AMENDED AND RESTATED LOAN AGREEMENT
Dated as of May 1, 1999,
by and among
TRINET REALTY CAPITAL, INC.,
as Lender,
and
▇▇▇ ▇▇▇, L.P.,
as Borrower
TABLE OF CONTENTS
1. Definitions; Certain Terms................................................ 1
1.1 Definitions..................................................... 1
1.2 Certain Terms................................................... 9
1.3 Replacement of Prior Loan Agreement............................. 9
2. The Loan; Payment Due on Maturity Date.................................... 9
2.1 Execution of Loan Documents..................................... 9
2.2 Payment on Maturity............................................. 9
3. Interest Rate Provisions; Payments........................................ 9
3.1 Applicable Interest Rate........................................ 9
3.2 Payments....................................................... 10
3.3 Computations................................................... 10
4. Late Charges; Prepayment................................................. 10
4.1 Late Charges................................................... 10
4.2 Prepayment..................................................... 10
5. Manner of Payment........................................................ 11
6. Conditions............................................................... 11
6.1 Documents...................................................... 11
6.2 Other Actions.................................................. 13
6.3 Opinions and Assurances........................................ 13
6.4 Representations................................................ 13
6.5 Closing Expenses............................................... 13
7. Representations and Warranties........................................... 13
7.1 Due Authorization.............................................. 14
7.2 Enforceability................................................. 14
7.3 Restricted Activities.......................................... 14
7.4 Borrower Obligations........................................... 14
7.5 General Partner................................................ 15
7.6 Transactions with Affiliates................................... 15
7.7 Employees...................................................... 15
7.8 No Violation................................................... 15
7.9 Consents....................................................... 15
7.10 Solvency...................................................... 16
7.11 Delinquent Property Liens..................................... 16
7.12 Defenses...................................................... 16
7.13 Lien Priority................................................. 16
7.14 Improvements.................................................. 17
7.15 Casualty; Condemnation........................................ 17
7.16 Zoning and Other Laws......................................... 17
7.17 Leases........................................................ 17
7.18 Tenant Estoppels.............................................. 17
7.19 Litigation.................................................... 17
7.20 Brokerage and Other Fees...................................... 17
7.21 Investment Company............................................ 17
7.22 Other Agreements.............................................. 17
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8. Affirmative Covenants.................................................... 18
8.1 Financial Statements; Other Information........................ 18
8.2 Maintenance of Existence and Property.......................... 18
8.3 Inspection of Property; Books and Records; Discussions; Bank
Accounts and Funds............................................. 18
8.4 Notices........................................................ 18
8.5 Expenses....................................................... 19
8.6 Loan Documents................................................. 19
8.7 Indemnification................................................ 19
8.8 Property Management............................................ 20
8.9 Impositions.................................................... 20
8.10 Insurance..................................................... 20
9. Negative Covenants....................................................... 20
9.1 Indebtedness................................................... 20
9.2 Consolidation and Merger....................................... 21
9.3 Sale of Assets-Encumbrances.................................... 21
9.4 Transactions with Affiliates................................... 21
9.5 Restricted Activities.......................................... 21
9.6 Fiscal Year.................................................... 21
9.7 Manager........................................................ 22
9.8 Leases......................................................... 22
10. Events of Default....................................................... 22
10.1 Payment Default............................................... 22
10.2 Misrepresentation............................................. 22
10.3 Negative Covenant Default..................................... 22
10.4 Other Loan Defaults........................................... 22
10.5 Bankruptcy, etc............................................... 23
10.6 Judgments..................................................... 23
10.7 Defaults Under Other Agreements............................... 23
10.8 Net Worth..................................................... 23
10.9 Tenant Defaults............................................... 24
10.10 Additional Borrower Cure Right............................... 24
10.11 Remedies..................................................... 24
11. Miscellaneous Provisions................................................ 24
11.1 Assignment.................................................... 24
11.2 Agents........................................................ 24
11.3 Cumulative Rights; No Waiver.................................. 24
11.4 Entire Agreement.............................................. 25
11.5 Survival...................................................... 25
11.6 Notices....................................................... 25
11.7 Headings...................................................... 26
11.8 Modifications in Writing...................................... 26
11.9 Execution in Counterparts..................................... 26
11.10 Severability of Provisions................................... 26
11.11 WAIVER OF JURY TRIAL......................................... 26
11.12 Reinstatement; Recapture..................................... 26
11.13 Governing Law................................................ 26
11.14 Cross Collateralization; Marshalling, etc.................... 27
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Table of Schedules
Schedule 6.1(iv) UCC Filings
Schedule 7.6 Transactions with Affiliates
Schedule 7.14 Encroachments
Schedule 7.19 Litigation
Table of Exhibits
Exhibit A Form of Environmental Indemnity
Exhibit B Form of Guaranty
Exhibit C Form of Assumption Agreement
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AMENDED AND RESTATED LOAN AGREEMENT
AMENDED AND RESTATED LOAN AGREEMENT, dated as of May 1, 1999, by and
between TRINET REALTY CAPITAL, INC., a Maryland corporation ("Lender"), as
lender, and ▇▇▇ ▇▇▇, L.P., a Delaware limited partnership ("Borrower"), as
borrower.
RECITALS
A. Lender made a Loan to ICG Services, Inc., a Delaware corporation
("Guarantor"), the proceeds of which Guarantor used to purchase the Property.
B. Guarantor intends to sell the Property to Borrower, and Borrower wishes
to acquire the Property subject to the Deed of Trust and to assume Guarantor's
obligations under the Loan Documents.
C. Lender is willing to allow Borrower to assume the Loan and Guarantor's
obligations under the Loan Documents, on the terms and conditions set forth
herein and in the other Loan Documents.
AGREEMENT
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions; Certain Terms.
1.1 Definitions. For purposes of this Agreement, the terms set forth below
shall have the following meanings:
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agreement" shall mean this Amended and Restated Loan Agreement, as it may
be amended from time to time in accordance with its terms.
"Assumption Agreement" shall mean the Assumption and Modification Agreement
dated as of May 1, 1999, among Borrower, Guarantor and Lender.
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"Borrower" shall have the meaning given such term in the introductory
paragraph of this Agreement.
"Borrower Partnership Agreement" shall mean the Limited Partnership
Agreement of ▇▇▇ ▇▇▇, L.P., dated as of May 1, 1999, between General Partner, as
general partner, and Limited Partner, as limited partner, as such agreement may
be amended or otherwise modified from time to time in accordance with the terms
thereof and hereof.
"Business Day" means any day other than Saturdays, Sundays and days on
which national banks are permitted to be closed in accordance with Federal
banking laws and regulations.
"Closing Date" shall mean the date on which all of the conditions precedent
set forth in Section 6 below shall all have been satisfied or waived.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute(s).
"Collateral" shall mean the Property and the other "Mortgaged Property," as
defined in the Deed of Trust.
"Deed of Trust" shall mean the Deed of Trust, Assignment of Rents and
Security Agreement dated as of January 1, 1999, among Guarantor, as trustor, the
Public Trustee of Arapahoe County, Colorado, as trustee, and Lender, as
beneficiary, as modified by the Assumption Agreement.
"Default Rate" shall mean a rate of interest equal to five hundred (500)
basis points in excess of the Interest Rate in effect from time to time.
"Effective Date" shall mean May 1, 1999.
"Environmental Indemnity" shall mean a Secured Environmental Indemnity,
dated as of the Effective Date, in the form attached hereto as Exhibit A.
"Environmental Laws" shall mean all laws, ordinances, rules, regulations,
orders and other requirements of any government or public authority now in force
or that may hereafter be in force relating to protection of human health or the
environment, including all requirements pertaining to reporting, licensing,
permitting, investigation and remediation of emissions, discharges, storage,
disposal or releases of Hazardous Substances and all requirements pertaining to
the protection of the health and safety of employees or the public.
"Escrow Company" shall mean Land Title Guarantee Company.
"Event of Default" shall have the meaning given such term in Section 10.
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"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect on the applicable date.
"General Partner" shall mean ICG Corporate Headquarters, L.L.C., a Colorado
limited liability company, in its capacity as general partner of Borrower, and
any successor general partner of Borrower.
"Governmental Authority" shall mean any federal, state, local or foreign
court, agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever or any governmental or
quasi-governmental unit, whether now or hereafter in existence, or any officer
or official thereof, having jurisdiction over Borrower or the Property.
"Guarantor" shall have the meaning given such term in Recital A of this
Agreement.
"Guaranty" shall mean the Guaranty executed by Guarantor in the form of
Exhibit B attached hereto.
"Hazardous Substance" shall mean any hazardous or toxic substance, material
or waste, or any pollutant or contaminant, or words of similar import, that is
or becomes regulated by any Governmental Authority, and includes, but is not
limited to, any material or substance that is, (i) designated as a "hazardous
substance" pursuant to section 311 of the Federal Water Pollution Control Act
(33 U.S.C. section 1317), (ii) defined as a "hazardous waste" pursuant to
section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
section 6901 et seq. (42 U.S.C. section 6903), (iii) defined as a "hazardous
substance" pursuant to section 101 of the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. section 9601 et seq.), (iv) asbestos,
(v) petroleum (including crude oil or any fraction thereof, natural gas, natural
gas liquids, liquefied natural gas, or synthetic gas usable for fuel, or any
mixture thereof), (vi) petroleum products, (vii) polychlorinated biphenyls,
(viii) urea formaldehyde, (ix) radon gas, (x) radioactive matter, (xi) medical
waste, and (xii) chemicals that may cause cancer or reproductive toxicity.
"ICGC" shall mean ICG Communications, Inc., a Delaware corporation.
"ICGC Financial Statements" shall have the meaning set forth in Section
1.19 of the Deed of Trust.
"ICG Lease" shall mean that certain Lease dated as of January 15, 1998,
between TEFX, as landlord, and Tenant, as tenant, as amended by that certain
First Amendment to Lease dated as of January 1, 1999 and by that Second
Amendment to Lease dated as of May 1, 1999.
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"ICG Parties" shall mean, collectively, Borrower, Guarantor, ICGC and all
Significant Subsidiaries of Borrower, Guarantor and ICGC.
"Impositions" shall have the meaning set forth in Section 1.8 of the Deed
of Trust.
"Improvements" shall mean all buildings and improvements now or hereafter
located or placed in or on the Land, including the existing office building that
has a gross area of approximately 239,749 square feet, together with any
additions thereto or alterations or replacements thereof.
"Indebtedness" of any Person shall mean, without duplication, (i) any
liability of such Person, to the extent it would appear as a liability on a
balance sheet of such Person prepared in accordance with GAAP, (a) for borrowed
money, (b) evidenced by a bond, note, debenture or similar instrument (including
a purchase money obligation) given in connection with the acquisition of any
businesses, properties or assets of any kind (other than a trade payable or a
current liability arising in the ordinary course of business), (c) for the
payment of money relating to a capitalized lease obligation or (d) evidenced by
a currency agreement or an interest rate agreement; (ii) any liability of such
Person under any reimbursement obligation relating to a letter of credit,
statutory obligation, performance or surety bond; (iii) any liability of others
described in the preceding clauses (i) and (ii) that such Person has guaranteed
or that is otherwise its legal liability or that is secured by a Lien on
property of such Person; and (iv) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types referred
to in clauses (i), (ii) and (iii) above.
"Indemnified Parties" shall have the meaning given such term in Section
8.7.
"Insurance Requirements" shall mean all provisions of the insurance
policies covering or applicable to all or any part of the Property or the
ownership, occupancy, right to possession, use, improvement, operation or
maintenance thereof, all requirements of the issuer of any of such insurance
policies and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions, including any local board of fire underwriters) that, pursuant to an
insurance policy, are binding upon Borrower and applicable to the Property.
"Interest Rate" shall have the meaning set forth in Section 3.1.
"Land" shall mean the real property described in Exhibit A to the Deed of
Trust.
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"Leases" shall mean all leases, licenses, rental agreements, subleases,
occupancy agreements, licenses and other agreements respecting the occupancy or
use of any part of the Real Property, in effect at any time during the term of
this Agreement.
"Lender" shall have the meaning set forth in the introductory paragraph to
this Agreement.
"Lien" shall mean any lien, mortgage, pledge, security interest or other
encumbrance of any nature upon any property of any Person, including any
mechanic's lien, materialmen's lien, conditional sale or other title retention
agreement or lease in the nature thereof.
"Limited Partner" shall mean TriNet Realty Investors V, Inc., a Maryland
corporation.
"Loan" shall mean the loan evidenced by the Note.
"Loan Assumption" shall mean Borrower's assumption of the Loan and the
obligations of the borrower under the Loan Documents.
"Loan Documents" shall mean, collectively, this Agreement, the Assumption
Agreement, the Note, the Deed of Trust, the Guaranty, the Environmental
Indemnity, any certificates delivered by Guarantor, General Partner or Borrower
in connection with the closing of the Loan or the Loan Assumption and any other
document, instrument or agreement executed by Guarantor, General Partner or
Borrower and delivered to Lender and evidencing, securing or relating to the
Note, as any of the same may from time to time be amended in accordance with
their terms and the terms hereof.
"Loan Year" shall mean each twelve-month period during the term of the
Loan, with the first Loan Year commencing on February 1, 1999 and terminating
January 31, 2000, and each subsequent Loan Year commencing on the next day,
February 1, and ending the following January 31.
"Losses" shall have the meaning given such term in Section 8.7.
"Management Agreement" shall mean that certain Agreement, dated as of
January 1, 1999, between Borrower's predecessor in interest, as owner, and
TriNet Property Management, Inc., a Maryland corporation, as manager, pursuant
to which property management services are being provided for the Real Property,
as it may be amended from time to time in accordance with its terms and the
terms hereof.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial condition of Borrower, (b)
5
the ability of Borrower to pay the Obligations in accordance with their terms,
(c) the Property or its value or utility, or (d) the Liens of Lender in the
Collateral or the priority of such Liens; provided, however, that a subdivision
of the Property pursuant to the Subdivision Agreement shall not constitute a
Material Adverse Effect.
"Maturity Date" shall mean January 31, 2013.
"Note" shall mean the $33,076,754 Promissory Note dated as of January 1,
1999, executed by Guarantor in favor of Lender and assumed by Borrower.
"Obligations" shall mean all loans, advances, debts, liabilities,
obligations, covenants and duties owing to Lender by Borrower of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement, the Note or any of the other
Loan Documents, whether or not for the payment of money, arising by reason of an
extension of credit, absolute or contingent, due or to become due, now existing
or hereafter arising, including all principal, interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum chargeable to Borrower
under this Agreement or any other Loan Document.
"Officer's Certificate" shall mean a certificate of an authorized officer
of General Partner.
"Permitted Exceptions" shall mean (i) the Liens created by the Deed of
Trust, the Memorandum of Right of First Refusal and the Option and Option
Agreement (as each are defined in the Borrower Partnership Agreement), (ii) the
ICG Lease, (iii) any future Leases, to the extent permitted hereunder, that are
or can be, without any action other than notice by Borrower, subordinate to the
Deed of Trust, (iv) any covenants, conditions, Liens, restrictions, rights of
way, easements and other matters, whether or not of public record or identified
in the Title Policy approved in writing by Lender and (v) other covenants,
conditions, restrictions, rights of way, easements and other matters, excluding
mortgages and other similar monetary encumbrances, to which like properties are
commonly subject and that do not impose any material affirmative obligations on
the owner of the Property or require the removal of any improvements from the
Property and that individually and in the aggregate do not and will not either
(a) materially interfere with the benefits of the security intended to be
provided by the Deed of Trust or the current use of the Property or (b)
materially impair the value or marketability of the Property.
"Person" shall mean any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or Governmental Authority.
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"Personal Property" shall mean all tangible personal property of Borrower
now or at any time hereafter located on or at the Real Property or used or
usable in connection with the intended use of the Real Property or any other
future occupancy or use of the Real Property and any replacements thereof,
including, but without limiting the generality of the foregoing, landscaping,
water treatment, garage and power equipment and supplies, engines, lifting,
cleaning, fire prevention, fire extinguishing, and communications apparatus,
incinerating equipment, shades, awnings, screens, storm doors and windows,
partitions, carpets, rugs, furnishings, televisions, radios, lamps, mirrors,
paintings and other works of art, wall hangings, decorations, and maintenance
equipment; excluding, however, any Personal Property owned by Tenant, any tenant
under any other Lease or by the Property Manager.
"Potential Default" shall mean an event or condition which, but for the
lapse of time or the giving of notice, or both, would, unless cured or waived,
constitute an Event of Default.
"Property" shall mean, collectively, the Real Property and the Personal
Property.
"Property Manager" shall mean the manager under the Management Agreement
and its successors and assigns.
"Real Property" shall mean, collectively, the Land and the Improvements.
"Requirements of Law" shall mean, as to any Person, (i) the corporate
charter and by-laws (in the case of a corporation), partnership agreement and
certificate or statement of partnership (in the case of a partnership) or other
organizational or governing documents of such Person, (ii) any legal requirement
including any local, state, federal or foreign statute, law, ordinance, code,
treaty, rule or regulation now or hereafter in effect (including Environmental
Laws and the Americans with Disabilities Act of 1991), or final and binding
determination of an arbitrator, or order, judgment, decree, injunction, permit,
license, authorization, certificate, franchise, approval, notice, demand letter,
direction or determination of any Governmental Authority applicable to or
binding upon such Person or any of its property (or the operation, management,
use or condition of its property) or to which such Person or any of its property
(or the operation, management, use or condition of its property) is subject or
(iii) any recorded deed of restriction, declaration, covenant running with the
land or otherwise, now or hereafter in force (including any such deed,
declaration or covenant that constitutes a Permitted Exception) other than any
such deed, declaration or covenant (a) the noncompliance with which will not
have a material adverse effect on the value, utility or legal compliance of the
Property or (b) as to which the Title Policy contains affirmative insurance
7
against any failure or reversion or title and against loss of priority of the
Lien of the Deed of Trust as a result of noncompliance therewith.
"Significant Subsidiaries" shall mean, as to any Person at any date of
determination, any Subsidiary of such Person that, together with its
Subsidiaries, (i) for the most recent fiscal year of such Person, accounted for
more than ten percent (10%) of the consolidated revenues of such Person and its
Subsidiaries, or (ii) as of the end of such fiscal year, was the owner of more
than ten percent (10%) of the consolidated assets of such Person and its
Subsidiaries, all as set forth on the most recently available consolidated
financial statements of such Person for such fiscal year.
"Subdivision Agreement" shall have the meaning given such term in Section
5.14 of the Deed of Trust.
"Subsidiary" shall mean, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) of which more
than fifty percent (50%) of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of such Person or a combination thereof, and
(ii) any partnership, joint venture, limited liability company or similar entity
of which (a) more than fifty percent (50%) of the capital accounts, distribution
rights, total equity and voting interests or general or limited partnership
interests, as applicable, are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person or a
combination thereof whether in the form of membership, general, special or
limited partnership or otherwise, and (b) such Person or any Subsidiary of such
Person is a general partner or otherwise controls such entity.
"Taking" shall mean a governmental taking described in Section 1.13 of the
Deed of Trust.
"Tangible Net Worth" shall mean the book value of the consolidated assets
of Guarantor and its Subsidiaries (exclusive of goodwill, patents, trademarks,
trade names, deferred organization costs, treasury stock, deferred charges and
other like intangibles, and exclusive of any receivable where the receivable
debtor is a direct or indirect Subsidiary of Guarantor or is an officer of
Guarantor or an officer of a direct or indirect Subsidiary of Guarantor) less
(a) reserves applicable thereto, and (b) all liabilities net of unamortized debt
discounts (including accrued and deferred income taxes).
"TEFX" shall mean TriNet Essential Facilities X, Inc., a Maryland
corporation.
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"Tenant" shall mean ICG Holdings, Inc., a Colorado corporation.
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policy" shall have the meaning given such term in Section 6.1(x).
"Transactions" shall mean the transactions contemplated by the Loan
Documents.
1.2 Certain Terms. Unless the context indicates otherwise, all accounting
terms are used herein as defined under GAAP. All references to Sections,
Schedules, Exhibits, etc. are to Sections, Schedules or Exhibits of or to this
Agreement unless otherwise specified. Any of the terms defined in Section 1.1
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Herein," "hereunder" and words of similar import
refer to this Agreement as an entirety and not to particular Sections of this
Agreement. The word "including" shall be construed to be followed by the words
"without limitation."
1.3 Replacement of Prior Loan Agreement. As of the Closing Date, this
Agreement replaces and supercedes in its entirety that certain Loan Agreement
dated as of January 1, 1999, between Guarantor, as borrower, and Lender, as
lender.
Section 2. The Loan; Payment Due on Maturity Date.
2.1 Execution of Loan Documents. On the terms and subject to the conditions
set forth herein, on the Closing Date, Borrower shall execute this Agreement,
and Borrower and Guarantor shall execute the Assumption Agreement and the
Environmental Indemnity, and Guarantor shall execute the Guaranty.
2.2 Payment on Maturity. On the Maturity Date, Borrower shall pay to Lender
an amount equal to the then outstanding principal balance of the Note, plus
interest accrued and unpaid thereon and any other amounts due and unpaid under
the Loan Documents. Upon payment in full of all amounts described in the
preceding sentence, Lender, at the request of Borrower, shall execute and
deliver or cause to be executed and delivered such documents as may be required
to release the Lien of the Deed of Trust, including a "Request for Release of
Deed of Trust," and tender to Borrower the original Note marked "canceled and
paid in full."
Section 3. Interest Rate Provisions; Payments.
3.1 Applicable Interest Rate. Except when the Default Rate is in effect as
provided in Section 4.1, the principal amount outstanding under the Note shall
bear interest from and after the Effective Date to and including the date
9
of payment in full at the following rates of interest (the "Interest Rate"):
during the first Loan Year, at the rate of fourteen and seven thousand six
hundred eighty-six ten thousandths percent (14.7686%) per annum; and during the
second Loan Year and each Loan Year thereafter, at a rate of interest equal to
one hundred three percent (103%) of the Interest Rate in effect for the
immediately preceding Loan Year. For example, the Interest Rate during the
second Loan Year shall be fifteen and two thousand one hundred seventeen ten
thousandths percent (15.2117%) per annum, and the Interest Rate during the third
Loan Year shall be fifteen and six thousand six hundred eighty-one ten
thousandths percent (15.6681%) per annum.
3.2 Payments. On the first day of each calendar month during the term of
the Loan, Borrower shall pay, in advance, all interest, at the Interest Rate,
that will accrue during such month against the principal sum of the Loan, as
provided in the Note. So long as no Event of Default has occurred, each monthly
installment paid under the Note shall be applied to accrued interest accruing
during the applicable month.
3.3 Computations. All computations of interest payable hereunder shall be
on the basis of a 360-day year of twelve 30-day months and, for partial months,
the actual days elapsed.
Section 4. Late Charges; Prepayment.
4.1 Late Charges. If any installment under the Note is not paid on the date
due, such installment shall bear interest at the lesser of five hundred basis
points (500) in excess of the prime or reference rate announced from time to
time by Bank of America NT&SA or twelve percent (12%) per annum, from the due
date until such installment is paid. In addition, Borrower shall pay to Lender a
late charge equal to six percent (6%) of the amount of any installment under the
Note that is not paid within five (5) Business Days of the date due. As long as
an Event of Default under this Agreement, the Note or any other Loan Document
exists, and from and after maturity of the Loan, whether or not resulting from
acceleration, the entire unpaid balance of the principal sum of the Note shall
bear interest at the Default Rate.
4.2 Prepayment. Except as expressly provided to the contrary in this
Agreement, Borrower shall have no right, at any time, to prepay the Note in
whole or in part. Borrower agrees that every payment of any portion of the
unpaid balance of the principal sum of the Note before the Maturity Date shall
constitute a prepayment under the Note, whether such payment occurs voluntarily,
involuntarily, or by acceleration of the maturity of the indebtedness evidenced
by the Note by Lender. Borrower further agrees that, upon any such payment of
the Note before the Maturity Date, Borrower shall, with such payment, pay to
Lender a prepayment charge determined in accordance with this Section 4.2.
Without limiting the foregoing, following any acceleration of the maturity of
the indebtedness evidenced by the Note, such prepayment charge shall be included
10
in the total amount due to Lender at any foreclosure sale under the Deed of
Trust and any tender of payment of the indebtedness evidenced by the Note
before, at or after any foreclosure sale under the Deed of Trust shall include
such prepayment charge. The prepayment charge shall be equal to five percent
(5%) of the entire unpaid balance of the principal sum of the Note as of the
prepayment date. Borrower agrees that material individual weight to the
consideration in this transaction has been given for the foregoing waiver and
agreement, and Borrower shall be estopped from claiming hereafter that
Borrower's agreement to pay such prepayment charge in accordance with this
Agreement is invalid or unenforceable in any respect for any reason.
4.3 Permitted Prepayment. Notwithstanding anything to the contrary
contained herein, Borrower may prepay all, but not less than all, of the
principal and interest outstanding under the Note prior to the Maturity Date
without paying the prepayment charge upon the occurrence of either one or both
of the following events:
(a) the closing of the option to purchase the partnership
interests of General Partner or the option to purchase the Real
Property pursuant to Articles X and XI of the Borrower Partnership
Agreement; or
(b) the occurrence of a lease termination pursuant to Section
16.1 of the Lease dated January 15, 1998, between Tenant and
Borrower's predecessor, following a condemnation or exercise of
eminent domain power.
Any prepayment that occurs pursuant to subsection 4.3 (a) shall be effective as
of the first day of the month in which the prepayment is made, unless the
purchase option is exercised as a result of the Put Option (as defined in the
Borrower Partnership Agreement), in which case the prepayment shall be effective
on the date paid.
Section 5. Manner of Payment. All payments made hereunder shall be made in
accordance with the provisions hereof without setoff or counterclaim as against
Lender, in lawful money of the United States of America, free and clear of and
without deduction for any taxes, fees or other charges of any nature whatsoever
imposed by any taxing authority.
Section 6. Conditions. Lender's obligation to consent to the Loan
Assumption and to perform any other obligation of Lender herein contemplated to
be performed on or after the Closing Date is subject to the following
conditions:
6.1 Documents. Borrower shall have delivered or shall have caused to be
delivered as of the Closing Date to Lender each of the following, in form and
substance satisfactory to Lender:
(i) A duly executed original of this Agreement;
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(ii) An original Assumption Agreement, duly executed and acknowledged by
Borrower and Guarantor, in the form of Exhibit C to this Agreement;
(iii) An original Guaranty, executed by Guarantor;
(iv) A duly executed original of each of the UCC financing statements and
fixture filings described in Schedule 6.1(iv);
(v) An original Environmental Indemnity, executed by Guarantor and
Borrower;
(vi) Appropriate organizational and authorization documents for Borrower
and Guarantor authorizing the execution and delivery of all Loan Documents
required to be delivered by such party on the Closing Date, which documents
shall include (a) Borrower's certificate of limited partnership, certified by
the appropriate Governmental Authority, (b) the articles of organization or
certificates of incorporation of Guarantor and General Partner, certified by the
appropriate Governmental Authority, (c) the operating agreement for Borrower,
(d) the by-laws of General Partner and of Guarantor, and (e) authorizing
resolutions of each of Borrower, General Partner and Guarantor, with respect to
the Loan Documents to which it is a party;
(vii) Good-standing certificates or other evidence of qualification to do
business for each of Borrower, General Partner and Guarantor, in each case
certifying that such entity is duly qualified to do business and is in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification;
(viii) A legal opinion or opinions of counsel to Borrower and Guarantor
dated as of the Closing Date, covering such matters as Lender may reasonably
request, including without limitation, the enforceability of the Loan Documents;
(ix) Certificates evidencing insurance for the Real Property in amount and
scope and with loss payment provisions as required by the Deed of Trust;
(x) An ALTA extended coverage lender's policy of title insurance Form
1992-B (the "Title Policy") (including all coverages, endorsements and
reinsurance reasonably requested by Lender) or an irrevocable and unconditional
commitment to issue such Title Policy from the Title Company, dated as of the
Closing Date, in an amount of $33,076,754, showing fee simple title to the Real
Property vested in Borrower, and insuring the Deed of Trust as a valid first
Lien on the Real Property subject only to the Permitted Exceptions;
(xi) An Officer's Certificate dated the Closing Date, to the effect that on
and as of the Closing Date: (i) the representations and warranties of Borrower
12
contained in the Loan Documents shall be accurate and complete in all material
respects and (ii) there shall not exist an Event of Default or Potential
Default;
(xii) An original Subdivision Agreement duly executed by Borrower and
Tenant;
(xiii) An original Subordination, Non-Disturbance and Attornment Agreement,
in form acceptable to Lender, executed by Borrower and Tenant; and
(xiv) An estoppel certificate from Tenant in the form attached as Exhibit A
to the Lease.
6.2 Other Actions. All acts and conditions and things (including the
obtaining of any necessary approvals of Governmental Authorities and the making
of any required filings, recordings or registrations) required to be done and
performed by Borrower and to have happened prior to or simultaneously with the
execution, delivery and performance of the Loan Documents and to constitute the
same legal, valid and binding obligations of Borrower, enforceable in accordance
with their respective terms, shall have been done and performed and shall have
happened in compliance with all applicable Requirements of Law.
6.3 Opinions and Assurances. All opinions, certificates and other
instruments required hereunder or by any other Loan Document, and all
proceedings in connection with the Transactions shall be reasonably satisfactory
in form and substance to Lender. Lender shall have received copies of all
instruments and other evidence as Lender may reasonably require, in form and
substance reasonably satisfactory to it, with respect to the Transactions and
the taking of all corporate proceedings in connection therewith.
6.4 Representations. On and as of the Closing Date: (i) the representations
and warranties of Borrower and Guarantor contained in the Loan Documents shall
be accurate and complete in all material respects and (ii) there shall not
exist, after giving effect to the execution and delivery of the Loan Documents,
an Event of Default or Potential Default.
6.5 Closing Expenses. Borrower shall have paid or caused to be paid to the
Escrow Company amounts sufficient to pay all transfer taxes and recording
charges required to be paid in connection with the Transactions as well as all
title premiums for the Title Policy and other reasonable title and escrow
charges. Borrower shall have paid the attorneys' fees and expenses of Lender's
counsel incurred in connection with the preparation and negotiation of the Loan
Documents.
Section 7. Representations and Warranties. As an inducement to Lender to
allow Borrower to assume the obligations of the borrower under the Loan
13
Documents as provided herein, Borrower represents and warrants to Lender that as
of the Closing Date each of the following statements shall be true and correct:
7.1 Due Authorization. Borrower is a limited partnership duly formed and
validly existing under the laws of the State of Colorado, with the requisite
partnership power and authority to own its properties, enter into the Loan
Documents and consummate the Transactions; and Borrower is qualified to do
business in Colorado and each other jurisdiction in which its properties are
located or where its ownership, leasing or operation of its property or the
conduct of its business requires such qualification.
7.2 Enforceability. The Loan Documents to which it is a party executed on
or before the Closing Date by Borrower have been duly authorized, executed and
delivered on behalf of Borrower and constitute the legal, valid and binding
obligations of Borrower enforceable against it in accordance with their
respective terms, subject to the effect of applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
7.3 Restricted Activities. The Borrower Partnership Agreement provides that
the only purposes of Borrower are to (i) purchase, hold title to and operate,
lease and otherwise deal directly or indirectly, with the Property, (ii) borrow
the Indebtedness evidenced by the Note and other Indebtedness that is not
prohibited under Section 9.1 hereof, (iii) give security for the Note and other
Indebtedness that is not prohibited under Section 9.1 hereof, (iv) enter into
contractual arrangements for the management and operation of the Property and
otherwise in furtherance of the purposes of Borrower, (v) sell, exchange and
refinance the Property and (vi) engage in such activities and exercise such
other powers permitted to limited partnerships under the laws of Delaware that
are necessarily incident to the foregoing purposes or necessary to accomplish
the foregoing purposes. The Borrower Partnership Agreement also provides that
only General Partner and Limited Partner acting together may commence or file a
bankruptcy petition or reorganization proceeding or similar proceeding by or on
behalf of Borrower under any federal or state law or any informal reorganization
or liquidation, including any arrangement for the benefit of creditors, or any
similar proceeding by or on behalf of Borrower.
7.4 Borrower Obligations. Borrower (i) believes it will be able to fund
from its own assets (including its initial working capital reserve) all of its
activities, expenses and liabilities, (ii) intends to pay its own operating
expenses and liabilities from its own funds, and (iii) has at all times since
its formation identified itself, in all dealings with the public, under its own
name and as a separate and distinct entity, and has not identified itself as
14
being a division or a part of any other Person, or identified any other Person
as being a division or a part of Borrower or General Partner.
7.5 General Partner. General Partner is a limited liability company, duly
organized and validly existing under the laws of Colorado, with the requisite
corporate power and authority to enter into the Loan Documents and consummate
the Transactions and to own its properties and conduct its business; and General
Partner is qualified to do business in Colorado and each other jurisdiction in
which its properties are located or where its ownership, leasing or operation of
its property or the conduct of its business requires such qualification. General
Partner is the sole General Partner of Borrower.
7.6 Transactions with Affiliates. Except as disclosed in Schedule 7.6,
Borrower has not purchased, acquired or leased any property from, or sold,
transferred or leased any property to, or loaned or advanced any money to, or
borrowed any money from, or guaranteed any obligation of, or acquired any stock,
obligations, or securities of, or entered into any merger or consolidation
agreement, or any management or similar agreement with, any Affiliate of General
Partner, or entered into any other transaction or arrangement or made any
payment to (including on account of any management fees, services fees, office
charges, consulting fees, technical services charges or tax sharing charges) or
otherwise dealt with, in the ordinary course of business or otherwise, any
Affiliate of General Partner on terms other than arm's-length commercially
reasonable terms.
7.7 Employees. Borrower has no employees.
7.8 No Violation. Neither the execution, delivery or performance of any
Loan Document nor the consummation of any of the Transactions violates or will
violate the Borrower Partnership Agreement or the charter or by-laws of General
Partner or Guarantor or violates, conflicts with or constitutes a default under
any agreement to which any of them is a party or by which any or them or the
Property is bound, violates any Requirements of Law to which Borrower or the
Property is subject or will result in the imposition of a Lien on the Property
other than Permitted Exceptions. None of the Transactions will result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including Regulations G, T, U, and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.
7.9 Consents. No consents, approvals, filings, permits or notices of, from,
with or to any Person are required on the part of Borrower or Guarantor that
have not been duly obtained, made or given, as the case may be (a) for the due
execution and delivery of each of the Loan Documents to which it is a party or
(b) for the performance of the Loan Documents in accordance with their terms
(except for obtaining approvals or permits from any Governmental Authority to
15
construct tenant improvements or other construction work at or about the Real
Property or for other future actions consent to which are contemplated or
required by the Loan Documents) and consummation of, or otherwise in connection
with, any of the Transactions.
7.10 Solvency. None of the Transactions will be or have been made with an
actual intent to hinder, delay or defraud any present or future creditors of
Borrower or Guarantor, and neither Borrower, Guarantor nor General Partner is,
nor will be, rendered insolvent by the Transactions, and Borrower has received
fair consideration and reasonably equivalent value in good faith for the grant
of the Lien created by the Deed of Trust. Each of Borrower, Guarantor and
General Partner is able to pay its debts as they become due, including
contingent obligations likely to become due.
7.11 Delinquent Property Liens. Except for claims that are being contested
in accordance with the Deed of Trust or that are not material in amount or that
constitute or will constitute Permitted Exceptions, to the best of Borrower's
knowledge there is no delinquent Imposition, sewer rent, water charge,
assessment or other outstanding charge against the Real Property; and, except as
shown in the Title Policy, to the best of Borrower's knowledge there are no
mechanics' or similar Liens or, to the best of Borrower's knowledge, claims for
overdue payment for labor or material affecting the Real Property that are or
could become Liens prior to, or equal with, the Lien of the Deed of Trust and
there are no mechanics' or similar Liens or, to the best of Borrower's
knowledge, claims affecting the Real Property that have not been insured or
endorsed over by the Title Policy.
7.12 Defenses. Except for the effect of applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or similar laws affecting the rights of
creditors generally, the Loan Documents are not subject to any valid right of
rescission, setoff, abatement, diminution, counterclaim or defense as against
Lender and its successors and assigns in interest, including the defense of
usury, and the operation of any of the terms of the Loan Documents, or the
proper exercise of any right thereunder, will not render the Loan unenforceable,
in whole or in part, or subject to any right of rescission, setoff, abatement,
diminution, counterclaim or defense, including the defense of usury, and neither
Borrower nor Guarantor has taken any action that would give rise to the
assertion of any of the foregoing and no such right of rescission, setoff,
abatement, diminution, counterclaim or defense, including the defense of usury,
has been asserted with respect thereto.
7.13 Lien Priority. Upon recording, the Deed of Trust shall constitute a
valid and enforceable first Lien and perfected security interest on the Property
granted by Borrower in favor of Lender, including all buildings and fixtures
that constitute part of the Property under applicable law, and all additions,
16
alterations and replacements made at any time with respect to the foregoing,
subject only to Permitted Exceptions.
7.14 Improvements. To the best of Borrower's knowledge, except as disclosed
in the Title Policy, all improvements comprising a portion of the Real Property
lie wholly within the boundary and building restriction lines of the Land and no
improvements on adjoining properties encroach upon any of the Land in any
respect except as shown in the Title Policy, on the survey or in Schedule 7.14.
7.15 Casualty; Condemnation. The Real Property is free of waste and of any
damage involving loss or destruction with a repair cost in excess of two hundred
fifty thousand dollars ($250,000), and there is no proceeding pending or, to the
best of Borrower's knowledge, threatened, for the Taking of any of the Real
Property.
7.16 Zoning and Other Laws. To the best of Borrower's knowledge, the use
and operation of the Real Property, separate and apart from any other
properties, constitutes a legal use under applicable zoning regulations and
complies in all material respects with all applicable Requirements of Law and
all applicable Insurance Requirements.
7.17 Leases. The ICG Lease is in full force and the landlord is not in
default thereunder. The ICG Lease is the only lease, sublease or other occupancy
agreement encumbering the Property, and Tenant is the only tenant, subtenant or
occupant of the Property. To the best of Borrower's knowledge, Tenant is not in
default under the ICG Lease.
7.18 Tenant Estoppels. Borrower has delivered to Lender an original tenant
estoppel certificate executed by Tenant with respect to the ICG Lease.
7.19 Litigation. Except as set forth on Schedule 7.19, no material
litigation, investigation or proceeding before any court, arbitrator or
Governmental Authority, agency or subdivision is pending or, to Borrower's best
knowledge, threatened, against Borrower or Guarantor or, to the best of
Borrower's knowledge, relating to any of the Real Property.
7.20 Brokerage and Other Fees. No brokerage or other fee, commission or
compensation is or will become due and payable by Borrower or Guarantor in
connection with the Transactions.
7.21 Investment Company. Neither Borrower nor Guarantor is now required nor
will it (by reason of this Agreement) be required to register under the
Investment Company Act of 1940, as amended.
7.22 Other Agreements. To the best of Borrower's knowledge, no party to any
deed, restriction, covenant or similar instrument that constitutes a Permitted
Exception in respect of the Real Property is in default of its obligations
17
thereunder except for such defaults that in the aggregate (if such defaults
remained uncured) do not or will not have a Material Adverse Effect.
Section 8. Affirmative Covenants. Borrower hereby covenants and agrees
that, so long as the Loan remains unpaid or any other amount is owing to Lender
under any of the Loan Documents or the Real Property remains subject to the Lien
of the Deed of Trust:
8.1 Financial Statements; Other Information. Borrower shall furnish or
cause to be furnished to Lender:
(a) As and when required to be delivered pursuant to the Deed of Trust, the
financial reports and statements described in Section 1.19 of the Deed of Trust;
and
(b) promptly, such additional financial and other information, including
information regarding the Property and the occupancy thereof (including an
updated rent roll), as Lender may from time to time reasonably request.
8.2 Maintenance of Existence and Property. Borrower shall preserve and
maintain its existence and all rights, privileges and franchises necessary in
the normal conduct of its business. In all dealings with the public, Borrower
shall identify itself under its own name and as a separate and distinct entity.
8.3 Inspection of Property; Books and Records; Discussions; Bank Accounts
and Funds. Borrower shall (i) keep its own separate and proper books of record
and account in which full, true and correct entries in conformity with GAAP or
as otherwise required under any Loan Document and under all Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities, and (ii) upon reasonable notice, permit representatives of Lender
and its agents and regulatory authorities to visit and inspect the Real Property
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired by Lender and to
discuss the business, operations, properties and financial and other conditions
of Borrower, Guarantor and ICGC with any of their officers. Borrower shall
maintain its own bank accounts and keep its funds or other assets separate from
the funds or other assets of all other Persons.
8.4 Notices. Borrower shall give prompt written notice to Lender of (i) any
claims, proceedings or disputes (whether or not purportedly on behalf of
Borrower) against, or to Borrower's knowledge, threatened or affecting, Borrower
or the Property that, if adversely determined, could reasonably be expected to
have a Material Adverse Effect or that involve in the aggregate monetary amounts
in excess of one million dollars ($1,000,000), (ii) any proposal of which
Borrower has knowledge or has received notification by any Governmental
Authority to acquire any of the Real Property or any portion thereof or as to
18
any notice or the discovery of any material violation or material alleged
violation of any Requirement of Law, (iii) the occurrence of any Potential
Default or Event of Default hereunder or (iv) any Material Adverse Effect. Such
notice shall be in the form of an Officer's Certificate specifying the nature
and details of any of the foregoing matters and the actions taken and proposed
to be taken by Borrower in response thereto.
8.5 Expenses. Borrower shall pay, indemnify and save harmless Lender with
respect to all Impositions (other than income or franchise taxes of Lender or
taxes caused by actions or elections of Lender) and all reasonable charges, fees
and out-of-pocket expenses (including reasonable fees and disbursements of
counsel of Lender) incident to the enforcement (including any foreclosure of the
Liens held by Lender) and administration (out-of-pocket expenses only) of the
Loan Documents and the preparation, negotiation, enforcement and administration
(out-of-pocket expenses only) of any amendments, waivers and renewals relating
to any thereof and the protection of the rights of Lender under the Loan
Documents whether by judicial proceedings or otherwise, including in connection
with bankruptcy, insolvency, liquidation, reorganization, moratorium or other
similar proceedings involving Borrower or a "workout" of the Loan. The Loan
shall not be considered to have been paid in full unless all obligations under
this Section 8.5 shall have been fully performed, are fully covered by insurance
or security satisfactory to Lender has been provided therefor (except for
contingent indemnification obligations for which no claim has actually been made
in good faith pursuant to this Agreement).
8.6 Loan Documents. Borrower and Guarantor shall comply with and observe
all terms and conditions of the Loan Documents to which they are a party. Until
released in accordance with this Agreement, Borrower warrants that the Deed of
Trust will at all times constitute a valid, subsisting and enforceable first
Lien and perfected security interest on the Property granted by Borrower in
favor of Lender, including all buildings and fixtures that constitute part of
the Property under applicable law, and all additions, alterations and
replacements made at any time with respect to the foregoing, subject only to
Permitted Exceptions.
8.7 Indemnification. Borrower shall indemnify and hold harmless Lender and
its directors, officers, shareholders, partners, employees, attorneys, agents,
representatives, successors and assigns (the "Indemnified Parties"), from and
against all damages as a result of liabilities, claims, actions, penalties and
fines (collectively and severally, "Losses") assessed against any of them
resulting from the claims of any party relating to the matters set forth in
Section 1.22 of the Deed of Trust, except for Losses otherwise covered under the
provisions of Section 8.5 and Losses directly caused by the gross negligence or
willful misconduct of the Indemnified Party seeking recovery hereunder; and
Borrower shall reimburse each Indemnified Party for any expenses (including the
19
fees and disbursements of legal counsel) incurred in connection with the
investigation of, preparation for or defense of any actual or threatened claim,
action or proceeding arising therefrom (including any such costs of responding
to discovery requests or subpoenas), regardless of whether Lender or such other
Indemnified Person is a party thereto. The provisions of Section 1.22 the Deed
of Trust are incorporated herein by reference. The Loan shall not be considered
to have been paid in full unless all obligations of Borrower under this Section
8.7 shall have been fully performed, are fully covered by insurance or security
satisfactory to Lender has been provided therefor (except for contingent
indemnification obligations for which no claim has actually been made in good
faith pursuant to this Agreement).
8.8 Property Management. Borrower shall cause the Property to be managed on
terms substantially similar to the terms and conditions of the Management
Agreement by the Property Manager; provided, however, that if the Management
Agreement is terminated pursuant to its terms, Borrower may replace Property
Manager with another property manager reasonably acceptable to Lender.
8.9 Impositions. Borrower shall promptly pay or cause to be paid all
Impositions pursuant to the provisions of Section 1.8 of the Deed of Trust,
subject to Borrower's right to contest such Impositions as provided in Section
1.8 of the Deed of Trust.
8.10 Insurance. Borrower shall maintain insurance with respect to the
Property as required under the Deed of Trust.
Section 9. Negative Covenants. Borrower hereby agrees that, so long as the
Loan remains unpaid or any other amount is owing to Lender under any of the Loan
Documents and any Property remains subject to the Lien of the Deed of Trust,
Borrower shall not, directly or indirectly:
9.1 Indebtedness. Create, incur or assume any Indebtedness except for: (i)
the Loan and other obligations to Lender under the Loan Documents or in
connection with the Transactions, and (ii) Indebtedness incurred in the ordinary
course of business on a basis and upon terms consistent with customary practices
of owners of office buildings, including indebtedness arising from obligations
in respect of performance or surety bonds and letters of credit required to be
posted by Borrower in connection with statutory obligations, tenant improvements
or similar work, but excluding indebtedness for borrowed money (other than
payments made in installments for goods and services obtained in the ordinary
course of business) and (iii) Indebtedness in respect of Impositions,
assessments, governmental charges or Liens and claims for labor, materials and
supplies, in each case, in respect of the Collateral to the extent the validity
or amount thereof is being currently contested in good faith by appropriate
proceedings in accordance with Section 1.8(d) or 1.15 of the Deed of Trust.
20
9.2 Consolidation and Merger. Liquidate or dissolve or enter into any
consolidation, merger, partnership, joint venture, syndicate or other
combination.
9.3 Sale of Assets-Encumbrances. Subject to Borrower's rights under section
1.15 of the Deed of Trust, suffer to exist any Lien with respect to any
Collateral other than Permitted Exceptions or sell, transfer, lease, assign,
exchange, contribute, encumber, abandon or create any Lien with respect to, or
otherwise dispose of, directly or indirectly, any Collateral or any interest
therein, except as permitted by the Subdivision Agreement.
9.4 Transactions with Affiliates. Purchase, acquire or lease any property
from, or sell, transfer or lease any property to, or lend or advance any money
to, or borrow any money from, or guarantee any obligation of, or acquire any
stock, obligations or securities of, or enter into any merger or consolidation
agreement, or any management or similar agreement with, any Affiliate of
Borrower, or enter into any other transaction or arrangement or make any payment
to (including on account of any management fees, service fees, office charges,
consulting fees, technical services charges or tax sharing charges) or otherwise
deal with, in the ordinary course of business or otherwise, any Affiliate of
Borrower on terms other than arm's-length commercially reasonable terms, except
for any of the following: (i) transactions relating to the sharing of
facilities, equipment, office space and actual overhead expenses, including
managerial, payroll and accounting and legal expenses, for which charges
assessed against Borrower is not greater than would be incurred by Borrower in
similar arm's-length transactions with non-Affiliates, and (ii) the ICG Lease.
9.5 Restricted Activities. Purchase or acquire any interest in any real
properties other than the Real Property, conduct any business other than that
permitted under the Borrower Partnership Agreement, have any assets or
liabilities other than assets or liabilities derived from or related to the
Property or otherwise related to a business that is permitted under the Borrower
Partnership Agreement, violate any of the provisions of the Borrower Partnership
Agreement or amend the Borrower Partnership Agreement. Borrower shall not allow
General Partner to purchase, acquire or own any assets other than its general
partnership interest in Borrower, conduct any business unrelated to acting as
general partner of Borrower or incur any Indebtedness. Borrower shall not
identify itself, in any dealings with the public, as being a division or a part
of any other Person, and shall not identify any other Person as being a division
or a part of Borrower or General Partner; provided, however, identifying General
Partner or Limited Partner as a partner in Borrower shall not be prohibited by
this Section 9.5.
9.6 Fiscal Year. Change its fiscal year.
21
9.7 Manager. Replace the Property Manager without Lender's prior written
consent, which shall not be unreasonably withheld, or terminate or amend the
Management Agreement.
9.8 Leases. Except as specifically permitted in Section 1.16 of the Deed of
Trust, Borrower shall not: (a) enter into any Lease; (b) amend, modify or revise
the ICG Lease or any other Lease; or (c) cancel, terminate or permit the
termination of, accept the surrender of any or all of the space demised under,
or waive any right or remedy under, the ICG Lease or any other Lease.
Section 10. Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder:
10.1 Payment Default. Borrower shall fail to make or cause to be made (i)
any payment of principal or interest under the Note or this Agreement within
five (5) days after the date due, or (ii) any other payment due hereunder or
under any other Loan Document within ten (10) days after demand therefor shall
have been made; or
10.2 Misrepresentation. Any representation, warranty or certification made
by Borrower or Guarantor under any Loan Document, or in any Officer's
Certificate or financial statement furnished by Borrower or Guarantor in
connection with any Loan Document, shall be materially inaccurate or incomplete
as of the date made; provided, however, if such inaccuracy or incompleteness is
susceptible to cure, no Event of Default shall occur if Borrower cures or causes
to be cured the same within thirty (30) days after written notice thereof from
Lender, or if such matter is susceptible of cure but cannot, with due diligence,
be cured within thirty (30) days, then no Event of Default shall occur if such
cure is commenced within that thirty (30) day period and diligently prosecuted
to completion within such longer period of time (but in no event to exceed
ninety (90) days from the date Borrower received notice of such breach); or
10.3 Negative Covenant Default. Borrower shall fail to perform or observe
the terms, provisions, covenants, obligations or agreements contained in any of
Sections 9.1 through 9.8; or
10.4 Other Loan Defaults. Borrower or Guarantor shall fail to perform or
observe in any material respect any of the covenants, obligations or agreements
contained in the Loan Documents (other than those referred to in Section 10.1,
10.2 or 10.3 above) and such failure shall, in each such case, continue for
thirty (30) days after written notice thereof from Lender, or if such cure
cannot, with due diligence, occur within thirty (30) days, such longer period of
time (not to exceed ninety (90) days from the date Borrower received notice of
such breach) as is reasonably required for such cure, provided Borrower is
diligently attempting to cure such failure; or
22
10.5 Bankruptcy, etc. (i) Any ICG Party shall commence any case, proceeding
or other action (a) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (b) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or substantially all of its assets, or any ICG Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any ICG Party any case, proceeding or other action of a nature
referred to in clause (i) above that (a) results in the entry of any order for
relief or any such adjudication or appointment, and (b) remains undismissed,
undischarged or unbonded for a period of ninety (90) days; or (iii) there shall
be commenced against any ICG Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or substantially all of its assets that results in the entry of an
order for any such relief that shall not have been vacated, discharged, stayed,
satisfied or bonded pending appeal within ninety (90) days from the entry
thereof; or (iv) any ICG Party shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due;
10.6 Judgments.
(a) One or more judgments or decrees (not covered by insurance) in an
aggregate amount exceeding five million dollars ($5,000,000) shall be entered
against Borrower or any Significant Subsidiary of Borrower and all such
judgments or decrees shall not have been vacated, discharged, stayed, satisfied
or bonded pending appeal within sixty (60) days from the entry thereof.
(b) Any adverse judgment in an amount greater than ten million dollars
($10,000,000) is entered against Guarantor or any Significant Subsidiary of
Guarantor that is not covered by insurance and is not stayed, satisfied or
bonded pending appeal within sixty (60) days from entry thereof.
10.7 Defaults Under Other Agreements. The occurrence of any monetary
default or other default resulting in acceleration of the obligation by
Guarantor or any Significant Subsidiary of Guarantor under any loan agreement,
note or other debt instrument where such obligation or liability exceeds ten
million dollars ($10,000,000).
10.8 Net Worth. The Tangible Net Worth of Guarantor and its Subsidiaries
shall be less than fifty million dollars ($50,000,000) at the end of any fiscal
quarter during the term of the Loan, as evidenced by the financial statements
delivered to Lender by Borrower pursuant to Section 8.1 of this Agreement.
23
10.9 Tenant Defaults. Any "Event of Default" (as defined in the ICG Lease)
occurs and is not waived by Borrower or cured by Tenant within thirty (30) days
after the occurrence of the breach giving rise to such "Event of Default."
10.10 Additional Borrower Cure Right. Borrower shall have the right to
effectuate a cure of an Event of Default described in Sections 10.6, 10.7 and
10.8 of this Agreement by posting a clean, irrevocable and unconditional letter
of credit in the full, outstanding principal amount of the Loan for the benefit
of Lender in form and substance reasonably satisfactory to Lender.
10.11 Remedies. Automatically upon the occurrence of an Event of Default
under Section 10.5, or at the option of Lender upon the occurrence of any other
Event of Default, the principal balance of the Loan and interest and other
charges accrued but unpaid thereon shall become immediately due and payable and
the Maturity Date shall be deemed to have occurred; and Lender may exercise all
rights and remedies available to it hereunder, under the other Loan Documents,
at law or in equity. Notwithstanding the foregoing, Lender agrees that Borrower
shall not be liable to Lender for compensatory money damages as a result of
Borrower's unknowing breach of any representation, warranty or certification
referred to in Section 10.2 (but Lender shall have all other remedies hereunder
and at law or in equity, including acceleration of the principal balance of the
Loan and accrued but unpaid interest and other charges, and collection of
interest on unpaid amounts at the Default Rate).
Section 11. Miscellaneous Provisions.
11.1 Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
Nothing expressed herein is intended or shall be construed to give any Person
other than the Persons referred to in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement. Lender,
in its sole and absolute discretion and without notice to Borrower, may sell
participations, assign its rights or interest, or both, in all or any part of
this Agreement or the other Loan Documents. Borrower may not assign its rights
or interest or delegate its duties hereunder or under the other Loan Documents,
except that if Lender or an Affiliate of Lender acquires the Property, such
Person shall be entitled to assume the Loan and the borrower's obligations under
the Loan Documents.
11.2 Agents. Lender may use one or more agents or mortgage servicers to
administer the Loan Documents or perform its obligations hereunder or under the
other Loan Documents.
11.3 Cumulative Rights; No Waiver. The rights, powers and remedies of
Lender hereunder are cumulative and in addition to all rights, powers and
remedies provided under any and all agreements by Borrower or any ICG Party with
or for the benefit of Lender under the Loan Documents or incident to the
Transactions, at law, in equity or otherwise. Any delay or failure by Lender to
24
exercise any right, power or remedy shall not constitute a waiver thereof by
Lender, and no single or partial exercise by Lender of any right, power or
remedy shall preclude other or further exercise thereof or any exercise of any
other rights, powers or remedies. No delay or omission of Lender to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Agreement or the other Loan
Documents or by law to Lender may be exercised from time to time, and as often
as may be deemed expedient by Lender.
11.4 Entire Agreement. This Agreement and the other Loan Documents embody
the entire agreement and understanding between the parties hereto with respect
to the Loan and supersede all prior agreements and understandings relating to
the subject matter hereof and thereof.
11.5 Survival. All representations and warranties, covenants and agreements
herein contained on the part of Borrower shall survive the closing and funding
of the Loan.
11.6 Notices. All approvals, consents, notices and other communications
under this Agreement shall be properly given only if made in writing and mailed
by certified mail, return receipt requested, postage prepaid, or delivered by
hand (including messenger or recognized delivery, courier or air express
service) to the party at the address set forth in this Agreement or such other
address as such party may designate by notice to the other party. Such
approvals, consents, notices and other communications shall be effective on the
date of receipt (evidenced by the certified mail receipt) if mailed or on the
date of such hand delivery if hand delivered. If any such approval, consent,
notice or other communication is not received or cannot be delivered due to a
change in the address of the receiving party of which notice was not previously
given to the sending party or due to a refusal to accept by the receiving party,
such approval, consent, notice or other communication shall be effective on the
date delivery is attempted. Any approval, consent, notice or other communication
under this Agreement may be given on behalf of a party by the attorney for such
party.
(a) The address of Lender is: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: Capital Markets, with additional copies
to Pillsbury Madison & Sutro, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) The address of Borrower is: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Director of Real Estate, Facilities and Corporate
Services, with an additional copy to ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant General Counsel.
25
11.7 Headings. The Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
11.8 Modifications in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision of this Agreement or any other Loan
Document to which Lender is a party, or consent to any departure by Borrower or
Guarantor therefrom, shall be effective unless in writing and signed by Lender
and Borrower and, if applicable, Guarantor. Any amendment, modification or
supplement of or to any provision of this Agreement or any such other Loan
Document, any waiver of any provision thereof, and any consent to any departure
by Borrower or Guarantor from the terms of any provision thereof shall be
effective only in the specific instance and for the specific purpose for which
made or given. Borrower shall not amend in any material respect any of the Loan
Documents to which Lender is not a party, and no purported amendment thereof
shall be effective, unless Lender shall have given its prior written consent
thereto.
11.9 Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts shall constitute one and the same agreement.
11.10 Severability of Provisions. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
11.11 WAIVER OF JURY TRIAL. BORROWER AND EACH OTHER PARTY HERETO HEREBY
WAIVES ANY RIGHTS TO A TRIAL BY JURY OF ANY MATTER OR CAUSE RELATING TO THIS
AGREEMENT.
11.12 Reinstatement; Recapture. To the extent Lender receives any payment
by or on behalf of Borrower or Guarantor, which payment or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to such party or its estate, trustee, receiver,
custodian or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the obligation or part thereof that has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid and shall be
included within the liabilities of Borrower to Lender as of the date such
initial payment, reduction or satisfaction occurred.
11.13 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO.
26
11.14 Cross Collateralization; Marshalling, etc. Borrower represents,
warrants and covenants that in the case of an Event of Default that is
continuing (i) Lender shall have the right to pursue all of its rights and
remedies in one proceeding, or separately and independently in separate
proceedings from time to time, as Lender, in its sole and absolute discretion,
shall determine from time to time, (ii) Lender is not required to either
▇▇▇▇▇▇▇▇ assets, sell Collateral in any inverse order of alienation or be
subject to any "election of remedies" law or rule, (iii) the exercise by Lender
of any remedies against any one item of Collateral will not impede Lender from
subsequently or simultaneously exercising remedies against any other item of
Collateral, and (iv) all Liens and other rights, remedies or privileges provided
to Lender shall remain in full force and effect until Lender has exhausted all
of its remedies against the Collateral and all Collateral has been foreclosed,
sold and/or otherwise realized upon in satisfaction of the Loan or until the
Secured Obligations (as defined in the Deed of Trust) have been fully satisfied.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
LENDER:
TRINET REALTY CAPITAL, INC., a Maryland
corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its Vice President
-----------------------------
27
BORROWER:
▇▇▇ ▇▇▇, L.P., a Delaware limited liability
company
By ICG CORPORATE HEADQUARTERS, L.L.C.,
a Colorado limited liability company,
its general partner
By ICG SERVICES, INC., a Delaware
corporation, its manager
By /s/ H. ▇▇▇ ▇▇▇▇▇▇
------------------------------
Its Executive Vice President
------------------------
28
SCHEDULE 6.1(iv)
UCC FILINGS
1
UCC-1 Fixture Filing to be recorded in the Official Records of the County of
Arapahoe, State of Colorado.
UCC-1 Financing Statement to be filed in the Office of the Secretary of State,
State of Colorado.
SCHEDULE 7.6
TRANSACTIONS WITH AFFILIATES
1
SCHEDULE 7.14
ENCROACHMENTS
None.
1
SCHEDULE 7.19
LITIGATION
None.
1
EXHIBIT A
ENVIRONMENTAL INDEMNITY
1
EXHIBIT B
GUARANTY
1
EXHIBIT C
FORM OF ASSUMPTION AGREEMENT
1