Exhibit 10.22
Loan No. ▇▇-▇▇▇▇▇▇▇
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GENERAL ELECTRIC CAPITAL CORPORATION
(Lender)
to
PARK MEDICAL ASSOCIATES GENERAL PARTNERSHIP
(Borrower)
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LOAN AGREEMENT
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Dated as of: August 2, 1999
Property Location: Pineville, North Carolina
DOCUMENT PREPARED BY:
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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TABLE OF CONTENTS
Page
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ARTICLE 1 - CERTAIN DEFINITIONS ............................................. 1
Section 1.1 Certain Definitions ..................................... 1
ARTICLE 2 - LOAN TERMS ...................................................... 4
Section 2.1 The Loan ................................................ 4
Section 2.2 Interest Rate; Late Charge .............................. 4
Section 2.3 Terms of Payment ........................................ 4
Section 2.4 Security; Establishment of Funds ........................ 5
ARTICLE 3 - INSURANCE, CONDEMNATION, AND IMPOUNDS ........................... 5
Section 3.1 Insurance ............................................... 5
Section 3.2 Use and Application of Insurance Proceeds ............... 7
Section 3.3 Condemnation Awards ..................................... 7
Section 3.4 Impounds ................................................ 8
ARTICLE 4 - ENVIRONMENTAL MATTERS ........................................... 8
Section 4.1 Certain Definitions ..................................... 8
Section 4.2 Representations and Warranties on Environmental Matters . 9
Section 4.3 Covenants on Environmental Matters ...................... 9
Section 4.4 Allocation of Risks Indemnity ........................... 9
Section 4.5 No Waiver ............................................... 10
ARTICLE 5 - LEASING MATTERS ................................................. 10
Section 5.1 Representations and Warranties on Leases ................ 10
Section 5.2 Standard Lease Form; Approval Rights .................... 10
Section 5.3 Covenants ............................................... 11
Section 5.4 Tenant Estoppels ........................................ 11
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES .................................. 11
Section 6.1 Organization, Power and Authority ....................... 11
Section 6.2 Validity of Loan Documents .............................. 11
Section 6.3 Liabilities; Litigation ................................. 12
Section 6.4 Taxes and Assessments ................................... 12
Section 6.5 Other Agreements; Defaults .............................. 12
Section 6.6 Compliance with Law ..................................... 12
Section 6.7 Location of Borrower .................................... 12
Section 6.8 ERISA ................................................... 12
Section 6.9 Forfeiture .............................................. 13
Section 6.10 Tax Filings ............................................. 13
Section 6.11 Solvency ................................................ 13
Section 6.12 Full and Accurate Disclosure ............................ 13
Section 6.13 Flood Zone .............................................. 13
Section 6.14 Single Purpose Entity/Separateness ...................... 14
Section 6.15 Year 2000 Compliance .................................... 15
Section 6.16 Property Specific Representations ....................... 15
ARTICLE 7 - FINANCIAL REPORTING........................................... 15
Section 7.1 Financial Statements.................................. 15
Section 7.2 Accounting Principles................................. 16
Section 7.3 Other Information; Access............................. 16
Section 7.4 Annual Budget......................................... 16
ARTICLE 8 - COVENANTS..................................................... 16
Section 8.1 Due On Sale and Encumbrance; Transfers of Interests... 16
Section 8.2 Taxes; Utility Charges................................ 16
Section 8.3 Control; Management................................... 16
Section 8.4 Operation; Maintenance; Inspection.................... 16
Section 8.5 Taxes on Security..................................... 17
Section 8.6 Legal Existence; Name, Etc............................ 17
Section 8.7 Further Assurances.................................... 17
Section 8.8 Estoppel Certificates................................. 17
Section 8.9 Notice of Certain Events.............................. 17
Section 8.10 Indemnification....................................... 17
Section 8.11 Cooperation........................................... 18
Section 8.12 Payment For Labor and Materials....................... 18
Section 8.13 Year 2000 Compliance.................................. 18
ARTICLE 9 - EVENTS OF DEFAULT............................................. 19
Section 9.1 Payments.............................................. 19
Section 9.2 Insurance............................................. 19
Section 9.3 Sale, Encumbrance, Etc................................ 19
Section 9.4 Covenants............................................. 19
Section 9.5 Representations and Warranties........................ 19
Section 9.6 Other Encumbrances.................................... 19
Section 9.7 Involuntary Bankruptcy or Other Proceeding............ 19
Section 9.8 Voluntary Petitions, etc.............................. 19
ARTICLE 10 - REMEDIES..................................................... 20
Section 10.1 Remedies - Insolvency Events.......................... 20
Section 10.2 Remedies - Other Events............................... 20
Section 10.3 Lender's Right to Perform the Obligations............. 20
ARTICLE 11 - MISCELLANEOUS................................................ 20
Section 11.1 Notices............................................... 20
Section 11.2 Amendments and Waivers................................ 21
Section 11.3 Limitation on Interest................................ 21
Section 11.4 Invalid Provisions.................................... 22
Section 11.5 Reimbursement of Expenses............................. 22
Section 11.6 Approvals; Third Parties; Conditions.................. 22
Section 11.7 Lender Not in Control; No Partnership................. 22
Section 11.8 Contest of Certain Claims............................. 23
Section 11.9 Time of the Essence................................... 23
Section 11.10 Successors and Assigns................................ 23
Section 11.11 Renewal, Extension or Rearrangement................... 23
Section 11.12 Waivers............................................... 23
Section 11.13 Cumulative Rights; Joint and Several Liability........ 23
Section 11.14 Singular and Plural................................... 23
Section 11.15 Phrases............................................. 24
Section 11.16 Exhibits and Schedules.............................. 24
Section 11.17 Titles of Articles, Sections and Subsections........ 24
Section 11.18 Promotional Materials............................... 24
Section 11.19 Survival............................................ 24
Section 11.20 Waiver of Jury Trial................................ 24
Section 11.21 Waiver of Punitive or Consequential Damages......... 24
Section 11.22 Governing Law....................................... 24
Section 11.23 Entire Agreement.................................... 24
Section 11.24 Counterparts........................................ 25
ARTICLE 12 - LIMITATIONS ON LIABILITY................................................... 25
Section 12.1 Limitations on Liability............................ 25
Section 12.2 Limitations on Liability of Lender's Officers,
Employees, etc.................................. 25
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A LEGAL DESCRIPTION OF PROJECT
SCHEDULE I DEFEASANCE
SCHEDULE II REQUIRED REPAIRS
LOAN AGREEMENT
This
Loan Agreement (this "AGREEMENT") is entered into as of August ,
1999 between GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("LENDER"), and PARK MEDICAL ASSOCIATES GENERAL PARTNERSHIP, a North Carolina
general partnership ("BORROWER").
ARTICLE 1
CERTAIN DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
"AFFILIATE" means (a) any corporation in which Borrower or any partner,
shareholder, director, officer, member, or manager of Borrower directly or
indirectly owns or controls more than ten percent (10%) of the beneficial
interest, (b) any partnership, joint venture or limited liability company in
which Borrower or any partner, shareholder, director, officer, member, or
manager of Borrower is a partner, joint venturer or member, (c) any trust in
which Borrower or any partner, shareholder, director, officer, member or
manager of Borrower is a trustee or beneficiary, (d) any entity of any type
which is directly or indirectly owned or controlled by Borrower or any
partner, shareholder, director, officer, member or manager of Borrower, (e) any
partner, shareholder, director, officer, member, manager or employee of
Borrower, (f) any Person related by birth, adoption or marriage to any partner,
shareholder, director, officer, member, manager, or employee of Borrower, or
(b) any Borrower Party.
"AGREEMENT" means this
Loan Agreement, as amended from time to time.
"ASSIGNMENT OF LEASES AND RENTS" means the Assignment of Leases and Rents,
executed by Borrower for the benefit of Lender, and pertaining to leases of
space in the Project.
"AWARD" has the meaning assigned in Section 3.3.
"BANKRUPTCY PARTY" has the meaning assigned in Section 9.7.
"BORROWER PARTY" means any Joinder Party, any general partner of Borrower,
any general partner in any partnership that is a general partner of Borrower,
any managing member of Borrower, and any managing member in any limited
liability company that is a managing member of Borrower, at any level.
"BUSINESS DAY" means a day other than a Saturday, a Sunday, or a legal
holiday on which national banks located in the State of New York are not open
for general banking business.
"CASUALTY" has the meaning assigned in Section 3.2.
"CLOSING DATE" means the date the Loan is funded by Lender.
"COMMITMENT" means the commitment letter, dated April 8, 1999, issued by
Lender and accepted by Borrower on April 14, 1999.
"CONDEMNATION" has the meaning assigned in Section 3.3.
"CONTRACT RATE" has the meaning assigned in Section 2.2.
"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.
"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 Project approved by Lender for the period of time for which
calculated.
"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.
"DEFEASANCE OPTION" has the meaning assigned in Section 2.3(c).
"ENVIRONMENTAL LAWS" has the meaning assigned in Section 4.1(a).
"ERISA" has the meaning assigned in Section 6.8.
"EVENT OF DEFAULT" has the meaning assigned in Article 9.
"FUNDS" means the Required Repair Fund, the Replacement Escrow Fund and
the Rollover Escrow Fund.
"HAZARDOUS MATERIALS" has the meaning assigned in Section 4.1(b).
"INSURANCE PREMIUMS" has the meaning assigned in Section 3.1(c).
"JOINDER PARTY" means the Persons, if any, executing the Joinder hereto.
"LIEN" means any interest, or claim thereof, in the Project securing an
obligation owed to, or a claim by, any Person other than the owner of the
Project, 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 Project.
"LOAN" means the loan made by Lender to Borrower under this Agreement and
all other amounts secured by the Loan Documents.
"LOAN DOCUMENTS" means: (a) this Agreement, (b) the Note, (c) the
Mortgage, (d) the Assignment of Leases and Rents, (e) Uniform Commercial Code
financing statements, (f) such assignments of management agreements, contracts
and other rights as may be required under the Commitment or otherwise requested
by Lender, (g) all other documents evidencing, securing, governing or otherwise
pertaining to the Loan, and (h) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing; provided however, in
no event shall the term "Loan Documents" include that certain Hazardous
Materials Indemnity Agreement (the "ENVIRONMENTAL INDEMNITY AGREEMENT") dated
the date hereof in favor of Lender.
"LOAN YEAR" means (a) for the first Loan Year, the period between the date
hereof and one calendar year from the last day of the month in which the
Closing Date occurs (unless the Closing Date is on the first day of a month, in
which case the first Loan Year shall commence on such Closing Date and end one
calendar year from the last day of the month immediately preceding the Closing
Date) and (b) each consecutive twelve month calendar period after the first
Loan Year until the Maturity Date.
"MATURITY DATE" means, as applicable, the earlier of (a) September 1,
2009, 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
Loan Documents.
"MORTGAGE" means the Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing executed by Borrower in favor of Lender,
covering the project.
"NOTE" means the Promissory Note of even date, in the stated principal
amount of $4,000,000.00, executed by Borrower, and payable to the order of
Lender in evidence of the Loan.
"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.
"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.
"PROJECT" means Park ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, and all related facilities, amenities, fixtures, and personal
property owned by Borrower and any improvements now or hereafter located on the
real property described in EXHIBIT A.
"RATING AGENCIES" means each of Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., ▇▇▇▇▇'▇ Investors Service, Inc., Duff & ▇▇▇▇▇▇
Credit Rating Co. and Fitch IBCA, Inc., or any other nationally-recognized
statistical rating agency which has been approved by Lender;
"REPLACEMENT ESCROW FUND" has the meaning assigned in Section 2.4.
"REQUIRED REPAIR FUND" has the meaning assigned in Section 2.4.
"ROLLOVER ESCROW FUND" has the meaning assigned in Section 2.4.
"SECONDARY MARKET TRANSACTION" has the meaning assigned in Section 8.11.
"SINGLE PURPOSE ENTITY" shall mean a Person (other than an individual, a
government or any agency or political subdivision thereof), which exists solely
for the purpose of owning the Project, observes corporate, company or
partnership formalities, as applicable, independent of any other entity, and
which otherwise complies with the covenants set forth in Section 6.14 hereof.
"SITE ASSESSMENT" means an environmental engineering report for the
Project prepared at Borrower's expense by an engineer engaged by Borrower, or
Lender on behalf of Borrower, and approved by Lender, and in a manner
reasonably satisfactory to Lender, based upon an investigation relating to and
making appropriate inquiries concerning the existence of Hazardous Materials on
or about the Project, and the past or present discharge, disposal, release or
escape of any such substances, all consistent with ASTM Standard E1527-93 (or
any successor thereto published by ASTM) and good customary and commercial
practice.
"STATE" means the State of North Carolina.
"TAX AND INSURANCE ESCROW FUND" has the meaning assigned in Section 3.4.
"TAXES" has the meaning assigned in section 8.2.
"YEAR 2000 COMPLIANT" and "YEAR 2000 COMPLIANCE" means that (a) the
performance and functionality of the operating systems for Borrower's computers,
all software applications that run on Borrower's computers, all of Borrower's
machinery and equipment (including, without limitation, any machinery or
equipment with an embedded microprocessor) shall accurately process date data
(including, without limitation, dates prior to, during, spanning or after
January 1, 2000), and (b) Borrower's business operations and financial condition
will not be materially interrupted, delayed, decreased or otherwise materially
adversely affected by the advent of the Year 2000.
"YIELD MAINTENANCE AMOUNT" has the meaning assigned in SCHEDULE I.
ARTICLE 2
LOAN TERMS
SECTION 2.1 THE LOAN. Upon satisfaction of all the terms and conditions
set forth in the Commitment, Lender agrees to make a Loan of FOUR MILLION AND
NO/100 DOLLARS ($4,000,000.00) to the Borrower, which shall be funded in one
advance and repaid in accordance with the terms of this Agreement and the Note.
Borrower hereby agrees to accept the Loan on the Closing Date, subject to and
upon the terms and conditions set forth herein.
SECTION 2.2 INTEREST RATE: LATE CHARGE. The outstanding principal
balance of the Loan shall bear interest at a rate of interest equal to seven
and ninety-seven hundredths percent (7.97%) per annum (the "CONTRACT RATE").
Interest at the Contract Rate shall be computed on the basis of a fraction, the
denominator of which is three hundred sixty (360) days and the numerator of
which is the actual number of days elapsed from the date of the initial
disbursement under the Loan or the date of the preceding interest installment
due date, as the case may be, to the date of the next interest installment due
date or the Maturity Date. If Borrower fails to pay any installment of interest
or principal within fifteen (15) days after the date on which the same is due,
Borrower shall pay to Lender a late charge on such past-due amount, as
liquidated damages and not as a penalty, equal to four percent (4%) of such
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:
(a) INTEREST AND PRINCIPAL. A payment of interest only on the date hereof
for the period from the date hereof through the last day of the current month.
Thereafter, a constant payment of $29,266.97, on the first day of October 1,
1999 and on the first day of each calendar month thereafter; each of such
payments, to be applied (i) to the payment of interest computed at the Contract
Rate and (ii) the balance applied toward reduction of the principal sum. The
constant payment required hereunder is based on a thirty (30)-year amortization
schedule.
(b) MATURITY. On the Maturity Date, Borrower shall pay to Lender all
outstanding principal, accrued and unpaid interest, default interest, late
charges and any and all other amounts due under the Loan Documents.
(c) PREPAYMENT. Except as set forth herein, the Loan is closed to
prepayment in whole or in part, until the ninety (90) day period prior to the
Maturity Date. Notwithstanding the foregoing, from the earlier to occur of (i)
two (2) years after the sale of the Loan in a Secondary Market Transaction or
(ii) the fourth (4th) anniversary of the Closing Date, provided no Event of
Default exists, Borrower may obtain the release of the Project from the lien of
the Mortgage in accordance with the terms and provisions of SCHEDULE I attached
hereto (the "DEFEASANCE OPTION").
If the Loan is accelerated for any reason other than casualty or
condemnation, and the Loan is otherwise closed to prepayment, Borrower shall
pay, in addition to all other amounts outstanding under the Loan Documents, a
prepayment premium equal to the sum of 1) the Yield Maintenance Amount, if any,
that would be required under the Defeasance Option and 2)five percent (5%) of
the outstanding balance of the Loan. If for any reason the Loan is prepaid on a
day other than a scheduled monthly payment date, the Borrower shall pay, in
addition to the principal, interest and premium, if any, required under this
Section, an amount equal to the interest that would have accrued on the Loan
from the date of prepayment to the next scheduled monthly payment date. In the
event of a prepayment resulting from Lender's application of insurance or
condemnation proceeds pursuant to Article 3 hereof, no prepayment penalty or
premium shall be imposed.
SECTION 2.4 SECURITY; ESTABLISHMENT OF FUNDS. (a) The Loan shall be
secured by the Mortgage creating a first lien on the Project, the Assignment of
Leases and Rents and other Loan Documents. Borrower agrees to establish the
following reserves with Lender, to be held by Lender as further security for the
Loan: (i) on the Closing Date, Borrower shall deposit with Lender the amount of
$15,594.00 (the "REQUIRED REPAIR FUND") which shall be held by Lender for the
completion of the required repairs set forth on SCHEDULE II annexed hereto on or
before six (6) months from the date hereof; (ii) Borrower shall deposit with
Lender on the first day of each calendar month a scheduled payment is due the
amount of $570.00 which shall be held by Lender for replacements and repairs
required to be made to the Project during the calendar year (the "REPLACEMENT
ESCROW FUND"); and (iii) Borrower shall deposit with Lender (A) on the Closing
Date the amount of $40,000.00, and (B) on the first day of each calendar month a
scheduled payment is due the amount of $2,835.00, all of which shall be held by
Lender for tenant improvement and leasing commission obligations incurred
following the date hereof (the "ROLLOVER ESCROW FUND").
(b) PLEDGE AND DISBURSEMENT OF FUNDS. Borrower hereby pledges to Lender,
and grants a security interest in, any and all monies now or hereafter
deposited in the Funds as additional security for the payment of the Loan.
Lender may reasonably reassess its estimate of the amount necessary for the
Funds from time to time and may adjust the monthly amounts required to be
deposited into the Funds upon thirty (30) days notice to Borrower. Lender
shall make disbursements from the Funds as requested by Borrower, and approved
by Lender in its reasonable discretion, on a quarterly basis in increments of
no less than $5,000.00 upon delivery by Borrower of Lender's standard form of
draw request accompanied by copies of paid invoices for the amounts requested
and, if required by Lender, lien waivers and releases from all parties
furnishing materials and/or services in connection with the requested payment.
Lender may require an inspection of the Project at Borrower's expense prior to
making a quarterly disbursement in order to verify completion of replacements
and repairs for which reimbursement is sought. The Funds shall be held without
interest in Lender's name and may be commingled with Lender's own funds at
financial institutions selected by Lender in its reasonable discretion. Upon
the occurrence of an Event of Default, Lender may apply any sums then present
in the Funds to the payment of the Loan in any order in its reasonable
discretion. Until expended or applied as above provided, the Funds shall
constitute additional security for the Loan. Lender shall have no obligation to
release any of the Funds while any Event of Default or Potential Default exists
or any material adverse change has occurred in Borrower or any Joinder Party,
the Project, or any major or anchor tenant. All costs and expenses incurred by
Lender in the disbursement of any of the Funds shall be paid by Borrower
promptly upon demand or, at Lender's sole discretion, deducted from the Funds.
ARTICLE 3
INSURANCE, CONDEMNATION, AND IMPOUNDS
SECTION 3.1 INSURANCE. Borrower shall maintain insurance as follows:
(a) CASUALTY; BUSINESS INTERRUPTION. Borrower shall keep the Project
insured against damage by fire and the other hazards covered by a standard
extended coverage and all-risk insurance policy for the full insurable value
thereof on a replacement cost claim recovery basis (without reduction for
depreciation of co-insurance), and shall maintain such other casualty insurance
as reasonable required by Lender. Lender reserves the right to require from
time
to time the following additional insurance: boiler and machinery; flood;
earthquake/sinkhole; worker's compensation and/or building law or ordinance.
Borrower shall keep the Project insured against loss by flood if the Project is
located currently or at any time in the future 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, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994 (as such acts may from time to time
be amended) 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 acts.
Any such flood insurance policy shall be issued in accordance with the
requirements and current guidelines of the Federal Insurance Administration.
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 the Project. Borrower
shall not maintain any separate or additional insurance which is contributing
in the event of loss unless it is properly endorsed and otherwise reasonably
satisfactory to Lender in all respects. The proceeds of insurance paid on
account of any damage or destruction to the Project shall be paid to Lender to
be applied as provided in Section 3.2.
(b) LIABILITY. Borrower shall maintain (i) commercial general liability
insurance with respect to the Project 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 (ii) other liability insurance as reasonable required
by Lender.
(c) FORM AND QUALITY. All insurance policies shall be endorsed in form and
substance acceptable to Lender to name Lender as an additional insured, loss
payee or mortgage thereunder, as its interest may appear, with loss payable to
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,
with a general company and financial size rating of "A-IX" or better as
established by Best's Rating Guide and "AA" or better by Standard & Poor's
Ratings Group. Each policy shall provide that such policy may not be canceled
or materially changed except upon thirty (30) days' prior written notice of
intention of non-renewal, cancellation or material change to Lender and that no
act or thing done by Borrower shall invalidate any policy as against Lender.
Blanket policies shall be permitted only if Lender receives appropriate
endorsements and/or duplicate policies containing Lender's right to continue
coverage on a pro rata pass-through basis and that coverage will not be affected
by any loss on other properties covered by the policies. Borrower authorized
Lender to pay the premiums for such policies (the "INSURANCE PREMIUMS") from the
Tax and Insurance Escrow Fund as the same become due and payable annually in
advance. If Borrower fails to deposit funds into the Tax and Insurance Escrow
Fund sufficient to permit Lender to pay the premiums when due, Lender may obtain
such insurance and pay the premium therefor and Borrower shall, on demand,
reimburse Lender for all expenses incurred in connection therewith. Borrower
shall assign the policies or proofs of insurance to Lender, in such manner and
form that 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 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
Lender shall not be deemed trust funds, and Lender shall be entitled to apply
such proceeds as herein provided.
(d) ADJUSTMENTS. Borrower shall give immediate written notice of any loss
to the insurance carrier and to Lender. Borrower hereby irrevocably authorizes
and empowers 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
Lender's reasonable expenses incurred in the collection of such proceeds.
Nothing contained in this Section 3.1(d), however, shall require Lender to
incur any expense or take any action hereunder.
SECTION 3.2 USE AND APPLICATION OF INSURANCE PROCEEDS.
(a) If the Project shall be damaged or destroyed, in whole or in part, by
fire or other casualty (a "CASUALTY"), Borrower shall give prompt notice
thereof to Lender. Following the occurrence of a Casualty, Borrower, regardless
of whether insurance proceeds are available, shall promptly proceed to
restore, repair, replace or rebuild the same to be of at least equal value and
of substantially the same character as prior to such damage or destruction, all
to be effected in accordance with applicable law.
(b) Lender shall apply insurance proceeds to costs of restoring the
Project or to the payment of the Loan as follows:
(i) if the loss is less than or equal to $100,000, Lender shall
apply the insurance proceeds to restoration provided (A) no Event of
Default or Potential Default exists, and (B) Borrower promptly commences
and is diligently pursuing restoration of the Project;
(ii) if the loss exceeds $100,000 but is not more than 25% of the
replacement value of the improvements, Lender shall apply the insurance
proceeds to restoration provided that (A) at all times during such
restoration no Event of Default or Potential Default exists; (B) Lender
determines throughout the restoration that there are sufficient funds
available to restore and repair the Project to a condition approved by
Lender; (C) Lender determines that the net operating income of the Project
during restoration, taking into account rent loss or business interruption
insurance, will be sufficient to pay Debt Service; (D) Lender determines
(based on leases which will remain in effect after restoration is complete
if the Project is not a multi-family project) that after restoration the
ratio of net operating income to Debt Service will equal at least the ratio
that existed on the Closing Date; (E) Lender determines that the ratio of
the outstanding principal balance of the Loan to appraised value of the
project after restoration will not exceed the loan-to-value ratio that
existed on the Closing Date; (F) Lender determines that restoration and
repair of the Project to a condition approved by Lender will be completed
with six months after the date of loss or casualty and in any event ninety
(90) days prior to the Maturity Date; (G) Borrower promptly commences and
is diligently pursuing restoration of the Project; and (H) the Project
after the restoration will be in compliance with and permitted under all
applicable zoning, building and land use laws, rules, regulations and
ordinances; and
(iii) if the conditions set forth in (i) and (ii) above are not
satisfied in Lender's reasonable discretion, Lender may apply any insurance
proceeds it may receive to the payment of the Loan or allow all or a
portion of such proceeds to be used for the restoration of the Project.
(c) Insurance proceeds applied to restoration will be disbursed on
receipt of reasonably satisfactory plans and specifications, contracts and
subcontracts, schedules, budgets, lien waivers and architects' certificates,
and otherwise in accordance with prudent commercial construction lending
practices for construction loan advances (including appropriate retainages to
ensure that all work is completed in a workmanlike manner).
SECTION 3.3 CONDEMNATION AWARDS. Borrower shall promptly give Lender
written notice of the actual, or threatened commencement of any condemnation or
eminent domain proceeding (a "CONDEMNATION") and shall deliver to Lender copies
of any and all papers served in connection with such Condemnation. Following
the occurrence of a Condemnation, Borrower, regardless of whether any award or
compensation (an "AWARD") is available, shall promptly proceed to restore,
repair, replace or rebuild the same to the extent practicable to be of at least
equal value and of substantially the same character as prior to such
Condemnation, all to be effected in accordance with applicable law. Lender may
participate in any such proceeding and Borrower will deliver to Lender all
instruments necessary or required by Lender to permit such participation.
Without Lender's prior consent, Borrower (a) shall not agree to any Award, and
(b) shall not take any action or fail to take any action which would cause the
Award to be determined. All Awards for the taking or purchase in lieu of
condemnation of the Project or any part thereof are hereby assigned to and shall
be paid to Lender. Borrower authorizes Lender to collect and receive such
Awards, to give proper receipts and acquittances
therefor, and in 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 Project; provided, however, if the Award is less than
or equal to $100,000 and Borrower requests that such proceeds be used for
non-structural site improvements (such as landscape, driveway, walkway and
parking area repairs) required to be made as a result of such condemnation,
Lender will apply the Award to such restoration in accordance with disbursement
procedures applicable to insurance proceeds provided there exists no Potential
Default or Event of Default. Borrower, upon request by Lender, shall execute all
instruments requested to confirm the assignment of the Awards to Lender, free
and clear of all liens, charges or encumbrances.
SECTION 3.4 IMPOUNDS. Borrower shall deposit with Lender, monthly, (a)
one-twelfth (1/12th) of the Taxes that Lender estimates will be payable during
the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Taxes at least thirty (30) days prior to their
respective due dates, and (b) one-twelfth (1/12th) of the Insurance Premiums
that Lender estimates will be payable for the renewal of the coverage afforded
by the insurance policies required by Lender upon the expiration thereof in
order to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to expiration (said amounts in (a) and
(b) above hereinafter called the "TAX AND INSURANCE ESCROW FUND"). At or before
the advance of the Loan, Borrower shall deposit with Lender a sum of money which
together with the monthly installments will be sufficient to make each of such
payments 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
Lender's estimate from time to time of the charges for the current year (after
giving effect to any reassessment or, at 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 Lender, without
interest, and may be commingled with Lender's general funds. Borrower hereby
grants to Lender a security interest in all funds so deposited with 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 Lender, as Lender may elect, but no such application shall be deemed
to have been made by operation of law or otherwise until actually made by
Lender. Borrower shall furnish Lender with 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. If at any time the amount on deposit with Lender,
together with amounts to be deposited by Borrower before such charges are
payable, is insufficient to pay such charges, Borrower shall deposit any
deficiency with Lender immediately upon demand. Lender shall pay such charges
when the amount on deposit with Lender is sufficient to pay such charges and
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:
(a) "ENVIRONMENTAL LAWS" means any federal, state or local law (whether
imposed by statute, ordinance, rule, regulation, administrative or judicial
order, or common law), now or hereafter enacted, governing health, safety,
industrial hygiene, the environment or natural resources, or Hazardous
Materials, including, without limitation, such laws governing or regulating (i)
the use, generation, storage, removal, recovery, treatment, handling, transport,
disposal, control, release, discharge of, or exposure to, Hazardous Materials,
(ii) the transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of such property, or (iii)
requiring notification or disclosure of releases of Hazardous Materials or other
environmental conditions whether or not in connection with a transfer of title
to or interest in property.
(b) "HAZARDOUS MATERIALS" means (i) petroleum or chemical products, whether
in liquid, solid, or gaseous form, or any fraction or by-product thereof, (ii)
asbestos or asbestos-containing materials, (iii) polychlorinated biphenyls
(pcbs), (iv) radon gas, (v) underground storage tanks, (vi) any explosive or
radioactive substances, (vii) lead or lead-based paint, or (viii) any other
substance, material, waste or mixture which is or shall be listed, defined, or
otherwise determined by any governmental authority to be hazardous, toxic,
dangerous or otherwise regulated, controlled or giving rise to liability under
any Environmental Laws.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES ON ENVIRONMENTAL MATTERS. To
Borrower's knowledge, except as set forth in the Site Assessment, (a) no
Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, treated, discharged, disposed of or otherwise present at or about the
Project or any property adjacent to the Project (except for cleaning and other
products currently used in connection with the routine maintenance or repair of
the Project in full compliance with Environmental Laws) and no Hazardous
Material was removed or transported from the Project, (b) all permits, licenses,
approvals and filings required by Environmental Laws have been obtained, and the
use, operation and condition of the Project does not, and did not previously,
violate any Environmental Laws, (c) 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 the Project concerning Hazardous Materials or
Environmental Laws; and (d) no underground storage tanks exist on any part of
the Project.
SECTION 4.3 COVENANTS ON ENVIRONMENTAL MATTERS.
(a) Borrower shall (i) comply strictly and in all respects with applicable
Environmental Laws; (ii) notify Lender immediately upon Borrower's discovery of
any spill, discharge, release or presence of any Hazardous Material at, upon,
under, within, contiguous to or otherwise affecting the Project; (iii) promptly
remove such Hazardous Materials and remediate the Project in full compliance
with Environmental Laws or as reasonably required by Lender based upon the
recommendations and specifications of an independent environmental consultant
approved by Lender; and (iv) promptly forward to Lender copies of all orders,
notices, permits, applications or other communications and reports in
connection with any spill, discharge, 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 the Project or Borrower.
(b) Borrower shall not cause, 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 (i)
causing any spill, discharge or release, or the use, storage, generation,
manufacture, installation, or disposal, of any Hazardous Materials at, upon,
under, within or about the Project or the transportation of any Hazardous
Materials to or from the Project (except for cleaning and other products used
in connection with routine maintenance or repair of the Project in full
compliance with Environmental Laws), (ii) installing any underground storage
tanks at the Project, or (iii) conducting any activity that requires a permit
or other authorization under Environmental Laws.
(c) Borrower shall provide to Lender, at Borrower's expense promptly upon
the written request of Lender from time to time, a Site Assessment or, if
required by Lender, an update to any existing Site Assessment, to assess the
presence or absence of any Hazardous Materials and the potential costs in
connection with abatement, cleanup or removal of any Hazardous Materials found
on, under, at or within the Project. Borrower shall pay the cost of no more than
one such Site Assessment or update in any twelve (12)-month period, unless
Lender's request for a Site Assessment is based on information provided under
Section 4.3(a), a reasonable suspicion of Hazardous Materials at or near the
Project, a breach of representations under Section 4.2, or an Event of Default,
in which case any such Site Assessment or update shall be at Borrower's expense.
SECTION 4.4 ALLOCATION OF RISKS AND INDEMNITY. As between Borrower and
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 the Project, shall lie solely with
Borrower. 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 by Lender or by law. Borrower shall
indemnify, defend and hold Lender and its shareholders, directors, officers,
employees and agents harmless from and against all loss, liabilities, damages,
claims, costs and expenses (including reasonable costs of defense and
consultant fees, investigation and laboratory fees, court costs, and other
litigation
expenses) arising out of or associated, in any way, with (a) the non-compliance
with Environmental Laws, or (b) the existence of Hazardous Materials in, on, or
about the Project, (c) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to Hazardous
Materials; (d) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Materials, (e) 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, or (f) the imposition of any environmental lien
encumbering the Project; provided, however, Borrower shall not be liable under
such indemnification to the extent such loss, liability, damage, claim, cost or
expense results solely from Lender's gross negligence or willful misconduct.
Borrower's obligations under this Section 4.4 shall arise 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 the Project (by
foreclosure, deed in lieu of foreclosure or otherwise). Additionally, if any
Hazardous Materials affect or threaten to affect the Project, Lender may (but
shall not be obligated to) give such notices and take such actions as it deems
necessary or advisable at the expense of the Borrower in order to ▇▇▇▇▇ the
discharge of any Hazardous Materials or remove the Hazardous Materials. Any
amounts payable to Lender by reason of the application of this Section 4.4 shall
become immediately due and payable and shall bear interest at the Default Rate
from the date loss or damage is sustained by Lender until paid. The obligations
and liabilities of Borrower under this Section 4.4 shall survive any
termination, satisfaction, assignment entry of a judgment of foreclosure or
delivery of a deed in lieu of foreclosure.
SECTION 4.5 NO WAIVER. Notwithstanding any provision in this Article 4 or
elsewhere in the Loan Documents, or any rights or remedies granted by the
Environmental Indemnity Agreement or the Loan Documents, Lender does not waive
and expressly reserves all rights and benefits now or hereafter accruing to
Lender under the "security interest" or "secured creditor" exception under
applicable Environmental Laws, as the same may be amended. No action taken by
Lender pursuant to the Environmental Laws, as the same may be amended. No action
taken by Lender pursuant to the Environmental Indemnity Agreement or the 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. Borrower represents
and warrants to Lender with respect to leases of the Project that: (a) the rent
roll delivered to Lender is true and correct, and the leases are valid and in
full force and effect; (b) the leases (including amendments) are in writing, and
there are no oral agreements with respect thereto; (c) the copies of the leases
delivered to Lender are true and complete; (d) neither the landlord nor any
tenant is in default under any of the leases; (e) Borrower has no knowledge of
any notice of termination or default with respect to any lease; (f) Borrower has
not assigned or pledged any of the leases, the rents or any interest therein
except to Lender; (g) no tenant or other party has an option to purchase all or
any portion of the Project; (h) no tenant has the right to terminate its lease
prior to expiration of the stated term of such lease; (i) 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); and (j) all existing
leases are subordinate to the Mortgage either pursuant to their terms or a
recorded subordination agreement.
SECTION 5.2 STANDARD LEASE FORM; APPROVAL RIGHTS. All leases and other
rental arrangements shall in all respects be approved by Lender and shall be on
a standard lease form approved by Lender with no modifications (except as
approved by Lender, which approval will not be unreasonably withheld or
delayed). Such lease form shall provide that (a) the lease is subordinate to the
Mortgage, (b) the tenant shall attorn to Lender, and (c) that any cancellation,
surrender, or amendment of such lease without the prior written consent of
Lender shall be voidable by Lender. 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. Within ten (10) days after
Lender's request, Borrower shall furnish to Lender a statement of all tenant
security deposits, and copies of all leases not previously delivered to Lender,
certified by Borrower as being true and correct. Notwithstanding anything
contained in the Loan Documents, Lender's approval shall not be required for
future leases or lease extensions if the following conditions are satisfied: (i)
there exists no Potential Default or Event of Default; (ii) the lease is on the
standard lease form approved by Lender with no modifications; (iii) the lease
does not conflict with any restrictive covenant affecting the project or any
other lease for space in the Project; and (iv) the lease is in accordance with
leasing parameters approved by Lender regarding rent, term, size, and credit
rating of tenants. Lender may evaluate potential leases with respect to, among
other factors, overall tenant mix, compatibility of intended use with the
Project's market niche, cost of tenant improvements, and/or contingency, go dark
and lease termination rights. Leases that require the approval of Lender shall
be submitted to Lender at least thirty (30) days prior to the proposed execution
date. All costs and expenses incurred by Lender in its review and approval of
any lease shall be paid by Borrower promptly upon request.
SECTION 5.3 COVENANTS. Borrower (a) shall perform the obligations which
Borrower is required to perform under the leases; (b) shall enforce the
obligations to be performed by the tenants; (c) shall promptly furnish to 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; (d) shall
not collect any rents for more than one (1) month 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 month's rent; (e) shall not enter into any ground
lease or master lease of any part of the Project; (f) shall not further assign
or encumber any lease; (g) shall not, except with Lender's prior written
consent, cancel or accept surrender or termination of any lease; (h) shall not,
except with 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 the lease); and (i) with respect to retail property, shall
deposit with Lender any lease termination or cancellation fees which shall be
held in the Rollover Escrow Fund. Any action in violation of clauses (e), (f),
(g), and (h) of this Section 5.3 shall be void at the election of Lender.
Borrower represents, warrants and covenants to Lender that:
SECTION 5.4 TENANT ESTOPPELS. At Lender's request, Borrower shall obtain
and furnish to Lender, written estoppels in form and substance reasonably
satisfactory to Lender, executed by tenants under leases in the Project and
confirming the term, rent, and other provisions and matters relating to the
leases.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants to Lender that:
SECTION 6.1 ORGANIZATION, POWER AND AUTHORITY. Borrower and each Borrower
Party (a) is duly organized, validly existing and in good standing under the
laws of the state of its formation or existence, (b) is in compliance with all
legal requirements applicable to doing business in the State, and (c) has the
necessary governmental approvals to own and operate the Project and conduct the
business now conducted or to be conducted thereon. Borrower has the full power,
authority and right to execute, deliver and perform its obligations pursuant to
this
Loan Agreement and the other Loan Documents, and to mortgage the Project
pursuant to the terms of the Mortgage and to keep and observe all of the terms
of this
Loan Agreement and the other Loan Documents on Borrower's part to be
performed. Borrower is not a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code.
SECTION 6.2 VALIDITY OF LOAN DOCUMENTS. The execution, delivery and
performance by Borrower and each Borrower Party of the Loan Documents: (a) are
duly authorized and do not require the consent or approval of any other party or
governmental authority which has not been obtained; and (b) 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 Loan Documents. The 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.
(a) 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 the Project, Borrower or any
Borrower Party. Except as disclosed in such financial statements, 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 the Project,
Borrower or any Borrower Party which if adversely determined could have a
material adverse effect on such party, the Project or the Loan.
(b) 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. The Project 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 the Project, nor are there any contemplated
improvements to the Project 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 might adversely affect
the Project or the business, operations, or condition (financial or otherwise)
of Borrower or any Borrower Party. Neither Borrower nor the Borrower Party is
in violation of any agreement which violation would have an adverse effect on
the Project, Borrower, Borrower Party or Borrower's or any Borrower Party's
business, properties, or assets, operations or condition, financial or
otherwise.
SECTION 6.6 COMPLIANCE WITH LAW.
(a) Borrower and each Borrower Party have all requisite licenses,
permits, franchises, qualifications, certificates of occupancy or other
governmental authorizations to own, lease and operate the Project and carry on
its business, and the Project is in compliance with all applicable legal
requirements and is free of all structural defects, and all building systems
contained therein are in good working order, subject to ordinary wear and tear.
The Project does not constitute, in whole or in part, a legally non-conforming
use under applicable legal requirements;
(b) No condemnation has been commenced or, to Borrower's knowledge, is
contemplated with respect to all or any portion of the Project or for the
relocation of roadways providing access to the Project; and
(c) The Project has adequate rights of access to public ways and is
served by adequate water, sewer, sanitary sewer and storm drain facilities. All
public utilities necessary or convenient to the full use and enjoyment of the
Project are located in the public right-of-way abutting the Project, and all
such utilities are connected so as to serve the Project without passing over
the property, except to the extent such other property is subject to a
perpetual easement for such utility benefiting the Project. All roads
necessary for the full utilization of the Project for its current purpose have
been completed and dedicated to public use and accepted by all governmental
authorities.
SECTION 6.7 LOCATION OF BORROWER. Borrower's principal place of
business and chief executive offices are located at the address stated in
Section 11.1.
SECTION 6.8 ERISA.
(a) As of the date hereof and throughout the term of the Loan, (i)
Borrower is not and will not be an "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is subject to Title I of ERISA, and (ii) the assets of Borrower
do not and will not constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of the Loan (i)
Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(3) of ERISA and (ii) transactions by or with Borrower are not and
will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.
SECTION 6.9 FORFEITURE. There has not been and shall never be committed
by Borrower or any other person in occupancy of or involved with the operation
or use of the Project any act or omission affording the federal government or
any state or local government the right of forfeiture as against the Project or
any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture.
SECTION 6.10 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. Borrower and each Borrower
Party believe that their respective tax returns properly reflect the income and
taxes of Borrower and each Borrower Party, respectively, for the periods
covered thereby, subject only to reasonable adjustments required by the
Internal Revenue Service or other applicable tax authority upon audit.
SECTION 6.11 SOLVENCY. Giving effect to the Loan, the fair saleable
value of Borrower's assets exceeds and will, immediately following the making
of the Loan, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured, Borrower's assets do not and, immediately
following the making of the Loan will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.
Borrower does not intend to, and does not believe that it will, incur Debts and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such Debts as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower). Except as expressly disclosed to Lender
in writing, no petition in bankruptcy has been filed against Borrower or any
Borrower Party in the last seven (7) years, and neither Borrower or any
Borrower Party in the last seven (7) years has ever made an assignment for the
benefit of creditors or taken advantage of any insolvency act for the benefit
of debtors.
SECTION 6.12 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 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 Lender which adversely affects, nor as far as
Borrower can foresee, might adversely affect, the Project or the business,
operations or condition (financial or otherwise) of Borrower or any Borrower
Party.
SECTION 6.13 FLOOD ZONE. No portion of the improvements comprising the
Project is located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1994, as amended,
or any successor law, or, if located within any such area, Borrower has
obtained and will maintain the insurance prescribed in Section 3.1 hereof.
SECTION 6.14 SINGLE PURPOSE ENTITY/SEPARATENESS. Borrower represents,
warrants and covenants as follows:
(a) Borrower has not owned, does not own, and will not own any asset or
property other than (i) the Project, and (ii) incidental personal property
necessary for the ownership or operation of the Project.
(b) Borrower will not engage in any business other than the ownership,
management and operation of the Project and Borrower will conduct and operate
its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any
Affiliate of the Borrower, any constituent party of Borrower, or any Affiliate
of any constituent party, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available
on an arms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Debt other than (i)
the Loan, (ii) trade and operational debt incurred in the ordinary course of
business with trade creditors and in amounts as are normal and reasonable under
the circumstances, provided such debt is not evidenced by a note and is paid
when due, and (iii) Debt incurred in the financing of equipment and other
personal property used on the Project. No indebtedness other than the Loan may
be secured (subordinate or pari passu) by the Project.
(e) Borrower has not made and will not make any loans or advances to any
third party (including any affiliate or constituent party or any affiliate of
any constituent party), and shall not acquire obligations or securities of its
affiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts
and liabilities (including, as applicable, shared personnel and overhead
expenses) from its own funds and assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Borrower will not, nor will Borrower permit any constituent party to amend,
modify or otherwise change the partnership certificate, partnership agreement,
articles of incorporation and bylaws, operating agreement, trust or other
organizational documents of Borrower or such constituent party without the
prior written consent of Lender.
(h) Borrower will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates and any
constituent party and Borrower will file its own tax returns. Borrower shall
maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower, any constituent party of Borrower, or any
Affiliate of any constituent party), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself or any of its Affiliates as a division or part
of the other and shall maintain and utilize a separate telephone number, if
any, and separate stationery, invoices and checks.
(j) Borrower will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.
(k) Neither Borrower nor any constituent party will seek the dissolution,
winding up, liquidation, consolidation or merger in whole or in part, of the
Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower
with those of any Affiliate or constituent party, or any Affiliate of any
constituent party, or any other person.
(m) Borrower has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party, or any
Affiliate of any constituent party, or any other person.
(n) Borrower does not and will not hold itself out to be responsible for
the debts or obligations of any other person.
Section 6.15 YEAR 2000 COMPLIANCE. Borrower has made (or will make on a
timely basis) written inquiry of each of its key suppliers, vendors, and
customers as to whether such persons will, on a timely basis, be Year 2000
Compliant in all material respects and on the basis of such inquiry believes
that all such persons will be Year 2000 Compliant. For purposes hereon, "key
suppliers, vendors and customers" refers to those suppliers, vendors, and
customers of Borrower whose business failure would, with reasonable
probability, result in a material adverse change in the business, properties,
or condition (financial or otherwise) of Borrower. Borrower reasonably
anticipates that it will be Year 2000 Compliant on a timely basis. Borrower
shall permit Lender and its agents, representatives and employees, upon
reasonable prior notice to Borrower, to enter the Project and conduct
inspections relating to Year 2000 Compliance as Lender may require, from time
to time, while the Loan remains outstanding; however, to the extent Lender
engages third party consultants to conduct any testing of the building systems,
Lender shall require such consultants to conduct the tests at a time designed
to minimize disruption of the building's operations during normal business
hours.
Section 6.16 PROPERTY SPECIFIC REPRESENTATIONS. The management agreement
for the Project is in full force and effect and there is no default or
violation by any party thereunder.
ARTICLE 7
FINANCIAL REPORTING
Section 7.1 FINANCIAL STATEMENTS.
(a) MONTHLY REPORTS. During the first twelve (12) months of the term of
the Loan, Borrower shall furnish to Lender within fifteen (15) days after the
end of each calendar month, a 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.
(b) QUARTERLY REPORTS. Within forty-five (45) days after the end of each
calendar quarter, Borrower shall furnish to Lender 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.
(c) ANNUAL REPORTS. Within ninety (90) days after the end of each fiscal
year of Borrower's operation of the Project, Borrower shall furnish to 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 each of Borrower and the Project, and, if required by Lender,
prepared on a review basis and certified by an independent public accountant
reasonably satisfactory to Lender. Borrower's annual financial statements shall
include (i) a list of the tenants, if any, occupying more than twenty percent
(20%) of the total floor area of the Project, (ii) breakdown showing the year
in which each lease then in effect expires, and (iii) a breakdown of the
percentage of total floor area of the Project and the percentage of base rent
with respect to which leases shall expire in each year, each such percentage to
be expressed on both a per year and a cumulative basis.
(d) CERTIFICATION; SUPPORTING DOCUMENTATION. Each such financial
statement shall be in scope and detail reasonably satisfactory to Lender and
certified by the chief financial representative of Borrower.
SECTION 7.2 ACCOUNTING PRINCIPLES. All financial statements shall be
prepared in accordance with generally accepted accounting principles in the
United States of America in effect on the date so indicated and consistently
applied (or such other accounting basis reasonably acceptable for Lender).
SECTION 7.3 OTHER INFORMATION; ACCESS. Borrower shall deliver to Lender
such additional information regarding Borrower, its subsidiaries, its business,
any Borrower Party, and the Project within 30 days after Lender's request
therefor. Borrower shall permit Lender to examine such records, books and
papers of Borrower which reflect upon its financial condition and the income
and expenses of the Project.
SECTION 7.4 ANNUAL BUDGET. At least thirty (30) days prior to the
commencement of each fiscal year, Borrower will provide to Lender its proposed
annual operating and capital improvements budget for such fiscal year for
review and approval by Lender.
ARTICLE 8
COVENANTS
Borrower covenants and agrees with Lender as follows:
SECTION 8.1 DUE ON SALE AND ENCUMBRANCE; TRANSFERS OF INTERESTS.
Without the prior written consent of Lender, neither Borrower nor any other
Person having an ownership or beneficial interest in Borrower shall sell,
transfer, convey, mortgage, pledge, or assign any interest in the Project or
any part thereof or further encumber, alienate, ▇▇▇▇▇ ▇ ▇▇▇▇ or ▇▇▇▇▇ any other
interest in the Project or any part thereof, whether voluntarily or
involuntarily, in violation of the covenants and conditions set forth in the
Mortgage.
SECTION 8.2 TAXES; UTILITY CHARGES. Except to the extent sums
sufficient to pay all Taxes (defined herein) have been previously deposited
with Lender as part of the Tax and Insurance Escrow Fund and subject to
Borrower's right to contest in accordance with Section 11.8 hereof, 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 (the
"TAXES") that may become a Lien upon the Project or become payable during the
term of the Loan. Borrower's compliance with Section 3.4 of this Agreement
relating to impounds for Taxes shall, with respect to payment of such Taxes, be
deemed compliance with the Section 8.2. Borrower shall not suffer or permit the
joint assessment of the Project with any other real property constituting a
separate tax lot or with any other real or personal property. Borrower shall
promptly pay for all utility services provided to the Project.
SECTION 8.3 CONTROL; MANAGEMENT. There shall be no change in the
day-to-day control management of Borrower or Borrower's general partner or
managing member without the prior written consent of Lender. Borrower shall not
terminate, replace or appoint any manager or terminate or amend the management
agreement for the Project without Lender's prior written approval, which
approval shall not be unreasonably withheld. Any change in ownership or control
of the manager shall be cause for Lender to re-approve such manager and
management agreement. 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. The management fee payable under the management agreement shall not
exceed five percent (5%) of rental collections.
SECTION 8.4 OPERATION; MAINTENANCE; INSPECTION. Borrower shall observe
and comply with all legal requirements applicable to the ownership, use and
operation of the Project. Borrower shall maintain the Project in good condition
and promptly repair any damage or casualty. Borrower shall permit Lender and its
agents, representatives and employees, upon reasonable prior notice to Borrower,
to inspect the Project and conduct such environmental and engineering studies as
Lender may require, provided such inspections and studies do not materially
interfere with the use and operation of the Project.
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 Note or the Liens created or secured by the Loan Documents,
other than income, franchise and doing business taxes imposed on Lender. If
there shall be enacted any law (a) deducting the Loan from the value of the
Project for the purpose of taxation, (b) affecting any Lien on the Project, or
(c) 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 Lender, on demand, all taxes,
costs and charges for which 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, Lender may declare all
amounts owing under the Loan Documents to be immediately due and payable.
SECTION 8.6 LEGAL EXISTENCE; NAME, ETC. Borrower shall preserve and
keep in full force and effect its entity status, 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 Project. Neither Borrower nor any general partner or managing
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, or permit any
subsidiary or Affiliate of Borrower to do so. Borrower shall not change its
name, identity, or organizational structure, or the location of its chief
executive office or principal place of business unless Borrower (a) shall have
obtained the prior written consent of Lender to such change, and (b) shall have
taken all actions necessary or requested by Lender to file or amend any
financing statement or continuation statement to assure perfection and
continuation of perfection of security interests under the Loan Documents.
SECTION 8.7 FURTHER ASSURANCES. Borrower shall promptly (a) cure any
defects in the execution and delivery of the Loan Documents and the
Environmental Indemnity Agreement, and (b) execute and deliver, or cause to be
executed and delivered, all such other documents, agreements and instruments as
Lender may reasonably request to further evidence and more fully describe the
collateral for the Loan, to correct any omissions in the Loan Documents, to
perfect, protect or preserve any liens created under any of the Loan Documents
and the Environmental Indemnity Agreement, or to make any recordings, file any
notices, or obtain any consents, as may be necessary or appropriate in
connection therewith. Borrower grants Lender an irrevocable power of attorney
coupled with an interest for the purpose of exercising and perfecting any and
all rights and remedies available to Lender under the Loan Documents and the
Environmental Indemnity Agreement, at law and in equity, including without
limitation such rights and remedies available to Lender pursuant to this
Section 8.7.
SECTION 8.8 ESTOPPEL CERTIFICATES. Borrower, within ten (10) days
after request, shall furnish to 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 Lender reasonably may request.
SECTION 8.9 NOTICE OF CERTAIN EVENTS. Borrower shall promptly notify
Lender of (a) any Potential Default or Event of Default, together with a
detailed statement of the steps being taken to cure such Potential Default or
Event of Default; (b) any notice of default received by Borrower under other
obligations relating to the Project or otherwise material to Borrower's
business; and (c) any threatened or pending legal, judicial or regulatory
proceedings, including any dispute between Borrower and any governmental
authority, affecting Borrower or the Project.
SECTION 8.10 INDEMNIFICATION. Borrower shall protect, defend, indemnify
and save harmless Lender its shareholders, directors, officers, employees and
agents from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation
reasonable attorneys' fees and expenses), imposed upon or incurred by or
asserted against Lender by reason of (a) ownership of the Mortgage, the Project
or any interest therein or receipt of any rents; (b) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Project or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (c) any use, nonuse or
condition in, on or about the Project or any part thereof
or on the adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (d) performance of any labor or services or the
furnishing of any materials or other property in respect of the Project or any
part thereof; and (e) the failure of any Person to file timely with the
Internal Revenue Service an accurate Form ▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇ for Recipients of
Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may
be required in connection with this Agreement, or to supply a copy thereof in a
timely fashion to the recipient of the proceeds of the transaction in
connection with which this Agreement is made. Any amounts payable to Lender by
reason of the application of this section shall become immediately due and
payable and shall bear interest at the Default Rate from the date loss or
damage is sustained by Lender until paid.
SECTION 8.11 COOPERATION. Borrower acknowledges that Lender and its
successors and assigns may (a) sell this Agreement, the Mortgage, the Note, the
other Loan Documents, and the Environmental Indemnity Agreement, and any and all
servicing rights thereto to one or more investors as a whole loan, (b)
participate the Loan to one or more investors, (c) deposit this Agreement, the
Note, other Loan Documents, and the Environmental Indemnity Agreement with a
trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets, or (d) otherwise sell the Loan or interest therein
to investors (the transactions referred to in clauses (a) through (d) are
hereinafter each referred to as "SECONDARY MARKET TRANSACTION"). Borrower shall
cooperate with Lender in effecting any such Secondary Market Transaction and
shall cooperate to implement all requirements imposed by any Rating Agency
involved in any Secondary Market Transaction. Borrower shall provide such
information, legal opinions and documents relating to the Borrower, the Project
and any tenants of the Project as Lender may reasonably request in connection
with such Secondary Market Transaction at no third-party professional expense
unless otherwise required by the Loan Documents. In addition, Borrower shall
make available to Lender all information concerning its business and operations
that Lender may reasonably request. Lender shall be permitted to share all such
information with the investment banking firms, Rating Agencies, accounting
firms, law firms and other third-party advisory firms involved with the Loan and
the Loan Documents or the applicable Secondary Market Transaction. It is
understood that the information provided by Borrower to Lender may ultimately be
incorporated into the offering documents for the Secondary Market Transaction
and thus various investors may also see some or all of the information. Lender
and all of the aforesaid third-party advisors and professional firms shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Borrower indemnifies Lender as to any losses, claims, damages or liabilities
that arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such information or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated in such information or necessary in order to make the
statements in such information, or in light of the circumstances under which
they were made, not misleading.
SECTION 8.12 PAYMENT FOR LABOR AND MATERIALS. Subject to Borrower's
right to contest in accordance with Section 11.8 hereof, Borrower will promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Project and never permit
to exist beyond the due date thereof in respect of the Project or any part
thereof any Lien, even though inferior to the Liens hereof, and in any event
never permit to be created or exist in respect of the Project or any part
thereof any other or additional Lien other than the Liens hereof, except for
the Permitted Encumbrances (defined in the Mortgage).
SECTION 8.13 YEAR 2000 COMPLIANCE. Borrower shall cause the Project and
Borrower's operations to be Year 2000 Compliant prior to September 1, 1999 and
at all times thereafter while the Loan remains outstanding.
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 other amount due under the Loan
Documents within five (5) days of (and including) the date when due, or
Borrower's failure to pay the Loan at 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 Project, or any
interest therein, or of any interest in Borrower, in violation of the Mortgage.
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
Loan Documents (other than payments under Section 9.1, insurance requirements
under Section 9.2, transfers and encumbrances under Section 9.3, and the Events
of Default described in Sections 9.7 and 9.8 below), and the continuance of
such failure for ten (10) days after notice by Lender to Borrower; however,
subject to any shorter period for curing any failure by Borrower as specified
in any of the other Loan Documents, Borrower shall have an additional sixty
(60) days to cure such failure if (a) such failure does not involve the failure
to make payments on a monetary obligation; (b) such failure cannot reasonably
be cured within ten (10) days; (c) Borrower is diligently undertaking to cure
such default; and (d) Borrower has provided Lender with security reasonably
satisfactory to Lender against any interruption of payment or impairment of
collateral as a result of such continuing failure.
SECTION 9.5 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made in any Loan Document proves to be untrue in any material respect
when made or deemed made.
SECTION 9.6 OTHER ENCUMBRANCES. Any default under any document or
instrument, other than the Loan Documents, evidencing or creating a Lien on the
Project or any part thereof, no cured within any applicable grace or cure
period therein.
SECTION 9.7 INVOLUNTARY BANKRUPTCY OR OTHER PROCEEDING. Commencement
of an involuntary case or other proceeding against Borrower, any Borrower Party
or any other Person having an ownership or security interest in the Project
(each, a "BANKRUPTCY PARTY") which 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 ay of its property, and such involuntary case or other
proceeding shall remain undismissed or unstayed for a period of 60 days; or an
order for relief against a Bankruptcy Party shall be entered in any such case
under the Federal Bankruptcy Code.
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.
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, all amounts due under the
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 Loan
Documents shall become immediately due and payable at Lender's election, in
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, Lender may (a) 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, and (b) exercise all rights and remedies therefor under the Loan
Documents and at law or in equity.
SECTION 10.3 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 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 Lender may have because of such Event of Default,
Lender may (but shall not be obligated to) make sure payment or perform such
act for the account of and at the expense of Borrower, and shall have the right
to enter upon the Project for such purpose and to take all such action thereon
and with respect to the Project as it may deem necessary or appropriate. If
Lender shall elect to pay any sum due with reference to the Project, 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 Loan Documents, 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. Borrower shall indemnify 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 Lender pursuant to the provisions of this Section 10.3. All sums
paid by Lender pursuant to this Section 10.3, and all other sums expended by
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 Loan
Documents and shall be paid by Borrower to Lender upon demand.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 NOTICES. Any notice 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: Park Medical Associates General Partnership
c/▇ ▇▇▇▇▇▇▇▇ Company
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: General Electric Capital Corporation
c/o GE Capital Loan Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Manager/Access Program
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: General Electric Capital Corporation
16479 Dallas Parkway, Suite ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any communication so addressed and mailed shall be deemed to be given on the
earliest of (a) when actually delivered, (b) on the first Business Day after
deposit with an overnight air courier service, or (c) on the third Business Day
after deposit in the United States mail, postage prepaid, in each case to the
address of the intended addressee, and any communication so delivered in person
shall be deemed to be given when receipted for by, or actually received by
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. 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 Environmental Indemnity Agreement and the 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 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 Lender or
charged by 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 and the
laws of the United States of America), then, notwithstanding anything to the
contrary in the Loan Documents: (a) the aggregate of all considerations which
constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received under the Loan Documents shall under no
circumstances exceed the maximum amount of interest allowed by applicable law,
and any excess shall be credited on the Note by the holder thereof; and (b) if
maturity is accelerated by reason of an election by 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 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 canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on the
Note. The terms and provisions
of this Section 11.3 shall control and supersede every other provision of the
Loan Documents. The Loan Documents are contracts made under and shall be
construed in accordance with and governed by the laws of the State, except that
if at any time the laws of the United States of America permit Lender to
contract for, take, reserve, charge or receive a higher rate of interest than is
allowed by the laws of the State (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 Lender may contract for, take, reserve,
charge or receive under the Loan Documents.
SECTION 11.4 INVALID PROVISIONS. If any provision of any Loan Document or
the Environmental Indemnity Agreement is held to be illegal, invalid or
unenforceable, such provision shall be fully severable; the Environmental
Indemnity Agreement and the 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 Environmental
Indemnity Agreement and such 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 reasonable
expenses incurred by Lender in connection with the Loan, including reasonable
fees and expenses of Lender's attorneys, environmental, engineering and other
consultants, and fees, charges or taxes for the recording or filing of Loan
Documents. Borrower shall pay all expenses of 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 Lender
for all amounts expended, advanced or incurred by Lender to collect the Note, or
to enforce the rights of Lender under this Agreement, the Environmental
Indemnity Agreement, or any Loan Document, or to defend or assert the rights and
claims of Lender under the Environmental Indemnity Agreement or the Loan
Documents or with respect to the Project (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 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
Lender, all of which shall constitute part of the Loan and shall be secured by
the Loan Documents.
SECTION 11.6 APPROVALS: THIRD PARTIES; CONDITIONS. All approval rights
retained or exercised by Lender with respect to leases, contracts, plans,
studies and other matters are solely to facilitate Lender's credit underwriting,
and shall not be deemed or construed as a determination that 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 Lender and Borrower and may not be enforced, nor relied upon, by any Person
other than Lender and Borrower. All conditions of the obligations of Lender
hereunder, including the obligation to make advances, are imposed solely and
exclusively for the benefit of Lender, its successors and assigns, and no other
Person shall have standing to require satisfaction of such conditions or be
entitled to assume that 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 Lender at any time
in Lender's sole discretion.
SECTION 11.7 LENDER NOT IN CONTROL; NO PARTNERSHIP. None of the covenants
or other provisions contained in this Agreement shall, or shall be deemed to,
give Lender the right or power to exercise control over the affairs or
management of Borrower, the power of Lender being limited to the rights to
exercise the remedies referred to in the Environmental Indemnity Agreement or
the Loan Documents. The relationship between Borrower and Lender is, and at all
times shall remain, solely that of debtor and creditor. No covenant or provision
of the Environmental Indemnity Agreement or the 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 Lender and Borrower or to create
an equity in the Project in Lender. Lender neither undertakes nor assumes any
responsibility or duty to Borrower or to any other person with respect to the
Project or the Loan, except as expressly provided in the Environmental Indemnity
Agreement
and the Loan Documents; and notwithstanding any other provision of the
Environmental Indemnity Agreement or the Loan Documents: (a) 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 Lender does not intend to
ever assume such status; (b) Lender shall in no event be liable for any Debts,
expenses or losses incurred or sustained by Borrower; and (c) Lender shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Borrower or its stockholders, members, or partners. Lender and Borrower
disclaim any intention to create any partnership, joint venture, agency or
common interest in profits or income between Lender and Borrower, or to create
an equity in the Project in Lender, or any sharing of liabilities, losses, costs
or expenses.
SECTION 11.8 CONTEST OF CERTAIN CLAIMS. Borrower may contest the validity
of Taxes or any mechanic's or materialman's lien asserted against the Project so
long as (a) Borrower notifies Lender that it intends to contest such Taxes or
liens, as applicable, (b) Borrower provides Lender with an indemnity, bond or
other security reasonably satisfactory to Lender assuring the discharge of
Borrower's obligations for such Taxes or liens, as applicable, including
interest and penalties, (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 tenth (10th) day preceding the earlier to occur of the
Maturity Date or the date on which the Project is scheduled to be sold for
non-payment, (d) Borrower promptly upon final determination thereof pays the
amount of any such Taxes or liens, as applicable, together with all costs,
interest and penalties which may be payable in connection therewith, and (e)
notwithstanding the foregoing, Borrower shall immediately upon request of Lender
pay any such Taxes or liens, as applicable, notwithstanding such contest if, in
the opinion of Lender, the Project or any part thereof or interest therein may
be in danger of being sold, forfeited, foreclosed, terminated, canceled or lost.
Lender may pay over any cash deposit or part thereof to the claimant entitled
thereto at any time when, in the reasonable judgment of Lender, the entitlement
of such claimant is established.
SECTION 11.9 TIME OF THE ESSENCE. Time is of the essence with respect to
this Agreement.
SECTION 11.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Lender and Borrower and their respective successors
and assigns, provided that neither Borrower nor any other Borrower Party shall,
without the prior written consent of Lender, assign any rights, duties or
obligations hereunder.
SECTION 11.11 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of the
Environmental Indemnity Agreement and the 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.
SECTION 11.12 WAIVERS. No course of dealing on the part of Lender, its
officers, employees, consultants or agents, nor any failure or delay by Lender
with respect to exercising any right, power or privilege of Lender under the
Environmental Indemnity Agreement and any of the Loan Documents, shall operate
as a waiver thereof.
SECTION 11.13 CUMULATIVE RIGHTS: JOINT AND SEVERAL LIABILITY. Rights and
remedies of Lender under the Environmental Indemnity Agreement and the 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. If
more than one person or entity has executed this Agreement as "Borrower," the
obligations of all such persons or entities hereunder shall be joint and
several.
SECTION 11.14 SINGULAR AND PLURAL. Words used in this Agreement, the other
Loan Documents, and the Environmental Indemnity Agreement 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, the other
Loan Documents, and the Environmental Indemnity Agreement shall apply to such
words when used in the plural where the context so permits and vice versa.
SECTION 11.15 PHRASES. Except as otherwise expressly provided herein,
when used in this Agreement, the other Loan Documents, and the Environmental
Indemnity Agreement, the phrase "including" shall mean "including, but not
limited to," the phrase "satisfactory to Lender" shall mean "in form and
substance satisfactory to Lender in all respects," the phrase "with Lender's
consent" or "with Lender's approval" shall mean such consent or approval at
Lender's sole discretion, and the phrase "acceptable to Lender" shall mean
"acceptable to Lender at Lender's sole discretion."
SECTION 11.16 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 11.17 TITLE OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles or
headings to articles, sections, subsections or other divisions of this
Agreement, the other Loan Documents, and the Environmental Indemnity Agreement
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 11.18 PROMOTIONAL MATERIAL. Borrower authorizes Lender to issue
press releases, advertisements and other promotional materials in connection
with Lender's own promotional and marketing activities, including in connection
with a Secondary Market Transaction, and such materials may describe the Loan
in general terms or in detail and Lender's participation therein in the Loan.
All references to Lender contained in any press release, advertisement or
promotional material issued by Borrower shall be approved in writing by Lender
in advance of issuance.
SECTION 11.19 SURVIVAL. All of the representations, warranties,
covenants, and indemnities hereunder (including environmental matters under
Article 4), under the indemnification provisions of the other Loan Documents
and under the Environmental Indemnity Agreement, 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 the
Project to any party, whether or not an Affiliate of Borrower.
SECTION 11.20 WAIVER OF JURY TRIAL. To the maximum extent permitted by
law, Borrower and 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, any other Loan Document, or
the Environmental Indemnity Agreement, 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 Loan Documents and
the Environmental Indemnity Agreement or in any way relating to the Loan or the
Project (including, without limitation, 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 Lender to enter this Agreement.
SECTION 11.21 WAIVER OF PUNITIVE OR CONSEQUENTIAL DAMAGES. Neither 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 11.22 GOVERNING LAW. The Loan Documents and the Environmental
Indemnity Agreement shall be governed by and construed in accordance with the
laws of the State and the applicable laws of the United States of America.
SECTION 11.23 ENTIRE AGREEMENT. This Agreement, the other Loan Documents
and the Environmental Indemnity Agreement embody the entire agreement and
understanding between Lender and Borrower and supersede all prior agreements
and understandings between such parties relating to the subject matter hereof
and thereof. Accordingly, the Loan Documents and the Environmental Indemnity
Agreement 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. If any conflict or
inconsistency exists between the Commitment and this Agreement, any of the
other Loan Documents, or the Environmental Indemnity Agreement, the terms of
this Agreement, the other Loan Documents, and the Environmental Indemnity
Agreement shall control.
SECTION 11.24 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
shall constitute one document.
ARTICLE 12
LIMITATIONS ON LIABILITY
SECTION 12.1 LIMITATION ON LIABILITY. Except as provided below,
Borrower shall not be personally liable for amounts due under the Loan
Documents. Borrower shall be personally liable to Lender for any deficiency,
loss or damage suffered by Lender because of: (a) Borrower's commission of a
criminal act; (b) the failure to comply with provisions of the Loan Documents
prohibiting the sale, transfer or encumbrance of the Project, any other
collateral, or any direct or indirect ownership interest in Borrower; (c) the
misapplication by Borrower or any Borrower Party of any funds derived from the
Project, including security deposits, insurance proceeds and condemnation
awards in violation of this Agreement or any of the other Loan Documents; (d)
the fraud or misrepresentation by Borrower or any Borrower Party made in or in
connection with the Loan Documents or the Loan; (e) Borrower's collection of
rents more than one month in advance or entering into or modifying leases, or
receipt of monies by Borrower or any Borrower Party in connection with the
modification of any leases, in violation of this Agreement or any of the other
Loan Documents; (f) Borrower's failure to apply proceeds of rents or any other
payments in respect of the leases and other income of the Project or any other
collateral when received to the costs of maintenance and operation of the
Project and to the payment of taxes, lien claims, insurance premiums, Debt
Service, the Funds, and other amounts due under the Loan Documents to the
extent the Loan Documents require such proceeds to be then so applied; (g)
Borrower's interference with Lender's exercise of rights under the Assignment
of Leases and Rents; (h) Borrower's failure to maintain insurance as required
by this Agreement; (i) damage or destruction to the Project caused by the acts
or omissions of Borrower, its agents, employees, or contractors; (j) Borrower's
obligations with respect to environmental matters under Article 4;
(k) Borrower's failure to pay for any loss, liability or expense (including
reasonable attorneys' fees) incurred by Lender arising out of any claim or
allegation made by Borrower, its successors or assigns, or any creditor of
Borrower, that this Agreement or the transactions contemplated by the Loan
Documents and the Environmental Indemnity Agreement establishes a joint
venture, partnership or other similar arrangement between Borrower and Lender;
or (l) any brokerage commission or finder's fees claimed in connection with the
transactions contemplated by the Loan Documents. Nothing herein shall be deemed
to be a waiver of any right which Lender may have under Sections 506(a),
506(b), 111(b) or any other provision of the United States Bankruptcy Code, to
file a claim for the full amount due to Lender under the Loan Documents or to
require that all collateral shall continue to secure the amounts due under the
Loan Documents.
SECTION 12.1 LIMITATION ON LIABILITY OF LENDER'S OFFICERS, EMPLOYEES,
ETC. Any obligation or liability whatsoever of Lender which may arise any
time under this Agreement, any other Loan Document, or the Environmental
Indemnity Agreement shall be satisfied, if at all, out of the Lender's assets
only. No such obligation or liability shall be personally binding upon, nor
shall resort for the enforcement thereof be had to, the property of any of
Lender's shareholders, directors, officers, employees or agents, regardless
of whether such obligation or liability is in the nature of contract, tort or
otherwise.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrower has caused this Agreement to be executed
under seal by its duly authorized representatives as of the date first above
written.
LENDER: GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation
By:
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Authorized Signatory
BORROWER: PARK MEDICAL ASSOCIATES GENERAL PARTNERSHIP,
a North Carolina general partnership
By: P-51 ASSOCIATES,
a North Carolina general partnership,
Its: Managing General Partner
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Company, Inc.,
a North Carolina corporation,
Its: Managing General Partner
[SEAL]
ATTEST: By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇▇▇▇▇, Secretary
[Corporate Seal]
JOINDER
By executing this Joinder ("JOINDER"), the undersigned ("JOINDER PARTIES")
jointly and severally guaranty the performance by Borrower of all obligations
and liabilities for which Borrower is personally liable under Section 12.1
of this Agreement. This Joinder is a guaranty of full and complete payment and
performance and not of collectability.
1. WAIVERS. To the fullest extent permitted by applicable law, each
Joinder Party waives all rights and defenses of sureties, guarantors,
accommodation parties and/or co-makers and agrees that its obligations under
this Joinder shall be primary, absolute and unconditional, and that its
obligations under this Joinder shall be unaffected by any of such rights or
defenses, including:
(a) the unenforceability of any Loan Document against Borrower
and/or any other Joinder Party;
(b) any release or other action or inaction taken by Lender with
respect to the collateral, the Loan, Borrower and/or other Joinder Party,
whether or not the same may impair or destroy any subrogation rights of any
Joinder Party, or constitute a legal or equitable discharge of any surety or
indemnitor;
(c) the existence of any collateral or other security for the Loan,
and any requirement that Lender pursue any of such collateral or other
security, or pursue any remedies it may have against Borrower and/or any other
Joinder Party;
(d) any requirement that Lender provide notice to or obtain a
Joinder Party's consent to any modification, increase, extension or other
amendment of the Loan, including the guaranteed obligations;
(e) any right of subrogation (until payment in full of the Loan,
including the guaranteed obligations, and the expiration of any applicable
preference period and statute of limitations for fraudulent conveyance claims);
(f) any defense based on any statute of limitations;
(g) any payment by Borrower to Lender if such payment is held to be
a preference or fraudulent conveyance under bankruptcy laws or Lender is
otherwise required to refund such payment to Borrower or any other party; and
(h) any voluntary or involuntary bankruptcy, receivership,
insolvency, reorganization or similar proceeding affecting Borrower or any of
its assets.
2. AGREEMENTS. Each Joinder Party further represents, warrants and
agrees that:
(a) The obligations under this Joinder are enforceable against each
such party and are not subject to any defenses, offsets or counterclaims;
(b) The provisions of this Joinder are for the benefit of Lender and
its successors and assigns;
(c) Lender shall have the right to (i) renew, modify, extend or
accelerate the Loan, (ii) pursue some or all of its remedies against Borrower
or any Joinder Party, (iii) add, release or substitute any collateral for the
Loan or party obligated thereunder, and (iv) release Borrower or any Joinder
Party from liability, all without notice to or consent of any Joinder Party (or
other Joinder Party) and without affecting the obligations of any Joinder Party
(or other Joinder Party) hereunder;
(d) Each Joinder Party covenants and agrees to furnish to Lender, within
ninety (90) days after the end of each fiscal year of such Joinder Party, a
current (as of the end of such fiscal year) balance sheet of such Joinder
Party, in scope and detail reasonably satisfactory to Lender, certified by the
chief financial representative of such Joinder Party and, if required by
Lender, prepared on a review basis and certified by an independent public
accountant reasonably satisfactory to Lender; and
(e) To the maximum extend permitted by law, each Joinder Party hereby
knowingly, voluntarily and intentionally waives the right to a trial by jury in
respect of any litigation based hereon. This waiver is a material inducement to
Lender to enter into this Agreement.
This Joinder shall be governed by the laws of the Sate.
Executed as of August ___, 1999.
JOINDER PARTIES: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXHIBIT A
(LEGAL DESCRIPTION OF PROJECT)
EXHIBIT A
Those tracts of land located in Mecklenburg County, North Carolina, as more
particularly described as follows:
TRACT 1
To find the true point of BEGINNING, commence at N.C.G.S. control monument
"M098" azimuth ▇▇▇▇ (State Plane Coordinates: Northing 493,458.92, Easting
1,440,763.09) and run North 34-27-39 West 512.59 feet (ground distance) to a
new nail on the northerly line of the property leased to Mercy Hospital Holding
Company, Inc., as described in Deed Book 4760, Page 709 of the Mecklenburg
County Public Registry; said nail being the true point and place of BEGINNING;
and runs thence with the Mercy Hospital Holding Company, Inc. line North
72-36-32 West 369.10 feet to a new iron rod at the southeast corner of the
Mercy Equipment Corporation property as described in Deed Book 8410, Page 696
of said registry; thence with the easterly line of Mercy Equipment Corporation
property North 26-40-14 East 243.46 feet to an existing iron rod at the
southwest corner of ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇ as
recorded in Map Book 26, Page 331 of said Registry; thence with the southerly
line of Lot 6 the following two (2) courses and distances: 1) South 63-26-57
East 69.99 feet to an existing iron rod; 2) North 26-34-41 East 50.17 feet to
an existing iron rod at a corner of Lot 6; thence with a third line of Lot 6,
and continuing along the southerly line of ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ ▇▇▇.▇▇
feet to a new nail at the northwest corner of Lot 2A; thence with the westerly
line of ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇-▇▇-▇▇ West, passing a new nail at the southwesterly
corner of Lot 2A at 277.50 feet, for a total distance of 278.50 feet to the
point and place of BEGINNING; containing 93,343 square feet or 2.1429 acres of
land as shown on a survey prepared by ▇.▇. ▇▇▇▇▇ & Associates, P.A., dated April
14, 1999, last revised May 12, 1999, and bearing File No. W-2400.
TRACT 2
To find the true point of BEGINNING, commerce at N.C.G.S. control monument
"MO98" azimuth ▇▇▇▇ (State Plane Coordinates: Northing 493,458.92, Easting
1,440,763.09) and run North 34-27-39 West 512.59 feet (ground distance) to a new
nail on the northerly line of the property leased to Mercy Hospital Holding
Company, Inc. as described in Deed Book 4760, Page 709 of the Mecklenburg
County Public Registry, said nail being the southeasterly corner of Tract 1 as
described above, said nail also being the true point and place of BEGINNING;
and runs thence with the easterly line of Tract 1 as described above North
17-23-24 East 1.00 foot to a new nail at the southwest corner of ▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇ as recorded in the Map Book 26, Page 331
of said Registry; thence with the southerly line of Lot 2A and continuing along
the southerly line of Lot 2B, and with the southerly line of the Magnolia
Enterprises property as described in Deed Book 6951, Page 11 of said Registry,
South right-of-way); thence with the westerly margin of Park Road South
26-17-24 West 1.01 feet to a new iron rod at the northeasterly corner of the
property leased to Mercy Hospital Holding Company, Inc. as described in Deed
Book 4760, Page 709 of said Registry; thence with the northerly line of the
Mercy Hospital Holding Company, Inc. property North 72-36-32 West 479.98 feet
to the point and place of Beginning; containing 480 square feet of 0.0110 acres
of land as shown on a survey prepared by ▇.▇. ▇▇▇▇▇ & Associates, P.A. dated
April 14, 1999, last revised May 12, 1999, and bearing File Number W-2400.
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ EASEMENT
To find the true point of BEGINNING, commence at N.C.G.S. control monument
"MO98" azimuth ▇▇▇▇ (State Plane Coordinates: Northing 493,458.92, Easting
1,440,763.09) and run the following two (2) courses and distances: 1) North
34-27-39 West 512.59 feet (ground distance) to a new nail, said nail being on
the northerly line of the property leased to Mercy Hospital Holding Company,
Inc. as described in Deed Book 4760, Page 709 of the Mecklenburg County Public
Registry, said nail being the southeasterly corner of Tract 1 as described
above; 2) with the Mercy Holding Company, Inc. property North 72-36-32 West
13.80 feet to a point, the true point and place of BEGINNING; and runs thence
North 17-23-24 East 264.45 feet to a point; thence with the arc of a circular
curve to the right having a radius of 48.76 feet an arc length of 14.25 feet
(chord: North 25-45-48 East 14.20 feet) to a point; thence with the arc of a
circular curve to the right having a radius of 48.76 feet an arc length of
72.05 feet (chord: North 76-27-58 East 65.67 feet) to a point; thence with the
arc of a circular curve to the left having a radius of 222.59 feet an arc
length of 44.41 feet (chord: South 66-55-09 East 44.34 feet) to a point; thence
South 72-38-04 East 244.47 feet to a point; thence with the arc of a circular
curve to the left having a radius of 136.37 feet an arc length of 49.65 feet
(chord: South 83-03-56 East 49.38 feet) to a point; thence North 81-00-40 East
35.85 feet to a point; thence with the arc of a circular curve to the right
having a radius of 111.72 feet an arc length of 68.49 feet (chord: South
81-25-11 East 67.42 feet) to a point; thence South 63-51.20 East 38.20 feet to
a point; thence with the arc of a circular curve to the left having a radius of
39.20 feet an arc length of 14.72 feet (chord: South 74-36-40 East 14.63 feet)
to a point in the westerly margin of Park Road (60' public right-of-way);
thence with the westerly margin of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ 55.01 feet to
a point; thence with the arc of a circular curve to the left having a radius of
39.20 feet an arc length of 14.72 feet (chord: North 53-12-45 West 14.48 feet)
to a point; thence North 63-51-24 West 59.43 feet to a point; thence with the
arc of a circular curve to the left having a radius of 116.76 feet an arc
length of 60.77 feet (chord: North 78-45-33 West 60.09 feet) to a point; thence
with the arc of a circular curve to the right having a radius of 164.37 feet an
arc length of 60.38 feet (chord: North 83-09-25 West 60.04 feet) to a point;
thence North 72-38-04 West 244.47 feet to a point; thence with the arc of a
circular curve to the right having a radius of 250.59 feet an arc length of
50.00 feet (chord: North 66-55-09 West 49.92 feet) to a point; thence with the
arc of a circular curve to the left having a radius of 20.76 feet an arc length
of 36.74 feet (chord: South 68-05-37 West 32.13 feet) to a point; thence South
17.23.24 West 264.45 feet to a point; thence North 72-36-32 West 28.00 feet to
the point and a place of BEGINNING, as shown on a survey prepared by ▇.▇. ▇▇▇▇▇
& Associates, P.A. dated April 14, 1999, last revised May 12, 1999, bearing
File Number W-2400.
In connection with the conditions set forth in paragraph 1(e) above, Borrower
hereby appoints Lender as its agent and attorney-in-fact for the purpose of
using the Defeasance Deposit to purchase U.S. Obligations which provide payments
on or prior to, but as close as possible to, all successive scheduled payment
dates after the Release Date upon which interest and principal payments are
required under the Note (including the amounts due on the Maturity Date) and in
amounts equal to the scheduled payments due on such dates under the Note (the
"SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the Security Agreement
or other appropriate document, shall authorize and direct that the payments
received from the U.S. Obligations may be made directly to Lender and applied
to satisfy the obligations of Borrower under the Note.
2. Upon compliance with the requirements of this Schedule I, the Project
shall be released from the lien of the Mortgage and pledged U.S. Obligations
shall be the sole source of collateral securing the Note. Any portion of the
Defeasance Deposit in excess of the amount necessary to purchase the U.S.
Obligations required by the preceding paragraph and to otherwise satisfy the
Borrower's obligations under this Schedule I shall be remitted to Borrower with
the release of the Project from the lien of the Mortgage. In connection with
such release, Lender shall establish or designate a successor entity (the
"SUCCESSOR BORROWER") and Borrower shall transfer and assign all obligations,
rights and duties under and to the Note together with the pledged U.S.
Obligations to such Successor Borrower. The obligation of Lender to establish
or designate a Successor Borrower shall be retained by Lender notwithstanding
the sale or transfer of the Mortgage unless such obligation is specifically
assumed by the transferee. Such Successor Borrower shall assume the
obligations under the Note and the Security Agreement and Borrower shall be
relieved of its obligations thereunder. Borrower shall pay $1,000.00 to any
such Successor Borrower as consideration for assuming the obligations under the
Note and the Security Agreement. Notwithstanding anything in the Mortgage to
the contrary, no other assumption fee shall be payable upon a transfer of the
Note in accordance with this paragraph, but Borrower shall pay all costs and
expenses incurred by Lender, including Lender's reasonable attorneys' fees and
expenses, incurred in connection with this Schedule.
3. For purposes of this Schedule I, the following terms shall have the
following meanings:
(a) The term "DEFEASANCE DEPOSIT" shall mean an amount equal to the
remaining principal amount of the Note, the Yield Maintenance Amount, any
costs and expenses incurred or to be incurred in the purchase of U.S.
Obligations necessary to meet the Scheduled Defeasance Payments and any
revenue, documentary stamp or intangible taxes or any other tax or charge
due in connection with the transfer of the Note or otherwise required to
accomplish the agreements of this Schedule I.
(b) The term "YIELD MAINTENANCE AMOUNT" shall mean the amount (if
any) which, when added to the remaining principal amount of the Note, will
be sufficient to purchase U.S. Obligations providing the required Scheduled
Defeasance Payments; and
(c) The term "U.S. OBLIGATIONS" shall mean direct non-callable
obligations of the United States of America.