EXHIBIT 99.1
Loan Nos. 08-10805 and 08-10806
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AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT
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Dated as of March 27, 2009
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by and among
AMERICAN STRATEGIC INCOME PORTFOLIO INC. -III,
as Borrower
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
as Lender
and
BABSON CAPITAL MANAGEMENT LLC,
as Agent
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TABLE OF CONTENTS
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Section 1. Definitions and Accounting Matters ........................ 1
1.01 Certain Defined Terms ..................................... 1
1.02 Accounting Terms and Determinations ....................... 13
Section 2. Loans, Note and Repayments ................................ 14
2.01 Loans ..................................................... 14
2.02 Notes ..................................................... 14
2.03 Procedure for Borrowing under Revolving Loan .............. 15
2.04 Repayment of Loans; Interest .............................. 17
2.05 Mandatory Prepayments or Pledge ........................... 17
2.06 Prepayment Restrictions ................................... 19
2.07 LIBOR Rate Provisions ..................................... 20
2.08 Limitation on Interest .................................... 23
Section 3. Payments; Computations; Etc. .............................. 23
3.01 Payments .................................................. 23
3.02 Computations .............................................. 24
3.03 Fees ...................................................... 24
Section 4. Collateral Security ....................................... 25
4.01 Collateral; Security Interest ............................. 25
4.02 Further Documentation ..................................... 26
4.03 Changes in Locations, Name, etc. .......................... 26
4.04 Agent's Appointment as Attorney-in-Fact ................... 26
4.05 Performance by Agent of Borrower's Obligations ............ 28
4.06 Proceeds .................................................. 28
4.07 Remedies .................................................. 28
4.08 Limitation on Duties Regarding Preservation of
Collateral ................................................ 29
4.09 Powers Coupled with an Interest ........................... 29
4.10 Release of Security Interest .............................. 30
4.11 Additional and Substitute Mortgage Loans .................. 30
Section 5. Conditions Precedent ...................................... 31
TABLE OF CONTENTS
(continued)
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5.01 Term Loan and Initial Revolving Loan Advance .............. 31
5.02 All Loans ................................................. 33
Section 6. Representations and Warranties ............................ 34
6.01 Existence ................................................. 34
6.02 Financial Condition ....................................... 34
6.03 Litigation ................................................ 35
6.04 No Breach ................................................. 35
6.05 Action .................................................... 35
6.06 Approvals ................................................. 35
6.07 Margin Regulations ........................................ 35
6.08 Taxes ..................................................... 35
6.09 Registered Investment Company ............................. 35
6.10 Collateral; Collateral Security ........................... 36
6.11 Chief Executive Office/Jurisdiction of Organization ....... 36
6.12 Location of Books and Records ............................. 36
6.13 Regulatory Status ......................................... 37
6.14 True and Complete Disclosure .............................. 37
6.15 Financial Representations ................................. 37
6.16 ERISA ..................................................... 37
6.17 No Subsidiaries ........................................... 37
6.18 Legal Name ................................................ 38
Section 7. Covenants of Borrower ..................................... 38
7.01 Financial Statements ...................................... 38
7.02 Litigation ................................................ 39
7.03 Corporate Matters and Existence ........................... 39
7.04 Prohibition of Fundamental Changes ........................ 40
7.05 Borrowing Base Deficiency ................................. 40
7.06 Notices ................................................... 40
7.07 Transactions with Affiliates .............................. 41
7.08 Limitation on Liens ....................................... 41
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TABLE OF CONTENTS
(continued)
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7.09 Limitation on Distributions ............................... 41
7.10 Servicer; Servicing Tape .................................. 41
7.11 ERISA ..................................................... 41
7.12 Limitation on Subsidiary Formation ........................ 42
7.13 Underwriting Guidelines ................................... 42
7.14 Reports ................................................... 42
7.15 Remittance of Prepayments ................................. 42
7.16 No Adverse Selection ...................................... 42
7.17 Financial Covenants ....................................... 42
7.18 Transfers and Encumbrances ................................ 43
Section 8. Events of Default ......................................... 43
Section 9. Remedies Upon Default ..................................... 45
Section 10. No Duty of Agent and Lender ............................... 46
Section 11. Agent ..................................................... 46
11.01 Appointment ............................................... 46
11.02 Delegation of Duties ...................................... 47
11.03 Exculpatory Provisions .................................... 47
11.04 Reliance by Agent ......................................... 47
11.05 Notice of Default ......................................... 48
11.06 Non-Reliance on Agent and Other Lender .................... 48
11.07 Indemnification ........................................... 48
11.08 Agent in Its Individual Capacity .......................... 49
11.09 Successor Agent ........................................... 49
Section 12. Miscellaneous ............................................. 49
12.01 Waiver .................................................... 49
12.02 Notices ................................................... 49
12.03 Indemnification and Expenses .............................. 52
12.04 Amendments and Waivers .................................... 53
12.05 Successors and Assigns .................................... 53
12.06 Survival .................................................. 54
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TABLE OF CONTENTS
(continued)
PAGE
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12.07 Captions .................................................. 54
12.08 Counterparts .............................................. 54
12.09 Loan Agreement Constitutes Security Agreement; Governing
Law ....................................................... 54
12.10 SUBMISSION TO JURISDICTION ................................ 54
12.11 WAIVER OF JURY TRIAL ...................................... 55
12.12 Acknowledgments ........................................... 55
12.13 Hypothecation or Pledge of Loans .......................... 55
12.14 Servicing ................................................. 55
12.15 Periodic Due Diligence Review ............................. 57
12.16 Set-Off ................................................... 57
12.17 Intent .................................................... 57
12.18 Assignments and Participations ............................ 57
12.19 Treatment of Certain Information .......................... 58
12.20 Replacement by Repurchase Agreement ....................... 59
SCHEDULES
Schedule 1 Representations and Warranties re: Collateral
Schedule 2 Filing Jurisdictions and Offices
Schedule 3 Initial Advances
EXHIBITS
Exhibit A-1 Form of Term Promissory Note
Exhibit A-2 Form of Revolving Promissory Note
Exhibit B Form of Custodial Agreement
Exhibit C Form of Request for Borrowing
Exhibit D Form of Borrower's Release Letter
Exhibit E Form of Servicer Notice
Exhibit F Form of Assignment and Acceptance
Exhibit G Underwriting Guidelines
Exhibit H Form of Request for Release
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Loan Nos. 08-10805 and 08-10806
AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT
AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT dated as of March
27, 2009 (as amended, restated, supplemented or otherwise modified and in effect
from time to time, this "AGREEMENT"), by and among AMERICAN STRATEGIC INCOME
PORTFOLIO INC.-III, a Minnesota corporation ("BORROWER"), MASSACHUSETTS MUTUAL
LIFE INSURANCE COMPANY, a Massachusetts corporation (together with any successor
or assignee under an Assignment and Acceptance, "LENDER"), and BABSON CAPITAL
MANAGEMENT LLC, a Delaware limited liability company, as agent for Lender (in
such capacity, "AGENT").
RECITALS:
Borrower, Lender and Agent are parties to that certain Master Loan
Agreement dated as of July 10, 2009 (the "Original Agreement"), pursuant to
which Original Agreement Lender made a Term Loan (as defined below) to Borrower
and agreed from time to time to make Revolving Loans (as defined below) to
Borrower to finance certain Mortgage Loans (as defined below) owned by Borrower.
Borrower, Lender and Agent desire to amend and restate the Original
Agreement in its entirety in order to allow Borrower to finance Eligible
Securities (in addition to Eligible Mortgage Loans) with the Loans and to
include Eligible Securities in the Collateral, all on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, Borrower, Lender and Agent hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, the receipt and
sufficiency of which are hereby acknowledged, that the Original Agreement is
hereby amended and restated in its entirety to read as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall have
the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"ACCEPTED SERVICING PRACTICES" shall mean, with respect to the Mortgage
Loans, the obligation of Borrower and/or Servicer to service and administer the
Mortgage Loans (a) in accordance with the provisions of the applicable Mortgage
Loan Documents and any applicable laws, (b) with the same care, skill,
commercial reasonableness, prudence and diligence as is customary and usual in
its general mortgage loan servicing with respect to first mortgage loans
comparable to the Mortgage Loans that either (i) are part of other third party
portfolios (giving due consideration to customary and usual standards of
practice of prudent institutional commercial mortgage lenders servicing their
own loans), or (ii) are held as part of its own portfolio, to the extent this is
a higher standard, and (c) without regard to any relationship that Borrower or
Servicer or any Affiliate of either Borrower or Servicer may have with any
Mortgagor or an Affiliate of any Mortgagor.
"ADJUSTED RATE" means the Federal Funds Rate as such Federal Funds Rate may
change from time to time, plus the Rate Spread, however, in no event shall the
Adjusted Rate be less than Five Percent (5%) per annum.
"AFFILIATE" shall mean any Person that is Controlled by, in Control of or
under common Control with any other Person.
"AGENT" shall have the meaning provided in the introductory paragraph of
this Agreement.
"AGREEMENT" shall have the meaning provided in the introductory paragraph
above.
"ALLONGE" shall mean, for each Eligible Mortgage Loan and for each other
promissory note secured by a Mortgage, an allonge in form reasonably
satisfactory to Agent endorsing said promissory note to the order of Agent for
the benefit of the Lenders.
"APPLICABLE COLLATERAL PERCENTAGE" shall mean fifty percent (50%).
"APPLICABLE MARGIN" shall mean Two and Six Hundred Twenty-Five Thousands
Percent (2.625%).
"APPRAISED VALUE" shall mean, with respect to any Mortgaged Property at any
time, the value of such Mortgaged Property, as most recently determined by an
appraisal, reasonably acceptable to the Agent in form and substance, and
prepared by an appraiser holding the MAI designation that is reasonably
acceptable to the Agent, which appraised value shall be calculated using
methodology consistent with that set forth in the Underwriting Guidelines. Such
appraisers and appraisals shall satisfy the requirements of the Uniform
Standards of Professional Appraisal Practice (USPAP) as promulgated by the
Appraisal Foundation.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning set forth in Section
12.18(a).
"ASSIGNMENT OF COLLATERAL DOCUMENTS" shall mean, for each Eligible Mortgage
Loan, an assignment to Agent for the benefit of the Lenders of all documents
evidencing and securing said Eligible Mortgage Loan, which assignment shall be
in form reasonably satisfactory to Agent.
"BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, 11 U.S.C.
Section 101 et. seq., as amended from time to time.
"BORROWER" shall have the meaning provided in the introductory paragraph of
this Agreement.
"BORROWING BASE" shall mean the sum of: (a) the aggregate Collateral Value
of all Eligible Mortgage Loans held by the Custodian, on behalf of Agent and
Lender, (b) the aggregate Collateral Value of all Eligible Securities held by
the Custodian, on behalf of Agent and Lender, and (c) the amount of Cash
Collateral held by the Custodian, on behalf of Agent and Lender, under Section
4.12 of this Agreement.
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"BORROWING BASE DEFICIENCY" shall have the meaning provided in Section
2.05(a) hereof.
"BREAKAGE FEE" shall mean the fee resulting from the following calculation:
Breakage Fee = ((R-T) x P) x D
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360
Where:
1. R = Contract Rate on the Prepayment Date
2. T = Current Libor Rate
3. P = The outstanding principal amount of the Loan on the
Prepayment Date
4. D = Number of days remaining in the Interest Period
"BUSINESS DAY" shall mean any day other than (i) a Saturday or Sunday or
(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New
York or the Custodian is authorized or obligated by law or executive order to be
closed.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"CAPITAL STOCK" shall mean any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all similar ownership interests in a Person (other than a corporation) and
any and all warrants or options to purchase any of the foregoing.
"CASH COLLATERAL" shall mean all cash delivered to or held by the
Custodian, on behalf of Agent under this Agreement and the Custodial Agreement,
as security for the Loan, including all cash delivered by Borrower to Custodian,
as aforesaid, pursuant to Section 4.12 of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time. "Collateral" shall have the meaning provided in Section 4.01(b) hereof.
"COLLATERAL VALUE" shall mean: (A) with respect to each Eligible Mortgage
Loan, the Applicable Collateral Percentage of the lowest of the following three
(3) amounts: (i) the then current outstanding principal balance of the Mortgage
Loan in question, (ii) the original or stated outstanding principal amount of
the Mortgage Loan in question, and (iii) Net Asset Value of the
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Mortgage Loan in question, provided, that, the following additional limitations
on Collateral Value shall apply: Collateral Value may be redetermined by Agent
acting in good faith (which redetermination may result in a Collateral Value of
zero) with respect to each Mortgage Loan once per fiscal quarter and at any time
if (1) there is a breach of any representation or warranty set forth on Schedule
1 with respect to the Mortgage Loan in question, (2) there is a delinquency in
the payment of principal and/or interest which continues for a period in excess
of thirty (30) days (without regard to any applicable grace periods) with
respect to the Mortgage Loan in question, or (3) the Mortgage Loan Documents
with respect to the Mortgage Loan in question have been released from the
possession of the Custodian under the Custodial Agreement to Borrower, other
than as expressly permitted under Section 5(a) of the Custodial Agreement; and
(B) with respect to each Eligible Security, the Applicable Collateral Percentage
of the then current fair market value of the Eligible Security, as reasonably
determined by Agent acting in good faith.
"COLLECTIONS" shall mean, collectively, all collections and proceeds on or
in respect of the Mortgage Loans, excluding collections required to be paid to
the Servicer or a mortgagor on the Mortgage Loans.
"COMMITMENT FEE" shall mean one percent (1%) of the Maximum Credit.
"CONTRACT RATE" shall mean the interest rate per annum equal to the sum of
the LIBOR Rate and the Applicable Margin; however in no event shall the Contract
Rate be less than Five Percent (5.0%) per annum.
"CONTROL" shall mean, when used with respect to any specified Person, the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract,
relation to individuals or otherwise; and the terms "Controlling" or
"Controlled" have meanings correlative to the foregoing.
"CONVERSION COSTS" has the meaning assigned to such term in Section 2.07.
"COSTS" shall have the meaning provided in Section 12.03(a) hereof.
"CURRENT LIBOR RATE" means the LIBOR Rate determined as reported at 11:00
a.m. on the day that is two (2) London Banking Days prior to the Prepayment Date
for the period commencing with the Prepayment Date and extending through the end
of the Interest Period.
"CUSTODIAL AGREEMENT" shall mean the Amended and Restated Custodial
Agreement of even date herewith by and among Lender, Agent, Borrower and
Custodian, executed and delivered by a duly authorized officer of each of the
parties thereto, as the same may be amended, restated, supplemented, replaced or
otherwise modified and in effect from time to time.
"CUSTODIAN" shall mean U.S. Bank National Association, as custodian under
the Custodial Agreement, and its successors and permitted assigns thereunder.
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"DEBT SERVICE COVERAGE RATIO" or "DSCR" shall mean, for each Mortgage Loan,
the ratio of Net Underwritable Cash Flow to long and short-term borrowing
requirements over the trailing twelve (12) months based on the actual mortgage
coupon rate for fixed rate Mortgage Loans and at the then current floating
interest rate for floating interest rate Mortgage Loans or at such higher
floating interest rate as may be reasonably estimated by Agent, with the exact
components of such ratio determined by Agent in its sole, good faith judgment.
"DEFAULT" shall mean an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"DEFAULT RATE" shall mean a rate per annum equal to the sum of five percent
(5%) and the greater of the Contract Rate or the Federal Funds Rate; provided,
however, in no event shall the Default Rate exceed the maximum rate permitted by
law.
"DELIVERABLE" shall mean any material, document or information required to
be provided by one party to this Agreement to another and shall not include
written notices required under this Agreement.
"DOLLARS" and "$" shall mean lawful money of the United States of America.
"DUE DILIGENCE REVIEW" shall mean the performance by Agent of any or all of
the reviews permitted under Section 12.15 hereof with respect to any or all of
the Mortgage Loans, as desired by Agent from time to time.
"EFFECTIVE DATE" shall mean July 10, 2008.
"ELIGIBLE CMBS SECURITIES" shall mean, subject to the limitations and
requirements set forth in Section 2.05(b) of this Agreement, commercial mortgage
backed securities that: (a) are rated with the highest investment grade rating
issued by at least two of the following three rating agencies: (i) AAA by
Standard & Poor's, (ii) Aaa by ▇▇▇▇▇'▇ Investors Service, and (iii) AAA by Fitch
Ratings Ltd.; (b) are classified by Agent, in its sole but reasonable
discretion, as being, so-called, super-duper senior CMBS paper; and (c) have at
least twenty-seven percent (27%) credit enhancement at origination, all of the
foregoing as determined by Agent in its sole but reasonable discretion from time
to time and at any time during the term of the Loan.
"ELIGIBLE COMMERCIAL MORTGAGE LOAN" shall mean a Mortgage Loan secured by a
first mortgage lien on a retail, office, industrial, hotel or other commercial
property which was purchased by and is now owned by Borrower, as to which the
representations and warranties in Section 6.10 and Part I of Schedule 1 hereof
are correct.
"ELIGIBLE MORTGAGE LOANS" shall be the collective reference to Eligible
Commercial Mortgage Loans and Eligible Multifamily Mortgage Loans; provided
that, as of the related Funding Date or other applicable date under this
Agreement, (a) each Eligible Mortgage Loan shall, (i) be fully advanced and have
a remaining unpaid principal balance of at least One Million Dollars
($1,000,000) on the date of this Agreement or on the date said Eligible Mortgage
Loan is assigned to Agent as Collateral for the Loan, (ii) have a Debt Service
Coverage Ratio of no less than 1.20:1, (iii) have achieved a stabilized
operating performance, (iv) conform to traditional
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conduit quality securitization standards, (v) have been underwritten in
conformance with Borrower's Underwriting Guidelines as approved by Agent, (vi)
have an outstanding principal balance that is less than five percent (5%) of
Borrower's total assets and, subject to the terms of clause (c) below, is less
than eighty percent (80%) of the Appraised Value of the applicable Mortgaged
Property at the time of the closing of the Mortgage Loan, (vii) not be in
default and no event or condition shall exist that with notice to the borrower
under the Mortgage Loan and/or the passage of time would constitute a default or
an event of default under the Mortgage Loan, (viii) be evidenced by a promissory
note payable to the order of Borrower and secured by a Mortgage held by Borrower
and shall otherwise be evidenced and secured by Mortgage Loan Documents
containing terms and conditions satisfactory to Lender and Agent in their sole
discretion, (ix) be secured by a Mortgage that constitutes a first and only
financial lien on the Mortgaged Property, and (x) be evidenced and secured by
Mortgage Loan Documents substantially on the Standard Form Mortgage Loan
Documents that have been approved in writing by Lender, (b) as to all Eligible
Mortgage Loans, in no event shall any Mortgage Loan that would constitute a
security for purposes of any securities or blue sky laws be considered an
Eligible Mortgage Loan for purposes hereof, and (c) each Eligible Mortgage Loan
shall be evidenced by a single promissory note and if any Mortgage securing an
Eligible Mortgage Loan also secures any other promissory note from the
applicable Mortgagor, said additional note(s) shall also be assigned to Agent as
Collateral for the Loans but shall not be included in the amount of the Eligible
Mortgage Loan and shall not be included in the calculation of the Borrowing
Base. At any time when an Event of Default exists and once per fiscal quarter
and as a condition precedent to each Revolving Loan Advance, Agent may review
each Eligible Mortgage Loan to determine if it continues to satisfy the
conditions of clauses (a) and (b) above, and Agent may, in its reasonable
determination, conclude (which conclusion shall be dispositive, absent manifest
error) that any one or more of the then current Eligible Mortgage Loans is no
longer an Eligible Mortgage Loan for purposes of this Agreement.
"ELIGIBLE MULTIFAMILY MORTGAGE LOAN" shall mean a Mortgage Loan secured by
a first mortgage lien on a five-or-more family residential property, which was
purchased and is now owned by Borrower, as to which the representations and
warranties in Section 6.10 and Part I of Schedule I hereof are correct.
"ELIGIBLE REIT SECURITIES" shall mean, at all times when Real Estate
Investment Trust (REIT) preferred stock is a Pledged Security during the term of
the Loan and subject to the limitations and requirements set forth in Section
2.05(b) of this Agreement, REIT preferred stock that is rated "investment grade"
by at least two of the following three rating agencies: Standard & Poor's,
▇▇▇▇▇'▇ Investors Service, and Fitch Ratings Ltd. For purposes of this
definition, "investment grade" for each rating agency shall mean: (a) BBB- or
better for Standard & Poor's, (b) Baa3 or better for ▇▇▇▇▇'▇ Investors Service,
and (c) BBB- or better for Fitch Ratings Ltd.
"ELIGIBLE SECURITIES" shall mean Eligible CMBS Securities and Eligible REIT
Securities, as to which the representations and warranties in Section 6.10 and
Part I of Schedule 1 hereof are correct.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"ERISA AFFILIATE" shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which Borrower is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which Borrower is a
member.
"EVENT OF DEFAULT" shall have the meaning provided in Section 8 hereof.
"FEDERAL FUNDS RATE" means the rate published in The Wall Street Journal as
the average federal funds rate in the Money Rates section as of the applicable
date. If The Wall Street Journal is not in publication on the applicable date,
or ceases to publish such average rates, then any other publication acceptable
to Lender and Agent quoting daily market average federal funds rates will be
used.
"FOREIGN TAXES" has the meaning assigned to such term in Section 2.07.
"FUNDING DATE" shall mean the date on which a Revolving Loan Advance is
made hereunder.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States.
"GOVERNMENTAL AUTHORITY" has the meaning assigned to such term in Section
2.07.
"INCREASED COSTS" has the meaning assigned to such term in Section 2.07.
"INDEBTEDNESS" shall mean, for any Person: (a) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others secured by a Lien
on the Property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; (e) Capital Lease Obligations of such Person; (f) obligations of such
Person under repurchase agreements, sale/buy-back agreements or like
arrangements; (g) Indebtedness of others guaranteed by such Person; (h) all
obligations of such Person incurred in connection with the acquisition or
carrying of fixed assets by such Person; and (i) Indebtedness of general
partnerships of which such Person is a general partner.
"INDEMNIFIED PARTY" shall have the meaning provided in Section 12.03(a)
hereof.
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"INTEREST PERIOD" means the initial period commencing on and including the
Effective Date to and including the last day in the month in which the Effective
Date occurs, and (ii) thereafter, each one calendar month period to the Maturity
Date. Each Interest Period shall commence on the day following last day of the
next preceding Interest Period, and shall end on the day immediately prior to
the first Business Day of the next Interest Period, and, provided further that,
if any such Interest Period would otherwise end after the Maturity Date, such
Interest Period shall end on the Maturity Date.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, with respect to any or all
of the Mortgage Loans, any short sale of US Treasury Securities, futures
contract, mortgage related security, Eurodollar futures contract, options
related contract, interest rate swap, cap or collar agreement or similar
arrangement providing for protection against fluctuations in interest rates or
the exchange of nominal interest obligations, either generally or under specific
contingencies, entered into by Borrower and an Affiliate of Agent, and
acceptable to Lender.
"LEGAL FEES" has the meaning assigned to such term in Section 5.01.
"LENDER" shall have the meaning provided in the introductory paragraph of
this Agreement and shall include any future holder of a Note.
"LIBOR RATE" means the one (1) month London Interbank Offered Rate, as
reported by the British Bankers Association on Bloomberg (or such other
financial service acceptable to Lender as may be nominated by the British
Bankers Association as the information vendor for the purpose of displaying
British Bankers' Association interest settlement rates for U.S. Dollar deposits)
and except as expressly set forth herein, the LIBOR Rate shall be determined at
11:00 a.m. (London time) on the day that is two (2) London Banking Days prior to
the date that the applicable LIBOR Rate is to be effective pursuant to the terms
hereof (or the last day prior thereto on which Bloomberg is published, if it is
not published on the applicable London Banking Day).
"LIEN" shall mean any mortgage, lien, pledge, charge, security interest or
similar encumbrance.
"LITIGATION MATTERS" shall have the meaning provided in Section 7.02
hereof.
"LOAN" shall have the meaning provided in Section 2.01(a) hereof.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note and the
Custodial Agreement and any other agreement, document or instrument evidencing
or securing the Loan.
"LONDON BANKING DAY" means any day (i) on which commercial banks in the
City of London, England are open for dealings in U.S. dollar deposits in the
London Interbank Market, and (ii) which is a Business Day.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
Property, business, operations, financial condition or prospects of Borrower,
(b) the status of Borrower as a Registered Investment Company or its compliance
with the Investment Company Act of 1940,
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(c) the ability of Borrower to perform its obligations under any of the Loan
Documents to which it is a party, (d) the validity or enforceability of any of
the Loan Documents, (e) the rights and remedies of Agent or Lender under any of
the Loan Documents, (f) the timely payment of the principal of or interest on
the Loans or other amounts payable in connection therewith, or (g) the
Collateral as a whole. For purposes of this Agreement and the definition of
Material Adverse Effect, any change in the financial condition of Borrower that
is greater than either $7,500,000 or seven and one-half percent (7.5%) of the
Net Asset Value of Borrower (whichever is less) shall be deemed to have had a
Material Adverse Effect on Borrower's financial condition.
"MATURITY DATE" shall mean July 31, 2011, or such earlier date on which
this Agreement shall terminate and/or the Loans shall be accelerated by Agent or
Lender in accordance with the provisions hereof or by operation of law.
"MAXIMUM CREDIT" shall mean the sum of the Maximum Revolving Loan Credit
and the Maximum Term Loan Credit.
"MAXIMUM REVOLVING LOAN CREDIT" shall mean the lesser of $15,600,000.00 or
twenty-two percent (22%) of the sum of (a) the Net Asset Value of the Mortgage
Loans, and (b) the fair market value of the Pledged Securities.
"MAXIMUM TERM LOAN CREDIT" shall mean $54,400,000.00.
"MORTGAGE" shall mean the mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first Lien on the fee in real property
securing the Mortgage Note and with respect to Eligible Mortgage Loans, together
with the assignment of rents and leases related thereto.
"MORTGAGE FILE" shall have the meaning assigned thereto in the Custodial
Agreement.
"MORTGAGE LOAN" shall mean a mortgage loan which the Custodian has been
instructed to hold for Agent on behalf of Lender pursuant to the Custodial
Agreement, and which Mortgage Loan includes, without limitation, (i) a Mortgage
Note and related Mortgage and (ii) all right, title and interest of Borrower in
and to the Mortgaged Property covered by such Mortgage.
"MORTGAGE LOAN DATA FILE" shall mean a computer-readable file containing
information with respect to each Mortgage Loan, to be delivered by Borrower to
Agent pursuant to Section 2.03(a) hereof which tape fields are identified on
Annex I to the Custodial Agreement.
"MORTGAGE LOAN DOCUMENTS" shall mean, with respect to a Mortgage Loan, the
documents comprising the Mortgage File for such Mortgage Loan.
"MORTGAGE LOAN SCHEDULE" shall have the meaning assigned thereto in the
Custodial Agreement.
"MORTGAGE LOAN SCHEDULE AND EXCEPTION REPORT" shall mean the mortgage loan
schedule and exception report prepared by the Custodian pursuant to the
Custodial Agreement.
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"MORTGAGE NOTE" shall mean the original executed promissory note or other
evidence of the indebtedness of a mortgagor/borrower with respect to a Mortgage
Loan.
"MORTGAGED PROPERTY" shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other collateral securing repayment of the
debt evidenced by a Mortgage Note.
"MORTGAGOR" shall mean the obligor on a Mortgage Note.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by Borrower or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"NET ASSET VALUE" shall mean, as applicable either the individual or
aggregate "net asset value" of a Mortgage Loan or of all Mortgage Loans included
in the Collateral, as determined in accordance with applicable law and in
accordance with GAAP and in accordance with the whole loan valuation procedures
established by Borrower's Board of Directors.
"NET ASSETS" shall mean the "Net Assets Applicable to Outstanding Capital
Stock" as measured in the manner specified in Borrower's Statement of Assets and
Liabilities.
"NET OPERATING INCOME" shall mean, as determined in accordance with GAAP
and confirmed by Agent, the difference between Borrower's operating revenue (all
of gross rents, revenues and other income from the operation of Borrower's
business) and operating expenses (all ordinary and necessary operating expenses
applicable to Borrower's business, including, but not limited to, expenses for
utilities, administration, cleaning, landscaping, security, repairs and
maintenance, ground rent payments, if any, management fees, real estate and
other taxes and assessments and insurance premiums, but excluding from any such
expenses any deductions for federal, state and other income taxes, debt service,
depreciation or amortization of capital expenditures and other similar non-cash
items) for the relevant time period immediately preceding the date the
calculation is made. Borrower shall provide Agent with Borrower's proposed
calculation of Net Operating Income, certified by a Responsible Officer of
Borrower, together with all relevant supporting detail required to determine the
same. Agent shall then perform Agent's own independent calculation of Net
Operating Income, which shall be the definitive determination of Net Operating
Income, absent manifest error.
"NET UNDERWRITABLE CASH FLOW" shall mean the net operating income for a
Mortgaged Property (making certain assumptions regarding minimum vacancy levels,
pending lease expirations, the lesser of actual and "market" rental rates,
management fees and other factors) less structural reserves and reserves for
tenant improvements and leasing commissions (whether these three types of
reserves are actually impounded or not), as such components are determined by
Agent.
"1934 ACT" shall mean the Securities and Exchange Act of 1934, as amended.
"1940 ACT" shall have the meaning provided in Section 6.09 hereof.
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"NOTE" shall mean, collectively, the Term Note and the Revolving Note and
any promissory note delivered in substitution or exchange therefor, in each case
as the same shall be amended, supplemented or otherwise modified and in effect
from time to time.
"PAYMENT DATE" shall mean, with respect to each Loan, the first Business
Day of each calendar month, commencing with the first such date after the
related Funding Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
"PLAN" shall mean an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate and covered by Title IV of ERISA,
other than a Multiemployer Plan.
"PLEDGED SECURITY" shall mean a security, other than a Mortgage Loan, that
has been added to the Collateral in accordance with the terms of this Agreement
and that the Custodian has been instructed to hold for Agent on behalf of Lender
pursuant to the Custodial Agreement.
"PREDATORY LENDING PRACTICES" means any and all underwriting and lending
policies, procedures and practices defined or enumerated in any local or
municipal ordinance or regulation or any state or federal regulation or statute
prohibiting, limiting or otherwise relating to the protection of consumers from
such policies, procedures and practices. Such policies, practices and procedures
may include, without limitation, charging excessive loan, broker, and closing
fees, charging excessive rates of loan interest, making loans without regard to
a consumer's ability to re-pay the loan, refinancing loans with no material
benefit to the consumer, charging fees for services not actually performed,
discriminating against consumers on the basis of race, gender, or age, failing
to make proper disclosures to the consumer of the consumer's rights under
federal and state law, and any other predatory lending policy, practice or
procedure as defined by ordinance, regulation or statute.
"PREPAYMENT DATE" shall mean the date on which Borrower makes or is
required hereunder to make a prepayment under the Revolving Loan.
"PREPAYMENT FEE" shall mean an amount equal to (a) three percent (3%) of
the outstanding principal balance of the Term Loan if the Term Loan is prepaid
or accelerated prior to July 31, 2009, (b) two percent (2%) of the outstanding
principal balance of the Term Loan if the Term Loan is prepaid or accelerated
between August 1, 2009 and July 31, 2010, and (c) one percent (1%) of the
outstanding principal balance of the Term Loan if the Term Loan is prepaid or
accelerated between August 1, 2010 and April 30, 2011.
"PRESCRIBED LAWS" shall mean, collectively, (a) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (b)
Executive Order No. 13224 on Terrorist
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Financing, effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism, (c) the International Emergency Economic Power Act, 50 U.S.C. Section
1701 et. seq. and (d) all other Requirements of Law relating to money laundering
or terrorism.
"PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"RATE SPREAD" means the positive difference, if any, between (a) the
Contract Rate then in effect during the Interest Period in which the conversion
of the Contract Rate takes place and (b) the Federal Funds Rate on the day that
is two (2) Business Days prior to the first day of such Interest Period. The
Rate Spread shall be determined one time (i.e., shall not be adjusted during the
Loan Term).
"REGISTERED INVESTMENT COMPANY" shall mean an investment company registered
under the Investment Company Act of 1940, as amended from time to time.
"REGULATIONS T, U AND X" shall mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.
"REQUIREMENT OF LAW" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law (including, without limitation, Prescribed Laws), treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"RESPONSIBLE OFFICER" shall mean, as to any Person, the senior vice
president or vice president of such Person.
"REVOLVING LOAN" shall have the meaning provided in Section 2.01(a)
hereof.
"REVOLVING LOAN ADVANCE" shall mean an advance of principal from Lender to
Borrower under the Revolving Loan pursuant to Section 2.03 of this Agreement.
"REVOLVING NOTE" shall mean the Revolving Promissory Note evidencing the
Revolving Loan substantially in the form attached hereto as Exhibit A-2.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SECURED OBLIGATIONS" shall have the meaning provided in Section 4.01(c)
hereof.
"SERVICER" shall have the meaning provided in Section 12.14(c) hereof.
"SERVICER NOTICE AND AGREEMENT" shall have the meaning provided in Section
12.14(c) hereof.
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"SERVICING AGREEMENT" shall have the meaning provided in Section 12.14(c)
hereof.
"SERVICING RECORDS" shall have the meaning provided in Section 12.14(b)
hereof.
"STANDARD FORM MORTGAGE LOAN DOCUMENTS" shall mean Borrower's form Mortgage
Loan Documents that have been approved in writing by Agent, on behalf of Lender,
and that are used by Borrower to evidence and secure Mortgage Loans.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"TERM LOAN" shall have the meaning provided in Section 2.01(a) hereof.
"TERM NOTE" shall mean the Term Promissory Note evidencing the Term Loan
substantially in the form attached hereto as Exhibit A-1.
"TOTAL INDEBTEDNESS" shall mean, for any period, the aggregate Indebtedness
of Borrower during such period.
"TRANSACTIONS" shall have the meaning assigned thereto in Section 12.19.
"TRUST RECEIPT" shall have the meaning assigned thereto in the Custodial
Agreement.
"UNDERWRITING GUIDELINES" shall mean Borrower's underwriting guidelines for
Mortgage Loans attached as Exhibit G hereto.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as in
effect from time to time in the Commonwealth of Massachusetts; provided that if
by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest or the renewal or
enforcement thereof in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than Massachusetts, "Uniform Commercial
Code" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.
"UNUSED REVOLVING LOAN FEE" shall have the meaning assigned thereto in
Section 3.03(b).
1.02 Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and
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certificates and reports as to financial matters required to be delivered to
Agent hereunder shall be prepared, in accordance with GAAP.
Section 2. Loans, Note and Repayments.
2.01 Loans.
(a) Subject to the fulfillment of the conditions precedent set forth
in Sections 5.01 and 5.02 hereof, and provided that no Default shall have
occurred and be continuing hereunder, Lender severally agrees to make on the
terms and conditions of this Agreement (i) a term loan in the amount of the
Maximum Term Loan Credit evidenced by the Term Note (the "TERM LOAN"), and a
commercial revolving loan in an amount up to the Maximum Revolving Loan Credit
evidenced by the Revolving Note (the "REVOLVING LOAN"). The Term Loan and the
Revolving Loan are individually referred to as a "LOAN" and collectively
referred to as the "Loans". The Loans shall be made to Borrower in Dollars, from
and including the Effective Date to and including the Maturity Date in an
aggregate principal amount at any one time outstanding up to but not exceeding
the lesser of (i) the Maximum Credit and (ii) the Borrowing Base as in effect
from time to time.
(b) On or about the date of this Agreement, Lender has made and fully
advanced to Borrower, and Borrower hereby acknowledges receipt of, the principal
amount of the Term Loan in an amount equal to the Maximum Term Loan Credit. Once
all or any portion of the principal amount of the Term Loan is repaid at any
time by Borrower, said principal amount of the Term Loan may not be re-advanced
to or borrowed again by Borrower, and the Maximum Term Loan Credit shall
automatically be reduced by the amount of such repayment or prepayment of
principal under the Term Loan.
(c) Subject to the terms and conditions of this Agreement, Borrower
may (i) borrow then unadvanced principal amounts under the Revolving Loan, (ii)
repay the Revolving Loan, in full or in part, without penalty other than the
payment of any applicable Breakage Fee, and (iii) reborrow then unadvanced
principal amounts under the Revolving Loan; provided, that, notwithstanding the
foregoing, Lender shall not have any obligation to make Revolving Loan Advances
to Borrower in excess of the Maximum Revolving Loan Credit and, in the event the
obligation of Lender to make Revolving Loan Advances to Borrower is terminated
as permitted hereunder, Lender shall not have any further obligation to make
additional Revolving Loan Advances hereunder. In no event shall a Revolving Loan
Advance be made when any Default or Event of Default has occurred and is
continuing.
2.02 Notes.
(a) The Term Loan shall be evidenced by the Term Note and the
Revolving Loan shall be evidenced by the Revolving Note. Lender shall have the
right to have the Notes subdivided, by exchange for promissory notes of lesser
denominations or otherwise.
(b) The date, amount and interest rate of the Term Loan and of each
Revolving Loan Advance and each payment made on account of the principal
thereof, shall be recorded by Lender on its books and, prior to any transfer of
the Note, endorsed by Lender on the
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schedule attached to its Note or any continuation thereof; provided, that the
failure of Lender to make any such recordation or endorsement shall not affect
the obligations of Borrower to make a payment when due of any amount owing
hereunder or under the Note in respect of the Loans.
2.03 Procedure for Borrowing under Revolving Loan.
(a) Not more two (2) times in each calendar month prior to the
Maturity Date, and only so long as no Default or Event of Default exists,
Borrower may request a Revolving Loan Advance, on any Business Day during the
period from and including the Effective Date to and including the Maturity Date,
by delivering to Agent, with a copy to the Custodian, a written final request
for borrowing, substantially in the form of Exhibit C attached hereto, which
request must be received by Agent prior to 11:00 a.m., New York City time, at
least five (5) Business Days prior to the requested Funding Date if no new
Eligible Mortgage Loans are being pledged to Agent to be included in the
Borrower Base in connection with the requested Revolving Loan Advance.
Notwithstanding the foregoing requirement that Borrower deliver to Agent each
funding request at least five (5) Business Days prior to the Funding Date, Agent
and Lender shall endeavor to accommodate funding requests within three (3)
Business Days. If Borrower is pledging additional Eligible Mortgage Loans or
additional Eligible Securities to Agent to be included in the Borrowing Base in
connection with the requested Revolving Loan Advance, Borrower shall request the
Revolving Loan Advance and deliver to Agent the items required under Section
2.03(g) of this Agreement with respect to additional Eligible Mortgage Loans
being pledged and the items required under Section 2.03(h) of this Agreement
with respect to additional Eligible Securities being pledged, in each case at
least ten (10) Business Days prior to the requested Funding Date. All requests
for a Revolving Loan Advance shall (i) attach a schedule identifying the
Eligible Mortgage Loans and the Eligible Securities, if any, that Borrower
proposes to pledge to Agent, for the benefit of Lender, and which are to be
included in the Borrowing Base in connection with such Revolving Loan Advance,
(ii) specify the requested Funding Date, (iii) be accompanied by a Mortgage Loan
Data File containing information with respect to the Eligible Mortgage Loans, if
any, that Borrower proposes to pledge to Agent for the benefit of Lender and to
be included in the Borrowing Base in connection with such Revolving Loan
Advance, and (iv) attach an officer's certificate signed by a Responsible
Officer of Borrower as required by Section 5.02(b) hereof, which officer's
certificate shall include a certification that the Collateral Value of Mortgage
Loans plus the amount of all Cash Collateral equals at least eighty percent
(80%) of the then outstanding principal balance of the Loans, inclusive of the
pending Revolving Loan Advance. Borrower shall pay all reasonable costs and
expenses incurred by Agent and Lender in connection with each Revolving Loan
Advance. Agent's approval of Eligible Mortgage Loans that Borrower proposes to
pledge to Agent, for the benefit of Lender, and which are to be included in the
Borrowing Base in connection with a Revolving Loan Advance shall be governed by
the provisions of Section 4.11 of this Agreement.
(b) Upon Borrower's request for a Revolving Loan Advance pursuant to
Section 2.03(a), Lender shall, subject to the limitations set forth in Section
2.01(a) hereof and upon satisfaction of all conditions precedent set forth in
Sections 5.01 and 5.02 and provided no Default or Event of Default shall exist,
make the Revolving Loan Advance to Borrower on the requested Funding Date.
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(c) Borrower shall release to the Custodian no later than 12:00 p.m.,
New York City time, two (2) Business Days prior to the requested Funding Date,
(i) the Mortgage File pertaining to each Eligible Mortgage Loan, if any, and
(ii) the executed Custodial Identification Certificate (as defined in the
Custodial Agreement) identifying each Eligible Mortgage Loan and each Eligible
Security, if any, to be pledged to Agent, for the benefit of Lender, and
included in the Borrowing Base on such requested Funding Date, in accordance
with the terms and conditions of the Custodial Agreement, together with an
original executed Allonge for each promissory note evidencing said Eligible
Mortgage Loan and/or secured by the applicable Mortgage and an original executed
Assignment of Collateral Documents for said Eligible Mortgage Loan.
(d) Pursuant to the Custodial Agreement, the Custodian shall deliver
to Agent and Borrower, no later than 11:00 a.m., New York City time, on a
Funding Date, a Trust Receipt (as defined in the Custodial Agreement) in respect
of all Mortgage Loans and all Eligible Securities pledged to Agent, for the
benefit of Lender, on such Funding Date, and a Mortgage Loan Schedule and
Exception Report.
(e) Upon Borrower's request for a Revolving Loan Advance, Agent shall
promptly notify Lender thereof. Lender shall thereupon, upon satisfaction of all
conditions precedent set forth in Sections 5.01 and 5.02 hereof, make the
requested amount of such Revolving Loan Advance available to Agent for the
account of Borrower at the office of Agent specified in Section 12.02, on the
applicable Funding Date in funds immediately available to Agent.
(f) Subject to this Section 2.03 and Section 5 hereof, each Revolving
Loan Advance will be made available to Borrower by Lender transferring the
aggregate amount of such Revolving Loan Advance in funds immediately available
to Borrower, via wire transfer, to the following account of Borrower:
AMERICAN STRATEGIC INCOME PORTFOLIO INC.-III
ABA: ▇▇▇▇▇▇▇▇▇
U.S. BANK N.A.
BNF: U.S. BANK TRUST
A/C: 112950027
OBI: Attn: Settlements / Reverse Repo's
BBI: For further credit to account ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇
(g) With respect to any Eligible Mortgage Loan which has not
previously been pledged to Agent, for the benefit of Lender, that Borrower
proposes to include in the Borrowing Base in connection with a Revolving Loan
Advance, Borrower shall deliver to Agent on behalf of Lender not later than ten
(10) Business Days prior to the requested Funding Date the following items, each
of which shall be subject to the approval of Agent and Lender: (i) a Mortgage
Loan Data File which specifies the requested Funding Date and identifies the
Eligible Mortgage Loans to be pledged; (ii) Borrower's internal credit write-up;
(iii) third party appraisal; (iv) environmental site assessment report; (v) an
engineering and property condition report; and (vi) such other information as
reasonably requested by Lender or Agent.
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(h) With respect to any Eligible Security which has not previously
been pledged to Agent for the benefit of Lender that Borrower proposes to
include in the Borrowing Base in connection with a Revolving Loan Advance,
Borrower shall deliver to Agent on behalf of Lender not later than five (5)
Business Days prior to the requested Funding Date the following items which
shall be subject to the approval of Agent and Lender: (i) evidence of Borrower's
beneficial ownership of the applicable Eligible Security by virtue of having a
security entitlement with the Custodian with respect thereto and the then
current fair market value of the applicable Eligible Security; and (ii) such
other information as may be reasonably requested by Lender or Agent.
2.04 Repayment of Loans; Interest.
(a) Borrower hereby promises to repay in full in Dollars on the
Maturity Date, the aggregate principal amount of the Loans then outstanding.
(b) Borrower hereby promises to pay to Agent for the account of Lender
interest on the unpaid principal amount of each Loan for the period from and
including the date of such Loan to but excluding the date such Loan shall be
paid in full, at a rate per annum equal to the Contract Rate. Notwithstanding
the foregoing, at all times when an Event of Default exists, Borrower hereby
promises to pay to Agent for the account of Lender interest at the Default Rate
on the entire outstanding principal balance of the Loans and on any other amount
payable by Borrower hereunder or under the Note. Accrued interest on each Loan
shall be payable monthly in arrears on the first (1st) Business Day of each
month and on the Maturity Date; provided, that, Agent may, in its sole
discretion, require accrued interest to be paid simultaneously with any
prepayment of principal made by Borrower on account of any of the Loans
outstanding. Promptly after the determination of any interest rate provided for
herein or any change therein, Agent shall endeavor to give notice thereof to
Borrower.
(c) It is understood and agreed that, unless and until a Default shall
have occurred and be continuing, Borrower shall be entitled to the proceeds of
the Mortgage Loans and the Pledged Securities pledged to Agent, for the benefit
of Lender hereunder. At any time while a Default has occurred and is continuing,
upon notice from Agent, Borrower shall promptly deliver to Agent all proceeds of
the Mortgage Loans and the Pledged Securities pledged to Agent, for the benefit
of Lender hereunder.
2.05 Mandatory Prepayments or Pledge.
(a) If at any time the aggregate outstanding principal amount of Loans
exceeds the Borrowing Base (a "BORROWING BASE DEFICIENCY"), as determined by
Agent, Borrower shall no later than one (1) Business Day after written notice
from Agent to Borrower informing Borrower that a Borrowing Base Deficiency
exists and the amount of the Borrowing Base Deficiency, either prepay the
Revolving Loan in part or in whole or pledge additional Eligible Mortgage Loans
and/or additional Eligible Securities (which Collateral shall be in all respects
acceptable to Agent in its sole discretion) to Agent for the account of Lender,
or deliver to Agent, for the benefit of Lender, Cash Collateral in accordance
with the provisions of Section 4.12 of this Agreement, such that after giving
effect to such prepayment or pledge of additional
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Eligible Mortgage Loans or additional Cash Collateral a Borrowing Base
Deficiency shall no longer exist.
(b) Notwithstanding any provision to the contrary in any Loan
Document, at all times during the term of and prior to the repayment in full of
the Loans, Borrower covenants and agrees that the Collateral Value of all
Mortgage Loans plus the amount of all Cash Collateral shall equal at least
eighty percent (80%) of all sums owed by Borrower under the Loans. If at any
time the Collateral Value of all Mortgage Loans (as determined by Lender in its
sole but reasonable discretion at any time during the term of the Loan) plus the
amount of all Cash Collateral is less than eighty percent (80%) of all sums owed
by Borrower under the Loans, Borrower shall no later than one (1) Business Day
after written notice from Agent to Borrower informing Borrower of the breach of
the covenant set forth in this Section 2.05(b) either prepay the Revolving Loan
in part or in whole or pledge additional Eligible Mortgage Loans (which Eligible
Mortgage Loans shall be in all respects acceptable to Agent in its sole
discretion) to Agent for the account of Lender, or deliver to Agent, for the
benefit of Lender, Cash Collateral in accordance with the provisions of Section
4.12 of this Agreement, such that after giving effect to such prepayment or
pledge of additional Eligible Mortgage Loans or additional Cash Collateral, the
breach of Borrower's covenant set forth in this Section 2.05(b) shall no longer
exist.
(c) If at any time the aggregate outstanding principal amount of Loans
exceeds the Maximum Credit then in effect, Borrower shall at such time prepay
the Loans such that, after giving effect to such prepayment, the aggregate
outstanding principal amount of Loans shall not exceed the Maximum Credit then
in effect.
(d) At any time when a Mortgage Loan that is part of the Collateral is
repaid by the Mortgagor thereunder, (i) Agent shall deliver or cause the
Custodian to deliver to Borrower the applicable Mortgage Note and Mortgage Loan
Documents, together with the original unrecorded assignment of said Mortgage
Loan Documents from Borrower to Agent, and (ii) so long as no Default or Event
of Default exists and so long as the release of said Mortgage Loan from the
Collateral will not create (or cause the continued existence of) a Borrowing
Base Deficiency, Borrower may retain the amount repaid under the Mortgage Loan.
If a Mortgage Loan that is part of the Collateral is repaid by the Mortgagor
thereunder when a Default or an Event of Default exists, the entire amount
repaid shall be immediately paid to Agent, for the benefit of Lender, which
amount shall be applied by Lender to the repayment of the Loans and all amounts
payable by Borrower under the Loan Documents in such order and priority as
Lender may determine. If a Mortgage Loan that is part of the Collateral is
repaid by the Mortgagor thereunder and the release by Agent of said Mortgage
Loan from the Collateral will cause a Borrowing Base Deficiency, Borrower shall,
prior to or simultaneously with the release by Agent of said Mortgage Loan from
the Collateral, either (x) prepay the Revolving Loan in part or in whole, (y)
assign to Agent, for the benefit of Lender, additional Eligible Mortgage Loans
in accordance with the provisions of Section 4.11 of this Agreement, and/or (z)
deliver to Agent, for the benefit of Lender, Cash Collateral in accordance with
the provisions of Section 4.12 of this Agreement, such that after giving effect
to said prepayment or assignment of additional Eligible Mortgage Loans or
delivery of Cash Collateral, a Borrowing Base Deficiency no long exists.
Borrower acknowledges and agrees that prepayments of the Term Loan to cure a
Borrowing Base Deficiency shall not be permitted under this Agreement.
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2.06 Prepayment Restrictions.
(a) So long as no Default or Event of Default exists, the Term Loan
may be prepaid by Borrower in whole, but not in part, upon not less than thirty
(30) days prior written notice from Borrower to Agent and Lender, which notice
of prepayment shall be irrevocable. An express condition to Borrower's right to
prepay the Term Loan and to Lender's obligations to accept such prepayment is
the simultaneous payment by Borrower of the Prepayment Fee and the Breakage Fee,
each to the extent applicable. The Prepayment Fee shall be paid by Borrower in
connection with any prepayment of the Term Loan (including a prepayment required
by the acceleration of the Term Loan following the occurrence of an Event of
Default) made or required to be made on or prior to May 1, 2011. The Breakage
Fee shall be paid by Borrower in connection with any prepayment of the Term Loan
on a day other than the last day of an Interest Period.
(b) So long as no Default or Event of Default exists, the Revolving
Loan may be prepaid by Borrower in whole or in part at any time upon not less
than five (5) Business Days prior written notice from Borrower to Agent and
Lender, which notice of prepayment shall be irrevocable. An express condition to
Borrower's right to prepay the Revolving Loan and to Lender's obligation to
accept such prepayment (in whole or in part) is the simultaneous payment by
Borrower of the Breakage Fee, to the extent applicable. The Breakage Fee shall
be paid by Borrower in connection with any prepayment of the Revolving Loan (in
whole or in part) on a day other than the last day of an Interest Period.
(c) In addition to the Prepayment Fee and the Breakage Fee, Borrower
agrees to indemnify Lender (or, without duplication, a hedging counterparty
which has entered into a derivatives transaction with Lender to hedge Lender's
exposure to the Loans) and to hold Lender (or hedging counterparty) harmless
from any loss or expense which Lender (or hedging counterparty) incurs as a
consequence of any prepayment (whether optional or mandatory) of the Loans if
Borrower did not give the prior written notice of such prepayment required
pursuant to the terms of this Agreement or if Borrower breached the restrictions
of this Section 2.06, including, without limitation, such loss or expense
arising from interest or fees payable by Lender (or hedging counterparty) to
lenders of funds obtained by it in order to maintain the Loan hereunder. This
provision shall survive payment of the Note in full and the satisfaction of all
other obligations of Borrower under this Agreement and the other Loan Documents.
(d) So long as no Default or Event of Default exists, Borrower may
prepay, in part or in whole, the Revolving Loan and, after the outstanding
principal balance of the Revolving Loan shall have been reduced to zero, the
Term Loan, each in an amount sufficient to cause Borrower to comply with the
financial covenants set forth in Section 7.18 of this Agreement upon not less
than thirty (30) days' prior written notice from Borrower to Agent and Lender,
which notice of prepayment shall be irrevocable. An express condition to
Borrower's right to prepay the Term Loan or the Revolving Loan under this
Section and to Lender's obligations to accept such prepayment is the
simultaneous payment by Borrower of the Prepayment Fee (with respect to the Term
Loan) and the Breakage Fee (with respect to the Term Loan and the Revolving
Loan), each to the extent applicable. The Prepayment Fee shall be paid by
Borrower in connection with any prepayment of the Term Loan under this Section
made or required to be made on or prior to May 1, 2011. The Breakage Fee shall
be paid by Borrower in
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connection with any prepayment of the Term Loan or the Revolving Loan under this
Section on a day other than the last day of Interest Period. Partial prepayments
of the Term Loan and the Revolving Loan shall be permitted under this Section if
such prepayments are necessary for Borrower to satisfy any requirements
regarding Borrower's Indebtedness imposed upon Borrower under the Investment
Company Act of 1940. Any partial prepayment made by Borrower pursuant to the
immediately preceding sentence shall not be conditioned upon there being no
Default or Event of Default at the time of the partial prepayment, shall require
three (3) Business Days (as opposed to 30 days) prior written notice from
Borrower to Agent and Lender, and shall be accompanied by the simultaneous
payment by Borrower of the Prepayment Fee (with respect to the Term Loan) and
the Breakage Fee (with respect to the Term Loan and the Revolving Loan), each to
the extent applicable.
2.07 LIBOR Rate Provisions.
(a) If any requirement of law or any change therein, or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender in good faith to make or maintain the Loan bearing interest at a LIBOR
Rate, (i) the obligation of Lender hereunder to make the Loan bearing interest
at the LIBOR Rate (plus the Applicable Margin) shall be canceled forthwith and
(ii) the Contract Rate shall (notwithstanding anything provided in this
Agreement to the contrary) automatically convert to the Adjusted Rate commencing
on the first day of the next succeeding Interest Period or within such earlier
period as required by law. Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for any reasonable third party
costs incurred by Lender in making any conversion in accordance with this
Agreement, including without limitation, any interest or fees payable by Lender
to lenders of funds obtained by it in order to make or maintain the Loan. Upon
written demand from Borrower, Agent or Lender shall demonstrate in reasonable
detail the circumstances giving rise to Lender's determination and the
calculation substantiating the Adjusted Rate and any additional costs incurred
by Lender in making the conversion, which, upon written notice thereof from
Agent or Lender, as certified to Borrower, shall be conclusive absent manifest
error. In the event Lender shall determine in its good faith (which
determination shall be conclusive and binding upon Borrower) that the aforesaid
circumstances no longer exist, the Contract Rate shall be converted back to the
LIBOR Rate plus the Applicable Margin commencing on the first day of the
Interest Period which occurs at least three (3) days after such determination by
Lender.
(b) In the event that any change in any requirement of law or in the
interpretation or application thereof other than changes relating to income,
excise, franchise or other taxes applicable to Lender, or compliance in good
faith by Lender with any request or directive (whether or not having the force
of law) hereafter issued by any central bank or other Governmental Authority:
(i) shall hereafter impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds, by any
office of Lender which is not otherwise included in the determination of the
LIBOR Rate hereunder;
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(ii) shall hereafter have the effect of reducing the rate of
return on Lender's capital as a consequence of its obligations hereunder to a
level below that which Lender could have achieved but for such adoption, change
or compliance (taking into consideration Lender's policies with respect to
capital adequacy) by any amount deemed by Lender to be material; or
(iii) shall hereafter impose on Lender any other condition;
and the result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining loans or extensions of credit or to reduce any
amount receivable hereunder, then, in any such case, Borrower shall promptly pay
Lender, upon demand, any additional amounts necessary to compensate Lender for
such additional cost or reduced amount receivable as determined by Lender
(collectively, "INCREASED COSTS"). If Lender becomes entitled to claim any
Increased Costs pursuant to this Section, Lender shall provide Borrower with not
less than thirty (30) days' written notice specifying in reasonable detail the
event or circumstance by reason of which it has become so entitled and the
additional amount required to fully-compensate Lender for such Increased Costs.
A certificate as to any Increased Costs submitted by Agent or Lender to Borrower
shall be conclusive in the absence of manifest error. This provision shall
survive the repayment of the Loan and the satisfaction of all other obligations
of Borrower under the Loan Documents.
(c) Borrower shall indemnify Lender and to hold Lender harmless from,
and to be responsible for paying, any Conversion Costs. This provision shall
survive payment of the Loan in full and the satisfaction of all other
obligations of Borrower under the Loan Documents. As used herein "CONVERSION
COSTS" means any reasonable third party loss or expense which Lender sustains or
incurs as a consequence of (a) any default by Borrower in payment of the
principal of or interest on the Loan while bearing interest at the LIBOR Rate
(plus the Applicable Margin), including, without limitation, any such expense
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain the LIBOR Rate (plus the Applicable Margin), (b) any
prepayment (whether voluntary or mandatory) of the Loan on a day that (i) is not
on the last day of the Interest Period (including, without limitation, the
Prepayment Fee and the Breakage Fee, each to the extent applicable) or (ii) is
on the last day of the Interest Period if Borrower did not give the prior
written notice of such prepayment required pursuant to the terms of this
Agreement, including, without limitation, such expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the LIBOR Rate (plus the Applicable Margin) hereunder and (c) the conversion
(for any reason whatsoever, whether voluntary or involuntary) of the LIBOR Rate
(plus the Applicable Margin) to the Adjusted Rate with respect to any portion of
the outstanding principal amount of the Loan then bearing interest at the LIBOR
Rate (plus the Applicable Margin) on a date other than on the last day of the
Interest Period, including, without limitation, such expenses arising from
interest or fees payable or which would be payable by Lender to lenders of funds
obtained by it in order to maintain the LIBOR Rate hereunder.
(d) All payments made by Borrower under this Agreement and the other
Loan Documents shall be made free and clear of, and without reduction for or on
account of, Foreign Taxes, excluding, in the case of the Lender, taxes measured
by its income, and franchise taxes imposed on it. If any non-excluded Foreign
Taxes are required to be withheld from any amounts
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payable to Lender hereunder, the amounts so payable to Lender shall be increased
to the extent necessary to yield to Lender (after payment of all non-excluded
Foreign Taxes) interest or any such other amounts payable hereunder at the rate
or in the amounts specified hereunder. Whenever any non-excluded Foreign Tax is
payable pursuant to applicable law by Borrower, as promptly as possible
thereafter, Borrower shall send to Lender an original official receipt, if
available, or certified copy thereof showing payment of such non-excluded
Foreign Tax. Borrower hereby agrees to indemnify Lender for, and to be
responsible for the payment of, any incremental taxes, interest or penalties
that may become payable by Lender which may result from any failure by Borrower
to pay any such non-excluded Foreign Tax when due to the appropriate taxing
authority or any failure by Borrower to remit to Lender the required receipts or
other required documentary evidence. Lender's inability to notify Borrower of
any such Foreign Tax in accordance with the immediately preceding sentence shall
in no way relieve Borrower of its obligations under this Section. As used herein
"FOREIGN TAXES" means, collectively, income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions, reserves or withholdings imposed,
levied, collected, withheld or assessed by any Governmental Authority, which are
imposed, enacted or become effective after the date hereof. As used herein
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency, commission, office
or other authority of any nature whatsoever for any governmental ▇▇▇▇ (▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or otherwise) whether new or hereafter
in existence. Notwithstanding anything contained herein to the contrary, the
foregoing obligation to pay such additional amounts resulting from the payment
of Foreign Taxes shall not apply to any payment to Lender if Lender is, on the
date hereof (or on the date that it becomes a Lender hereunder), entitled to
submit either a Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY (relating to such Lender and
certifying its complete exemption from Foreign Taxes in respect of the Loan) and
does submit such Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY and such exemption remains in
effect throughout the term of the Loan with respect to Lender (other than by
reason of a change in law after the date of this Agreement).
(e) If Lender shall have determined that the adoption of or any change
in any Requirement of Law (other than with respect to any amendment made to
Lender's certificate of incorporation and by-laws or other organizational or
governing documents) regarding capital adequacy or in the interpretation or
application thereof or compliance by Lender or any corporation controlling
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any Governmental Authority made subsequent to the
date hereof shall have the effect of reducing the rate of return on Lender's or
such corporation's capital as a consequence of its obligations hereunder to a
level below that which Lender or such corporation would have achieved but for
such adoption, change or compliance (taking into consideration Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
Lender to be material, then from time to time, Borrower shall promptly pay to
Lender such additional amount or amounts as will compensate Lender for such
reduction.
(f) If Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify Borrower of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section submitted by Lender to Borrower shall
be conclusive in the absence of manifest error.
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2.08 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 consideration 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, without any Prepayment Fee, to the outstanding principal of the
Revolving Loan and then the Term Loan; and (b) if the Maturity Date is
accelerated by reason of an election by Lender in accordance with the terms
hereof, 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 thereof so that the actual rate of interest is uniform through the term
hereof. If such amortization, proration, allocation and spreading is not
permitted under applicable law, then such excess interest shall be cancelled
automatically on the Note as of the date of such acceleration or prepayment and,
if theretofore paid, shall be credited, without any Prepayment Fee, to the
outstanding principal of the Revolving Loan and then the Term Loan. The terms
and provisions of this Section 2.08 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
Commonwealth of Massachusetts as set forth in Section 12.09 hereof, 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 3. Payments; Computations; Etc..
3.01 Payments.
(a) All payments of principal, interest and other amounts to be made
by Borrower under this Agreement, the Note and any other Loan Document, shall be
made in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to Agent, for the benefit of Lender. All such payments that are
regularly scheduled monthly payments of interest and all other payments from
Borrower to Agent or Lender under this Agreement or any other Loan Document
shall be made by wire transfer of immediately available funds to the following
account of Agent or to any other account designated by Agent in writing to
Borrower:
Citibank, New York, New York
ABA: ▇▇▇▇▇▇▇▇▇
For Account Of: MASSMUTUAL COMMERCIAL MORTGAGE
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ELBX
Account: ▇▇▇▇▇▇▇▇
Reference: Loan Nos. 08-10805 and 08-10806
(b) If the due date of any payment under this Agreement or the Notes
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall accrue and be
payable for any principal so extended for the period of such extension.
(c) Each payment received by Lender hereunder, under the Notes or any
other Loan Document shall be applied in the following order:
(i) First, to the interest due on any advances made by Lender
or Agent under this Agreement or any other Loan Document;
(ii) Next, to the principal amount of any advances made by
Lender or Agent under this Agreement or any other Loan
Document;
(iii) Next, to late charges, attorneys' fees or any other amount
due hereunder or under any other Loan Document save for the
amounts described in clauses (iv), (v) and (vi) immediately
below;
(iv) Next, to any Prepayment Fee and any Breakage Fee then due
and payable under this Agreement;
(v) Next, to accrued interest due Lender under this Agreement
or any of the other Loan Documents; and
(vi) Next, to the principal balance of the of the Revolving
Loan;
(vii) Finally, to the principal balance of the Term Loan.
Notwithstanding the foregoing, during the continuance of an Event of Default or
in the event that Borrower does not pay the outstanding principal balance and
accrued interest due under this Agreement, when due, whether on the Maturity
Date or on any earlier date as a result of acceleration of the Loan, Agent and
Lender shall apply any payments Agent or Lender then receives in such order as
Agent and Lender deems appropriate in their sole discretion.
3.02 Computations. Interest on the Loans shall be computed on the basis of
a 360-day year for the actual number of days elapsed occurring in the period for
which payable.
3.03 Fees.
(a) Commitment Fee. On or before the Effective Date, Borrower shall
pay to Agent, for the account of Lender, the Commitment Fee.
(b) Unused Revolving Loan Fee. On the tenth (10th) day of each
calendar quarter prior to the Maturity Date (January 10, April 10, July 10 and
October 10) and on the
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Maturity Date, Borrower shall pay Lender a fee (the "UNUSED REVOLVING LOAN FEE")
in an amount equal to thirty-two (32) basis points (per quarter) multiplied by
the difference between the Maximum Revolving Loan Credit and the average daily
outstanding principal balance of the Revolving Loan for the immediately
preceding calendar quarter, as calculated by Agent. If applicable, the first and
last payment of the Unused Revolving Loan Fee shall be prorated if the period of
time between the Effective Date and the end of the then current calendar quarter
or the period of time between the end of the prior calendar quarter and the
Maturity Date is less than a full calendar quarter.
Section 4. Collateral Security.
4.01 Collateral; Security Interest.
(a) Pursuant to the Custodial Agreement, the Custodian shall hold the
Mortgage Loan Documents and the Pledged Securities as exclusive bailee, agent
and securities intermediary, within the meaning of Article 8 of the Uniform
Commercial Code, for the benefit of Agent on behalf of Lender pursuant to terms
of the Custodial Agreement and shall deliver Trust Receipts (as defined in the
Custodial Agreement) to Agent each to the effect, inter alia, that it has
reviewed such Mortgage Loan Documents in the manner and to the extent required
by the Custodial Agreement and identifying any deficiencies in such Mortgage
Loan Documents as so reviewed.
(b) All of Borrower's right, title and interest in, to and under each
of the following items of property, whether now owned or hereafter acquired, now
existing or hereafter created and wherever located, is hereinafter referred to
as the "COLLATERAL":
(i) all Mortgage Loans;
(ii) all Mortgage Loan Documents, including, without limitation,
all promissory notes and all Servicing Records, Servicing Agreements and any
other collateral pledged or otherwise relating to such Mortgage Loans, together
with all files, documents, instruments, surveys, certificates, correspondence,
appraisals, computer programs (subject to any restrictions on transfer under any
related licensing agreement), computer storage media, accounting records and
other books and records relating thereto, including electronic records;
(iii) all mortgage guaranties and insurance (issued by
governmental agencies or otherwise) and any mortgage insurance certificate or
other document evidencing such mortgage guaranties or insurance relating to any
Mortgage Loan and all claims and payments thereunder;
(iv) all other insurance policies and insurance proceeds relating
to any Mortgage Loan or the related Mortgaged Property;
(v) all Interest Rate Protection Agreements, relating to or
constituting any and all of the foregoing;
(vi) all Cash Collateral;
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(vii) all Pledged Securities;
(viii) all "general intangibles", "accounts", "instruments",
"investment property", "deposit accounts" and "chattel paper" as defined in the
Uniform Commercial Code relating to or constituting any and all of the
foregoing; and
(ix) any and all replacements, substitutions, distributions on or
proceeds of any and all of the foregoing.
(c) Borrower hereby assigns, pledges and grants a security interest in
all of its right, title and interest in, to and under the Collateral to Agent,
for the benefit of Lender, to secure the repayment of principal of and interest
on all Loans and all other amounts owing to Lender hereunder, under the Note and
under the other Loan Documents (collectively, the "SECURED OBLIGATIONS").
Borrower shall ▇▇▇▇ its computer records and files to evidence the interests
granted hereunder to Agent, for the benefit of Lender.
4.02 Further Documentation. At any time and from time to time, upon the
written request of Agent, and at the sole expense of Borrower, Borrower will
promptly and duly execute and deliver, or will promptly cause to be executed and
delivered, such further instruments and documents and take such further action
as Agent may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the Liens created hereby. Borrower also hereby authorizes Agent to
file any such financing or continuation statement without the signature of
Borrower to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.
4.03 Changes in Locations, Name, etc. Borrower shall not (i) change the
location of its chief executive office/chief place of business from that
specified in Section 6 hereof, (ii) change its name, identity or corporate
structure (or the equivalent) or change the location where it maintains its
records with respect to the Collateral or (iii) reincorporate or reorganize
under the laws of another jurisdiction unless it shall have given Agent at least
thirty (30) days prior written notice thereof and shall have delivered to Agent
all Uniform Commercial Code financing statements and amendments thereto as Agent
shall request and taken all other actions deemed necessary by Agent to continue
its perfected status in the Collateral with the same or better priority.
Borrower's federal tax identification number is ▇▇-▇▇▇▇▇▇▇ and its
organizational identification number is 7R-234. Borrower shall promptly notify
Agent of any change in any such tax identification number or organizational
identification number.
4.04 Agent's Appointment as Attorney-in-Fact.
(a) Borrower hereby irrevocably constitutes and appoints Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Borrower and in the name of Borrower or in its own name, from time
to time in Lender's discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute
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any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement; provided that Agent hereby agrees
that it shall not exercise its rights as attorney-in-fact unless an Event of
Default shall have occurred. Without limiting the generality of the foregoing,
Borrower hereby gives Agent the power and right, on behalf of Borrower, without
assent by, but with notice to, Borrower, if an Event of Default shall have
occurred and be continuing, to do the following:
(i) in the name of Borrower or its own name, or otherwise, to
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
mortgage insurance or with respect to any other Collateral and to file any claim
or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by Agent for the purpose of collecting any and all
such moneys due under any such mortgage insurance or with respect to any other
Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment under any
Collateral to make payment of any and all moneys due or to become due thereunder
directly to Agent or as Agent shall direct; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Collateral;
(C) to sign and endorse any invoices, assignments, verifications, notices and
other documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (E) to defend any suit,
action or proceeding brought against Borrower with respect to any Collateral;
(F) to settle, compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharges or
releases as Agent may deem appropriate; and (G) generally, to sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though Agent were the absolute owner
thereof for all purposes, and to do, at Agent's option and Borrower's expense,
at any time, and from time to time, all acts and things which Agent deems
necessary to protect, preserve or realize upon the Collateral and Agent's Liens
thereon and to effect the intent of this Agreement, all as fully and effectively
as Borrower might do.
Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) Borrower also authorizes Agent, at any time and from time to time,
to execute, in connection with any sale provided for in Section 4.07 or Section
9 hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral and to file any initial financing
statement, amendments thereto and continuation statements with or without the
signature of any Borrower as authorized by applicable law, as applicable to all
or any part of the Collateral.
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(c) The powers conferred on Agent are solely to protect Lender's
interests in the Collateral and shall not impose any duty upon Agent to exercise
any such powers. Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither Agent nor any
of its officers, directors, or employees shall be responsible to Borrower for
any act or failure to act hereunder, except for its own gross negligence or
willful misconduct.
4.05 Performance by Agent of Borrower's Obligations. If Borrower fails to
perform or comply with any of its covenants, agreements or obligations contained
in the Loan Documents (except with respect to the payment of any amounts,
whether in respect of any principal, interest or otherwise, owing to Lender
under this Agreement or any other Loan Document) and Agent itself performs or
complies, or otherwise causes performance or compliance, with such agreement,
the expenses of Agent incurred in connection with such performance or
compliance, together with interest thereon at the Default Rate, shall be payable
by Borrower to Agent on demand and shall constitute Secured Obligations.
4.06 Proceeds. If an Event of Default shall occur and be continuing, (a)
all proceeds of Collateral received by Borrower consisting of cash, checks and
other near-cash items shall be held by Borrower in trust for Agent, for the
benefit of Lender, segregated from other funds of Borrower, and shall forthwith
be turned over by Borrower to the Custodian, to be held in trust by the
Custodian for Agent, for the benefit of Lender, and, upon receipt by the
Custodian of written notice from Agent directing that Collateral proceeds in a
specified amount be turned over to Agent and confirming that the Collateral
proceeds so turned over will be applied promptly by Agent first to the payment
of Borrower's obligations under this Agreement and the other Loan Documents, the
Custodian shall turn over to Agent such specified Collateral proceeds in the
exact form received by the Custodian (duly endorsed by Borrower to Agent, if
required), (b) any and all such Collateral proceeds received by Agent shall,
promptly following Agent's receipt thereof, be applied to repayment in full (or
to the fullest extent possible) of all outstanding obligations of Borrower under
this Agreement and the other Loan Documents, and (c) Agent shall, upon
completion of the foregoing, confirm in writing to the Custodian the application
of such Collateral proceeds in accordance with the foregoing and the nature and
amount of all indebtedness repaid in whole or in part. For purposes hereof,
Collateral proceeds shall include, but not be limited to, all principal and
interest payments, all prepayments and payoffs, insurance claims, condemnation
awards, sale proceeds, real estate owned rents and any other income and all
other amounts received with respect to the Collateral.
4.07 Remedies. If an Event of Default shall occur and be continuing, Agent
may, at its option and at Borrower's expense, enter into one or more Interest
Rate Protection Agreements covering all or a portion of the Mortgage Loans
pledged to Agent, for the benefit of Lender hereunder, and Borrower shall be
responsible for all damages, judgments, costs and expenses of any kind which may
be imposed on, incurred by or asserted against Agent relating to or arising out
of such Interest Rate Protection Agreements; including, without limitation, any
losses resulting from such Interest Rate Protection Agreements. If an Event of
Default shall occur and be continuing, Agent may exercise, in addition to all
other rights and remedies granted to it in this Agreement and in any other Loan
Document, all rights and remedies of a secured party under the Uniform
Commercial Code. Without limiting the generality of the foregoing, Agent without
demand of performance or other demand, presentment, protest, advertisement or
notice
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of any kind (except any notice required by law referred to below) to or upon
Borrower or any other Person (each and all of which demands, presentments,
protests, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels or as an entirety at public or private sale or sales, at any
exchange, broker's board or office of Agent or elsewhere upon such terms and
conditions and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. Agent shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in Borrower, which
right or equity is hereby waived or released. Borrower further agrees, at
Agent's request, to assemble the Collateral and make it available to Agent at
places that Agent shall reasonably select, whether at Borrower's premises or
elsewhere. Agent shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of Agent hereunder, including without limitation reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Secured Obligations, in such order as Agent may elect, and only after such
application and after the payment by Agent of any other amount required or
permitted by any provision of law, including, without limitation, Sections
9-608(a) and 9-615(a) of the Uniform Commercial Code, and Agent shall account
for the surplus, if any, to Borrower. To the extent permitted by applicable law,
Borrower waives all claims, damages and demands it may acquire against Agent or
Lender arising out of the exercise by Agent or Lender of any of their respective
rights hereunder, other than those claims, damages and demands arising from the
gross negligence or willful misconduct of Agent or Lender. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale or other disposition. Borrower shall remain liable for any
deficiency (plus accrued interest thereon at the Default Rate) if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorneys employed by
Agent to collect such deficiency.
4.08 Limitation on Duties Regarding Preservation of Collateral. Agent's
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Uniform Commercial Code
or otherwise, shall be to deal with it in the same manner as Agent deals with
similar property for its own account. Neither Agent, Lender nor any of their
respective directors, officers or employees shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of Borrower or otherwise.
4.09 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
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4.10 Release of Security Interest. Upon termination of this Agreement and
repayment to Lender of all Secured Obligations and the performance of all
obligations under the Loan Documents, Agent shall release its security interest
in any remaining Collateral.
4.11 Additional and Substitute Mortgage Loans. So long as no Default or
Event of Default exists, Borrower may add an Eligible Mortgage Loan or Eligible
Mortgage Loans to the Mortgage Loans constituting the Collateral upon
satisfaction of each of the following conditions, as determined by Agent and
Lender in their sole discretion:
(a) At least ten (10) Business Days prior to the date Borrower
proposes to add an Eligible Mortgage Loan to the Collateral, Borrower shall
deliver to Agent the Mortgage Loan Documents, the Mortgage File and the Mortgage
Data File for said Mortgage Loan; an appraisal of the Mortgaged Property, an
environmental site assessment for the Mortgaged Property, an engineering or
property condition report for the buildings, improvements and building systems
on the Mortgaged Property, an ALTA survey of the Mortgaged Property, a title
insurance policy insuring the Mortgage (or a marked up title insurance
commitment or pro-forma title insurance policy, so long as the title insurance
coverage reflected thereon is in full force and effect), financial statements
for the Mortgagor and the Mortgaged Property, insurance certificates and all
other information, documents and material relating to the Mortgagor or the
Mortgaged Property as Agent or Lender may reasonably request.
(b) The Mortgage Loan shall comply with the Underwriting Guidelines;
(c) Borrower shall pay an underwriting fee to Agent in the amount of
$2,500.00 for each Eligible Mortgage Loan for which Borrower seeks Agent's
approval as a Mortgage Loan to be included in the Collateral; which fee shall be
due and payable by Borrower simultaneously with Borrower's delivery to Agent of
the items set forth in Section 4.11(a) above and shall be non-refundable
regardless of whether Agent approves the proposed Mortgage Loan; and
(d) Borrower shall pay all reasonable out of pocket expenses incurred
by Agent or Lender in connection with Borrower's request for approval of the
proposed Mortgage Loan, including but not limited to the reasonable fees and
expenses of counsel to Agent and Lender.
Borrower may add an Eligible Mortgage Loan or Eligible Mortgage Loans to the
Mortgage Loans constituting the Collateral in order to increase the Borrowing
Base, to satisfy the covenant by Borrower set forth in Section 2.05(b) of this
Agreement, or to replace a Mortgage Loan that has been repaid or to replace a
Mortgage Loan that no longer constitutes an Eligible Mortgage Loan.
4.12 Cash Collateral. Upon Borrower's request for Agent to release a
Mortgage Loan pursuant to Section 2.05(c) of this Agreement, if the release of
said Mortgage Loan will, in Agent's determination, cause a Borrowing Base
Deficiency, or at any other time when a Borrowing Base Deficiency exists or when
a breach of the covenant by Borrower set forth in Section 2.05(b) of this
Agreement exists, Borrower may elect to cure or eliminate the Borrowing Base
Deficiency and/or the breach of Section 2.05(b) by delivering to the Custodian,
on behalf of
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Agent under this Agreement and the Custodial Agreement, Cash Collateral in an
amount determined by Agent to be sufficient to cure or eliminate the Borrowing
Base Deficiency and/or the breach of Section 2.05(b). All Cash Collateral shall
be held by Custodian for the benefit of Agent and Lender and, Agent shall have a
perfected security interest therein. All Cash Collateral shall be added to and
deemed to be a part of the Borrowing Base in accordance with the formula set
forth in the definition of Borrowing Base.
4.13 Pledged Securities. In addition to Mortgage Loans and Cash Collateral,
but subject to the limitations established by Borrower's covenant set forth in
Section 2.05(b) of this Agreement, Borrower may pledge to Agent, for the benefit
of Lender, Eligible Securities as Collateral upon satisfaction of each of the
following conditions, as determined by Agent and Lender in their sole
discretion:
(a) At least ten (10) Business Days prior to the date Borrower
proposes to add an Eligible Security to the Collateral, Borrower shall deliver
to Agent evidence of Borrower's beneficial ownership of the applicable Eligible
Security by virtue of Borrower having a security entitlement with the Custodian
with respect thereto and the then current fair market value of the applicable
Eligible Security and such other information as may be reasonably requested by
Lender or Agent;
(b) Borrower shall pay all reasonable out of pocket expense incurred
by Agent or Lender in connection with Borrower's request for approval of the
proposed Eligible Securities, including but not limited to the reasonable fees
and expenses of counsel to Agent and Lender; and
(c) The Pledged Securities shall continue to be Eligible Securities
only so long as the Pledged Securities satisfy the requirements of Eligible
Securities, as determined by Lender in its sole but reasonable discretion from
time to time during the term of the Loan, and the value of Pledged Securities
shall be determined by Lender from time to time during the term of the Loan in
its sole but reasonable discretion.
Borrower may add Eligible Securities to the Collateral in order to increase the
Borrowing Base or to replace a Mortgage Loan that has been repaid or to replace
a Mortgage Loan that no longer constitutes an Eligible Mortgage Loan.
Section 5. Conditions Precedent.
5.01 Term Loan and Initial Revolving Loan Advance. The obligation of Lender
to make the Term Loan and the initial Revolving Loan Advance being advanced to
Borrower on or about the date of this Agreement is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loans, of the
condition precedent that Agent shall have received all of the following items,
each of which shall be satisfactory to Agent and Lender in form and substance:
(a) Loan Documents.
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(i) Loan Agreement. This Agreement, executed and delivered by a
duly authorized officer of Borrower;
(ii) Notes. The Term Note and the Revolving Note, each executed
and delivered by a duly authorized officer of Borrower; and
(iii) Custodial Agreement. The Custodial Agreement, substantially
in the form of Exhibit B hereto, executed and delivered by a duly authorized
officer of Borrower and the Custodian;
(b) Organizational Documents. A good standing certificate and
certified copies of the charter and by-laws (or equivalent documents) of
Borrower and originals or certified copies of all authorizing resolutions or
consents necessary to consummate the transactions contemplated by this
Agreement, together with an incumbency certificate, all confirming the officers
of Borrower having authority to execute and deliver the Loan Documents and each
other document to be delivered by Borrower from time to time in connection
herewith (and Lender may conclusively rely on such certificate until it receives
notice in writing from Borrower to the contrary);
(c) Legal Opinion. A legal opinion (or opinions) of counsel to
Borrower, in form and substance acceptable to Agent in its sole discretion;
(d) Trust Receipt, Mortgage Loan Schedule and Exception Report and
Pledged Securities Report. A Trust Receipt, substantially in the form of Annex 2
of the Custodial Agreement, dated the Effective Date, from the Custodian, duly
completed, with a Mortgage Loan Schedule and Exception Report attached thereto
and, if applicable, a Pledged Securities Report;
(e) Servicing Agreement(s). Any Servicing Agreement, certified as a
true, correct and complete copy of the original, together with the respective
Servicer Notice;
(f) Underwriting Guidelines. A certified copy of the Underwriting
Guidelines, which shall be in form and substance satisfactory to Agent;
(g) Consents, Licenses, Approvals, etc. Copies certified by Borrower
of all consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by Borrower of, and the validity and
enforceability of the Mortgage Loan Documents and the Loan Documents, which
consents, licenses and approvals shall be in full force and effect; and
(h) Other Documents. Such other documents as Agent or Lender may
reasonably request.
In addition, it shall be a further condition precedent to the funding of
the Term Loan and the initial Revolving Loan Advance that Agent shall have
received from Borrower full and final payment of the Commitment Fee and all
fees, disbursements, and expenses of Agent's counsel incurred in connection with
the consummation of this Loan facility (the "LEGAL FEES"), on or
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before the date hereof, by wire transfer to Agent's account. However, if the
initial Funding Date is the same date as the date hereof, payment of the Legal
Fees shall be made by deduction of such Legal Fees from the Loan proceeds
disbursed by Agent to Borrower on such Funding Date.
5.02 All Loans. The making of each Loan to Borrower (including the Term
Loan and all Revolving Loan Advances) is subject to the satisfaction of the
following further conditions precedent, both immediately prior to the making of
such Loan and also after giving effect thereto and to the intended use thereof:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) both immediately prior to the making of such Loan and also after
giving effect thereto and to the intended use thereof, the representations and
warranties made by Borrower in Section 6 and Schedule 1 hereof, and elsewhere in
each of the Loan Documents, shall be true, correct and complete on and as of the
date of the making of such Loan in all material respects (in the case of the
representations and warranties in Section 6.10 and Schedule 1, solely with
respect to Mortgage Loans and Eligible Securities included in the Borrowing
Base) with the same force and effect as if made on and as of such date (or, if
any such representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date). Agent shall have received an
officer's certificate signed by a Responsible Officer of Borrower certifying as
to the truth, accuracy and completeness of the above, which certificate shall
specifically include a statement that Borrower is in compliance with all
governmental licenses and authorizations, statutory and regulatory requirements,
and is qualified to do business and in good standing in all required
jurisdictions, and that such borrowing does not violate restrictions imposed
upon Borrower as a Registered Investment Company or otherwise;
(c) the aggregate outstanding principal amount of the Loans (including
the Revolving Loan Advance then being made by Lender) shall not exceed the
Borrowing Base;
(d) subject to Agent's right to perform one or more Due Diligence
Reviews pursuant to Section 12.15 hereof, Agent shall have completed its due
diligence review of the Mortgage Loan Documents for each Mortgage Loan included
in the Collateral and such other documents, records, agreements, instruments,
mortgaged properties or information relating to such Mortgage Loans as Agent in
its sole discretion deems appropriate to review and such review shall be
satisfactory to Agent in its sole discretion;
(e) Agent shall have received from the Custodian a Mortgage Loan
Schedule and Exception Report with Exceptions as are acceptable to Agent in its
sole discretion in respect of Eligible Mortgage Loans to be included in the
Collateral;
(f) Agent shall have received from Borrower a Borrower's Release
Letter substantially in the form of Exhibit D hereto (or such other form
acceptable to Agent) covering each Mortgage Loan to be pledged to Agent, for the
benefit of Lender;
(g) there shall not have occurred a material adverse change in the
financial condition of Lender which affects (or can reasonably be expected to
affect) materially and adversely the ability of Lender to fund its obligations
under this Agreement; provided, however,
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if a Revolving Loan Advance is not made due to the occurrence of a material
adverse change in the financial condition of Lender, Borrower may prepay the
Loan with no Prepayment Fee and, if Borrower does not elect to prepay the Loan,
the Unused Revolving Loan Fee will be waived until such time as Lender confirms
in writing its ability to make Revolving Loan Advances.
(h) neither Agent nor Lender shall have determined in good faith that
there is any action, proceeding or investigation by or before any Governmental
Authority affecting Borrower or any of its Affiliates or Property (including,
without limitation, any Mortgage Loan pledged to Agent for the benefit of Lender
hereunder), which, in the good faith judgment of Agent or Lender, as the case
may be, is reasonably likely to be adversely determined and which, in the good
faith judgment of Agent or Lender, as the case may be, if decided adversely,
would have a reasonable likelihood of having a Material Adverse Effect.
(i) As of the Effective Date and the date of each Revolving Loan
Advance, Borrower shall be in compliance with the financial covenants set forth
in Section 7.18 of this Agreement, as confirmed by Agent in its reasonable
discretion.
Each request for a borrowing by Borrower hereunder shall constitute a
certification by Borrower that all the conditions set forth in Section 5.01 and
the conditions set forth in Section 5.02(a), (b), (e) and (f) have been
satisfied (both as of the date of such notice, request or confirmation and as of
the date of such borrowing).
Section 6. Representations and Warranties. Borrower represents and warrants to
Agent and Lender that throughout the term of this Agreement:
6.01 Existence. Borrower (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota, (b) has
all requisite corporate or other power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted, and (c) is qualified
to do business and is in good standing in all other jurisdictions and pursuant
to all statutory and regulatory requirements, in which the nature of the
business conducted by it makes such qualification necessary.
6.02 Financial Condition. Borrower has heretofore provided to Agent a copy
of (i) its balance sheet for its fiscal year ended August 31, 2007 and the
related statements of income and retained earnings and of cash flows for
Borrower for such fiscal year, setting forth in each case in comparative form
the figures for the previous year, with the opinion thereon of Ernst & Young,
and (ii) its balance sheet for the three most recently ended quarterly fiscal
periods of Borrower and the related statements of income and retained earnings
and of cash flows for Borrower for such quarterly fiscal periods, setting forth
in each case in comparative form the figures for the previous year. All such
financial statements are complete and correct and fairly present, in all
material respects, the financial condition of Borrower and the results of its
operations as at such dates and for such fiscal periods, all in accordance with
GAAP applied on a consistent basis; provided, however, the quarterly balance
sheets and income statements delivered by Borrower pursuant to clause (ii) above
do not include footnotes. Since the date of the most recently delivered
financials, there has been no material adverse change in the business,
operations or financial condition of Borrower from that set forth in said
financial statements.
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6.03 Litigation. There is no action, proceeding or investigation by or
before any Governmental Authority affecting Borrower, or any of its Affiliates
or Property (including, without limitation, any Mortgage Loan pledged to Agent
for the benefit of Lender hereunder), which if adversely determined and would
have a Material Adverse Effect.
6.04 No Breach. Neither (a) the execution and delivery of the Loan
Documents, nor (b) the consummation of the transactions therein contemplated in
compliance with the terms and provisions thereof will conflict with or result in
a breach of the charter or by-laws of Borrower, or any applicable law
(including, without limitation, the Prescribed Laws), rule or regulation, or any
order, writ, injunction or decree of any Governmental Authority, or any
Servicing Agreement or other agreement or instrument to which Borrower or any of
its Affiliates is a party or by which it or any of its Property is bound or to
which it is subject, or constitute a default under any such material agreement
or instrument or result in the creation or imposition of any Lien (except for
the Liens created pursuant to this Agreement) upon any Property of Borrower
pursuant to the terms of any such agreement or instrument.
6.05 Action. Borrower has all necessary corporate or other power, authority
and legal right to execute, deliver and perform its obligations under each of
the Loan Documents; the execution, delivery and performance by Borrower of each
of the Loan Documents have been duly authorized by all necessary corporate or
other action on its part; and each Loan Document has been duly and validly
executed and delivered by Borrower and constitutes a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms.
6.06 Approvals. No authorizations, approvals or consents of, and no filings
or registrations with, any Governmental Authority or any securities exchange are
necessary for the execution, delivery or performance by Borrower of the Loan
Documents or for the legality, validity or enforceability thereof, except for
filings and recordings in respect of the Liens created pursuant to this
Agreement.
6.07 Margin Regulations. Neither the making of any Loan hereunder, nor the
use of the proceeds thereof, will violate or be inconsistent with the provisions
of Regulations T, U or X.
6.08 Taxes. Borrower has filed all Federal income tax returns and all other
tax returns that are required to be filed by it and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by it, except
for any such taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided. Each such pending tax contest has been disclosed in
writing to Agent. The charges, accruals and reserves on the books of Borrower in
respect of taxes and other governmental charges are, in the opinion of Borrower,
adequate.
6.09 Registered Investment Company. Borrower (a) is a Registered Investment
Company under the Investment Company Act of 1940, as amended (the "1940 ACT");
(b) has no class of senior securities (as defined in Section 18(g) of the ▇▇▇▇
▇▇▇) outstanding; and (c) complies with the asset coverage requirements of
Section 18 of the 1940 Act applicable to the Loans. The Loans requested and made
under this Agreement do not violate any restrictions imposed on Borrower
pursuant to the 1940 Act or any regulations promulgated thereunder.
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6.10 Collateral; Collateral Security.
(a) Borrower has not assigned, pledged, or otherwise conveyed or
encumbered any Mortgage Loan or other Collateral to any other Person, and
Borrower is the sole owner of each Mortgage Loan or such other Collateral and
had good and marketable title thereto, free and clear of all Liens, in each case
except for Liens to be released simultaneously with the Liens granted in favor
of Agent, for the benefit of Lender hereunder. No Mortgage Loan or other
Collateral pledged to Lender hereunder was acquired (by purchase or otherwise)
by Borrower from an Affiliate of Borrower.
(b) The provisions of this Agreement are effective to create in favor
of Agent, for the benefit of Lender, a valid security interest in all right,
title and interest of Borrower in, to and under the Collateral.
(c) Upon the crediting of each Mortgage Note to the securities account
within the meaning of Article 8 of the Uniform Commercial Code, of Agent, Agent
shall have a fully perfected first priority security interest in the financial
asset, within the meaning of Article 8 of the Uniform Commercial Code,
consisting of the Mortgage Note, within the meaning of Article 8 of the Uniform
Commercial Code.
(d) Upon the filing of financing statements on Form UCC-1 naming Agent
as "Secured Party" and Borrower as "Debtor", and describing the Collateral, in
the jurisdictions and recording offices listed on Schedule 2 attached hereto,
the security interests granted hereunder in the Collateral will constitute fully
perfected first priority security interests under the Uniform Commercial Code in
all right, title and interest of Borrower in, to and under such Collateral which
can be perfected by filing under the Uniform Commercial Code.
(e) Each Eligible Mortgage Loan that is pledged to Agent as Collateral
satisfies all of the conditions set forth in the definition of "Eligible
Mortgage Loans" in Section 1.01 above, including but not limited to having a
Debt Service Coverage Ratio of no less than 1.20:1, and the representations and
warranties set forth on Schedule 1 with respect to each such Eligible Mortgage
Loan are true and correct.
(f) The Collateral Value of all Mortgage Loans pledged to Agent as
Collateral plus the amount of all Cash Collateral held by Agent equals at least
eighty percent (80%) of the current outstanding principal balance of the Loans,
inclusive of any pending Revolving Loan Advance.
6.11 Chief Executive Office/Jurisdiction of Organization. On the Effective
Date, Borrower's chief executive office is, and during the four months
immediately preceding the Effective Date such office has been, located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. On the Effective Date,
Borrower's jurisdiction of organization is Minnesota.
6.12 Location of Books and Records. Borrower keeps all of its books and
records, including all computer files and records relating to the Collateral
either: (a) at its chief executive office, (b) with the Custodian or the
applicable Servicer pursuant to the Custodial Agreement or the applicable
Servicing Agreement, (c) at the offices of Borrower's outside counsel, or (d) at
the
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offices of other accounting and administrative agents on behalf of Borrower.
Notwithstanding the location of said books and records, all such books and
records are under Borrower's possession or control and shall, subject to the
terms of the Custodial Agreement, be delivered to Agent upon the occurrence of a
Default or an Event of Default and written request therefor by Agent.
6.13 Regulatory Status. Borrower is not a "bank holding company" or a
direct or indirect subsidiary of a "bank holding company" as defined in the Bank
Holding Company Act of 1956, as amended, and Regulation Y thereunder of the
Board of Governors of the Federal Reserve System.
6.14 True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of
Borrower to Agent in connection with the negotiation, preparation or delivery of
this Agreement and the other Loan Documents or included herein or therein or
delivered pursuant hereto or thereto, when taken as a whole, do not contain any
untrue statement of material fact or omit to state any material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading. All written information provided after the
date hereof by or on behalf of Borrower to Agent in connection with this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby will be true, complete and accurate in every material respect, or
(in the case of projections) based on reasonable estimates, on the date as of
which such information is stated or certified. There is no fact known to a
Responsible Officer of Borrower, after due inquiry, that could reasonably be
expected to have a Material Adverse Effect that has not been disclosed herein,
in the other Loan Documents or in a report, financial statement, exhibit,
schedule, disclosure letter or other writing, provided to Agent for use in
connection with the transactions contemplated hereby or thereby.
6.15 Financial Representations.
(a) On the Effective Date, Borrower's total assets, calculated in a
manner consistent with Borrower's most recent balance sheet delivered to Lender,
are not less than $308,000,000.00.
(b) On the Effective Date, the ratio of (i) Borrower's Net Operating
Income for Borrower's immediately preceding fiscal quarter, annualized, to (ii)
the annualized debt service payment obligations of all Indebtedness of Borrower,
including the Loans, is greater than 3.0:1.
(c) The total outstanding amount of all Indebtedness of Borrower is
less than thirty-three percent (33%) of Borrower's total assets, calculated in a
manner consistent with Borrower's most recent balance sheet delivered to Lender.
6.16 ERISA. Borrower has not established any employee benefit plans or
other plans pursuant to ERISA, the Code or any other Federal or State law.
6.17 No Subsidiaries. Borrower has no Subsidiaries.
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6.18 Legal Name. On the Effective Date the exact legal name of Borrower is
American Strategic Income Portfolio Inc.-III, and Borrower has not used any
previous names, assumed names or trade names.
Section 7. Covenants of Borrower. Borrower covenants and agrees with Agent and
Lender that, so long as any Loan is outstanding and until payment in full of all
Secured Obligations:
7.01 Financial Statements. Borrower shall deliver to Agent:
(a) as soon as available and in any event within thirty (30) days
after the end of each fiscal quarter of Borrower the unaudited balance sheets of
Borrower as at the end of the previous fiscal quarter and the related unaudited
statements of income and retained earnings and of cash flows for Borrower for
such period and the portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for the previous
year, and said balance sheets and financial statements following the second and
fourth fiscal quarter in each fiscal year shall be accompanied by a certificate
of a Responsible Officer of Borrower, which certificate shall state that said
balance sheets and financial statements fairly present the financial condition
and results of operations of Borrower in accordance with GAAP, consistently
applied, as at the end of, and for, such period (subject to normal year-end
audit adjustments);
(b) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Borrower, the balance sheets of Borrower as
at the end of such fiscal year and the related statements of income and retained
earnings and of cash flows for Borrower for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, accompanied
by an opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said financial statements fairly present the
financial condition and results of operations of Borrower as at the end of, and
for, such fiscal year in accordance with GAAP; and
(c) as soon as available and in any event within thirty (30) days
after the end of each fiscal quarter of Borrower, a written certification by a
Responsible Officer of Borrower calculating (i) the ratio of Borrower's Net
Operating Income to its annualized debt service payment obligations, calculated
in accordance with Section 7.18(a) of this Agreement, and (ii) the percentage of
Borrower's Indebtedness relative to the Net Asset Value of all of Borrower's
assets, calculated in accordance with Section 7.18(b) of this Agreement, each of
which shall be calculated quarterly by Borrower in a manner consistent with
Borrower's financial statements and said calculation shall be subject to Agent's
review and approval;
(d) as soon as available and in any event within thirty (30) days
after the end of each month, a written certification by a Responsible Officer of
Borrower calculating the Net Asset Value of each Mortgage Loan; and
(e) from time to time such other information regarding the financial
condition, operations, or business of Borrower as Agent may reasonably request.
Borrower will provide to Agent, at the time it provides each set of
financial statements pursuant to paragraphs (a), (b) and (c) above, a
certificate of a Responsible Officer of Borrower
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stating that, to the best of such Responsible Officer's knowledge, Borrower
during such fiscal period or year has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate (and, if any Default or Event
of Default has occurred and is continuing, describing the same in reasonable
detail and describing the action Borrower has taken or proposes to take with
respect thereto).
7.02 Litigation. Borrower will, as soon as available and in any event not
later than thirty (30) days following the end of each calendar month, deliver to
Agent either a statement that there is nothing to report under this Section 7.02
or a current "noteworthy litigation report", which shall in any event include a
report of all litigation, actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending or
threatened) or other legal or arbitrable proceedings affecting Borrower, or any
of its Affiliates or Property (including, without limitation, any Mortgage
Loan), before any Governmental Authority or arbitration (collectively,
"LITIGATION MATTERS") that (i) makes a claim or claims in an aggregate amount
greater than $5,000,000, (ii) is styled as a class action, (iii) individually or
in the aggregate, if adversely determined, could be reasonably likely to have a
Material Adverse Effect or (iv) requires filing with the Securities and Exchange
Commission in accordance with the 1934 Act or any rules thereunder. In addition,
Borrower shall promptly, and in any event within ten (10) days after service of
process on Borrower or any of its Affiliates, give to Agent notice of any
Litigation Matter that questions or challenges the validity or enforceability of
any of the Loan Documents or any action to be taken in connection with the
transactions contemplated hereby.
7.03 Corporate Matters and Existence. Borrower will:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises, including its registration as a
Registered Investment Company; provided, however, that nothing in this Section
7.03(a) shall prohibit any transaction expressly permitted under Section 7.04
hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, all Prescribed Laws, environmental laws and all laws with respect to
unfair and deceptive lending practices and Predatory Lending Practices);
(c) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;
(d) not move its chief executive office from the address referred to
in Section 6.11 or change its jurisdiction of organization from the jurisdiction
referred to in Section 6.11 unless it shall have provided Agent thirty (30)
days' prior written notice of such change;
(e) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment
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of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained and with respect to which Borrower
has provided Agent with written notice of such contest within ten (10) days
following the commencement of such contest by Borrower or the due date for the
applicable tax, assessment, governmental charge or levy, whichever is earlier;
and
(f) permit representatives of Agent, during customary business hours,
to examine, copy and make extracts from its books and records, to inspect any of
its Properties, including all Mortgage Loans, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by Agent.
7.04 Prohibition of Fundamental Changes. Borrower shall not enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation, winding up or dissolution) or sell
all or substantially all of its assets; provided, however, that, so long as no
Default or Event of Default exists hereunder, Borrower may merge or consolidate
with any other Person if Borrower is the surviving corporation and Borrower has
received Lender's prior written approval of the proposed merger or
consolidation, which approval by Lender shall not be unreasonably withheld,
conditioned or delayed. Borrower acknowledges and agrees that Lender may
reasonably withhold its approval of a proposed merger or consolidation based
upon Lender's analysis of the pro-forma financial statements and senior
management team for the surviving entity. If Lender does not approve a proposed
merger or consolidation, the Loans may be prepaid in full simultaneously with
the consummation of the merger or consolidation, together with any applicable
Prepayment Fee and Breakage Fee.
7.05 Borrowing Base Deficiency. If at any time there exists a Borrowing
Base Deficiency Borrower shall cure the same in accordance with Section 2.05
hereof.
7.06 Notices. Borrower shall give notice to Agent and Lender:
(a) promptly upon receipt of notice or knowledge of the occurrence of
any Default or Event of Default;
(b) with respect to any Mortgage Loan, immediately upon receipt of any
principal prepayment (in full or partial) of such Mortgage Loan;
(c) with respect to any Mortgage Loan, immediately upon receipt of
notice or knowledge that the underlying Mortgaged Property has been damaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty, or otherwise damaged so as to affect adversely the Collateral Value of
such Mortgage Loan;
(d) promptly upon receipt of notice or knowledge of (i) any default or
event of default under a Mortgage Loan or related to any other Collateral, (ii)
any Lien or security interest (other than security interests created hereby or
by the other Loan Documents) on, or claim asserted against, any of the
Collateral or (iii) any event or change in circumstances which could reasonably
be expected to have a Material Adverse Effect; and
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(e) promptly upon receipt of notice or knowledge that Borrower is not
in compliance with any material requirements for a Registered Investment Company
or is not in compliance with the requirements for a Registered Investment
Company and said non-compliance could constitute a Default or an Event of
Default under this Agreement.
(f) Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein and stating what action Borrower has taken or
proposes to take with respect thereto.
7.07 Transactions with Affiliates. Borrower will not enter into any
transaction, including without limitation any purchase, sale, lease or exchange
of property or the rendering of any service, with any Affiliate unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary
course of Borrower's business and (c) upon fair and reasonable terms no less
favorable to Borrower than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, or make a payment that is
not otherwise permitted by this Section 7.07 to any Affiliate.
7.08 Limitation on Liens. Borrower will defend the Collateral against, and
will take such other action as is necessary to remove, any Lien, security
interest or claim on or to the Collateral, other than the security interests
created under this Agreement, and Borrower will defend the right, title and
interest of Agent and Lender in and to any of the Collateral against the claims
and demands of all persons whomsoever.
7.09 Limitation on Distributions. After the occurrence and during the
existence of any Event of Default and at any time when Borrower is not in
compliance with the financial covenants set forth in Section 7.18, Borrower
shall not make any payment on account of, or set apart assets for, a sinking or
other analogous fund for the purchase, redemption, defeasance, retirement or
other acquisition of any equity or partnership interest of Borrower, whether now
or hereafter outstanding, or make any other distribution or dividend in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of Borrower.
7.10 Maintenance of Net Assets. Borrower shall not permit the amount of Net
Assets reported on its semi-annual Statements of Assets and Liabilities to
decrease by more than twenty-five percent (25%) from the amount of Net Assets
reported on its Statement of Assets and Liabilities delivered to Agent on or
about the Effective Date.
7.11 Servicer; Servicing Tape. Borrower shall provide to Agent on or prior
to the 22nd day of each month a computer readable file containing servicing
information, including without limitation those fields specified by Agent from
time to time, on a loan-by-loan basis and in the aggregate, with respect to the
Mortgage Loans, whether serviced by Borrower or any Servicer. Borrower shall not
cause the Mortgage Loans to be serviced by any servicer other than a Servicer
expressly approved in writing by Agent, which approval shall not be unreasonably
withheld.
7.12 ERISA. Borrower shall not establish any employee benefit plans or
other plans pursuant to ERISA, the Code and any other Federal or State law.
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7.13 Limitation on Subsidiary Formation. Borrower shall not form any
Subsidiaries.
7.14 Underwriting Guidelines.
(a) Borrower shall give Agent prior notice of all intended changes,
amendments or modifications to the Underwriting Guidelines, which changes,
amendments and modifications shall be subject to Agent's prior written approval.
If Agent determines, in its sole discretion, that a proposed change is material
or unsatisfactory, Lender will not have any obligation to finance any Mortgage
Loans that are originated pursuant to the new Underwriting Guidelines and said
Mortgage Loans shall not be Eligible Mortgage Loans. In the event that Borrower
makes any amendment or modification to the Underwriting Guidelines, Borrower
shall promptly deliver to Agent a complete copy of the amended or modified
Underwriting Guidelines.
(b) Borrower shall originate Mortgage Loans in a manner which is
consistent with sound underwriting and appraisal practices, and in compliance
with applicable federal and state laws including, without limitation, all laws
with respect to unfair or deceptive practices and all laws relating to Predatory
Lending Practices.
7.15 Reports. Borrower shall provide Agent with a monthly report, which
report shall include, among other items, (a) a summary of Borrower's delinquency
and loss experience with respect to all Mortgage Loans, plus any such additional
reports as Agent may reasonably request with respect to the Mortgage Loans and
(b) a ▇▇▇▇ to market summary of any residual securities held by Borrower.
Borrower shall also provide Agent with such property level information with
respect to Mortgage Loans as Agent requests, including but not limited to (i) a
quarterly summary of the rent rolls for each Mortgaged Property prepared and
certified by Borrower and delivered to Agent within thirty (30) days after the
end of each fiscal quarter of Borrower, (ii) within ten (10) days following a
request by Agent, which request shall not be made more frequently than once per
fiscal quarter so long as no Event of Default exists, true and correct copies of
the most recent rent roll for each Mortgaged Property and all other reports and
information required to be delivered to Borrower under the Mortgage Loan
Documents, and (iii) an annual report of operating income/net operating income.
7.16 Remittance of Prepayments. Borrower shall notify Agent of all
principal prepayments that Borrower has received in respect of the Mortgage
Loans, no later than 5:00 p.m., New York City time, on the next Business Day
following receipt thereof by Borrower, with sufficient detail to enable Agent to
recalculate the Borrowing Base to reflect such prepayments of such Mortgage
Loans.
7.17 No Adverse Selection. Borrower has not selected the Collateral in a
manner so as to adversely affect Lender's interests.
7.18 Financial Covenants. At all times prior to the repayment of the Loans
in full and the termination of this Agreement, Borrower shall:
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(a) maintain a ratio of (i) Borrower's Net Operating Income for the
immediately preceding fiscal quarter, annualized, to (ii) the annualized debt
service payment obligations of all Indebtedness of Borrower, including the Loan,
that is greater than 3.0:1;
(b) not incur Indebtedness (including the Loan) in an amount that is
greater than or equal to thirty-three percent (33%) of Borrower's total assets,
calculated in a manner consistent with Borrower's most recent balance sheet
delivered to Lender.
7.19 Transfers and Encumbrances. Neither Borrower nor any Person shall
sell, transfer, convey, assign, mortgage, encumber, pledge, hypothecate, grant a
security interest in, grant options with respect to, or otherwise dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) all or any portion
of any legal or beneficial interest in: (a) all or any portion of any Mortgage
Loan; or (b) all or any ownership interest in Borrower, except for the sale or
transfer of any publicly traded shares in Borrower.
Section 8. Events of Default. Each of the following events shall constitute an
event of default (an "EVENT OF DEFAULT") hereunder:
(a) Borrower shall default in the payment of any principal of or
interest on any Loan when due (whether on the Maturity Date, on a monthly
payment date, upon acceleration, or on a mandatory or optional prepayment date);
or
(b) Borrower shall default in the payment of any other amount payable
by it hereunder or under any other Loan Document after written notice from Agent
to Borrower of such default, and such default shall have continued unremedied
for five (5) Business Days following said notice; or
(c) any representation, warranty or certification made or deemed made
herein or in any other Loan Document by Borrower or any certificate provided to
Agent pursuant to the provisions hereof or thereof shall prove to have been
false or misleading in any material respect as of the time made or provided;
provided, however, a breach of a representation or warranty set forth in
Schedule 1 with respect to one Mortgage Loan or an Eligible Security may be
cured or remedied by Borrower by substituting a new Eligible Mortgage Loan or a
new Eligible Security for the Mortgage Loan or Eligible Security in question in
accordance with the provisions of Sections 4.11 and 4.13 of this Agreement; or
(d) Borrower shall fail to comply with the requirements of Section
7.03(a), (b) and (e), Section 7.04 through Section 7.18 hereof; or Borrower
shall otherwise fail to comply with the requirements of Section 7.03 hereof and
such default shall continue unremedied for a period of five (5) Business Days;
or Borrower shall fail to observe or perform any other covenant or agreement
contained in this Agreement or any other Loan Document and such failure to
observe or perform shall continue unremedied for a period of seven (7) Business
Days; or
(e) a final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate shall be rendered against Borrower or any of its
Affiliates by one or more courts, administrative tribunals or other bodies
having jurisdiction and the same shall not
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be satisfied, discharged (or provision shall not be made for such discharge) or
bonded, or a stay of execution thereof shall not be procured, within sixty (60)
days from the date of entry thereof, and Borrower or any such Affiliate shall
not, within said period of sixty (60) days, or such longer period during which
execution of the same shall have been stayed or bonded, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(f) Borrower shall admit in writing its inability to pay its debts as
such debts become due; or
(g) Borrower or any of its Affiliates shall (i) apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator or the like of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or (vi) take any corporate or
other action for the purpose of effecting any of the foregoing; or
(h) a proceeding or case shall be commenced, without the application
or consent of Borrower or any of its Affiliates, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator or the like of Borrower or any such Affiliate or
of all or any substantial part of its property, or (iii) similar relief in
respect of Borrower or any such Affiliate under any law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect, for a
period of sixty (60) or more days; or an order for relief against Borrower or
any such Affiliate shall be entered in an involuntary case under the Bankruptcy
Code; or
(i) the Custodial Agreement or any Loan Document shall for whatever
reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by Borrower; or
(j) Borrower shall grant, or suffer to exist, any Lien on any
Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Collateral in
favor of Agent, for the benefit of Lender, or shall be Liens in favor of any
Person other than Agent; or
(k) Borrower or any of Borrower's Affiliates shall be in default under
any note, indenture, loan agreement, guaranty, swap agreement or any other
contract to which it is a party, which default (i) involves the failure to pay a
matured obligation, or (ii) permits the acceleration of the maturity of
obligations by any other party to or beneficiary of such note, indenture, loan
agreement, guaranty, swap agreement or other contract; or
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(l) any materially adverse change in the Property, business, financial
condition or prospects of Borrower or any of its Affiliates shall occur, in each
case as determined by Agent or Lender in their sole discretion, or any other
condition shall exist which, in Agent's or Lender's sole discretion, constitutes
a material impairment of Borrower's ability to perform its obligations under
this Agreement, the Note or any other Loan Document.
Section 9. Remedies Upon Default.
(a) An Event of Default shall be deemed to be continuing unless
expressly waived in writing by Agent at the direction of Lender. Upon the
occurrence of an Event of Default, Lender shall have the following rights and
remedies:
(i) The obligation of Lender to make additional Revolving Loan
Advances to Borrower shall automatically terminate without further action by any
Person. Upon the occurrence of one or more Events of Default other than those
referred to in Sections 8(g) and 8(h), Agent may, at the direction of Lender,
immediately declare the principal amount of the Loans then outstanding under the
Note to be immediately due and payable, together with all accrued and unpaid
interest thereon and fees and expenses accruing under this Agreement. Upon the
occurrence of an Event of Default referred to in Sections 8(g) and 8(h), such
amounts shall immediately and automatically become due and payable without any
further action by any Person. Upon such declaration or such automatic
acceleration, the balance then outstanding on the Note shall become immediately
due and payable, without presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by Borrower.
(ii) Agent and Lender shall have the right to obtain, and
Borrower shall deliver or cause to be delivered, on demand, physical possession
of the Servicing Records and all other files of Borrower relating to the
Collateral and all documents relating to the Collateral which are then or may
thereafter come in to the possession of Borrower or any third parties acting for
Borrower and Borrower shall deliver to Agent such assignments as Agent shall
request. Agent and Lender shall be entitled to specific performance of all
agreements of Borrower contained in this Agreement.
(iii) Lender may declare the Loans and all amounts owing under
the Loan Documents immediately due and payable, without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any
kind, all of which are hereby expressly waived by Borrower.
(iv) In addition to all other rights and remedies granted to
Agent and Lender in this Agreement and in any other Loan Documents, Agent and
Lender shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code as adopted by the Commonwealth of Massachusetts. Without
limiting the generality of the foregoing, Agent or Lender may (a) without demand
or notice to Borrower, collect, receive, or take possession of the Collateral or
any part thereof and for that purpose Agent or Lender may enter upon any
premises on which the Collateral is located and remove the collateral therefrom
or render it inoperable, and/or (B) sell, lease, or otherwise dispose of the
Collateral, or any part thereof, in one or more parcels at public or private
sale or sales, at Agent's or Lender's offices or elsewhere, for cash, on credit,
or for future delivery. Upon the request of Agent or Lender,
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Borrower shall assemble the Collateral and make it available to Agent or Lender
at any place designated by Agent or Lender that is reasonably convenient to
Borrower, Agent and Lender. Borrower agrees that neither Agent nor Lender shall
be obligated to give more than ten (10) days written notice of the time and
place of any public sale or of the time after which any private sale may take
place and that such notice shall constitute reasonable notice of such matters.
Borrower shall be liable for all expenses of retaking, holding, preparing for
sale, or the like, and all reasonable attorneys' fees, legal expenses, and all
other expenses incurred by Lender in connection with the collection of the Loans
and the enforcement of Agent's and Lender's rights under this Agreement and the
Loan Documents. Agent or Lender may apply the Collateral against the Loans and
all amounts owing under the Loan Documents in such order and manner as Agent and
Lender may elect in its sole discretion.
(v) Agent or Lender may cause any or all of the Collateral held
by it to be transferred into the name of Agent or Lender or the name or names of
Agent's or Lender's nominee or nominees.
(vi) Lender shall have any and all other remedies available at
law or equity.
(b) Remedies Cumulative. No disbursement of proceeds of the Loan shall
constitute a waiver of any conditions to Lender's obligation to make further
disbursements nor, in the event Borrower is unable to satisfy any such
conditions, shall any such waiver have the effect of precluding Lender from
thereafter declaring such inability to constitute a default under this
Agreement. No failure or delay on the part of Lender in the exercise of any
power, right or privilege hereunder, the Note or any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude any other or further exercise thereof or
of any other power, right or privilege. Except as specifically provided herein,
all rights and remedies existing under this Agreement, the Note and the other
Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
Section 10. No Duty of Agent and Lender. The powers conferred on Agent and
Lender hereunder are solely to protect Lender's interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. Agent and Lender
shall be accountable only for amounts that each actually receives as a result of
the exercise of such powers, and neither Lender nor Agent nor any of their
officers, directors, employees or agents shall be responsible to Borrower for
any act or failure to act hereunder, except for its or their own gross
negligence or willful misconduct.
Section 11. Agent.
11.01 Appointment. Lender hereby irrevocably designates and appoints Babson
Capital Management LLC, and Babson Capital Management LLC hereby accepts such
designation and appointment, as Agent on behalf of Lender under this Agreement
and the other Loan Documents, and Lender irrevocably authorizes Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to Agent by the terms of this
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Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against Agent.
11.02 Delegation of Duties. Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
11.03 Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of Lender for any recitals, statements,
representations or warranties made by Borrower or any officer thereof contained
in this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Loan Document or for any failure of Borrower to
perform its obligations hereunder or thereunder. Agent shall not be under any
obligation to Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of Borrower.
11.04 Reliance by Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon the Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrower), independent accountants and other experts
selected by Agent. Agent may deem and treat the payee of the Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with Agent. As between Agent and Lender,
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of Lender as it deems appropriate or it shall first be
indemnified to its satisfaction by Lender against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. As between Agent and Lender, Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of Lender, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all Lender and all future holders of the Loans.
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11.05 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the existence of any Default or Event of Default hereunder (other than
Agent's actual notice or knowledge of an Event of Default under Section 8
hereof) unless Agent has received notice from Lender or Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that Agent receives such a
notice of default, Agent shall give notice thereof to Lender. Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by Lender; provided that unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of Lender.
11.06 Non-Reliance on Agent and Other Lender. Lender expressly acknowledges
that neither Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by Agent hereinafter taken, including any review of the affairs
of Borrower, shall be deemed to constitute any representation or warranty by
Agent to Lender. Lender represents to Agent that it has, independently and
without reliance upon Agent, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Lender also represents that it will,
independently and without reliance upon Agent, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Borrower. Except for
notices, reports and other documents expressly required to be provided by
Borrower to Agent hereunder or under the other Loan Documents, which Agent must
distribute promptly to Lender, Agent shall not have any duty or responsibility
to provide Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of Borrower which may come into the possession of Agent or any
of its officers, directors, employees, attorneys-in-fact or Affiliates.
11.07 Indemnification. Lender agrees to indemnify Agent in its capacity as
such (to the extent not reimbursed by Borrower and without limiting the
obligation of Borrower to do so) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent under or
in connection with any of the foregoing; provided that Lender shall not be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder.
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11.08 Agent in Its Individual Capacity. Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
Borrower as though Agent were not Agent hereunder and under the other Loan
Documents. With respect to the Loans made by it, Agent shall have the same
rights, powers and obligations under this Agreement and the other Loan Documents
as any Lender and may exercise the same as though it were not Agent, and the
terms "Lender" and "Lenders" shall include Agent in its individual capacity.
11.09 Successor Agent. Agent may resign as Agent upon thirty (30) days'
notice to Lender and to Borrower. If Agent shall resign as Agent under this
Agreement and the other Loan Documents, then Lender shall appoint a successor
Agent for Lender, and any such successor Agent shall succeed to the rights,
powers and duties of Agent, and the term "Agent" shall mean such successor Agent
effective upon such appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or deed on
the part of such former Agent or any of the parties to this Agreement or any
holders of the Loans and Note. If no successor Agent has been appointed and
shall have accepted such appointment within 30 days after the retiring Agent's
giving notice of its resignation, then the retiring Agent, on behalf of Lender,
may appoint an Agent. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations,
under this Agreement and the other Loan Documents. After any retiring Agent's
resignation as Agent, the provisions of this Section 11 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of Agent or Lender to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under any
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
12.02 Notices.
(a) All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by: (i)
certified or registered United States mail, postage prepaid, return receipt
requested; (ii) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery; or (iii) for
Deliverables, e-mail addressed in either case as follows:
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If to Agent, at the following address:
Babson Capital Management LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Managing Director, Real Estate Finance Group
e-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (for Deliverables only)
with a copy to:
Babson Capital Management LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President, Real Estate Law
e-mail: ▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ (for Deliverables only)
If to Lender, at the following address:
Massachusetts Mutual Life Insurance Company
c/o Babson Capital Management LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Managing Director, Real Estate Finance Group
e-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (for Deliverables only)
with a copy to:
Massachusetts Mutual Life Insurance Company
c/o Babson Capital Management LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President, Real Estate Law
e-mail: ▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ (for Deliverables only)
If to Borrower, at the following address:
American Strategic Income Portfolio Inc.-III
c/o FAF Advisors
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
e-mail: ▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (for Deliverables only)
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with a copy to:
▇▇▇▇▇▇▇, Street & Deinard
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇, Esq.
e-mail: ▇▇▇▇▇▇.▇▇▇@▇▇▇▇▇▇▇.▇▇▇ (for Deliverables only)
or to such other address and person as shall be designated from time to time by
Lender, Agent or Borrower, as the case may be, in a written notice to the other
parties in the manner provided for in this Section 12.02. Except as otherwise
provided in this Agreement and except for notices given under Section 2 (which
shall be effective only on receipt), a notice shall be deemed to have been
given: in the case of hand delivery, at the time of actual delivery; in the case
of registered or certified mail, three (3) Business Days after deposit in the
United States mail; in the case of expedited prepaid delivery, upon the first
attempted delivery on a Business Day. A party receiving a notice that does not
comply with the technical requirements for notice under this Section 12.02 may
elect to waive any deficiencies and treat the notice as having been properly
given. The parties acknowledge and agree that e-mail addresses have been
provided and may only be used for providing another party to this Agreement with
Deliverables, as opposed to notices. Any notice requirement under this Agreement
may not be satisfied via e-mail or other electronic communication and must be
sent pursuant to either clause (i) or clause (ii) of this Section 12.02(a).
(b) Borrower acknowledges that Lender and Agent may elect to
correspond or transmit information concerning the Loan or Borrower to Borrower
and to investors, co-lenders, participants and other third parties via email or
the internet. Such transmissions shall be for the convenience of the parties
hereto and shall not replace or supplement the required methods of delivering
notices provided for above. In addition, Borrower acknowledges that that such
information may be transmitted via the internet or by email and with or without
any algorithm enhanced security software and Borrower waives any right to
privacy in connection therewith.
(c) Borrower shall notify Lender promptly of the occurrence of any of
the following: (i) receipt of notice from any Governmental Authority relating to
a Mortgage Loan; (ii) any material adverse change with respect to a Mortgage
Loan; or (iii) receipt of any notice from the holder of any other lien or
security interest in any Mortgage Loan.
(d) In addition to the notices and communications provided for in this
Agreement, Agent shall (i) receive from Borrower and transmit to Lender all
notices and communications required to be delivered by Borrower under any Loan
Document, including without limitation, all communications relating to requests
for amendments, terminations, borrowing requests, waivers, Defaults, Events of
Default, required reporting, suits or proceedings, breaches of any
representations or warranties and delegation of duties under the Loan Documents
and with respect to any Mortgage Loan, and (ii) receive from Lender and transmit
to Borrower all notices and communications required to be delivered by Lender
under any Loan Document, including without limitation, all communications
relating to requests for amendments, terminations, borrowing requests, waivers,
Defaults, Events of Default, required
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reporting, suits or proceedings, breaches of the representations or warranties
and delegation of duties. Furthermore, Borrower shall copy Lender on all
communications and notices directed to Agent and shall copy Agent on all
communications and notices directed to Lender.
12.03 Indemnification and Expenses.
(a) Borrower agrees to hold Agent, Lender, and each of their
respective Affiliates and their officers, directors, employees, agents and
advisors (each an "INDEMNIFIED PARTY") harmless from and indemnify any
Indemnified Party against all liabilities, losses, damages, judgments, costs and
expenses of any kind which may be imposed on, incurred by or asserted against
such Indemnified Party (collectively, the "COSTS") relating to or arising out of
this Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Note, any
other Loan Document or any transaction contemplated hereby or thereby, that, in
each case, results from anything other than any Indemnified Party's (i) gross
negligence or willful misconduct, or (ii) actions, to the extent that they are
determined in a final non-appealable judgment of a court of competent
jurisdiction to constitute a breach by Agent and Lender of a written agreement
between Agent and Lender and any other Person. Without limiting the generality
of the foregoing, Borrower agrees to hold any Indemnified Party harmless from
and indemnify such Indemnified Party against all Costs with respect to all
Mortgage Loans relating to or arising out of any violation or alleged violation
of any environmental law, rule or regulation or any consumer credit laws,
including, without limitation, laws with respect to unfair or deceptive lending
practices, and Predatory Lending Practices, the Truth in Lending Act and/or the
Real Estate Settlement Procedures Act, that, in each case, results from anything
other than such Indemnified Party's gross negligence or willful misconduct. In
any suit, proceeding or action brought by an Indemnified Party in connection
with any Mortgage Loan for any sum owing thereunder, or to enforce any
provisions of any Mortgage Loan, Borrower will save, indemnify and hold such
Indemnified Party harmless from and against all expense, loss or damage suffered
by reason of any defense, set-off, counterclaim, recoupment or reduction or
liability whatsoever of the account debtor or obligor thereunder, arising out of
a breach by Borrower of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
account debtor or obligor or its successors from Borrower. Borrower also agrees
to reimburse an Indemnified Party as and when billed by such Indemnified Party
for all such Indemnified Party's costs and expenses incurred in connection with
the enforcement or the preservation of such Indemnified Party's rights under
this Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and disbursements of its counsel. Borrower hereby acknowledges that,
notwithstanding the fact that the Note is secured by the Collateral, the
obligations of Borrower under the Note, this Agreement and the other Loan
Documents are recourse obligations of Borrower.
(b) Borrower agrees to pay as and when billed by Agent all of the
out-of- pocket costs and expenses incurred by Lender in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the Note, any other Loan Document or any other
documents prepared in connection herewith or therewith. Borrower agrees to pay
as and when billed by Lender all of the out-of-pocket costs and expenses
incurred in connection with any actions taken at the request of Borrower with
respect to the
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consummation and administration of the transactions contemplated hereby and
thereby including without limitation (i) all the reasonable fees, disbursements
and expenses of counsel to Agent; (ii) all fees, disbursements and expenses of
the Custodian and (iii) in the event of a Default or Event of Default under this
Agreement, all the due diligence, inspection, testing and review costs and
expenses incurred by Agent with respect to Collateral under this Agreement,
including, but not limited to, those costs and expenses incurred by Lender
pursuant to Sections 12.03(a) and 12.15 hereof.
12.04 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 12.04. Lender
may, or, with the written consent of Lender, Agent may, from time to time, (a)
enter into with Borrower written amendments, supplements or modifications hereto
and to the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
Lender or of Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as Lender or Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall:
(i) reduce the amount or extend the scheduled date of maturity of
any Loan or of any installment thereof, or reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, in each case without the consent of Lender, or
(ii) amend, modify or waive any provision of this Section 12.04
or consent to the assignment or transfer by Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents or release any of
the Collateral (except in accordance with this Agreement upon repayment of all
amounts owing under the Loan Documents in respect of such Collateral) in each
case without the written consent of Lender, or
(iii) amend, modify or waive any provision of Section 11 without
the written consent of the then Agent;
provided, that any waiver, amendment, supplement or modification shall be
binding upon Borrower, Lender, Agent and all future holders of the Loans and, in
the case of any waiver, Borrower, Lender and Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon;
and, provided, further, that each waiver, amendment, supplement or
modification shall become effective on the second (2nd) Business Day after
receipt by Agent of a fully executed original thereof.
12.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
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12.06 Survival. The obligations of Borrower under Sections 2.07 and 12.03
hereof shall survive the repayment of the Loans and the termination of this
Agreement. In addition, each representation and warranty made or deemed to be
made by a request for a borrowing, herein or pursuant hereto shall survive the
making of such representation and warranty, and Lender shall not be deemed to
have waived, by reason of making any Loan, any Default that may arise because
any such representation or warranty shall have proved to be false or misleading,
notwithstanding that Lender may have had notice or knowledge or reason to
believe that such representation or warranty was false or misleading at the time
such Loan was made.
12.07 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
12.08 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
12.09 Loan Agreement Constitutes Security Agreement; Governing Law. This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the Commonwealth of Massachusetts and shall constitute a
security agreement within the meaning of the Uniform Commercial Code.
12.10 SUBMISSION TO JURISDICTION. BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
DISTRICT OF MASSACHUSETTS, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH AGENT SHALL HAVE
BEEN NOTIFIED; AND
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(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇ IN
ANY OTHER JURISDICTION.
12.11 WAIVER OF JURY TRIAL. EACH OF BORROWER, LENDER AND AGENT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
12.12 Acknowledgments. Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Notes and the other Loan Documents;
(b) Lender has no fiduciary relationship to Borrower, and the
relationship between Borrower and Lender is solely that of debtor and creditor;
and
(c) no joint venture exists between Lender and Borrower.
12.13 Hypothecation or Pledge of Loans. Subject to the terms of the
Custodial Agreement, Agent, acting at the direction of Lender, shall have free
and unrestricted use of all of Lender's interest in the Collateral and nothing
in this Agreement shall preclude Lender from engaging in repurchase transactions
with Lender's interest in the Collateral or otherwise pledging, repledging,
transferring, hypothecating, or rehypothecating Lender's interest in the
Collateral, on terms, and subject to conditions, within Lender's absolute
discretion. Nothing contained in this Agreement shall obligate Agent to
segregate any Collateral delivered to Agent by Borrower.
12.14 Servicing.
(a) Borrower covenants to maintain or cause the servicing of the
Mortgage Loans to be maintained in conformity with Accepted Servicing Practices
in the industry for the same type of mortgage loans as the Mortgage Loans and in
a manner at least equal in quality to the servicing Borrower provides for other
mortgage loans which it owns. In the event that the preceding language is
interpreted as constituting one or more servicing contracts, each such servicing
contract shall terminate automatically upon the earliest of (i) an Event of
Default, (ii) the date on which all the Secured Obligations have been paid in
full, or (iii) the transfer of servicing approved by Borrower.
(b) If any of the Mortgage Loans are serviced by Borrower, (i)
Borrower agrees that Agent is the collateral assignee of all servicing records,
including but not limited to any and all servicing agreements, files, documents,
records, data bases, computer tapes, copies of computer tapes, proof of
insurance coverage, insurance policies, appraisals, other closing documentation,
payment history records, and any other records relating to or evidencing the
servicing of Mortgage Loans (the "SERVICING RECORDS"), and (ii) Borrower grants
Agent, for the
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benefit of Lender, a security interest in all servicing fees and rights relating
to the Mortgage Loans and all Servicing Records to secure the obligation of
Borrower or its designee to service the Mortgage Loans in conformity with this
Section and any other obligation of Borrower to Lender. Borrower covenants to
safeguard such Servicing Records and to deliver them promptly to Agent or its
designee (including the Custodian) at Agent's request.
(c) If any of the Mortgage Loans are serviced by a third party
servicer (such third party servicer, the "SERVICER"), Borrower (i) shall provide
a copy of the servicing agreement to Agent, which shall be in form and substance
acceptable to Agent (the "SERVICING AGREEMENT"), (ii) shall provide a Servicer
Notice and Agreement to the Servicer substantially in the form of Exhibit E
hereto (a "SERVICER NOTICE AND AGREEMENT") and shall cause the Servicer to
acknowledge and agree to the same and (iii) hereby irrevocably assigns to Lender
and such Lender's successors and assigns all right, title and interest of
Borrower in, to and under, and the benefits of, and Servicing Agreement with
respect to the Mortgage Loans. Any successor or assignee of a Servicer shall be
approved in writing by Lender and shall acknowledge and agree to a Servicer
Notice and Agreement prior to such successor's assumption of servicing
obligations with respect to the Mortgage Loans.
(d) If the servicer of the Mortgage Loans is Borrower or an Affiliate
of Borrower, Borrower shall provide to Agent a letter from the Servicer, as the
case may be, to the effect that upon the occurrence of an Event of Default,
Agent may terminate any Servicing Agreement and transfer servicing to Agent's
designee, at no cost or expense to Agent, it being agreed that Borrower will pay
any and all fees required to terminate the Servicing Agreement and to effectuate
the transfer of servicing to the designee of Agent.
(e) After the Funding Date, until the pledge of any Mortgage Loan is
relinquished by the Custodian, unless otherwise agreed in writing by Agent,
Borrower will have no right to modify or alter the terms of such Mortgage Loan
and Borrower will have no obligation or right to repossess such Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement.
(f) In the event Borrower or its Affiliate is servicing the Mortgage
Loans, Borrower shall permit Agent to inspect Borrower's or its Affiliate's
servicing facilities, as the case may be, for the purpose of satisfying Agent
that Borrower or its Affiliate, as the case may be, has the ability to service
the Mortgage Loans as provided in this Agreement.
(g) Borrower represents that each Servicing Agreement can be
terminated by Borrower without cause and without payment of any termination fee
or other fee upon not greater than sixty (60) days prior written notice to the
Servicer thereunder. Borrower shall not modify or amend any Servicing Agreement
without Agent's prior written consent. Borrower represents that each Servicing
Agreement is in full force and effect and no default or event of default by
Borrower exists under any Servicing Agreement, and Borrower has no knowledge of
any default or event of default thereunder by the Servicer. Borrower shall,
within ten (10) days following a written request by Agent, deliver to Agent true
and correct copies of all Servicing Agreements.
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12.15 Periodic Due Diligence Review. Borrower acknowledges that Agent has
the right to perform continuing Due Diligence Reviews with respect to the
Mortgage Loans, for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or otherwise, and Borrower agrees
that, unless a Default has occurred (in which case no notice is required), upon
reasonable (but no less than five (5) Business Days) prior notice to Borrower,
Agent or its authorized representatives will be permitted during customary
business hours to examine, inspect, and make copies and extracts of, the
Mortgage Files and any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession or under the
control of Borrower and/or the Custodian. Borrower also shall make available to
Agent a knowledgeable financial or accounting officer for the purpose of
answering questions respecting the Mortgage Files and the Mortgage Loans.
Without limiting the generality of the foregoing, Borrower acknowledges that
Agent may consummate the Loans and make Revolving Loan Advances to Borrower
based solely upon the information provided by Borrower to Agent in the Mortgage
Loan Data File and the representations, warranties and covenants contained
herein, and that Agent, at its option, has the right at any time to conduct a
partial or complete due diligence review on some or all of the Mortgage Loans
securing such Loan, including without limitation ordering new credit reports and
new appraisals on the related Mortgaged Properties and otherwise re-generating
the information used to originate such Mortgage Loan. Agent may underwrite such
Mortgage Loans itself or engage a mutually agreed upon third party underwriter
to perform such underwriting. Borrower agrees to cooperate with Agent and any
third party underwriter in connection with such underwriting, including, but not
limited to, providing Agent and any third party underwriter with access to any
and all documents, records, agreements, instruments or information relating to
such Mortgage Loans in the possession, or under the control, of Borrower. All
costs and expenses incurred by Agent or Lender in connection with any Due
Diligence Review pursuant to this Section 12.15 shall be borne by Agent or
Lender so long as no Default exists. If a Default or an Event of Default exists,
all such costs and expenses shall be borne by Borrower.
12.16 Set-Off. In addition to any rights and remedies of Lender provided by
this Agreement and by law, Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
12.17 Intent. The parties recognize that each Loan is a "securities
contract" as that term is defined in Section 741 of Title 11 of the United
States Code, as amended.
12.18 Assignments and Participations.
(a) Lender may assign and delegate to one or more Persons all or a
portion of its rights and obligations under this Agreement; provided, that none
of the costs incurred by the
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assigning Lender or its assignee in connection therewith shall be borne by
Borrower and the parties to each such assignment shall execute and deliver an
Assignment and Acceptance substantially in the form of Exhibit F, with
appropriate completions (an "ASSIGNMENT AND ACCEPTANCE"), along with replacement
Notes executed and delivered by Borrower; and provided, further, that Lender
shall not so assign its rights and obligations under this Agreement to an
Affiliate of Borrower.
(b) Upon such execution and delivery, from and after the effective
date specified in such Assignment and Acceptance, (i) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned and delegated to it pursuant to such Assignment and
Acceptance, have the rights and obligations of Lender hereunder, and (ii) Lender
assignor thereunder shall, to the extent that any rights and obligations
hereunder have been assigned and delegated by it, and accepted and assumed by
the assignee pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement.
(c) Lender may sell participations to one or more Persons in or to all
or a portion of its rights and obligations under this Agreement; provided,
however, that (i) Lender's obligations under this Agreement shall remain
unchanged, (ii) Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) Lender shall remain the
holder of the Note for all purposes of this Agreement; and (iv) Borrower shall,
to the extent otherwise required by this Agreement, continue to deal solely and
directly with Lender in connection with Lender's rights and obligations under
and in respect of this Agreement and the other Loan Documents. Notwithstanding
the terms of Section 2.07, each participant of Lender shall be entitled to the
additional compensation and other rights and protections afforded Lender under
Section 2.07 to the same extent as Lender would have been entitled to receive
them with respect to the participation sold to such participant.
(d) Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 12.18, disclose to
the assignee or participant or proposed assignee or participant, as the case may
be, any information relating to Borrower or any of their Subsidiaries or to any
aspect of the Loans that has been provided to Lender by or on behalf of Borrower
or any of its Subsidiaries.
(e) Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note held by it) in favor of any Federal Reserve Bank
in accordance with Regulation A of the Board of Governors of the Federal Reserve
System and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
12.19 Treatment of Certain Information. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, all Persons may
disclose to any and all Persons, without limitation of any kind, the federal
income tax treatment of the Loans or any of the transactions contemplated by
this Agreement or any other Loan Document (collectively, the "TRANSACTIONS"),
any fact relevant to understanding the federal tax treatment of the Transactions
-58-
and all materials of any kind (including opinions or other tax analyses)
relating to such federal income tax treatment.
12.20 Time is of the Essence. Borrower acknowledges and agrees that time
is of the essence with respect to this Agreement and every other Loan Document
and Borrower's obligations hereunder and thereunder.
[SIGNATURES FOLLOW]
-59-
IN WITNESS WEHEROF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
BORROWER
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
-60-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
LENDER
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, a Massachusetts corporation
By: Babson Capital Management LLC
Its Authorized Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Managing Director
-61-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
AGENT
BABSON CAPITAL MANAGEMENT LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Managing Director
-62-
Loan Nos. 08-10805 and 08-10806
Schedule 1
REPRESENTATIONS AND WARRANTIES RE: COLLATERAL
Part I-A. Eligible Commercial Mortgage Loans and Eligible Multifamily Mortgage
Loans.
As to each Eligible Mortgage Loan included in the Borrowing Base on the
date of this Agreement, on a Funding Date and on each date on which Collateral
Value is determined (and as to the related Mortgage, Mortgage Note, Assignment
of Mortgage, Mortgage Loan Documents and Mortgaged Property), Borrower shall be
deemed to make the following representations and warranties to each of Lender
and Agent as of such date (certain defined terms used herein and not otherwise
defined in the Loan Agreement appearing in Part II to this Schedule 1). With
respect to any representations and warranties made to the best of Borrower's
knowledge or actual knowledge, in the event that it is discovered that the
circumstances with respect to the related Mortgage Loan are not accurately
reflected in such representation and warranty notwithstanding the knowledge or
lack of knowledge of Borrower, then, notwithstanding that such representation
and warranty is made to the best of Borrower's knowledge, the Collateral Value
of such Mortgage Loan may be redetermined by Agent acting in good faith (which
redetermination may result in a Collateral Value of zero) in light of such
inaccuracy.
(a) The information set forth in the Mortgage Loan Schedule as to the
Mortgage Loan is complete, true and correct in all material respects;
(b) Borrower is the sole owner and holder of the Mortgage Loan and has
good and marketable title thereto, has full right, power and authority to sell
and assign such Mortgage Loan free and clear of any interest or claim of a third
party;
(c) The Mortgage Loan has not been since the date of origination by
the applicable Qualified Originator, and currently is not, thirty or more days
delinquent, and the Mortgagor is not in default thereunder beyond any applicable
grace period for the payment of any obligation to pay principal and interest,
taxes, insurance premiums and required reserves;
(d) Borrower has not advanced funds, or knowingly received any advance
of funds from a party other than the Mortgagor subject to the related Mortgage,
directly or indirectly, for the payment of any amount required by the Mortgage
Loan;
(e) The Mortgage Loan Documents have been duly and properly executed,
and the Mortgage Loan Documents are legal, valid and binding obligations of the
Mortgagor, and their terms are enforceable against the Mortgagor, subject only
to bankruptcy, insolvency, moratorium, fraudulent transfer, fraudulent
conveyance and similar laws affecting rights of creditors generally and to the
application of general principles of equity;
(f) The lien of each Mortgage is insured by an ALTA lender's title
insurance policy or its equivalent as adopted in the applicable jurisdiction
issued by one or more nationally recognized title insurance companies, insuring
the Qualified Originator, its successors and
Schedule 1-1
assigns, as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan after all advances of principal, subject only to (a)
the lien of current real property taxes, ground rents, water charges, sewer
rents and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record, none
of which, individually or in the aggregate, in the reasonable judgment of
Borrower, materially interferes with the current use of the related Mortgaged
Property or the security intended to be provided by such Mortgage or with the
Mortgagor's ability to pay its obligations when they become due or the value of
the related Mortgaged Property and (c) the exceptions (general and specific) set
forth in such policy, none of which, individually or in the aggregate, in the
reasonable judgment of Borrower, materially interferes with the current use of
the related Mortgaged Property or security intended to be provided by such
Mortgage, with the Mortgagor's ability to pay its obligations when they become
due or the value of the related Mortgaged Property (or if a title insurance
policy has not yet been issued in respect of the Mortgage Loan, a policy meeting
the foregoing description is evidenced by a commitment for title insurance
"marked-up" at the closing of the Mortgage Loan). No material claims have been
made under such title policy and no claims have been made thereunder;
(g) As of the date of origination of the Mortgage Loan there were no,
and to the best knowledge of Borrower, based on due diligence that customarily
performed by Qualified Originators in the origination and servicing of
comparable mortgage loans, there are no, mechanics', materialman's or other
similar liens or claims which have been filed for work, labor or materials
affecting the Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the Mortgage, unless such lien is insured against
under the related title insurance policy;
(h) Each building or other improvement located on any Mortgaged
Property was insured by a fire and extended perils insurance policy, issued by
an insurer or reinsured by an insurer meeting the requirements of the Mortgage
Loan Documents, in an amount not less than the loan amount of the Mortgaged
Property; each Mortgaged Property was also covered by business interruption
insurance and comprehensive general liability insurance in amounts generally
required by institutional lenders for similar properties; all premiums on such
insurance policies required to be paid as of the date hereof have been paid;
such insurance policies require prior notice to the insured of termination or
cancellation, and no such notice has been received; and (B) the Mortgage Loan
Documents obligate the Mortgagor to maintain all such insurance and, at the
Mortgagor's failure to do so, authorize the mortgagee to maintain such insurance
at the Mortgagor's cost and expense and to seek reimbursement therefor from such
Mortgagor;
(i) As of the most recent date of inspection of each Mortgaged
Property by Borrower, based solely on Borrower's review of the report prepared
by the engineer who inspected the structure, exterior walls, roofing, interior
construction, mechanical and electrical systems and general conditions of the
site, buildings and other improvements with respect to the Mortgage Loan (which
report indicated, where appropriate, a variety of deferred maintenance items and
recommended capital improvements with respect to such Mortgaged Property, as
well as the estimated cost of such items and improvements and the most recent
visual inspection (as described in (r) below) of the Mortgaged Property, no
building or other improvement on any Mortgaged Property has been affected in any
material manner or suffered any material loss as a result of any fire, wind,
explosion, accident, riot, war, or act of God or the public enemy, and
Schedule 1-2
each Mortgaged Property is free of any material damage that would affect
materially and adversely the value of the Mortgaged Property as security for the
Mortgage Loan and is in good repair. Borrower has neither received notice, nor
is otherwise aware, of any proceedings pending for the total condemnation of any
Mortgaged Property or a partial condemnation of any portion material to
Borrower's ability to perform its obligations under its related Mortgage Loan;
(j) To Borrower's best knowledge, after review of compliance
confirmations from applicable municipalities, surveys and/or title insurance
endorsements, none of the improvements included for the purpose of determining
the Appraised Value of each Mortgaged Property at the time of the origination of
the Mortgage Loan lies outside of the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
materially encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy (including endorsements thereto) issued in
connection with the Mortgage Loan and all improvements on the Mortgaged Property
comply with the applicable zoning laws and/or set-back ordinances in force when
improvements were added;
(k) The Mortgage Loan does not violate applicable usury laws;
(l) Since the date of origination of the Mortgage Loan, the terms of
the Mortgage Loan have not been impaired, waived, altered, satisfied, canceled,
subordinated or modified in any respect (except with respect to modifications
the economic terms of which are reflected in the mortgage loan schedule and
which are evidenced by documents in the Mortgage File delivered to the
Custodian) and no portion of the Mortgaged Property has been released from the
lien of the Mortgage in any manner;
(m) All applicable Mortgage recording taxes and other filing fees have
been paid in full or deposited with the issuer of the title insurance policy
issued in connection with the Mortgage Loan for payment upon recordation of the
relevant documents;
(n) Each assignment of leases and rents, if any, creates a valid
assignment of, or a valid security interest in, certain rights under the related
leases, subject only to a license granted to the relevant mortgagor to exercise
certain rights and to perform certain obligations of the lessor under such
leases, including the right to operate the related Mortgaged Property. To the
best of Borrower's knowledge, based on due diligence that customarily performed
by Qualified Originators in the origination and servicing of comparable mortgage
loans, no person other than the relevant Mortgagor owns any interest in any
payments due under such leases that is superior to or of equal priority with the
mortgagee's interest therein;
(o) Each Mortgage, upon due recordation, is a valid and enforceable
first lien on the related Mortgaged Property, subject only to those exceptions
described in clause (vi) above;
(p) Borrower has not taken any action, nor has knowledge that the
Mortgagor has taken any action, that would cause the representations and
warranties made by the Mortgagor in the Mortgage Loan Documents not to be true;
Schedule 1-3
(q) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and Borrower covenants
that it will not make any future advances under the Mortgage Loan to the
Mortgagor. Except for the escrows and disbursements therefrom as contemplated by
the Mortgage Loan Documents, any Mortgagor requirements for on or off-site
improvements as to disbursement of any escrow funds therefor have been complied
with;
(r) Borrower has inspected or caused to be inspected each Mortgaged
Property within the past twelve months preceding the date hereof;
(s) The Mortgage Loan does not have a shared appreciation feature,
other contingent interest feature or negative amortization, except with those
Mortgage Loans that provide for deferred interest;
(t) The Mortgage Loan is a whole loan and contains no equity
participation by Lender;
(u) No fraudulent acts were committed by Borrower in connection with
the origination process of the Mortgage Loan;
(v) All taxes and governmental assessments that prior to the date of
origination of the Mortgage Loan became due and owing in respect of each
Mortgaged Property have been paid, or an escrow of funds in an amount sufficient
to cover such payments has been established or are insured against by the title
insurance policy issued in connection with the origination of the Mortgage Loan;
(w) To the extent required under applicable law, Borrower was
authorized to transact and do business in each jurisdiction in which a Mortgaged
Property is located at all times when it held the Mortgage Loan;
(x) There is no material default, breach, violation or event of
acceleration existing under any of the Mortgage Loan Documents and Borrower has
not received actual notice of any event (other than payments due but not yet
delinquent) which, with the passage of time or with notice and the expiration of
any grace or cure period, would and does constitute a default, breach, violation
or event of acceleration; no waiver of the foregoing exists and no person other
than the holder of the Note may declare any of the foregoing;
(y) Each Mortgage contains customary and enforceable provisions such
as to render the rights and remedies of the holder thereof adequate for the
realization against each related Mortgaged Property of the material benefits of
the security, including realization by judicial or, if applicable, non-judicial
foreclosure, and there is no exemption available to the mortgagor which would
materially interfere with such right to foreclosure;
(z) With respect to each Mortgaged Property, a Phase I environmental
report and, in certain cases, a Phase II environmental report or an update to
such Phase I report was conducted by a licensed qualified engineer. Borrower has
reviewed each such report and update. Borrower, having made no independent
inquiry other than reviewing the environmental reports
Schedule 1-4
and updates referenced herein and without other investigation or inquiry, has no
knowledge of any material and adverse environmental condition or circumstance
affecting any Mortgaged Property that was not disclosed in the related report
and/or update. Borrower has not received any actual notice of a material
violation of CERCLA or any applicable federal, state or local environmental law
with respect to any Mortgaged Property that was not disclosed in the related
report and/or update. Borrower has not taken any actions which would cause any
Mortgaged Property not to be in compliance with all federal, state and local
laws pertaining to environmental hazards;
(aa) The Mortgage Loan agreement contains provisions for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
if (A) the Mortgagor voluntarily transfers or encumbers all or any portion of
any related Mortgaged Property, or (B) any direct or indirect interest in
Mortgagor is voluntarily transferred or assigned, other than, in each case, as
permitted under the terms and conditions of the Mortgage Loan Documents;
(bb) To the best of Borrower's knowledge, based on due diligence that
customarily performed by Qualified Originators in the origination and servicing
of comparable mortgage loans, there is no pending action, suit or proceeding,
arbitration or governmental investigation against the Mortgagor or any Mortgaged
Property an adverse outcome of which could materially affect the Mortgagor's
performance of its obligations under the Mortgage Loan Documents;
(cc) The servicing and collection practices used by Borrower, and to
the best of Borrower's knowledge, the origination practices of the related
Qualified Originator, have been in all respects legal, proper and prudent and
have met customary industry standards except to the extent that, in connection
with its origination, such standards were modified by the applicable Qualified
Originator in its reasonable discretion;
(dd) In connection with the assignment, transfer or conveyance of any
individual Mortgage, the Note and Mortgage contain no provision limiting the
right or ability of the applicable Qualified Originator to assign, transfer and
convey the Mortgage to any other person or entity;
(ee) If any Mortgaged Property is subject to any leases (other than
any Ground Lease referred to in (ii) below), to the best of Borrower's
knowledge, the Mortgagor is the owner and holder of the landlord's interest
under any leases, and the related Mortgage and Assignment of Leases, Rents and
Profits, if any, provides for the appointment of a receiver for rents or allows
the mortgagee to enter into possession to collect rent or provide for rents to
be paid directly to mortgagee in the event of a default, subject to the
exceptions described in clause (vi) hereof;
(ff) If a Mortgage is a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently so
serves and is named in the deed of trust, and no fees or expenses are or will
become payable to the trustee under the deed of trust, except in connection with
the sale or release of the Mortgaged Property following default or payment of
the loan;
Schedule 1-5
(gg) Any insurance proceeds in respect of a casualty loss or taking
will be applied either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee or a trustee appointed by it
having the right to hold and disburse such proceeds (provided that such proceeds
exceed the threshold amount described in the loan documents) as the repair or
restoration progresses, or to the payment of the outstanding principal balance
of the Mortgage Loan together with any accrued interest thereon, except to the
extent of any excess proceeds after restoration;
(hh) No Mortgaged Property is located in a special flood hazard area
as defined by the Federal Emergency Management Agency;
(ii) With respect to any Mortgage which is secured in whole or in part
by the interest of a borrower as a lessee under a Ground Lease and based upon
the terms of the Ground Lease or an estoppel letter from the ground lessor the
following apply to such Ground Lease:
(1) The Ground Lease or a memorandum thereof has been duly recorded,
the Ground Lease permits the interest of the lessee thereunder to be
encumbered by the related Mortgage, does not restrict the use of the
Mortgaged Property by the lessee or its successors and assigns in a manner
that would adversely affect the security provided by the related Mortgage,
and there has not been a material change in the terms of the Ground Lease
since its recordation, with the exception of written instruments which are
part of the related Mortgage Loan Documents delivered to the Custodian.
(2) The Ground Lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the related Mortgage, other than
the related ground lessor's related fee interest.
(3) Borrower's interest in the Ground Lease is assignable to the
holder of the Mortgage upon notice to, but without the consent of, the
lessor thereunder and, in the event that it is so assigned, it is further
assignable by the trustee and its successors and assigns upon notice to,
but without a need to obtain the consent of, such lessor.
(4) To the best of Borrower's knowledge, based on due diligence that
customarily performed by Qualified Originators in the origination of
comparable mortgage loans, as of the Origination Date of the Mortgage Loan,
the Ground Lease was in full force and effect and no material default had
occurred under the Ground Lease and there was no existing condition which,
but for the passage of time or the giving of notice, would result in a
default under the terms of the Ground Lease. No notice of default under the
Ground Lease has been received by Borrower.
(5) The Ground Lease requires the lessor thereunder to give notice of
any default by the lessee to the mortgagee; and the Ground Lease, or an
estoppel letter received by the mortgagee from the lessor, further provides
that notice of termination given under the Ground Lease is not effective
against the mortgagee unless a copy of the notice has been delivered to the
mortgagee in the manner described in such Ground Lease or estoppel letter.
Schedule 1-6
(6) The mortgagee is permitted a reasonable opportunity (including,
where necessary, sufficient time to gain possession of the interest of the
lessee under the Ground Lease) to cure any default under the Ground Lease
which is curable after the receipt of notice of any default, before the
lessor thereunder may terminate the Ground Lease.
(7) The Ground Lease either (i) has a term which extends not less than
10 years beyond the maturity date of the related Mortgage Loan or (ii)
grants the lessee the option to extend the term of the lease for a period
(in the aggregate) which exceeds ten years beyond the maturity date of the
related Mortgage Loan.
(8) The Ground Lease requires the lessor to enter into a new lease
with the mortgagee upon termination of the Ground Lease for any reason,
including rejection of the Ground Lease in a bankruptcy proceeding,
provided the mortgagee cures the lessee's defaults to the extent they are
curable and succeeds to the interest of the mortgagee.
(9) Under the terms of the Ground Lease and the related Mortgage,
taken together, any related insurance proceeds will be applied either to
the repair or restoration of all or part of the related Mortgaged Property,
with the mortgagee or a trustee appointed by it having the right to hold
and disburse the proceeds as the repair or restoration progresses, or to
the payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon.
(10) Such Ground Lease does not impose any material restrictions on
subletting.
(11) Either the Ground Lease or the related Mortgage contains
Borrower's covenant that such Ground Lease shall not be amended, canceled,
or terminated without the prior written consent of the mortgagee.
(12) Either the Ground Lease or an estoppel letter contains a covenant
that the lessor thereunder is not permitted in the absence of an uncured
default under the Ground Lease, to disturb the possession, interest or
quiet enjoyment of any lessee in the relevant portion of the Mortgaged
Property subject to such Ground Lease for any reason, or in any manner,
which would materially adversely affect the security provided by the
related Mortgage;
(jj) The Mortgage Loan is directly secured by a Mortgage on a
commercial real property, and (2) the fair market value of such real property,
as evidenced by an appraisal conducted within 12 months of the origination of
the Mortgage Loan, or as determined by Borrower based on market studies and
pursuant to its Underwriting Guidelines, was at least equal to 80% of the
principal amount of the Mortgage Loan (I) at origination (or if the Mortgage
Loan has been modified in a manner that constituted a deemed exchange under
Section 1001 of the Code at a time when the Mortgage Loan was not in default or
default with respect thereto was not reasonably foreseeable, the date of the
last such modification) or (II) at the related Funding Date; provided that the
fair market value of the real property interest must first be reduced by (a) the
amount of any lien on the real property interest that is senior to the Mortgage
Loan (unless such senior lien also secures a Mortgage Loan, in which event the
computation
Schedule 1-7
described in (I) and (II) shall be made on an aggregated basis) and (b) a
proportionate amount of any lien that is in parity with the Mortgage Loan
(unless such other lien secures a Mortgage Loan that is cross-collateralized
with such Mortgage Loan, in which event the computation described in (I) and
(II) shall be made on an aggregate basis);
(kk) To the best knowledge of Borrower, based on due diligence that
customarily performed by Qualified Originators in the origination of comparable
mortgage loans, certificates of occupancy and building permits, as applicable,
have been issued with respect to the Mortgaged Property;
(ll) Any escrow accounts for taxes or other reserves required to be
funded on the date of origination of the Mortgage Loan pursuant to the Mortgage
Loan documents have been funded and all such escrow accounts required to have
been funded as of the Funding Date (taking into account any applicable notice
and grace period) have been funded;
(mm) The related Assignment of Mortgage constitutes a legal, valid and
binding assignment of such Mortgage to Agent, for the benefit of Lender, and the
related Reassignment of Assignment of Leases, Rents and Profits, if any,
constitutes a legal, valid and binding assignment thereof to Agent;
(nn) The related Note is not, and has not been since the date of
origination of the Mortgage Loan, secured by any collateral except the lien of
the related Mortgage, any related Assignment of Leases, Rents and Profits and
any related security agreement and escrow agreement; the security for the
Mortgage Loan consists only of the related Mortgaged Property or Properties, any
leases (including without limitation any credit leases) thereof, and any
appurtenances, fixtures and other property located thereon; and such Mortgaged
Property or Properties do not secure any mortgage loan other than the Mortgage
Loan being transferred and assigned to Agent, for the benefit of Lender
hereunder (except for Mortgage Loans, if any, which are cross-collateralized
with other Mortgage Loans being conveyed to Agent or subsequent transferee
hereunder and identified on the Mortgage Loan Schedule);
(oo) To Borrower's knowledge, based on due diligence that customarily
performed by Qualified Originators in the origination of comparable mortgage
loans, as of the date of origination of each Mortgage Loan, the related
Mortgagor was in possession of all material licenses, permits and franchises
required by applicable law for the ownership and operation of the related
Mortgaged Property as it was then operated;
(pp) The Mortgage Loan is directly secured by a first lien on one or
more parcels of real estate upon which is located one or more commercial
structures; and the Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance company, or
similar institution which is authorized and has all governmental approvals
necessary to originate said Mortgage Loan; and
(qq) No Eligible Multifamily Mortgage Loan has an LTV greater than 80%
or such other percentage as may be consented to by Agent in its sole discretion.
No Eligible Commercial Mortgage Loan has an LTV greater than 80% or such other
percentage as may be consented to by Agent in its sole discretion.
Schedule 1-8
Part I-B. Eligible Securities.
As to each Eligible Security included in the Borrowing Base on the date of
this Agreement, on a Funding Date and on each date on which Collateral Value is
determined, Borrower shall be deemed to make the following representations and
warranties to each of Lender and Agent as of such date (certain defined terms
used herein and not otherwise defined in the Loan Agreement appearing in Part II
to this Schedule 1). With respect to any representations and warranties made to
the best of Borrower's knowledge or actual knowledge, in the event that it is
discovered that the circumstances with respect to the related Eligible Security
are not accurately reflected in such representation and warranty notwithstanding
the knowledge or lack of knowledge of Borrower, then, notwithstanding that such
representation and warranty is made to the best of Borrower's knowledge, the
Collateral Value of such Eligible Security may be redetermined by Agent acting
in good faith (which redetermination may result in a Collateral Value of zero)
in light of such inaccuracy.
(a) The information set forth in the Pledged Securities Schedule (as
defined in the Custodial Agreement) as to the Eligible Security is complete,
true and correct in all material respects;
(b) Borrower is the sole beneficial owner and holder of the Eligible
Security by virtue of Borrower having a security entitlement with respect
thereto with the Custodian and has good and marketable title thereto, has full
right, power and authority to sell and assign such Eligible Security or security
entitlement free and clear of any interest or claim of a third party, including
the issuer of the Eligible Security;
Schedule 1-9
Part II. Defined Terms.
In addition to terms defined elsewhere in the Loan Agreement, the following
terms shall have the following meanings when used in this Schedule 1:
"ACCEPTABLE STATE" shall mean any state notified by Borrower to Agent from
time to time and approved in writing by Lender, which approval has not been
revoked by Lender in their sole discretion, any such notice of revocation to be
given no later than ten (10) Business Days prior to its intended effective date.
"ACCEPTED SERVICING PRACTICES" shall mean, with respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage
Loans in the jurisdiction where the related Mortgaged Property is located.
"ALTA" means the American Land Title Association.
"APPRAISED VALUE" shall mean with respect to each Mortgaged Property at any
time, the value of such Mortgaged Property, as most recently determined by an
appraisal, reasonably acceptable to the Agent in form and substance, and
prepared by an appraiser holding the MAI designation that is reasonably
acceptable to the Agent, which appraised value shall be calculated using
methodology consistent with that set forth in the Underwriting Guidelines. Such
appraisers and appraisals shall satisfy the requirements of the Uniform
Standards of Professional Appraisal Practice (USPAP) as promulgated by the
Appraisal Foundation.
"ASSIGNMENT OF MORTGAGE" means, with respect to any Mortgage, an assignment
of the Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the assignment and pledge of the Mortgage.
"BEST'S" means Best's Key Rating Guide, as the same shall be amended from
time to time.
"CUT-OFF DATE" means the first day of the month in which the related
Funding Date occurs.
"DUE DATE" means the day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
"ESCROW PAYMENTS" means, with respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
"▇▇▇▇▇▇▇ MAC" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
Schedule 1-10
"▇▇▇▇▇▇ MAE" means the Federal National Mortgage Association, or any
successor thereto.
"GROSS MARGIN" means, with respect to each adjustable rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note.
"GROUND LEASE" means a lease for all or any portion of the real property
comprising the Mortgaged Property, the lessee's interest in which is held by the
Mortgagor of the related Mortgage Loan.
"INDEX" means, with respect to each adjustable rate Mortgage Loan, the
index set forth in the related Mortgage Note for the purpose of calculating the
interest rate thereon.
"INSURANCE PROCEEDS" means, with respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
"INTEREST RATE ADJUSTMENT DATE" means, with respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
"LOAN-TO-VALUE RATIO" or "LTV" means, with respect to any Mortgage Loan,
the ratio of the original outstanding principal amount of the Mortgage Loan to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
or (b) if the Mortgaged Property was purchased within 12 months of the
origination of the Mortgage Loan, the purchase price of the Mortgaged Property.
"MONTHLY PAYMENT" means the scheduled monthly payment of principal and
interest on a Mortgage Loan as adjusted in accordance with changes in the
Mortgage Interest Rate pursuant to the provisions of the Mortgage Note for an
adjustable rate Mortgage Loan.
"MORTGAGE INTEREST RATE" means the annual rate of interest borne on a
Mortgage Note, which shall be adjusted from time to time with respect to
adjustable rate Mortgage Loans.
"MORTGAGE INTEREST RATE CAP" means, with respect to an adjustable rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
"MORTGAGEE" means Borrower or any subsequent holder of a Mortgage Loan.
"ORIGINATION DATE" shall mean, with respect to each Mortgage Loan, the date
of the Mortgage Note relating to such Mortgage Loan, unless such information is
not provided by Borrower with respect to such Mortgage Loan, in which case the
Origination Date shall be deemed to be the date that is forty (40) days prior to
the date of the first payment under the Mortgage Note relating to such Mortgage
Loan.
"PMI POLICY" or "PRIMARY INSURANCE POLICY" means a policy of primary
mortgage guaranty insurance issued by a Qualified Insurer.
Schedule 1-11
"QUALIFIED INSURER" means an insurance company duly qualified as such under
the laws of the states in which the Mortgaged Property is located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, and approved as an insurer by
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and whose claims paying ability is rated in the two
highest rating categories by any of the rating agencies with respect to primary
mortgage insurance and in the two highest rating categories by Best's with
respect to hazard and flood insurance.
"QUALIFIED ORIGINATOR" means an originator of Mortgage Loans reasonably
acceptable to Agent.
"SERVICING FILE" means, with respect to each Mortgage Loan, the file
retained by Borrower consisting of originals of all documents in the Mortgage
File which are not delivered to a Custodian and copies of the Mortgage Loan
Documents set forth in Section 2 of the Custodial Agreement.
Schedule 1-12
Loan Nos. 08-10805 and 08-10806
Schedule 2
FILING JURISDICTIONS AND OFFICES
Minnesota Secretary of State
Schedule 2-1
Loan Nos. 08-10805 and 08-10806
Schedule 3
INITIAL ADVANCES
Lender Amount
------ --------------
Massachusetts Mutual Life Insurance Company Term Loan: $54,400,000.00
Revolving Loan: $ 7,600,000.00
--------------
Total: $62,000,000.00
Schedule 3-1
Exhibit A-1
LOAN NO. 08-10805
CSP TERM LOAN
TERM PROMISSORY NOTE
$54,400,000.00 July 10, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, AMERICAN STRATEGIC INCOME PORTFOLIO INC.-III, a
Minnesota corporation (the "Borrower") hereby promises to pay to the order of
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation (the
"Lender"), at the principal office of Babson Capital Management, LLC, Agent for
Lenders under the Loan Agreement referred to below, at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ in lawful money of the United
States, and in immediately available funds, the principal sum of FIFTY-FOUR
MILLION FOUR HUNDRED THOUSAND AND 00/100 DOLLARS ($54,400,000.00) (or such
lesser amount as shall equal the aggregate unpaid principal amount of the Loans
made by Lender to Borrower under the Loan Agreement), on the dates and in the
principal amounts provided in the Loan Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Loan
Agreement.
Borrower acknowledges that the full principal amount of the loan evidenced
by this Note has been advanced to and received by Borrower. The date, amount and
interest rate of said Loan made by Lender to Borrower, and each payment made on
account of the principal thereof, shall be recorded by Lender on its books and,
prior to any transfer of this Note, endorsed by Lender on the schedule attached
hereto or any continuation thereof; provided, that the failure of Lender to make
any such recordation or endorsement shall not affect the obligations of Borrower
to make a payment when due of any amount owing under the Loan Agreement or
hereunder in respect of the Loans made by Lender.
This Term Promissory Note (this "Term Note") is the "Note" referred to in
that certain Master Loan and Security Agreement, dated as of July 10, 2008 (as
amended, restated, supplemented or otherwise modified and in effect from time to
time, the "Loan Agreement"), by and among Borrower, Lender, and Babson Capital
Management, LLC, as Agent for Lender (in such capacity, the "Agent").
Capitalized terms used but not defined in this Note have the respective meanings
assigned to them in the Loan Agreement.
Borrower agrees to pay all Lender's costs of collection and enforcement
(including reasonable attorneys' fees and disbursements of Lender's counsel) in
respect of this Note when incurred, including, without limitation, reasonable
attorneys' fees through appellate proceedings.
A-1
Notwithstanding the pledge of the Collateral, Borrower hereby acknowledges,
admits and agrees that Borrower's obligations under this Note are recourse
obligations of Borrower to which Borrower pledges its full faith and credit.
Borrower, and any endorsers or guarantors hereof, (a) severally waive
diligence, presentment, protest and demand and also notice of protest, demand,
dishonor and nonpayments of this Note, (b) expressly agree that this Note, or
any payment hereunder, may be extended from time to time, and consent to the
acceptance of further Collateral, the release of any Collateral for this Note,
the release of any party primarily or secondarily liable hereon, and (c)
expressly agree that it will not be necessary for Lender, in order to enforce
payment of this Note, to first institute or exhaust Lender's remedies against
Borrower or any other party liable hereon or against any Collateral for this
Note. No extension of time for the payment of this Note, or any installment
hereof, made by agreement by Lender with any person now or hereafter liable for
the payment of this Note, shall affect the liability under this Note of
Borrower, even if Borrower is not a party to such agreement; provided, however,
that Lender and Borrower, by written agreement between them, may affect the
liability of Borrower.
Any reference herein to Lender shall be deemed to include and apply to
every subsequent holder of this Note. Reference is made to the Loan Agreement
for provisions concerning optional and mandatory prepayments, Collateral,
acceleration and other material terms affecting this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WHOSE LAWS BORROWER
EXPRESSLY ELECTS TO APPLY TO THIS NOTE. BORROWER AGREES THAT ANY ACTION OR
PROCEEDING BROUGHT TO ENFORCE OR ARISING OUT OF THIS NOTE MAY BE COMMENCED IN
ANY STATE COURT IN THE COMMONWEALTH OF MASSACHUSETTS OR IN ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ FOR THE DISTRICT OF MASSACHUSETTS.
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
A-2
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Loan Agreement to
Borrower, on the dates, in the principal amounts and bearing interest at the
rates set forth below, and subject to the payments and prepayments of principal
set forth below:
PRINCIPAL INTEREST AMOUNT PAID OR UNPAID PRINCIPAL NOTATION
Date Made AMOUNT OF LOAN RATE PREPAID AMOUNT MADE BY
--------- -------------- ------------- -------------- ---------------- --------
July 10, 2008 $54,400,000 Contract Rate N/A $54,400,000
▇-▇
▇▇▇▇▇▇▇ ▇-▇
LOAN NO. 08-10806
CSP REVOLVING LOAN
REVOLVING PROMISSORY NOTE
$15,600,000.00 July 10, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, AMERICAN STRATEGIC INCOME PORTFOLIO INC.-III, a
Minnesota corporation (the "Borrower") hereby promises to pay to the order of
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation (the
"Lender"), at the principal office of Babson Capital Management, LLC, Agent for
Lenders under the Loan Agreement referred to below, at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ in lawful money of the United
States, and in immediately available funds, the principal sum of up to FIFTEEN
MILLION SIX HUNDRED THOUSAND AND 00/100 DOLLARS ($15,600,000.00) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
Lender to Borrower under the Loan Agreement), on the dates and in the principal
amounts provided in the Loan Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds, for
the period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Loan Agreement.
The date, amount and interest rate of each Loan made by Lender to Borrower,
and each payment made on account of the principal thereof, shall be recorded by
Lender on its books and, prior to any transfer of this Note, endorsed by Lender
on the schedule attached hereto or any continuation thereof; provided, that the
failure of Lender to make any such recordation or endorsement shall not affect
the obligations of Borrower to make a payment when due of any amount owing under
the Loan Agreement or hereunder in respect of the Loans made by Lender.
This Revolving Promissory Note (this "Revolving Note") is the "Note"
referred to in that certain Master Loan and Security Agreement, dated as of July
10, 2008 (as amended, restated, supplemented or otherwise modified and in effect
from time to time, the "Loan Agreement"), by and among Borrower, Lender, and
Babson Capital Management, LLC, as Agent for Lender (in such capacity, the
"Agent"). Capitalized terms used but not defined in this Note have the
respective meanings assigned to them in the Loan Agreement.
Borrower agrees to pay all Lender's costs of collection and enforcement
(including reasonable attorneys' fees and disbursements of Lender's counsel) in
respect of this Note when incurred, including, without limitation, reasonable
attorneys' fees through appellate proceedings.
Notwithstanding the pledge of the Collateral, Borrower hereby acknowledges,
admits and agrees that Borrower's obligations under this Note are recourse
obligations of Borrower to which Borrower pledges its full faith and credit.
A-4
Borrower, and any endorsers or guarantors hereof, (a) severally waive
diligence, presentment, protest and demand and also notice of protest, demand,
dishonor and nonpayments of this Note, (b) expressly agree that this Note, or
any payment hereunder, may be extended from time to time, and consent to the
acceptance of further Collateral, the release of any Collateral for this Note,
the release of any party primarily or secondarily liable hereon, and (c)
expressly agree that it will not be necessary for Lender, in order to enforce
payment of this Note, to first institute or exhaust Lender's remedies against
Borrower or any other party liable hereon or against any Collateral for this
Note. No extension of time for the payment of this Note, or any installment
hereof, made by agreement by Lender with any person now or hereafter liable for
the payment of this Note, shall affect the liability under this Note of
Borrower, even if Borrower is not a party to such agreement; provided, however,
that Lender and Borrower, by written agreement between them, may affect the
liability of Borrower.
Any reference herein to Lender shall be deemed to include and apply to
every subsequent holder of this Note. Reference is made to the Loan Agreement
for provisions concerning optional and mandatory prepayments, Collateral,
acceleration and other material terms affecting this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WHOSE LAWS BORROWER
EXPRESSLY ELECTS TO APPLY TO THIS NOTE. BORROWER AGREES THAT ANY ACTION OR
PROCEEDING BROUGHT TO ENFORCE OR ARISING OUT OF THIS NOTE MAY BE COMMENCED IN
ANY STATE COURT IN THE COMMONWEALTH OF MASSACHUSETTS OR IN ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ FOR THE DISTRICT OF MASSACHUSETTS.
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
A-5
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Loan Agreement to
Borrower, on the dates, in the principal amounts and bearing interest at the
rates set forth below, and subject to the payments and prepayments of principal
set forth below:
PRINCIPAL INTEREST AMOUNT PAID OR UNPAID PRINCIPAL NOTATION
Date Made AMOUNT OF LOAN RATE PREPAID AMOUNT MADE BY
--------- -------------- ------------- -------------- ---------------- --------
July 10, 2008 $7,600,000.00 Contract Rate N/A $7,600,000.00
A-6
Exhibit B
AMENDED AND RESTATED CUSTODIAL AGREEMENT
[TO BE ADDED]
B-1
Exhibit C
FORM OF REQUEST FOR BORROWING
Amended and Restated Master Loan and Security Agreement, dated as of March
27, 2009 (the "Loan and Security Agreement"), by and among AMERICAN STRATEGIC
INCOME PORTFOLIO INC.-III, a Minnesota corporation ("Borrower"), MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation ("Lender"), and
BABSON CAPITAL MANAGEMENT LLC, a Delaware limited liability company, as Agent
for Lender (in such capacity, "Agent").
Lender: Massachusetts Mutual Life Insurance
Company
Agent: Babson Capital Management LLC
Borrower: American Strategic Income Portfolio Inc.-III
Requested Funding Date: __________________________, 20__.
Number of Mortgage Loans to be Pledged,
if any: ____________________________
UPB: $___________________________
Requested Amount of Revolving Loan
Advance: $_____________.00
Borrower's Wire Instructions: AMERICAN STRATEGIC INCOME PORTFOLIO INC.-III
ABA: ▇▇▇▇▇▇▇▇▇
U.S. BANK N.A.
BNF: U.S. BANK TRUST
A/C: 112950027
OBI: Attn: Settlements / Reverse Repo's
BBI: For further credit to account ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇
Wire Instructions (including relevant bank account):
Requested by:
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
Date: By:
---------------- ------------------------------------
Name:
Title:
C-1
Attachment 1
To Exhibit C
OFFICER'S CERTIFICATE
I hereby certify as a Responsible Officer of American Strategic Income
Portfolio Inc.-III, pursuant to Section 5.02(b) of the Loan Agreement, that both
immediately prior to the making of the Loan herein requested, and also after
giving effect thereto and to the intended use thereof, the representations and
warranties made by Borrower in Section 6 of the Loan Agreement, and elsewhere in
each of the Loan Documents, shall be true and complete on and as of the date of
the making of such Loan in all material respects (in the case of the
representations and warranties in Section 6.10 and Schedule 1, solely with
respect to Mortgage Loans included in the Borrowing Base) with the same force
and effect as if made on and as of such date (or if any such representation or
warranty is expressly stated to have been made as of such specific date); that
Borrower is in compliance with all governmental licenses and authorizations,
statutory and regulatory requirements, and is qualified to do business and in
good standing in all required jurisdictions, and that this borrowing does not
violate any restrictions imposed upon Borrower as a registered investment
company under the Investment Company Act of 1940 or otherwise.
Responsible Officer Certification by: _________________________________
American Strategic Income Portfolio Inc.-III
By:
------------------------------------
Name:
Title:
Date:
-------------
C-2
Exhibit D
FORM OF BORROWER'S RELEASE LETTER
[Date]
Babson Capital Management LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Managing Director, Real Estate Finance Group
Re: Amended and Restated Master Loan and Security Agreement, dated as of March
27, 2009 (the "Loan and Security Agreement"), by and among American
Strategic Income Portfolio Inc.-III (the "Borrower"), Massachusetts Mutual
Life Insurance Company, (the "Lender"), and Babson Capital Management LLC
(the "Agent")
Ladies and Gentlemen:
With respect to the mortgage loans described in the attached Schedule A
(the "Mortgage Loans") we hereby certify to you that the Mortgage Loans are not
subject to a lien of any third party.
Very truly yours,
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
By:
------------------------------------
Name:
Title:
D-1
Exhibit E
FORM OF SERVICER NOTICE
______________ __, 200_
[SERVICER], as Servicer
[ADDRESS]
Attention: ___________________
Re: Amended and Restated Master Loan and Security Agreement, dated as of March
27, 2009 (the "Loan and Security Agreement"), by and among American
Strategic Income Portfolio Inc.-III (the "Borrower"), Massachusetts Mutual
Life Insurance Company, (the "Lender"), and Babson Capital Management LLC
(the "Agent")
Ladies and Gentlemen:
[SERVICER] (the "Servicer") is servicing certain mortgage loans for
Borrower pursuant to certain Servicing Agreements between the Servicer and
Borrower. Pursuant to the Loan Agreement by and among Lender and Borrower, the
Servicer is hereby notified that Borrower has granted a security interest to
Agent, for the benefit of Lender in certain mortgage loans which are serviced by
Servicer.
Upon receipt of a Notice of Event of Default from Agent in which Agent
shall identify the mortgage loans which are then pledged to Agent, for the
benefit of Lender under the Loan Agreement (the "Pledged Mortgage Loans"), the
Servicer shall segregate all amounts collected on account of such Pledged
Mortgage Loans, hold them in trust for the sole and exclusive benefit of Agent,
and remit such collections in accordance with Agent's written instructions.
Following such Notice of Event of Default, the Servicer shall follow the
instructions of Agent with respect to the Pledged Mortgage Loans, and shall
deliver to Agent any information with respect to the Pledged Mortgage Loans
reasonably requested by Agent.
Notwithstanding any contrary information or direction which may be
delivered to the Servicer by Borrower, the Servicer may conclusively rely on any
information, direction or notice of an Event of Default delivered by Agent, and
Borrower shall indemnify and hold the Servicer harmless for any and all claims
asserted against the Servicer for any actions taken in good faith by the
Servicer in connection with the delivery of such information or Notice of Event
of Default.
No provision of this letter may be amended, countermanded or otherwise
modified without the prior written consent of Agent. Agent is an intended third
party beneficiary of this letter.
Please acknowledge receipt and your agreement to the terms of this
instruction letter by signing in the signature block below and forwarding an
executed copy to Agent promptly upon receipt. Any notices to Agent should be
delivered to the following address: Babson Capital
E-1
Management, LLC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ Attention: Managing Director, Real Estate Finance Group.
Very truly yours,
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED TO:
-------------------------------------
as Servicer
By:
---------------------------------
Title:
Telephone No.:
Facsimile No.:
E-2
Exhibit F
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Master Loan and Security
Agreement dated as of March 27, 2009, (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement") by and among AMERICAN
STRATEGIC INCOME PORTFOLIO INC.-III, a Minnesota corporation (the "Borrower"),
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation (the
"Lender"), and BABSON CAPITAL MANAGEMENT, LLC, a Delaware limited liability
company (in such capacity, the "Agent"). Capitalized terms not otherwise defined
herein shall have the same meanings as specified therefor in the Loan Agreement.
Each "Assignor" referred to on Schedule I hereto (each, an "Assignor") and
each "Assignee" referred to on Schedule I hereto (each an "Assignee") hereby
agrees severally with respect to all information relating to it and its
assignment hereunder and on Schedule I hereto as follows:
Such Assignor hereby sells and assigns, without recourse except as to the
representations and warranties made by it herein, to such Assignee, and such
Assignee hereby purchases and assumes from such Assignor, an interest in and to
such Assignor's rights and obligations under the Loan Agreement as of the
Effective Date (as hereinafter defined) equal to the percentage interest
specified on Schedule I hereto of all outstanding rights and obligations under
the Loan Agreement (collectively, the "Assigned Interests").
Such Assignor:
(i) hereby represents and warrants that its name set forth on Schedule
I hereto is its legal name, that it is the legal and beneficial owner of the
Assigned Interest and that such Assigned Interest is free and clear of any
adverse claim;
(ii) other than as provided herein, makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Agreement
or any of the other Loan Documents, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, the Loan Agreement or any of the other Loan
Documents, or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or any of the
other Loan Parties or the performance or observance by Borrower or any of the
other Loan Parties of any of its Obligations under or in respect of any of the
Loan Documents, or any other instrument or document furnished pursuant thereto;
and
(iv) attaches the Note held by such Assignor for the Assigned
Interests specified on Schedule I hereto and requests that Borrower exchange
such Note for a
F-1
new Note payable either to the order of such Assignee or to its registered
assigns in an amount equal to the Assigned Interests assumed by such Assignee
pursuant hereto and either to the order of such Assignor or to its registered
assigns in an amount equal to the interests retained by such Assignor under the
Loan Agreement, respectively, as specified on Schedule I hereto.
Such Assignee:
(v) confirms that it has received a copy of the Loan Agreement,
together with copies of the financial statements referred to in Section 7.01
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance;
(vi) agrees that it will, independently and without reliance upon
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement;
(vii) represents and warrants that its name set forth on Schedule I
hereto is its legal name;
(viii) agrees that, from and after the Effective Date, it will be
bound by the provisions of the Loan Agreement and the other Loan Documents and,
to the extent of the Assigned Interest, it will perform in accordance with their
terms all of the obligations that by the terms of the Loan Agreement are
required to be performed by it as Lender; and
(ix) the effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date specified on Schedule I hereto.
As of the Effective Date, (a) such Assignee shall be a party to the Loan
Agreement and, to the extent that rights and obligations under the Loan
Agreement have been assigned to it pursuant to this Assignment and Acceptance,
have the rights and obligations of Lender thereunder and (b) such Assignor
shall, to the extent that any rights and obligations under the Loan Agreement
have been assigned by it pursuant to this Assignment and Acceptance, relinquish
its rights (other than provisions of the Loan Documents that are specified under
the terms of such Loan Documents to survive the payment in full of the
Obligations of Borrower under or in respect of the Loan Documents) and be
released from its obligations under the Loan Agreement (and, if this Assignment
and Acceptance covers all or the remaining rights and obligations of such
Assignor under the Loan Agreement, such Assignor shall cease to be a party
thereto).
Such Assignor and such Assignee shall make all appropriate adjustments in
payments under the Loan Agreement and the Note for periods prior to the
Effective Date directly between themselves.
Such Assignee hereby covenants and agrees that, prior to the date which is
one year and one day after the payment in full of all outstanding commercial
paper, extendible notes and any other debt securities of Concord, rated at the
request of Concord by an internationally recognized
F-2
rating agency, it will not institute against, or join any other Person in
instituting against, Concord any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of any jurisdiction. The provisions of this paragraph shall survive the
termination of the Loan Agreement.
This Assignment and Acceptance shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
This Assignment and Acceptance shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Acceptance may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule I hereto by telecopier shall be effective as delivery of an originally
executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule I
hereto to be executed by their respective officers thereunto duly authorized, as
of the date specified thereon.
F-3
Schedule I
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned _______% _______% _______% _______% _______%
Amount of Maximum Credit assigned $_______ $_______ $_______ $_______ $_______
Aggregate outstanding principal amount
of Loans assigned $_______ $_______ $_______ $_______ $_______
Principal amount of Note payable to Assignor $_______ $_______ $_______ $_______ $_______
Principal amount of Note payable to Assignee $_______ $_______ $_______ $_______ $_______
Effective Date: ,
---------- --- ----
Assignor
, as
------------------------------------
Assignor
[Type or print legal name of Assignor]
By
-------------------------------------
Name:
Title:
Dated: ,
---------- --- ----
Exhibit G
UNDERWRITING GUIDELINES
G-1
Exhibit H
FORM OF REQUEST FOR RELEASE
[Date]
Babson Capital Management LLC
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ 011115-5189
Attention: Managing Director,
Real Estate Finance Group
Re: American Strategic Income Portfolio Inc.-III
Ladies and Gentlemen:
This Notice of Prepayment is delivered to you pursuant to Section 2.06 of
the Amended and Restated Master Loan and Security Agreement, dated as of
__________, 2008, (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement") by and among American Strategic Income Portfolio
Inc.-III ("Borrower"), Massachusetts Mutual Life Insurance Company ("Lender"),
and Babson Capital Management LLC ("Agent"). Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings provided in
the Loan Agreement.
Borrower hereby irrevocably notifies Agent that Borrower shall prepay the
[TERM LOAN/REVOLVING LOAN], on __________ __, 20__, in aggregate principal
amount of $[__________] and requests the release by Lender of all right,
interest, lien or claim of any kind with respect to the Mortgage Loans described
in the attached Schedule A.
[Signature page follows]
H-1
Borrower has caused this Request for Release to be executed and delivered,
and the certification and warranties contained herein to be made, by its duly
authorized officer this the day of __________ __, 20__.
Very truly yours,
AMERICAN STRATEGIC INCOME PORTFOLIO
INC.-III
By:
------------------------------------
Name:
Title:
H-2
Schedule A
to Exhibit H
SCHEDULE OF MORTGAGE LOANS PROPOSED TO BE RELEASED