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Dames & ▇▇▇▇▇, Inc., a Delaware corporation having an
address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(51) "Good Faith Guaranty" means that certain so-called
"Good Faith Guaranty" dated on or about the Closing Date executed by the
Good Faith Guarantors.
(52) "Governmental Approval" means any permit, license,
variance, certificate, consent, letter, Clearance, closure, exemption,
decision or action or approval of a Governmental Authority, having proper
and full jurisdiction to issue such approval.
(53) "Governmental Authority" shall mean any applicable
international, foreign, federal, state, regional, county, local or other
person or body having governmental or quasi-governmental authority or
subdivision thereof.
(54) "Hard Costs" means all costs of on-site physical
activity in connection with Remediation or Development (as applicable),
including, without limitation, excavation, construction, site protection,
plumbing, paving, landscaping, fences, alterations, utilities, lighting,
grading and filling, and other activities on Property, including all labor
and materials in connection therewith.
(55) "Hazardous Materials" has the meaning set forth in
Article 4.
(56) "Hazardous Materials Activity" means any activity,
event or occurrence involving a Hazardous Material, including the
manufacture, possession, presence, use, generation, transportation,
treatment, storage, Hazardous Material Release, threatened Hazardous Material
Release, abatement, removal, remediation, handling of or corrective or
response action to any Hazardous Material.
(57) "Hazardous Materials Release" has the meaning set
forth in Article 4.
(58) "Identifiable Environmental Risks" means all
Environmental Risks or potential Environmental Risks (including the correct
magnitude thereof) that Cleanup Contractor or any comparable environmental
consulting organization of comparable quality and expertise, exercising
normal standards and diligence of professional environmental consulting
specialists, should have detected and should have disclosed in the
environmental assessment submitted with a Loan Application, whether or not
such Environmental Risks or potential Environmental Risks were actually so
identified and disclosed. All Identified Environmental Risks are automatically
also deemed Identifiable Environmental Risks.
(59) "Identified Environmental Risks" means any
Environmental Risks or potential Environmental Risks arising from any
environmental matter or condition affecting a Property, to the extent that
such matter or condition and its Environmental Risks and potential
Environmental Risks, were fully and accurately disclosed, with clarity and
specificity, in a Loan Application as approved by Senior Lender. Any cost
overruns incurred and payable by Cleanup Contractor under a GMP Agreement
shall not constitute Identified Environmental Risks.
(60) "Initial Property" means each Property to be
Acquired and Remediated by the applicable Initial Subsidiary with the
Initial Property Approved Advance on the Closing Date, as more particularly
set forth on Exhibit A attached hereto.
(61) "Initial Property Approved Advance" means the
Approved Advance with respect to the Initial Property.
(62) "Initial Property Assignment of Rents and Leases"
means the assignments of rents and leases, dated as of the Closing Date,
executed by the Initial Subsidiary for the benefit of Senior Lender with
respect to the applicable Initial Property.
(63) "Initial Property Loan Application" means Borrower's
written proposal to invest in Subsidiaries that would Acquire, Remediate
and/or Develop the Initial Property, which Loan Application shall set forth
the information contained in Exhibit B-1 attached hereto, and comply with
the criteria contained in Exhibit B-2 attached hereto. Where the term "Loan
Application" is used with reference to any activities or expenditures of
Borrower or a Subsidiary, or with reference to any Property or any Advance,
such term shall mean a Loan Application that has been approved in writing
by Senior Lender, together with any conditions or modifications required by
Senior Lender as a condition to such approval.
(64) "Initial Property Mortgage" means those certain
mortgages, deeds of trust, deeds to secure debt, assignments of rents and
leases, security agreements and fixture filings, dated as of the Closing
Date, executed by the Initial Subsidiary in favor of Senior Lender,
encumbering the Initial Property and securing the applicable Subsidiary
Note, as the same may hereafter be amended, supplemented, modified or
restated from time to time, all in the form attached hereto as Exhibit E-1
or Exhibit E-2, as applicable, but subject to such modifications or
amendments to accommodate requirements of local law, as reasonably required
by Senior Lender based on consultation with local counsel.
(65) "Initial Subsidiary" means each of the Subsidiaries
which shall acquire the Initial Property.
(66) "Interest Payment Date" has the meaning set forth
in Section 2.3 hereof.
(67) "Latent Environmental Risks" means: (a) any
Environmental Risks that are not Identifiable Environmental Risks; and (b)
any increase in Environmental Risks resulting from a change in Law after
the date of a Loan Application.
(68) "Law" shall mean any applicable treaty, convention,
statute, law, regulation, ordinance, Governmental Approval, injunction,
judgment, order, consent decree or other requirement of any Governmental
Authority.
(69) "Leases" means collectively, all leases, subleases,
underlettings, concession agreements, licenses and other occupancy agreements
which now or hereafter may affect any of the Properties or any portion
thereof and any and all guarantees, amendments, supplements, modifications,
renewals and extensions thereof.
(70) "Leasing Guidelines" means, for each Property, the
leasing guidelines set forth in the applicable Loan Application.
(71) "Libor Rate" means the U.S. Dollar rate (rounded
upward to the nearest one sixteenth of one percent) listed on page 3750
(i.e., the Libor page) of the Telerate News Services (or such other page
as may replace the Telerate Page on that service for purposes of displaying
London interbank offered rates of major banks) for a designated maturity of
one (1) month determined as of 11:00 a.m. London Time on the second (2nd)
full Eurodollar Business Day next preceding the first day of each month
with respect to which interest is payable under the Loan (unless such date
is not a Business Day in which event the next succeeding Eurodollar Business
Day which is also a Business Day will be used). If the Telerate News
Services (a) publishes more than one such Libor Rate, the average of such
rates shall apply, or (b) ceases to publish the Libor Rate, then the Libor
Rate shall be determined from such substitute financial reporting service as
Senior Lender in its reasonable discretion shall determine.
(72) "Lien" means any interest, or claim thereof, in
any Property securing an obligation owed to, or securing a claim by, any
Person other than the owner of such Property, whether such interest is based
on common law, statute or contract, including the lien or security interest
arising from a deed of trust, mortgage, assignment, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting the Properties.
(73) "Loan" means the loan to be made by Senior Lender
to Borrower under this Agreement up to the Maximum Loan Amount.
(74) "Loan Application" means, collectively, the Initial
Property Loan Application and all Additional Property Loan Applications.
(75) "LTV Notice" has the meaning set forth in Section
2.5 hereof.
(76) "LTV Ratio" means as of any date of determination,
the ratio of (a) the aggregate outstanding principal balance of the Loan
allocable to a particular Property or all of the Properties, as the case may
be, to (b) the market value of a particular Property or all of the
Properties, as the case may be, as determined by an Appraisal conducted by
the Appraiser.
(77) "LTV Test" means a test that shall be satisfied if
the LTV Ratio is not greater than 80%.
(78) "Material Adverse Effect" means a material adverse
effect on any of the following: (a) the use, management, operations, value,
income or marketability of a particular Property, the Properties in the
aggregate or the business, operations, management, properties, assets or
condition (financial or otherwise) of Borrower, any Borrower Party, or
guarantor of the Senior Loan, (b) the ability of Borrower or any Borrower
Party to repay the Loan or otherwise perform its obligations under the
Senior Loan Documents, (c) the expense or scheduling of any Remediation,
Development, compliance with Law or Borrower's compliance with the applicable
Loan Application. Any matter that would or is reasonably likely to increase
the cost of, or delay any Remediation or Development, or limit or impair in
any material respect the usability, value or utility of a Property, or that
would in any material respect impair, limit or delay the effectiveness
of any Governmental Approval, shall be deemed to have a Material Adverse
Effect.
(79) "Material Agreement" means any material written or
oral agreement, contract, commitment or understanding requiring payments,
pledges, or performance executed or assumed by a Subsidiary in connection
with any Property that provides for payments by such Subsidiary over the
term of any such agreement, contract, commitment or understanding in excess
of Fifty Thousand Dollars ($50,000).
(80) "Material Lease" means any Lease that: (a) affects
more than 5,000 rentable square feet and more than ten percent (10%) of the
rentable area of the improvements constituting part of a Property; or (b) is
entered into on a form of lease that is not substantially consistent with
the standard form of lease approved by Senior Lender.
(81) "Maturity Date" means the earlier of (a) December
31, 1999, or (b) any earlier date on which the entire Loan is required to be
paid in full, by acceleration or otherwise, under this Agreement or any of
the other Senior Loan Documents, or (c) simultaneously with the occurrence
of a Payment of Loan Closing or a Borrower Buyout Closing under the Subordinated
Loan Agreement.
(82) "Maximum Loan Amount" has the meaning set forth in
the recitals.
(83) "Mortgage" means collectively, the Initial Property
Mortgages and the Additional Property Mortgages, executed by the Subsidiaries
in favor of Senior Lender, covering the Properties.
(84) "Mortgage Acquisition" means the acquisition of a
mortgage encumbering a Property in lieu of acquiring the Property itself,
and thereafter Remediating such Property and obtaining fee title to such
Property pursuant to the exercise of remedies (or acceptance of a deed
in lieu thereof) pursuant to the applicable acquired mortgage.
(85) "Mortgage Hypothecation Documents" means with
respect to any Mortgage Acquisition, a collateral assignment of the
applicable mortgage and note and all other security documents evidencing,
securing, governing or guaranteeing the indebtedness evidenced by such note,
made by a Subsidiary for the benefit of Senior Lender, all in form and
substance reasonably satisfactory to Senior Lender.
(86) "Net Cash Flow" means, for any period, the amount
by which Operating Revenues exceed the sum of (a) Operating Expenses, (b)
Debt Service and (c) any actual payment into impounds, escrows, or reserves
required by Senior Lender pursuant to the Mortgages, except to the extent
included within the definition of Operating Expenses.
(87) "Net Operating Income" means the amount by which
Operating Revenues exceed Operating Expenses.
(88) "Net Sales Proceeds" means without duplication:
(a) the sum of: (i) the net cash proceeds from all sales and other
dispositions (including sales and dispositions of a Subsidiary's or
Borrower's real property in the ordinary course of business and the proceeds
from any casualty or condemnation affecting real property), (ii) the net
cash proceeds from all sales and other dispositions of property distributed
to Borrower from any entity in which Borrower has an interest, including any
Subsidiary, and (iii) the net cash proceeds from all refinancings of property
by Borrower or any entity in which Borrower has an economic interest,
including any Subsidiary, to the extent distributed to Borrower, minus (b)
any portion thereof used to establish commercially reasonable reserves (or,
in the case of a casualty or condemnation, applied or reserved to pay for
commercially reasonable costs of adjustment, collection, and restoration).
The term "net cash proceeds" means gross proceeds less reasonable and
customary transaction costs. "Net Sales Proceeds" shall include all
principal payments received by Borrower with respect to any note or other
obligation taken back in connection with any sale or other disposition of
property. In calculating "Net Sales Proceeds" any payments payable to Senior
Lender pursuant to this Agreement on account of the particular transaction
or property being sold or refinanced (but not any payments made or payable
on account of DMB Affiliated Financing) shall be subtracted out as a
deduction.
(89) "Operating Expenses" means all reasonable,
customary and necessary expenses of operating the Properties in the ordinary
course of business (or as provided for in a budget or Loan Application
approved by Subordinated Lender) that are paid in cash by any Subsidiary and
that are directly associated with and fairly allocable to the Properties for
the applicable period, including ad valorem real estate taxes and
assessments, insurance premiums, regularly scheduled tax impounds paid to
Senior Lender, maintenance costs, third party management fees and costs not
to exceed four percent (4%) of Operating Revenues, accounting, legal, and
other professional fees, fees relating to environmental and Net Cash Flow
and Net Operating Income audits, capital expenditures approved by Senior
Lender, and other expenses incurred by Senior Lender and reimbursed by
Borrower under this Agreement and the other Senior Loan Documents, deposits
to any reserves required by Senior Lender, wages, salaries, and personnel
expenses, but excluding Debt Service, capital expenditures not approved by
Senior Lender, any of the foregoing expenses which are paid from deposits
to cash reserves previously included as Operating Expenses, any payment or
expense for which Borrower or any Subsidiary was or is to be reimbursed
from proceeds of the Loan or insurance or by any third party, and any
non-cash charges such as depreciation and amortization. Except as
otherwise expressly provided in a Loan Application, any management fee,
construction management fee, remediation fee, leasing fee or other expense
payable to Borrower or to an Affiliate of Borrower shall be included
as an Operating Expense only with Senior Lender's prior written approval.
Operating Expenses shall not include federal, state or local income taxes
or legal and other professional fees unrelated to the operation of the
Properties.
(90) "Operating Revenues" means all cash receipts from
the operation of the Properties or otherwise arising in respect of the
Properties after the date hereof which are properly allocable to the
Properties for the applicable period, including receipts from Leases and
parking agreements, concession fees and charges and other miscellaneous
operating revenues, proceeds from rental or business interruption insurance,
but excluding security deposits and ▇▇▇▇▇▇▇ money deposits until they are
forfeited by the depositor, advance rentals until they are earned, proceeds
from a sale or other disposition, all Advances and advances or proceeds of any
other loan which may be permitted by Senior Lender (including the
Subordinated Debt).
(91) "Original Allocated Loan Amount" means with respect
to any Property, the portion of the applicable Approved Advance allocable
to such Property, as determined and adjusted from time to time by Senior
Lender in its sole discretion.
(92) "Original Maturity Date" has the meaning set forth
in Section 2.3(3) hereof.
(93) "Outside Financing" means Borrower's or any
Subsidiary's borrowing of any money (including purchase-money financing from
the seller of any Property and the Subordinated Debt), other than trade
payables, the Loan and DMB Affiliated Financing, which Outside Financing
shall be subject to Senior Lender's approval in its sole discretion.
(94) "Partial Release " means a release of, subject to
and in accordance with, the terms and provisions of Section 2.3(4) hereof,
a Property from the Liens granted to Senior Lender under this Agreement and
the other Senior Loan Documents.
(95) "Permitted Encumbrances" means (a) liens for taxes
or assessments or other governmental charges not yet due and payable or to
the extent that nonpayment thereof is expressly permitted by this Agreement;
and (b) such other Liens listed in the mortgagee title insurance policy
issued in connection with each Property insuring the lien status of the
related Mortgage held by Senior Lender or as shall otherwise be acceptable
to Senior Lender in its sole discretion.
(96) "Permitted Sponsor" means the Subsidiary that owns
the applicable Property or Cleanup Contractor. Neither Borrower nor DMB is
a Permitted Sponsor.
(97) "Person" means any individual, corporation,
partnership, joint venture, association, joint stock company, trust, trustee,
estate, limited liability company, unincorporated organization, real estate
investment trust, government or any agency or political subdivision thereof,
or any other form of entity.
(98) "Pledge Agreement" means, with respect to each
Subsidiary, a senior pledge agreement executed by Borrower, as pledgor, in
favor of Senior Lender of all of Borrower's right, title and interest in and
to such Subsidiary (together with the consent of the applicable Subsidiary
thereto), all in the form attached hereto as Exhibit F.
(99) "Potential Default" means the occurrence of any
event or condition which, with the giving of notice, the passage of time,
or both, would constitute an Event of Default. Where the nonexistence of a
"Potential Default" is a condition to any right or privilege of Borrower,
or obligation or duty of Senior Lender, which right, privilege, obligation
or duty relates solely to a particular Property, a "Potential Default"
shall not be deemed to include any circumstance that would otherwise
constitute a Potential Default, but that: (a) does not relate to the Property
to which such right, privilege, obligation or duty relates; (b) is not
monetary; (c) is being diligently cured by Borrower; and (d) is not material.
(100) "Pre-Acquisition Remediation Purchase and Sale
Agreement " means any agreement between a Subsidiary and a third-party
seller pursuant to which such Subsidiary is contractually obligated to
purchase after the completion of Remediation, and the seller is contractually
obligated to sell, a Property to such Subsidiary.
(101) "Pre-Acquisition Remediation Loan Documents"
means: (a) the Collateral Assignment of Acquisition Contract and Mortgage
and (b) the Pre-Acquisition Remediation Seller's Estoppel Certificate and
Agreement.
(102) "Pre-Acquisition Remediation Mortgage" means, with
respect to a Property to be acquired pursuant to a Pre-Acquisition
Remediation Purchase and Sale Agreement, a mortgage, deed of trust, deed to
secure debt, assignment of rents and leases, security agreement and fixture
filing, executed by the seller of such Property in favor of the applicable
Subsidiary, securing such seller's obligations under the Pre-Acquisition
Remediation Purchase and Sale Agreement.
(103) "Pre-Acquisition Remediation Seller's Estoppel
Certificate and Agreement" means, with respect to any Property to be
acquired pursuant to a Pre-Acquisition Remediation Purchase and Sale
Agreement, an estoppel certificate and agreement in the form of Exhibit I
attached hereto executed by the applicable seller in favor of the Senior
Lender.
(104) "Prepayment Conditions" has the meaning set forth
in Section 2.3(4) hereof.
(105) "Prepayment Notice" has the meaning set forth in
Section 2.3(4) hereof.
(106) "Project Costs" means, with respect to any
Property, the sum of (a) all Acquisition Costs, (b) costs of Remediation
and Development (including, without limitation, all Hard Costs and Soft
Costs and any necessary capital expenditures or capital repairs) and (c)
budgeted carrying costs, approved by the Senior Lender in connection with
the applicable Loan Application or otherwise.
(107) "Properties" means all real property acquired by
the Subsidiaries pursuant to the terms of this Agreement, together with the
improvements, equipment and all related facilities, amenities, fixtures,
and personal property owned by any Subsidiary now or hereafter located
thereon or used in connection therewith, all as more particularly described
in each Mortgage, including, without limitation, the Initial Property and
all Additional Properties, and the term "Property" shall mean and refer to
any of the Properties, individually.
(108) "Purchase and Sale Agreement" means any agreement
between a Subsidiary and a third-party seller pursuant to which such
Subsidiary is contractually obligated to purchase prior to completion of
Remediation, and the seller is contractually obligated to sell, a Property
to such Subsidiary.
(109) "Release" has the meaning set forth in Section
2.3(4) hereof.
(110) "Release Conditions" has the meaning set forth in
Section 2.3(4) hereof.
(111) "Release Parcel" has the meaning set forth in
Section 2.3(4) hereof.
(112) "Release Payment" has the meaning set forth in
Section 2.3(4) hereof.
(113) "Release Shortfall" has the meaning set forth in
Section 2.6 hereof.
(114) "Release Shortfall Interest" has the meaning set
forth in Section 2.6 hereof.
(115) "Remediation" shall mean environmental clean-up and
remediation of a Property by the Cleanup Contractor, acting on behalf of
the applicable Subsidiary, all in compliance with a Loan Application and
Law, including all Environmental Laws. Any reference to "completion" of
Remediation shall mean completion of Remediation to a degree such that all
Clearances contemplated by the applicable Loan Application shall have been
issued. Remediation shall include physical on-site remediation activities
and the making of all necessary filings and applications with Governmental
Authorities in connection therewith, and other activities necessary
or appropriate to obtain Clearances.
(116) "Restoration Threshold" means fifty percent (50%)
of the aggregate total Project Costs (incurred and/or projected to be
incurred, including land acquisition) with respect to the Property of which
the Damaged Property is a part.
(117) "Retained Earnings Reserve" has the meaning set
forth in Section 2.6 hereof.
(118) "Satisfactory Replacement Cleanup Contractor"
means a contractor fully qualified and licensed to perform all Remediation
that was to have been performed by Cleanup Contractor (as to all Properties
or specific Properties only), provided that Senior Lender approved such
replacement pursuant to a Loan Application, or such replacement: (a) is
reasonably satisfactory to Senior Lender; (b) is, in Senior Lender's
reasonable judgment, creditworthy and capable to the degree necessary or
appropriate to reliably perform as Cleanup Contractor; (c) has, in a manner
reasonably satisfactory to Senior Lender, entered into documentation
substantially equivalent to all those previously entered into by Cleanup
Contractor; (d) has at least the same insurance coverage as the Cleanup
Contractor as originally defined in this Agreement; and (e) does not, in
Senior Lender's judgment, impair any coverage provided by the Environmental
Insurance Policy.
(119) "Satisfactory Replacement Guarantor" means a Person
that is, in Senior Lender's sole, absolute and unreviewable discretion, an
adequate and satisfactory replacement for any Good Faith Guarantor (as
initially defined herein), provided that such Person has entered into
documentation similar (in Senior Lender's judgment) to all documentation
creating or evidencing the Good Faith Guaranty previously entered into and
delivered by the Good Faith Guarantor being replaced.
(120) "Senior Loan" means the Loan, as defined in this
Agreement.
(121) "Senior Loan Documents" means: (a) this Agreement,
(b) the Senior Note, (c) the Mortgage, (d) the Assignment of Rents and
Leases, (e) Uniform Commercial Code financing statements covering all
fixtures and personal property with respect to any Property, (f) the Pledge
Agreement, (g) the Assignment of GMP Agreement, (h) the Mortgage Hypothecation
Documents, (i) the Good Faith Guaranty, (j) the Pre-Acquisition Remediation
Loan Documents, (k) such assignments of management agreements, contracts
and other rights as may be reasonably required by Senior Lender, (l) all
other documents evidencing, securing, or guaranteeing the Loan or with
respect to the making of any Advance, or otherwise delivered to Senior
Lender from time to time relative to a request for any Advance or pursuant
to any Loan Application, and (m) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing.
(122) "Senior Loan Joinder" means the joinder in the form
attached hereto as Exhibit L to be executed by each Subsidiary with respect
to such Subsidiary's obligations to: (a) pay the portion of the Senior Loan
allocable to such Subsidiary's Property or Mortgage Acquisition; and (b)
perform the nonmonetary obligations under the Senior Loan Documents that
relate to such Subsidiary's Property or Mortgage Acquisition.
(123) "Senior Note" means the Senior Promissory Note of
even date herewith, in the stated principal amount of One Hundred Fifty
Million Dollars ($150,000,000), executed by Borrower, and payable to the
order of Senior Lender, in evidence of the Loan.
(124) "Site Assessment" means an environmental engineering
report relating to one or more Property(ies) prepared by an engineer
(including Cleanup Contractor or any of its Affiliates) engaged by Senior
Lender at Borrower's expense, and in a manner satisfactory to Senior Lender,
based upon an investigation relating to and making appropriate inquiries
concerning the existence of Hazardous Materials on or about such
Property(ies), and the past or present discharge, disposal, release or
escape of any such substances, all consistent with good customary and
commercial practice.
(125) "Soft Costs" means all costs of Remediation or
Development, including payment of real estate taxes, insurance premiums and
other carrying costs during the period of any actual Remediation or
Development; consultants' fees; legal fees; "general conditions" charges;
construction management fees; contractor's overhead and profit charges;
marketing expenses; but excluding Hard Costs, costs of acquisition, and
carrying costs except during the period of any actual Remediation or
Development.
(126) "Sponsor" means, as to any Remediation, the "owner"
and "operator" of the Property where such Remediation occurs; the "arranger"
and "transporter" in connection with such Remediation; and the Person
otherwise responsible under Environmental Laws for or with respect to such
Remediation and any related Hazardous Material Activity. Lower-case terms in
quotes used in this definition shall have the meanings set forth in
applicable Environmental Laws.
(127) "Standard Disposition Agreement" means, with respect
to any disposition of a Property, a disposition agreement in the form
attached hereto as Exhibit K or on terms more favorable to the Seller than
such attached form.
(128) "Subordinated Debt" means that certain subordinated
loan in the maximum principal amount of $40,000,000, made by Subordinated
Lender to Borrower pursuant to the Subordinated Loan Agreement.
(129) "Subordinated Lender" means Greenfields Funding
Corp., a Delaware corporation.
(130) "Subordinated Loan Agreement" means that certain
subordinated loan agreement, dated as of March 11, 1997, by and between
Subordinated Lender and Borrower.
(131) "Subordinated Pledge Agreement" means that certain
subordinated pledge agreement, dated as of March 11, 1997, made by Borrower,
as pledgor, in favor of Subordinated Lender of all of Borrower's right,
title and interest in and to each Subsidiary (together with the consent of
the applicable Subsidiary thereto), subject and subordinate to the terms
and provisions of, and the rights and security interest granted to Senior
Lender under the Pledge Agreement.
(132) "Subsidiary" shall mean a corporation, limited
partnership, or limited liability company that, at all times until the Loan
has been repaid in full: (a) is wholly owned by Borrower, which ownership
interest of Borrower shall have been pledged to Senior Lender pursuant to a
perfected security interest; (b) is a single purpose entity whose sole
purpose shall be the Acquisition, Development, Remediation and/or disposition
of a Property (and/or the making of a Mortgage Acquisition) in all cases in
conformity with a Loan Application; (c) has no assets other than the Property
(or as contemplated by a Mortgage Acquisition) and as contemplated by the
related Loan Application; (d) has no liabilities other than (i) its allocable
portion of the Loan (including its obligations under the Senior Loan
Joinder), (ii) as contemplated by the applicable Loan Application and this
Agreement and (iii) routine trade payables; (e) has agreed in writing to
hold in trust all Advances directly or indirectly received by it, to be
applied solely to the purposes for which such Advances were made; (f) has
executed and delivered to Senior Lender a Senior Loan Joinder; (g) is duly
organized, validly existing and in good standing under the laws of one of
the states of the United States of America; (h) is engaged in no other
business whatsoever other than the Acquisition (including Mortgage
Acquisition), Remediation, Development, disposition and/or operation of its
Property consistent with the applicable Loan Application; and (i) is not
itself a partner, member or other constituent or principal of any other
entity.
(133) "Subsidiary Loan Documents" shall mean,
collectively, the (a) Subsidiary Note, (b) Senior Loan Joinder, (c) Mortgage
executed by each Subsidiary securing such Subsidiary's Subsidiary Note and
Senior Loan Joinder, (d) Uniform Commercial Code financing statements
securing any of the Subsidiaries' obligations under the Subsidiary Loan
Documents, and (e) such other Senior Loan Documents as shall be executed by
Subsidiaries from time to time.
(134) "Subsidiary Note" shall mean, with respect to each
Subsidiary, the subsidiary promissory note evidencing and representing each
such Subsidiary's obligation to repay a portion of the Loan, all in the form
attached hereto as Exhibit J.
(135) "Taken Property" has the meaning set forth in
Section 3.3 hereof.
(136) "Third Party Mortgage Proposal" has the meaning
set forth in Section 2.8 hereof.
(137) "Title Insurance Policy" means with respect to
each Property, an ALTA mortgagee's title insurance policy as more
particularly described on Exhibit "O" attached hereto.
(138) "Venture II" has the meaning set forth in Section
2.6(3) hereof.
(139) "Waterfall" has the meaning set forth in the
Subordinated Loan Agreement.
ARTICLE 2
LOAN TERMS
Section 2.1 The Loan; Advances; Not a Revolving Credit Loan. (1)
Subject to the terms and conditions of this Agreement, Senior Lender agrees
to make to the applicable Subsidiaries (or, where applicable, Borrower) the
Loan, up to the Maximum Loan Amount, which Loan shall be funded in Advances
to be made from time to time by the Senior Lender and repaid in accordance
with this Agreement. Advances under the Loan shall only be used to provide
financing for the Acquisition (including a Mortgage Acquisition), Development
and Remediation of Properties (including the funding of any reserves or
escrows required to be maintained by Senior Lender in accordance with the
Mortgages). Subject to Senior Lender's approval of the applicable Loan
Application in its sole discretion, Remediation may be conducted prior to, or
subsequent to, the acquisition of title to a Property by a Subsidiary. All
Advances shall be made in accordance with the terms of this Article 2 and
Senior Lender's disbursement procedures and in no event shall the aggregate
amount of all Advances exceed the Maximum Loan Amount. Notwithstanding
anything to the contrary contained in this Agreement, the Loan is not a
revolving credit loan and Borrower is not entitled to any readvances of any
portion of the Loan which it may prepay pursuant to the provisions of Section
2.3 hereof.
(2) Initial Property Approved Advance and Subsequent Approved
Property Advances. Upon Borrower's satisfaction of all of the terms and
conditions to the Initial Property Approved Advance described in Exhibit "O"
attached hereto, Senior Lender shall make the Initial Property Approved
Advance to the applicable Subsidary as set forth in the approved Loan
Application. The proceeds of such Initial Property Approved Advance shall
be used by such Subsidiary to Acquire (including a Mortgage Acquisition),
Remediate, Develop and dispose of the Initial Property and to fund any
reserves required to be maintained by Senior Lender in its sole discretion.
Disbursements of the Initial Property Approved Advance shall be made subject
to the satisfaction of the terms and conditions of Section 2.3(3) hereof. In
order to obtain an Additional Property Approved Advance, Borrower must
complete and submit to Senior Lender for its review and approval, a loan
application containing all the information required to be provided under the
Initial Property Loan Application (the "Additional Property Loan
Application"). Within thirty (30) days after the submission of a complete
Additional Property Loan Application, together with all other documents,
certificates, information and reports as may be required by Senior Lender (or
its counsel) in its customary legal review and underwriting procedures
(including, without limitation, environmental and engineering inspections,
appraisals, financial audits of rent rolls and net operating income and cash
receipts, market analysis, legal and title review), Senior Lender shall
approve or disapprove, in its sole discretion, such Additional Property Loan
Application. Upon its approval of an Additional Property Loan Application,
Senior Lender shall specify in writing the amount of such Additional Property
Approved Advance. All Additional Property Approved Advances subsequent to the
Closing Date shall be made in accordance with, and upon Borrower's
satisfaction of the same terms and conditions required with respect to the
Initial Property Approved Advance set forth on Exhibit "O" attached hereto,
together with any other additional terms, conditions and documentation that
Senior Lender may require based on any closing conditions set forth in the
Additional Property Loan Application or imposed by Senior Lender in its
reasonable discretion, including, without limitation:
(a) the execution by Borrower or any Subsidiary, as
applicable, of any amendments, modifications or supplements to any
existing Senior Loan Documents with respect to any previously
acquired Properties, so as to address the subsequently acquired
Property(ies);
(b) Borrower shall obtain, as an Administrative Expense (as
defined in the Subordinated Loan Agreement), any endorsements,
continuations or modifications to any existing Title Insurance
Policy with respect to any previously acquired Properties as
Senior Lender or its counsel may reasonably request;
(c) Borrower shall deliver an updated Borrower's Certificate
with respect to any previously acquired Properties;
(d) Borrower shall deliver updates to any existing
certificates, environmental reports, engineering reports, opinions
of counsel, Uniform Commercial Code, title, municipal violation,
tax, judgment and bankruptcy searches, as Senior Lender or its
counsel may reasonably require in order to preserve, confirm or
secure the Liens and security granted to Senior Lender by the
Senior Loan Documents;
(e) Borrower shall deliver evidence satisfactory to Senior
Lender and its counsel that the representations and warranties
contained in this Agreement and the other Senior Loan Documents
are true and correct as of the date of the making of the Additional
Property Approved Advance; provided, however, that with respect to
any Property which has previously been Acquired by a Subsidiary
pursuant to an Approved Advance, to the extent that any
representations and warranties set forth in this Agreement relate
to events or occurrences after the date of such acquisition,
such representations and warranties shall be made without any
qualification relating to Borrower's or the applicable Subsidiary's
knowledge; and
(f) No Potential Default or Event of Default shall have
occurred or exist with respect to any Property, other than any
Potential Default that is cured by the making of such Approved
Advance.
(3) Advances of an Approved Advance. Subject to the
satisfaction of the Advance Conditions, the disbursement of the
first Advance of an Approved Advance shall take place within ten (10)
Business Days of Senior Lender's approval of the applicable Additional
Property Loan Application and shall be made to the applicable Subsidiary.
Senior Lender agrees to reasonably endeavor to disburse additional Advances
of each Approved Advance within a shorter period after such approval. The
initial Advance under the Initial Property Approved Advance shall be made
in accordance with the timing, and in the amount, set forth in the approved
Loan Application. Each Advance of an Approved Advance with respect to the
applicable Property, shall be subject to the satisfaction of the following
terms and conditions (the "Advance Conditions"), provided, that, any waiver
by Senior Lender as to any particular Advance shall not preclude Senior
Lender from requiring full compliance with a particular requirement as to any
subsequent Advances:
(a) As of the date of the request for such Advance and as of
the date of disbursement of such Advance, Borrower's
representations, warranties and covenants in this Agreement shall
be true and correct in all material respects with respect to any
Property; provided, however, that, to the extent that any
representations and warranties set forth in this Agreement relate
to events or occurrences after the date Borrower acquired the
Property in question, such representations and warranties shall
be made without any qualification relating to Borrower's or the
applicable Subsidiary's knowledge.
(b) At least ten (10) Business Days prior to the date of the
disbursement of the Advance, Senior Lender shall have received
copies of all invoices, bills, certifications and other supporting
documentation with respect to the work for which such Advance is
requested.
(c) With respect to any individual Property, a request for
the disbursement of an Advance may not be submitted more frequently
than once every thirty (30) days.
(d) All Remediation or Development work with respect to any
Advances previously made shall have been prosecuted and
accomplished in a timely and good workerlike manner.
(e) Borrower shall have provided Senior Lender with evidence
from the title insurer insuring the applicable Mortgage (including
an update of the Title Insurance Policy) that a search of the
public records does not disclose any additional matters of record
that will create an exception to such Title Policy, including,
without limitation, any conditional sales contracts, judgments,
liens, mechanics liens, outstanding taxes, assessments or water
rents, chattel mortgages, leases, financing documents or title
retention agreements, filed and/or recorded against the Borrower,
the applicable Subsidiary or the Property.
(f) Borrower shall have assigned to Senior Lender, pursuant
to documentation reasonably satisfactory to Senior Lender, any and
all contracts (to the extent that such contracts are assignable)
relating in any way to the Remediation or Development work or the
providing of materials or supplies therefor, including contracts
with any construction managers, architects, designers, consultants,
space planners, engineers and any other third party.
(g) Senior Lender shall have received copies of partial lien
waivers (to the extent of any payments made pursuant to any prior
Advances) from any contractor, subcontractor or material supplier
providing work, labor or services to be paid with any Advance, and
before the final Advance to any contractor, subcontractor or
material supplier, a copy of a general release and final waiver
of lien (upon final payment) to be delivered by such contractor,
subcontractor or material supplier, as the case may be.
(h) Borrower shall provide Senior Lender and its architects,
engineers or other consultants access to all improvements for the
purpose of inspecting the work, at Borrower's expense, to verify
and confirm that the Remediation or Development work has been
completed in a good workerlike manner and that the requirements
of this Agreement have been satisfied; provided, however, that
any costs or expenses incurred in connection with the foregoing
may be paid out of the funds from an Approved Advance so long as
such costs and expenses are set forth in the applicable Loan
Application or operating budget approved by Senior Lender.
(i) All disbursements of an Advance shall be for an amount
that is (i) except with respect to the final Advance of an
Approved Advance, not less than One Hundred Thousand Dollars
($100,000), (ii) equal to the aggregate amounts due and payable
to Borrower's and the applicable Subsidiary's contractors,
subcontractors and material suppliers and licensed architects,
designers and other consultants regarding such Remediation or
Development work (less any applicable holdback(s) pending
completion) that (A) are the subject of the request, (B) have not
been the subject of a previous Advance and (C) do not exceed, in
the aggregate with other Advances theretofore made with respect to
the component(s) of such Remediation or Development work that is
the subject of the request, the then governing budgeted amount
(considered on a line-item by line-item basis) for such
component(s) of the Remediation or Development work taking into
account any contingency funds set forth in the applicable budget
and Loan Application approved by Senior Lender and (iii) not in
excess of the then unadvanced portion of the Loan.
(j) Senior Lender is satisfied in its reasonable discretion
that the monies remaining unadvanced with respect to any Approved
Advance together with any remaining equity funds of Borrower that
are unconditionally and irrevocably funded and committed to
completion of the Remediation or Development work (such as by
having been escrowed in cash with Senior Lender or by a letter of
credit satisfactory to Senior Lender) shall equal or exceed the
amount necessary to complete such Remediation or Development work
and pay the costs for all work, labor or services performed and
materials, supplies or equipment furnished for the Property.
(k) No condemnation of all or a significant part of any
Property or adverse zoning or usage change proceedings shall have
been commenced with respect to any Property, or threatened in
writing to the applicable Subsidiary by any Governmental
Authorities having jurisdiction over such Property.
(l) From and after the date of the last disbursement of an
Advance, there shall have been no material adverse change in the
gross income, cash flow or the business or financial condition of
Borrower or any Subsidiary as determined by Senior Lender in its
reasonable discretion, which material adverse change is, in
Senior Lender's judgment, reasonably likely to impair Borrower's
ability to pay its obligations as they become due.
(m) No Property nor any furnishings, fixtures, equipment and
property of any kind and nature used in connection with or located
upon any Property shall have suffered any significant damage by
fire or other casualty that has not been repaired or is not in good
faith being repaired pursuant to the provisions of the applicable
Mortgage.
Upon the satisfaction of the Advance Conditions, Senior Lender shall disburse
such Advance to the applicable Subsidiary, and if applicable, to the
Borrower, as part of the Loan, increasing the outstanding principal amount
thereof by the amount of such Advance provided that, simultaneously with the
making of such Advance, Borrower shall (i) reimburse Senior Lender for
all reasonable costs and expense (including mortgage taxes, recording
charges, title insurance premiums and attorneys' fees and disbursements)
incurred by Senior Lender in connection with the making of such Advance,
and (ii) deliver to Senior Lender a paid endorsement to the applicable Title
Insurance Policy with respect to the Property for which such Advance is being
made (x) increasing the amount of insurance coverage of such policy by, or
provide such additional coverage in, an amount equal to the amount of such
Advance, and (y) reflecting that no lien, other encumbrance or other matter
that may adversely affect the security interest created by any or all of the
Senior Loan Documents (other than Permitted Encumbrances) shall appear of
record against such Property.
Section 2.2 Interest Rate; Late Charge. (1) The outstanding
principal balance of the Loan (including any amounts added to principal
under the Senior Loan Documents) shall bear interest at the Contract Rate.
Interest shall be computed on the basis of a fraction, the denominator of
which is three hundred sixty (360) and the numerator of which is the actual
number of days elapsed from the date of the initial Advance or the date on
which the immediately preceding payment was due. If Borrower fails to pay any
installment of interest or principal within seven (7) days after the date
on which the same is due, Borrower shall pay to Senior Lender a late charge
on such past-due amount, as liquidated damages and not as a penalty, equal
to the greater of (a) interest at the Default Rate on such past-due amount
from the date when due until paid, or (b) five percent (5%) of such
past-due amount, but not in excess of the maximum amount of interest
allowed by applicable law. While any Event of Default exists, the Loan shall
bear interest at the Default Rate.
Section 2.3 Terms of Payment. The Loan shall be payable as follows:
(1) Interest. Commencing on the first day of the first
full calendar month after the date hereof, Borrower shall pay interest in
arrears on the first day of each month (the "Interest Payment Date") until
the Maturity Date, when all amounts secured by and outstanding under the
Senior Loan Documents shall be paid in full.
(2) Principal Amortization. In addition to the payment of
interest as provided in Section 2.3(1), Borrower shall pay to Senior Lender
on an individual Property by Property basis equal monthly payments in an
amount equal to the higher of (i) the amount sufficient so as to amortize
the outstanding balance of the Loan over a twenty-five (25) year period
commencing on the date hereof, such payments to be recalculated on a monthly
basis to amortize the outstanding balance of the Loan over the remaining
amortization term and (ii) twenty-five percent (25%) of the aggregate Net
Cash Flow of the applicable Properties. Any payments made pursuant to
clause "(ii)" of the preceding sentence shall be applied pro-rata across
all Advances and shall be treated as a prepayment of principal in accordance
with this Section 2.3.
(3) Maturity. On the Maturity Date, Borrower shall pay to
Senior Lender all outstanding principal, accrued and unpaid interest, and
any other amounts due under the Senior Loan Documents. Notwithstanding the
foregoing, with respect to an Approved Advance relating to one or more
specific Property(ies) (other than any specific Property(ies) whose Loan
Applications specified an Exit Date later than December 31, 1999), Borrower
shall have the option (the "Extension Option") to the extend the Maturity
Date of the Loan from December 31, 1999 (the "Original Maturity Date"), to
June 30, 2000 (the "Extended Maturity Date"), upon Borrower's satisfaction
of each of the following conditions as to each such Property:
(i) Borrower and the applicable Subsidiary shall have provided
Senior Lender with written notice on or before August 31, 1999, of
their election to exercise the Extension Option (the "Extension
Notice");
(ii) The Extension Notice shall be accompanied by (A) Borrower's
written explanation of delays incurred in implementing any activities
described in the Loan Application for such Property; (B) Borrower's
written plan for completing the activities described in the Loan
Application for such Property, and disposing of or refinancing the
Property before the Extended Maturity Date (the "Exit Strategy");
and (C) a one-time payment (which payment shall constitute an
extension fee and shall not be applied against principal, interest,
or any other charges payable under the Senior Loan Documents)
equal to One Half of One Percent (1/2%) of the total amount of
the Approved Advance(s) for which an extension of the Maturity
Date is being requested, which payment shall be refunded by Senior
Lender to the extent that Borrower fails to qualify for such
extension;
(iii) Borrower's Exit Strategy shall be commercially
reasonable, feasible, and achievable;
(iv) Effective from and after the Original Maturity Date: (A)
the definition of "Contract Rate" shall be automatically deemed
modified by substituting for the words "two hundred and
seventy-five (275)" the words "three hundred and twenty-five
(325)"; and (B) pursuant to documentation satisfactory to Senior
Lender, all Net Cash Flow of Borrower and all Subsidiaries shall
be paid to Senior Lender to be applied to prepay the Loan until
such time as the entire Loan has been prepaid in full; and
(v) Borrower and all Borrower Parties shall execute and
deliver such documentation as Senior Lender shall reasonably
require, and reimburse all of Senior Lender's reasonable costs
and expenses (including reasonable attorneys' fees) incurred, in
connection with all of the foregoing, all of which shall constitute
a Project Cost.
(4) Prepayment. A. General Prepayments. Subject to the
satisfaction of the following conditions (collectively, the "Prepayment
Conditions"), Borrower may prepay the Loan, in whole or in part, without
the payment of any prepayment premium during the term of the Loan, provided,
however, that any such prepayment shall be accompanied by an amount
representing all accrued interest on the portion of the Loan being prepaid
and other amounts due under the Senior Loan Documents:
(i) Borrower or the applicable Subsidiary provides Senior
Lender with at least twenty (20) days prior written notice (the
"Prepayment Notice") of its intent to prepay the Loan and the
amount of such prepayment (which amount, except in the case of a
final payment of the entire remaining principal balance of
the Loan allocable to a particular Subsidiary, shall not be less
than $1,000,000);
(ii) All prepayments shall be made on a scheduled Interest
Payment Date;
(iii) Partial prepayments of the Loan may only be made in
connection with a Partial Release;
(iv) No Potential Default nor Event of Default has occurred
and is continuing on the date on which Borrower or the applicable
Subsidiary gives Senior Lender the Prepayment Notice and on the
date of prepayment, other than any Potential Default that is
cured by the making of such prepayment;
(v) In the event of a partial prepayment, the LTV Test after
giving effect to such prepayment shall have been satisfied; and
(vi) Borrower or the applicable Subsidiary shall pay for any
and all costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, incurred by Senior
Lender in connection with or arising out of any prepayment of the
Loan.
B. Partial Releases. In the event that a Subsidiary desires to
sell or transfer a Property or desires to have any Property released (a
"Partial Release") from the Lien of the Senior Loan Documents (each a
"Release Parcel"), Senior Lender shall execute and deliver to the applicable
Subsidiary, a release or discharge (the "Release") of the applicable Mortgage
and other Senior Loan Documents with respect to such Release Parcel, provided
that, all of the following conditions are satisfied (collectively, the
"Release Conditions"):
(i) Borrower or the applicable Subsidiary provides Senior Lender
with at least twenty (20) days prior written notice (the "Partial
Release Notice") of the proposed release together with all the
material terms and conditions of such Partial Release and copies
of all documents required to be executed in connection with
such proposed release;
(ii) Senior Lender shall have approved such Partial Release
or other disposition of the Release Parcel as determined by Senior
Lender in the exercise of its reasonable judgment; provided,
however, that Senior Lender's approval shall not be withheld if
(w) the Standard Disposition Agreement is used in connection
with such Partial Release (or the terms of sale are more favorable
to the seller), (x) such disposition or refinancing shall be
entered into at arms-length, (y) if a refinancing, the same shall
be entered into on terms comparable to those which would be entered
into between unaffiliated parties for similar properties in the
same market area and (z) the sale price of the Release Parcel is
at or above the bottom of the price range set forth in the
applicable Loan Application.
(iii) Subject to the provisions of Section 2.6 hereof,
simultaneously with the delivery of the Release, Borrower or the
applicable Subsidiary pays to Senior Lender, in immediately
available funds, an amount (the "Release Payment") equal
to the outstanding principal portion of the Loan allocable to
such Release Parcel together with all accrued interest on such
portion of the Loan;
(iv) No Event of Default has occurred and is continuing on
the date on which Borrower or the applicable Subsidiary gives
Senior Lender the Partial Release Notice and on the date of
delivery of the Release;
(v) Borrower and the applicable Subsidiary shall execute and
deliver such other instruments, certificates, opinions of counsel
and documentation as Senior Lender shall reasonably request in
order to preserve, confirm or secure the Liens and security granted
to Senior Lender by the Senior Loan Documents, including, without
limitation, any amendments, modifications or supplements to
any of the Senior Loan Documents and endorsements to the existing
Title Insurance Policy; and
(vi) Borrower and the applicable Subsidiary shall pay for
any and all costs and expenses incurred in connection with any
proposed release, including, without limitation, reasonable
attorneys' fees and disbursements and all title insurance premiums
for any endorsements to any existing Title Insurance Policy
required by Senior Lender in connection with such proposed release.
(5) Application of Payments. All payments received by
Senior Lender under the Senior Loan Documents shall be applied on an
individual Property basis: first, to any fees and expenses due to Senior
Lender under the Senior Loan Documents; second, to any Default Rate
interest or late charges; third, to accrued and unpaid interest; and fourth,
to the principal sum and other amounts due under the Senior Loan Documents.
Any Release Payments received by Senior Lender shall be applied as provided
in the preceding sentence to reduce the portion of the Loan allocable to the
applicable Release Parcel.
Section 2.4 Security. The Loan and all amounts secured by and
outstanding under the Senior Loan Documents shall be secured by the Mortgages
creating a first lien on each Property, the Assignment of Rents and Leases
and the other Senior Loan Documents. With respect to each Property, the
related Mortgage and Assignment of Rents and Leases shall contain provisions
which will have the effect of cross-defaulting such Property with all the other
Properties Acquired pursuant to this Agreement.
Section 2.5 LTV Test. If, at any time during the term of the Loan,
Borrower receives written notice (the "LTV Notice") from Senior Lender that
the LTV Test has not been satisfied, Borrower shall, commencing with the
second (2nd) Business Day after Borrower receives the LTV Notice and on the
Business Day immediately preceding the last Business Day of each calendar
month thereafter, pay all Net Cash Flow from the Properties to Senior Lender
to reduce the outstanding principal balance of the Loan pro rata until such
time as the LTV Ratio is less than or equal to 75%.
Section 2.6 Retained Earnings Reserve.
(1) Required Deposits. Borrower shall deposit with Senior Lender,
simultaneously with the making of any distributions to DMB on account of
Net Property Profit under the Waterfall, an amount equal to fifty percent
(50%) of all such amounts distributable to DMB on account of Net Property
Profit under the Waterfall (all such deposits required to be made by
Borrower, together with interest accrued thereon in accordance with this
Agreement, the "Retained Earnings Reserve"). Borrower hereby pledges to
Senior Lender any and all monies now or hereafter deposited in the Retained
Earnings Reserve as additional security for the Loan. The Retained Earnings
Reserve shall be held in an interest-bearing account in Senior Lender's
name at a financial institution selected by Borrower and approved by Senior
Lender in its reasonable discretion, provided that such financial institution
shall have a rating of at least "AA" (or the equivalent thereof) by a
nationally recognized statistical rating agency with respect to its
long-term unsecured debt obligations.
(2) Investment of Retained Earnings Reserve. All funds or moneys
in the Retained Earnings Reserve, for so long as no Event of Default shall
have occurred and be continuing and no Release Shortfall shall exist, shall
be invested in (a) direct obligations of, or obligations fully guaranteed
as to payment of principal and interest by, (i) the United States or any
agency or instrumentality thereof provided such obligations are backed by
the full faith and credit of the United States of America or (ii) the
Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Federal Farm Credit System or the Federal Home Loan Banks,
or (b) other comparable obligations or securities as selected by Borrower
and approved by Senior Lender in its reasonable discretion. All earnings
or interest on the Retained Earnings Reserve shall be and become part of
such Retained Earnings Reserve.
(3) Payment of Release Shortfall. If the Net Sales Proceeds with
respect to any Property are less than the required Release Payment (a
"Release Shortfall"), then Borrower shall remain obligated to pay fifty
percent (50%) of such Release Shortfall (the "Borrower Release Shortfall
Obligation") and Senior Lender shall withdraw and apply any funds or moneys
on deposit in the Retained Earnings Reserve toward the Borrower Release
Shortfall Obligation. The outstanding balance of the Release Shortfall
(after the application by Senior Lender of any funds or moneys on deposit
in the Retained Earnings Reserve and any advances made by Subordinated
Lender on account of the Release Shortfall) shall bear interest (the
"Release Shortfall Interest") at an annual rate equal to four hundred and
seventy-five (475) basis points in excess of the Libor Rate. The Release
Shortfall Interest shall be computed on the basis of a fraction, the
denominator of which is three hundred sixty (360) and the numerator of
which is the actual number of days elapsed from the date such Release
Shortfall was due and payable. If after application of the amounts on
deposit in the Retained Earnings Reserve, the Borrower Release Shortfall
Obligation has still not been paid, then Senior Lender may satisfy the
balance due on account of the Borrower Release Shortfall Obligation by,
(x) in the event that DMB and an Affiliate of Senior Lender have formed a
joint venture ("Venture II") for the acquisition, development, remediation
and disposition of environmentally distressed properties similar to the
transactions contemplated by Borrower under this Agreement pursuant to a
letter agreement entered into between DMB or its Affiliate and Senior
Lender or its Affiliate, taking title to DMB's or its Affiliate's ownership
interest in Venture II, with such ownership interest to be valued at the
lesser of DMB's or its Affiliate's cost or the fair market value of such
ownership interest as determined by an independent third party at such
time, or (y) in the event that such ownership interest is insufficient to
satisfy the remaining Borrower Release Shortfall Obligation or if Venture
II has not been formed, Borrower's paying to Senior Lender all amounts that
DMB is entitled to receive under the Waterfall (as defined in the
Subordinated Loan Agreement), or that would otherwise be deposited in the
Retained Earnings Reserve under this Agreement, until such time as the
Borrower Release Shortfall Obligation has been paid. Notwithstanding
anything to the contrary contained in this paragraph, the application by
Senior Lender of any funds or moneys toward the Release shall not relieve
Borrower of its obligation to fund the Retained Earnings Reserve.
Notwithstanding anything to the contrary contained in this paragraph,
Borrower, DMB or any of their Affiliates shall have the right to pay in full
any unpaid Release Shortfall (together with any accrued and unpaid Release
Shortfall Interest) at any time during the term of the Loan.
(4) Retained Earnings Reserve as Loan Security. Upon the
occurrence of an Event of Default, Senior Lender may apply any sums then in
the Retained Earnings Reserve to the payment of the Loan in any order in
its sole discretion. Until expended or applied as above provided, the
Retained Earnings Reserve shall constitute additional security for the Loan.
The Retained Earnings Reserve shall not constitute a trust fund and may be
commingled with any other monies held by Senior Lender with respect to any
of the Properties.
(5) Additional Payments on Account of Release Shortfall. At the
same time that Borrower actually makes any payment on account of Borrower's
Release Shortfall Obligation, or Senior Lender actually applies any funds
in the Retained Earnings Reserve on account of Borrower's Release Shortfall
Obligation, it is understood that Subordinated Lender shall contribute
toward the amount of the Release Shortfall an amount equal to the amount so
actually paid or actually applied on account of such Release Shortfall.
Section 2.7 Pool Acquisitions. A Loan Application may relate to
more than one Property. In that case, Senior Lender shall approve or
disapprove the entire Loan Application and shall not approve or disapprove
individual Properties as set forth in the Loan Application. To the extent
that Senior Lender approves a Loan Application, each Property identified
therein shall constitute a Property for all purposes of this Agreement, and
shall be acquired, Remediated, Developed, and disposed of by a separate
Subsidiary (and treated as an entirely separate Property), with separate
Advances consistent with a separate budget, except to the extent that the
Loan Application for any such multi-Property transaction provides otherwise.
Section 2.8 Delayed Mortgage Acquisitions. If (a) pursuant to a Loan
Application, a Subsidiary undertakes any Mortgage Acquisition and (b) because
of litigation or bankruptcy, such Subsidiary's activities with respect to
such Mortgage Acquisition are delayed by more than three (3) months beyond
the timeline provided for in the Loan Application, then Borrower shall,
within thirty (30) days thereafter, present to Senior Lender a complete,
detailed, specific and reasonable plan for termination and disposition of
the Mortgage Acquisition. If, after such thirty (30) day period, in Senior
Lender's sole and absolute discretion Borrower's proposed plan has not been
submitted or is not satisfactory and there still has been no disposition
pursuant to the Loan Application, then Senior Lender shall have the right
to require Borrower within thirty (30) days after Senior Lender's written
request, to (i) discontinue and terminate such Mortgage Acquisition and
dispose of such Mortgage Acquisition by sale to an outside third-party
purchaser, but not to a purchaser that is an Affiliate of Senior Lender,
in accordance with the terms and conditions of this Section 2.8, and (ii)
require Borrower to repay all Advances made for such Mortgage Acquisition,
such repayment to be in accordance with the terms and provisions of Section
2.3(4) hereof.
Within thirty (30) days after Senior Lender notifies Borrower
and DMB that Borrower's plan for disposition of the Mortgage Acquisition
is not satisfactory, DMB shall submit a proposal in writing (together with
the proposed purchase price and other material economic terms) to Senior
Lender for the purchase of such Mortgage Acquisition from the applicable
Subsidiary (the "DMB Mortgage Proposal"). Upon receipt of the DMB Mortgage
Proposal, Senior Lender shall have the option to either (A) approve such
DMB Mortgage Proposal, in which event Borrower shall sell such Mortgage
Acquisition as set forth in the DMB Mortgage Proposal, which sale shall be
consummated within thirty (30) days after Senior Lender notifies Borrower
and DMB of its approval of the DMB Mortgage Proposal, or (B) require that such
offer be kept open for a period of ninety (90) days after the date when
Senior Lender receives such DMB Mortgage Proposal and during such period
Borrower shall use its best efforts to market (in such manner as Senior
Lender shall direct) the Mortgage Acquisition in order to obtain a higher
purchase price (and more attractive terms and conditions) for such Mortgage
Acquisition than the price set forth in the DMB Mortgage Proposal. If,
during such ninety-day period, an offer is obtained from a third-party
purchaser (the "Third Party Mortgage Proposal") for such Mortgage Acquisition
on terms that are identical to, or in Senior Lender's judgment more favorable
than the DMB Mortgage Proposal, which Third Party Mortgage Proposal is approved
by Senior Lender, then Borrower shall dispose of such Mortgage Acquisition
to such third-party purchaser pursuant to the terms of such Third Party
Mortgage Proposal within thirty (30) days of receipt of Senior Lender's
notice of approval of the Third Party Mortgage Proposal.
Section 2.9 Subsidiary Structuring Conditions. As a condition to
any and all obligations of Senior Lender under this Agreement, each
Subsidiary shall at all times:
(1) Loan Obligations. Perform and comply with all obligations
under this Agreement applicable to it;
(2) Transfer Funds. By the close of the Business Day following
receipt, transfer to Borrower all Net Sales Proceeds. On the Business Day
before every Payment Date each Subsidiary shall distribute to Borrower all
other Borrower Cash (as defined in the Subordinated Loan Agreement) held by
such Subsidiary, except the Subsidiary Cash Reserve (as defined in the
Subordinated Loan Agreement);
(3) Structure. Comply with the definition of "Subsidiary" set
forth in this Agreement;
(4) Legally Separate. Remain a legally separate entity,
independent of Borrower. Without limiting the generality of the foregoing,
each Subsidiary shall take such action as shall be reasonably required in
order that:
(a) Shared Expenses. No Subsidiary shall incur any material
indirect or overhead expenses for items shared between such Subsidiary and
other Subsidiaries and/or Borrower, other than shared items of expenses
such as legal, auditing and other professional services, all of which shall
be allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably related to
the actual use or the value of services rendered.
(b) Accounting and Management of Liabilities. Each Subsidiary
shall account for and manage its liabilities separately from those of
Borrower and every other Subsidiary, including payment of all payroll and
administrative expenses and taxes (other than taxes that are determined or
required to be determined on a consolidated or combined basis) from
its own as sets.
(c) Corporate Records. Each Subsidiary shall maintain
corporate records, books of account and stationery separate from those of
Borrower and every other Subsidiary.
(d) Assets. Each Subsidiary's assets shall be maintained in
a manner that facilitates their identification and segregation from those
of Borrower or any other Subsidiary.
(e) Transaction Terms. Any transaction between a Subsidiary
and Borrower or any other Subsidiary shall be the type of transaction that
would be entered into by a prudent Person in the position of such Subsidiary
and shall be on terms that are at least as favorable as may be obtained
from a Person that is not Borrower or any other Subsidiary (it being understood
and agreed that the transactions contemplated in the Senior Loan Documents
and approved by the Senior Lender meet the requirements of this clause).
(f) Debts. Except to the extent specified by this Agreement
and to the extent required by law, no Subsidiary shall be, nor shall it hold
itself out to be, responsible for the debts of Borrower or any other
Subsidiary.
(g) Management. No Subsidiary shall participate in
remediation, disposition, or other activity related to the management of
any other entity;
(h) Collateral. No Subsidiary shall provide any of its assets
as collateral for the benefit of any other Subsidiary or Borrower; nor shall
any Subsidiary allow any lien to be taken on any of its assets for the
benefit of any other Subsidiary or Borrower.
(5) Independent Director. Have at least one independent director,
whose affirmative vote shall be required for the Subsidiary to voluntarily
commence any Bankruptcy Proceeding;
(6) Use of Funds. Use its funds solely for its own corporate
purposes, and use only its own funds (including contributed capital and loan
proceeds) for such purposes, and maintain its own separate bank accounts
and employment relationships;
(7) Dealings With Affiliates. Deal with Borrower, DMB and
Borrower's Affiliates solely on an arm's length basis, and provide services
to and obtain services from (and transact any other business with) any such
Affiliates based only on written agreements in its own name; and
(8) Subsidiary Cash Reserve. Maintain a cash reserve equal to
the Subsidiary Cash Reserve (as defined in the Subordinated Loan Agreement).
ARTICLE 3
INSURANCE, CONDEMNATION, AND IMPOUNDS
Section 3.1 Insurance. Borrower shall maintain insurance with
respect to all the Properties as follows (except to the extent that Borrower
has demonstrated, to Senior Lender's satisfaction, that any such insurance
is not reasonably obtainable in the market upon commercially reasonable terms):
(1) Casualty; Business Interruption. Borrower shall keep
each Property insured against damage by fire and the other hazards covered
by a standard extended coverage and all-risk insurance policy for the greater
of (a) the full insurable value thereof or (b) the then full replacement
cost of all improvements and equipment located thereon (without reduction for
depreciation or co-insurance), and shall maintain such other casualty
insurance as reasonably required by Senior Lender. Borrower shall keep
each Property insured against loss by flood if the Property is located in
an area identified by the Federal Emergency Management Agency as an area
having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 (and any successor
act thereto) in an amount at least equal to the lesser of (i) the maximum
amount of the Loan or (ii) the maximum limit of coverage available under said
Act. Borrower shall maintain use and occupancy insurance covering, as
applicable, rental income or business interruption, with coverage in an
amount not less than twelve (12) months anticipated gross rental income or
gross business earnings, as applicable in each case, attributable to each
Property. No Borrower Party shall maintain any separate or additional
insurance which is contributing in the event of loss unless it is properly
endorsed and otherwise satisfactory to Senior Lender in all respects. The
proceeds of insurance paid on account of any damage or destruction to any
Property shall be paid to Senior Lender to be applied as provided in Section
3.2.
(2) Liability. Borrower shall maintain (a) commercial
general liability insurance with respect to each Property providing for
limits of liability of not less than $5,000,000 for both injury to or death
of a person and for property damage per occurrence, and (b) other liability
insurance as reasonably required by Senior Lender including, without
limitation, the Environmental Insurance Policy.
(3) Form and Quality. All insurance policies shall be
endorsed in form and substance acceptable to Senior Lender and shall name
Senior Lender as an additional insured, loss payee or mortgagee thereunder,
as its interest may appear, with loss payable to Senior Lender, without
contribution, under a standard New York (or local equivalent) mortgagee
clause. All such insurance policies and endorsements shall be fully paid
for and contain such provisions and expiration dates and be in such form
and issued by such insurance companies licensed to do business in the State
of New York, with a rating of "A-IX" or better as established by Best's
Rating Guide and "A" or better as established by Standard & Poor's Ratings
Services (or an equivalent rating approved in writing by Senior Lender).
Each policy shall provide that such policy may not be cancelled or materially
changed except upon thirty (30) days' prior written notice of intention of
non-renewal, cancellation or material change to Senior Lender and that no
act or thing done by Borrower shall invalidate any policy as against Senior
Lender. If Borrower fails to maintain insurance in compliance with this
Section 3.1, Senior Lender may obtain such insurance and pay the premium
therefor and Borrower shall, on demand, reimburse Senior Lender for all
expenses incurred in connection therewith. Borrower shall assign the
policies or proofs of insurance to Senior Lender, in such manner and form
that Senior Lender and its successors and assigns shall at all times have
and hold the same as security for the payment of the Loan. Borrower shall
deliver copies of all original policies certified to Senior Lender by the
insurance company or authorized agent as being true copies, together with
the endorsements required hereunder. The proceeds of insurance policies
coming into the possession of Senior Lender shall not be deemed trust funds,
and Senior Lender shall be entitled to apply such proceeds as herein provided.
(4) Adjustments. Borrower shall give immediate written notice
of any loss to the insurance carrier and to Senior Lender. Borrower hereby
irrevocably authorizes and empowers Senior Lender, as attorney-in-fact for
Borrower coupled with an interest, to make proof of loss, to adjust and
compromise any claim under insurance policies, to appear in and prosecute
any action arising from such insurance policies, to collect and receive
insurance proceeds, and to deduct therefrom Senior Lender's expenses
incurred in the collection of such proceeds. Notwithstanding anything to
the contrary contained in this paragraph, in the event of an insured casualty
that does not exceed the Restoration Threshold for the applicable Property,
may settle and adjust any insurance claim in connection therewith with the
prior consent of Senior Lender (not to be unreasonably withheld or delayed)
and may agree with the insurance company or insurance companies, as
applicable, on the amount to be paid upon such loss provided that, such
adjustment is carried out in a competent and timely manner. In such case,
Borrower is authorized to collect and receipt for any such insurance
proceeds. In the event that an insured casualty shall exceed the Restoration
Threshold for the applicable Property, then and in that event, Senior Lender
shall have the right to settle and adjust any claim without the consent of
Borrower and agree with the insurance company or insurance companies on the
amount to be paid on such loss and the proceeds of any such policy shall be
due and payable solely to Senior Lender and held by Senior Lender in
accordance with the terms of this Agreement. Nothing contained in this
Section 3.1(4), however, shall require Senior Lender to incur any expense or
take any action hereunder.
Section 3.2 Use and Application of Insurance Proceeds. Senior Lender
shall apply insurance proceeds to costs of restoring any Property or portion
thereof damaged by a casualty (a "Damaged Property") or the Loan as follows:
(1) if the loss is less than or equal to the Restoration
Threshold, Senior Lender shall apply the insurance proceeds to restoration
provided (a) no Event of Default or Potential Default exists, and (b)
Borrower or the applicable Subsidiary promptly commences and is diligently
pursuing restoration of the Damaged Property;
(2) if the loss exceeds the Restoration Threshold, Senior
Lender shall apply the insurance proceeds to restoration, provided that,
the following conditions are satisfied at all times during such restoration:
(a) no Event of Default or Potential Default exists; (b) Senior Lender
determines that there are sufficient funds available to restore and repair
the Damaged Property to a condition and value at least equal and of
substantially the same character as prior to such casualty and consistent
with the applicable Loan Application; (c) Senior Lender determines that
the Net Operating Income (including the proceeds of business or rental
interruption insurance as to which the carrier has acknowledged coverage)
of the Damaged Property during restoration will be sufficient to pay Debt
Service; (d) Senior Lender determines not later than three (3) months
after the loss or casualty, that the restoration and repair of the Damaged
Property to the condition described in the preceding clause "b" hereof,
will be completed within six (6) months after the date of such loss or
casualty and in any event at least one hundred eighty (180) days prior to the
Maturity Date; and (e) Borrower promptly commences and is diligently
pursuing restoration of the Damaged Property;
(3) if the conditions set forth above are not satisfied or
the loss exceeds the maximum amount specified in Subsection 3.2(2) above,
in Senior Lender's sole discretion, Senior Lender may apply any insurance
proceeds it may receive to the payment of the applicable Original Allocated
Loan Amount or allow all or a portion of such proceeds to be used for the
restoration of the Damaged Property; and
(4) Insurance proceeds applied to restoration will be
disbursed on receipt of satisfactory plans and specifications, contracts
and subcontracts, schedules, budgets, lien waivers and architects'
certificates, and otherwise in accordance with Senior Lender's then current
construction or restoration lending requirements as determined and applied
by Senior Lender in its reasonable discretion.
Section 3.3 Condemnation Awards. Borrower shall immediately notify
Senior Lender of the institution of any proceeding for the condemnation or
other taking of all or any portion of any Property (the "Taken Property").
Senior Lender may participate in any such proceeding and Borrower will
deliver to Senior Lender all instruments necessary or required by Senior
Lender to permit such participation. Without Senior Lender's prior
reasonable consent, No Borrower Party (1) shall agree to any compensation or
award, or (2) shall take any action or fail to take any action which would
cause the compensation to be determined. All awards and compensation for
the taking or purchase in lieu of condemnation of the Taken Property are hereby
assigned to and shall be paid to Senior Lender. Borrower authorizes Senior
Lender to collect and receive such awards and compensation, to give proper
receipts and acquittances therefor, and in Senior Lender's sole discretion
to apply the same toward the payment of the Loan, notwithstanding that the
Loan may not then be due and payable, or to the restoration of the Taken
Property; provided, however, that if Borrower requests that such proceeds be
used for either (a) non-structural site improvements (such as landscape,
driveway, walkway and parking area repairs) required to be made as a result
of such condemnation or (b) to restore, replace or rebuild the Taken
Property to the extent practicable to be of at least equal value and of
substantially the same character as prior to such condemnation or taking and
consistent with the Loan Application, all to be effected in accordance with
applicable law, then, Senior Lender shall apply the award to such restoration
in accordance with the disbursement procedures applicable to insurance
proceeds set forth in Section 3.2 above so long as (i) there exists no
Potential Default or Event of Default, (ii) such award and compensation
does not exceed the Restoration Threshold, and (iii) such restoration or
replacement shall be completed within six (6) months after such condemnation
or taking and in any event at least one hundred eighty (180) days prior to
the Maturity Date. Borrower upon request by Senior Lender, shall execute
all instruments requested to confirm the assignment of the awards and
compensation to Senior Lender, free and clear of all liens, charges or
encumbrances.
Section 3.4 Impounds. Borrower shall deposit with Senior Lender,
monthly, one-twelfth (1/12th) of the annual charges for ground or other rent,
if any, and real estate taxes, assessments and similar charges relating to
each Property. At or before the Initial Advance or an Advance for an
Additional Property, Borrower shall deposit with Senior Lender a sum of money
which, together with the monthly installments, will be sufficient to make
each of such payments, with respect to the Initial Property or such
Additional Properties, as the case may be, at least thirty (30) days prior
to the date any delinquency or penalty becomes due with respect to such
payments. Deposits shall be made on the basis of Senior Lender's estimate
from time to time of the charges for the current year (after giving effect to
any reassessment or, at Senior Lender's election, on the basis of the
charges for the prior year, with adjustments when the charges are fixed for
the then current year). All funds so deposited shall be held by Senior
Lender, without interest, and may not be commingled with Senior Lender's
general funds, excluding, however, any other funds held by Senior Lender
with respect to any of the other Properties. Borrower hereby grants to
Senior Lender a security interest in all funds so deposited with Senior
Lender for the purpose of securing the Loan. While an Event of Default
exists, the funds deposited may be applied in payment of the charges for
which such funds have been deposited, or to the payment of the Loan or any
other charges affecting the security of Senior Lender, as Senior Lender may
elect, but no such application shall be deemed to have been made by operation
of law or otherwise until actually made by Senior Lender. Borrower shall
furnish to Senior Lender bills for the charges for which such deposits are
required at least thirty (30) days prior to the date on which the charges
first become payable. Provided sufficient funds are available and allocated
to pay such charges, Senior Lender shall pay same, and shall as instructed
by Borrower take advantage of any available discounts for early payment.
If at any time the amount on deposit with Senior Lender, together with
amounts to be deposited by Borrower or any applicable Subsidiary before such
charges are payable, is insufficient to pay such charges, Borrower shall
deposit any deficiency with Senior Lender immediately upon demand. Senior
Lender shall pay such charges when the amount on deposit with Senior Lender
is sufficient to pay such charges and Senior Lender has received a ▇▇▇▇
for such charges.
ARTICLE 4
ENVIRONMENTAL MATTERS
Section 4.1 Certain Definitions. As used herein, the following
terms have the meanings indicated:
(1) "Environmental Laws" means any current or future Law
pertaining to (a) the protection of health, safety and the indoor or outdoor
environment, (b) the conservation, management or use of natural resources
and wildlife, (c) the protection or use of surface water and groundwater,
(d) the management, manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, Hazardous Materials Release,
threatened Hazardous Materials Release, abatement, removal, Remediation or
handling of, or exposure to, any Hazardous Material or (e) pollution.
"Environmental Law" includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Section 9601 et seq., Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. Section 6901 et seq., Federal Watern Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. Section
1251 et seq., Clean Air Act of 1966, as amended, 42 U.S.C. Sectiion 7401 et
seq., Toxic Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq.,
Hazardous Materials Transportation Act, 49 U.S.C. App. Section 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section
651 et seq., Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.,
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et seq., National Environmental Policy Act of 1969, 42 U.S.C.
Section 4321 et seq., Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
Section 300(f) et seq., any similar, implementing or successor law, and any
amendment, rule, regulation, order or directive issued or enacted by any
applicable Governmental Authority.
(2) "Hazardous Materials" means any substance, chemical,
compound, product, solid, gas, liquid, waste, byproduct, pollutant,
contaminant or material that is hazardous or toxic, and includes (a)
asbestos, polychlorinated biphenyls and petroleum (including crude oil or any
fraction thereof) and (b) any such material classified or regulated as
"hazardous" or "toxic" pursuant to any Environmental Law.
(3) "Hazardous Materials Release" means any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment of
Hazardous Materials (including, without limitation, the movement of
Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata).
Section 4.2 Representations and Warranties on Environmental Matters.
To Borrower's knowledge and except as set forth in the applicable Site
Assessment and Loan Application, (1) no Hazardous Material is now or was
formerly used, stored, generated, manufactured, installed, disposed of or
otherwise present at or about any Property or any property adjacent to such
Property (except for cleaning and other products currently used by the
applicable Subsidiary or any tenants in connection with the routine
maintenance or repair of any Property in full compliance with Environmental
Laws), (2) all permits, licenses, approvals and filings required by
Environmental Laws have been obtained, and the use, operation and condition
of the Property does not, and did not previously, violate any Environmental
Laws, and (3) no civil, criminal or administrative action, suit, claim,
hearing, investigation or proceeding has been brought or been threatened,
nor have any settlements been reached by or with any parties or any
liens imposed in connection with any Property concerning Hazardous Materials
or Environmental Laws.
Section 4.3 Covenants on Environmental Matters.
(1) Borrower shall consistent with the applicable Loan
Application, (a) comply strictly and in all respects with applicable
Environmental Laws; (b) other than as to those matters previously disclosed
to Senior Lender in the applicable Loan Application, notify Senior Lender
immediately upon Borrower's or any applicable Subsidiary's discovery of any
Hazardous Materials Release or presence of any Hazardous Material at, upon,
under, within, contiguous to or otherwise affecting any Property; (c)
promptly remove such Hazardous Materials and Remediate any Property in full
compliance with Environmental Laws and in accordance with the applicable
Loan Application; and (d) promptly forward to Senior Lender copies of all
orders, notices, permits, applications or other communications and reports
in connection with any Hazardous Materials Release or the presence of any
Hazardous Material or any other matters relating to the Environmental Laws
or any similar laws or regulations, as they may affect any Property or any
Borrower Party. Borrower shall simultaneously provide Senior Lender with a
copy of any written notice that would, or is likely to, have a Material
Adverse Effect, given to or received from Cleanup Contractor, any
Governmental Authority, or any third party (including the owner of any
Property as to which Remediation is occurring or contemplated or as to which
a Mortgage Acquisition has been made or is contemplated, as set forth in a
Loan Application, and including any other creditor of Borrower or any
Subsidiary), which notice relates to any Property, any Remediation or
Development, Borrower's or any Subsidiary's business, or Borrower's or any
Subsidiary's ability to perform its obligations under this Agreement.
(2) Borrower shall not cause and shall prohibit any other
Person within the control of Borrower from causing, and shall use prudent,
commercially reasonable efforts to prohibit other Persons (including tenants)
from (a) causing any Hazardous Materials Release, or the use, storage,
generation, manufacture, or installation of any Hazardous Materials at, upon,
under, within or about any Property or the transportation of any Hazardous
Materials to or from any Property (except for cleaning and other products
used in connection with routine maintenance or repair of the Property in
full compliance with Environmental Laws and except for any Remediation in
accordance with the applicable GMP Agreement and used in the ordinary course
of business by any tenant of any Property or Borrower), (b) installing any
underground storage tanks at the Property, or (c) conducting any activity
that requires a permit or other authorization under Environmental Laws,
except for any Remediation in accordance with the applicable GMP Agreement.
(3) Borrower shall provide to Senior Lender at Borrower's
expense, promptly upon the written request of Senior Lender made no more
than at a reasonable frequency (in the exercise of Senior Lender's reasonable
judgment), a Site Assessment or other environmental tests, or, if reasonably
required by Senior Lender, an update to any existing Site Assessment relating
to any Property, all in such detail and covering such matters as Senior
Lender shall from time to time request based on the written advice or
recommendations of Senior Lender's third-party consultants or advisers.
(4) Borrower shall Remediate, Develop, Acquire and/or dispose
of each Property in compliance with the applicable Loan Application and in
compliance with all Environmental Laws. Borrower shall timely obtain and
thereafter comply with and maintain in full force and effect, all
Governmental Approvals necessary or appropriate for any Remediation.
Borrower shall cause the Cleanup Contractor to prosecute all Remediation
with diligence and continuity and without material interruption or suspension
of work, except as required by Law or as a result of Force Majeure.
(5) Borrower shall diligently enforce in all material
respects, all GMP Agreements. Borrower shall diligently seek to achieve
timely and cost-effective performance by Cleanup Contractor under each GMP
Agreement. Borrower shall diligently pursue the prevailing professional
standards of quality, performance and timeliness that Cleanup Contractor would
normally deliver for its third-party clients. GMP Agreements shall be
negotiated at arms length on substantially the same terms that a
non-affiliated party would obtain. Borrower shall not waive, modify, amend,
terminate or to release Cleanup Contractor's obligations under any GMP
Agreement, or replace Cleanup Contractor, without Senior Lender's consent.
Senior Lender shall not unreasonably withhold consent to reasonable changes
necessitated by field conditions, provided that the GMP Agreement continues
to substantially comply with the applicable Loan Application and the
guaranteed maximum price is not increased. Borrower shall not terminate
Cleanup Contractor unless Cleanup Contractor is simultaneously replaced
with a Satisfactory Replacement Cleanup Contractor.
(6) If and when Borrower becomes aware of any site conditions
or other circumstances affecting any Property that will or is reasonably
likely to have a Material Adverse Effect, then Borrower shall promptly and
in any event within ten (10) days after obtaining knowledge of such site
conditions or circumstances, notify Senior Lender in writing thereof, in
reasonable detail, and thereafter provide Senior Lender with such additional
information relating thereto as Senior Lender shall reasonably request.
Borrower shall with reasonable promptness develop a written plan to respond
to such site conditions or other circumstances, and provide Senior Lender
with a copy of such written plan and any updates thereof.
Section 4.4 Allocation of Risks and Indemnity. As between Borrower
and Senior Lender, all risk of loss associated with non-compliance with
Environmental Laws, or with the presence of any Hazardous Material at,
upon, within, contiguous to or otherwise affecting any Property, shall lie
solely with Borrower and the applicable Subsidiary. Accordingly, Borrower
shall bear all risks and costs associated with any loss (including any loss
in value attributable to Hazardous Materials), damage or liability therefrom,
including all costs of removal of Hazardous Materials or other remediation
required to bring the Properties in compliance with applicable Environmental
Laws. Borrower shall indemnify, defend and hold Senior Lender and its
officers, directors, agents, shareholders and employees harmless from and
against all loss, liabilities, damages, claims, costs and expenses
(including reasonable costs of defense) arising out of or associated, in any
way, with the non-compliance with Environmental Laws, or the existence of
Hazardous Materials in, on, or about any Property, or a breach of any
representation, warranty or covenant contained in this Article 4, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law, including those arising from the
joint, concurrent, or comparative negligence of Senior Lender; provided,
however, that Borrower shall not be liable under such indemnification to
the extent such loss, liability, damage, claim, cost or expense results
solely from Senior Lender's or its officers', directors', agents',
shareholders' and employees' gross negligence or willful misconduct.
Borrower's obligations under this Section 4.4 shall arise upon the
discovery of the presence of any Hazardous Material, whether or not any
governmental authority has taken or threatened any action in connection
with the presence of any Hazardous Material, and whether or not the
existence of any such Hazardous Material or potential liability on
account thereof is disclosed in the Site Assessment and shall continue
notwithstanding the repayment of the Loan or any transfer or sale of any
right, title and interest in any Property (by foreclosure, deed in lieu of
foreclosure or otherwise). Notwithstanding anything to the contrary
contained in this Agreement, Senior Lender shall not be liable for its
failure to take any action or failure to exercise any of its rights or
remedies under this Article 4.
Section 4.5 No Waiver. Notwithstanding any provision in this
Article 4 or elsewhere in the Senior Loan Documents, or any rights or
remedies granted by the Senior Loan Documents, Senior Lender does not waive
and expressly reserves all rights and benefits now or hereafter accruing to
Senior Lender under the "security interest" or "secured creditor" exception
under applicable Environmental Laws, as the same may be amended. No action
taken by Senior Lender pursuant to the Senior Loan Documents shall be
deemed or construed to be a waiver or relinquishment of any such rights or
benefits under the "security interest exception."
ARTICLE 5
LEASING MATTERS
Section 5.1 Representations and Warranties on Leases. Except to
the extent otherwise expressly waived or approved by Senior Lender in the
relevant Loan Application, Borrower represents and warrants to Senior
Lender with respect to all Leases that: (1) to Borrower's knowledge, after
due inquiry, the rent roll delivered to Senior Lender is true and correct,
and the Leases are valid and in and full force and effect; (2) except as
otherwise disclosed to Senior Lender in writing prior to the Acquisition of
the applicable Property, the Leases are in writing, and neither Borrower
nor the applicable Subsidiary have entered into any oral agreements with
respect thereto; (3) to the best of Borrower's knowledge, after due inquiry
and investigation, the copies of the Leases delivered to Senior Lender are
true and complete; (4) to Borrower's knowledge, after due inquiry and
investigation, neither the landlord nor any tenant is in default under any
of the Leases; (5) Borrower has no knowledge, after due inquiry and
investigation, of any notice of termination or default with respect to any
Lease; (6) neither Borrower nor any Subsidiary has assigned or pledged any
of the Leases, the rents or any interests therein except to Senior Lender;
(7) except as set forth in the rent roll delivered to Senior Lender and, to
the best of Borrower's knowledge, after due inquiry and investigation, no
tenant or other party has an option to purchase all or any portion of any
Property; (8) to the best of Borrower's knowledge, after due inquiry and
investigation, no tenant has the right to terminate its Lease prior to
expiration of the stated term of such lease and the Borrower and the
applicable Subsidiary have not granted any tenant such right; (9) except as
set forth on a separate schedule delivered to Senior Lender, all Leases
contain provisions fully subordinating such leases and the interests of
the tenants thereunder to any existing or future mortgages or deeds of
trust in any amount and on any terms; (10) except as set forth on a
separate schedule delivered to Senior Lender, no tenant under any Lease is
claiming any right to any rent credit, set-off, recoupment, counterclaim or
defense and Borrower has not received any notice of such claim; (11) to the
best of Borrower's knowledge, after due inquiry and investigation, there
are no leasing commissions that are owing in connection with any Leases or
tenancies in effect as of the date hereof; and (12) to the best of Borrower's
knowledge, after due inquiry and investigation, no tenant has prepaid more
than one month's rent in advance (except for bona fide security deposits
not in excess of an amount equal to two month's rent, or as expressly set
forth in the Lease).
Section 5.2 Standard Lease Form; Approval Rights. With respect to
each Property, all future Leases and other rental arrangements shall comply
in all respects with the Leasing Guidelines set forth in the applicable
Loan Application. If a Lease complies with the Leasing Guidelines and is
not a Material Lease, then Senior Lender's approval of such Lease shall
not be required; otherwise Senior Lender's approval shall be required. Any
material modifications from the Leasing Guidelines in the applicable Loan
Application shall be subject to Senior Lender's prior written approval in
its discretion. Borrower shall furnish (or shall cause to be furnished to)
Senior Lender copies of all executed Leases and at least five (5) Business
Days prior written notice of all amendments, modifications, or supplements
to any and all Leases if, after giving effect to such amendment, modification
or supplement the Lease would be a Material Lease or would not comply with
the Leasing Guidelines for the particular Property. Senior Lender shall
endeavor to approve or disapprove all Leases and modifications subject to
its approval that are submitted to Senior Lender within five (5) Business
Days after receipt of all necessary documentation in connection therewith.
Senior Lender's failure to respond within such period shall be deemed
disapproval. Borrower shall hold, in trust, all tenant security deposits in a
segregated account, and, to the extent required by applicable law, shall not
commingle any such funds with any other funds of Borrower or such Subsidiary,
as applicable. Within ten (10) days after Senior Lender's request, Borrower
shall furnish to Senior Lender a statement of all tenant security deposits,
and copies of all Leases not previously delivered to Senior Lender,
certified by Borrower as being true and correct. Senior Lender agrees that
in the event that a particular existing space tenant is entitled to receive
a non-disturbance agreement, Senior Lender shall execute a subordination,
non-disturbance agreement in form reasonably acceptable to Senior Lender.
Senior Lender shall have the right to review and approve (such approval not
to be unreasonably withheld) all tenant improvement costs and allowances
proposed to be incurred by the Borrower or the applicable Subsidiary in
onnection with renewing any existing Leases or executing new Leases on any
Property, unless same are consistent with the Leasing Guidelines for
such Property. All leasing commissions incurred by Borrower with respect
to the renewal of any existing Leases or the execution of a new Lease for
any Property shall be commercially reasonable. The applicable Mortgage and
Assignment of Rents and Leases shall provide that all rents and other monies
received by the Borrower or the applicable Subsidiary with respect to any
Leases shall be subject to the Lien of such documents and shall be held by
the applicable Subsidiary in trust for the benefit of Senior Lender for use
in the payment of all sums due under the Loan allocable to such Subsidiary.
Section 5.3 Covenants. Borrower shall (1) perform the obligations
landlord is required to perform under the Leases; (2) enforce the obligations
to be performed by the tenants thereunder; (3) shall promptly furnish to
Senior Lender any notice of default or termination received by Borrower
from any tenant, and any notice of default or termination given by
Borrower to any tenant; (4) not collect any rents for more than thirty
(30) days in advance of the time when the same shall become due, except for
bona fide security deposits not in excess of an amount equal to two months
rent; (5) except as otherwise contemplated under the applicable Loan
Application, not enter into any ground lease or master lease of any part of
any Property; (6) not further assign or encumber any Lease; (7) not, except
if a tenant is in default of its monetary obligations under the Lease
beyond all applicable notice, grace and cure periods, cancel or accept
surrender or termination of any Lease; and (8) not, except with Senior
Lender's prior written consent, modify or amend any Lease (except for minor
modifications and amendments entered into in the ordinary course of
business, consistent with prudent property management practices, not
affecting the economic terms of such Lease), and any action in violation of
clauses (5), (6), (7), and (8) of this Section 5.3 shall be void at the
election of Senior Lender.
Section 5.4 Tenant Estoppel Certificates. At Senior Lender's request
and not more frequently than once per calendar year (except as otherwise
expressly permitted under this Agreement), Borrower shall obtain and furnish
(or exercise best efforts to do so, where the applicable Lease does not
obligate the tenant to cooperate) to Senior Lender, written estoppel
certificates in form and substance reasonably satisfactory to Senior Lender,
executed by tenants under Leases in any Property and confirming among other
things, the term, rent, and other material provisions and matters relating
to such Leases and such other matters as Senior Lender shall reasonably
require.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Senior Lender that:
Section 6.1 Organization and Power. Borrower and each Borrower
Party is duly organized, validly existing and in good standing under the
laws of the State of its formation or existence, and is in compliance with
legal requirements applicable to doing business in the State where the
Properties are located and has the power and authority to own and operate the
Properties, to enter into this Agreement and the other Senior Loan Documents
and to perform all of its obligations hereunder and thereunder. Borrower
and each Borrower party are not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code.
Section 6.2 Validity of Senior Loan Documents. The execution,
delivery and performance by Borrower and each Borrower Party of the Senior
Loan Documents: (1) are duly authorized and do not require the consent or
approval of any other party or governmental authority which has not been
obtained; and (2) will not violate any law or result in the imposition
of any lien, charge or encumbrance upon the assets of any such party, except
as contemplated by the Senior Loan Documents. The Senior Loan Documents
constitute the legal, valid and binding obligations of Borrower and each
Borrower Party, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, or similar laws generally
affecting the enforcement of creditors' rights.
Section 6.3 Liabilities; Litigation.
(1) The financial statements delivered by Borrower and each
Borrower Party are true and correct with no significant change since the
date of preparation. Except as disclosed in such financial statements,
there are no liabilities (fixed or contingent) affecting any Property,
Borrower or any Borrower Party. Except as disclosed in such financial
information there is no litigation, administrative proceeding, investigation
or other legal action (including any proceeding under any state or federal
bankruptcy or insolvency law) pending or, to the knowledge of Borrower,
threatened, against any Property, Borrower or any Borrower Party which if
adversely determined could have a Material Adverse Effect.
(2) Neither Borrower nor any Borrower Party is contemplating
either the filing of a petition by it under state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets
or property, and neither Borrower nor any Borrower Party has knowledge of
any Person contemplating the filing of any such petition against it.
Section 6.4 Taxes and Assessments. Each Property is comprised of
one or more parcels, each of which constitutes a separate tax lot and none
of which constitutes a portion of any other tax lot. There are no pending
or, to Borrower's best knowledge, proposed, special or other assessments for
public improvements or otherwise affecting any Property, nor are there any
contemplated improvements to any Property that may result in such special or
other assessments.
Section 6.5 Other Agreements; Defaults. Neither Borrower nor any
Borrower Party is a party to any agreement or instrument or subject to any
court order, injunction, permit, or restriction which is reasonably likely
to materially adversely affect any Property or the business, operations, or
condition (financial or otherwise) of Borrower or any Borrower Party. Neither
Borrower nor any Borrower Party is in violation of any agreement which
violation would have a Material Adverse Effect.
Section 6.6 Title Matters. Except with respect to a Mortgage
Acquisition, Borrower or the applicable Subsidiary has good and marketable
title to each Property, subject only to the Permitted Encumbrances, and to
the best of Borrower's knowledge after due inquiry and investigation, no
part of any Property is subject to any security interest or Liens or any
adverse claim of any kind whatsoever except for the Permitted Encumbrances;
and Borrower or the applicable Subsidiary has full power and authority to
encumber the Properties and grant Liens and other interests provided for in
the Senior Loan Documents; and Borrower or the applicable Subsidiary has
received all assignments, waivers, consents and other documents, and duly
effected all recordings, filings and other actions necessary to establish,
protect and perfect its right, title and interest in and to all the
Properties. Neither Borrower nor any Subsidiary or their constituents owns
or holds, or is obligated under or a party to, any option, right of first
refusal or any other contractual right to purchase, acquire, sell, assign
or dispose of any of the Properties except as otherwise contemplated by the
applicable Loan Application.
Section 6.7 Compliance with Law; Status of Properties. Except as
identified in a particular Loan Application and identified in such Loan
Application as an exception to the following representations and warranties
with respect to a particular Property:
(1) Borrower and each Borrower Party have all requisite
licenses, permits, franchises, qualifications, certificates of occupancy or
other governmental authorizations to own, lease and operate each Property
and carry on its business, and except as otherwise set forth in the
applicable Loan Application, each Property is in compliance with all
applicable legal requirements and to the best of Borrower's knowledge, after
due inquiry and investigation, is free of structural defects, and all
building systems contained therein are in good working order, subject to
ordinary wear and tear. Except as otherwise set forth in the applicable
Loan Application, no Property is in violation of any zoning, building,
health, fire, traffic, environmental, wetlands, coastal or other rules,
regulations, ordinances, statute and requirements applicable thereto;
(2) No condemnation has been commenced or, to Borrower's
knowledge, is contemplated with respect to all or any portion of any
Property or for the relocation of roadways providing access to any Property;
and
(3) No portion of any Property has suffered any material
damage (i.e., damage costing in excess of $50,000 to repair) by fire or
other casualty loss which has not heretofore been completely repaired and
restored to its original (or better) condition or proceeds have been made
available or set aside for such repair and restoration. No portion of any
Property is located in a special flood hazard area as designated by any
governmental authority except as indicated on the survey for such Property
delivered to Senior Lender. Each Property has rights of access to public
ways and is served by all necessary water, sewer, sanitary sewer and storm
drain facilities. All public utilities necessary to the material use and
enjoyment of each Property are located in the public right-of-way abutting
any Property, and all such utilities are connected so as to serve each
Property without passing over other property, except to the extent such
other property is subject to a perpetual easement for such utility
benefitting such Property. All roads necessary for the utilization of each
Property for its current purpose have been completed and dedicated to public
use and accepted by all governmental authorities.
Section 6.8 Location of Borrower. Borrower's principal place of
business and chief executive offices are located at the address stated in
Section 11.1.
Section 6.9 Material Agreements. All copies of any Material
Agreements, including, without limitation, management agreements, operating
agreements, service, maintenance and union contracts and all other
agreements, contracts and arrangements, whether written or oral, to which
Borrower or any Borrower Party is a party or a successor to a party
affecting or relating to all or any part of the operations of any of the
Properties have been delivered by Borrower or the applicable Subsidiary to
Senior Lender, together with a schedule listing all such agreements and
specifically identifying any operating and service agreements which
are terminable only upon more than thirty (30) days prior notice and/or with
the payment of additional fees, damages or penalties. Each such Material
Agreement is currently in full force and effect in accordance with its
terms, with no amendments or other modifications thereto that are not listed
on the schedule described in the preceding sentence and included in the
copies delivered to Senior Lender. All payments due under each such Material
Agreement have been paid in full, and no default exists or is alleged to
exist under any such Material Agreement which would have a Material Adverse
Effect. Neither Borrower nor any Borrower Party is in default, and to
Borrower's knowledge, no third party is in default, under or with respect to
any contract, agreement, lease or other instrument to which it is a party,
except for any default which (either individually or collectively with
other defaults) would not have a Material Adverse Effect. There are no
employment, consulting or management agreements covering the management of the
Properties other than as set forth on a schedule previously delivered to
Senior Lender. There are no collective bargaining agreements or other labor
agreements covering any employees of Borrower or any Borrower Party.
Section 6.10 ERISA. Borrower has not established any pension plan for
employees which would cause Borrower to be subject to the Employee Retirement
Income Security Act of 1974, as amended.
Section 6.11 Financial Statements. All financial statements delivered
by Borrower to Senior Lender are true and correct in all material respects
and as of the respective dates of such financial statements, fairly present
the respective financial conditions and results of operations of the entities
to which they, including notes thereto, relate, as of the dates indicated
and the results of operations and changes in financial position, if any, for
the periods therein specified, and are correct and complete. All such
financial statements were prepared in accordance with proper accounting
practices. Except as disclosed in writing to Senior Lender, after the
respective dates of such financial statements and information, the applicable
party with respect to such financial statements, has not incurred any
material liabilities or obligations, direct or contingent, or entered into
any material transactions not in the ordinary course of business, nor
has there been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), business prospects, net worth or results of operations of such
party.
Section 6.12 Usury. The indebtedness evidenced by the Loan, including
all interest, fees and charges provided for herein, is a business loan and
the Loan is an exempted transaction under the Truth in Lending Act, 15
U.S.C. Section 1601 et. seq. The Loan and each disbursement of an Approved
Advance pursuant to the terms and provisions hereunder does not
violate the provisions of any consumer credit laws or usury laws.
Section 6.13 Margin Stock. No part of proceeds of the Loan will be
used for purchasing or acquiring any "margin stock" within the meaning of
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System and the proceeds of the Loan will only be used for the purposes
contemplated hereunder.
Section 6.14 Investment Company Act. Borrower is not required to
register as an "investment company" under the Investment Company Act of 1940,
as amended. The making of the Loan by Senior Lender, the application of
the proceeds and repayment thereof by Borrower and the consummation of the
transactions contemplated by this Agreement and the other Senior Loan
Documents will not violate any applicable provision of such act or any
applicable rule, regulation or order issued by the Securities and Exchange
Commission thereunder which is binding on Borrower or any of its managing
members.
Section 6.15 Tax Filings. Borrower and each Borrower Party have filed
(or have obtained effective extensions for filing) all federal, state and
local tax returns required to be filed and have paid or made adequate
provision for the payment of all federal, state and local taxes, charges and
assessments payable by Borrower and each Borrower Party, respectively.
Section 6.16 Solvency. The fair saleable value of Borrower's and each
Borrower Party's assets exceeds and will, immediately following the making
of the Loan and any Advance thereunder, exceed Borrower's and each Borrower
Party's total liabilities, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. The fair saleable value
of Borrower's and each Borrower Party's assets is and will, immediately
following the making of the Loan and any Advance thereunder, be greater
than such Borrower's or Borrower Party's, as the case may be, probable
liabilities, including the maximum amount of its contingent liabilities on
its Debts as such Debts become absolute and matured. Borrower's assets and
each Borrower Party's assets do not and, immediately following the making of
the Loan and any Advance thereunder, will not, constitute unreasonably
small capital to carry out its business as conducted or as proposed to be
conducted. Neither Borrower nor any Borrower Party intends to, and does
not believe that it will, incur Debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such Debts as
they mature (taking into account the timing and amounts of cash to be
received by such Borrower or Borrower Party, as applicable, and the
amounts to be payable on or in respect of obligations of such Borrower or
Borrower Party, as applicable).
Section 6.17 Full and Accurate Disclosure. No statement of fact made
by or on behalf of Borrower or any Borrower Party in this Agreement or in
any of the other Senior Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to make
statements contained herein or therein not misleading. There is no fact
presently known to Borrower which has not been disclosed to Senior Lender
which adversely affects, nor as far as Borrower can foresee, might adversely
affect, any Property or the business, operations or condition (financial
or otherwise) of Borrower or of any Borrower Party.
Section 6.18 Opinion Authorization. Borrower represents and warrants
that it has authorized and requested its counsel to prepare and deliver an
opinion letter to Senior Lender with respect to the matters set forth in
item nine of Exhibit "O" attached hereto or as otherwise addressed in any
such opinion letter. Borrower acknowledges that (a) the preparation of such an
opinion might be construed to be in conflict with such counsel's
representation of Borrower and that such representation might result in a
loss of confidentiality with respect to information and knowledge of or
about Borrower and (b) the consequences of any loss of confidentiality as a
result of the preparation and delivery of such an opinion have been fully
disclosed to it. Borrower hereby waives its attorney-client privilege with
respect to the limited matters set forth in such opinion letter.
ARTICLE 7
FINANCIAL REPORTING
Section 7.1 Financial Statements.
(1) Monthly Reports. Within twenty (20) days after the end
of each calendar month, Borrower shall furnish to Senior Lender with
respect to each Property and with respect to all of the Properties combined
(and with respect to each Subsidiary), a current (as of the calendar month
just ended) detailed operating statement (showing monthly activity and
year-to-date) stating Operating Revenues, Operating Expenses, operating
income and Net Cash Flow for the calendar month just ended, a general
ledger, and, as requested by Senior Lender, a written statement setting
forth any variance from the annual budget, copies of bank statements and bank
reconciliations and other documentation supporting the information disclosed
in the most recent financial statements.
(2) Quarterly Reports. Within forty-five (45) days after
the end of each calendar quarter, Borrower shall furnish to Senior Lender,
with respect to each Property and with respect to all of the Properties
combined (and with respect to each Subsidiary), a detailed operating
statement (showing quarterly activity and year-to-date) stating Operating
Revenues, Operating Expenses, operating income and Net Cash Flow for the
calendar quarter just ended, together with a balance sheet (current as of
the last day of such calendar quarter) and rent roll (current as of the last
day of such calendar quarter).
(3) Annual Reports. Within one hundred twenty (120) days
after the end of each fiscal year of the applicable Subsidiary's operation
of each Property, Borrower shall furnish to Senior Lender a current (as of
the end of such fiscal year) balance sheet, a detailed operating statement
stating Operating Revenues, Operating Expenses, operating income and Net
Cash Flow for such Subsidiary and the applicable Property and with respect
to all of the Properties combined, and, if required by Senior Lender,
prepared on a review basis and audited by an independent public accountant
satisfactory to Senior Lender.
(4) Certification; Supporting Documentation. Each such
financial statement shall be in scope and detail satisfactory to Senior
Lender and certified by the chief financial representative of Borrower or
the applicable Subsidiary.
(5) Asset Markdowns. Borrower shall provide Senior Lender
with notice of any "markdown" or adjustment in book value or carrying value
of any asset of Borrower or any Subsidiary, promptly upon taking such
markdown or adjustment.
Section 7.2 Accounting Principles. All financial statements shall
be prepared in accordance with sound accounting principles applicable to
commercial real estate, consistently applied from year to year. If the
financial statements are prepared on an accrual basis, such statements shall
be accompanied by a reconciliation to cash basis accounting principles.
Section 7.3 Other Information. Borrower shall deliver to Senior
Lender such additional information regarding Borrower, its Subsidiaries,
its business, and any Property, as reasonably requested by Senior Lender,
within thirty (30) days after Senior Lender's request therefor.
Section 7.4 Annual Budget; Modifications; Progress Reports. At least
thirty (30) days prior to the commencement of each fiscal year of Borrower
or any Subsidiary or with respect to each Property, Borrower shall provide
to Senior Lender, a copy of Borrower's and each Subsidiary's proposed
annual operating and capital improvements budget (including, without
limitation, leasing parameters) for each Property for such fiscal year for
review and approval by Senior Lender. Neither Borrower nor the applicable
Subsidiary shall materially deviate from the budgets approved by Senior
Lender without the prior written consent of Senior Lender (such consent not
to be unreasonably withheld, conditioned or delayed). If any event or
circumstance has occurred that reasonably could or would have a Material
Adverse Effect on any Remediation, Development, physical condition, or
on-site conditions affecting any Property, or Borrower's compliance with any
Loan Application, Borrower shall deliver upon request, within seven (7)
Business Days, updated budgets for the completion of any Remediation and
Development or otherwise relating to such Property. On a monthly basis,
Borrower shall keep Senior Lender informed of the status and progress of all
Remediation and Development with respect to each Property.
Section 7.5 Audits. Senior Lender shall have the right to request
that Borrower choose and appoint a certified public accountant reasonably
satisfactory to Senior Lender to perform financial audits as it deems
necessary, at Borrower's expense. Upon reasonable prior written notice,
Borrower shall permit Senior Lender or its agents to examine at the offices of
Borrower or the applicable Subsidiary at all reasonable times such records,
books and papers of Borrower or such Subsidiary, as applicable, which
reflect upon its financial condition and the income and expense relative to
any Property.
ARTICLE 8
COVENANTS
Borrower covenants and agrees with Senior Lender as follows:
Section 8.1 Due on Sale and Encumbrance; Transfers of Interests.
Except as set forth in a particular Loan Application (and identified as an
exception to the following covenants with respect to a particular Property),
or as necessary or appropriate to implement the sale of a Property in
accordance with a Loan Application, or as otherwise approved by Senior
Lender in writing, without the prior written consent of Senior Lender:
(1) Borrower shall not (a) directly or indirectly sell,
transfer, convey, mortgage, pledge, or assign any direct or indirect
interest in any Property or any part thereof (including any partnership,
member or any other ownership interest in Borrower or any Subsidiary or any
partner or member thereof); (b) further encumber, alienate, ▇▇▇▇▇ ▇ ▇▇▇▇ or
▇▇▇▇▇ any other interest in any Property or any part thereof (including any
partnership or other ownership interest in Borrower or any Subsidiary),
whether voluntarily or involuntarily; or (c) enter into any easement or other
agreement granting rights in or restricting the use or development of any
Property; provided, however, that Senior Lender shall not unreasonably
withhold or delay its consent with respect to utility and other easements
and restrictive covenants which do not in Senior Lender's reasonable
judgment adversely affect any security interest or Lien granted to Senior
Lender under the Senior Loan Documents;
(2) no new general partner, member, or limited partner
having the ability to control the affairs of Borrower shall be admitted to
or created in Borrower or any Subsidiary (nor shall any existing general
partner or member or controlling limited partner withdraw from Borrower or
such Subsidiary, as applicable), and no change in Borrower's or any
Subsidiary's organizational documents relating to control over Borrower or
such Subsidiary, as applicable, and/or any Property shall be effected; and
(3) no transfer shall be permitted of the beneficial interest
in Borrower, any of its constituent members, any Subsidiary or any of the
Properties.
As used in this Section 8.1, "transfer" shall include the sale, transfer,
conveyance, mortgage, pledge, or assignment of the legal or beneficial
ownership of (a) any Property, (b) any partnership interest in any member
of Borrower that is a partnership, (c) any membership interest in any
member of Borrower that is a limited liability company, and (d) any voting
stock in any member of Borrower that is a corporation; "transfer" shall not
include (i) the leasing of individual units within any Property so long
as Borrower complies with the provisions of the Senior Loan Documents
relating to such leasing activity; or (ii) the transfers of limited partner
interests in Borrower so long as the provisions of Sections 8.1(2) and
8.1(3) are satisfied. Senior Lender shall endeavor to respond to any
written request for approval of a transfer within fifteen (15) days
of its receipt of notice of such proposed transfer together with all
documentation in connection therewith that Senior Lender may reasonably
request. Notwithstanding anything to the contrary contained in this Section
8.1, Senior Lender hereby acknowledges and consents to the execution and
delivery of the Subordinated Pledge Agreement by Borrower to Subordinated
Lender, subject and subordinate to the terms and provisions of, and the
rights and security interest granted to Senior Lender under the Pledge
Agreement.
Notwithstanding anything to the contrary contained in this Section
8.1, any holder of a direct or indirect ownership interest in Borrower as of
the date of this Agreement (an "Interest Holder") shall have the right to
transfer its direct or indirect ownership interest in Borrower without Senior
Lender's prior consent, provided, that, (A) after taking into account any
prior transfers pursuant to this paragraph and the current transfer, whether
to the proposed transferee or otherwise, no such transfer or series of
transfers shall result in (I) the proposed transferee (together with any
other transferees pursuant to this paragraph) owning (directly or indirectly,
or beneficially) more than forty-nine percent (49%) of the direct or indirect
ownership interests in Borrower, or (II) a transfer of more than forty-nine
percent (49%) of the direct or indirect ownership interests in Borrower;
(B) no Event of Default has occurred and remains uncured; (C) no change of
control shall occur as a result of such transfer; (D) such transferee shall
be a reputable entity or person of good character; (E) such transferee and
all transferees in the aggregate under this paragraph shall have no voting
rights and shall not possess the power to, directly or indirectly, direct
the management and policies of Borrower or any Subsidiary in any way, whether
through the ownership of voting securities, by contract or otherwise; (F) any
provisions in any of the organizational documents of either Borrower or any
Subsidiary that require the unanimous affirmative vote or consent of all the
holders of ownership interests in Borrower or any Subsidiary, as applicable,
or any other applicable voting threshold, shall not require or include the
vote or consent of such proposed transferee or transferees; and (G) no
transferee shall be an investment bank, securities firm, institutional
lender, or other significant competitor of Credit Suisse First Boston in
any substantial line of business of Credit Suisse First Boston, or an
officer, director, or employee of any of the foregoing.
Section 8.2 Taxes; Charges. Borrower shall pay before any fine,
penalty, interest or cost may be added thereto, and shall not enter into
any agreement to defer, any real estate taxes and assessments, franchise
taxes and charges, and other governmental charges that may become a Lien
upon any Property or become payable during the term of the Loan, and will
promptly furnish Senior Lender (or cause to be furnished to Senior Lender)
with evidence of such payment; however, Borrower's compliance with Section
3.4 of this Agreement relating to impounds for taxes and assessments shall,
with respect to payment of such taxes and assessments, be deemed compliance
with this Section 8.2. Borrower shall not consent to the joint assessment
of any Property with any other real property constituting a separate tax
lot or with any other real or personal property.
Borrower shall pay or shall cause to be paid when due all claims
and demands of mechanics, materialmen, laborers and others which, if unpaid,
might result in a Lien on any Property; however, Borrower may contest the
validity of such claims and demands so long as (a) Borrower notifies Senior
Lender that it intends to contest such claim or demand, (b) Borrower
provides Senior Lender with an indemnity, bond or other security reasonably
satisfactory to Senior Lender (including an endorsement to Senior Lender's
title insurance policy insuring against such claim or demand) assuring the
discharge of Borrower's obligations for such claims and demands, including
interest and penalties, and (c) Borrower is diligently contesting the same by
appropriate legal proceedings in good faith and at its own expense and
concludes such contest prior to the thirtieth (30th) day preceding the
earlier to occur of the Maturity Date or the date on which any Property is
scheduled to be sold for non-payment.
Section 8.3 Control; Management. There shall be no change in the
day-to-day control and management of Borrower or any Borrower Party (or the
organizational, operative or governing agreements of each) without the prior
written consent of Senior Lender. Borrower shall not terminate, replace or
appoint any property manager or terminate or amend the management agreement
for any Property without Senior Lender's prior written approval. All
management fees under any property management agreement with respect to any
Property shall be commercially reasonable. Any change in ownership or
control of the manager shall be cause for Senior Lender to re-approve such
manager and management agreement (such approval not to be unreasonably
withheld). Each manager shall hold and maintain all necessary licenses,
certifications and permits required by law. Borrower shall fully perform
all of its covenants, agreements and obligations under the management
agreement.
Section 8.4 Operation; Maintenance; Inspection. Borrower shall
observe and comply with all legal requirements applicable to the ownership,
use and operation of each Property. Borrower shall maintain each Property
in good condition consistent with prudent commercial practices and promptly
repair any damage or casualty. Borrower shall keep Senior Lender apprised,
in a timely fashion and in a format acceptable to Senior Lender, of the
status of all Properties including, but not limited to, delinquencies,
litigation, foreclosures, bankruptcies, court orders, material damage to any
of the Properties and insurance claims with respect to any of the Properties.
Borrower shall permit Senior Lender and its agents, representatives and
employees, upon reasonable prior notice to Borrower to inspect any Property
and conduct such environmental and engineering studies as Senior Lender may
require, provided such inspections and studies do not materially interfere
with the use and operation of any Property.
Section 8.5 Taxes on Security. Borrower shall pay all taxes,
charges, filing, registration and recording fees, excises and levies payable
with respect to the Senior Note or the Liens created or secured by the Senior
Loan Documents, other than income, franchise and doing business taxes imposed
on Senior Lender. If there shall be enacted any law (1) deducting the Loan
from the value of any Property for the purpose of taxation, (2) affecting
any Lien on any Property, or (3) changing existing laws of taxation of
mortgages, deeds of trust, security deeds, or debts secured by real property,
or changing the manner of collecting any such taxes, Borrower shall promptly
pay to Senior Lender, on demand, all taxes, costs and charges for which Senior
Lender is or may be liable as a result thereof; however, if such payment
would be prohibited by law or would render the Loan usurious, then instead
of collecting such payment, Senior Lender may declare all amounts owing
under the Senior Loan Documents to be due and payable within forty-five (45)
days after prior written notice thereof by Senior Lender.
Section 8.6 Legal Existence; Name, Etc. Except as otherwise
contemplated by the applicable Loan Application, Borrower, each member of
Borrower, and each Subsidiary shall preserve and keep in full force and
effect its existence as a single purpose entity, all franchises, rights and
privileges under the laws of the State of its formation, and all
qualifications, licenses and permits applicable to the ownership, use and
operation of the applicable Property. Neither Borrower nor any member of
Borrower, shall wind up, liquidate, dissolve, reorganize, merge, or
consolidate with or into, or convey, sell, assign, transfer, lease, or
otherwise dispose of all or substantially all of its assets, or acquire all
or substantially all of the assets of the business of any Person. Except as
otherwise contemplated by the applicable Loan Application, Borrower, each
member of Borrower and each Subsidiary shall conduct business only in its
own name and not change its name, identity, or organizational structure, or
the location of its chief executive office or principal place of business
unless the prior written consent of Senior Lender to such change has
been obtained and such Person has taken all actions necessary or requested
by Senior Lender to file or amend any financing statement or continuation
statement to assure perfection and continuation of perfection of security
interests under the Senior Loan Documents. Except as otherwise contemplated
by the applicable Loan Application, Borrower, each member of Borrower
and each Subsidiary shall maintain its separateness as an entity, including
maintaining separate books, records, and accounts and observing corporate,
limited liability company and partnership formalities independent of any
other entity, shall pay its obligations with its own funds and shall
not commingle funds or assets with those of any other entity.
Section 8.7 Affiliate Transactions. Except as otherwise contemplated
by this Agreement and as contemplated by a Loan Application, without the
prior written consent of Senior Lender, Borrower shall not engage in any
transaction affecting any Property with an Affiliate of Borrower.
Section 8.8 Limitation on Other Debt. Except as otherwise
contemplated by the applicable Loan Application, Borrower, each member and
each Subsidiary shall not without the prior written consent of Senior
Lender (which consent may be granted or withheld in Senior Lender's sole
discretion), incur any Debt other than the Loan, the Subordinated Debt, the DMB
Affiliated Financing and customary trade payables which are payable, and
shall be paid, within thirty (30) days of when incurred.
Section 8.9 Further Assurances. Borrower shall promptly (1) cure
any defects in the execution and delivery of the Senior Loan Documents
(including, without limitation, the payment of Net Cash Flow as provided in
Section 2.5 hereof), and (2) execute and deliver, all such other documents,
agreements and instruments as Senior Lender may reasonably request to
further evidence and more fully describe the collateral for the Loan, to
correct any errors in the Senior Loan Documents, to perfect, protect or
preserve any liens created under any of the Senior Loan Documents, or to
make any recordings, file any notices, or obtain any consents, as may be
necessary or appropriate in connection therewith.
Section 8.10 Estoppel Certificates. Borrower, within ten (10) days
after request, shall furnish to Senior Lender a written statement, duly
acknowledged, setting forth the amount due on the Loan, the terms of payment
of the Loan, the date to which interest has been paid, whether any offsets
or defenses exist against the Loan and, if any are alleged to exist, the
nature thereof in detail, and such other matters as Senior Lender reasonably
may request.
Section 8.11 Notice of Certain Events. Borrower shall promptly notify
Senior Lender of (1) any Event of Default, together with a detailed statement
of the steps being taken to cure such Event of Default; (2) any notice of
default received by Borrower under any other material obligations relating
to any Property (including, without limitation, any Leases or Material
Agreements) or which if uncured would have a Material Adverse Effect; and
(3) any material threatened, or pending legal, judicial or regulatory
proceedings, including any dispute between Borrower or any Subsidiary and
any governmental authority, affecting Borrower or any Subsidiary or any
Property.
Section 8.12 Indemnification. Borrower shall indemnify, defend and
hold Senior Lender and its directors, officers, shareholders, employees and
agents harmless from and against any and all losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs
or disbursements of any kind or nature whatsoever, including the reasonable
fees and actual expenses of Senior Lender's counsel, in connection with (1) any
inspection, review or testing of or with respect to any Property, (2) any
investigative, administrative, mediation, arbitration, or judicial
proceeding, whether or not Senior Lender is designated a party thereto,
commenced or threatened at any time (including after the repayment of
the Loan) in any way related to the execution, delivery or performance of
any of the Senior Loan Documents or any Property, (3) any proceeding
instituted by any Person claiming a Lien, (4) any brokerage commissions or
finder's fees claimed by any broker or other party in connection with
any Property, including those arising from the joint, concurrent, or
comparative negligence of Senior Lender and (5) any material breach of any
representation, warranty, covenant or agreement made by Borrower under this
Agreement, except to the extent any of the foregoing is caused by Senior
Lender's gross negligence or willful misconduct.
Section 8.13 Limited Purpose Entities. Borrower shall not Acquire,
Remediate, Develop, or otherwise invest (other than Borrower's investment in
the Subsidiaries as contemplated by Additional Property Loan Applications)
in any real or personal property other than the Properties. Borrower shall
not conduct any business of any kind other than the business contemplated by
this Agreement and the Subordinated Loan Agreement.
Section 8.14 Conduct of Business. Borrower shall not enter into
contracts relating to any Property(ies), or otherwise conduct business
relating to any Property(ies), in Borrower's name. Any such contracts shall
be entered into, and business shall be conducted, solely by the applicable
Subsidiary, and only in its own name.
ARTICLE 9
EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default under the Loan:
Section 9.1 Payments. Borrower's failure to pay any regularly
scheduled installment of principal, interest or any other amount due under
the Senior Loan Documents (including, without limitation, the payment of Net
Cash Flow as provided in Section 2.5 hereof) within seven (7) days after
the date when due, or Borrower's failure to pay the Loan on the Maturity
Date, whether by acceleration or otherwise.
Section 9.2 Insurance. Borrower's failure to maintain insurance as
required under Section 3.1 of this Agreement.
Section 9.3 Sale, Encumbrance, Etc. The sale, transfer, conveyance,
pledge, mortgage or assignment of any part or all of the Properties, or any
interest therein, or of any interest in Borrower or any Subsidiary in
violation of Section 8.1 of this Agreement.
Section 9.4 Covenants. Borrower's failure to perform or observe any
of the agreements and covenants contained in this Agreement or in any of the
other Senior Loan Documents (other than timely delivery of financial
statements and information required under Section 7.1, repayments under
Section 9.1, insurance requirements under Section 9.2, and transfers and
encumbrances under Section 9.3, for all of which there shall be no grace or
cure period), and the continuance of such failure for thirty (30) days after
notice by Senior Lender to Borrower; provided, however, that subject to any
shorter period for curing any failure by Borrower as specified in any of
the other Senior Loan Documents, Borrower shall have an additional sixty (60)
days to cure such failure if (1) such failure does not involve the failure to
make payments on a monetary obligation; (2) such failure cannot reasonably
be cured within thirty (30) days; and (3) Borrower is diligently undertaking
to cure such default. The notice and cure provisions of this Section 9.4
do not apply to the Events of Default described in Section 9.5, Section 9.6,
and Section 9.7.
Section 9.5 Representations and Warranties. Any representation or
warranty made hereunder or in any other Senior Loan Document proves to be
untrue in any material respect when made or deemed made and is not cured
within ten (10) days after Borrower receives written notice from Senior
Lender of the falsity or breach of such representation or warranty.
Section 9.6 Other Encumbrances. Any material default (after the
expiration of any applicable notice, grace and cure periods) under any
document or instrument, other than the Senior Loan Documents, evidencing or
creating a Lien on any Property or any part thereof prior to the Lien granted
to Senior Lender under the applicable Mortgage and such default has a
Material Adverse Effect.
Section 9.7 Involuntary Bankruptcy or Other Proceeding. Commencement
of an involuntary case or other proceeding against Borrower, any Borrower
Party, Cleanup Contractor, or any Good Faith Guarantors and the Environmental
Indemnitors (each, a "Bankruptcy Party") that seeks liquidation,
reorganization or other relief with respect to it or its debts or other
liabilities under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeks the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any of its property,
and such involuntary case or other proceeding shall remain undismissed or
unstayed for a period of sixty (60) days; or an order for relief against a
Bankruptcy Party shall be entered in any such case under the Federal
Bankruptcy Code. Notwithstanding anything to the contrary contained in this
paragraph, the commencement of an involuntary case or other proceeding
against the Cleanup Contractor shall not constitute an Event of Default under
this Agreement, if within thirty (30) days after the commencement of such
proceeding, Borrower has procured a Satisfactory Replacement Cleanup
Contractor. Notwithstanding anything to the contrary contained in this
paragraph, the commencement of an involuntary case or other proceeding
against any Good Faith Guarantor shall not constitute an Event of Default
under this Agreement, if within forty-five (45) days after the commencement of
such proceeding, Borrower has procured a Satisfactory Replacement Guarantor.
Section 9.8 Voluntary Petitions, etc. Commencement by a Bankruptcy
Party of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its Debts or other
liabilities under any bankruptcy, insolvency or other similar law or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or any of its property, or consent by a Bankruptcy
Party to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced
against it, or the making by a Bankruptcy Party of a general assignment
for the benefit of creditors, or the failure by a Bankruptcy Party, or the
admission by a Bankruptcy Party in writing of its inability, to pay its
debts generally as they become due, or any action by a Bankruptcy Party
to authorize or effect any of the foregoing.
Section 9.9 Cleanup Contractor Default. The failure of the Cleanup
Contractor to perform any obligation under a GMP Agreement, which failure
is not cured within (a) ten (10) days, in the case of any monetary default,
(b) three (3) Business Days in the case of a nonmonetary default relating
to failure to provide insurance, and (c) thirty (30) days, in the case
of any other nonmonetary defaults (other than failure to provide insurance),
which thirty-day period shall be extended by up to an additional period of
thirty (30) more days, but only so long as the party in default is, with
diligence and continuity, endeavoring to cure such nonmonetary default.
Section 9.10 Subsidiary Non-Compliance. The failure of any Subsidiary
to satisfy any conditions expressed in this Agreement, which failure is of a\
material nature and is not cured within (a) ten (10) days, in the case of
any monetary default, (b) three (3) Business Days in the case of a
nonmonetary default relating to failure to provide insurance, and (c) thirty
(30) days, in the case of any other nonmonetary defaults (other than failure
to provide insurance), which thirty-day period shall be extended by up to
an additional period of thirty (30) more days, but only so long as such
Subsidiary is, with diligence and continuity, endeavoring to cure such
nonmonetary default.
ARTICLE 10
REMEDIES
Section 10.1 Remedies - Insolvency Events. Upon the occurrence of any
Event of Default described in Section 9.7 or 9.8, the obligations of Senior
Lender to advance amounts hereunder shall immediately terminate, and all
amounts due under the Senior Loan Documents immediately shall become due
and payable, all without written notice and without presentment, demand,
protest, notice of protest or dishonor, notice of intent to accelerate the
maturity thereof, notice of acceleration of the maturity thereof, or any other
notice of default of any kind, all of which are hereby expressly waived by
Borrower; however, if the Bankruptcy Party under Section 9.7 or 9.8 is
other than Borrower, then all amounts due under the Senior Loan Documents
shall become immediately due and payable at Senior Lender's election, in Senior
Lender's sole discretion.
Section 10.2 Remedies - Other Events. Except as set forth in Section
10.1 above, while any Event of Default exists, Senior Lender may (1) by
written notice to Borrower, declare the entire Loan to be immediately due
and payable without presentment, demand, protest, notice of protest or
dishonor, notice of intent to accelerate the maturity thereof, notice of
acceleration of the maturity thereof, or other notice of default of any
kind, all of which are hereby expressly waived by Borrower, (2) terminate
the obligation, if any, of Senior Lender to advance amounts hereunder,
and/or (3) exercise all rights and remedies therefor under this Agreement and
the other Senior Loan Documents and at law or in equity, including, without
limitation, the right to receive all Net Cash Flow from each of the
Properties until such time as the Event of Default is cured.
Section 10.3 Senior Lender's Right to Perform the Obligations. If
Borrower shall fail, refuse or neglect to make any payment or perform any
act required by the Senior Loan Documents, then while any Event of Default
exists, and without notice to or demand upon Borrower and without waiving
or releasing any other right, remedy or recourse Senior Lender may have
because of such Event of Default, Senior Lender may (but shall not be
obligated to) make such payment or perform such act for the account of and
at the expense of Borrower, and shall have the right to enter upon any
Property for such purpose and to take all such action thereon and with
respect to any Property as it may deem necessary or appropriate. If Senior
Lender shall elect to pay any sum due with reference to any Property, Senior
Lender may do so in reliance on any ▇▇▇▇, statement or assessment procured
from the appropriate governmental authority or other issuer thereof without
inquiring into the accuracy or validity thereof. Similarly, in making any
payments to protect the security intended to be created by the Senior Loan
Documents, Senior Lender shall not be bound to inquire into the validity of
any apparent or threatened adverse title, lien, encumbrance, claim or charge
before making an advance for the purpose of preventing or removing the same.
Additionally, if any Hazardous Materials affect or threaten to affect any
Property, Senior Lender may (but shall not be obligated to) give such
notices and take such actions as it deems necessary or advisable in order to
▇▇▇▇▇ the discharge of any Hazardous Materials or remove the Hazardous
Materials. Borrower shall indemnify Senior Lender for all losses, expenses,
damages, claims and causes of action, including reasonable attorneys' fees,
incurred or accruing by reason of any acts performed by Senior Lender pursuant
to the provisions of this Section 10.3, including those arising from the
joint, concurrent, or comparative negligence of Senior Lender, except as a
result of Senior Lender's gross negligence or willful misconduct. All sums
paid by Senior Lender pursuant to this Section 10.3, and all other sums
expended by Senior Lender to which it shall be entitled to be indemnified,
together with interest thereon at the Default Rate from the date of such
payment or expenditure until paid, shall constitute additions to the Loan,
shall be secured by the Senior Loan Documents and shall be paid by Borrower
to Senior Lender upon demand.
Section 10.4 Senior Lender's Right to Complete Remediation. Upon the
occurrence of any Event of Default, Senior Lender shall have the right (which
right may be exercised in Senior Lender's sole discretion) to engage
third-party environmental contractor(s) to complete any Remediation not
completed, in substantially the manner contemplated by the applicable Loan
Application or in such other manner as such third-party environmental
contractor(s) shall recommend. Senior Lender may pay, settle or compromise
all existing bills and claims relating to any Remediation. Senior Lender's
third-party environmental contractor(s) may execute all applications and
certificates in the name of Borrower or any Subsidiary that may be required
by Law with respect to any Remediation. Borrower hereby grants Senior Lender
and its third-party environmental contractor(s) a power of attorney for
purposes of the foregoing. This power of attorney shall be deemed to be a
power coupled with an interest, which cannot be revoked. All sums expended
by Senior Lender pursuant to this paragraph shall be deemed expenditures made
to cure Borrower's Event of Default and shall bear interest at the Default Rate
until repaid. In the event that an Event of Default has occurred and is
subsequently cured after Senior Lender has exercised any of the remedies
provided under this paragraph, Senior Lender shall have the option in its
sole discretion to either (a) continue prosecuting any Remediation commenced
by it or any third-party contractors engaged by it or (b) terminate such
Remediation. In the event that Senior Lender elects to terminate Remediation
as provided in the preceding sentence, then Borrower shall be responsible
for completion of such Remediation in accordance with the applicable Loan
Application. Notwithstanding anything to the contrary contained in this
Section 10.4, Senior Lender shall be under no obligation to complete any
Remediation of any Property.
ARTICLE 11
MISCELLANEOUS
Section 11.1 Notices. Any notices, approvals and/or consents required
or permitted to be given under this Agreement shall be in writing and either
shall be mailed by certified mail, postage prepaid, return receipt requested,
or sent by overnight air courier service, or personally delivered to a
representative of the receiving party, or sent by telecopy (provided an
identical notice is also sent simultaneously by mail, overnight courier, or
personal delivery as otherwise provided in this Section 11.1). All such
communications shall be mailed, sent or delivered, addressed to the party for
whom it is intended at its address set forth below.
If to Borrower: DMB/Remediation LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
and ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Senior Lender: PPA Funding Corp.
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇ and
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any communication so addressed and mailed shall be deemed to be given on the
earliest of (1) when actually delivered, (2) on the first Business Day after
deposit with an overnight air courier service, or (3) on the third Business
Day after deposit in the United States mail, postage prepaid, in each case
to the address of the intended addressee (except as otherwise provided in the
Mortgage), and any communication so delivered in person shall be deemed to
be given when receipted for by, or actually received by Senior Lender or
Borrower, as the case may be. If given by telecopy, a notice shall be deemed
given and received when the telecopy is transmitted to the party's telecopy
number specified above, and confirmation of complete receipt is received by
the transmitting party during normal business hours or on the next Business
Day if not confirmed during normal business hours, and an identical notice
is also sent simultaneously by mail, overnight courier, or personal delivery
as otherwise provided in this Section 11.1. Either party may designate a
change of address by written notice to the other by giving at least ten
(10) days prior written notice of such change of address.
Section 11.2 Amendments and Waivers. No amendment or waiver of any
provision of the Senior Loan Documents shall be effective unless in writing
and signed by the party against whom enforcement is sought.
Section 11.3 Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws. Accordingly,
all agreements between Borrower and Senior Lender with respect to the Loan
are hereby expressly limited so that in no event, whether by reason of
acceleration of maturity or otherwise, shall the amount paid or agreed to be
paid to Senior Lender or charged by Senior Lender for the use, forbearance
or detention of the money to be lent hereunder or otherwise, exceed the
maximum amount allowed by law. If the Loan would be usurious under
applicable law (including the laws of the State of New York and the laws of
the United States of America), then, notwithstanding anything to the contrary
in the Senior Loan Documents: (1) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received under the Senior Loan Documents shall under
no circumstances exceed the maximum amount of interest allowed by applicable
law, and any excess shall be credited on the Senior Note by the holder
thereof (or, if the Senior Note has been paid in full, refunded to Borrower);
and (2) if maturity is accelerated by reason of an election by Senior Lender,
or in the event of any prepayment, then any consideration which constitutes
interest may never include more than the maximum amount allowed by applicable
law. In such case, excess interest, if any, provided for in the Senior
Loan Documents or otherwise, to the extent permitted by applicable law,
shall be amortized, prorated, allocated and spread from the date of advance
until payment in full so that the actual rate of interest is uniform through
the term hereof. If such amortization, proration, allocation and spreading
is not permitted under applicable law, then such excess interest shall be
cancelled automatically as of the date of such acceleration or prepayment
and, if theretofore paid, shall be credited on the Senior Note (or, if the
Senior Note has been paid in full, refunded to Borrower). The terms and
provisions of this Section 11.3 shall control and supersede every other
provision of the Senior Loan Documents. The Senior Loan Documents are
contracts made under and shall be construed in accordance with and governed by
the laws of the state of New York, except that if at any time the laws of
the United States of America permit Senior Lender to contract for, take,
reserve, charge or receive a higher rate of interest than is allowed by the
laws of the State of New York (whether such federal laws directly so provide
or refer to the law of any state), then such federal laws shall to such
extent govern as to the rate of interest which Senior Lender may contract
for, take, reserve, charge or receive under the Senior Loan Documents.
Section 11.4 Invalid Provisions. If any provision of any of the
Senior Loan Documents is held to be illegal, invalid or unenforceable, such
provision shall be fully severable; the Senior Loan Documents shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part thereof; the remaining provisions thereof shall
remain in full effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance therefrom; and in lieu of such
illegal, invalid or unenforceable provision there shall be added
automatically as a part of such Senior Loan Document a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be possible
to be legal, valid and enforceable.
Section 11.5 Reimbursement of Expenses. Borrower shall pay all expenses
incurred by Senior Lender in connection with the Loan and all Advances
thereof, including title insurance premiums, reasonable fees and expenses of
Senior Lender's attorneys, environmental, engineering and other consultants,
and fees, charges or taxes for the recording or filing of Senior Loan
Documents. Borrower shall pay all reasonable expenses of Senior Lender in
connection with the administration of the Loan, including audit costs,
inspection fees, settlement of condemnation and casualty awards, and
premiums for title insurance and endorsements thereto. Borrower shall, upon
request, promptly reimburse Senior Lender for all amounts expended, advanced
or incurred by Senior Lender to collect the Senior Note, or to enforce the
rights of Senior Lender under this Agreement or any other Senior Loan
Document, or to defend or assert the rights and claims of Senior Lender
under the Senior Loan Documents or with respect to any Property (by
litigation or other proceedings), which amounts will include all court costs,
reasonable attorneys' fees and expenses, fees of auditors and accountants,
and investigation expenses as may be incurred by Senior Lender in connection
with any such matters (whether or not litigation is instituted), together
with interest at the Default Rate on each such amount from the date of
disbursement until the date of reimbursement to Senior Lender, all of which
shall constitute part of the Loan and shall be secured by the Senior Loan
Documents. Senior Lender shall upon request provide projected budgets for
Senior Lender's costs and expenses to be reimbursed pursuant to this
paragraph. Senior Lender shall not be bound by any such budgets, but to the
extent that any cost overruns arise because of overruns in Senior Lender's
costs and expenses, such overruns shall not be deemed a default by Borrower.
Nothing in this paragraph shall obligate Borrower to reimburse Senior Lender
for Senior Lender's cost of funds.
Section 11.6 Approvals; Third Parties; Conditions. All approval rights
retained or exercised by Senior Lender with respect to leases, contracts,
plans, studies and other matters are solely to facilitate Senior Lender's
credit underwriting, and shall not be deemed or construed as a determination
that Senior Lender has passed on the adequacy thereof for any other purpose
and may not be relied upon by Borrower or any other Person. This Agreement
is for the sole and exclusive use of Senior Lender and Borrower and may not
be enforced, nor relied upon, by any Person other than Senior Lender and
Borrower. All conditions of the obligations of Senior Lender hereunder,
including the obligation to make Advances, are imposed solely and exclusively
for the benefit of Senior Lender, its successors and assigns, and no other
Person shall have standing to require satisfaction of such conditions or be
entitled to assume that Senior Lender will refuse to make Advances in the
absence of strict compliance with any or all of such conditions, and no
other Person shall, under any circumstances, be deemed to be a beneficiary
of such conditions, any and all of which may be freely waived in whole or in
part by Senior Lender at any time in Senior Lender's sole discretion.
Section 11.7 Senior Lender Not in Control; No Partnership/Membership;
Not a Permitted Sponsor; Affiliation with Subordinated Lender. (a) None of
the covenants or other provisions contained in this Agreement shall, or shall
be deemed to, give Senior Lender the right or power to exercise control
over the affairs or management of Borrower, the power of Senior Lender
being limited to the rights to exercise the remedies referred to in the
Senior Loan Documents. The relationship between Borrower and Senior Lender
is, and at all times shall remain, solely that of debtor and creditor. No
covenant or provision of the Senior Loan Documents is intended, nor shall
it be deemed or construed, to create a partnership, joint venture, agency or
common interest in profits or income between Senior Lender and Borrower or
to create an equity in any Property in Senior Lender. Senior Lender neither
undertakes nor assumes any responsibility or duty to Borrower or to any
other person with respect to any Property or the Loan, except as expressly
provided in the Senior Loan Documents; and notwithstanding any other
provision of the Senior Loan Documents: (1) Senior Lender is not, and shall
not be construed as, a partner, joint venturer, alter ego, manager,
controlling person or other business associate or participant of any kind
of Borrower or its stockholders, members, or partners and Senior Lender
does not intend to ever assume such status; (2) Senior Lender shall in no
event be liable for any Debts, expenses or losses incurred or sustained by
Borrower; and (3) Senior Lender shall not be deemed responsible for or a
participant in any acts, omissions or decisions of Borrower or its
stockholders, members, or partners. Senior Lender and Borrower disclaim any
intention to create any partnership, joint venture, agency or common
interest in profits or income between Senior Lender and Borrower, or to
create an equity in any Property in Senior Lender, or any sharing of
liabilities, losses, costs or expenses.
(b) Senior Lender shall have no right or obligation to direct, manage,
control, or participate in any Remediation. At all times, Permitted
Sponsor(s) shall constitute the sponsor of, and shall control, any and all
Remediation, all in full compliance with all applicable Law. Upon request,
Borrower shall promptly cause a Permitted Sponsor to confirm in writing to
Senior Lender that such party is the Sponsor as to any Property(ies) or
Remediation designated by Senior Lender. Senior Lender shall have neither
the right nor the obligation to: (i) take any action, make any decision or
otherwise participate in management of Borrower or any Subsidiary in any way
if such action, decision or participation would or could, in Senior Lender's
judgment, cause Senior Lender to be deemed a Sponsor of any Remediation; or
(ii) exercise decisionmaking control over any environmental compliance or
hazardous substance handling or disposal. Nothing in this paragraph shall
limit any right or remedy of Senior Lender upon the occurrence of an Event
of Default.
(b) Borrower acknowledges that Subordinated Lender and Senior Lender are
Affiliates. Notwithstanding such affiliation, Senior Lender's rights,
remedies and obligations under this Agreement, and Senior Lender's exercise
and performance thereof, shall at all times be determined and interpreted
as if no affiliation existed between Subordinated Lender and Senior Lender.
The preceding shall not be deemed to impose any obligation on Senior Lender,
or to limit or restrict in any way Senior Lender's exercise of its rights
and remedies under the Senior Loan Documents.
Section 11.8 Time of the Essence. Time is of the essence with respect
to this Agreement.
Section 11.9 Assignment. This Agreement shall be binding upon and
inure to the benefit of Senior Lender and Borrower and their respective
successors and assigns of Senior Lender and Borrower, provided that neither
Borrower nor any other Borrower Party shall, without the prior written
consent of Senior Lender (which consent may be granted or withheld in
Senior Lender's sole discretion), assign any rights, duties or obligations
hereunder. Notwithstanding the foregoing, Senior Lender shall be free at any
time or from time to time to assign the Senior Loan Documents to any
assignee, whether completely or only as they relate to any specific
Property(ies) without the consent of Borrower. If Senior Lender from time
to time desires to make any such assignment, complete or partial, then
Borrower shall provide such certificates, deliveries, and other documents
as Senior Lender shall reasonably require in connection therewith, including
any amendments to the Senior Loan Documents to sever the Senior Loan
Documents as to any particular Property(ies), or as otherwise necessary or
appropriate, in Senior Lender's reasonable judgment, to facilitate any
transfer or assignment, in whole or in part, by Senior Lender.
Section 11.10 Renewal, Extension or Rearrangement. All provisions
of the Senior Loan Documents shall apply with equal effect to each and all
promissory notes and amendments thereof hereinafter executed which in whole
or in part represent a renewal, extension, increase or rearrangement of the
Loan. For portfolio management purposes, Senior Lender may elect to divide
the Loan into two or more separate loans evidenced by separate promissory
notes so long as the payment and other obligations of Borrower are not
effectively increased or otherwise modified and, provided that, if such
division results in the imposition of intangible taxes or mortgage
recording taxes in excess of the amount of such taxes that would be
due and payable absent such division (the "Excess Mortgage Taxes"), then
Senior Lender shall be responsible for the payment of such Excess Mortgage
Taxes. Borrower agrees to cooperate with Senior Lender and to execute such
documents as Senior Lender reasonably may request to effect such division
of the Loan. To the extent that any actual or potential assignee of the
Loan or an interest therein incurs any expenses (such as attorneys' and
consultants' fees, "due diligence" costs, and other transaction costs),
which expenses would not have been incurred but for such actual or potential
assignment, Borrower shall have no obligation to pay or contribute to such
expenses.
Section 11.11 Waivers. No course of dealing on the part of Senior
Lender, its officers, employees, consultants or agents, nor any failure or
delay by Senior Lender with respect to exercising any right, power or
privilege of Senior Lender under any of the Senior Loan Documents, shall
operate as a waiver thereof, it being understood that any waivers must be in
writing and executed by the party giving such waiver.
Section 11.12 Cumulative Rights. Rights and remedies of Senior Lender
under the Senior Loan Documents shall be cumulative, and the exercise or
partial exercise of any such right or remedy shall not preclude the exercise
of any other right or remedy.
Section 11.13 Singular and Plural. Words used in this Agreement and
the other Senior Loan Documents in the singular, where the context so
permits, shall be deemed to include the plural and vice versa. The
definitions of words in the singular in this Agreement and the other
Senior Loan Documents shall apply to such words when used in the plural
where the context so permits and vice versa.
Section 11.14 Phrases. When used in this Agreement and the other
Senior Loan Documents, the phrase "including" (and comparable phrases, such
as "include") shall mean "including, but not limited to," the phrase
"satisfactory to Senior Lender" shall mean "in form and substance
satisfactory to Senior Lender in all respects," the phrase "with Senior
Lender's consent" or "with Senior Lender's approval" shall mean such consent
or approval at Senior Lender's discretion, and the phrase "acceptable to
Senior Lender" shall mean "acceptable to Senior Lender at Senior Lender's
sole discretion." Wherever any party's consent is not to be unreasonably
withheld, such consent shall not be unreasonably delayed or conditioned.
Section 11.15 Exhibits and Schedules. The exhibits and schedules
attached to this Agreement are incorporated herein and shall be considered
a part of this Agreement for the purposes stated herein.
Section 11.16 Titles of Articles, Sections and Subsections. All titles
or headings to articles, sections, subsections or other divisions of this
Agreement and the other Senior Loan Documents or the exhibits hereto and
thereto are only for the convenience of the parties and shall not be
construed to have any effect or meaning with respect to the other content
of such articles, sections, subsections or other divisions, such other
content being controlling as to the agreement between the parties hereto.
Section 11.17 Promotional Material. Borrower authorizes Senior Lender to
issue press releases, advertisements and other promotional materials in
connection with Senior Lender's own promotional and marketing activities,
and describing the Loan in general terms or in detail and Senior Lender's
participation in the Loan. All references to Senior Lender contained in
any press release, advertisement or promotional material issued by Borrower
shall be approved in writing by Senior Lender in advance of issuance.
Section 11.18 Survival. All of the representations, warranties, and
indemnities hereunder (including environmental matters under Article 4),
and under the indemnification provisions of the other Senior Loan Documents
shall survive the repayment in full of the Loan and the release of the
liens evidencing or securing the Loan, and shall survive the transfer (by sale,
foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all
right, title and interest in and to any Property to any party, whether or
not an Affiliate of Borrower.
SECTION 11.19 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, BORROWER AND SENIOR LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER SENIOR LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF
EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER
THE SENIOR LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE LOAN OR ANY
PROPERTY (INCLUDING ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND
ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY
INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL
INDUCEMENT FOR SENIOR LENDER TO ENTER THIS AGREEMENT.
Section 11.20 Waiver of Punitive or Consequential Damages. Neither
Senior Lender nor Borrower shall be responsible or liable to the other or
to any other Person for any punitive, exemplary or consequential damages
which may be alleged as a result of the Loan or the transaction contemplated
hereby, including any breach or other default by any party hereto.
Section 11.21 Governing Law. The Senior Loan Documents are being
executed and delivered, and are intended to be performed, in the state of
New York and the laws of the state of New York and of the United States of
America shall govern the rights and duties of the parties hereto and the
validity, construction, enforcement and interpretation of the Senior Loan
Documents, except to the extent otherwise specified in any of the Senior
Loan Documents.
Section 11.22 Entire Agreement. This Agreement and the other Senior Loan
Documents embody the entire agreement and understanding between Senior
Lender and Borrower and supersede all prior agreements and understandings
between such parties relating to the subject matter hereof and thereof.
Accordingly, the Senior Loan Documents may not be contradicted by evidence
of prior, contemporaneous, or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
Section 11.23 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
shall constitute one document.
Section 11.24 Knowledge of Borrower. Whenever the phrase "to Borrower's
knowledge" or "to the best of Borrower's knowledge" is used in this Agreement
such term shall mean the best of Borrower's knowledge and shall include the
knowledge of any Borrower Party.
EXECUTED as of the date and year first written above.
BORROWER:
DMB/REMEDIATION LLC, a Delaware
limited liability company
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SENIOR LENDER:
PPA FUNDING CORP., a Delaware corporation
By: ▇▇▇▇▇ ▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President