CASH COLLATERAL ACCOUNT
SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
among
1290 PARTNERS, L.P.
and
237 PARK PARTNERS L.P.,
as Borrowers
and
THE CHASE MANHATTAN BANK,
as Agent for certain Lenders
DATED: as of October 10, 1996
0148055.08-01S4a
CASH COLLATERAL ACCOUNT
SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
CASH COLLATERAL ACCOUNT SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
(this "Agreement"), dated as of October 10, 1996, by and among 1290 PARTNERS,
L.P., a Delaware limited partnership, and 237 PARK PARTNERS, L.P., a Delaware
limited partnership (each, a Borrower and collectively, the "Borrowers"), and
THE CHASE MANHATTAN BANK, as agent ("Agent") for certain lenders (the
"Lenders").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Credit Agreement, dated as of the
date hereof (the "Credit Agreement"), among Borrowers, as borrowers, the Lenders
listed on the signature page thereof (the "Lenders") and Agent, as agent for the
Lenders, Agent and Lenders have committed to make a loan (the "Loan") to
Borrowers in the aggregate amount of $420,000,000, evidenced by certain
promissory notes, dated as of the date hereof (the "Notes") and secured by that
certain Mortgage Modification, Restatement and Security Agreement, dated as of
the date hereof (the "Mortgage"), between Borrowers, as mortgagor, and Agent, as
mortgagee, and the other Loan Documents (as hereinafter defined); and
WHEREAS, pursuant to the Credit Agreement, Borrowers have agreed
to establish the Collection Accounts, the Cash Collateral Account and the
Sub-Accounts therein (as such terms are hereinafter defined) and to grant to
Agent, a first perfected security interest therein, upon the terms and subject
to the conditions hereof.
NOW, THEREFORE, in consideration of the agreements and covenants
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. Unless the context otherwise requires,
capitalized terms used but not otherwise de- fined herein shall have the
respective meanings provided therefor in the Credit Agreement, and the following
terms shall have the following meanings:
0148055.08-01S4a
"Annual Budget" has the meaning provided in the Credit Agreement.
"Basic Sub-Accounts" means the Sub-Accounts of the Cash
Collateral Account established and maintained pursuant to Section 3(b) hereof
relating to the payment of Basic Carrying Costs (as defined in Section 3(a)).
"Cash Collateral Account" has the meaning provided in Section 3.
"Cash Flow Commencement Date" has the meaning provided in Section
3(g).
"Collection Accounts" has the meaning provided in Section 3.
"Current Month" has the meaning provided in Section 3(e).
"Debt Service Payment Sub-Account" means the Sub-Account of the
Cash Collateral Account, entitled "237 & 1290 Debt Service Payment CMB Escrow
Account", Account Number: 230-110886, established and maintained pursuant to
Section 3(b) hereof relating to the Required Debt Service Payment.
"Domestic Business Day" has the meaning provid- ed in the Credit
Agreement.
"Equitable Lease" means that certain Lease, dated July 1, 1995,
by and between 1290 Partners, L.P. (successor in interest to 1290 Associates),
as landlord, and Equitable Life Assurance Society of the United States, as
tenant.
"Escrow Sub-Account" means the Sub-Account of the Cash Collateral
Account, entitled "237 & 1290 T.I. CMB Escrow Account", Account Number:
230-110894, estab- lished and maintained pursuant to Section 3(b) hereof
relating to the Warner Work Allowance and the 1290 Lobby Improvements.
"Event of Default" means any material breach of this Agreement
which, unless otherwise specified herein, continues for more than, with respect
to monetary matters, three (3) Domestic Business Days, and with respect
0148055.08-01S4a
2
to non-monetary matters, ten (10) Domestic Business Days, after written notice
thereof has been given by Agent to Borrowers or any Event of Default as defined
in the Credit Agreement or the Mortgage.
"Expiring Lease Costs" has the meaning provided in the Credit
Agreement.
"Expiring Lease Costs Reserve Sub-Account" means the Sub-Account
of the Cash Collateral Account to be established and maintained pursuant to
Section 3(b) hereof relating to the payment of Expiring Lease Costs.
"Expiring Lease Costs Monthly Amount" means an amount equal to
50% of Net Cash Flow for each Monthly Collection Period, which amount shall be
deposited by Borrowers into the Expiring Lease Costs Reserve Sub-Ac-count for
each month commencing in the Fourth Loan Year, until such time as $15,000,000 is
on deposit in the Expiring Lease Costs Reserve Sub-Account, as such amount may
be reduced (i) pursuant to the terms of Section 2.9 of the Credit Agreement and
(ii) by the sum of Expiring Lease Costs actually incurred by Borrowers from and
after the date hereof, whether directly by Borrowers or in accordance with the
provisions of Section 3(i)(iv) hereof, as certified by Borrowers to Agent in an
Officer's Certificate and verified by such other documentation as Agent may
reasonably require.
"Imposition Sub-Account" means the Sub-Account of the Cash
Collateral Account, entitled "237 & 1290 Imposition CMB Escrow Account", Account
Number: 230- 110851, established and maintained pursuant to Section 3(b) hereof
relating to the payment of all Impositions hereunder.
"Initial Basic Carrying Costs Deposit" means $8,936,424.
"Insurance Sub-Account" means the Sub-Account of the Cash
Collateral Account, entitled "237 & 1290 Insurance CMB Escrow Account", Account
Number: 230- 110878, established and maintained pursuant to Section 3(b) hereof
relating to the payment of all insurance premiums required hereunder.
0148055.08-01S4a
3
"Loan" has the meaning provided in the recitals hereof.
"Manager" has the meaning provided in the Credit Agreement.
"Monthly Amount" has the meaning provided in the Credit
Agreement.
"Monthly Collection Period" means the period commencing on the
first day of each calendar month and ending on the last day of such calendar
month.
"Net Cash Flow" has the meaning provided in the Credit Agreement.
"Officer's Certificate" has the meaning provid- ed in the Credit
Agreement.
"Payment Date" means the date or dates upon which any Required
Debt Service Payment is due.
"Pledged Notes" has the meaning provided in the Credit Agreement.
"Properties" has the meaning provided in the Mortgage.
"Property Expenses" has the meaning provided in the Credit
Agreement.
"Property Income" has the meaning provided in the Credit
Agreement.
"Required Debt Service Payment" with respect to any month, shall
mean the sum of any interest on the Loan, the Monthly Amount which is required
to be paid pursuant to the terms of the Credit Agreement during such month and
any payments or costs payable pursuant to any Termination Event (as defined in
the Swap Agreement) required to be paid under the Swap Agreement.
"Sub-Accounts" means any Sub-Accounts, however designated, of the
Cash Collateral Account, including the Basic Sub-Accounts, the Expiring Lease
Costs Reserve Sub-Account, and the Escrow Sub-Account to be established pursuant
to Section 3 hereof.
0148055.08-01S4a
4
"Swap Agreement" has the meaning provided in the Credit
Agreement.
"Taking" has the meaning provided in the ▇▇▇▇- ▇▇▇▇.
"Term" has the meaning provided in the Credit Agreement.
"1290 Lobby Improvements" means the work to be performed by
Landlord in the lobby of the 1290 Property pursuant to the terms of Section 8.21
of the Equitable Lease.
"Warner Lease" means that certain Lease, dated February 1, 1996,
by and between 1290 Partners, L.P. (successor in interest to 1290 Associates,
L.L.C.), as landlord, and Warner Communications, Inc., as tenant.
"Warner Work Allowance" means the Tenant Work Allowance payable
to Warner Communications, Inc. pursuant to Section 4.01(d) of the Warner Lease,
excluding any allowance applicable to Block F (as defined in the Warner Lease).
2. Security for Obligations. To secure the full and punctual
payment and performance of the Obligations, Borrowers hereby sell, assign,
convey, pledge, grant and transfer to Agent, a first and continuing perfected
security interest in and Lien on and to all of Borrowers' right, title and
interest in and to the following property of Borrowers, whether now owned or
existing or hereafter acquired or arising and regardless of where located (all
of the same, collectively, the "Collateral"):
(i) the Collection Accounts, the Cash Collateral Account and the
Sub-Accounts therein and all cash, checks, drafts, certificates and
instruments, if any, from time to time deposited or held in the
Collection Accounts, the Cash Collateral Account and the Sub-Accounts
therein from time to time including, without limitation, all deposits
or wire transfers made to the Collection Accounts, the Cash Collateral
Account and the Sub-Accounts therein pursuant to this Agreement;
0148055.08-01S4a
5
(ii) any and all Permitted Investments (as hereinafter defined)
purchased with funds deposited in the Collection Accounts, the Cash
Collateral Account and the Sub-Accounts therein;
(iii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise payable
in respect of, or in exchange for, any or all of the foregoing; and
(iv) to the extent not covered by clauses (i), (ii) and (iii)
above, all proceeds (as defined under the Uniform Commercial Code as
in effect in the State of New York (the "UCC")) of any or all of the
foregoing.
Agent shall have with respect to the Collateral, in addition to the rights and
remedies herein set forth, all of the rights and remedies available to a secured
party under the UCC, as if such rights and remedies were fully set forth herein,
as well as all other rights and remedies available at law or equity.
3. Cash Flow and Establishment of Accounts.
(a) Cash Flow. Borrowers hereby acknowledge and agree that all
Property Income derived from the Properties shall be deposited into the
Collection Accounts. Borrowers hereby acknowledge and agree that Agent shall
transfer, on a daily basis, all funds received in the Collection Accounts into
the Cash Collateral Account and the Sub-Accounts therein and such funds shall be
utilized as follows: (i) to fund the Imposition Sub-Account, to the extent
required pursuant to Section 3(e)(i) hereof, (ii) to fund the Insurance
Sub-Account, to the extent required pursuant to Section 3(e)(ii) hereof, (iii)
to fund the Debt Service Payment Sub-Account to the extent required pursuant to
Section 3(e)(iii) hereof and (iv) to replenish any of the Sub-Accounts described
in clauses (i)-(iii) above, to the extent funds in such Sub-Accounts were
previously drawn upon to fund other Sub-Accounts hereunder as provided in
Section 3 hereof (the amounts required to be paid out of the accounts described
in clauses (i) through (iv) above are collectively, the "Basic Carrying Costs").
In addition to the
0148055.08-01S4a
6
foregoing, on the date hereof, Borrowers shall fund the Escrow Sub-Account in an
amount equal to $5,508,000. Each Borrower hereby represents and warrants that a
notice has been sent to each Tenant and any other Persons required to make any
payments to Borrowers, including, without limitation, the obligors under the
Pledged Notes and the Counterparty, instructing each Tenant and such other
Persons to send all rents, additional rents and other payments due and owing to
Borrowers under the Leases, the Pledged Notes, the Swap Agreement or otherwise,
directly to a Collection Account or the Cash Collateral Account. All leases
hereafter executed with respect to the Mortgaged Property shall include a
provision requiring such Person to send all rents, additional rents and other
payments due to Borrowers directly to a Collection Account or the Cash
Collateral Account or shall be accompanied by a notice evidencing such
requirement. Each Borrower agrees that it shall promptly deliver notice to any
future tenant and other Persons hereafter owing any Property Income to Borrowers
(except as otherwise provided in the Mortgage) requiring such Person to send all
rents, additional rents and other payments due to Borrowers directly to a
Collection Account or the Cash Collateral Account. Each Borrower covenants that
it shall not revoke any such notice sent to any Tenant or other Person in
accordance with the terms hereof. Each Borrower shall take all other reasonable
and necessary actions to ensure that each Tenant and such other Persons pay
Property Income due and owing to Borrowers into a Collection Account or the Cash
Collateral Account. If the Manager or either Borrower shall collect any Property
Income from any Tenant or any other Person, the Manager or such Borrower, as
applicable, shall send such funds, within three (3) Domestic Business Days after
receipt thereof, to a Collection Account or the Cash Collateral Account, and, to
the extent additional payments of Property Income are to be received from such
party, within three (3) Domestic Business Days thereof shall send such Tenant or
Person a notice directing that all Property Income be sent directly to a
Collection Account or the Cash Collateral Account, and shall send Agent a
duplicate copy of such notice, and if Borrowers fail to do so, Agent is hereby
appointed Borrowers' attorney-in-fact for purposes of sending such notice and
collecting such Property Income. Borrowers hereby grant Agent a security
interest in Borrowers' right, title and interest, if any, in all amounts
deposited into the Collection Accounts and
▇▇▇▇▇▇▇.08-01S4a
7
the Cash Collateral Account. Until so deposited, any such amounts held by
Borrowers shall be deemed to be Collateral and shall be held in trust by them
for the benefit and as the property of Lender (as secured party) and shall not
be commingled with any other funds or property of Borrowers. Each Borrower shall
be liable to Agent for any sums received by either Borrower or by any agent of
either Borrower which are not deposited in a Collection Account or the Cash
Collateral Account in accordance with this Agreement.
Each Borrower agrees that all Property Income from the Mortgaged
Property, including, without limitation, Proceeds received in accordance with
the Mortgage (except as otherwise provided in the Mortgage) and all amounts
payable to Borrowers under the Swap Agreement, will be deposited directly into a
Collection Account or the Cash Collateral Account, there are no other accounts
maintained by Borrowers or the Manager for the collection of Property Income
with respect to the ownership and operation of the Mortgaged Property, and so
long as the Notes shall be outstanding, neither Borrowers nor the Manager shall
open any accounts for the collection of Property Income with respect to the
Mortgaged Property other than such accounts as may be established to hold any
amounts disbursed by Agent to Borrowers from the Cash Collateral Account after
funding of the Basic Sub-Accounts in accordance with Section 3(e) hereof.
Notwithstanding the foregoing, Agent shall in its reasonable discretion
determine whether to deposit any checks received by Agent with any restrictive
endorsement (e.g. "accord and satisfaction"). Prior to the occurrence of an
Event of Default, Agent shall not deposit any check for which Borrowers have
notified Agent prior to receipt thereof as to any dispute concerning the maker
of such check.
(b) Establishment of Collection Accounts, Cash Collateral Account
and Sub-Accounts. (i) On or before the date hereof, there have been established
in the name of Agent, on behalf of the Lenders, as secured parties, a collateral
account (the "1290 Collection Account"), a collateral account (the "237 Park
Collection Account"; each, a "Collection Account" and collectively, the
"Collection Accounts") and a collateral account (the "Cash Collateral Account",
the Collection Accounts and the Cash Collateral Account collectively, the
"Accounts") with
▇▇▇▇▇▇▇.08-01S4a
8
Agent. On the date hereof, Borrowers shall deposit in the Collection Accounts or
the Cash Collateral Account, an amount sufficient to fund the Initial Basic
Carrying Costs Deposit and the Escrow Sub-Account.
(ii) The Collateral shall be held in the Accounts and the
Sub-Accounts in accordance with the terms of this Agreement. The 1290 Collection
Account will be entitled "1290 Partners, LP CMB Clearing Account", Account
Number: 230-110789. The 237 Park Collection Account will be entitled "237 Park
Partners, LP CMB Clearing Account", Account Number: 230-110797. The Cash
Collateral Account will be entitled "237 & 1290 CMB Cash Collateral Account",
Account Number: 230-110800. The Accounts shall at all times be maintained with a
commercial bank in New York City. Until the Indebtedness (as defined in the
Mortgage) secured under the Mortgage is repaid in full, the Accounts and the
Sub-Accounts shall be under the sole dominion and control of Agent, subject to
the terms of this Agreement. Borrowers hereby irrevocably direct and authorize
Agent to deposit into and withdraw funds from the Accounts and the Sub-Accounts
and transfer funds between Accounts and Sub-Accounts, all in accordance with the
terms and conditions hereof. Until the Indebtedness secured under the Mortgage
is repaid in full, Borrowers shall have no right of withdrawal in respect of the
Accounts or the Sub-Accounts. Each transfer of funds from the Accounts and the
SubAccounts shall be made only to the extent that funds are on deposit in such
Account or Sub-Account, as applicable, and Agent shall have no responsibility to
make additional funds available in the event that funds on deposit are
insufficient. The Imposition Sub-Account, Insurance Sub-Account, the Debt
Service Payment Sub-Account (collectively, the "Basic Sub-Accounts"), the
Expiring Lease Costs Reserve Sub-Account and the Escrow Sub-Account are
Sub-Accounts of the Cash Collateral Account to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Agreement. Agent shall deliver to Borrowers on each Domestic Business Day
during which activity occurs, a daily report of all activity in the Cash
Collateral Account for such day and a facsimile of debits and credits as well as
copies of all checks deposited weekly.
(c) Permitted Investments. Upon the written request of Borrowers,
Agent shall direct the Bank to
▇▇▇▇▇▇▇.08-01S4a
9
invest and reinvest any balance in the Cash Collateral Account from time to
time, but not more frequently than weekly, in permitted investments as set forth
on Schedule A attached hereto (the "Permitted Investments") as directed by
Borrowers, provided that (i) if Borrowers fail to so instruct Agent, or during
an Event of Default, Agent may invest and reinvest such balance in Permitted
Investments in its discretion, (ii) the maturities of the Permitted Investments
on deposit in the Cash Collateral Account, and allocated to any of the
Sub-Accounts, shall be selected and coordinated to become due not later than the
day before any disbursements from the applicable Sub- Accounts must be made. If
Borrowers make such a request and Agent invests such monies as requested,
disbursements to Borrowers, if any, from such accounts shall be made prior to
the maturity of such Permitted Investments (x) only if Agent receives a written
request from Borrowers to take such a step and (y) only if Agent is able to
liquidate such Permitted Investments prior to maturity. All such Permitted
Investments shall be held in the name and be under the sole dominion and control
of Agent, and no Permitted Investment shall be made unless Agent shall perfect
its first priority Lien in such Permitted Investment securing the Indebtedness
and Agent shall have sole possession and control over each such Permitted
Investment and the income thereon, and any certificate or other instrument or
document evidencing any such investment shall be delivered directly to Agent,
together with any document of transfer necessary to transfer title to such
investment to Agent. It is the intention of the parties hereto that the entire
amount deposited in the Cash Collateral Account (or as much thereof as Agent may
reasonably arrange to invest) shall at all times be invested in Permitted
Investments. All funds in the Cash Collateral Account that are invested in any
Permitted Investment are deemed to be held in the Cash Collateral Account for
all purposes of the Mortgage and the other Loan Documents. Agent shall not have
any liability for any loss in investments of funds in the Cash Collateral
Account that are invested in Permitted Investments whether Borrowers or Agent
selected such Permitted Investment in accordance herewith, including (without
limitation) any loss incurred for any early liquidation of any Permitted
Investment, and no such loss shall affect Borrowers' obligation to fund, or
liability for funding, the Cash Collateral Account and each Basic Sub-Account or
such other Sub-Account established hereunder, as the case
0148055.08-01S4a
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may be. Borrowers agree that Borrowers shall include all such earnings on the
Cash Collateral Account as income of Borrowers (and, if either Borrower is a
partnership or other pass-through entity, the partners, members or beneficiaries
of such Borrower, as the case may be), shall include all such losses on the Cash
Collateral Account as losses of Borrowers (and, if either Borrower is a
partnership or other pass-through entity, the partners, members or beneficiaries
of such Borrower, as the case may be) and shall be the owner of such accounts
for federal and applicable state and local tax purposes.
(d) Interest on Accounts. All interest paid or other earnings on
the Permitted Investments of funds deposited into the Cash Collateral Account
made hereunder shall be deposited into the Cash Collateral Account and shall be
allocated to the Basic Sub-Account or such other Sub-Account established
hereunder which would, but for such Permitted Investments, have contained the
funds with respect to which such interest was paid or other earnings earned. All
such interest and earnings, once so allocated, shall be treated as Property
Income allocated to such Basic Sub-Account or such other Sub-Account established
hereunder.
(e) Monthly Funding of Basic Sub-Accounts. On the date hereof all
applicable Basic Sub-Accounts hereunder shall be funded with the Initial Basic
Carrying Costs Deposit. For all months thereafter, commencing with the calendar
month after the calendar month in which the Closing Date occurs (each, the
"Current Month"), all ------------- monies collected in the Cash Collateral
Account during such Current Month's Monthly Collection Period shall be allocated
as set forth in this Section 3(e). In each Current Month, during the Current
Month's Monthly Collection Period, Agent shall allocate all funds transferred or
deposited into the Cash Collateral Account among the Sub-Accounts as follows and
in the following priority:
(i) first, to the Imposition Sub-Account, until an amount has
been allocated to the Imposition Sub-Account equal to the monthly proportionate
sum of (w) all Impositions against the Mortgaged Property attributable to the
Current Month (with any such sums due less frequently than monthly allocated
equally to each Current Month) (i.e., if a certain Imposition is payable on a
semi-annual basis, then one-sixth (1/6) of such semi-
0148055.08-01S4a
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annual Imposition shall be due during each Current Month), plus (x) an amount
equal to such payments for any prior month(s), to the extent not previously
allocated to such Sub-Account, plus (y) an amount equal to the amount, if any,
deducted therefrom in any preceding month to pay any amounts due from any other
Basic Sub-Accounts because of a shortfall in such other Basic Sub-Accounts;
(ii) second, to the Insurance Sub-Ac- count, until an amount has
been allocated to the Insurance Sub-Account equal to the monthly proportionate
sum of (w) all insurance premiums attributable to the Current Month (with any
such sums due less frequently than monthly allocated equally to each Current
Month), for all insurance policies required to be maintained pursuant to the
terms of the Mortgage (i.e., if a certain insurance premium is payable on a
semi-annual basis, then one sixth (1/6) of such semi-annual premium shall be
deposited during each Current Month), plus (x) an amount equal to such payments
for any prior month(s), to the extent not previously allocated to such
Sub-Account, plus (y) an amount equal to the amount, if any, deducted therefrom
in any preceding month to pay any amounts due from any other Basic Sub-Accounts
because of a shortfall in such other Basic Sub-Accounts; and
(iii) third, to the Debt Service Payment Sub-Account, until an
amount equal to the Required Debt Service Payment for any Payment Date occurring
in such Current Month, has been allocated to the Debt Service Payment
Sub-Account plus (x) an amount equal to such payments for any prior month(s), to
the extent not previously allocated to such Sub-Account, plus (y) an amount
equal to the amount, if any, deducted therefrom in any preceding month to pay
any amounts due from any other Basic Sub-Accounts because of a shortfall in such
other Basic Sub-Accounts.
(f) Funding of Expiring Lease Costs Reserve Sub-Account.
Commencing in the Fourth Loan Year, Borrowers shall, subject to the provisions
of Section 2.15(b) of the Credit Agreement, deposit into the Expiring Lease
Costs Reserve Sub-Account an amount equal to the Expiring Lease Costs Monthly
Amount for the first month thereof and for each month thereafter during the
remainder of the Term not later than the fifteenth (15th) day of the next
succeeding month; provided that if the fifteenth day of
0148055.08-01S4a
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any month is not a Domestic Business Day, such deposit shall be made on the next
succeeding Domestic Business Day of such month.
(g) Cash Flow Commencement Date. During each Current Month Agent
shall notify Borrowers as soon as reasonably practicable after the amounts set
forth in clauses (i) through (iii) of Section 3(e) above have been transferred
or deposited into the Cash Collateral Account during such Monthly Collection
Period and allocated as aforesaid. The date such Sub-Accounts have been fully
funded in a given Monthly Collection Period is hereinafter referred to as the
"Cash Flow Commencement Date". Provided that no Event of Default has occurred
and is continuing, from and after the Cash Flow Commencement Date, Agent shall
disburse to Borrowers or at the direction of Borrowers, to the Manager, on a
daily basis, free of any lien hereunder, any amounts remaining in the Cash
Collateral Account for such Monthly Collection Period after the Basic
Sub-Accounts set forth in clauses (i) through (iii) of Section 3(e) have been
fully funded, less any amounts then due and payable but not yet paid to Agent in
accordance with Section (f) hereof for any prior month. The balance of the funds
distributed to Borrowers after payment of all amounts allocated to the
Sub-Accounts may be retained by Borrowers and may be used by Borrowers to pay
operating costs of the Properties, make distributions or for any purpose they
determine in their sole discretion.
(h) Funding of Deficiencies. Not later than two (2) Domestic
Business Days before each Payment Date during the term of the Loan, Agent shall
deliver (by facsimile or otherwise) to Borrowers a certificate in the form
annexed hereto and made a part hereof as Exhibit A, stating whether sufficient
funds have theretofore been deposited into the Cash Collateral Account to fund
each of the Basic Sub-Accounts. If any such certificate states that the funds
then allocated to any Basic Sub-Accounts are less than the amount of funds which
are required to be deposited therein for such Payment Date, Borrowers shall be
obligated to deposit immediately available United States funds (in addition to
Property Income) into the Cash Collateral Account, prior to such Payment Date,
in the amount of such deficiency, and failure to make such deposit within three
(3) Domestic Business Days after such Payment Date (to the extent such
0148055.08-01S4a
13
shortfall has not been remedied by collection of Property Income during such
period) shall be an Event of Default hereunder. The failure of Agent to deliver
such certificate to Borrowers shall not relieve any Event of Default hereunder.
If, on any Payment Date, the aggregate balance in the Debt Service Payment
Sub-Account is insufficient to make the Required Debt Service Payment required
to be made pursuant to clause (iii) of Section 3(i) below, then if Borrowers
shall fail to deposit such funds within three (3) Domestic Business Days after
same is due, an Event of Default shall exist hereunder. In the event that Agent
applies the proceeds of any Sub-Account other than the one allocated therefor to
make such payment, to make payments under any insurance policy or to pay any
Impositions, Borrowers shall, upon demand, repay to Agent, in order to replenish
such Sub-Account up to the amount contained therein immediately prior to such
application (including interest earned on the balance prior to withdrawal), the
amount of the funds so applied, and if Borrowers shall fail to repay such
amounts within five (5) Domestic Business Days after such demand (to the extent
such Sub-Account has not been replenished by Property Income during such
period), an Event of Default shall exist hereunder, which Event of Default shall
not be cured unless and until Borrowers repay such amount or all Sub-Accounts
have otherwise been fully funded. Agent may, at its sole option, replenish such
Sub-Account(s) out of available Property Income in subsequent months which
Borrowers would have otherwise been entitled to receive. Borrowers shall deliver
to Agent, an unaudited financial statement in respect of the Fourth Loan Year,
within thirty (30) days after the end of such year, which shall include a
reconciliation (reasonably satisfactory to Agent) and adjustment of the sum of
the Expiring Lease Costs Monthly Amounts so as to be equal to 50% of the actual
Net Cash Flow for such Fourth Loan Year. Agent shall notify Borrowers of any
deficiency in such amounts and Borrowers shall deposit such amount into the
Expiring Lease Costs Reserve Sub-Account within five (5) Domestic Business Days
after notice thereof. If Borrowers shall fail to pay such amounts within five
(5) Domestic Business Days after such demand, an Event of Default shall exist
hereunder, which Event of Default shall not be cured unless and until Borrowers
pay such amount or the Expiring Lease Costs Reserve Sub-Account has otherwise
been fully funded from Property Income for such year. In addition, the annual
financial statements of Borrowers to
0148055.08-01S4a
14
be delivered to Agent in accordance with the Credit Agreement in respect of the
Fourth Loan Year, shall include a reconciliation (reasonably satisfactory to
Agent) and adjustment of the sum of the Expiring Lease Costs Monthly Amounts so
as to be equal to 50% of the actual Net Cash Flow for such Fourth Loan Year.
Agent shall notify Borrowers of any deficiency in such amounts and Borrowers
shall deposit such amount into the Expiring Lease Costs Reserve Sub-Account
within five (5) Domestic Business Days after notice thereof. If Borrowers shall
fail to pay such amounts within five (5) Domestic Business Days after such
demand, an Event of Default shall exist hereunder, which Event of Default shall
not be cured unless and until Borrowers pay such amount or the Expiring Lease
Costs Reserve Sub-Account has otherwise been fully funded from Property Income
for such year. Any excess amounts in the Expiring Lease Costs Reserve
Sub-Account at the end of the Fourth Loan Year shall be credited against amounts
next due to be deposited therein in the Fifth Loan Year. Borrowers shall pay
operating costs, reserve for working capital, accrue expenses and otherwise
maintain their books and records and accounting practices as of the end of the
Third Loan Year in a manner consistent with the practices employed during the
first three (3) years of the Loan.
(i) Transfers of Funds out of Sub-Accounts. Transfers and
payments made out of the Sub-Accounts shall be made in accordance with the
following provisions to the extent the same are applicable and shall be payable
in the following order:
(i) Payments of Impositions. Borrowers shall deliver to Agent
bills received by Borrowers, if any, for all Impositions due in the following
month. Agent shall pay from the Imposition Sub-Account, all Impositions against
the Mortgaged Property when such payments become due.
(ii) Payments Under Insurance Policies. Borrowers shall deliver
to Agent copies of bills received by Borrowers, if any, for all insurance
premiums due the following month. Agent shall disburse to Borrowers, or at the
direction of Borrowers, to Manager from the Insurance Sub-Account all insurance
premiums on all insurance polices required to be maintained pursuant to the
terms of the Mortgage, as and when such payments become due.
0148055.08-01S4a
15
Borrowers, or if applicable Manager, as directed by Borrowers, shall use
proceeds disbursed from the Cash Collateral Account pursuant to this Section
solely for the payment of insurance premiums. Borrowers shall deliver to Agent
within ten (10) Domestic Business Days after any such disbursement is made
evidence reasonably satisfactory to Agent that such insurance premiums have been
paid.
(iii) Payment of Debt Service. On each Payment Date during the
term of the Loan, Agent shall disburse from the Debt Service Payment
Sub-Account, an amount equal to the sum of (x) the Required Debt Service Payment
for such Payment Date, including any payments required to be made to the
Counterparty for any costs incurred in connection with any Termination Event and
(y) any amounts deposited into the Cash Collateral Account that are (1) Loss
Proceeds that Agent has elected to apply to reduce the Indebtedness in
accordance with the terms of the Mortgage and the Credit Agreement and the other
Loan Documents, (2) excess Loss Proceeds remaining after the completion of any
restoration required hereunder following a Taking and (3) prepayments made
pursuant to the Credit Agreement, if any.
(iv) Funds in the Expiring Lease Costs Re- serve Sub-Account. Not
more than once each month, Borrowers' may deliver to Agent an Officer's
Certificate and any other documentation reasonably required by Agent evidencing
and requesting a release of funds on deposit in the Expiring Lease Costs Reserve
Sub-Account for any Expiring Lease Costs (collectively, the "Expiring Lease
Costs Package"). Provided that no Event of Default shall have occurred and such
Expiring Lease Costs have been approved by Agent in its reasonable discretion
(which approval shall be deemed granted if the Lease under which such Expiring
Lease Costs are to be paid has been previously approved by Agent) and there are
sufficient funds available in the Expiring Lease Costs Reserve Sub-Account,
Agent shall disburse to Borrowers an amount equal to such Expiring Lease Costs
within five (5) Domestic Business Days after Agent shall have received an
Expiring Lease Costs Package from Borrowers. Notwithstanding anything to the
contrary set forth herein, Borrowers may deliver to Agent an Officer's
Certificate and any other documentation reasonably requested by Agent evidencing
and requesting a release of funds in the Expiring Lease Costs Reserve
Sub-Account for the purpose of funding 50%
0148055.08-01S4a
16
of the amount (the "Shortfall") by which Property Expenses exceed Property
Income for such Monthly Collection Period. Provided that no Event of Default
shall have occurred, Agent shall disburse to Borrowers an amount equal to the
lesser of (x) the amount requested by Borrowers pursuant to such Officer's
Certificate (which in no event shall be more than 50% of the Shortfall), (y) the
amount which Borrowers shall, to Agent's reasonable satisfaction, have paid, are
paying simultaneously and/or shall pay, from sums previously retained by
Borrowers as Net Cash Flow, in respect of the Shortfall, and (iii) the remaining
balance of the Expiring Lease Costs Reserve Sub-Account in respect of deposits
(net of withdrawals therefrom and exclusive of any amounts deposited pursuant to
Section 2.9 (e) of the Credit Agreement) made during the Loan Year in which such
Shortfall occurs.
(v) Funds in the Escrow Sub-Account. Not more than once each
month, Borrowers may deliver to Agent an Officer's Certificate and any other
documentation reasonably required by Agent evidencing and requesting a release
of funds on deposit in the Escrow Sub-Account for any 1290 Lobby Improvements or
the Warner Work Allowance. Agent shall disburse to Borrowers such amount
provided that with respect to the Warner Work Allowance, such disbursement is in
accordance with the terms of Section 4.01 of the Warner Lease, and with respect
to the 1290 Lobby Improvements, the construction contracts therefor.
(j) Payment of Basic Carrying Costs. Except to the extent that
Agent is obligated to pay Basic Carrying Costs on behalf of Borrowers from the
Basic Sub-Accounts pursuant to Section 3(i) hereof, Borrowers hereby agree to
pay all Basic Carrying Costs. Borrowers' obligation to pay (or cause Agent to
pay on its behalf from the Basic Sub-Accounts) Basic Carrying Costs pursuant to
the Mortgage and the Cash Collateral Agreement shall include, to the extent
permitted by applicable law, Impositions resulting from future changes in law
which impose upon Agent an obligation to pay any property taxes or other
Impositions as provided in the Mortgage or the Credit Agreement. Borrowers shall
deliver to Agent, promptly following receipt by Borrowers, originals of all real
estate tax bills and other documents evidencing Impositions and copies of all
bills for insurance premiums.
0148055.08-01S4a
17
(k) Event of Default. All funds deposited into the Cash
Collateral Account shall be held by Agent pursuant to the provisions hereof and
shall be applied in payment of the applicable obligations provided herein when
and as payable, provided that no Event of Default shall have occurred and be
continuing or that Agent shall not have accelerated the Obligations due under
the Loan Documents. Should an Event of Default occur and be continuing or if
Agent shall have accelerated the Obligations due under the Loan Documents, the
proceeds on deposit in the Cash Collateral Account may be applied by Agent in
payment of any Basic Carrying Costs or Property Expenses for all or any portion
of the Mortgaged Property or may be applied to the payment of the Indebtedness
or any other charges affecting all or any portion of the Mortgaged Property as
Agent in its sole discretion may determine upon prior notice to Borrowers in
accordance with the Credit Agreement and the Mortgage; provided, however, that
no such application shall be deemed to have been made by operation of law or
otherwise until actually made by Agent as herein provided. Upon the occurrence
and during the continuance of an Event of Default hereunder or upon the
acceleration of the Obligations due under the Loan Documents, Agent may, at
Agent's sole discretion, either (i) upon receipt by Agent of copies of bills,
invoices and other reasonable substantiation of Property Expenses for any such
Property Expenses acceptable to Agent, pay the Property Expenses directly from
amounts on deposit in the Cash Collateral Account or (ii) not more than once
during each calendar month, on such date as shall be requested by Borrowers and
approved by Agent, disburse from the Cash Collateral Account, to Borrowers or at
Borrower's election, the Manager, an amount necessary to pay such Property
Expenses approved by Agent. All such disbursements from the Cash Collateral
Account to Borrowers or the Manager to pay Property Expenses hereunder shall be
made against receipt by Agent of (i) copies of bills, invoices and other
reasonable substantiation of Property Expenses for any such Property Expenses
acceptable to Agent and (ii) proof, including, without limitation, paid invoices
or other reasonable substantiation, including, without limitation, cancelled
checks, satisfactory to Agent that all disbursements from the Cash Collateral
Account for previous calendar months were applied to the payment of Property
Expenses. Borrowers or if applicable Manager, as directed by Borrowers, shall
use proceeds disbursed from the Cash Collater-
0148055.08-01S4a
18
al Account pursuant to this Section solely for the pay-
ment of Property Expenses.
(l) Loss Proceeds. In the event of a casualty to the Mortgaged
Property, unless Agent elects, or is deemed to have elected, pursuant to the
Mortgage to make the Proceeds received under the insurance policy required to be
maintained by Borrowers available to Borrowers for restoration, Agent and
Borrowers shall cause all such Proceeds, except as otherwise set forth in the
Mortgage, (less Borrowers's cost of recovering such Proceeds, including, without
limitation, reasonable attorneys' fees) to be paid by the insurer directly to
the Cash Collateral Account, whereupon Agent shall (after deducting out Agent's
reasonable expenses incurred in accordance with the terms of the Mortgage or the
Credit Agreement, to protect Agent's interest in the Mortgaged Property and
Agent's cost of recovering and paying out such Insurance Proceeds, including,
without limitation, reasonable attorneys' fees) apply the same to reduce the
Indebtedness in accordance with the terms of the Credit Agreement and the
Mortgage; provided, however, that if in accordance with the terms of the
Mortgage and the Credit Agreement the Proceeds shall be available for
restoration, all Proceeds in respect of business interruption coverage shall be
maintained in the Cash Collateral Account, to be applied by Agent in the same
manner as Property Income with respect to the operation of the Mortgaged
Property; provided, further, however, that in the event that the Proceeds of
such business interruption insurance policy are paid in a lump sum in advance,
Agent shall hold such Proceeds in a segregated interest-bearing escrow account,
shall estimate, in Agent's reasonable discretion, the number of months required
for Borrowers to restore the damage caused by the casualty, shall divide the
aggregate business interruption Proceeds by such number of months, and shall
disburse from such escrow account into the Cash Collateral Account each month
during the performance of such restoration such monthly installment of the
Proceeds. In the event that Proceeds are to be applied toward restoration, Agent
shall hold such funds in a segregated bank account, which shall be interest
bearing to the extent practicable, and shall disburse the same in accordance
with the provisions of the Mortgage. If in accordance with the terms of the
Mortgage and the Credit Agreement the Proceeds in respect of any taking are to
be made available to Borrowers for
0148055.08-01S4a
19
restoration, Agent and Borrowers shall cause such Proceeds (less Borrowers' cost
of recovering such Proceeds, including, without limitation, reasonable
attorneys' fees) to be paid to the Cash Collateral Account, whereupon Agent
shall (after deducting out Agent's reasonable expenses incurred to protect
Agent's interest in the Mortgaged Property and Agent's cost of recovering and
paying out such Proceeds, including, without limitation, reasonable attorneys'
fees) apply same to reduce the Indebtedness in accordance with the terms of the
Credit Agreement and the Mortgage; provided, however, that any Proceeds received
in connection with a temporary Taking shall be maintained in the Cash Collateral
Account, to be applied by Agent in the same manner as Property Income received
with respect to the operation of the Mortgaged Property; provided, further,
however, that in the event that the Proceeds of any such temporary taking are
paid in a lump sum in advance, Agent shall hold such Proceeds in a segregated
interest-bearing escrow account, shall estimate, in Agent's reasonable
discretion, the number of months that the Mortgaged Property shall be affected
by such temporary taking, shall divide the aggregate Proceeds in connection with
such temporary taking by such number of months, and shall disburse from such
escrow account into the Cash Collateral Account each month during the pendency
of such temporary taking such monthly installment of the Proceeds. In the event
that in accordance with the provisions of the Mortgage Proceeds are payable to
or to be held by Agent to be applied toward restoration, Agent shall hold such
funds in a segregated bank account, which shall be interest bearing to the
extent practicable, and shall disburse same in accordance with the provisions of
the Mortgage. If any Proceeds in excess of the Casualty Amount or Proceeds paid
due to a Taking (collectively, "Loss Proceeds") are received by Borrowers, such
Loss Proceeds (less Borrowers' reasonable cost of recovering such Loss Proceeds,
including, without limitation, reasonable attorneys' fees) shall be received in
trust for Agent, shall be segregated from other funds of Borrowers, and shall be
paid within five (5) Domestic Business Days after receipt into the Cash
Collateral Account, or paid to Agent to hold in a segregated account, which
shall be interest bearing to the extent practicable, in each case to be applied
or disbursed in accordance with the foregoing. Except during the continuance of
an Event of Default, any Loss Proceeds made available to Borrowers, in the event
of a casualty, for
0148055.08-01S4a
20
restoration in accordance herewith, to the extent not used by Borrowers in
connection with, or to the extent they exceed the cost of, such restoration,
shall be paid to Borrowers. Any Loss Proceeds made available to Borrowers, in
the event of a Taking, for restoration in accordance herewith, to the extent not
used by Borrowers in connection with, or to the extent they exceed the cost of,
such restoration, shall be paid to Agent, to reduce the Indebtedness.
4. Financing Statement; Further Assurances.
(a) Simultaneously herewith, Borrowers shall execute and deliver
to counsel for Agent for filing, a financing statement or statements in
connection with the Collateral in the form required to properly perfect Agent's
security interest in the Collateral that may be perfected by such filings.
Borrowers agree that, at any time and from time to time, including, without
limitation, in connection with any Permitted Investments under Section 3 hereof,
at the expense of Borrowers, Borrowers will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
reasonably necessary or desirable, or that Agent may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby (including, without limitation, any security interest in and to
any Permitted Investments), or to enable Agent, to exercise and enforce Agent's
rights and remedies hereunder with respect to, any Collateral in furtherance of
Borrowers' obligations under this Agreement and the Credit Agreement.
(b) The chief executive office of each Borrower is c/o ▇▇▇▇▇▇
Capital Group, L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Each Borrower
will not change such chief executive office unless such Borrower shall provide
Agent with thirty (30) days' prior written notice thereof of such change (but in
any event, within the period required pursuant to the UCC) and there shall have
been taken such action, reasonably satisfactory to Agent, as may be necessary to
maintain the security interest of Agent in the Collateral, at all times fully
perfected and in full force and effect. Each Borrower shall not change its name
unless it shall have given Agent thirty (30) days' prior written notice thereof
of such change (but in any event, within the period required pursuant to the
0148055.08-01S4a
21
UCC) and shall take such action, reasonably satisfactory to Agent, as may be
necessary to maintain the security interest of Agent, in the Collateral granted
hereunder at all times fully perfected and in full force and effect.
5. Transfers and Other Liens. Each of the Borrowers and Agent
agrees that it will not (i) sell or otherwise dispose of any of the Collateral
other than pursuant to the terms hereof or pursuant to the terms of the Credit
Agreement or (ii) create or permit to exist any Lien upon or with respect to all
or any of the Collateral, except for the Lien granted to the Agent under this
Agreement or as otherwise permitted under the Credit Agreement or the Mortgage.
6. Agent's Right to Perform Borrowers' Obligations. If Borrowers
fail to perform any of the covenants or obligations contained herein, and such
failure shall continue for a period of three (3) Domestic Business Days with
respect to monetary obligations, or ten (10) Domestic Business Days with respect
to non-monetary obligations, after Borrowers' receipt of written notice thereof
from Agent, Agent may itself perform, or cause performance of, such covenants or
obligations, and the reasonable expenses of Agent incurred in connection
therewith shall be payable by Borrowers to Agent in accordance with Section 10
hereof.
7. Reasonable Care. Beyond the exercise of reasonable care in the
custody thereof, except as provided in Section 5 hereof, Agent shall not have
any duty as to any Collateral or any income thereon in its possession or control
or in the possession or control of any agents for, or of, Agent for the
preservation of rights against any Person or otherwise with respect thereto.
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which a reasonable person would exercise
under similar circumstances, it being understood that Agent shall not be liable
or responsible for any loss or damage to any of the Collateral, or for any
diminution in value thereof including, without limitation, any loss, damage or
diminution in value resulting from any Permitted Investment), by reason of the
act or omission of Agent or its agents, employees or bailees, except to the
0148055.08-01S4a
22
extent that such loss or damage results from Agent's gross negligence or willful
misconduct.
8. Remedies.
(a) Upon the occurrence and during the continuance of an Event of
Default, and subject to the terms and conditions of this Agreement and the
Credit Agreement, as applicable, Agent may:
(i) without notice to Borrowers except as required by law or any
of the Loan Documents and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Collateral against
the Obligations or any part thereof or any other expenses due in
accordance with the Credit Agreement;
(ii) in Agent's sole discre- tion, at any time and from time to
time, exercise any and all rights and remedies available to it under
this Agreement, and/or as a secured party under the UCC or otherwise
under applicable law; and
(iii) demand, collect, take possession of, receipt for, settle,
compromise, adjust, ▇▇▇ for, foreclose or realize upon the Collateral
(or any portion thereof) as Agent may determine in its sole
discretion.
Borrowers hereby expressly waive, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind except as specifically
provided herein or in the other Loan Documents in connection with this Agreement
or the Collateral. Borrowers acknowledge and agree that ten (10) days' prior
written notice of the time and place of any public sale of the Collateral or any
other intended disposition thereof shall be commercially reasonable and
sufficient notice to Borrowers within the meaning of the UCC or otherwise under
applicable law.
9. No Waiver. The rights and remedies pro- vided in this
Agreement and the other Loan Documents are cumulative and may be exercised
independently or concur- rently, and are not exclusive of any other right or
0148055.08-01S4a
23
remedy provided at law or in equity. No failure to exercise or delay by Agent or
Borrowers in exercising any right or remedy hereunder or under the other Loan
Documents shall impair or prohibit the exercise of any such rights or remedies
in the future or be deemed to constitute a waiver or limitation of any such
right or remedy or acquiescence therein. Every right and remedy granted to Agent
under Section 8 hereof or by law may be exercised by Agent at any time and from
time to time, and as often as Agent may deem it expedient. Any and all of
Agent's rights with respect to the lien and security interest granted hereunder
shall continue unimpaired, and Borrowers shall be and remain obligated in
accordance with the terms hereof, notwithstanding (a) any proceeding of
Borrowers under the Federal Bankruptcy Code or any bankruptcy, insolvency or
reorganization laws or statutes of any state, (b) the release or substitution of
Collateral at any time, or of any rights or interests therein or (c) any delay,
extension of time, renewal, compromise or other indulgence granted by Agent in
the event of any default, with respect to the Collateral or otherwise hereunder.
No delay or extension of time by Agent in exercising any power of sale, option
or other right or remedy hereunder, and no notice or demand which may be given
to or made upon Borrowers by Agent, shall constitute a waiver thereof, or limit,
impair or prejudice Agent's right, without notice or demand, to take any action
against Borrowers or to exercise any other power of sale, option or any other
right or remedy.
10. Expenses. The Collateral shall secure, and Borrowers shall
pay to Agent and/or Agent's counsel upon thirty (30) days written notice from
Agent as applicable, from time to time, all reasonable costs and expenses
(including, but not limited to, reasonable attorneys' fees and disbursements,
and transfer, recording and filing fees, taxes and other charges) actually
incurred for, or incidental to, the creation or perfection of any lien or
security interest granted or intended to be granted hereby, the custody, care,
sale, transfer, administration, collection of or realization on the Collateral,
or in any way relating to the enforcement, protection or preservation of the
rights or remedies of Agent and the Lenders under this Agreement, the Credit
Agreement, the Mortgage or the other Loan Documents.
0148055.08-01S4a
24
11. Agent Appointed Attorney-In-Fact. Upon the occurrence and
during the continuance of an Event of Default, Borrowers hereby irrevocably
constitute and appoint Agent, as Borrowers' true and lawful attorney-in-fact,
with full power of substitution, to execute, acknowledge and deliver any
instruments and to exercise and enforce every right, power, remedy, option and
privilege of Borrowers with respect to the Collateral, and do in the name, place
and stead of Borrowers, all such acts, things and deeds for and on behalf of and
in the name of Borrowers, which Borrowers could or might do or which Agent may
deem necessary or desirable to more fully vest in Agent the rights and remedies
provided for herein and to accomplish the purposes of this Agreement. The
foregoing powers of attorney are irrevocable and coupled with an interest. If
Borrowers fail to perform any agreement herein contained, Agent may, subject to
Section 6 hereof, itself perform or cause performance of any such agreement, and
any reasonable expenses of Agent, and, at the direction of Agent, incurred in
connection therewith shall be paid by Borrowers as provided in Section 10
hereof.
12. Liability of Agent.
(a) Agent, in Agent's capacity as secured party hereunder, shall
be responsible for the performance only of such duties as are specifically set
forth in this Agreement, and no duty shall be implied from any provision hereof.
Agent shall not be required to take any discretionary actions hereunder. Agent
shall take action hereunder at the written direction of Borrowers (but only
where specifically permitted hereunder), it being understood and agreed that
Agent's duties hereunder shall be wholly ministerial in nature. In connection
with any action which Borrowers are permitted under this Agreement to direct
Agent to take, if Agent believes that the same is contrary to the provisions of
the Credit Agreement, Agent shall advise Borrowers thereof accordingly in
writing, and thereafter shall have no liability to Borrowers (or to any other
person) for not following any directions of Borrowers. Agent shall not be under
any obligation or duty (i) to perform any act which, in Agent's sole judgment,
could involve any liability or any expense for which it will not be reimbursed
or (ii) to institute or defend any suit in respect hereof, or to advance any of
its own monies; provided, however, that Agent shall
0148055.08-01S4a
25
advise Borrowers in writing in those cases where it intends to make such a
determination. Borrowers shall indemnify and hold Agent, and its agents,
employees and officers harmless from and against any loss, cost or damage
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred by Agent in connection with the transactions contemplated hereby,
excepting losses, costs, expenses and claims arising as a result of its own
gross negligence or willful misconduct.
(b) Agent shall be protected in acting upon any notice,
resolution, request, consent, order, certificate, representation, report,
opinion, bond or other paper, document or signature reasonably believed by Agent
to be genuine, and Agent may assume that any purported officer of Borrowers
purporting to give any of the foregoing in connection with the provisions hereof
has been duly authorized to do so. Agent may require such written certifications
or directions from Borrowers as it deems necessary or appropriate before taking
any action hereunder. Agent may consult with counsel, and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by it hereunder and in good faith in accordance
therewith. Borrowers shall hold Agent harmless from and against any loss
incurred by Agent provided Agent was acting in accordance with this Agreement or
in reliance upon any instruction, direction or certification received by Agent
and provided Agent's action or omission was without gross negligence or willful
or reckless misconduct. Except as expressly set forth herein, Agent shall not be
responsible for monitoring Borrowers' compliance with Borrowers' obligations
under this Agreement or Borrowers' breach of any of its obligations under this
Agreement.
13. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full force
and effect until payment in full of the Obligations. Upon payment in full of the
Obligations, this Agreement shall terminate and Borrowers shall be entitled to
the return, upon their request and at their expense, of such of the Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof
and Agent shall execute such instruments and documents as may be reasonably
requested
0148055.08-01S4a
26
by Borrowers to evidence such termination and the release
of the lien hereof.
14. Miscellaneous.
(a) This Agreement, the Mortgage together with the Credit
Agreement and the other Loan Documents, constitutes the entire and final
agreement among the parties with respect to the subject matter hereof and may
not be changed, terminated or otherwise varied, except by a writing duly
executed by the parties.
(b) No waiver of any term or condition of this Agreement, whether
by delay, omission or otherwise, shall be effective unless in writing and signed
by the party sought to be charged, and then such waiver shall be effective only
in the specific instance and for the purpose for which given.
(c) This Agreement shall be binding upon and inure to the benefit
of the parties hereto, their respective successors and permitted assigns.
(d) The provisions of Section 9.1 of the Credit Agreement with
respect to any notice to be delivered hereunder are incorporated herein by
reference.
(e) At the written request of Agent, Borrowers, at their sole
cost and expense, promptly shall take such action and execute and deliver such
financing statements and further instruments and documents as Agent may
reasonably request in order to more fully perfect, evidence or effectuate the
pledge and the security interest granted hereby or to enable Agent to exercise
and enforce its rights and remedies hereunder. Borrowers authorize Agent to file
one or more financing or continuation statements under the UCC relating to the
Collateral, naming Agent, as "secured party".
(f) All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
(g) This Agreement shall be governed by and construed and
enforced in all respects in accordance with the laws of the State of New York.
0148055.08-01S4a
27
(h) Any legal action or proceeding with respect to this Agreement
and any action for enforcement of any judgment in respect thereof may be brought
in the courts of the State of New York in and for the City of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, Borrowers hereby accept for themselves
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof.
Borrowers irrevocably consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to Borrowers at its
address set forth herein. Borrowers hereby irrevocably waive any objection which
they may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of Agent to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against Borrowers in any other jurisdiction.
(i) In the event any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included
hereunder.
15. Recourse. The provisions of Section 9.14 of the Credit
Agreement are incorporated herein by refer- ence.
16. WAIVER OF JURY TRIAL. EACH OF THE BOR- ROWERS AND AGENT
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
0148055.08-01S4a
28
17. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
0148055.08-01S4a
29
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written:
Borrowers: 1290 PARTNERS, L.P.
By: 1290 GP Corp., General Partner
By:____________________
Name:
Title:
237 PARK PARTNERS, L.P.
By: 237 GP Corp., General Partner
By:____________________
Name:
Title:
Agent: THE CHASE MANHATTAN BANK, AS AGENT
By:___________________________
Name:
Title:
Manager: MANAGER EXECUTES THIS AGREEMENT SOLELY
TO EVIDENCE ITS CONSENT TO PERFORM ITS
OBLIGATIONS SET FORTH IN SECTION 3(a),
3(k) AND 3(i) HEREOF:
TISHMAN SPEYER PROPERTIES, L.P.
By:___________________________,
General Partner
By:____________________
Name:
Title:
0148055.08-01S4a
SCHEDULE A
"Permitted Investments" shall mean (i) savings, money market or
other interest bearing accounts of Agent, (ii) direct obligations of the United
States Government, including, without limitation, treasury bills, notes and
bonds, (iii) interest bearing or discounted obligations of the Federal Home Loan
Mortgage Corporation, Government National Mortgage Association and the Federal
National Mortgage Association or (iv) commercial paper of domestic corporations,
which has received a rating of A1 or P-1 or its equivalent from either of
▇▇▇▇▇'▇ Investors Services, Inc. or Standard & Poor's Ratings Group
(collectively, the "Rating Agencies") and/or unconditionally guaranteed by an
entity which has received an equivalent credit rating by the Rating Agencies.
0148055.08-01S4a