EXHIBIT 10.17
================================================================================
LOAN AGREEMENT
FIXED RATE
BETWEEN
PG(MULTI-16)L.P., A DELAWARE LIMITED PARTNERSHIP
AS BORROWER
AND
GMAC COMMERCIAL MORTGAGE BANK, A UTAH INDUSTRIAL BANK
AS LENDER
DATED AS OF OCTOBER 22, 2004
LOAN NUMBER: 46675
================================================================================
Ply Gem Industries
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINED TERMS AND CONSTRUCTION GUIDELINES......................1
1.01. Defined Terms..................................................1
1.02. General Construction...........................................1
1.03. Reserved.......................................................1
1.04. Property.......................................................2
ARTICLE 2 MAXIMUM LOAN AMOUNT; PAYMENT TERMS; ADVANCES; DEFEASANCE.......2
2.01. Commitment to Lend.............................................2
2.02. Calculation of Interest........................................2
2.03. Payment of principal and Interest..............................3
2.04. Payments Generally.............................................3
2.05. Prepayment Rights..............................................5
ARTICLE 3 CASH MANAGEMENT................................................11
3.01. Intentionally Deleted..........................................11
ARTICLE 4 ESCROW AND RESERVE REQUIREMENTS................................11
4.01. Creation and Maintenance of Escrows and Reserves...............11
4.02. Tax Escrow.....................................................12
4.03. Insurance Premium Escrow.......................................13
4.04. Immediate Repair Escrow Account................................14
4.05. Replacement Reserve Account....................................15
4.06. TI/LC Reserve Account..........................................16
ARTICLE 5 COMPLETION OF REPAIRS RELATED TO RESERVE ACCOUNTS;
CONDITIONS TO RELEASE OF FUNDS...............................17
5.01. Conditions Precedent to Disbursements from
Certain Reserve Accounts......................................17
5.02. Waiver of Conditions to Disbursement...........................19
5.03. Direct Payments to Suppliers and Contractors...................19
5.04. Performance of Reserve Items...................................19
ARTICLE 6 LOAN SECURITY AND RELATED OBLIGATIONS..........................20
6.01. Security Instrument and Assignment of Rents and Leases.........20
6.02. Assignment of Property Management Contract.....................21
6.03. Assignment of Operating Agreements.............................21
6.04. Pledge of Property; Grant of Security Interest.................20
6.05. Environmental Indemnity Agreement..............................20
Ply Gem Industries
-i-
6.06. Guaranty of Borrower Sponsors............................. 20
6.07. Letters of Credit......................................... 20
ARTICLE 7 SINGLE PURPOSE ENTITY REQUIREMENTS........................ 23
7.01. Commitment to be a Single Purpose Entity.................. 23
7.02. Definition of Single Purpose Entity....................... 23
ARTICLE 8 REPRESENTATIONS AND WARRANTIES............................ 26
8.01. Organisation; Legal Status................................ 26
8.02. Power; Authorization; Enforceable Obligations............. 27
8.03. No Legal Conflicts........................................ 27
8.04. No Litigation............................................. 27
8.05. Business Purpose of Loan.................................. 27
8.06. Warranty of Title......................................... 27
8.07. Condition of the Property................................. 28
8.08. No Condemnation........................................... 28
8.09. Requirements of Law....................................... 28
8.10. Operating Permits......................................... 28
8.11. Separate Tax Lot.......................................... 29
8.12. Flood Zone................................................ 29
8.13. Adequate Utilities........................................ 29
8.14. Public Access............................................. 29
8.15. Boundaries................................................ 29
8.16. Mechanic Liens............................................ 29
8.17. Assessments............................................... 29
8.18. Insurance................................................ 29
8.19. Leases.................................................. 30
8.20. Management Agreement...................................... 30
8.21. Financial Condition....................................... 30
8.22. Taxes..................................................... 31
8.23. No Foreign Person......................................... 31
8.24. Federal Regulations....................................... 31
8.25. Investment Company Act, Other Regulations................. 31
8.26. ERISA..................................................... 31
8.27. No Illegal Activity as Source of Funds.................... 31
8.28. Compliance with Anti-Terrorism, Embargo, Sanctions and
Anti-Money Laundering Laws................................ 31
8.29. Brokers and Financial Advisors............................ 31
8.30. Complete Disclosure; No Change in Facts or Circumstances.. 32
ARTICLE 9 BORROWER COVENANTS........................................ 32
9.01. Payment of Debt and Performance of Obligations............ 32
9.02. Payment of Taxes and Other Lienable Charges............... 32
Ply Gem Industries
-ii-
9.03. Insurance......................................................... 33
9.04. Obligations upon Condemnation of Casualty......................... 37
9.05. Inspections and Right of Entry.................................... 43
9.06. Leases and Rents.................................................. 43
9.07. Use of Property................................................... 45
9.08. Maintenance of Property........................................... 46
9.09. Waste............................................................. 46
9.10. Compliance with Laws.............................................. 46
9.11. Financial Reports, Books and Records.............................. 46
9.12. Performance of Other Agreements................................... 48
9.13. Existence Change of Name; Location as a Registered Organization....49
9.14. Property Management............................................... 49
9.15. ERISA............................................................. 50
9.16. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws.................................................. 50
ARTICLE 10 NO TRANSFERS OR ENCUMBRANCES; DUE ON SALE......................... 51
10.01. Prohibition Against Transfers..................................... 51
10.02. Lender Approval................................................... 51
10.03. Borrower Right to Partial Defeasance and Release for Allocated
Maximum Loan Amount.............................................. 53
10.04. Other Releases of the Mortgaged Property.......................... 55
10.05. OFAC Compliance; Substantive Consolidation Opinion................ 55
ARTICLE 11 EVENTS OF DEFAULT; REMEDIES....................................... 55
11.01. Events of Default................................................. 55
11.02. Remedies.......................................................... 58
11.03. Cumulative remedies; No Waiver; Other Security.................... 60
11.04. Enforcement Costs................................................. 61
11.05. Application of Proceeds........................................... 61
11.06. Cross-Default; Cross-Collateralization; Waiver of
Marshalling of Assets........................................... 61
ARTICLE 12 NONRECOURSE - LIMITATIONS ON PERSONAL LIABILITY................... 62
12.01. Nonrecourse Obligation............................................ 62
12.03. Full Personal Liability........................................... 62
12.03. Personal Liability for Certain Losses............................. 62
12.04. No Impairment..................................................... 63
12.05. No Waiver of Certain Rights....................................... 64
ARTICLE 13 INDEMNIFICATION................................................... 64
13.01. Indemnification Against Claims.................................... 64
10.02. Duty to Defend.................................................... 65
Ply Gem Industries
-iii-
ARTICLE 14 SUBROGATION; NO USURY VIOLATIONS............................. 65
14.01. Subrogation.................................................. 65
14.02. No Usury..................................................... 65
ARTICLE 15 SALE OR SECURITIZATION OF LOAN............................... 66
15.01. Splitting the Note........................................... 66
15.02. Lender's Rights to Sell or Securitize........................ 66
15.03. Dissemination of Information................................. 67
15.04. Reserves Accounts............................................ 67
15.05. Securitization Indemnification............................... 67
ARTICLE 16 BORROW FURTHER ACTS AND ASSURANCES PAYMENT OF SECURITY
RECORDING CHARGES........................................... 69
16.01. Further Acts................................................. 69
16.02. Replacement Documents........................................ 69
16.03. Borrower Estoppel Certificates............................... 69
16.04. Recording Costs.............................................. 70
16.05. Publicity.................................................... 70
ARTICLE 17 LENDER CONSENT............................................... 70
17.01. No Joint Venture; No Third Party Beneficiaries............... 70
17.02. Lender Approval.............................................. 71
17.03. Performance at Borrower's Expense............................ 71
17.04. Non-Reliance................................................. 71
ARTICLE 18 MISCELLANEOUS PROVISIONS..................................... 72
18.01. Notices...................................................... 72
18.02. Entire Agreement; Modifications; Time of Essence............. 73
18.03. Binding Effect; Joint and Several Obligations................ 73
18.04 Duplicate Originals; Counterparts............................ 73
18.05. Unenforceable Provisions..................................... 73
18.06. Governing Law................................................ 73
18.07. Consent to Jurisdiction...................................... 74
18.08. WAIVER OF TRIAL BY JURY...................................... 74
ARTICLE 19 SUBSTITUTION OF PROPERTY..................................... 74
19.01. Substitution of Properties................................... 74
ARTICLE 20 LIST OF DEFINED TERMS........................................ 81
20.01. Definitions.................................................. 81
ARTICLE 21 LOCAL LAW PROVISIONS......................................... 97
Intentionally Deleted........................................ 97
Ply Gem Industries
-iv-
LOAN AGREEMENT
(FIXED RATE LOAN)
THIS-LOAN AGREEMENT is made as of this 22nd day of October, 2004 by PG
(MULTI-16) L.P., a Delaware limited partnership, and its successors and assigns
("BORROWER"), as borrower, and GMAC COMMERCIAL MORTGAGE BANK, a Utah Industrial
Bank (together with its successors and assigns "LENDER"), as lender.
BACKGROUND
Borrower desires to obtain a commercial mortgage loan from Lender in the
original principal amount of $17,650,000.00 in lawful money of the United
States of America. Lender is willing to make such loan to Borrower on the terms
and conditions set forth in this Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of such loan and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, Borrower and Lender
agree as follows:
ARTICLE 1
DEFINED TERMS AND CONSTRUCTION GUIDELINES
1.01. Defined Terms. Each defined term used in this Loan Agreement has the
meaning given to that term in Article 20 of this Loan Agreement.
1.02. General Construction. Defined terms used in this Loan Agreement may
be used interchangeably in singular or plural form, and pronouns are to be
construed to cover all genders. All references to this Loan Agreement to any
agreement or instrument referred to in this Loan Agreement shall mean such
agreement or instrument as originally executed and as hereafter amended,
supplemented, extended, consolidated or restated from time to time. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Loan Agreement as whole and not to any particular subdivision; and the
words "Article" and "section" refer to the entire article or section, as
applicable and not to any particular subsection or other subdivision. Reference
to days for performance means calendar days unless business days are expressly
indicated.
1.03. Reserved.
Ply Gem Industries
1.04. Property. The parties hereto acknowledge that the defined term
"Property" has been defined to collectively include each individual Property and
the Letters of Credit and Ohio Letter of Credit. All references to "Property" in
this Loan Agreement shall be deemed to refer to one or more Individual
Properties, as the context required and the Letters of Credit. It is the intent
of the parties hereto in making any determinations under this Loan Agreement,
including, without limitation, in determining whether (a) breach of a
representation, warranty or a covenant has occurred, (b) there has occurred a
default or Event of Default, or (c) an event has occurred which would create
recourse obligations under Article 12 of his Loan Agreement, that any such
breach, occurrence or event with respect to any Individual Property shall be
deemed to be such a breach, occurrence or event with respect to the Loan.
ARTICLE 2
MAXIMUM LOAN AMOUT; PAYMENT TERMS; ADVANCES; DEFEASANCE
2.01. Commitment to Lend.
(a) Maximum Loan Amount Approved. Subject to the terms and conditions set
forth herein, and in reliance on Borrower's representations, warranties and
covenants set forth herein, Lender agrees to loan the Maximum Loan Amount to
Borrower. The Loan shall be evidenced by this Loan Agreement and by the Note
made by Borrower to the order of Lender and shall bear interest and be paid upon
the terms and conditions provided herein.
(b) Advance of Maximum Loan Amount. On the Closing Date, Lender
shall advance the entire Maximum Loan Amount to Borrower.
2.02. Calculation of Interest.
(a) Calculation Basis. Interest due on the Loan shall be paid in
arrears and calculated based on a 360-day year and paid for the actual number of
days elapsed in such partial month by a daily rate calculated on said 360-day
year.
(b) Applicable Interest Rate. Interest shall accrue on outstanding
principal at the rate of six and fourteen one hundredths percent (6.14%) per
annum ("APPLICABLE INTEREST RATE").
(c) Adjustment for Impositions on Loan Payment. All payments made by
Borrower hereunder shall be made free and clear of, and without reduction for,
or on account of, any income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings hereafter imposed, levied, collected,
withheld or assessed by and government or taxing authority (other than taxes on
the overall net income or overall gross receipts of Lender imposed as a result
of a present or former connection between Lender and the jurisdiction of the
government or taxing authority imposing same provided, that this exclusion shall
not apply to a government or taxing authority imposing same provided, that this
exclusion shall not apply to a connection arising solely from Lender's having
executed, delivered, performed its obligations
Ply Gem Industries
-2-
under, received a payment under, or enforced this Loan Agreement or any other
Loan Document). If any such amounts are required to be withheld from amounts
payable to lender, the amounts payable to lender under the Loan Documents shall
be increased to the extent necessary to yield to Lender, after payment of such
amounts, interest or any such other amounts payable at the rates or in the
amounts specified herein. If any such amounts are payable by Borrower, Borrower
shall pay all such amounts by their due date and promptly send Lender a
certified copy of an original official receipt showing payment thereof. If
Borrower fails to pay such amounts when due or to deliver the required receipt
to Lender, Borrower shall indemnify Lender for any incremental taxes, interest
or penalties that may become payable by Lender as a result of any such failure.
(d) Intentionally Omitted.
(e) Acceleration. Notwithstanding anything to the contrary contained
herein, if Borrower is prohibited by law from paying any amount due to Lender
under Section 2.02(c) or (d), Lender may elect to declare the unpaid principal
balance of the Loan, together with all unpaid interest accrued thereon and any
other amount due hereunder, due and payable within ninety (90)
days of Lender's written notice to Borrower. No prepayment Fee shall be due in
such event. Lender's delay or failure in accelerating the Loan upon the
discovery or occurrence of an event under Section 2.02(c) or (d) shall not be
deemed a waiver or estoppel against the exercise of such right.
2.03. Payment of Principal and Interest.
(a) Payment at Closing. If the Loan is funded on a date other than
the first (1st) day of a calendar month, Borrower shall pay to Lender at the
time of funding an interest payment calculated by multiplying (i) the number of
days from and including the date of funding to (but excluding) the first
(1st)day of the next calendar month by (ii) a daily rate based on the Applicable
Interest Rate and Calculated for a 360-day year.
(b) Payment Dates. Commencing on the first (1st) day of December,
2004 and continuing on the first (1st) day of each and every successive month
thereafter (each, a "PAYMENT DUE DATE"), through and including the Payment Due
Date immediately prior to the Maturity date, Borrower shall pay consecutive
monthly payments of principal and interest in the amount of $127,879.75 and any
amounts due pursuant to Section 2.02 of this Loan Agreement.
(c) Maturity Date. On the first (1st) day of November, 2024
("MATURITY DATE"), Borrower shall pay the entire outstanding principal balance
of the Loan, together with all accrued but unpaid interest thereon and all other
amounts due under this Loan Agreement, the Note or any other Loan Document.
Ply Gem Industries
-3-
\ 2.04. Payments Generally.
(a) Delivery of Payments. All payments due to Lender under this Loan
Agreement and the other Loan Documents are to be paid in immediately available
funds to Lender at Lender's office located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Servicing - Accounting Manager or by wire
transfer to Lender, or at such other Place as Lender may designate to Borrower
in writing from time to time. All amounts due under this loan Agreement and the
other Loan Documents shall be paid without setoff, counterclaim or any other
deduction whatsoever.
(b) Credit for Payment Receipt. No payment due under this Loan
Agreement or any of the other Loan documents shall be deemed paid to Lender
until received by Lender at its designated office on a business day prior to
2:00 p.m. Eastern Standard Time. Any payment received after the time established
by the preceding sentence shall be deemed to have been paid on the immediately
following business day. Each payment that is paid to Lender in the calendar
month in which it is due, but prior to its scheduled Payment due date, shall not
be deemed a prepayment and shall be deemed to have been received on the payment
Due Date, solely for the purpose of calculating interest due. Where a Payment
Due Date falls on a date other than a business day, the Payment due date shall
be deemed the first business day immediately thereafter.
(c) Invalidated Payments. If any payment received by Lender is
deemed by a court of competent Jurisdiction to be a voidable preference or
fraudulent Conveyance under any bankruptcy, insolvency or other debtor relief
law, and is required to be returned by Lender, then the obligation to make such
payment shall be reinstated, notwithstanding that the Note may have been marked
satisfied and returned to Borrower or otherwise canceled, and such payment shall
be immediately due and payable upon demand.
(d) Late Charges. If any payment due on a Payment Due Date is not
received by Lender in full on or before the fifth (5th) day after the Payment
Due Date on which such payment is due (e.g., if the Payment Due Date is the 1st
day of month, a late charge would accrue if the full payment is not received on
or before the 5th day of the month), Borrower shall pay to Lender, immediately
and without demand, a late fee equal to five percent (5%) of such delinquent
amount.
(e) Default Interest Rate. If the Loan is not paid in full on or
before the Maturity Date or if the Loan is accelerated following an event of
Default and during the continuance thereof, the interest rate then payable on
the Loan shall immediately increase to the Applicable Interest Rate plus five
hundred (500) basis points ("DEFAULT RATE") and continue to accrue at the
Default Rate until full payment is received. In addition, Lender shall have the
right, without acceleration of the Loan, to collect interest at the Default rate
on any payment due hereunder (including, without limitation, late charges and
fees for legal counsel) which is not received by Lender on or before the date on
which such payment originally was due. Interest at
Ply Gem Industries
- 4 -
the Default Rate also shall accrue on any judgment obtained by Lender in
connection with collection of the Loan or enforcement of any obligations due
under the other Loan Documents until such judgment amount is paid in full.
(f) Application of Payments. Payments of principal and interest due
from Borrower shall be applied first to the payment of late fees, then to Lender
advances made to protect the Property or to perform obligations which Borrower
failed to perform, then to the payment of accrued but unpaid interest, and then
to reduction of the outstanding principal. If at any time Lender receives less
than the full amount due and payable on a Payment Due Date, Lender may apply the
amounts received to amounts then due and payable in any manner and in any order
determined by Lender, in its sole discretion. Following an Event of Default,
Lender may apply all payments to amounts then due in any manner and in any order
determined by Lender, in its sole discretion. Lender's acceptance of a payment
form Borrower in an amount that is less than the full amount then due and
Lender's application of such payments to amounts then due from Borrower shall
not constitute or be deemed to constitute a waiver of the unpaid amounts or an
accord and satisfaction. No principal amount repaid may be reborrowed.
2.05. Prepayment Rights.
(a) Prepayment. Borrower acknowledges that Lender is making the
Loan to it at the interest rate and upon the other terms herein set forth in
reliance upon Borrower's promise to pay the Loan over the full stated term of
this Loan Agreement and that Lender may suffer loss or other detriment if
Borrower were to prepay all or any portion of the Note prior to its stated
Maturity Date. Except as provided in this Section 2.05 and Section 9.04(f) or
as otherwise provided in this Agreement, Borrower agrees that Borrower has no
right to prepay all or any part of the Loan prior to the Maturity Date. On and
after the first (1st) day of the third (3rd) month preceding the Maturity Date
(the "OPEN DATE"), Borrower may prepay the Loan in whole, but not in part,
provided Borrower pays with such prepayment (a) all accrued interest and all
other outstanding amounts then due and unpaid under this Loan Agreement and
under the other Loan Documents, and (b) if the prepayment is not made on a
Payment Due Date, Borrower pays with such prepayment the full interest amount
that would have accrued for the period from the date of prepayment through the
day prior to the next Payment Due Date. Lender is not obligated to accept any
prepayment unless accompanied by amounts required hereunder. Notwithstanding any
contrary provision of this Loan Agreement, Lender may at any time apply proceeds
from a casualty or condemnation to principal as provided in this Loan
Agreement, provided that any such application shall not be subject to any
prepayment due.
(b) Voluntary Defeasance of the Loan.
(i) Defeasance to Release Property from Security Instrument.
Subject to Borrower's compliance with all terms and conditions of this Section
2.05(b), Borrower may defease the Loan in whole, or in part as set forth in
Section 10.03, in the manner hereinafter set forth ("DEFEASANCE") on any
Business Day after the Lock-out Period Expiration Date (defined
Ply Gem Industries
- 5 -
below) and obtain a release ("RELEASE") of the Property or any one Property,
provided Borrower complies with section 10.03, from the lien of the Security
Instrument. Once a Defeasance in whole has been completed, the Loan will be
secured by the Defeasance Collateral (defined below), and thereafter the Loan
cannot be the subject of any further Defeasance nor prepaid in whole or in part,
notwithstanding any provision of this Section 2.05 to the contrary. Once partial
Defeasance has been completed, the Loan will be partially secured by the
Defeasance Collateral (defined below), and thereafter the portion of the Loan
defeased cannot be prepaid in whole or in part, notwithstanding any provision of
this Section 2.05 to the contrary. "LOCK-OUT PERIOD EXPIRATION DATE" means the
earlier to occur of (i) the third (3rd) anniversary of the Closing Date, or (ii)
the second (2nd) anniversary of the "startup date" of the REMIC within the
meaning of Section 860G(a)(9) of the Tax Code.
(ii) Condition to Defeasance. Borrower may cause a Release or
a Partial Release upon the satisfaction of the following conditions (all as
reasonably approved by Lender):
(A) no Event of Default shall exist under any of the
Loan Document;
(B) not less than forty-five (45) (but not more than
ninety (90)) days prior written notice shall be given to Lender specifying a
date (such date being on a Payment Due Date) on which the Defeasance Collateral
(as hereinafter defined) is to be delivered (the "RELEASE DATE");
(C) all accrued and unpaid interest and all other sums
due under the Note, this Loan Agreement and under the other Loan Documents up to
the Release Date including, without limitation, all fees, costs and expenses
incurred by Lender and its agents in connection with such release (including,
without limitation, reasonable legal fees and expenses for the review and
preparation of the Defeasance Pledge Agreement (as defined below) and of the
other materials described in Section 2.05(b)(ii)(D) below and any release
documentation, and any servicing fees, rating Agency fees or other costs related
to such release), shall be paid in full on or prior to the Release Date;
(D) Borrower shall deliver the following to Lender on or
prior to the Release Date:
(1) The Defeasance Collateral which meets all
requirements of subsection 2.05(b)(iii) below and is owned by Borrower, free and
clear of all liens and claims of third-parties.
(2) A written certification of an independent
certified public accounting firm (reasonably acceptable to Lender), confirming
that the Defeasance Collateral will (1) in the event of Defeasance of the entire
loan generate amounts sufficient to
Ply Gem Industries
- 6 -
make all Scheduled Debt Payments as they fall due under the Note, including full
payment due on the Note on the Maturity Date, or (2) in the event of partial
Defeasance, generate amounts sufficient to make scheduled Debt Payments as they
fall due under the Defeasance Note, including full payment on such Defeasance
Note on the Maturity Date.
(3) Lender's form of a pledge and security
agreement ("DEFEASANCE PLEDGE AGREEMENT") and financing statements which pledge
and create a first priority security interest in the Defeasance Collateral in
favor of Lender.
(4) Confirmation in writing from Lender's
custodian that it has received all of the Defeasance Collateral for the account
and benefit of Lender.
(5) A written certification from Borrower which
confirms that, following Defeasance, Borrower continues to satisfy the "single
purpose entity" requirements of this Loan Agreement.
(6) Such legal opinions given by Borrower's
counsel (which counsel must be reasonably acceptable to Lender) as Lender may
require to confirm (i) that the Defeasance Collateral and the proceeds thereof
have been validly pledged to Lender, that the Defeasance Pledge Agreement and
other Loan Documents after the Defeasance are enforceable against Borrower in
accordance with the respective terms and Lender has a perfected first priority
security interest in the Defeasance Collateral, (ii) the release of the lien of
the Security Instrument and the Pledge of Defeasance Collateral will not
directly or indirectly result in or cause any REMIC that then holds the Notes to
fail to maintain its status as a REMIC and(iii) the defeasance will not cause
any REMIC to be an investment company under the Investment company Act of 1940
and (iv) an opinion by Lender's counsel or counsel reasonably acceptable to
Lender at Borrower's expense in the event of a bankruptcy proceeding or similar
occurrence with respect to Borrower, none of the Defeasance Collateral nor any
proceeds thereof will be property of Borrower's estate under Section 541 of the
Bankruptcy Code or any similar statute and the grant of security interest
therein to Lender shall not constitute an avoidable preference under Section 547
of the Bankruptcy Code or applicable state law.
(7) Forms of all documents necessary to release
the Property or, in the case of partial defeasance, the Release Property from
the liens created by the security Instrument and related UCC financing
statements (collectively, "RELEASE INSTRUMENTS"), each in appropriate form
required by the state in which the Property or, in the case of partial
Defeasance, the Release Property is located.
(8) Such other certificates, confirmations,
documents or instruments as Lender reasonably deems necessary in connection with
the Defeasance, including, without limitation, a rating Confirmation.
(G) Borrower shall satisfy the requirements of Section
10.03 hereof.
Ply Gem Industries
- 7 -
(iii) Purchase and Ownership of the Defeasance Collateral. The
"DEFEASANCE COLLATERAL" must consist only of non-callable and non-redeemable
securities issued, or fully insured as to payment, by the United States of
America or such other securities as are permitted at the time of Defeasance by
the Tax Code with respect to REMIC collateral substitutions. The Defeasance
Collateral also must provide for (A) redemption payments to occur prior, but as
close as possible, to all successive Payment Due Dates Occurring after the
Release Date and (B) deliver redemption proceeds at least equal to (1) in the
event of Defeasance of the entire Loan the amount of principal and interest due
on the Note on each such Payment Due Date including full payment due on the Note
on the Maturity Date or (2) in the event of partial Defeasance the amount of
principal and interest due on the Defeased Not on each such Payment Due Date,
including full payment due on the Defeasance Note on the Maturity Date
("SCHEDULED DEBT PAYMENT"). The Defeasance collateral shall be arranged such
that redemption payments received from the Defeasance Collateral are paid
directly to Lender to be applied on account of the Scheduled Debt Payments.
Unless otherwise agreed in writing by Lender, the pledge of the Defeasance
Collateral shall be effectuated through the book-entry facilities of a qualified
securities intermediary designated by Lender (which may be Lender itself or an
affiliate of Lender if such party qualifies as a securities Intermediary) in
conformity with all applicable laws.
(iv) Successor Borrower Option. Borrower, at Borrower's
expense, has the right, or in the case of partial Defeasance, an obligation to
designate an accommodation borrower ("SUCCESSOR BORROWER") which satisfies
Lender's then current requirements for a "single purpose entity" to assume at
the time of Defeasance ownership of the Defeasance Collateral and liability for
all or, in the case of partial Defeasance, a portion of, related to the Partial
Release Price of Borrower's obligations under this Loan Agreement, the
Defeasance Pledge Agreement and the other Loan Documents (to the extent that
liability thereunder survives repayment of the Loan and release of the Property
or, in the case of partial Defeasance, the Release Property). Such transfer and
assumption shall be evidenced by a duly executed, Written agreement reasonably
satisfactory to Lender, whereupon Borrower (subject to satisfaction of all
requirements of this Section 2.05(b)(ii) shall be relieved, or, in the case of
partial Defeasance, Partially relieved from liability in connection with the
Loan (except for those obligations which, by the express terms of the Loan
Documents, survive payment of the Loan which shall be assumed by Successor
Borrower). Notwithstanding any contrary provision in this Loan Agreement, no
assumption fee is required upon a transfer of the Loan in accordance with this
Section. If a Successor Borrower assumes Borrower's obligations, Lender may
require as a condition to Defeasance, such additional legal opinions from
Borrower's counsel as Lender reasonably deems necessary to confirm the valid
creation and authority of the Successor Borrower (including a nonconsolidation
opinion), the assignment and assumption of the Loan and Defeasance Collateral
between Borrower and Successor Borrower, and the enforceability of the
assignment documents and of the Loan Documents as the obligation of Successor
Borrower.
Ply Gem Industries
- 8 -
(v) Substitute Notes on Partial Defeasance. With respect to any
partial Defeasance, Borrower shall execute and deliver to Lender all documents
necessary to amend and restate the Note with two substitute notes: one note
having a principal balance equal to the defeased portion of the Loan (the
"DEFEASED NOTE") and one note having a principal balance equal to the undefeased
portion of the Note (the "UNDEFEASED NOTE"). The Undefeased Note may be the
subject of a further Defeasance in accordance with the terms of this Section
2.05(b) (the term "Note", as used in this Section 2.05(b), being deemed to refer
to the Undefeased Note that is the subject of further Defeasance).
(vi) Defeasance Costs and Expenses. Borrower shall pay reasonable
costs and expenses incurred by Lender in connection with Defeasance, which
payment is required prior to Lender's issuance of the Release and whether or not
Defeasance is completed. Such expenses include, without limitation, the cost
incurred by Lender to obtain Rating Confirmation contemplated by Section
2.05(b)(ii)(D)(8), the reasonable fees and disbursements of Lender's legal
counsel and a processing fee to cover Lender's administrative costs to process
Borrower's Defeasance request. Lender reserves the right to require that
Borrower post a deposit to cover costs which Lender reasonably anticipates will
be incurred.
(c) Prohibited Prepayment Prior to Open Date. Except as otherwise set
forth in Section 2.05(d), if payment of all or any part of the principal balance
of the Loan is tendered by Borrower, a purchaser at foreclosure, a Guarantor, or
any other Person prior to the Open Date, whether by reason of acceleration of
the Loan or otherwise (a "PROHIBITED PREPAYMENT"), such tender shall be deemed
an attempt to circumvent the prohibition against prepayment set forth in Section
2.05(a) and, at Lender's option, shall be an Event of Default. If a prohibited
prepayment occurs and is accepted voluntarily or otherwise by Lender, then, in
addition to all other rights and remedies available to lender upon an Event of
Default, a Prohibited Prepayment Fee (as defined below) shall be due to
compensate Lender for damages suffered as a result of the Prohibited Prepayment,
such amount shall be due in addition to the outstanding principal balance, all
accrued and unpaid interest and other outstanding amounts due under the Loan
Documents. The "PROHIBITED PREPAYMENT FEE" shall be prepayment premium equal to
the greater of:
(i) one percent (1%) of the outstanding principal balance of
Note, or
(ii) the Yield Maintenance Premium (as defined below).
The "YIELD MAINTENANCE PREMIUM" shall be equal to the excess, if any, of (A) the
present value ("PV") of all scheduled interest and principal payments due on
each Payment Due Date in respect of the Loan for the period from the date of
such accepted prepayment to the Maturity Date, including the principal amount of
the Loan scheduled to be due on the maturity Date, discounted at an interest
rate per annum equal to the Index (defined below), based on a 360-day year of
twelve 30-day months, over (B) the principal amount of the Loan outstanding
immediately before such accepted prepayment [i.e., (PV of all future payments) -
(principal
Ply Gem Industries
- 9 -
balance at time of acceleration)]. The foregoing amount shall be calculated by
Lender and shall be conclusive and binding on Borrower (absent manifest error).
For purposes hereof, "Index" means the average yield for "treasury
constant maturities" published by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519)("FRB Release"), for the second full week
preceding the date of acceleration of the Maturity Date for instruments having
a maturity coterminous with the remaining term of the Loan. If the FRB Release
is no longer published, Lender shall select a comparable publication to
determine the Index. If there is no Index for instruments having a maturity
coterminous with the remaining term of the Loan, then the weighted average
yield to maturity of the Indices with maturities next longer and shorter than
such remaining average life to maturity shall be used, calculated by averaging
(and rounding upward to the nearest whole multiple of 1/100 of 1% per annum, if
the average is not such a multiple) the yields of the relevant Indices
(rounded, if necessary, to the nearest 1/100 of 1% with any figure of 1/200 of
1% or above rounded upward).
(d) Prepayment as a Result of a Casualty or Condemnation.
Prepayments arising from Lender's application of insurance proceeds upon the
occurrence of a Casualty, the application of a condemnation award upon the
occurrence of a Condemnation, application of the Termination Amount or as set
forth in Section 2.02 (e) may be made prior to the Open Date without being
deemed a Prohibited Prepayment and, whenever made, without payment of the
Prohibited Prepayment Fee.
(e) Notice Irrevocable. Notwithstanding any provision of this Loan
Agreement to the contrary, Borrower's notice of defeasance in accordance with
subsection 2.05(b) above shall be irrevocable, and the principal balance to be
prepaid shall be absolutely and unconditionally due and payable on the date
specified in such notice.
ARTICLE 3
CASH MANAGEMENT
3.01. Intentionally Deleted.
ARTICLE 4
ESCROW AND RESERVE REQUIREMENTS
4.01. Creation and Maintenance of Escrows and Reserves.
(a) Control of Reserve Accounts. On the Closing date, each of the
Reserve Accounts shall be established by Lender. Each Reserve Account required
under this Loan Agreement shall be a custodial account established by Lender,
and, at Lender's option, funds deposited into a Reserve Account may be
commingled with other money held by Lender. Each Reserve Account shall be under
the sole dominion and control of Lender, and Borrower shall not
Ply Gem Industries
- 10 -
have any right to withdraw funds from a Reserve Account. Unless required by the
laws of the state which govern this Loan Agreement or otherwise expressly
provided in this Loan Agreement, Borrower shall not be entitled to any earnings
or interest on funds deposited in any Reserve Account. Upon the occurrence of an
Event of Default, Lender may, in addition to any and all other rights and
remedies available to Lender, apply any sums then present in any or all of the
Reserve Accounts to the payment of the Debt in any order as determined by Lender
in its sole discretion.
(b) Funds Dedicated to Particular Purpose. Funds held in a Reserve
Account are not to be used to fund Reserve Items contemplated by a different
Reserve Account, and Borrower may not use and Lender shall have no obligation to
apply funds one Reserve Account to pay for Reserve Items contemplated by another
Reserve Account. For example, (i) funds held in the Immediate Repair Escrow
Account shall not be used to pay for Replacements, Tenant Improvements or
Leasing Commissions; (ii) funds held in the replacement Reserve Account shall
not be used to pay for Immediate Repairs, Tenant Improvements or Leasing
Commissions, and (iii) funds held in the TI/LC Reserve Account shall not be used
to pay for Immediate Repairs or Replacements.
(c) Release of Reserves Upon Payment of Debt. Upon payment in full of
the Loan, Lender shall disburse to Borrower all unapplied funds held by Lender
in the Reserve Accounts pursuant to this Loan Agreement.
(d) Release of Individual Reserve Account after Full Performance of
Reserve Items. Lender shall disburse to Borrower all unapplied funds remaining
in the Immediate Repair Escrow Account upon receipt of evidence satisfactory to
Lender that (i) Borrower has completed, in the manner required by this Loan
Agreement, all Reserve Items to be funded by such Reserve Account , and (ii) no
Liens exist against the Property with respect to such Reserve Items. Lender
shall not be obligated to make any such disbursement when an Event of Default
exists, and Lender may deduct from such final disbursement all outstanding
amounts then due and unpaid to Lender under the Loan Documents.
(e) No Obligation of Lender. Nothing in this Loan Agreement shall; (i)
make Lender responsible for making or completing any Reserve Item; (ii) require
Lender to advance, disburse or expend funds in addition to funds then on deposit
in the related Reserve Account to make or complete any Reserve Item; or (iii)
obligate Lender to demand from Borrower additional sums to make or complete any
Reserve Item.
(f) No Waiver of Default. No disbursements made from a Reserve Account
at the time when a Borrower default or Event of Default has occurred and is then
continuing shall be deemed a waiver or cure by Lender of that default or Event
of Default, nor shall Lender's rights and remedies by prejudiced in any manner
thereby.
(g) insufficient Amounts in a Reserve Amount. Notwithstanding that
Lender has the right to require Borrower to pay any deficiency in a Reserve
Account if Lender
Ply Gem Industries
- 11 -
determines that amounts in a Reserve Account are insufficient, the
insufficiency of funds in a Reserve Account, or Lender's application of funds in
a Reserve Account following an Event of Default other than for funding of the
Reserve Items, shall not relieve Borrower from its obligation to perform in full
each of its: (i) obligations and covenants under this Loan Agreement; (ii)
agreements or covenants with tenants under the Leases; and (iii) agreements with
leasing agents.
4.02. Tax Escrow.
(a) Deposits to the Tax Escrow Account. At the option of Lender, (i) at
any time after the occurrence of an Event of Default (as defined therein) under
the Ply Gem Lease, (ii) if the Ply Gem Lease or an Acceptable Replacement Lease
in not in effect, (iii) if at any time Ply Gem is not required by the terms of
the Ply Gem Lease to pay all Taxes due with respect to the Property; (iv) at any
time after there has been a change in ownership of the Property (excluding a
transfer to an Affiliate of Borrower), or (v) at any time after the occurrence
of an Event of Default, Lender may require Borrower to establish the Tax Escrow
Account. If Lender establishes the Tax Escrow Account, then beginning on the
first Payment Due Date following the establishment of the Tax Escrow Account,
and on each Payment Due Date thereafter, Borrower shall deliver to Lender the
Monthly Tax Deposit.
(b) Disbursement from Tax Escrow Account. Provided amounts in the Tax
Reserve Account are sufficient to pay the Taxes then due and no Event of Default
exists, Lender shall pay the Taxes as they become due on their respective due
dates on behalf of Borrower by applying the funds held in the Tax Escrow Account
to the payments of Taxes then due. In making any payment of Taxes, Lender may do
so according to any ▇▇▇▇, statement or estimate obtained from the appropriate
public office with respect to Taxes without inquiry into the accuracy of such
▇▇▇▇, statement or estimate or into the validity of any tax, assessment sale,
forfeiture, tax lien or title or claim thereof.
(c) Surplus or Deficiency in Tax Escrow Account. If amounts on deposit
in the Tax Escrow Account collected for an annual tax period exceed the Taxes
actually paid during such tax period, Lender shall, in its discretion, return
the excess to Borrower or credit the excess against the payments Borrower is to
make to the Tax Escrow Account for the next tax period. If amounts on deposit in
the Tax Escrow Account collected for an annual tax period are insufficient to
pay the Taxes actually due during such tax period, Lender shall notify Borrower
of the deficiency and, within ten (10) days thereafter, Borrower shall deliver
to Lender such deficiency amount. If , however, Borrower receives notice of any
such deficiency on a date that is within ten (10) days prior to the date that
Taxes are due, Borrower will deposit the deficiency amount within five (5)
business days after its receipt of such deficiency notice.
(d) Changes in Amount of Taxes Due; Changes in the Monthly Tax Deposit.
Borrower shall notify Lender immediately of any changes to the amounts,
schedules and instructions for payment of any Taxes of which it has or obtains
knowledge and authorizes
Ply Gem Industries
- 12 -
Lender or its agent to obtain the bills for Taxes directly from the appropriate
taxing authority. If the amount due for Taxes shall increase and Lender
reasonably determines that amounts on deposit in the Tax Escrow Account will not
be sufficient to pay Taxes due for an annual tax period, Lender shall notify
Borrower of such determination and of the increase needed to the Monthly Tax
Deposit. Commencing with the Payment due Date specified in such notice from
Lender, Borrower shall make deposits at the increased amount of the Monthly Tax
Deposit.
4.03. Insurance Premium Escrow.
(a) Deposits to Insurance Premium Escrow Account. At the option of
Lender (i) at any time after the occurrence of an Event of Default (as defined
therein) under the ply Gem Lease, (ii) if the Ply Gem Lease or an Acceptable
Replacement Lease is not in effect, (iii) if at any time Ply Gem is not required
by the terms of the Ply Gem Lease to pay all Insurance Premiums due with respect
to the Property; (iv) at any time after there has been a change in ownership of
the Property ( excluding a transfer to an Affiliate of Borrower), or (v) at any
time after the occurrence of an Event of Default, Lender may require Borrower to
establish the Insurance Premium Escrow Account. If Lender establishes the
Insurance Premium Escrow Account, then beginning on the first Payment Due Date
after the establishment of the Insurance Premium Escrow Account and on each
Payment Due Date thereafter, Borrower shall deliver to Lender the Monthly
Insurance Deposit.
(b) Disbursement from Insurance Premium Escrow Account. Provided
amounts in the Insurance Premium Escrow Account are sufficient to pay the
Insurance Premiums then due and no Event of Default exists, Lender shall pay
the Insurance Premiums as they become due on their respective due dates on
behalf of Borrower by applying funds held in the Insurance Premium Escrow
Account to the payments of Insurance Premiums, Lender may do so according to
any ▇▇▇▇, statement or estimate procured from the insurer without inquiry into
the accuracy of such ▇▇▇▇, statement or estimate.
(c) Surplus or Deficiency in Insurance Premium Escrow Account. If
amounts on deposit in the Insurance Premiums Escrow Account collected for an
annual period exceed the Insurance Premium actually paid during such period.
Lender shall, in its discretion, return such excess to Borrower or credit such
excess against the payments Borrower is to make to the Insurance Premium Escrow
Account for the next annual period. If amounts on deposit in the Insurance
Premium Escrow Account collected for an annual premium period are insufficient
to pay the Insurance Premiums actually due during such annual period Lender
shall notify Borrower of the deficiency and, within ten (10) days thereafter,
Borrower shall deliver to Lender such deficiency amount. If, however,
Borrower receives notice if by such deficiency on a date that is within ten (10)
days prior to the date that Insurance Premiums are due, Borrower will deposit
the deficiency amount within five (5) business days after its receipt of such
deficiency notice.
Ply Gem Industries
- 13 -
(d) Changes in Insurance Premium Amounts; Change in Monthly Deposit
Amount. Borrower shall notify Lender immediately of any changes to the amounts,
schedules and instructions for payment of any insurance Premiums of which it
has or obtains knowledge and authorizes Lender or its agent to obtain the bills
for the Insurance Premiums directly from the insurance provider or its agent. If
the amount due for Insurance Premiums shall increase and Lender reasonably
determines that amounts on deposit in the Insurance Premium Escrow Account will
not be sufficient to pay the Insurance Premiums, Lender shall notify Borrower of
such determination and of the increase needed to the Monthly Insurance Deposit.
Commencing with the Payment Due Date specified in such notice from Lender,
Borrower shall make deposits at the increased amount of the Monthly Insurance
Deposit.
4.04. Immediate Repair Escrow Account.
(a) Immediate Repair Escrow Generally. Amounts in the Immediate
repair Escrow Account are to be used for the purpose of funding the immediate
repairs, which Borrower covenants and agrees to perform in accordance with the
terms of this Loan Agreement on or before the dates specified on Exhibit B but
not later than twelve (12) months from the date hereof or such longer period as
is permitted under the Ply Gem Lease, provided that there shall be no outside
date for completion of any item that has no outside date of completion under the
Ply-Gem Lease.
(b) Deposit to the Immediate Repair Escrow Account. On the Closing
Date, Borrower shall deposit $70,437.00 with Lender as the reserve for
completion of the immediate Repairs ("IMMEDIATE REPAIR DEPOSIT").
Notwithstanding the foregoing, Borrower has also transferred the Letters of
Credit to Lender pursuant to those certain Notices of Transfer dated _________,
2004 (the "NOTICE").
(c) Release of Immediate Repair Deposit. The Immediate repair
Deposit shall be releases in accordance with the terms of the Ply Gem Lease.
(d) Disbursements from the Immediate Repair Escrow Account. Lender
shall make disbursements from the Immediate Repair Escrow Account upon
Borrower's performance to Lender's satisfaction, of all conditions to
disbursement set forth in Article 5 of this Loan Agreement.
(e) Reassessment of Required Deposit. If at any time Lender
reasonably determines that the Immediate Repair Deposit will not be sufficient
to pay the cost of the immediate Repairs, Lender may notify Borrower of such
determination and of the amount estimated by Lender to make-up such deficiency
as reasonably determined by Lender based upon changes in circumstances. Within
ten (10) days after such notice from Lender, Borrower shall deliver the
deficiency amount to Lender, and Lender shall deposit in the Immediate repair
Escrow Account and hold and administer same in accordance with this Loan
Agreement.
Ply Gem Industries
- 14 -
4.05. Replacement Reserve Account.
(a) Replacement Reserve Generally. Amounts in the Replacement
Reserve Account are to be used for the purpose of funding the Replacements,
which Borrower covenants and agrees to perform or cause to be performed in
accordance with the terms of this Loan Agreement.
(b) Deposits to the Replacement Reserve Account. Beginning on the
first Payment Due Date and on each Payment Due Date thereafter, Borrower shall
pay $19,450.50 ("MONTHLY REPLACEMENT RESERVE DEPOSIT") to Lender as a deposit to
the Replacement Reserve Account. During any period in which the balance of the
Replacement Reserve Account equals or exceeds $933,624.00 (the "REPLACEMENT
RESERVE THRESHOLD"), Borrower shall not be required to make any Monthly
Replacement Reserve Deposits. At any time that the balance of the Replacement
Reserve Account is less than the Replacement Reserve Threshold, then, upon
notice by Lender, Borrower shall resume monthly payments of the Monthly
Replacement Reserve Deposit in accordance with this Section 4.05(b) with such
payments to begin on the first Payment Due Date following such notice and
continuing until such time as the balance of the Replacement Reserve Account
equals or exceeds the Replacement Reserve Threshold.
(c) Disbursements from the Replacement Reserve Account. Lender shall
make disbursements from the Replacement Reserve Account upon Borrower's
performance, to Lender's satisfaction, of all conditions to disbursements set
forth in Article 5 hereof.
(d) Reassessment of Required Monthly Deposits. Lender may, from time
to time based on Lender's inspection of the Property, reassess its estimate of
the Monthly Replacement Reserve Deposit and may increase such amount on not
less than thirty (30) days written notice to Borrower if Lender determines that
an increase is necessary (i) to fund replacements not listed as part of the
Replacements (and not intended to be covered by the Immediate Repair Escrow
Account or TL/LC Reserve Account) which are advisable to keep the Property in
good order, repair and marketable condition, or (ii) to fund the replacement of
any major building systems or components (e.g., roof, HVAC system) not listed
as part of the Replacements (and not intented to be covered by the Immediate
Repair Escrow Account or TI/LC Reserve Account) which will reach the end of its
useful life within two (2) years of the date of Lender's inspection.
(e) Waiver of Deposits. Notwithstanding anything in the foregoing
subparagraphs 4.05(a), (b), (c) and (d) to the contrary, Lender shall waive the
requirement of Monthly Replacement Reserve Deposits so long as (i) Lender is
satisfied with its annual inspection of the Property, and (ii) the Ply Gem
Lease or Acceptable Replacement Lease is not in default beyond any applicable
notice and/or cure period.
Ply Gem Industries
- 15 -
4.06. TI/LC Reserve Account.
(a) TI/LC Reserve Generally. Amounts in the TI/LC Reserve Account
are to be used for the purpose of funding the costs of tenant Improvements and
Leasing Commissions that are paid by Borrower during the term of the Loan.
(b) Deposits to the TI/LC Reserve Account. Beginning on the first
Payment Due Date and on each Payment Due Date thereafter, Borrower shall pay
$17,456.16 ("MONTHLY TI/LC DEPOSIT") to Lender as an additional deposit to the
TI/LC Reserve Account. During any period in which the balance of the TI/LC
Reserve Account equals or exceeds $387,895.00 (the " TI/LC THRESHOLD"), Borrower
shall not be required to make any Monthly TI/LC Deposits. At any time that the
balance of the TI/LC Reserve Account is less than the TI/LC Threshold, then,
upon notice by Lender, Borrower shall resume monthly payments of the Monthly
TI/LC Deposit in accordance with this Section 4.06(b) with such payments to
begin on the first Payment Due Date following such notice and continuing until
such time as the balance of the TI/LC Reserve Account equals or exceeds the
TI/LC threshold.
(c) Disbursements from the TI/LC Reserve Account. Lender shall make
disbursement from the TI/LC Reserve Account as Follows:
(i) Lender shall make disbursements from the TI/LC Reserve
Account to reimburse Borrower for Tenant Improvements required under any new
Lease or any modification, renewal or extension of an existing Lease paid by
Borrower, in accordance with the disbursement procedures (including evidence of
lien-free performance) set forth in Article 5 hereof, provided that: (A) the
Tenant Improvements are required under any new Lease or any modification,
renewal or extension of any existing Lease, provided that any such new Lease or
modification, renewal or extension of an existing Lease is entered into in
accordance with the terms and provisions of Section 9.06; (B) the cost of such
Tenant Improvements is market, reasonable and customary, (C) the Tenant
Improvements are fully performed in accordance with the standards set forth in
Article 5 hereof and have been accepted without condition by the related tenant;
(D) unless otherwise agreed to by Lender, the related tenant is occupying the
space benefited by the Tenant Improvements and has commenced paying rent; and
(E) if required by Lender, the related tenant shall have executed and delivered
a subordination, non disturbance agreement and an estoppel certificate or both
all on such forms as in reasonably acceptable to Lender.
(ii) Lender shall make disbursements from the TI/LC Reserve
Account to reimburse Borrower for Leasing Commissions paid by Borrower in
accordance with the disbursement procedures set forth in Article 5 hereof
provided that: (A) such leasing commissions and "override" leasing commissions
are market, reasonable and customary for properties similar to the Property and
the portion of the Property leased for which a commission is due; (B) the amount
of such leasing commissions and "override" leasing commissions are determined
pursuant to arms length transactions between Borrower and each such leasing
agent
Ply Gem Industries
-16-
to which a commission is due; (C) the Lease has been approved by Lender in
accordance with this Loan Agreement or, if Lender's approval is not required,
conforms with all requirements Set forth in Section 9.06 of this Loan Agreement;
and (D) unless otherwise agreed by Lender, the tenant under the Lease for which
such Leasing Commission is claimed has taken occupancy of the leased space and
commenced paying rent.
(d) Deposit Reassessment. Lender may, from time to time, based on
Lender's review of Leases and leasing information relating to the Property,
reassess its estimate of the Monthly TI/LC Deposit and may increase such amount
on not less than thirty (30) days written notice to Borrower if Lender
determines that an increase is necessary to maintain a proper reserve to pay the
costs of likely Tenant Improvements or Leasing Commissions that may arise during
the remaining term of the Loan.
(e) Waiver of Deposits. Notwithstanding anything in the foregoing
subparagraphs 4.06(a), (b), (c) and (d) to the contrary, Lender shall waive the
requirement of Monthly TI/LC Deposits so long as (i) Lender is satisfied with
its annual inspection of the property, and (ii) the Ply Gem Lease or Acceptable
Replacement Lease is not in default beyond and applicable notice and cure
period.
ARTICLE 5
COMPLETION OR REPAIRS RELATED TO RESERVE ACCOUNTS;
CONDITIONS TO RELEASE OF FUNDS
50.1. Conditions Precedent to Disbursements from Certain Reserve Accounts.
The following provisions apply to each request for disbursement from the
Immediate Repair Escrow Account, the Replacement Reserve Account and the TI/LC
Reserve Account:
(a) Disbursement only for Completed Repairs. Disbursements shall be
limited to Reserve Items that are fully completed and paid for in full by
Borrower except to the extent permitted under Section 5.01(b) of this Loan
Agreement and, in the case of Leasing Commissions, fully and unconditionally
earned and paid in full by Borrower. At no time shall Lender be obligated to pay
amounts to Borrower in excess of the current balance in the applicable Reserve
Account at the time of disbursement.
(b) Partial Completion. Lender may agree to disburse funds for
Reserve Items prior to completion thereof where (i) the contractor performing
such work requires periodic payments pursuant to the terms of its written
contract with Borrower and Lender has given its prior written approval to such
contract, and (ii) the cost of the portion of the Reserve Item to be completed
under such contract exceeds $10,000.
(c) Disbursement Request; Maximum Frequency and Amount. Borrower
shall submit to Lender a Disbursement Request together with such additional
information as Lender may reasonably request in connection with the Disbursement
Request at least ten (10)
Ply Gem Industries
-17-
business days prior to the date on which Borrower requests Lender to make a
disbursement from a Reserve Account. Unless otherwise agreed to by Lender,
Borrower may not submit, and Lender shall not be required to make, more than one
(1) disbursement from each Reserve Account during any calendar month. No
Disbursement Request shall be made for less than $2,500 or the total cost of the
Reserve Items, if less.
(d) No Existing Event of Default. Lender may refuse to make any
disbursement if an Event of Default exists as of the date on which Borrower
submits the Disbursement Request or on the date the disbursement is actually to
be made.
(c) Responsible Officer Certificate. Lender must receive a
certificate, signed by a Responsible Officer of Borrower (and, at Lender's
option, also signed by Borrower's project architect or engineer if the cost of a
single Reserve Item or the aggregated amount of the Disbursement Request exceeds
$50,000), which certifies that:
(i) All information stated in the Disbursement Request is true
and correct in all material respects, each attachment to the Disbursement
Request is correct and complete, and if the attachment is a copy of the
original, that it is a true and an accurate reproduction of the original;
(ii) Each of the Reserve Items to be funded in connection with
the Disbursement Request was performed in a good and workmanlike manner and in
accordance with all Requirements of Law, and has been paid in full by Borrower;
(iii) The Leasing Commission has been fully and
unconditionally earned and paid in full by Borrower, if the Reserve Item to be
funded is a Leasing Commission.
(iv) Subject to Section 5.03, each Party that supplied
materials, labor or services has been paid in full (for the portion for which
disbursement in sought in the case of disbursements authorized in accordance
with Section 5.01 (b) hereof); and
(v) In the case of disbursements authorized in accordance with
Section 5.01(b) hereof, the materials for which the request are made are on-site
at the Property and properly secured or have been installed in the Property.
(f) Inspection to Confirm Completion. Prior to making any
disbursement which exceeds $50,000 in the aggregate or for a single Reserve
Item, Lender may require an inspection of the Property, performed at Borrower's
expense, to verify completion thereof.
(g) Absence of Liens. Lender may require that Borrower provide
Lender with any or all of the following: (i) a written lien waiver acceptable to
Lender from each party to be paid who is to be receive payment of $25,000 or
more in connection with the Disbursement Request; (ii) a search of title to the
Property effective to the date of the disbursement which shows no Liens other
than the Permitted Encumbrances; or (iii) an endorsement to the Title
Ply Gem Industries
-18-
Insurance Policy which updates the effective date of such policy to the date of
the disbursement and shows no Liens other than the Permitted Encumbrances.
(h) Payment of Lender's Expenses. Borrower shall pay all
reasonable expenses incurred by Lender in processing Borrower's Disbursement
Request including, without limitation, any inspection costs (whether performed
by Lender or an independent inspector selected by Lender) and reasonable legal
fees and expenses.
(i) Other Items Lender Deems Necessary. Lender shall have received
such other evidence as Lender reasonably requests in connection with its
confirmation that each Reserve Item to be paid in connection with the
Disbursement Request has been completed or performed in accordance with the
terms of this Loan Agreement.
5.02. Waiver of Conditions to Disbursement. No waiver given by
Lender of any condition precedent to disbursement from a Reserve Account shall
preclude Lender from requiring that such condition be satisfied prior to making
any other disbursement from a Reserve Account.
5.03. Direct Payments to Suppliers and Contractors. Lender, at its
option, may make disbursements directly to the supplier or contractor to be
paid in connection with the Disbursement Request. Borrower's execution of this
Loan Agreement constitutes an irrevocable direction and authorization for
Lender to make requested payments directly to the supplier or contractor,
notwithstanding any contrary instructions from Borrower or notice from Borrower
of a dispute with such supplier or contractor. Each disbursement so made by
Lender shall satisfy Lender's obligation under this Loan Agreement. If
requested by Borrower any disbursement to any one supplier or contractor which
is in excess of $10,000 may be paid directly by Lender to such supplier or
contractor.
5.04. Performance of Reserve Items.
(a) Performance of Reserve Items. Borrower agrees to
commence or cause Ply Gem to commence and to pursue completion diligently of
each Reserve Item which is also identified as a Post-Closing Obligation on
Exhibit I to the Ply-Gem Lease on or before its completion date stated under
the Ply Gem Lease. (provided that there shall be no outside date for completion
of any item that has no outside date of completion under the Ply-Gem Lease) and
to pursue completion diligently of any other Reserve Item when necessary in
order to keep the Property in good order and repair, in a good and marketable
condition and as necessary to keep any portion thereof from deteriorating, or
in the case of Tenant Improvements, when required under the Leases. Borrower
shall complete or cause Ply Gem to complete each Reserve Item in a good and
workmanlike manner, using only new materials of the same or better quality than
that being replaced. All Reserve Items shall be performed in accordance with,
and upon completion shall comply with, all Requirements of Law (including
without limitation obtaining and maintaining in effect all necessary permits
and governmental approvals) and all applicable insurance requirements.
Ply Gem Industries
-19-
(b) Contracts. Lender shall have the right, at its option, to
approve all contracts or work order in excess of $50,000, with materialmen,
mechanics, suppliers, subcontractors, contractors or other parties providing
labor or materials in connection with the Reserve Items.
(c) Entry onto Property. In order to perform inspections or,
following an Event of Default, to complete Reserve Items which Borrower has
failed to perform, Borrower hereby grants Lender and its agents the right, from
time to time, to enter onto the Property, subject, in all events, to the rights
of any tenant.
(d) Lender Remedy for Failure to Perform. In addition to Lender's
remedies following an Event of Default, Borrower acknowledges that Lender shall
have the right (but not the obligation) to complete or perform the Reserve Items
for which amounts have been reserved under this Loan Agreement (or pay the
Leasing Commissions as applicable) and for such purpose, Borrower hereby
appoints Lender its attorney-in-fact with full power of substitution (and which
shall be deemed to be coupled with an interest and irrevocable until the Loan is
paid in full and the Security Instrument is discharged of record, with Borrower
hereby ratifying all that its said attorney shall do by virtue thereof): (i) to
complete or undertake such work in the name of Borrower; (ii) to proceed under
existing contracts or to terminate existing contracts (even where a termination
penalty may be incurred) and employ such contractors, subcontractors, watchmen,
agents, architects and inspectors as Lender determines necessary or desirable
for completion of such work; (iii) to make any additions, changes and
corrections to the scope of the work as Lender deems necessary or desirable for
timely completion; (iv) to pay, settle or compromise all existing bills and
claims which are or may become Liens against the Property or as may be necessary
or desirable for completion of such work; (v) to execute all applications and
certificates in the name of Borrower which may be required to obtain permits and
approvals for such work or completion of such work; (vi) to prosecute and defend
all actions or proceedings in connection with the repair or improvements to the
Property; and (vii) to do any and every act which Borrower might do in its own
behalf to fulfill the terms of Borrower's obligations under this Loan Agreement.
Amounts expended by Lender which exceed amounts held in the Reserve Accounts
shall be added to the Maximum Loan Amount, shall be immediately due and payable,
and shall bear interest at the Default Rate from the date of disbursement until
paid in full.
ARTICLE 6
LOAN SECURITY AND RELATED OBLIGATIONS
6.01. Security Instrument and Assignment of Rents and Leases. Payment of
the Loan and performance of the Obligations shall be secured, inter alia, by the
Security Instrument and the Assignment of Leases and Rents. Borrower shall
execute at closing the Security Instrument and the Assignment of Leases and
Rents and abide by its obligations thereunder.
Ply Gem Industries
-20-
6.02. Assignment Of Property Management Contract. Borrower and the
Property Manager, if there is a separate third party Property Manager, shall
execute at closing the Assignment of the Property Management Contract and
Subordination of Management Fees and to abide by their respective obligations
thereunder.
6.03. Assignment Of Operating Agreements. As security for payment of the
Loan and performance by Borrower of all Obligations, Borrower hereby transfers,
sets over and assigns to Lender all of Borrower's right, title and interest in
and to the Operating Agreements to Lender for security purposes.
6.04. Pledge Of Property; Grant Of Security Interest. As security for
payment of the Loan and performance by Borrower of all Obligations, Borrower
hereby pledges, assigns, sets over and transfers to Lender, and grants to Lender
a continuing security interest in and to: (a) the Reserve Accounts, (b) all
funds and monies from time to time deposited or held in the Reserve Accounts,
and (c) all interest accrued, if any, with respect to the Reserve Accounts;
provided that Lender shall make disbursements from the Reserve Accounts when, as
and to the extent required by this Loan Agreement. The Parties agree that the
Reserve Accounts are a "deposit account" within the meaning of Article 9 of the
UCC and that this Loan Agreement also constitutes a "security agreement" within
the meaning of Article 9 of the UCC. Borrower shall not, without Lender's prior
written consent, further pledge, assign, transfer or grant any security interest
in any of the Reserve Accounts nor permit any Lien to attach thereto, except as
may be created in favor of Lender in connection with the Loan.
6.05. Environmental Indemnity Agreement. Borrower and each Guarantor will
be required to execute at closing the Environmental Indemnity and to abide by
their obligations thereunder.
6.06. Guaranty of Exceptions to Nonrecourse Liability. Each Guarantor will
be required to execute at closing the Guaranty of Exceptions to Nonrecourse
Liability and to abide by its obligations thereunder.
6.07. Letter of Credit. As security for performance of the those certain
immediate repair items listed in Section 39 and Exhibit I to the Ply Gem Lease,
Borrower shall assign and deliver to Lender on the Closing Date the Letters of
Credit (payable on sight draft), naming Lender as the sole beneficiary thereof.
As security for performance of those certain obligations discussed in that
certain Agreement to Convey (the "AGREEMENT TO CONVEY") dated August 27, 2004
between Ply Gem and Borrower, Borrower shall assign and deliver to Lender on the
Closing Date, the Ohio Letter of Credit (payable on sight draft), naming Lender
as the sole beneficiary thereof. The Letters of Credit and Ohio Letter of Credit
shall: (a) be perpetual or for a term of one year with automatic renewals unless
Lender receives written notice of non-renewal from the issuing financial
institution at least sixty (60) days prior to the expiration of the then current
Letter of Credit; (b) be issued by a domestic financial institution that is not
an Affiliate of Borrower and that has a long-term senior debt rating by S&P of
not less than "A" or such other
Ply Gem Industries
-21-
credit rating as is acceptable to Lender; (c) permit full or partial draws
without condition or charge to the beneficiary of the Letter of Credit; ( d) be
freely transferable by the beneficiary of the Letter of Credit (and each
successor as beneficiary) without restriction or charge and (e) otherwise be
acceptable to Lender in all respects. Borrower shall cause the Letter of Credit
to remain valid and effective at all times while those certain immediate repair
items listed in Section 39 and Exhibit I to the Ply Gem Lease remain to be
completed plus an additional thirty (30) days. If Borrower fails to cause the
renewal of the Letters of Credit or Ohio Letter of Credit within thirty (30)
days prior to their expiration thereof, time being of the essence, Lender shall
have the right at any time after the thirtieth (30th) day before such expiration
date to draw on such Letters of Credit or Ohio Letter of Credit and to hold the
proceeds thereof as a cash escrow. The Letters of Credit shall remain in full
force and effect until such time as provided for in Section 39 of the Ply Gem
Lease. The Ohio Letter of Credit shall remain in full force and effect until
such time as provided for in that certain Agreement to Convey.
So long as no Event of Default has occurred and is continuing, if the
amount Lender requires to be deposited in connection with the Loan with respect
to environmental matters is less than the amount of the applicable Environmental
Escrow ( as defined in the Ply Gem Lease), then Borrower may cause the
substitution of new Letters of Credit in such reduced amounts.
The Lender's right to draw upon the Ohio Letter of Credit and apply the
proceeds thereof shall be determined by that certain Agreement Re: Ohio Property
of even date herewith entered into between Borrower and Lender.
If at any time prior to the full payment of the Loan an Event of Default
shall have occurred and be continuing, Lender shall be entitled subject to the
rights of Ply Gem under the Ply Gem Lease to draw upon the Letters of Credit,
and shall use the proceeds of the Letters of Credit to the extent required to
satisfy the Rocky Mount Post-Closing Environmental Obligations, the General
Post-Closing Environmental Obligations or Post-Closing Compliance Obligations,
as defined in the Ply Gem Lease, as applicable, and be entitled, at its sole
discretion, to apply any remaining balance in payment of any charges which have
not been made pursuant to the Loan Documents, and any other sums due to Lender
in connection with any default or the curing thereof, including, without
limitation, any damages incurred by Lender by reason of such default.
Within ten (10) days of full payment of Loan by Borrower, provided that no
Event of Default has occurred and is continuing, Lender shall return the Letters
of Credit to Borrower and will execute documents reasonably requested by
Borrower to re-assign the Letters of Credit and Ohio Letter of Credit.
Ply Gem Industries
-22-
ARTICLE 7
SINGLE PURPOSE ENTITY REQUIREMENTS
7.01. Commitment to be a Single Purpose Entity. Borrower represents,
warrants and covenants to Lender as follows:
(a) Borrower is a Single Purpose Entity and will continue to be a
Single Purpose Entity at all times until the Loan has been paid in full.
(b) SPE Equity Owner is a Single Purpose Entity and will continue to
be a Single Purpose Entity at all times until the Loan has been paid in full.
(c) The Organizational Chart attached to this Loan Agreement is
true, complete and correct.
(d) The "single purpose entity" provisions included in the
organizational documents of Borrower and SPE Equity Owner shall not, without
Lender's prior written consent, be amended, rescinded or otherwise revoked until
the Loan has been paid in full.
(e) Prior to the withdrawal or the disassociation of the SPE Equity
Owner from Borrower, Borrower shall immediately appoint a new general partner or
managing member whose organizational documents are substantially similar to
those of the original SPE Equity Owner and, if an opinion letter pertaining to
substantive consolidation was required at closing, deliver new substantive
consolidation opinion letter with respect to the new SPE Equity Owner and its
equity owners which is acceptable in all respects to Lender and to the Rating
Agencies if a Securitization has occurred. (The requirements of this subsection
shall not be construed to permit a Transfer in violation of Article 10.)
7.02. Definition of Single Purpose Entity.
(a) Borrower Criteria. With respect to Borrower, a "SINGLE PURPOSE
ENTITY" means a corporation, limited partnership or limited liability company
which, at all times since its formation and thereafter:
(i) has not and shall not engage in any business or activity,
other than with respect to Borrower, the ownership, operation and maintenance of
the Property and activities incidental thereto;
(ii) has not and shall not, acquire or own any other than with
respect to Borrower, the Property and such incidental Personal Property as may
be necessary for the operation of the Property;
(iii) if such entity is (A) a limited liability company (other
than a single member limited liability company which satisfies the requirements
of clause (iv) below), has
Ply Gem Industries
-23-
had and shall have at least one member that satisfies the requirements of
Section 7.02(b) below and such member is its managing member, and (B) a limited
partnership, all of its general partners have satisfied and shall satisfy the
requirements of Section 7.02(b) below;
(iv) if such entity is a single member limited liability
company, such entity shall be (A) formed and organized under Delaware law and
otherwise comply with all other Rating Agency criteria for single member limited
liability companies (including, without limitation, the inclusion of a
"springing member" and delivery of Delaware single member liability company
opinions acceptable in all respects to Lender and the Rating Agencies); and (B)
such entity shall have at least one (1) Independent Director on its board of
managers; provided however if this Loan becomes part of a securitization and any
Rating Agency requires at least two (2) Independent Directors, Borrower shall
appoint, or cause the appointment of, a second Independent Director;
(v) if such entity is a corporation, has had and shall have at
least one (1) Independent Director on its board of directors, provided, however,
if this Loan becomes part of a Securitization and any Rating Agency requires at
least two (2) Independent Directors, Borrower shall appoint, or cause the
appointment of, a second Independent Director;
(vi) has and shall preserve its existence as an entity duly
organized, validly existing and in good standing (if applicable) under the laws
of the jurisdiction of its formation or organization;
(vii) except as permitted in Section 10.02(b), has not and
shall not merge or consolidate with any other Person;
(viii) has not taken, and shall not take, any action to
dissolve, wind-up, terminate or liquidate in whole or in part except as
permitted in Section 10.02(b); to sell, transfer or otherwise dispose of all or
substantially all of its assets except as permitted in or permit the direct or
indirect transfer of any partnership, membership or other Equity Interests, as
applicable, other than Permitted Transfers; issue additional partnership,
membership or other Equity Interests, as applicable; or seek to accomplish any
of the foregoing except as permitted in Section 10.02(b);
(ix) shall not, without the unanimous written consent of all
Borrower's partners, members, or shareholders, as applicable, and the written
consent of 100% of the members of the board of directors of the SPE Equity Owner
or board of managers in the case of a single member limited liability company,
including without limitation the Independent Director(s): (A) file or consent to
the filing of any petition, either voluntary or involuntary, to take advantage
of any applicable insolvency, bankruptcy, liquidation or reorganization statute;
(B) seek or consent to the appointment of a receiver, liquidator or any similar
official; or (C) make an assignment for the benefit of creditors;
Ply Gem Industries
-24-
(x) shall not amend or restate its organizational documents if
such change would adversely impact the requirements set forth in this Section
7.02;
(xi) shall not own any subsidiary or make any investment in,
any other Person;
(xii) shall not commingle its assets with the assets of any
other Person;
(xiii) has not, and shall not, incur any debt, secured or
unsecured, direct or contingent (including, without limitation, guaranteeing
any obligation), other than the Loan and customary unsecured trade payables
incurred in the ordinary course of owning and operating the Property provided
the same are not evidenced by a promissory note, do not exceed, in the
aggregate, at any time a maximum amount of two percent (2%) of the outstanding
principal amount of the Loan and are paid within sixty (60) days of the date
incurred;
(xiv) shall maintain its records, books of account, bank
accounts, financial statements, accounting records and other entity documents
separate and apart from those of any other Person;
(xv) shall only enter into any contract of agreement with any
general partner, member, shareholder, principal or Affiliate of Borrower or
Guarantor, or any general partner, member, principal or Affiliate thereof, upon
terms and conditions that are intrinsically fair and substantially similar to
those that would be available on an arms-length basis with third parties;
(xvi) shall not maintain its assets in such a manner that it
will be costly or difficult to segregate, ascertain or identify its individual
assets from those of any other Person;
(xvii) shall not assume or guaranty the debts of any other
Person, hold itself out to be responsible for the debts of another Person, or
otherwise pledge its assets for the benefit of any other Person or hold out its
credit as being available to satisfy the obligations of any other Person;
(xviii) shall not make any loans or advances to any other
Person;
(xix) shall file its own tax returns as required under federal
and state law, provided that, to the extent permitted by applicable state and
federal laws and GAAP, Borrower may file consolidated tax returns with Corporate
Property Associates 16 Global Incorporated, a Maryland corporation;
Ply Gem Industries
-25-
(xx) shall hold itself out to the public as a legal entity
separate and distinct from any other Person and conduct its business solely in
its own name and shall correct any known misunderstanding regarding its separate
identity;
(xxi) shall maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations;
(xxii) shall allocate shared expenses (including, without
limitation, shared office space) and to use separate stationery, invoices and
checks;
(xxiii) shall pay (or cause the Property Manager to pay on
behalf of Borrower from Borrower's fund) its own liabilities (including, without
limitation, salaries of its own employees) from its own funds; and
(xxiv) shall not acquire obligations or securities of its
partners, members or shareholders, as applicable.
(b) SPE Equity Owner Criteria. With respect to SPE Equity Owner, a
"SINGLE PURPOSE ENTITY" means a corporation which, at all times since its
formation and thereafter complies in its own right with each of the requirements
contained in Section 7.02(a)(iv) - (xxiv), except that:
(i) with respect to Section 7.02(a)(i) the SPE Equity Owner
shall not engage in any business or activity other than being the sole managing
member or general partner, as the case may be, of the Borrower and owing its
Equity Interest in Borrower;
(ii) with respect to Section 7.02(a)(ii), the SPE Equity Owner
has not and shall not acquire or own any assets other than its Equity Interest
in Borrower; or
(iii) with respect to Section 7.02(a)(xiii) the SPE Equity
Owner has not and shall not incur any debt, secured or unsecured, direct or
contingent (including, without limitation, guaranteeing any obligation).
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that, as of the Closing Date:
8.01. Organization; Legal Status. Borrower and each SPE Equity Owner are
duly organized, validly existing and in good standing under the laws of its
state of formation and Borrower; (a) is duly qualified to transact business and
is in good standing in the state where the Property is located; and (b) has all
necessary approvals, governmental and otherwise, and full
Ply Gem Industries
-26-
power and authority to own, operate and lease the Property and otherwise carry
on its business as now conducted and proposed to be conducted. Borrower's
correct legal name is set forth on the first page of this Loan Agreement.
Borrower is a "registered organization" within the meaning of the UCC and
Borrower's organization identification number issued by its state of
organization is correctly stated on the signature page to this Loan Agreement.
8.02. Power; Authorization; Enforceable Obligations. Borrower has full
power, authority and legal right to execute, deliver and perform its obligations
under the Loan Documents. Borrower has taken all necessary action to authorize
the borrowing of the Loan on the terms and conditions of this Loan Agreement and
the other Loan Documents, and Borrower has taken all necessary action to
authorize the execution and delivery of its performance under the Loan
Documents. The officer or representative of Borrower the Loan Documents has been
duly authorized and empowered to do so. The Loan Documents constitute legal,
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights generally.
8.03. No Legal Conflicts. The borrowing of the Loan and Borrower's
execution, delivery and performance of its obligations under the Loan Documents
will not: (a) violate, conflict with, result in a material default (following
notice and/or expiration of the related grace/cure period without cure or both,
as applicable) under any agreement or the other instrument to which Borrower is
a party or by which the Property may be bound or affected, or any Requirements
of Law (including, without limitation, usury laws); (b) result in the creation
or imposition of any Lien whatsoever upon any of its assets, except the Liens
created by the Loan Documents; nor (c) require any authorization or consent
from, or any filing with, any Governmental Authority (except for the recordation
of the Security Instrument in the appropriate land records in the state where
the Property is located and UCC filings relating to the security interest
created hereby and by the Security Instrument which are necessary to perfect
Lender's security interest in the Property).
8.04. No Litigation. No action, suit, or proceeding or investigation,
judicial, administrative or otherwise (including, without limitation, any
reorganization, bankruptcy, insolvency or similar proceeding) currently is
pending or, to the best of Borrower's knowledge, threatened or contemplated
against or affecting Borrower, SPE Equity Owner, any Guarantor or the Property
that has not been disclosed by Borrower in writing to Lender and which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
8.05. Business Purpose of Loan. Borrower will use the proceeds of the Loan
solely for the purpose of carrying on a business or commercial enterprise and
not for personal, family or household purposes.
8.06. Warranty of Title. With the exception of that certain portion of the
Property now known and numbered as ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ in the City of Toledo and
State of Ohio, Borrower
Ply Gem Industries
- 27 -
has good, insurable fee simple title of record to the Property, free and clear
of all Liens whatsoever except for the Permitted Encumbrances. The Security
Instrument and Assignment of Leases and Rents, when properly recorded in the
appropriate recording office, together with the UCC financing statements
required to be filed in connection therewith, will create (a) a valid, first
priority, perfected lien on the Property subject only to Permitted Encumbrances;
and (b) perfected security interests in and to, and perfected assignments as
collateral of , all Personal Property (including, without limitation, the
Leases), all in accordance with the terms thereof , in each case subject only to
any Permitted Encumbrances. None of the Permitted Encumbrances, individually or
in the aggregate: (a) materially interfere with the benefits of the security
intended to be provided by the Security Instrument, (b) materially and adversely
affect the value of the Property, or (c) materially and adversely impair the use
and operations of the Property. Borrower owns or has rights in all collateral
given as security for the Loan, free and clear of any and all Liens except for
the Liens created in favor of Lender in connection with the Loan. Borrower shall
forever warrant, defend and preserve the title and the validity and priority of
the Liens created in favor of Lender in connection with the Loan and shall
forever warrant and defend the same to Lender against the claims of all persons
whomsoever.
8.07. Condition of the Property. To the actual knowledge of Borrower,
except as disclosed in the structural inspection report received by Lender, (i)
the Improvements are structurally sound, in good repair and free of defects in
materials and workmanship; (ii) all major building systems located within the
Improvements (including, without limitation, the heating and air conditioning
systems, the electrical systems, plumbing systems; (iii) all liquid and solid
waste disposal, septic and sewer systems) are in good working order and
condition and in compliance with all Requirements of Law; and (iv) the Property
is free from damage caused by fire or other casualty.
8.08. No Condemnation. No Condemnation proceeding has been commenced or,
to the best of Borrower's knowledge, is contemplated with respect to all or any
portion of the Property or for the relocation of roadways providing access to
the Property.
8.09. Requirements of Law. To the actual knowledge of Borrower, the
Property and its present and contemplated use and occupancy are in compliance in
all material respects with all Requirements of Law.
8.10. Operating Permits. To the actual knowledge of Borrower, Borrower or
Ply Gem has obtained all licenses, permits, registrations, certificates and
other approvals, governmental and otherwise (including, without limitation,
zoning, building code, land use and environmental), necessary for the use,
occupancy and operation of the Property and the conduct of its business thereat,
all of which are in full force and effect as of the date hereof. To the actual
knowledge of Borrower without independent investigation, no event or condition
currently exists which could result in the revocation, suspension, of
forfeiture thereof.
Ply Gem Industries
- 28 -
8.11. Separate Tax Lot. The Property is assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate from any
adjoining land or improvements not constituting a part of the Property with the
exception of that certain portion of the Property now known and numbered as ▇▇▇
▇▇▇▇▇▇ ▇▇▇ in Middlesex Township, Pennsylvania, provided that Borrower shall
obtain a tax lot endorsement for said portion of the Property.
8.12. Flood Zone. Except as otherwise disclosed on the survey of the
Property provided to Lender in connection with the Loan, no portion of the
Improvements is located in an area identified by the Federal Emergency
Management Agency or any successor thereto, as an area having special flood
hazards.
8.13. Adequate Utilities. The Property is adequately served by all
utilities required for the current or contemplated use thereof. To the knowledge
of Borrower, all water and sewer systems are provided to the Property by public
utilities, and the Property has accepted or is equipped to accept such utility
services.
8.14. Public Access. All public roads and streets necessary for access to
the Property for the current use thereof have been completed, are serviceable,
and are physically and legally open for use by the public.
8.15. Boundaries. Based upon the surveys prepared and delivered to Lender
in connection with the Loan, to Borrower's actual knowledge, all of the
Improvements lie wholly within the boundaries and, except as shown on such
surveys, building restriction lines of the Property, and no easements or other
encumbrances affecting the Property (including, without limitation, the
Permitted Encumbrances) encroach upon any of the Improvements. Based upon the
surveys prepared and delivered to Lender in connection with the Loan, to
Borrower's actual knowledge, no improvements on adjacent properties encroach
upon the Property.
8.16. Mechanic Liens. No mechanics', materialmen's or similar liens or
claims have been, or to the actual knowledge of Borrower may be, filed for work,
labor or materials affecting the Property which are or may be Liens prior, equal
or subordinate to the Security Instrument.
8.17. Assessments. No unpaid assessments for public improvements or
assessments otherwise affecting the Property currently exist or, to the best of
Borrower's knowledge, are pending, nor are improvements contemplated to the
Property that may result in any such assessments.
8.18. Insurance. Borrower has obtained, or caused to be obtained, and
delivered to Lender all insurance policies Lender has required pursuant to
Section 9.03 of this Loan Agreement, with all Insurance Premiums prepaid
thereunder, reflecting the insurance coverages, amounts and other requirements
set forth in this Loan Agreement. To the actual knowledge of Borrower, no claims
have been made under any of such insurance policies, and no party, including
Borrower, has done, by act or omission, anything which would impair the coverage
of any of such insurance policies.
Ply Gem Industries
-29-
8.19. Leases. With respect to the Leases: (a) the Rent Roll dated as of
the Closing Date is true, complete and correct and the Property is not subject
to Leases other than the Leases identified on such Rent Roll; (b) Borrower has
delivered to Lender complete and accurate copies of all Leases and no verbal or
written agreements exist which terminate, modify or supplement the Leases,
except as otherwise disclosed to Lender in writing and acknowledged by Lender;
(c) each Lease, by its terms, is subordinate to the lien of the Security
Instrument or the subject of a separate subordination agreement subordinating
the Lease to the lien of the Security Instrument; (d) Borrower is the sole owner
of the entire lessor's interest in the Leases and has not assigned, pledged or
otherwise transferred the Rents reserved in the Leases (except to Lender); (e)
all of the Leases are bona fide, arms-length agreements with tenants unrelated
to Borrower, (f) none of the Rents have been collected for more than one (1)
month in advance of the date when due under the Lease (and for such purpose, a
security deposit shall not be deemed rent collected in advance and further
provided that rent under the Ply Gem Lease may be collected no more than three
(3) months in advance); (g) all security deposits reflected on the Rent Roll
have been collected and are being held by Borrower in the full amount reported
on the Rent Roll; (h) all work to be performed by Borrower under each Lease has
been performed as required and has been accepted unconditionally by the
applicable tenant; (i) no offsets or defenses exist in favor of any tenant to
the payment of any portion of the Rents and Borrower has no monetary obligation
to any tenant under any Lease; (j) Borrower has not received notice from any
tenant challenging the validity or enforceability of any Lease; (k) all payments
due from tenants under the Leases are current; (l) no tenant under any Lease is
in default thereunder, or is a debtor in any bankruptcy, reorganization,
insolvency or similar proceeding, or, to the best knowledge of Borrower, has
demonstrated a history of payment problems which suggest financial difficulty;
(m) no Lease contains an option to purchase, right of first refusal to purchase,
or any other similar provision (provided that the provision in the Ply Gem Lease
regarding the Termination Notice for casualty or condemnation, shall not be
deemed an option to purchase); and (n) no brokerage commissions, finders fees or
similar payment obligations are due and unpaid by Borrower or any Affiliate of
Borrower regarding any Lease which have not been disclosed in writing to Lender
and for which adequate amounts have not been set aside in the TI/LC Reserve
Account.
8.20. Management Agreement. No change in the Property Manager or Property
Management Contract has occurred since the date of the most recent information
submitted to Lender with respect thereto, other than has been disclosed in
writing to Lender.
8.21. Financial Condition. Borrower currently is solvent and has received
reasonably equivalent value for its granting of the Liens in favor of Lender in
connection with the Loan. No change has occurred in the financial condition of
Borrower, SPE Equity Owner, Guarantor, or any of their respective constituent
equity owners, general partners or managing members which would have a Material
Adverse Effect, since the date of the most recent financial statements submitted
to Lender with respect to each such party, other than has been disclosed in
writing to Lender.
Ply Gem Industries
-30-
8.22. Taxes. Borrower and SPE Equity Owner have filed all federal, state,
county, municipal, and city income tax returns required to have been filed by
them and have paid all taxes and related liabilities which have become due
pursuant to such returns or pursuant to any assessments received by them.
Borrower does not know of any basis for any additional assessment in respect of
any such taxes and related liabilities for prior years.
8.23. No Foreign Person. Borrower is not a "foreign person" within the
meaning of section 1445(f)(3) of the Tax Code.
8.24. Federal Regulations. Borrower is not engaged nor will it engage,
principally, or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U or
Regulation G.
8.25. Investment Company Act; Other Regulations. Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940 and the regulations issued
thereunder, each as amended. Borrower is not subject to regulations under any
federal or state statute or regulation which limits its ability to incur
indebtedness.
8.26. ERISA. (a) Borrower is not and will not be an "employee benefit
plan," as defined in section 3(3) of ERISA, subject to Title I of ERISA, (b)
none of the assets of Borrower constitute or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. section 2510.3-101, (c)
Borrower is not and will not be a "governmental plan" within the meaning of
section 3(3) of ERISA, and (d) transactions by or with Borrower are not and will
not be subject to state statutes regulating investment of, and fiduciary
obligations with respect to, governmental plans.
8.27. No Illegal Activity as Source of Funds. No portion of the Property
has been or will be purchased, improved, equipped or furnished with proceeds of
any illegal activity.
8.28. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws. Borrower, SPE Equity Owner, Borrower's general partner or
managing member (if applicable), each Guarantor, and the Property Manager: (i)
is not currently identified on the OFAC List, and (ii) is not a Person with whom
a citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States. Borrower
agrees to confirm this representation and warranty in writing on an annual basis
if requested by Lender to do so.
8.29. Brokers and Financial Advisors. Borrower has not dealt with any
financial advisor, broker, underwriter, placement agent or finder in connection
with the transaction contemplated by this Loan Agreement who may be owed a
commission or other compensation which Borrower will not have paid in full as of
the Closing Date.
Ply Gem Industries
-31-
8.30. Complete Disclosure; No Change in Facts or Circumstances. Borrower
has disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially inaccurate, incomplete or misleading. All information provided in or
supplied with the application for Loan, or in satisfaction of the terms thereof,
remains true, complete and correct in all material respects, and no adverse
change in any condition or fact has occurred that would make any of such
information materially inaccurate, incomplete or misleading.
ARTICLE 9
BORROWER CONVENANTS
9.01. Payment of Debt and Performance of Obligations. Borrower shall fully
and punctually pay the Loan and perform the Obligations when and as required by
the Loan Documents. Borrower may not prepay the Loan except in strict accordance
with this Loan Agreement.
9.02. Payment of Taxes and Other Lienable Charges.
(a) Payment Obligation. Borrower shall promptly and fully pay by
their due date all Taxes and Other Charges now or hereafter assessed or charged
against the Property as they become due and payable. Borrower shall promptly
cause to be paid and discharged any Lien which may be or become a Lien against
the Property (including, without limitation, mechanic's or materialman's liens).
Except to the extent sums sufficient to pay Taxes or Other Charges have been
deposited with Lender in accordance with this Loan Agreement, Borrower shall
furnish to Lender, upon request, evidence satisfactory to Lender that all Taxes
and Other Charges have been paid and are not delinquent.
(b) Right to Contest. After prior written notice to Lender,
Borrower, at its own expense, may contest, or permit Ply Gem to contest, by
appropriate legal proceeding, promptly initiated and conducted in good faith
with due diligence, the amount or validity or application in whole or in part of
any of the Taxes or Other Charges, provided that: (i) no Event of Default
exists; (ii) such proceeding suspends the collection of such Taxes or Other
Charges and the Property will not be in danger of being sold for such unpaid
Taxes or Other Charges, or Borrower has paid all of such Taxes or Other Charges
under protest; (iii) such proceeding is permitted under and is conducted in
accordance with the provisions of any other instrument to which Borrower or the
Property is subject and does not constitute a default thereunder; (iv) if
Borrower has not paid the disputed amounts in full under protest, Borrower shall
deposit: with Lender cash (or other security as may be approved, in writing, by
Lender) in an amount Lender deems sufficient to insure the payment of any such
Taxes or Other Charges together with interest and penalties thereon, if any,
provided that after a Securitization, one hundred twenty-five percent (125%) of
the contested amount (plus anticipated penalty and interest) shall be deposited
with Lender; (v) Borrower furnishes to Lender all other items reasonably
requested by Lender; and (vi) upon a final determination thereof, Borrower
promptly pays the amount of any such
Ply Gem Industries
-32-
Taxes or Other Charges, together with all costs, interest and penalties which
may be payable in connection therewith. Lender may pay over any security held by
Lender pursuant to this Section to the claimant entitled thereto at any time
when, in Lender's judgment, the entitlement of such claimant is established,
and, to the extent the security posted by Borrower with Lender is insufficient
to pay the full amount due (including, without limitation, any penalties or
interest thereon), Borrower shall be liable for the deficiency. If Lender pays
the deficiency (which Lender shall not be obligated to do), the amount paid by
Lender shall be added to principal, shall bear interest at the Default Rate
until paid in full and payment of such amounts shall be secured by the Security
Instrument and other collateral given to secure the Loan.
9.03. Insurance.
(a) Insurance Required During the Loan Term. Borrower, at
Borrower's expense, shall obtain and maintain, or cause to be obtained and
maintained, during the term of the Loan such insurance coverage (including,
without limitation, type, minimum coverage amount, maximum deductible and
acceptable exclusions) for Borrower and the Property as Lender deems reasonably
necessary considering, among other things, the location and occupancy of the
Property and all uses of the Property. Lender reserves the right to periodically
review the insurance coverage Lender has required (types, minimum coverage
amounts and maximum deductibles) and to increase or otherwise change the
required coverage should Lender deem an increase or change to be reasonably
necessary under then existing circumstances. Without limiting Lender's rights
hereunder in any respect, it shall be deemed reasonable for Lender to require no
less coverage than the coverage in place on the Closing Date. Subject to the
foregoing, Lender shall require the following insurance coverage to be effective
during the term of the Loan, coverage amounts and deductibles to be acceptable
to Lender:
(i) Property Insurance. Casualty insurance must be maintained
for the Improvements and all Personal Property insuring against any peril now or
hereafter included within the classification "all risks of physical loss" and in
an amount at all times sufficient to prevent Borrower or Lender from becoming a
co-insurer within the terms of the applicable policies, but in any event at all
times equal to the full replacement cost (as reasonably determined and adjusted
from time to time by Lender) of the Improvements and Personal Property (without
taking into account any depreciation and exclusive of excavations, footings and
foundations, landscaping and paving), without any exclusions for windstorms. In
all cases where (A) the outstanding principal balance on the Note exceeds $5
million, or (B) any part of the Improvements constitutes a legal non-conforming
use under the Requirements of Law, such insurance must include "Ordinance of Law
Coverage," with "Time Element," "Loss to the Undamaged Portion of the Building,"
"Demolition Cost" and "Increased Cost of Construction" endorsements, in the
amount of coverage requested by Lender. The policy must name Lender as an
insured mortgagee under a standard mortgagee clause. The maximum deductible
shall be $50,000.00 per occurrence, or, so long as the Ply Gem Lease remains in
effect, such greater amount (up to a maximum of $100,000.00) as shall be
permitted by the Ply Gem Lease,
Ply Gem Industries
-33-
provided, however, that Borrower and Guarantor shall be jointly and severally
liable, on a recourse basis, for deductible amounts in excess of $50,000.00.
(ii) Insurance against Acts of Terrorism. The insurance
coverage provided under Section 9.03(a) in effect as of the Closing Date and
during the Loan term must also insure against loss or damage resulting from acts
of terrorism or comparable coverage acceptable to Lender in its discretion. The
deductible shall not exceed $100,000.00.
(iii) Boiler and Machinery Insurance. Broad form boiler and
machinery insurance (without exclusion for explosion) and systems breakdown
coverage must be maintained, covering all steam boilers, pipes, turbines,
engines or other pressure vessels, electrical machinery, HVAC equipment,
refrigeration equipment and other similar mechanical equipment located in, on or
about the Property in such amount per accident equal to the full replacement
cost thereof (as reasonably determined and adjusted from time to time by Lender)
and also providing coverage against loss of occupancy or use arising from any
breakdown thereof. The policy must name Lender as an insured under a standard
joint loss clause and provide that all proceeds are to be paid to Lender.
(iv) Flood Insurance. Flood insurance must be maintained if
any portion of the Improvements is located in an area identified by the Federal
Emergency Management Agency or any successor thereto as a 100-year flood zone or
special hazard area. The required coverage amount shall be the maximum allowable
per building under the then-current guidelines published by the Federal
Emergency Management Agency or any successor thereto. The policy must name
Lender as an insured mortgagee under a standard mortgagee clause. The deductible
may not exceed the greater of five percent (5%) of net cash flow from the
Property, as determined by Lender, or $25,000.00.
(v) Business Interruption. Business interruption insurance
must by maintained in an amount sufficient to provide the lost rental income for
the Property for a period of not less than 1 year from the date of Casualty,
with a 6 month extended period of indemnity. For purposes of this coverage,
"rental income" means the sum of (A) the total, then ascertainable Rents payable
under the Leases and (B) the total ascertainable amount of all other payments to
be received by Borrower from third parties which are the legal obligation of the
tenants, reduced to the extent such amounts would not be received because of
operating expenses not incurred during the period that any portion of the
Property cannot be occupied as a result of the Casualty. The policy must name
Lender as a loss payee and provide that all proceeds are to be paid to Lender.
(vi) Liability Insurance. Commercial general liability
insurance coverage must be maintained, covering bodily injury or death and
property damage, including all legal liability to the extent insurable and all
court costs, legal fees and expenses, arising out of, or connected with, the
possession, use, leasing, operation, maintenance or condition of the Property in
such amounts generally required by institutional lenders for properties
comparable
Ply Gem Industries
-34-
to the Property but in no event for an amount less than $15 million per
occurrence and $15 million in the aggregate. The required coverage must provide
for claims to be made on an occurrence basis. The policy must name Lender as an
additional insured. The insurance coverage required under this subsection (vi)
may be satisfied by a layering of Commercial General Liability, Umbrella and
Excess Liability Policies, but in no event will the Commercial General Liability
policy be written for an amount less than $1,000,000 per occurrence and
$2,000,000 aggregate for bodily injury and property damage liability, and in no
event shall the Umbrella and Excess Liability policy be written for an amount
of less than $5,000,000. Lender may required umbrella coverage which will be
evaluated on a case by case basis.
(vii) Workers' Compensation Insurance. Workers' compensation
insurance must be maintained with respect of all employees employed at the
Property, in compliance with the laws of the state in which the Property is
located.
(viii) Earthquake Insurance. If the Property is located in a
high earthquake hazard area, earthquake must be maintained in form, amount and
with deductibles satisfactory to Lender.
(ix) Other Coverage. Without limiting Lender's rights under
this Section 9.03(a), Lender may also require Borrower to maintain builder's
risk insurance during any period of construction, renovation or alteration of
the Improvements, motor vehicles liability insurance in connection with all
owned or non-owned motor vehicles used in connection with the management or
maintenance of the Property, sinkhole coverage, fidelity bond coverage for
employees handling Rents and other income from the Property, environmental
insurance and other insurance with respect to the Property or on any
replacements or substitutions thereof or additions thereto and in an amount
covering losses to the extent of full replacement cost value against
condemnation and/or other insurable hazards or casualties which at the time are
commonly insured against in the case of property similarly situated, due regard
being given to the height and type of buildings, their construction, location,
use and occupancy. If any construction, renovation or alteration of the
Improvements is done by Ply Gem under the Ply Gem Lease, then Borrower shall
cause Ply Gem to comply with the provisions of the Ply Gem Lease relating
thereto. In furtherance of the forgoing, Lender acknowledges and agrees that it
may only require Borrower to obtain and maintain environmental insurance or
cause the same to be obtained and maintained under the following circumstances:
(i) to the extent that an environmental condition arises that is subject to
Environmental Law and affects the Property and such condition was not known to
Lender on or before the date hereof or disclosed in the Environmental Report and
the cost of Remediation thereof, as reasonably determined by Lender will be more
than $500,000; or (ii) to the extent the environmental condition was known to
Lender on or before the date hereof or disclosed in the Environmental Report and
there has been a material change in said condition such that (a) the cost to
remediate has increased by more than $500,000.00 and any reserve or additional
security provided to remediate such condition is not sufficient to cover such
increased cost, or
Ply Gem Industries
-35-
(b) the condition shall materially impair the use and operation of the business
of the tenant at the property;
(x) Tenant's Insurance. Notwithstanding anything in the Section 9.03
to the contrary, and provided that (i) the Ply Gem Lease or an Acceptable
Replacement Lease, as applicable, remains in effect with Ply Gem, or an
Acceptable Replacement Tenant, as applicable, as the tenant thereunder, (ii) Ply
Gem or an Acceptable Replacement Tenant is not in default beyond the expiration
of any applicable notice and cure period under the Ply Gem Lease or an
Acceptable Replacement Lease, as applicable, and (iii) Ply Gem or an Acceptable
Replacement Tenant carries all insurance required under the Ply Gem Lease or an
Acceptable Replacement Lease, as applicable, then the requirements of Sections
9.03(a) shall be deemed satisfied, except that with respect to Borrower's
continuing obligation to maintain terrorism insurance, Borrower shall cause Ply
Gem or an Acceptable Replacement Tenant at all times to maintain terrorism
insurance in such amounts as are customary for properties of sizes, types and
uses as the Property. Notwithstanding the foregoing, so long as Ply Gem
maintains a self-insured retention limit in excess of $50,000.00, Borrower shall
maintain excess liability insurance with a self-insured retention not in excess
of $50,000.00 and otherwise meeting the requirements of this Section 9.03
hereof.
(b) Qualified Insurers; Lender's Consent. All insurance must be issued
under valid and enforceable policies of insurance acceptable to Lender and
issued by one or more domestic primary insurers authorized to issue insurance in
the state in which the Property is located. Each insurer must have a minimum
investment grade rating of "A" or better from S & P and an A.M. Best rating of
A:IX or better, or from an equivalent comparable credit rating agency acceptable
to Lender. With respect to insurance required under Section 9.03(a)(i) above,
Lender agrees to accept policies written by Factory Mutual Insurance Company
("F.M. GLOBAL") during any period that F.M. Global does not have an A or better
S & P claims paying ability rating, so long as F.M. Global has Best's rating of
A:IX or above. Lender's approval of insurance coverage at any time is not a
representation or warranty concerning the sufficiency of any coverage or the
solvency of any insurer, and Lender shall not be responsible for, nor incur any
liability for, the insolvency of the insurer or other failure of the insurer to
perform.
(c) Policy Requirements. All policies must be for a term of not less than
a year and name Lender as a beneficiary of such coverage as provided in this
Section 9.03 or otherwise identified by Lender. Each policy must also contain:
(i) an endorsement or provision that permits recovery by Lender notwithstanding
the negligent or willful acts or omissions of Borrower, (ii) a waiver of
subrogation endorsement as to Lender to the extent available at commercially
reasonable rates; (iii) a provision that prohibits cancellation or termination
before the expiration date, denial of coverage upon renewal, or material
modification without at least thirty (30) days prior written notice to Lender in
each instance; and (iv) effective waivers by the insurer of all claims for
Insurance Premiums against Lender. If the required insurance coverage is to be
provided under a blanket policy covering the Property and other properties and
assets not part of the Property, such blanket policy must specify the portion of
the total coverage that is
Ply Gem Industries
-36-
allocated to the Property and any sublimit in such blanket policy which is
applicable to the Property and shall otherwise comply in all respects with the
requirements of this Section 9.03.
(d) Evidence of Insurance. Borrower must deliver to Lender on or
before the Closing Date either (i) the original of each insurance policy
required hereunder, (ii) a copy of each original policy certified by the
insurance agent to be a true, correct and complete copy of the original; (iii)
the insurance binder (▇▇▇▇▇ Form 25S provided by the insurance carrier) (as well
as proof of payment of the first years premium); (iv) a certificate of insurance
(▇▇▇▇▇ Form 28 provided by the insurance agent of, where form ▇▇▇▇▇ Form 28 is
not available, a certificate of insurance that confirms the same rights as are
confirmed by form ▇▇▇▇▇ Form 28), (v) an original letter from the insurance
carrier on the primary layer, signed by an officer of such carrier, attaching
the form of insurance policy pursuant to which coverage will be provided (and,
if applicable, an original letter from each insurance carrier on the excess
layers, signed by an officer of each such carrier, agreeing that it is bound to
the form of insurance policy delivered by the primary carrier (i.e., agreeing to
"follow form" to the primary carrier)); and (A) each such letter must set forth
the date by which the policy will be delivered to the Lender, which must not be
more than sixty (60) days following closing and (B) include as attachments all
mortgagee/loss payee/additional insured endorsements. Evidence of the required
coverage for the first year of the Loan (as well as proof of payment of the
first year's premium) must be delivered to Lender on or before the Closing Date
and thereafter not less than ten (10) days prior to the expiration date of each
policy.
(e) Lender's Right to Obtain Insurance for Borrower. If Borrower
fails to deliver to Lender the evidence of the insurance coverage required by
this Loan Agreement and does not cure such deficiency within ten (10) days after
Lender's notice of nondelivery, an Event of Default shall be deemed to have
occurred (without further cure period or notice) and Lender may procure such
insurance at Borrower's expense, without prejudice to Lender's rights upon an
Event of Default. All amounts advanced by Lender to procure the required
insurance shall be added to principal, secured by the Security Instrument and
bear interest at the Default Rate. Lender shall not be responsible for, nor
incur any liability for the insolvency of the insurer or other failure of the
insurer to perform, even though Lender has caused the insurance to be placed
with the insurer after Borrower's failure to furnish such insurance.
(f) Additional Insurance. Borrower shall not obtain insurance for
the Property in addition to that required by Lender without Lender's prior
written consent, which consent will not be unreasonably withheld provided that
(i) Lender is named insured on such insurance, (ii) Lender receives evidence of
such insurance as required by subsection (d) above, and (iii) such insurance
complies with all of the applicable requirements set forth in this Loan
Agreement.
9.04. Obligations upon Condemnation or Casualty. If the Property, or any
portion thereof, shall be damaged or destroyed by a Casualty or become subject
to any Condemnation, the following shall apply:
Ply Gem Industries
- 37 -
(a) Generally. Upon receiving notice thereof, Borrower shall promptly
notify Lender, in writing, of any actual or threatened Condemnation or of any
Casualty that damages or renders unusable the Property or any part thereof and,
except as otherwise provided below, shall promptly and diligently pursue, or
cause to be pursued, Borrower's claim for a Condemnation award or insurance
proceeds, as applicable. Borrower shall not make any agreement in lieu of
Condemnation or accept any Condemnation award without Lender's prior written
consent, which shall not be unreasonably withheld or delayed. Borrower shall not
accept any settlement of insurance proceeds with respect to a Casualty without
Lender's prior written consent, which shall not be unreasonably withheld or
delayed. If requested by Lender, Borrower agrees to provide copies to Lender of
all notices or filings made or received by Borrower in connection with the
Casualty or Condemnation or with respect to collection of the insurance proceeds
or Condemnation award, as applicable. Notwithstanding that a Casualty or
Condemnation has occurred, or that rights to a Condemnation award or insurance
proceeds are pending, Borrower shall continue to pay the Loan at the time and in
the manner provided in this Loan Agreement.
(b) Lender Right to Pursue Claim. Borrower hereby grants Lender the
authority, at Lender's option, subject to the rights of Ply Gem under the Ply
Gem Lease, either : (i) to settle and adjust any claim arising with respect to
the Casualty or Condemnation without Borrower's consent, or (ii) to allow
Borrower to settle and adjust such claim; provided that, in either case, the
insurance proceeds or Condemnation award in excess of $250,000, as applicable,
is paid directly to Lender. Borrower hereby appoints Lender its attorney -in-
fact with full power of substitution (and which shall be deemed to coupled with
an interest and irrevocable until the Loan is paid and the Security Instrument
is discharged of record, with Borrower hereby ratifying all that its said
attorney shall do by virtue thereof) to endorse any agreements, instruments or
drafts received in connection with a Casualty or Condemnation. If any portion
of the insurance proceeds or Condemnation award in excess of $250,000, as
applicable, should be paid directly to Borrower, Borrower shall be deemed to
hold such amounts in trust for Lender and shall promptly remit such amounts to
Lender. If the Property is sold, through foreclosure or otherwise, prior to the
receipt of the Condemnation award, Lender shall have the right, whether or not a
deficiency judgement on the Note shall have been sought, recovered or denied,
to receive the proceeds of such sale in an amount sufficient to pay the Loan in
full subject, however to the rights of Ply Gem or Acceptable Replacement Tenant
under the Ply Gem Lease or Acceptable Replacement Lease. All expenses incurred
by lender in the settlement and collection of amounts paid with respect to a
Casualty or Condemnation (including, without limitation, reasonable legal fees
and expenses) shall be deducted and reimbursed to Lender from the insurance
proceeds or Condemnation award, as applicable, prior to any other application
thereof. The insurance proceeds or Condemnation award paid or payable on account
of a Casualty or Condemnation, as applicable (including all business
interruption insurance proceeds paid as a result of such Casualty or
Condemnation), less expenses to be reimbursed to Lender hereunder, is referred
to herein as the "RESTORATION PROCEEDS."
(c) Application of Restoration Proceeds; Restoration Obligations. Except
as specifically hereafter provided in subsection (d) below, Lender may, in its
sole discretion, either
Ply Gem Industries
-38-
(i) apply the Restoration Proceeds to payment of the Loan, whether
or not then due and payable, or (ii) hold and release the Restoration Proceeds
to Borrower (A) for the costs of Restoration undertaken by Borrower in
accordance with this Loan Agreement and (B) to cover any shortfall in Operating
Income as a result of such Casualty or Condemnation that is necessary to pay in
full the debt service payments due from Borrower on each Payment Due Date and
other Operating Expenses falling due during the period until Restoration is
completed; provided, however, that Lender shall have no obligation to release
Restoration Proceeds to fund amounts contemplated by clause (B) unless (1)
Lender is satisfied that Restoration Proceeds are sufficient to pay in full the
estimated cost to complete Restoration and (2) all Operating Expenses to be
funded with Restoration Proceeds are approved by Lender. If Lender applies
Restoration Proceeds to payment of the Loan and the Loan is still outstanding,
interest will continue to accrue and be due on the unpaid principal at the
Applicable Interest Rate. If Lender makes the Restoration Proceeds available to
Borrower for Restoration, Borrower shall diligently pursue, or cause to be
diligently pursued, Restoration so as to restore the Property to at least equal
value and substantially the same character as existed immediately prior to such
Casualty or Condemnation. All plans and specifications for the Restoration and
all contractors, subcontractors and materialmen to be engaged in the
Restoration, as well as the contracts under which they have been engaged, shall
be subject to Lender's prior review and approval. Lender may engage, at
Borrower's expense, an independent engineer or inspector to assist Lender in
its review of the approvals requested of Lender in connection with the
Restoration and to periodically inspect the Restoration in progress and upon
substantial completion.
(d) Condition to Release of Restoration Proceeds for Restoration. Lender
agrees to make the Restoration Proceeds available to Borrower for Restoration
as long as.
(i) The Restoration Proceeds recovered are less than the
outstanding principal balance of the Loan.
(ii) No Event of Default exists and no Event of Default then
exists under the Ply Gem Lease or Acceptable Replacement Lease, as applicable.
(iii) Borrower demonstrates to Lender's satisfaction that the
Restoration Proceeds are sufficient to pay in full the estimated cost to
complete Restoration and, if the Ply Gem Lease or an Acceptable Replacement
Lease is not in effect, any shortfalls in Operating Income as a result of such
Casualty or Condemnation that are anticipated until Restoration is substantially
completed, or, if the Restoration Proceeds are determined by Lender to be
insufficient to pay such costs in full, Borrower deposits with Lender, in cash
or by a cash equivalent acceptable to Lender, the additional amount estimated by
Lender to be necessary to pay the full cost of Restoration ("RESTORATION
DEFICIENCY DEPOSIT")
(iv) The Casualty or Condemnation has not occurred in the six (6)
months prior to the Maturity Date.
Ply Gem Industries
-39-
(v) Restoration can be completed not later than the earlier of (A)
twelve (12) months from the date the Casualty or Condemnation occurred, (B) the
earliest date by which completion is required under the Ply Gem Lease, or an
Acceptable Replacement Lease, (C) the earliest date by which completion is
required under the Requirements of Law to preserve the right to rebuild the
Improvements as they existed prior to the Casualty or Condemnation, (D) the
expiration of Borrower's business interruption insurance, or (E) six (6) months
prior to the Maturity Date.
(vi) If a Condemnation has occurred, less than 10% of the Land is
taken and the land taken is along the perimeter or periphery of the Land, and no
portion of the Improvements are taken.
(vii) If a Casualty has occurred, less than 25% of the total floor
area of the Improvements is damaged or rendered unusable by the Casualty and
Borrower demonstrates to Lender's satisfaction that a reasonable means of access
exists to the Property and within the Improvements unaffected by Casualty.
(viii) Borrower demonstrates to Lender's satisfaction that the Ply
Gem Lease or an Acceptable Replacement Lease, as applicable, will continue in
full force and effect without rent abatement following Restoration and that,
upon completion of Restoration, the net cash flow of the Property will be
restored to a level sufficient to cover all Operating Expenses of the Property,
including without limitation, supporting a Debt Service Coverage Ratio at least
equal to, or greater than 1.20 to 1.0.
(ix) The Property and its use after completion of Restoration will
be in compliance with and permitted under, all Requirements of Law.
(e) Disbursement Procedure; Holdback. If the Restoration Proceeds will be
made available by Lender to Borrower for Restoration and the estimated cost of
Restoration approved by Lender (together with all other amounts then held by
Borrower pursuant to this subsection (c)) is less than $250,000, Lender shall
disburse the entire amount of the Restoration Proceeds to Borrower or to Ply Gem
at the direction of Borrower, and Borrower hereby covenants and agrees to use,
or to cause Ply Gem to use, the Restoration Proceeds solely for Restoration
performed in accordance with this Loan Agreement. If, however, the estimated
cost of Restoration approved by Lender (together with all other amounts then
held by Borrower pursuant to this subsection (e)) is more than $250,000, Lender
may retain the Restoration Proceeds in a non-interest bearing escrow account and
make periodic disbursement to Borrower (or to Ply Gem at the direction of
Borrower) as follows:
(i) Disbursements for Restoration
(A) Lender will disburse Restoration Proceeds for the costs of
Restoration to, or as directed by, Borrower from time to time during the course
of the Restoration, upon receipt of evidence reasonably satisfactory to Lender
that (1) all materials
Ply Gem Industries
-40-
installed and work and labor performed in connection with the Restoration have
been paid in full (except to the extent that they are to be paid out of the
requested disbursement), and (2) there exist no notices of pendency,
stop orders, mechanic's or materialman' s liens or notices of intention to file
same, or any other Liens of any nature whatsoever on the Property arising out of
the Restoration which have not either been fully bonded and discharged of record
or, in the alternative, fully insured to Lender's reasonable satisfaction by the
title company insuring the Lien of the Security Instrument.
(B) Lender may limit disbursements to not more than one (1)
per month.
(C ) Lender may hold-back from each requested (disbursement an
amount equal to the greater of (1)ten percent (10%) of the requested
disbursement) or (2) the amount which Borrower is permitted to withhold under
its contract with the contractor or supplier to be paid with the proceeds of
such disbursement (either a "RESTORATION HOLDBACK"). Amounts held as the
Restoration Holdback shall be disbursed once: (1) Lender receives Substantially
evidence that Restoration has been substantially Completed (as defined below) in
accordance with all Requirements of Law; (2) Lender receives satisfactory
evidence that all Restoration costs have been paid in full or will be fully paid
from the remaining Restoration Proceeds and the Restoration Holdback; and (3)
Lender receives, at Lender's option, a search of title to the Property,
effective as of the date on which the restoration Holdback is to be disbursed,
showing no liens other than the permitted Encumbrances or an endorsement to its
Title Insurance Policy which updates the effective date of such policy to the
date on which the Restoration Holdback is to be disbursed and which shows no
Line since the date of recordation of the Security Instrument (other than the
permitted Encumbrances). As used herein, the term "SUBSTANTIALLY COMPLETED"
shall mean the completion of construction, except for miner details of
construction, decoration and mechanical adjustment, the non-completion of which
will not materially interfere with the use and occupancy of the Property for
normal business purposes.
(D) Notwithstanding subsection (C) above, Lender may release
from the Restoration Holdback payments to a contractor or supplier if: (1)
Lender receives satisfactory evidence that such contractor has satisfactory
completed its contract with Borrower; (2) such contractor or supplier delivers
to Lender an acceptable written waiver of its mechanic's lien, in recordable
form; and (3) Borrower provides written consent from the surety company, if any,
which has issued a payment or performance bond with respect to such contractor
or supplier.
(ii) Disbursements for Shortfalls in Operating Income. Provided that
Lender determines that the Restoration Proceeds are sufficient to pay in full
the estimated cost to complete Restoration Proceeds not reserved for Restoration
to pay the shortfall in Operating Income necessary to pay (A) first, the debt
service payments due from Borrower on each Payment Due Date falling due from the
date of the Casualty or Condemnation through the date on which Restoration is
substantially completed and (B)
Ply Gem Industries
-41-
provided the Ply Gem Lease has been terminated, and no Acceptable Replacement
Lease is them in effect, any Operating Expenses approved by Lender. Lender may
require satisfactory evidence that Operating Expenses to be paid have been
incurred any may issue payments directly to the Person entitled to the payment
claimed as an Operating Expense.
(iii) Restoration Proceeds Deemed Insufficient. If, in Lender's
reasonable judgment, at any time during Restoration, the undisbursed portion of
the Restoration Proceeds shall not be sufficient to pay the costs remaining for
Restoration to be completed or to pay any shortfall in Operating Income needed
to pay in full Borrower's debt service payments on the Loan and Operating
Expenses anticipated to be incurred during the period of Restoration, Borrower
shall deposit the deficiency with Lender, in cash or by a cash equivalent
acceptable to Lender (also called a "RESTORATION DEFICIENCY DEPOSIT"), within
ten (10) days after Lender's notice of such deficiency, and no further
disbursement of the Restoration Proceeds will be made until such funds are
deposited. Amounts held by Lender as the Restoration Deficiency Deposit shall be
held by Lender in an interest bearing account and shall be disbursed accordance
with this Section 9.04.
(iv) Consequence of Event of Default. If a default under the Ply Gem
Lease has occurred and is continuing or the Ply Gem Lease has been terminated
and no Acceptable Replacement Lease is in full force and effect or and Event of
Default beyond any applicable notice and/or cure period, Lender shall not be
obligated to disburse Restoration Proceeds or amounts from the Restoration
Holdback, and upon the occurrence of and Event of Default, any undisbursed
portion of the Restoration Proceeds (including the Restoration Deficiency
Deposit and the Restoration Holdback) may, at Lender's option, be applied
against the Loan, whether or not then due or accelerated, in such order and
manner as Lender determines.
(v) Surplus Restoration Proceeds After Restoration Completion. Any
Restoration Proceeds remaining after full payment of Restoration costs and
unpaid expenses due to Lender for which Lender is permitted reimbursement under
this Section 9.04 shall be released to Borrower provided no Event of Default
exists, and Borrower delivers evidence satisfactory to Lender that (i)
Restoration has been fully completed in accordance with all Requirements of Law
and (ii) the Property is free and clear of all Liens which may be asserted with
respect to the Restoration.
(f) If as a result of a Casualty or Condemnation, the tenant under the Ply
Gem Lease makes a rejectable offer under Paragraph 18 thereof, to terminate the
Ply Gem Lease as to any Related Premises ( as defined in the Ply Gem Lease )
which is accepted by Borrower, then upon satisfaction of the Casualty Release
Criteria (hereinafter defined), Lender shall deliver to Borrower a release or
partial release of the Security Instrument for the Related Premises with respect
to which the Ply Gem Lease is terminated (hereinafter the "AFFECTED PREMISES").
As used herein, the term "CASUALTY RELEASE CRITERIA" shall mean and refer to the
following: (i) Borrower shall have delivered to Lender a sum of money in
immediately available funds (the
Ply Gem Industries
-42-
"CASUALTY RELEASE AMOUNT" equal to 115% of the portion of the then current
outstanding principal balance of the Note allocated to the Affected Premises;
and (ii) the Borrower shall not then be in default hereunder or the other Loan
Documents beyond any applicable notice and/or cure period. Upon Lender's receipt
of the Casualty Release Amount, Lender shall apply such sum at par, without
prepayment penalty or premium or defeasance payment, to reduction of the
outstanding principal balance of the Note, and thereafter, at Lender's option in
its sole discretion, monthly payments due under the Note shall be recalculated
based upon the remaining outstanding Principal balance of the Note, the
remainder of the original amortization schedule of the Note and the remaining
term of the Loan. Borrower shall not reject any offer to terminate the Ply Gem
Lease with respect to an Affected Premises, without first obtaining the written
consent of Lender.
(g) Notwithstanding any provision of this Section 9.04 to the
contrary, provided that (i) the Ply Gem Lease remains in effect with Ply Gem as
the tenant thereunder, and (ii) Ply Gem is not in default beyond the expiration
of any applicable notice and cure period under the Ply Gem Lease, then (A) the
requirements of Section 9.04(d)(ii) hereof shall be deemed satisfied, unless a
monetary Event of Default or a material non-monetary Event of Default then
exists under the Note, this Loan Agreement or any of the other Loan Documents,
and (B) the requirements of Sections 9.04(d)(v), (vi), (vii) and hereof shall be
deemed satisfied, unless Lender has reasonably determined that the Restoration
cannot be reasonably completed on or before the date that is six (6) months
prior to the Maturity Date.
9.05. Inspections and Right of Entry. Subject to the terms of the Ply Gem
Lease, Lender and its agents may enter the Property upon prior notice to
Borrower (notice to be given unless an Event of Default or an emergency exists,
as determined by Lender in good faith) to inspect the Property and Borrower's
books and records relating to the Property. In making such entry and inspection,
Lender agrees to use reasonable efforts to minimize disturbance to Borrower and
tenants of the Property. Lender and its agents shall have access, at all
reasonable times, to the Property, including, without limitation, all contracts,
plans and specifications, permits, licenses and approvals required or obtained
in connection with the property.
9.06. Leases and Rents.
(a) Right to Enter into New Leases. Lender's prior written consent
shall be required for all Leases at the Property, which consent shall not be
unreasonably withheld, provided that Lender's consent shall not be required for
assignments and subleases which do not require the consent of the Borrower as
landlord under the Ply Gem Lease. Upon request, Borrower shall furnish Lender
with executed copies of all Leases. Lender acknowledges receipt and approval of
the Ply Gem Lease, which Ply Gem Lease shall constitute one of the Leases.
(b) Leasing Decisions. Borrower shall not: (i) amend or supplement
any Lease or waive any term thereof (including, without limitation, shortening
the lease term, reducing rents, granting rent abatements, or accepting a
surrender of all or any portion of the
Ply Gem Industries
- 43 -
leased space) without Lender's prior written consent, which shall not be
unreasonably withheld or delayed; (ii) cancel or terminate any Lease (or in the
case of the Ply Gem Lease, reject any termination offer); (iii) except to the
extent that such consent is not required under the Ply Gem Lease, consent to a
tenant's assignment of its Lease or subleasing of space without Lender's prior
written consent, which shall not be unreasonably withheld or delayed; or (iv)
amend, supplement, waive or terminate any Lease Guaranty without Lender's prior
written consent, which stall not be unreasonably withheld or delayed; provided
that none of the foregoing actions (taking into account the planned alternative
use of the affected space in the case of termination, rent reduction, surrender
of space or shortening of term) will have a Material Adverse Effect on the value
of the Property taken as a whole and such Lease, as amended, supplemented or
waived is otherwise in compliance with the requirements of Section 9.06 (a)
hereof; provided, however, that in all events Borrower shall have the right to
waive any default under Paragraph 22(a)(iv) and (v) of the Ply Gem Lease without
Lender's consent. Termination of a Lease (other than a Major Lease) with a
tenant who is in default beyond applicable notice and grace/cure periods shall
not be considered action which has a Material Adverse Effect on the value of the
Property taken as a whole. Any action with respect to any Lease that does not
satisfy the requirements set forth in this Section requires Lender's prior
written approval at Borrower's expense (including reasonable legal fees).
Borrower shall promptly deliver to Lender a copy of all instruments documenting
the action taken, together with written certification from a Responsible Officer
that (x) the copies delivered are true, complete and correct copies of the
materials represented thereby and (y) Borrower has satisfied all conditions of
this Section. Lender's acceptance of Borrower's certification or a copy of such
Lease materials shall not be deemed a waiver of the requirements of this Section
if the action taken is not in compliance herewith. Lender agrees that to the
extent any action by Ply Gem requires Lender's consent, such consent shall not
be unreasonably withheld or delayed. If Borrower submits to Lender a written
request for approval with respect to a proposed Lease (or a proposed extension,
modification or expansion of an existing Lease) and Lender fails to approve or
disapprove any such action within 15 Business Days after Lender receives from
Borrower such request together with a copy of the final version of such proposed
Lease(or proposed extension, modification or expansion of an existing Lease),
such action shall be deemed approved, provided that Lender will only be deemed
to have given such approval if, and only if, such request includes all to the
supporting documentation reasonably necessary for Lender to make a decision
regarding such request, as determined by Lender, and includes the following in
all capital, bolded, block letters on the first page thereof:
"THE FOLLOWING REQUEST REQUIRES A RESPONSE WITHIN 15 BUSINESS DAYS
OF RECEIPT. FAILURE TO DO SO WILL BE DEEMED AND APPROVAL OF THE
REQUEST."
(c) Observance of Lessor Obligations. Borrower (i) shall observe and
perform all obligations imposed upon the lessor under the Lease and shall not do
or permit to be done anything to impair the value of any of the Leases as
security for the Loan; (ii) upon Lender's request, shall promptly send copies to
Lender of all notices of default which Borrower
Ply Gem Industries
- 44 -
shall send or receive (or may have sent or received) under any non-residential
Lease; (iii) shall diligently enforce in a commercially reasonable manner all of
the material terms, covenants and conditions contained in the Leases to be
observed or performed by the tenant, including but not limited to those items
listed on Exhibit I to the Ply Gem Lease; provided, however, that Borrower may,
in its sole discretion, waive any breach by Ply Gem or any Acceptable
Replacement Tenant of any reporting requirement in the Ply Gem Lease or
Acceptable Replacement Lease, (iv) shall not collect any Rents more than one (1)
month in advance of the date when due under the Lease (and for this purpose a
security deposit shall not be deemed rent collected in advance and provided
further that rent under the Ply Gem Lease or Acceptable Replacement Lease may be
collected no more than three (3) months in advance); and (v) shall not execute
any assignment or pledge of the lessor's interest in any of the Leases or the
Rents (other than in connection with the Loan).
(d) Landlord Waivers. Lender acknowledges that Borrower may enter
into certain Landlord Waivers with respect to Ply Gem's equipment, personal
property and inventory located in, on and around the Property, and that Borrower
shall be entitled to enter into Landlord Waivers in the future without Lender's
consent so long as they are entered into in a form approved in advance by Lender
and in the normal course of business and contain customary provisions and
otherwise reasonably acceptable to Lender requiring the person, firm or entity
that finances and/or leases Ply Gem's FF&E to promptly remove Ply Gem's FF&E
within a reasonable period of time after a default occurs under the Ply Gem
Lease. In addition, Borrower shall be entitled to enter into a consent (and
Lender shall also execute such consent if requested by Borrower) to any
encumbrance by Ply Gem of its leasehold interest so long as such consent
contains reasonable and customary landlord protections. Lender has no obligation
to enter into a nondisturbance or recognition agreement with any such leasehold
mortgagee unless and until such time as such leasehold mortgagee shall succeed
to the interest of Ply Gem under the Ply Gem Lease, in which case Mortgagee
shall enter into a subordination, nondisturbance and attornment agreement
substantially the same in form and substance to the subordination,
nondisturbance and attornment agreement entered into among Borrower, Ply Gem and
Lender in connection with the closing of the Loan, so long as any and all
monetary defaults under the Ply Gem Lease have been cured by such leasehold
mortgagee.
9.07. Use of Property. Subject to the rights of Ply Gem under the
Ply Gem Lease, Borrower shall not allow changes in the use of the Property
without Lender's prior written consent, which shall not be unreasonably
withheld, delayed or conditioned as to uses permitted by law and under zoning.
Borrower shall not initiate, join in, or consent to any change in any private
restrictive covenant or zoning or land use ordinance limiting or defining the
uses which may be made of the Property. If use of all or any portion of the
Property is or shall become a nonconforming use, Borrower will not cause or
permit the nonconforming use to be discontinued or the nonconforming portion of
the Property to be abandoned without Lender's prior written consent.
Ply Gem Industries
- 45 -
9.08. Maintenance of Property. Borrower shall maintain or cause Ply Gem or
any Acceptable Replacement Tenant to maintain the Property in a good and safe
condition and repair. No portion of the Property shall be removed, demolished or
materially altered (except for normal repair or replacement or, with respect to
the Personal Property belonging to Ply Gem, as otherwise permitted by the terms
of the Ply Gem Lease) without Lender's prior written consent, which consent
shall not be unreasonably withheld, delayed or conditioned. Unless the Ply Gem
Lease is in effect and Ply Gem makes a termination offer pursuant to the terms
of Paragraph 18 of the Ply Gem Lease, which termination offer shall be
sufficient for and shall be used to pay the applicable portion of the Loan in
strict accordance with Section 9.04(f) of this Loan Agreement or to substitute a
Property pursuant to Article 19 of this Loan Agreement, which Substitution
Property Borrower shall maintain, or cause Ply Gem or any Acceptable Replacement
Tenant to maintain, the Substitution Property in a good and safe condition and
repair, Borrower shall promptly repair or replace any portion of the Property
(or cause the prompt performance thereof) which may become damaged, worn or
dilapidated.
9.09. Waste. Borrower shall not commit or suffer any waste of the
Property or do or permit to be done thereon anything that may in any way impair
the value of the Property in any material respect (in Lender's sole good faith
judgment) or invalidate the insurance coverage required hereunder to be
maintained by Borrower. Borrower will not, without Lender's prior written
consent, permit any drilling exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Property,
regardless of the depth thereof or the method of mining or extraction thereof.
9.10. Compliance with Laws.
(a) Obligation to Perform. Borrower shall promptly and fully comply
with, or cause to be complied with, in all material respects, all Requirements
of now or hereafter affecting the Property. Borrower shall notify Lender
promptly of Borrower's knowledge or receipt of any notice related to a violation
of any Requirements of Law or of the commencement of any proceedings or
investigations which relate to compliance with Requirements of Law. At Lender's
request, Borrower shall provide Lender with copies of all notices, reports or
other documents relating to any litigation or governmental investigation
relating to Borrower or the Property.
(b) Right to Contest. After prior written notice to Lender,
Borrower, at its own expense, may contest or permit Ply Gem or an Acceptable
Replacement Tenant to contest by appropriate legal proceedings, promptly
initiated and conducted in good faith and with due diligence, the Requirements
of Law affecting the Property or alleged violation thereof, provided that: (i)
no Event of Default exists; (ii) such proceedings shall be permitted under and
be conducted in accordance with the Requirements of Law; (iii) the Property will
not be in danger of being sold, forfeited, terminated, cancelled or lost; (iv)
non-compliance with such Requirement of Law shall not impose any civil, criminal
or environmental liability on Lender or Borrower; (v) if requested by Lender,
Borrower deposits with Lender cash (or other security
Ply Gem Industries
- 46 -
'
acceptable to Lender) in such amount as Lender deems sufficient to cover loss
or damage that may result from Borrower's failure to prevail in such contest,
provided that after a Securitization, one hundred twenty-five percent (125%) of
the amount estimated by Lender is deposited; (vi) Borrower furnishes to Lender
all other items reasonably requested by Lender, and (vii) upon a final
determination thereof, Borrower promptly complies with the obligations
determined to be applicable.
9.11. Financial Reports, Books and Records.
(a) Delivery of Financial Statements. Borrower shall keep adequate
books and records of accounts with respect to its financial condition and the
operation of the Property, in accordance with GAAP consistently applied (or such
other method which is reasonably acceptable to Lender), and shall furnish the
following to Lender, each prepared in such detail as reasonably required by
Lender and certified by a Responsible Officer to be true, complete and correct:
(i) as soon as available, but in any event within thirty (30)
days after the end of each fiscal quarter, a quarterly Rent Roll providing the
required information as of end of such fiscal quarter;
(ii) if at any time the Ply Gem Lease or an Acceptable
Replacement Lease is not in effect, as soon as available, but in any event
within thirty (30) days after the end of each fiscal quarter, a quarterly
operating statement for the Property detailing the operating income received,
operating expenses incurred by Borrower, the cost of all Immediate Repairs,
Replacements and Tenant Improvements and Leasing Commissions performed or paid
by Borrower during such quarter;
(iii) as soon as available, but in any event within ninety (90)
days after the close of Borrower's fiscal year, (A) an annual Rent Roll,
presented on an annual basis consistent with the quarterly Rent Rolls described
above; and (B) an annual balance sheet and profit and loss statement for
Borrower;
(iv) if at any time the Ply Gem Lease or an Acceptable
Replacement Lease is not in effect, as soon as available, but in any event at
least thirty(30) days prior to the start of each calendar year, an annual
operating budget for the Property presented on a monthly basis consistent with
the information required in the quarterly operating statement described above
which budget shall be subject to Lender's approval (each such budget as
approved, the "APPROVED BUDGET"); and
(v) if at any time the Ply Gem Lease or an Acceptable Replacement
Lease is not in effect, such other financial information or property management
information including, without limitation, copies of Borrower's state and
federal tax returns, information on tenants under Leases to the extent such
information is available to Borrower, and an accounting of security deposits) as
may reasonably be required by Lender from time to time.
Ply Gem Industries
- 47 -
Notwithstanding anything to the contrary in this Section 9.11, if such items
requested pursuant to Section 9.11(a)(i)-(v) are delivered at any other than
that required under Section 9.11(a)(i)-(v) to Borrower by Ply Gem or an
Acceptable Replacement Tenant, Borrower will deliver said items to Lender within
ten (10) days of its receipt thereof and Borrower shall upon Lender's request
obtain from Ply-Gem or an Acceptable Replacement Tenant said items of other
financial information as may be required under the Ply Gem Lease or a
Replacement Lease and deliver a copy thereof to Lender promptly upon receipt.
(b) Lender Audit Rights. Lender and its agents have the right, upon
prior written notice to Borrower (notice to be given unless an Event of Default
exists), to examine the records, books and other papers which reflect upon
Borrower's financial condition or pertain to the income, expense and management
of the Property and to make copies and abstracts from such materials. Lender
also shall have the right, from time to time (but, in the absence of an Event of
Default, existing, not more than annually and upon prior notice to Borrower
(notice to be given unless an Event of Default exists), to have an independent
audit conducted of any of Borrower's financial information. Lender shall pay the
cost of such audit unless Lender performed the audit following the occurrence of
an Event of Default to if the results of Lender's audit disclose an error by
more than ten percent (10%), in which case (and in addition to Lender's other
remedies) Borrower shall pay the cost incurred by Lender with respect to such
audit upon Lender's demand. Upon Borrower's failure to pay such amounts, and in
addition to Lender's remedies for Borrower's failure to perform, the unpaid
amounts shall be added to principal, shall bear interest at the Default Rate
until paid in full, and payment of such amounts shall be secured by the Security
Instrument and other collateral given to secure the Loan.
(c) Financial Reports from Guarantors and SPE Equity Owner. Borrower
shall cause each Guarantor and, at Lender's request, the SPE Equity Owner, to
provide to Lender (i) within one hundred twenty (120) days after the close of
such party's fiscal year, such party's balance sheet and profit and loss
statement (or if such party is an individual, within ninety (90) days after the
close of each calendar year, such party's personal financial statements) in form
reasonably satisfactory to Lender and prepared by a "big four" accounting firm
or another national or regional accounting firm reasonably acceptable to Lender;
and (ii) such additional financial information (including, without limitation,
copies of state and federal tax returns) as Lender may reasonably require from
time to time and in such detail as reasonably required by Lender.
(d) Data Delivery Failure. If a Data Delivery Failure occurs,
Borrower shall pay Lender, without demand, the applicable Data Delivery failure
fee on the first Business Day following each occurrence of a Data Delivery
Failure . The collection of the Data Delivery Failure Fee shall be in addition
to Lender's other rights and remedies under the Loan Documents and, until paid,
shall be deemed added to the Debt, secured by the Security Instrument and shall
bear interest at the Default Rate.
Ply Gem Industries
- 48 -
9.12. Performance of Other Agreements. Borrower shall observe and perform (or
cause to be observed and performed) in a timely manner each and every obligation
to be observed or performed by Borrower pursuant to the terms of any agreement
or recorded instrument affecting or pertaining to the Property or, if Borrower
is a party, used in connection with the operation of the Property (including,
without limitation, the Operating Agreements). Without limiting the foregoing.
Borrower shall (a) give prompt notice to Lender of any notice received by
Borrower with respect to any of the Operating Agreements which alleges a default
or nonperformance by Borrower thereunder, together with a complete copy of any
such notice; (b) enforce, short of termination, performance of the Operating
Agreements to be performed or observed, and (c) not terminate or amend, or waive
compliance with, any of the Operating Agreements without Lender's prior written
consent (which shall not be unreasonably withheld or delayed), except as may be
(i) permitted pursuant to the respective terms thereof or (ii) absent the
existence of an Event of Default, done in the ordinary course of business. If
the absence of an Operating Agreement that has terminated will have a Material
Adverse Effect on the value of the Property, Borrower agrees to enter into a new
Operating Agreement in replacement of the terminated Operating Agreement,
containing terms and conditions no less favorable to Borrower than the
terminated Operating Agreement. Borrower shall notify Lender if Borrower does
not replace the terminated Operating Agreement.
9.13. Existence; Change of Name; Location as a Registered Organization. Borrower
shall continuously maintain (a) its existence and shall not dissolve or permit
its dissolution, and (b) its rights and franchises to do business in any state
where the Property is located. Borrower shall not change Borrower's name, legal
entity, or its location as a registered organization within the meaning of the
UCC, without notifying Lender of such change in writing at least thirty (30)
days prior to its effective date, provided, however, that with respect to
Borrower's name change,Borrower shall have thirty(30) days to cure and notify
Lender of said name change. The notification requirements set forth in this
Section are in addition to, and not in limitation of, the requirements of
Article 7. Borrower shall pay all costs and expenses incurred by Lender
(including, without limitation, reasonable legal fees) in connection with any
change described herein.
9.14. Property Management.
(a) Borrower shall cause any Property Manager to manage the Property in the
manner in which it is currently being maintained. Borrower shall not remove or
replace the Property Manager (which, with respect to a Property Manager which is
an Affiliate of Borrower, shall be deemed to occur upon a change of Control of
the Property Manager) or modify or waive any material terms of the Property
Management Contract without Lender's prior written consent, which shall not be
unreasonably withheld or delayed, and, if requested by Lender, a Rating
Confirmation. Upon replacement of the Property Manager, Borrower shall, and
shall cause the new manager of the Property to, execute an Assignment of
Property Management Contract in form and substance similar to the Assignment of
Property Management Contract executed by the Property Manager. Borrower shall
comply with all obligations of Borrower under the
Ply Gem Industries
- 49 -
Assignment of Property Management Contract. The property management fee and all
other fees payable under the Property Management Contract shall not exceed three
percent [3%] of gross revenues. Notwithstanding the foregoing, Borrower shall be
permitted to manage the property so long as no management fees are paid to
Borrower, Borrower is managing the Property in the manner that the property is
maintained as of the date hereof, and the Debt Service Coverage Ratio is not
less than 1.20 to 1.0. If Borrower ceases self-management and engages a
third-party manager for the Property, Borrower shall comply with all of the
provisions hereof regarding replacement of the Property Manager, including
without limitation, the execution of an Assignment of Property Management
Contract on Lender's then standard form and Lender acknowledges that Ply Gem
currently self-manages the Property.
(b) Termination of Property Manager. Irrespective of whether an
Event of Default has occurred, Borrower agrees, that if (a) Lender, in its
reasonable discretion, determines that the Property is not being properly
managed in accordance with management practices customarily employed for
properties similar to the Property, or (b) Property Manager becomes insolvent,
then Lender may deliver written notice to Borrower and Property Manager, which
notice shall specify in reasonable detail the grounds for Lender's
determination. If Lender reasonably determines that the conditions specified in
Lender's notice are not remedied to Lender's reasonable satisfaction by Borrower
or Property Manager within thirty (30) days from receipt of such notice, or if
Borrower or Property Manager have failed to diligently undertake correcting such
conditions within such thirty (30) day period, Lender may direct Borrower to
terminate the Property Management Contract and/or cease self-management and
replace Property Manager with a management company acceptable to Lender.
9.15. ERISA. Borrower shall not engage in any transaction which would
cause any obligation or action taken or to be taken hereunder by Borrower (or
the exercise by Lender of any of its rights under any of the Loan Documents) to
be a non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA. Borrower agrees to deliver to Lender such
certifications or other evidence throughout the term of the Loan as requested by
Lender in its sole discretion to confirm compliance with Borrower's obligations
under this Section 9.15 or to confirm that Borrower's representations and
warranties regarding ERISA remain true.
9.16. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws. Borrower shall comply with all Requirements of Law relating to
money laundering, anti-terrorism, trade embargos and economic sanctions, now or
hereafter in effect. Without limiting the foregoing, Borrower shall not take any
action, or permit any action to be taken, that would cause Borrower's
representations and warranties in Section 8.28 of this Loan Agreement to become
untrue or inaccurate at any time during the term of the Loan. Borrower shall
notify Lender promptly of Borrower's actual knowledge that the representations
and warranties in Section 8.28 of this Loan Agreement may no longer be accurate
or that any other violation of the foregoing Requirements of Law has occurred or
is being investigated by Governmental Authorities. In connection with such an
event, Borrower shall comply with all
Ply Gem Industries
- 50 -
Requirements of Law and directives of Governmental Authorities and, at Lender's
request, provide to Lender copies of all notices, reports and other
communications exchanged with, or received from, Governmental Authorities
relating to such event. Borrower shall also reimburse Lender for any expense
incurred by Lender in evaluating the effect of such an event on the Loan and
Lender's interest in the collateral for the Loan, in obtaining any necessary
license from Governmental Authorities as may be necessary for Lender to enforce
its rights under the Loan Documents, and in complying with all Requirements of
Law applicable to Lender as the result of the existence of such an event and for
any penalties or fines imposed upon Lender as a result thereof.
ARTICLE 10
NO TRANSFER OR ENCUMBRANCES; DUE ON SALE
10.01. Prohibition Against Transfers. Borrower shall not permit any
Transfer to be undertaken or cause any Transfer to occur other than a Permitted
Transfer. Any Transfer made in violation of this Loan Agreement shall be void.
10.02. Lender Approval.
(a) Lender's decision to approve any Transfer proposed by Borrower
shall be made in Lender's sole discretion and Lender shall not be obligated to
approve any Transfer. Notwithstanding the foregoing, Lender will not
unreasonably withhold its consent two (2) times during the term of the Loan to a
transfer or sale (but not a pledge, mortgage, assignment, encumbrance or other
transfer as security for an obligation) of the Property and Borrower's
obligations under the Loan Documents, provided Borrower satisfies all of the
conditions set forth in this Section 10.02. Borrower agrees to supply all
information Lender may request to evaluate a Transfer, including, without
limitation,information regarding the proposed transferee's ownership
structure, financial condition and management experience for comparable
properties. Borrower acknowledges that Lender may impose conditions to its
approval of a Transfer, including, without limitation, (i) no Event of Default,
or an event which with the giving of notice or lapse of time or both could
become an Event of Default, has occurred and is continuing, or no default under
the Ply Gem Lease has occurred and is continuing, (ii) approval of the proposed
transferee's ownership structure, financial condition and management experience
for comparable properties, (iii) payment of an assumption fee equal to one
percent (1%) of the outstanding principal balance of the Loan, except that with
respect to any Transfer of the Property to an Affiliate of Borrower, the
assumption fees shall be waived, (iv) adding guarantors or changing the scope of
the Guaranty, (v) assumption in writing (acceptable to Lender in its sole
discretion) by the transferee and a guarantor (which guarantor must be
acceptable to Lender in its sole discretion) of all obligations of the
transferor and the Guarantor under the Loan Documents and execution and delivery
of such other documentation as may be required by Lender and the Rating
Agencies, (vi) delivery of a new substantive consolidation opinion, a tax
opinion and other applicable opinions as required by Lender and the Rating
Agencies, (vii) adjusting amounts
Ply Gem Industries
- 51 -
required for the Reserve Accounts, and (viii) obtaining Rating Confirmations if
a Securitization has occurred. In connection with such transfer, if a transferee
of creditworthiness acceptable to Lender, in its sole discretion, assumes all
obligations of Corporate Property Associates 16 Global Incorporated pursuant to
an assumption agreement and executes an Environmental Indemnity and Guaranty of
Recourse Obligations of Borrower acceptable to Lender in its sole discretion,
then from and after the date of such assignment, Lender shall release Corporate
Property Associates 16 Global Incorporated from all obligations thereafter
accruing under the Loan Documents, but not for obligations under the Loan
Documents which accrued prior to the date of the transfer.
(b) Notwithstanding any provision of this Article 10 to the
contrary, and provided that no Event of Default has occurred and is continuing
under the Loan Documents, Borrower and Corporate Property Associates 16 Global
Incorporated shall be permitted at any time and from time to time to transfer or
convey (through merger or otherwise) their interests in Borrower and Borrower
shall be entitled to transfer the Property, as applicable, to any Affiliate of
either of them, provided that following the transfer any new guarantor or
guarantors shall satisfy the Net Worth Requirement, without payment of any
prepayment or transfer fee so long as such transfer does not result in a
downgrade, qualification or withdrawal of the Securities and provided that any
transferee of the Property is a single purpose, bankruptcy remote entity (based
upon Lender's review of the transferee's organizational structure, and as
evidenced by a non-consolidation opinion to be delivered at Lender's request and
in form and substance reasonably acceptable to Lender). As used herein, the term
"AFFILIATE" refers to another W.P. ▇▇▇▇▇ Parent (as hereinafter defined) or to
an entity which controls, is controlled by or is under common control with
Corporate Property Associates 14 Incorporated, Corporate Property Associates 15
Incorporated, Corporate Property Associates 12 Incorporated, or their
successors, or the Guarantor or any other funds which is a member of the W.P.
▇▇▇▇▇ family of funds (each, a "W.P. ▇▇▇▇▇ PARENT"). In connection with the
transfer of the Property or interests in Borrower to any Affiliate, if the W.P.
▇▇▇▇▇ Parent of such Affiliate (i) assumes all of the obligations of Corporate
Property Associates 16 Global Incorporated pursuant to an assumption agreement
satisfactory to Lender, in its sole discretion, which assumption agreement
provides, among other things for the assumption of all liabilities of whatever
nature in connection with the Loan accruing from and after the date of such
transfer, and for waivers of any and all defenses in connection with such
liabilities and obligations under the Loan Documents and in connection with the
assumption and (ii) such transferee delivers to Lender an opinion of counsel as
to the enforceability of such assumption and the waivers of defenses thereunder,
and a non-consolidation opinion, each in form and substance satisfactory to
Lender, in its sole discretion, then upon such transfer, Lender shall release
Corporate Property Associates 16 Global Incorporated from all liabilities under
the Loan Documents which arise with respect to matters that occur after, but not
prior to, such transfer, and (iii) the new W.P. ▇▇▇▇▇ Parent satisfies the Net
Worth Requirement. Borrower agrees to pay all of Lender's expenses incurred in
connection with reviewing and documenting a Transfer (including, without
limitation, the costs of obtaining Rating Confirmations if required), which
amounts must be paid by Borrower whether or not the proposed Transfer is
approved, if approval is required. Upon Borrower's
Ply Gem Industries
- 52 -
failure to pay such amounts, and in addition to Lender's remedies for Borrower's
failure to perform, the unpaid amounts shall be added to principal, shall bear
interest at the Default Rate until paid in full, and payment of such amounts
shall be secured by the Security Instrument and other collateral given to secure
the Loan.
10.03. Borrower Right to Partial Releases.
(a) Right to Release. After the Open Date, Borrower shall have the
right, from time to time, to obtain a partial release ("PARTIAL RELEASE") of a
Release Property from the Security Instrument, Assignment of Leases and Rents
and related UCC financing statements. Borrower must provide at least thirty
(30), but no more than sixty (60) days prior written notice to Lender requesting
a Partial Release and identifying the Release Property and date upon which it
desires to have the Release Property released ("PARTIAL RELEASE DATE"). Prior to
Lender's agreement to a Partial Release, each of the following conditions must
be satisfied to Lender's reasonable satisfaction:
(i) No Event of Default shall have occurred and be continuing
at the time Borrower requests a Partial Release or on the Partial Release Date.
(ii) On or before the Partial Release Date, Borrower shall
deliver to Lender the Defeasance Collateral in an amount calculated on
the basis of the Partial Release Price allocated to the Release Property.
(iii) As of the Partial Release Date, and after giving effect
to the Partial Release to occur on such date the Loan to Value Ratio for the
remaining Property is no more than sixty-five percent (65%), as determined by
Lender.
(iv) As of the Partial Release Date, and, after giving effect
to the Partial Release to occur on such date, the Debt Service Coverage Ratio
for the remaining Property is at least 1.20:1.00 for the twelve (12) month
period immediately preceding the Partial Release with respect to the Remaining
Property after giving effect to the Partial Release; all as determined by Lender
in its sole discretion.
(v) Borrower has delivered to Lender forms of all documents
necessary to release the Release Property from the liens created by the Security
Instrument, Assignment of Rents and Leases and related UCC financing statements,
each in appropriate form required by the state in which the Release Property is
located and otherwise satisfactory to Lender in all respects.
(vi) Borrower shall deliver to Lender confirmation, in form
and substance satisfactory to Lender, that all conditions of partial Defeasance
have been met from any applicable Rating Agency that has required as a condition
to such partial Defeasance that such conditions have been met.
Ply Gem Industries
- 53 -
(vii) Borrower has complied with the terms and conditions of
this Article 10 and Section 2.05 hereof, satisfactory to Lender in all respects.
(viii) Borrower has delivered a certificate from a Responsible
Officer certifying that the requirements set forth in this Section 10.03 have
been satisfied in all material respects.
(ix) Borrower has paid all amounts then due and unpaid under
the Loan Documents through (and including) amounts due on the Release Date and
in connection with the Partial Release.
(x) Lender shall have received a copy of a deed conveying all
of Borrower's right, title and interest in and to the Release Property to an
entity other than Borrower and any SPE Equity Owner and a letter from Borrower
countersigned by a title insurance company acknowledging receipt of such deed
and agreeing to record such deed in the real estate records of the appropriate
recording office in which the Release Property is located.
(b) Reimbursement of Lender Expenses. Borrower agrees to pay all of
Lender's expenses incurred in connection with reviewing and documenting such
Partial Release (including, without limitation, the costs of obtaining Rating
confirmations if required by Lender), which amounts must be paid by Borrower
whether or not the proposed Partial Release is approved or executed. Upon
Borrower's failure to pay such amounts, and in addition to Lender's remedies for
Borrower's failure to perform, the unpaid amounts shall be added to principal,
shall bear interest at the Default Rate until paid in full and payment of such
amounts shall be secured by the Security Instrument and other collateral given
to secure the Loan.
(c) Liens of Security Instrument Otherwise Unaffected. No Partial
Release granted by Lender shall, in any way, impair or affect the lien or
priority of the Security Instrument relating to the portion of the Property not
included in the Partial Release or improve the position of any subordinate
lienholder with respect thereto, except to the extent that the obligations
hereunder shall have been reduced by the actual monetary consideration, if any,
received by Lender for such Partial Release. This Security Instrument shall
continue as a Lien and security interest on the portion of the Property not
included in a Partial Release.
10.04 Other Releases of the Mortgaged Property. In addition to the rights
granted to Borrower under Section 10.03 with respect to the Release Properties,
Lender may release other portions of the Property for such consideration and
upon such conditions as Lender may require without, as to the remainder of the
Property, in any way impairing or affecting the Lien or priority of the Security
Instrument or improving the position of any subordinate lienholder with respect
thereto, except to the extent that the obligations hereunder shall have been
reduced by the actual monetary consideration, if any, received by Lender for
such release, and Lender may accept by assignment, pledge or otherwise any other
property in place thereof as Lender may require without being accountable for so
doing to any other lienholder. Notwithstanding
Ply Gem Industries
-54-
anything to the contrary herein, Borrower shall have no right to request and
Lender shall have no obligation to grant its consent to any release pursuant
this Section 10.04.
10.05. OFAC Compliance; Substantive Consolidation Opinion. Notwithstanding
anything to the contrary contained in this Section 10, (a) no transfer (whether
or not such transfer shall constitute a Transfer) shall be made to any Person on
the OFAC list and (b) in the event any transfer (whether or not such transfer
shall constitute a Transfer) results in any Person owning in excess of
forty-nine percent (49%) of the ownership interest Borrower or any SPE Equity
Owner, Borrower shall, prior to such transfer, deliver a new substantive
consolidation opinion letter with respect to the new equity owners which is
acceptable in all respects to Lender and to the Rating Agencies if a
Securitization has occurred.
ARTICLE 11
EVENTS OF DEFAULT; REMEDIES
11.01. Events of Default. The occurrence of any one or more of the
following events shall, at Lender's option, constitute an "Event of Default"
hereunder:
(a) If any payment of principal and interest is not paid in full on
or before the fifth (5th) day after the Payment Due Date on which such payment
is due (e.g., if the Payment Due Date is the 1st day of month, and Event of
Default occurs if the payment is not received on or before the fifth (5th) day
of the month);
(b) If any monthly payment required to be made to a Reserve Account
is not paid in full on or before the fifth (5th) day after the Payment Due Date
on which such payment is due;
(c) if unpaid principal, accrued but unpaid interest and all other
amounts outstanding under the Loan Documents are not paid in full on or before
the Maturity Date;
(d) If an "Event of Default" as that term is defined under any other
Loan Document has occurred;
(e) If any representation of warranty made by Borrower, SPE Equity
Owner or any Guarantor herein, in the Guaranty, in the Environmental Indemnity
or in any other Loan Document, or in any certificate, report, financial
statement or other instrument or document furnished to Lender in connection
herewith or hereafter, or in connection with any request for consent by Lender
made during the term of the Loan shall have been false or misleading in any
material respect as of the date made and results in a material adverse effect or
Lender's sole discretion may result in a material adverse effect;
Ply Gem Industries
-55-
(f) If Borrower, SPE Equity Owner or any Guarantor shall (i) make an
assignment for the benefit of creditors; (ii) generally not be paying its debts
as they become due; or (iii) admit in writing its inability to pay its debts as
they become due;
(g) If (i) Borrower, SPE Equity Owner or any Guarantor shall
commence any case, proceeding or other action under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors (A) 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 of its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it for all or any
substantial part of its assets; or (ii) there shall be commenced against
Borrower, SPE Equity Owner or any Guarantor any case, proceeding or other action
of a nature referred to in clause (i) above by any party other than Lender which
(A) results in the entry of an order for relief or any such adjudication or
appointment, or (B) remains undismissed, undischarged or unbonded for a period
of ninety (90) days; or (iii) there shall be commenced against Borrower, SPE
Equity Owner or any Guarantor any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
any order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within ninety (90) days from the entry thereof;
or (iv) Borrower, SPE Equity Owner or any Guarantor shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above;
(h) Any final, non-appealable judgment for monetary damages is
entered against Borrower, SPE Equity Owner or any Guarantor which, in Lender's
sole opinion applied in a commercially reasonable manner, has a Material Adverse
Effect or is not covered to Lender's satisfaction by collectible insurance
proceeds;
(i) If Borrower or SPE Equity Owner violates or fails to comply with
any provision of Article 7 of this Loan Agreement (captioned: Single Purpose
Entity Requirements);
(j) If Borrower violates or fails to comply with any of the
provisions of Section 9.03 (captioned: Insurance), Section 9.06 (captioned:
Leases and Rents), or upon expiration of any applicable notice and cure periods,
Section 9.13 (captioned: Existence, Change of Name or Location as a Registered
Organization); provided that with respect to a violation of Section 9.03, it
shall not be an Event of Default if any policy of insurance is cancelled for
non-payment of premium if (A) Lender has required that insurance premiums be
deposited with Lender pursuant to Section 4.03 hereof and Borrower has timely
deposited with Lender sums sufficient to pay the premiums for such policies, and
(B) the failure to keep the policy in full force and effect is due solely to
Lender's failure to make a timely disbursement of funds to pay the premiums due
on the Policy when Lender is required to do so under this Loan Agreement;
Ply Gem Industries
-56-
(k) If a Transfer (other than a Permitted Transfer) shall occur
without Lender's prior written consent or in violation of the terms of Lender's
consent;
(l) If Borrower abandons or ceases work on any Immediate Repair,
Replacement or Tenant Improvement for a period of more than twenty (20) days,
unless such cessation results from causes beyond the reasonable control of
Borrower and Borrower is diligently pursuing reinstitution of such work;
(m) If a Lien other than a Permitted Encumbrance is filed against
the Property and not removed, insured against or bonded over within thirty (30)
days after the filing thereof, unless such Lien is promptly contested in good
faith by Borrower as permitted in accordance with Section 9.02(b);
(n) If Corporate Property Associates 16 Global Incorporated
("GUARANTOR") fails on the last day of any fiscal quarter to maintain (x) an
aggregate minimum net worth of at last Twenty-five Million Dollars
($25,000,000.00) an (y) aggregate cash and/or marketable securities (which for
purposes hereof shall include, without limitation, short term investments of
less than one year) of at least One Million Seven Hundred Sixty-five Thousand
and 00/100 Dollars ($l,765,000.00), as determined by Lender in its reasonable
discretion ((x) and (y) collectively, the "NET WORTH REQUIREMENT"), and within
sixty(60) days from the date Lender notifies Borrower of such failure, Guarantor
fails either to (I) deliver to Lender evidence satisfactory to Lender that
Guarantor has attained the Net Worth Requirement, or (II) do each of the
following (a) identify for Lender an additional guarantor whose net worth
(as determined by Lender in its sole discretion is, at such time, at
least equal to the difference between the net worth of Guarantor, and
Twenty-Five Million Dollars ($25,000,000.00) and the difference between the cash
and/or marketable securities (which for purposes hereof shall include, without
limitation,. short term investments of less than one year) of Guarantor and One
Million Seven Hundred Sixty-five Thousand Dollars ($1,765,000.00), (b) cause
such additional guarantor to execute and deliver to Lender (i) a guaranty of
Borrower's recourse obligations under the Note and the other Loan Documents and
(ii) an environmental indemnity agreement, each on substantially the same form
as the Guaranty of Recourse Obligations of Borrower and Environmental Indemnity
Agreement executed by Guarantor, concurrently herewith; (c) execute and deliver,
and/or cause to be executed and delivered, as applicable, such other amendments
and modifications to and reaffirmations of the Loan Documents as Lender may
reasonably require; and (d) deliver opinions of counsel with respect to said
additional Guarantor, such additional guaranty and environmental indemnity, and
any such amendments and modifications to and reaffirmations of the Loan
Documents as Lender may reasonably required;
(o) lf Borrower fails to pay the Prohibited Prepayments Fee when
required; or
(p) Except for the specific defaults set forth in this Section
11.01, if any other default occurs hereunder or under any other Loan Document
which is not cured (i) in the case of any default which can be cured by the
payment of a sum of money, within five (5) days after
Ply Gem Industries
-57-
written notice from Lender to Borrower, or (ii) in the case of any other
default, within thirty(30) days after written notice from Lender to Borrower;
provided that if a default under clause(ii) cannot reasonably be cured within
such thirty (30) day period and Borrower has responsibly commenced to cure such
default promptly upon notice thereof from Lender and thereafter diligently
proceeds to cure same, such thirty (30) day period shall be extended for so long
as it shall require Borrower, in the exercise of due diligence, to cure such
default, but in no event shall the entire cure period be more than one hundred
five (105) days (except that with respect to a default under the Environmental
Indemnity Agreement which requires remediation, the cure period shall be
extended without limitation so long as Borrower is in the exercise of due
diligence, to cure such default in accordance with the requirements of
applicable Environmental Laws, and Lender may, at Borrower's cost, retain an
environmental consultant to review Borrower's actions in attempting to cure any
default hereunder and advise Lender as to whether, in the opinion of the
environmental consultant, Borrower is proceeding to cure such default with due
diligence in accordance with said Environmental Laws.
11.02. Remedies. If an Event of Default occurs, and any applicable grace
or cure period expires without cure having been completed, Lender may,
at its option, and without prior notice or demand, do and hereby is authorized
and empowered by Borrower so to do, any or all of the following:
(a) Acceleration. Lender may declare the entire unpaid principal
balance of the Loan to be immediately due and payable. If such acceleration
takes place prior to the Open Date, an amount equal to the Prohibited Prepayment
Fee shall be added to balance of the Debt.
(b) Recovery of Unpaid Sums. Lender may, from time to time, take
legal action to recover any sums as the same become due, without regard to
whether or not the Loan shall be accelerated and without prejudice to Lender's
right thereafter to accelerate the Loan or exercise any other remedy, if such
sums remain uncollected.
(c) Foreclosure. Lender may institute proceedings, judicial or
otherwise, for the complete or partial foreclosure of the Security Instrument or
the complete or partial sale of the Property under power of sale or under any
applicable provision of law. In connection with any such proceeding Lender may
sell the Property as an entirely or in parcels or units and at such times and
place (at one or more sales) and upon such terms as it may deem expedient unless
prohibited by law from so acting.
(d) Receiver. Lender may apply for the appointment of a receiver,
trustee, liquidator or conservator of the Property, without regard for the
adequacy of the security for the Debt or a showing of insolvency, fraud or
mismanagement the part of Borrower. Any receiver or other party so appointed has
all powers permitted by law which may be necessary or usual in such cases for
the protection, procession, control, management and operation of the Property.
Borrower hereby consent, to the extent permitted under applicable law, to the
appointment of a
Ply Gem Industries
-58-
receiver or trustee of the Property upon Lender's request if an Event of
Default has occurred. At Lender's option, such receiver or trustee shall serve
without any requirement of posting a bond.
(e) Recovery of Possession. Subject to the Requirements of Law and
the rights of Ply Gem under the Ply Gem Lease or the rights of any Acceptable
Replacement Tenant under an Acceptable Replacement Lease, Lender may enter into
or upon the Property, either personally or by its agents, and dispossess and
exclude Borrower and its agents and servants therefrom (without liability for
trespass, damages or otherwise), and take possession of all books, records and
accounts relating to the Property, and Borrower agrees to surrender possession
of the Property and all other Property, including without limitation, all
documents, books, records and accounts relating to the Property, to Lender upon
demand. As a mortgagee-in-possession of the Property, Lender shall have all
rights and remedies permitted by law or in equity to a mortgagee-in-possession,
including, without limitation, the right to charge Borrower the fair and
reasonable rental value for Borrower's use and occupation of any part of the
Property that may be occupied or used by Borrower and the right to exercise all
rights and powers of Borrower with respect to the Property, whether in the name
of Borrower or otherwise (including, without limitation, the right to make,
cancel, enforce or modify Leases (provided, however, that Lender shall not,
prior to completion of foreclosure, agree to any reduction of rent under the Ply
Gem Lease or any Acceptable Replacement Lease, modify the term of the Ply Gem
Lease or any Acceptable Replacement Lease, or cancel or terminate the Ply Gem
Lease or any Acceptable Replacement Lease unless Ply Gem or any Acceptable
Replacement Tenant is in default beyond any applicable cure period), obtain and
evict tenants, and demand, ▇▇▇ for, collect and receive all Rents of the
Property).
(f) UCC Remedies. Lender may exercise with respect to the Property,
each right, power or remedy granted to a secured party under the UCC, including,
without limitation, (i) the right to take possession of the Property and to take
such other measures as Lender deems necessary for the care, protection and
preservation of the Property, and (ii) the right to require that Borrower, at
its expense, assemble the Property and make it available to Lender at a
convenient place acceptable to Lender. Any notice of sale, disposition or other
intended action by Lender with respect to the Property sent to Borrower in
accordance with the provisions hereof at least ten (10) days prior to such
action, shall constitute reasonable notice to Borrower. Lender shall not have
any obligation to clean-up or otherwise prepare the Property for sale.
(g) Apply Funds in Reserve Accounts. Lender may apply any funds then
deposited in any or all of the Reserve Accounts and or otherwise held in escrow
or reserve (except to the extent that such sums belong to Ply Gem and the terms
of the Ply Gem Lease do not permit Borrower, as landlord, to utilize such sums)
by Lender under the Loan Documents (including without limitation Restoration
Proceeds) as a credit on to Loan, in such priority and proportion as Lender
deems appropriate.
(h) Insurance Policies. Lender may surrender any or all insurance
policies maintained as required by this Loan Agreement, unless such policies
then belong to Ply Gem,
Ply Gem Industries
- 59 -
collect the unearned Insurance Premiums and apply such sums as a credit on the
Loan, in such priority and proportion as Lender deems appropriate. Borrower
hereby appoints Lender its attorney-in-fact with full power of substitution (and
which shall be deemed to be coupled with an interest and irrevocable until the
Loan is paid and the Security Instrument is discharged of record, with Borrower
hereby ratifying all that its said attorney shall do by virtue thereof) to
surrender such insurance policies and collect such Insurance Premiums.
(i) Protection of Lender's Security and Right to Cure. Lender may,
without releasing Borrower from any obligation hereunder or waiving the Event of
Default, perform the obligation which Borrower failed to perform in such manner
and to such extent as Lender deems necessary to protect and preserve the
Property and Lender's interest therein, including without limitation (i)
appearing in, defending or bringing any action or proceeding with respect to the
Property, in Borrower's name or otherwise; (ii) making repairs to the Property
or completing improvements or repairs in progress; (iii) hiring and paying legal
counsel, accountants, inspectors or consultants; and (iv) paying amounts which
Borrower failed to pay. Amounts disbursed by Lender shall be added to the Loan,
shall be immediately due and payable, and shall bear interest at the Default
Rate from the date of disbursement until paid in full.
(j) Violation of Laws. If the Property is not in compliance with
all Requirements of Laws, Lender may impose additional requirements upon
Borrower in connection with such Event of Default including, without limitation,
monetary reserves or financial equivalents.
11.03 Cumulative Remedies; No Waiver; Other Security. Lender's remedies
under this Loan Agreement are cumulative (whether set forth in this Article 11
or in any other section of this Loan Agreement) with those in the other Loan
Documents and otherwise permitted by law or in equity and may be exercised
independently, concurrently or successively in Lender's sole discretion and as
often as occasion therefor shall arise. Lender's delay or failure to accelerate
the Loan or exercise any other remedy upon the occurrence of an Event of Default
shall not be deemed a waiver of such right as remedy. No partial exercise by
Lender of any right or remedy will preclude further exercise thereof, Notice or
demand given to Borrower in any instance will not entitle Borrower to notice or
demand in similar or other circumstances (except where notice is expressly
required by this Loan Agreement to be given) nor constitute Lender's waiver of
its right to take any future action in any circumstance without notice or
demand. Lender may release security for the Loan, may release any party liable
therefor, may grant extensions, renewals or forbearances with respect thereto,
may accept a partial or past due payment or grant other indulgences, or may
apply any other security held by it to payment of the Loan, in each case without
prejudice to its rights under the Loan Documents and without such action being
deemed an accord and satisfaction or a reinstatement of the Loan. Lender will
not be deemed as a consequence of its delay or failure to act, or any
forbearance granted, to have waived or be estopped from exercising any of its
rights or remedies.
Ply Gem Industries
-60-
11.04 Enforcement Costs. Borrower shall pay, on written demand by Lender
all costs incurred by Lender in (a) collecting any amount payable under the Loan
Documents, or (b) enforcing its rights under the Loan Documents, in each case
whether or not legal proceedings are enforcing its rights under the Loan
Documents, in each case whether or not legal proceedings are commenced or
whether legal action of pursued to final judgment. Such fees and expenses
include, without limitation, reasonable fees for attorneys, paralegals, law
clerks and other hired professionals, a reasonable assessment of the cost of
services performed by Lender's default management staff, court fees, costs
incurred in connection with pre-trial, trial and appellate level proceedings,
including discovery, and costs incurred in post-judgment collection efforts or
in any bankruptcy proceeding. Amounts incurred by Lender shall be added to
principal, shall be immediately due and payable, shall bear interest at the
Default Rate from the date of disbursement until paid in full, if not paid in
full within five (5) days after Lender's written demand for payment, and such
amounts shall be secured by the Security Instrument and other collateral given
to secure the Loan.
11.05 Application of Proceeds. The proceeds from disposition of the
Property shall be applied by Lender as a credit to the Loan and to recovery or
reimbursement of the costs of enforcement (contemplated by Section 11.04 above)
in such priority and proportion as Lender determines appropriate.
11.06 Cross-Default; Cross-Collateralization; Waiver of Marshalling of
Assets.
(a) Borrower acknowledges that Lender has made the Loan to
Borrower upon the security of its collective interest in the Property and in
reliance upon the aggregate of the Property taken together being of greater
value as collateral security than the sum of each Individual Property taken
separately. Borrower agrees that the Security Instruments are and will be cross-
collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Security Instrument shall constitute an Event of
Default under each of the other Security Instrument which secure the Note; (ii)
an Event of Default under the Note or this Loan Agreement shall constitute an
Event of Default under each Security Instrument; (iii) each Security Instrument
shall constitute security for the Note as if a single blanket lien were placed
on all of the Properties as security for the Note; and (iv) such cross-
collateralization shall in no event be deemed to constitute a fraudulent
conveyance.
(b) To the fullest extent permitted by law, Borrower, for itself
and its successors and assigns, waives all rights to a marshalling of the assets
of Borrower, Borrower's partners and others with interests in Borrower, and of
the Property, or to a sale in inverse order of alienation in the event of
foreclosure of all or any of the Security Instruments, and agrees not to assert
any right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Property for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Property in preference to every other claimant whatsoever. In addition,
Borrower, for itself and its
Ply Gem Industries
-61-
successors and assigns, waives in the event of foreclosure of any or all of the
Security Instruments, any equitable right otherwise available to Borrower which
would require the separate sale of the Property or require Lender to exhaust its
remedies against any Individual Property or any combination of the Property
before proceeding against any other Individual Property or combination or
Property; and further in the event of such foreclosure Borrower does hereby
expressly consents to and authorizes, at the option of Lender, the foreclosure
and sale either separately or together of any combination of the Property.
ARTICLE 12
NONRECOURSE-LIMITATIONS ON PERSONAL LIABILITY
12.01. Nonrecourse Obligation. Except as otherwise provided in this
Article 12 or expressly stated in any of the other Loan Documents, Lender shall
enforce the liability of Borrower to perform and observe the obligations
contained in this Loan Agreement and in each other Loan Document only against
the Property and other collateral given by Borrower as security for payment of
the Loan and performance of Borrower's obligations under the Loan Documents and
not against Borrower or any of Borrower's principals, directors, officers or
employees. Notwithstanding the foregoing, this Article 12 is not applicable to
the Environmental Indemnity or to any Guaranty executed in connection herewith.
12.02. Full Personal Liability. Section 12.01 above shall BECOME NULL AND
VOID and the Loan FULLY RECOURSE to Borrower if: (a) the property or any part
thereof becomes an asset in a voluntary bankruptcy or other insolvency
proceeding; (b) Borrower or SPE Equity Owner commences a bankruptcy or other
insolvency proceeding; (c) an involuntary bankruptcy or other insolvency
proceeding is commenced against Borrower or any SPE Equity Owner (by a party
other than Leader or an investor or participant in the Loan) but only if
Borrower or such SPE Equity Owner has field to use its best efforts to dismiss
such proceeding or has consented to such proceeding or (d) if Borrower, any SPE
Equity Owner, Guarantor or any Affiliate or agent of (x) Borrower,(y) any SPE
Equity Owner or (z) any Guarantor has acted in concert with, colluded or
conspired with any party to cause the filing of any involuntary bankruptcy or
other insolvency proceeding.
12.03 Personal Liability for Certain Losses. Section 12.01 above SHALL NOT
APPLY and Borrower shall be PERSONALLY LIABLE for all losses, claims, expenses
or other liabilities incurred by Lender arising out of, or attributable to, any
of the following:
(a) Fraud or material misrepresentation or failure to disclose a
material fact by Borrower or any other party in connection with (i) the
application for the Loan or the execution and delivery of the Loan Documents or
making of the Loan, (ii) any financial statement or any other material
certificate, report or document required to be furnished by Borrower to Lender
herewith or hereafter, or (iii)any request for Lender's consent made during the
term of the Loan;
(b) A violation of any provision of Article 10 (captioned; No
Transfers or Encumbrances; Due On Sale);
Ply Gem Industries
-62-
(c) Failure by Borrower or the SPE Equity Owner to comply with any
provision of Article 7 (captioned: Single Purpose Entity Requirements) or
Section 9.13 (captioned: Existence, Change of Name or Location as a Registered
Organization) of the Loan Agreement limited, however, to $5,883,333.00;
(d) Misapplication or misappropriation of (i) insurance proceeds or
condemnation awards payable to Lender in accordance with the Loan Agreement;
(ii) Rent received by Borrower after the occurrence of an Event of Default;
(iii) Rent paid in advance by tenants under the Leases; and (iv)tenant security
deposits or other refundable deposits held by or on behalf of Borrower in
connection with Leases;
(e) Fees or commissions paid by any Borrower, after the occurrence
and during the continuance of an Event of Default, to any Guarantor , any
Affiliate, or any principal of Borrower, any Guarantor or Affiliate, in
violation of the Loan Documents limited, however, to $5,883,333.000;
(f) Damage to or loss of all or any part of the Property as a result
of waste, gross negligence or willful misconduct by Borrower or its agents;
(g) Criminal acts of Borrower, any principal of Borrower, or any
Affiliate resulting in the seizure, forfeiture or loss of all or any part of the
Property;
(h) Removal of all or any portion of the Personal Property in
violation of the Loan Agreement;
(i) All amounts contemplated under Section 11.04 and any real estate
or other transfer tax incurred to transfer title to the Property in connection
with any foreclosure, deed in lieu of foreclosure or non-judicial sale of the
Property following the occurrence of an Event of Default (limited, however, to
$5,883,333.00); and
(j) Payment of the deductible amount in excess of $50,000.00 under
any casualty insurance maintained in respect of the Property.
12.04. No Impairment. Nothing contained in this Article 12 shall impair,
release or otherwise adversely affect: (a) any lien, assignment or security
interest created by the Loan Documents; (b) any indemnity, personal guaranty,
master lease or similar instrument now or hereafter made in connection with the
Loan (including, without limitation, the Environmental Indemnity and Guaranty);
(c) Lender's right to have a receiver or trustee appointed for the Property; (d)
Lender's right to name Borrower as a defendant in any foreclosure action or
judicial sale under the Security Instrument or other Loan Documents or in any
action for specific performance or otherwise to enable Lender to enforce
obligations under the Loan Documents or to realize upon Lender's interest in any
collateral given to Lender as security for the Loan; or (e) Lender's right to a
judgment on the Note against Borrower if necessary to (i) enforce any guaranty
or indemnity provided in connection with the Note, (ii) preserve or enforce its
rights or
Ply Gem Industries
-63-
remedies against any Individual Property, or (iii) to obtain any insurance
proceeds or condemnation awards to which Lender would otherwise be entitled
under this Loan Agreement; provided, however, that any judgment obtained against
Borrower shall, except to the extent otherwise expressly provided in this
Article 12, be enforceable against Borrower only to the extent of Borrower's
interest in the Property and other collateral securing payment of the Loan and
performance of Borrower's obligations under the Loan Documents.
12.05. No Waiver of Certain Rights. Nothing contained in this Article 12
shall be deemed a waiver of any right which Lender may have under the Bankruptcy
Code or applicable law to protect and pursue its rights under the Loan Documents
including, without limitation, its rights under Sections 506(a) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the Loan
or to require that the collateral continues to secure all of the indebtedness
owing to Lender under Loan Documents.
ARTICLE 13
INDEMNIFICATION
13.01. Indemnification Against Claims. Borrower shall indemnify, defend,
release and hold harmless Lender and each of the other Indemnified Parties from
and against any and all Losses directly or indirectly arising out of, or in any
way relating to, or as a result of (a) accident, injury to or death of Persons,
or loss of, or damage to, property occurring in, on or with respect to the
Property or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways or otherwise arising with respect to the use of
the Property;(b)failure of the Property to be in compliance with any
Requirements of Law; (c) breach or default of Borrower's representations or
obligations under Sections 8.27, 8.28 or 9.16 of this Loan Agreement; (d) any
and all claims and demands whatsoever which may be asserted against Lender by
reason of any alleged obligations or undertakings on its part to perform or
discharge the lessor's agreements contained in any Lease, unless such
undertakings are in writing and signed by Lender; (e) breach or default under
the ERISA obligations set forth in Sections 8.26 and 9.15 of this Loan Agreement
(including, without limitation, legal fees and costs incurred in the
investigations, defense and settlement of Losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in
Lender's sole discretion); or (f) any claim, litigation, investigation or
proceeding commenced or threatened relating to any of the foregoing, whether or
not Indemnified party is a party thereto; provided, however, any such indemnity
shall not apply to any Indemnified Party to the extent any such Losses arise
from Indemnified Party's gross negligence or willful misconduct(collectively,
"INDEMNIFIED CLAIMS").
13.02. Duty to Defend. If an Indemnified Party claims indemnification under this
Loan Agreement, the Indemnified Party shall promptly notify Borrower of the
Indemnified claim. After notice by any Indemnified party,Borrower shall defend
such Indemnified Party against such Indemnified Claim (if requested by any
Indemnified Party, in the name of the Indemnified
Ply Gem Industries
-64-
Party) by attorneys and other professionals reasonably approved, in writing, by
the Indemnified Party. Notwithstanding the foregoing, any Indemnified Party may,
in its sole discretion and at the expense of Borrower, engage its own attorneys
and other professionals to defend or assist it if such Indemnified Party
determines that the defense as conducted by Borrower is not proceeding or being
conducted in a satisfactory manner or that a conflict of interest exists between
any of the parties represented by Borrower's counsel in such action or
proceeding. Within five (5) business days of Indemnified Party's demand,
Borrower shall pay or, in the sole discretion of the costs and expenses
(including, without limitation, reasonable attorney fees, engineer fees,
environmental consultant fees, laboratory fees and other professionals in
connection therewith) Default Rate until paid in full and payment of such
amounts shall be secured by the Security Instrument and other collateral given
to secure the Loan.
ARTICLE 14
SUBROGATION; NO USURY VIOLATIONS
14.01. Subrogation. If the Loan is used to pay, satisfy, discharge, extend
or renew any indebtedness secured by a pre-existing mortgage, deed of trust or
other Lien encumbering the Property, then to the extent of funds so used, Lender
shall automatically, and without further action on its part, be subrogated to
all rights, including lien priority, held by the holder of the indebtedness
secured by such prior Lien, whether or not the prior Lien is released, and such
former rights are not waived but rather are continued in full force and effect
in favor of Lender and are merged with the Liens created in favor of Lender as
security for payment of the Loan and performance of the Obligations.
14.02. No Usury. At no time is Borrower required to pay interest on the
Loan or on any other payment due hereunder or under any of the other Loan
Documents (or to make any other payment deemed by law or by a court of competent
jurisdiction to be interest) at a rate which would subject Lender either to
civil or criminal liability as a result of being in excess of the maximum
interest rate which Borrower is permitted by applicable law to pay. If interest
(or such other amount deemed to be interest) paid or payable by Borrower is
deemed to exceed such maximum rate, then the amount to be paid immediately shall
be reduced to such maximum rate and thereafter computed at such maximum rate.
All previous payments in excess of such maximum rate shall be deemed to have
been payments of principal (in inverse order of maturity) and not on account of
interest due hereunder. For purposes of determining whether any applicable usury
law has been violated, all payments deemed by law or a court of competent
jurisdictions to be interest shall, to the extent permitted any applicable law,
be deemed to be amortized, prorated, allocated and spread over the full term of
the Loan in such manner so that interest is computed at a rate throughout the
full term of the Loan which does not exceed the maximum lawful rate of interest.
Ply Gem Industries
- 65 -
ARTICLE 15
SALE OR SECURITIZATION OF LOAN
15.01. Splitting the Note. Lender has the right, from time to time, to
sever the Note into one or more separate promissory notes, each secured by all
of the Property, in such denominations as Lender determines in its sole
discreation (including the creation of a mezzanine loan secured by a collateral
assignment of the equity interest in Borrower and SPE Equity Owner) which
promissory notes may be included in separate sales or securitizations undertaken
by Lender. In conjunction with any such action, Lender may redefine the interest
rate and amortization schedule; provided, however: (a) if Lender redefines the
interest rate, the initial weighted average of the interest rates contained in
the severed promissory notes taken in the aggregate shall equal the Applicable
Interest Rate, and (b) if Lender redefines the amortization schedule, the
amortization of the severed promissory notes taken in the aggregate shall
require no more amortization to be paid under the Loan than as required under
this Loan Agreement and the Note at the time such action was taken by Lender.
Subject to the foregoing each severed promissory note, and the Loan evidenced
thereby, shall be upon all of the terms and provisions contained in this Loan
Agreement and the Loan Documents which continue in full force and effect.
Borrower, at Borrower's expense, agrees to cooperate with all reasonable
requests of Lender to accomplish the foregoing, including, without limitation,
execution and prompt delivery to Lender of a severance agreement and such other
documents as Lender shall reasonably require, provided that no such agreement
may allocate specific collateral given for the Loan as security for performance
of specific promissory notes and no separate servicer may be assigned for any
separate notes. Borrower hereby appoints Lender its attorney-in-fact with full
power of substitution (and which shall be deemed to be coupled with an interest
and irrevocable until the Loan is paid and the Security Instrument is discharged
of record, with Borrower hereby ratifying all that its said attorney shall do by
virtue thereof) to make and execute all documents necessary or desirable to
effect the aforesaid severance; provided, however, Lender shall not make or
execute any such documents under such power until five (5) days after written
notice has been given to Borrower by Lender of Lender's intent to exercise its
rights under such power. Borrower's failure to deliver any of the documents
requested by Lender hereunder for a period of ten (10) business days after such
notice by Lender shall, at Lender's option, constitute an Event of Default
hereunder.
15.02. Lender's Rights to Sell or Securitize. Borrower acknowledges that
Lender, and each successor to Lender's interest, may (without prior notice to
Borrower or Borrower's prior consent), sell or grant participations in the Loan
(or any part thereof), sell or subcontract the servicing rights related to the
Loan, Securitize the Loan or include the Loan as part of a Securitization and,
in connection therewith, assign Lender's rights hereunder to a securitization
trustee. Borrower, at its expense, agrees to cooperate with all reasonable
requests of Lender in connection with any of the foregoing including, without
limitation, executing any financing statements or other documents deemed
necessary by Lender or its transferee to create, perfect or preserve the rights
and interest to be acquired by such transferee, provide any updated financial
information with appropriate verification through auditors letters, revised
organizational
Ply Gem Industries
- 66 -
documents and counsel opinions satisfactory to the Rating Agencies, and executed
amendments to the Loan Documents, and review information contained in a
preliminary or final private placement memorandum, prospectus, prospectus,
supplements or other disclosure documents, providing a mortgagor estoppel
certificate and such other information about Borrower, SPE Equity Owner, any
Guarantor or the Property as Lender may require for Lender's offering materials.
15.03. Dissemination of Information. Borrower acknowledges that Lender may
provide to third parties with an exiting or prospective interest in the
servicing, enforcement, evaluation, performance, ownership, purchase,
participation, or Securitization of the Loan, including, without limitation, any
Rating Agency and any entity maintaining databases on the underwriting and
performance of commercial mortgage loans, any and all information which Lender
now has or may hereafter acquire relating to the Loan, the Property, Borrower,
SPE Equity Owner or any Guarantor, as Lender determines necessary or desirable
and that such information may be included in disclosure documents in connection
with a Securitization or syndication of participation interests, including,
without limitation, a prospectus, prospectus supplement, offering memorandum,
private placement memorandum or similar document (each, a "DISCLOSURE DOCUMENT")
and also may be included in filing with the Securities and Exchange
Commission pursuant to the Securities Act on the Securities Exchange Act. To the
fullest extent permitted under applicable law, Borrower irrevocably waives all
rights, if any, to prohibit such disclosure, including, without limitation, any
right of privacy.
15.04. Reserves Accounts. If the Loan is made a part of a Securitization,
Borrower acknowledges that all funds held by Lender in the Reserve Accounts in
accordance with this Loan Agreement or the other Loan Documents shall be
deposited in "eligible accounts" at "eligible institutions" or invested in
"permitted investments" as then defined and required by the Rating Agencies, and
this Loan Agreement will automatically be amended to so provide.
15.05. Securitization Indemnification. Borrower agrees to provide in
connection with each Disclosure Document, an indemnification certificate: (a)
certifying that such Disclosure Document has carefully been examined, including,
without limitation, the section entitled "Special Considerations," and or "Risk
Factors," and "certain Legal Aspects of the Mortgage Loan," or similar sections,
and all sections relating to Borrower, SPE Equity Owner, Guarantors, Property
Manager, their respective Affiliates, the Loan,the Loan Documents and the
Property, and any risks or special considerations relating thereto, and that, to
the best of such indeminator's knowledge, such sections (and any other sections
reasonably requested) do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading; (b)
indemnifying Lender (and for purposes of this Section 15.05, Lender shall
include its officers and directors) and the Affiliate of Lender that (i) has
filed the registration statement, if any, relating to the Securitization and/or
(ii) which is acting as issuer, depositor, sponsor and/or a similar capacity
with respect to the Securitization (any Person described in (i) or (ii), and
"ISSUER PERSON"), and each director and officer of any Issuer Person, and each
Person or entity who
Ply Gem Industries
- 67 -
controls any Issuer Person within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act (collectively, "ISSUER GROUP"),
and each Person which is acting as an underwriter, manager, placement agent,
initial purchaser or similar capacity with respect to the Securitization, each
of its directors and officers and each Person who controls any such Person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act which is acting as an underwriter, manager, placement
agent, initial purchaser or similar capacity with respect to the Securitization,
each of its directors and officers and each Person who controls any such Person
within the meaning of Section 15 of the of the Securities Act and Section 20 of
the Securities Exchange Act (collectively, "UNDERWRITER GROUP") for any Losses
to which lender, the Issuer Group or the Underwriter Group may become subject
insofar as the Losses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such section or arise
out of are based upon the omission or alleged omission to state therein a
material fact required to be stated in such sections necessary in order to make
the statements in such sections or in light of the circumstances under which
they were made, not misleading (collectively, "SECURITIES LIABILITIES"); and (c)
agreeing to reimburse Lender, the Issuer Group and the Underwriter Group for any
legal or other expenses reasonably incurred by Lender, the Issuer Group and the
Underwriter Group in investigating or defending the Securities Liabilities;
provided, however, that indemnitor will be liable under clauses(b) or (c) above
only to the extent that such Securities liabilities arise out of, or are based
upon, any such untrue statement or omission made therein in reliance upon, and
in conformity with, information furnished to Lender or any member of the Issuer
Group or Underwriter Group by or on behalf of Borrower or a Guarantor in
connection with the preparation of the Disclosure Documents or in connection
with the underwriting of the Loan, including, without limitation, financial
statements of Borrower, SPE Equity Owner or any Guarantor, and operating
statements, rent rolls, environmental site assessment reports and property
condition reports with respect to the Property. This indemnity is in addition to
any liability which Borrower may otherwise have and shall be effective whether
or not an indemnification certificate described in (a) above is provided and
shall be applicable based on information previously provided by or on behalf of
Borrower or a Guarantor if the indemnification certificate is not provided.
ARTICLE 16
BORROW FURTHER ACTS AND ASSURANCES
PAYMENT OF SECURITY RECORDING CHARGES
16.01. Further Acts. Borrower's, at Borrower's expense, agrees to take
such further actions and execute such further documents as Lender reasonable may
request to carry out the intent of the Loan Documents or to establish and
protect the rights and remedies created or intended to be created in favor of
Lender under the Loan Documents or to protect the value of the Property and
Lender's security interest or liens therein. Borrower agrees to pay all filing,
registration or recording fees or taxes, and all expenses incident to the
preparation, execution, acknowledgement, or filing/recording of the Security
Instrument, the Assignment of Leases and
Ply Gem Industries
- 68 -
Rents, financing statements or any such instrument of further assurance, except
where prohibited by law so to do.
16.02. Replacement Documents. Upon receipt of an affidavit from an officer
of Lender as to the loss, theft, destruction or mutilation of the Note or any
other Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such document, Borrower will
issue a replacement original in lieu thereof in the same original principal
amount and otherwise on the same terms and conditions as the original; provided,
however, that Lender shall reimburse Borrower for any expense, including,
without limitation, reasonable attorney's fees up to the amount of $1,000.00 per
instance or $2,000.00 in the aggregate, in connection with the issuance of such
replacement Note or other Loan Document.
16.03. Borrower Estoppel Certificates.
(a) Borrower Information. Borrower, within fifteen (15) days of
Lender's written request (but not more than twice annually, provided that no
Event of Default has occurred), shall furnish to Lender or Lender's designee a
statement, duly acknowledged and certified by a Responsible Officer, setting
forth: (i) the Maximum Loan Amount and the amount of principal advanced as of
the certificate date;(ii) the unpaid principal amount of the Loan; (iii) the
calculation of the rate of interest accruing on the Loan, including the then
Applicable Interest Rate; (iv) the Payment Due Date and the Maturity Date; (v)
the date installments of interest and/or principal were last paid; (vi) that,
except as provided in such statement, no defaults or, to the best knowledge of
Borrower, events which would be an Event of Default with the giving of any
applicable notice or the expiration of any applicable grace or cure period or
both exist; (vii) that the Loan Documents are valid , legal and binding
obligations, subject to bankruptcy, insolvency, reorganization, moratorium and
other laws affecting creditors' rights generally, and have not been modified or,
if modified, giving the particulars of such modifications; (viii) whether any
offsets or defenses exist against Borrower's obligation to pay the Loan and
perform the Obligations and, if any are alleged to exist, a detailed description
thereof; (ix) whether all Leases are in full force and effect, and if not,
describing any deficiencies, and, for Leases other than residential Leases,
whether or not they have been modified, and if modified, setting forth all
modifications; (x)a current Rent Roll for the Property, (xi) the date to which
Rents under the Leases have been paid; (xii) whether or not, to the best
knowledge of Borrower, any of the tenants under the Leases are in default under
the Leases, and, if any of the tenants are in default, setting forth the
specific nature of all such defaults; and (xiii) such other matters reasonably
requested by Lender and reasonably related to the Leases or the Property.
(b) Tenant Estoppels. Borrower shall deliver to Lender, promptly
upon Lender's written request (but in any event no later than twenty (20) days
following Lender's request), duly executed estoppel certificates from tenants
identified by Lender attesting to such facts regarding a tenant's
non-residential Lease as Lender may require, including, without limitation: (i)
that the Lease is in full force and effect with no defaults thereunder on the
part of any party, and no event exists that would be an event of default
thereunder with giving of any
Ply Gem Industries
- 69 -
applicable notice or the expiration of any applicable grace or cure period or
both, or if one or more defaults exists, specifying the nature thereof; (ii)
that none of the Rents have been paid more than one month in advance of the date
when due under the Lease, except as a security deposit; and (iii)that the tenant
claims no defense or offset against the full and timely performance of its
obligations under the Lease, or if such claims exist, specifying the nature
thereof. Borrower shall have no obligation to deliver an estoppel certificate
from Ply Gem with respect to any matters not required to be certified by ply Gem
under the terms of the Ply Gem Lease and no Event of Default shall exist if Ply
Gem does not deliver any such estoppel within the required timeframe so long as
Borrower is deligently attempting to obtain such estoppel.
(C) Lender Statement of Loan Information. after written request by
Borrower not more than twice annually, Lender shall furnish Borrower a statement
setting forth: (i) the original Maximum Loan Amount and the amount of principal
advanced by Lender as of the certificate date; (ii) the unpaid principal amount
of the Loan; (iii) the rate of interest accruing on the Loan, including the then
Applicable Interest Rate; and (iv) the balance of amounts held in the Reserve
Accounts, if any.
16.04. Recording Costs. Borrower will pay all transfer taxes, filing,
registration, recording or similar fees, and all expenses incident to the
preparation, execution, acknowledgment, recording, filing and/or release or
discharge of the Note, the Security Instrument and each of the other Loan
Documents, and all modifications, extensions, consolidations, or restatements of
the same, except where prohibited by law so to do.
16.05 Publicity. Borrower acknowledges and agrees that Lender may release
publicity articles concerning the financing or servicing of the Loan.
ARTICLE 17
LENDER CONSENT
▇▇.▇▇.▇▇ Joint Venture; No Third Party Beneficiaries. Borrower and Lender
intend that the relationships created hereunder and under each of the other Loan
Documents are solely those of borrower and lender. Nothing herein or in any of
the other Loan Documents is intended to create, nor shall it be construed as
creating anything but a debtor-creditor relationship between Borrower and Lender
nor shall they be deemed to confer on anyone other than Lender, and its
successors and assigns, any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein or therein.
17.02. Lender Approval. Wherever pursuant to a Loan Document (a) Lender
exercises any right to approve or disapprove or to grant or withhold consent;
(b) any arrangement or term is to be satisfactory to Lender; (c) a waiver is
requested from Lender, or (d) any other decision is to be made by Lender, all
shall be made in Lender's sole discretion, unless expressly provided otherwise
in such Loan Document. By approving or granting consent, accepting performance
from Borrower, or releasing funds from a Reserve Account, Lender shall not be
deemed to have
Ply Gem Industries
- 70 -
warranted or affirmed the sufficiency, completeness, legality or effectiveness
of the subject matter or of Borrower's compliance with Requirements of Laws.
Notwithstanding any provision under the Loan Documents which provides Lender the
approve or disapprove any action or decision by Borrower, Lender is not thereby
opportunity to undertaking the performance of any obligation of Borrower under
any of the Loan Documents or any of the other documents and agreements in
connection with this transaction(including, without limitation, the Leases).
17.03. Performance at Borrower's Expense. Borrower acknowledges and
agrees that in connection with each request by Borrower to: (a) modify or waive
any provision of the Loan Documents; (b) release or substitute Property; (c)
obtain Lender's approval or consent whenever required by the Loan Documents
including, without limitation, review of a Transfer request, matters affecting a
Major Lease, improvements or alterations to the Property, and easements or other
additions to Permitted Encumbrances; or (d) provide a subordination,
non-disturbance and attornment agreement, Lender reserves the right to collect
a review or processing fee from Borrower based on a reasonable estimate of the
administrative costs which lender will incur to connection therewith. Borrower
agrees to pay such fee along with all reasonable legal fees and expenses
incurred by Lender and the fees required for a Rating Confirmation or approval
from the trustee if the Loan has been Securitized, as applicable, irrespective
of whether the matter is approved, denied or withdrawn. Any amounts payable by
Borrower hereunder, shall be deemed a part of the Loan, shall be secured by this
Loan Agreement and shall bear interest at the Default Rate if not fully paid
within ten (10) days of written demand for payment.
17.04. Non-Reliance. Borrower agrees that any diligence or
investigation performed by or on behalf of Lender in underwriting or servicing
the Loan (including, without limitation, information obtained about the Property
the Borrower or its equity investors or affiliates) does not in any respect
limit or excuse any of Borrower's representations, warranties, covenants or
agreements set forth in this Loan Agreement or any of the other Loan Documents.
The fact that Lender has performed diligence does not affect Lender's ability or
right to rely fully upon the representations, warranties , covenants and
agreements made by Borrower in the Loan Documents or to pursue any available
remedy for a breach thereof. If Lender delivers or has delivered to Borrower
(or to Borrower's agents, equity investors or representatives) any information
obtained or developed by Lender relating to the Loan, the Property or Borrower,
Borrower acknowledges and agrees that such information has been delivered for
informational purposes only and Lender has no liability of responsibility to
Borrower with respect to such information, including, without limitation, the
completeness or accuracy of any such information. No due diligence consultant
engaged by Lender is or shall deemed an agent of Lender.
Ply Gem Industries
- 71 -
ARTICLE 18
MISCELLANEOUS PROVISIONS
18.01. Notices. All notices and other communications under this Loan
Agreement are to be in writing and addressed to each party as set forth below.
Default or demand notices shall be deemed to have been duly given upon the
earlier of: (a) actual receipt; (b) one (1) business day after having been
timely deposited for overnight delivery, fee prepaid, with a reputable overnight
courier service, having a reliable tracking system; or (c) three (3) business
days after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by certified mail, postage
prepaid, return receipt requested, and in the case of clause (b) and (c)
irrespective of whether delivery is accepted. A new address for notice may be
established by written notice to the other, provided, however, that no change of
address will be effective until written notice thereof actually is received by
the party to whom such address change is sent. Notice to outside counsel or
parties other than the named Borrower and Lender, now or hereafter designated by
a party as entitled to notice, are for convenience only and are not required for
notice to a party to be effective in accordance with this section. Notice
addresses are as follows:
Address for Lender: GMAC Commercial Mortgage Bank
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn.: Servicing Accounting - Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a required copy to:
GMAC Commercial Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: PLG Asset Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for Borrower: PG (MULTI-16) L.P.
c/o W.P. ▇▇▇▇▇ & Co. LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Director, Asset Management
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Ply Gem Industries
-72-
and ▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Chairman, Real Estate Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
18.02. Entire Agreement; Modifications; Time of Essence. This Loan
Agreement, together with the other Loan Documents, contain the entire agreement
between Borrower and Lender relating to the Loan and supersede and replace all
prior discussions, representations, communications and agreements (oral or
written). If any documents relating to the Loan are in conflict, the Note shall
control over this Loan Agreement, and this Loan Agreement shall control over all
of the other documents. No Loan Document shall be modified, supplemented or
terminated, nor any provision thereof waived, except by a written instrument
signed by the party against whom enforcement thereof is sought, and then only to
the extend expressly set forth in such writing. Time is of the essence with
respect to all of Borrower's and Lender's obligations under the Loan Documents.
18.03. Binding Effect; Joint and Several Obligations. This Loan Agreement
and each of the other Loan Documents shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns,
whether by voluntary action of the parties or by operation of law.(The foregoing
does not modify any conditions regulating Transfers.) Except as specifically
provided herein, if Borrower consists of more than one party, each shall be
jointly and severally liable to perform the obligations of Borrower under the
Loan Documents.
18.04. Duplicate Originals; Counterparts. This Loan Agreement and each of
the other Loan Documents may be executed in any number of duplicate originals,
and each duplicate original shall be deemed to be an original. This Loan
Agreement and each of the other Loan Documents (and each duplicate original)
also may be executed in any number of counterparts, each of which shall be
deemed an original and all of which together constitute a fully executed
agreement even though all signatures do not appear on the same document.
18.05. Unenforceable Provisions. Any provision of this Loan Agreement or
any other Loan Documents which is determined by a court of competent
jurisdiction or government body to be invalid, unenforceable or illegal shall be
ineffective only to the extend of such holding and shall not affect the
validity, enforceability or legality of any other provision, nor shall such
determination apply in any circumstance or to any party not controlled by such
determination.
18.06. Governing Law. This Loan Agreement and each of the other Loan
Documents shall be interpreted and enforced according to the laws of the State
of New York, except that with respect to real estate laws, the law of the state
where the Property is located shall govern (in all events without giving effect
to rules regarding conflict of laws).
18.07. Consent to Jurisdiction. Borrower hereby consents and submits to
the exclusive jurisdiction and venue of any state or federal court sitting in
the county and state where the
Ply Gem Industries
- 73 -
Property encumbered hereby is located with respect to any legal action or
proceeding arising with respect to the Loan Documents and waives all objections
which it may have to such jurisdiction and venue. Nothing herein shall,
however, preclude or prevent Lender from bringing actions against Borrower in
any other jurisdiction as may be necessary to enforce or realize upon the
security for the Loan provided in any of the Loan Documents.
18.08. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVE THEIR
RESPECTIVE RIGHT, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AGREE NOT TO ELECT
A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS LOAN AGREEMENT,
ANY OTHER LOAN DOCUMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND
LENDER.
ARTICLE 19
SUBSTITUTION OF PROPERTY
19.01. Substitution of Properties. Subject to the terms of this Section,
Borrower may obtain a release of the lien of the Property-related Loan Documents
from up to three (3) parcels constituting the Property (the "RELEASE PROPERTY"),
which constitute in the aggregate, not more than thirty percent (30%) of the
total cash flow of the Property, by substituting therefor an office and/or
industrial property of like quality to be owned by a subsidiary of the Guarantor
(a "SUBSTITUTE PROPERTY"), provided that the following conditions precedent are
satisfied.
(a) Lender shall have received at least sixty (60) days prior
written notice requesting the substitution and identifying the Substitute
Property and Release Property.
(b) Lender shall have received (i) a copy of a deed conveying all
of Borrower's right, title and interest in and to the Release Property to a
Person other than Borrower or any principal or affiliate of Borrower pursuant
to an arms length transaction, and (ii) a letter from Borrower countersigned by
a title insurance company acknowledging receipt of such deed and agreeing to
record such deed in the real estate records for the county or town (as
applicable) in which the Release Property is located simultaneously with the
substitution.
(c) Lender shall have received a current M.A.I. appraisal of the
Release Property, the Substitute Property and the Remaining Property
(hereinafter defined) in form and substance meeting the standards of prudent
institutional lenders prepared within six (6) months prior to the release and
substitution (i) showing as to the Substitute Property an appraised value equal
to or greater than the appraised value of the Release Property as of the
original closing date of the Loan, and (ii) which supports a post-substitution,
aggregate loan-to-value ratio, for all properties that will secure the Loan
after the substitution, that does not exceed the lesser of (A) the aggregate
loan-to-value ratio for the properties securing the Loan as of the original
closing date of the Loan or (B) the aggregate loan-to-value ratio of such
properties immediately prior to the date of the proposed substitution.
Ply Gem Industries
-74-
(d) RESERVED.
(e) Lender shall have received a certificate of Borrower, together with
all supporting financial information and other documentation satisfactory to
Lender, certifying that, after the substitution (i) with respect to any
Remaining Property which shall continue to secure the Loan, the debt service
coverage ratio for the twelve (12) months immediately preceding the closing date
of the substitution (as determined by Lender in its sole discretion) shall be
equal to or greater than the debt service coverage ratio for such Remaining
Property (excluding the Substitute Property) during the twelve (12) months
immediately preceding the original closing date of the Loan, and (ii) with
respect to the Substitute Property, the debt service coverage ratio for the
twelve (12) months immediately preceding the date of the substitution (as
determined by Lender in its sole discretion) shall be equal to or greater than
the corresponding debt service coverage ratio for the Release Property during
the twelve (12) months immediately preceding the closing date of the
substitution, such that the aggregate debt service coverage ratio for all
properties securing the Loan prior to the substitution shall remain unchanged
upon the closing date of the substitution notwithstanding the substitution of
property securing the Loan. In the event that trailing twelve (12) month net
operating income for the Substitution Property is not available, Lender agrees
to base its determination of compliance with this subsection (e) upon the best
available financial information for the Substitute Property by estimating an
underwritten net cash flow amount to be used in lieu of trailing twelve (12)
month Net Operating Income.
(f) Lender shall have received, at the sole cost and expense of
Borrower, (i) confirmation in writing from the Rating Agencies to the effect
that such release and substitution will not result in a withdrawal,
qualification or downgrade of the respective ratings in effect immediately prior
to such release and substitution of the Securities issued in connection with the
Securitization, and (ii) the consent of the servicer of the Loan, which consent
shall not be unreasonably withheld or delayed. If the Loan is not part of a
Securitization, Lender shall have consented in writing to such release and
substitution, which consent shall be given in Lender's reasonable discretion
applying the standard of a prudent institutional lender with respect to a Loan
of similar size to be secured by real estate collateral of similar size, scope
and value of the Substitute Property.
(g) No Event of Default shall have occurred and be continuing under the
Note, this Loan Agreement or the other Loan Documents and Borrower shall be in
compliance in all material respects with all of the terms and conditions set
forth in this Loan Agreement and in each other Loan Document. Lender shall have
received a certificate from Borrower, in form and substance reasonably
satisfactory to Lender and the Rating Agencies, confirming the foregoing,
stating that the representations and warranties of Borrower contained in this
Loan Agreement and the other Loan Documents are true and correct in all material
respects on and as of the data of the release and substitution with respect to
Borrower, the Remaining Property and the Substitute Property and containing any
other representations and warranties with respect to Borrower, the Properties
and the Substitute Property, such certificate to be in form and substance
satisfactory to Lender or the Rating Agencies, as applicable.
Ply Gem Industries
-75-
(h) Borrower shall (A) have executed, acknowledged and delivered to Lender
(i) a Security Instrument, an Assignment of Leases and Rents and two UCC-1
Financing Statements with respect to the Substitute Property and the Borrower,
together with a letter from Borrower countersigned by a title insurance company
acknowledging receipt of such Security Instrument, Assignment of Leases and
Rents and UCC-1 Financing Statements and agreeing to record or file, as
applicable, such Security Instrument, Assignment of Leases and Rents and one of
the UCC-1 Financing Statements in the real estate records for the county or town
(as applicable) in which the Substitute Property is located and to file one of
the UCC-1 Financing Statement in the office of the Secretary of State (or other
central filing office) of the State in which the Borrower is organized, so as to
effectively create upon such recording and filing valid and enforceable first
priority liens upon the Substitute Property, in favor of Lender, subject only to
encumbrances acceptable to Lender in its sole discretion and (ii) an
Environmental Indemnity of Inseminator with respect to the Substitute property,
and (B) have caused Guarantor to acknowledge and reaffirm its continuing
obligations under the other Loan Documents. The Security Instrument, Assignment
of Leases and Rents, UCC-1 Financing Statements and Environmental Indemnity
shall be on the same form as and substantively equivalent to the counterparts of
such documents executed and delivered with respect to the Release Property,
subject only to modifications reflecting the substitution and any local law of
the State in which the Substitute Property is located. The Security Instrument
encumbering the Substitute Property shall secure all amounts then outstanding
under the Note, provided that in the event that the jurisdiction in which the
Substitute Property is located imposes a mortgage recording, intangibles or
similar tax and does not permit the allocation of indebtedness for the purpose
of determining the amount of such tax payable, the principal amount secured by
such Security Instrument shall be equal to one hundred twenty-five percent
(125%) of the Allocated Loan Amount for the Substitute Property. The amount of
the Loan allocated to the Substitute Property (such amount being hereinafter
referred to as the "SUBSTITUTE ALLOCATED LOAN AMOUNT") shall equal the Allocated
Loan Amount of the related Release Property.
(i) Lender shall have received and ALTA title insurance policy (or a
marked, signed and redated commitment to issue such title insurance policy)
insuring the lien of the Security Instrument encumbering the Substitute
Property, issued by the title company that issued the title insurance policies
insuring the lien of the Security Instrument for the Remaining Property and
dated as of the date of the substitution. The title insurance policy issued with
respect to the Substitute Property shall (1) provide coverage in the amount of
the Substitute Allocated Loan Amount if a "tie-in" or similar endorsement
described above is available or, if such endorsement is not available, in an
amount equal to one hundred twenty-five percent (125%) of the substitute
Allocated Loan Amount, (2) insure Lender's valid first lien on the Substitute
Property, free and clear of all exceptions from coverage other than encumbrances
acceptable to Lender in its sole discretion and standard exceptions and
exclusions from coverage (as modified by the terms of any endorsements), (3)
contain such endorsements and affirmative coverages, provided same are available
in the jurisdiction in which the Property is located, as a prudent institutional
lender would require, including, without limitation, a "first loss" endorsement
as of the date of the substitution, a deletion of the creditors rights exclusion
and
Ply Gem Industries
-76-
deletion of arbitration provisions, a single tax lot endorsement, and (4) name
Lender and its successors and assigns as the insured. Lender also shall have
received copies of a closing statement or other evidence showing that all
premiums in respect of such endorsements and title insurance policy have been
paid. Notwithstanding the foregoing, if a single or separate tax lot endorsement
is not available, Borrower shall provide a letter from the appropriate taxing
authority stating that the Substitute Property constitutes a separate tax lot.
(j) Lender shall have received a current survey for the Substitute
Property in form and substance reasonably acceptable to Lender, certified to the
Borrower, the title company, the Lender and its successors and assigns, on
Lender's then current required certification form prepared by a professional
land surveyor licensed in the state in which the Substitute Property is located
and acceptable to the Rating Agencies, and prepared in accordance with the 1999
Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys. Such
survey shall reflect the same legal description contained in the title insurance
policy relating to such Substitute Property and shall include, among other
things, a metes and bounds description of the real Property comprising part of
such Substitute Property (unless such real has been satisfactorily designated by
lot number on a recorded plat). The surveyor's seal shall be affixed to each
survey and each survey shall certify whether or not the surveyed property is
located in a flood hazard area."
(k) Lender shall have received valid certificates of insurance
indicating that the insurance requirements for policies of insurance as required
hereunder have been satisfied with respect to the Substitute Property and
evidencing the payment of all insurance premiums payable for the existing policy
period.
(l) Lender shall have received a Phase I environmental report dated
not more than twelve (12) months prior to the proposed date of substitution and
otherwise acceptable to a prudent institutional lender and, if recommended under
the Phase I environmental report, a Phase II environmental report that would be
acceptable to a prudent institutional lender, which reports collectively
conclude that the Substitute Property does not contain any Hazardous Materials
or Releases and is not subject to a risk of contamination from any on-site
activity or off-site Hazardous Materials or Releases; provided, however, in the
event that either report discloses that such Substitute Property contains any
Hazardous Materials, Release, or a risk of contamination from any on-site
activity or off-site Hazardous Materials or Releases, Lender will not disqualify
such Substitute Property on the basis of such condition(s); provided, however,
in the event that either report discloses that such Substitute Property contains
any Hazardous Materials, Release, or a risk of contamination from any on-site
activity or off-site Hazardous Materials or Releases, Lender will not disqualify
such Substitute Property on the basis of such condition(s); provided further,
however, that (i) such condition(s) are capable of and will be remediated to the
extent required by Environmental Law, pursuant to any directive from any
government authority, and/or required pursuant to the Environmental Indemnity
Agreement, dated as of the date hereof, within two (2) years after the effective
date of the substitution but, in no event, later than 12 months prior to the
Maturity Date and Borrower agrees in writing that failure to complete such
Ply Gem Industries
-77-
remediation as aforesaid shall be an Event of Default; (ii) the cost to
remediate such condition(s) shall be established in the Phase I add/or Phase II
environmental report and shall not be in excess of five percent(5%) of the
appraised value of such Substitute Property but in no event, may the cost be in
excess of $300,000 and; (iii) in connection with such remediation, additional
security will be delivered prior to the effective date of the substitution,
which security shall facilitate the cure of or cure the same, which security may
include, without limitation, the posting of a letter of credit that satisfies
all of Lender's standard requirements or the establishment of a reserve or
escrow in an amount equal to 150% of the cost to cover the remediation, or
delivery of environmental insurance (e.g. secured creditor environmental
insurance policy). In all respects, to the extent any environmental condition
exists, such plan to remediate, the determination of the cost to remediate,
and/or additional security provided shall be acceptable to a prudent
institutional lender.
(m) Borrower shall deliver or cause to be delivered to Lender
certified (A) updates of all organizational documents of Borrower and its
managing member or general partner (including incumbency certificates and
certificates of existence, good standing and/or qualification to do business in
the states in which the Borrower is organized and in which the properties
securing the Loan are located), and (B) resolutions of Borrower authorizing the
release and substitution and affirming and ratifying any and all actions taken
in connection with such release and substitution.
(n) Lender shall have received the following opinions of Borrower's
counsel: (A) an opinion or opinions of counsel admitted to practice under the
laws of the state in which the Substitute Property is located stating that,
among other things, the Security Instrument and other Loan Documents delivered
with respect to the Substitute Property are valid and enforceable in accordance
with their terms, subject to the laws applicable to creditors' rights and
equitable principles, and that Borrower is qualified to do business and is in
good standing under the laws of the jurisdiction where the Substitute Property
is located or that Borrower is not required by Applicable Law to qualify to do
business in such jurisdiction; (B) an opinion of counsel acceptable to the
Rating Agencies, if the Loan is part of a Securitization, or to Lender if the
Loan is not part of a Securitization, stating that the Loan Documents delivered
with respect to the Substitute Property pursuant to this section, are among
other things, duly authorized, executed and delivered by Borrower and that the
execution and delivery of such security instrument and other Loan Documents and
the performance by Borrower of its obligations thereunder will not cause a
breach of, or a default under its organizational documents, any security
instrument, document, agreement or instrument to which Borrower is a party or to
which it or its properties are bound or any judgment to which Borrower or its
properties are subject; (C) an update of any insolvency and/or non-consolidation
opinion previously provided to Lender indicating that the substitution does not
affect the opinions set forth therein; (D) if the Loan is part of a
Securitization , an opinion of counsel acceptable to the Rating Agencies that
the substitution does not constitute a "significant modification" of the Loan
under Section 1001 of the Code or otherwise cause a tax to be imposed on a
"prohibited transaction" by any REMIC Trust.
Ply Gem Industries
-78-
(o) Borrower shall (i) have paid, (ii) have escrowed with Lender or
(iii) be contesting in accordance with the terms hereof, all basic carrying
costs relating to each of the properties securing the Loan prior to the
substitution, as well as the Substitute Property, including without limitation,
(x) accrued but unpaid Insurance Premiums, (y) currently due and payable Taxes
(including any in arrears) and (z) currently due and payable charges, if any.
(p) Borrower shall have paid or reimbursed Lender for all costs and
expenses incurred by Lender (including, without limitation, reasonable
attorneys' fees and disbursements) in connection with the release and
substitution and Borrower shall have paid all recording charges, filing fees,
taxes or other expenses (including, without limitation, mortgage and intangibles
taxes and documentary stamp taxes) payable in connection with the substitution.
Borrower shall have paid all costs and expenses of the Rating Agencies incurred
in connection with the substitution.
(q) Lender shall have received annual operating statements and
occupancy statements for the Substitute Property for the most current completed
fiscal year and a current operating statement for the Release Property, each
certified by Borrower to Lender as being true and correct in all material
respects and a certificate from Borrower certifying that there has been no
material adverse change in the financial condition of the Substitute Property
since the date of such operating statements.
(r) Lender shall have received copies of all Leases affecting the
Substitute Property, certified by Borrower as being true and correct.
(s) Lender shall have determined that tenants occupying 100% of the
net rentable space at the Substitute Property have taken occupancy on a
rent-paying basis and are open for business at the Substitute Property. Borrower
shall have delivered to Lender a certified rent roll and estoppel certificates
from all tenants at the Substitute Property. All such estoppel certificates
shall be substantially on Lender's then current standard form and shall indicate
that (1) the subject Lease is a valid and binding obligation of the tenant
thereunder and that the tenant is open for business and occupying the property
on a full rent-paying basis, (2) to the best of the tenant's knowledge, there
are no defaults under such Lease on the part of the landlord or tenant, (3) the
tenant has no Knowledge of any defense or offset to the payment of rent under
such Lease, (4) no rent under such Lease has been paid more than one (1) month
in advance or as otherwise provided in a Lease which has been approved by
Lender, (5) the tenant has no option to purchase all or any portion of the
Substitute Property, and (6) all tenant improvement work required under such
Lease has been substantially completed and the tenant under such Lease is in
actual occupancy of its leased premises. If an estoppel certificate indicates
that any tenant improvement work required under the relevant Lease has not yet
been completed. Borrower, at Lender's option, shall deliver to Lender financial
statements indicating that Borrower has adequate funds to pay all costs related
to such tenant improvement work as required under such Lease or deliver to
Lender the amount of 125% of the estimated cost of such tenant improvement.
-79-
Ply Gem Industries
work for deposit into and disbursement in accordance with the Tenant Improvement
and Leasing Commission Reserve.
(t) Lender shall have received subordination agreements on Lender's
then current standard form (or such other form approved by Lender) with respect
to all tenants, including Ply Gem, if applicable, at the Substitute Property to
the extent such Leases are not automatically subordinate (in lien and in terms)
to Lender's Loan and the security instrument.
(u) Lender shall have received an engineering report with respect to
the Substitute Property from an engineer on Lender's approved consultant list
starting that the Substitute Property is in good condition and repair and free
of damage or waste or in the event such report indicates the need for immediate
or on-going repairs at the Substitute Property, Lender shall have established a
reserve in the amount of 125% of the estimated cost of completing such immediate
or on-going repairs, provided, however, in no event shall Lender be obligated to
accept a Substitute Property if the physical condition report relating to such
Substitute Property indicates any damage or deficiencies which in Lender's
judgment create a risk to the safety or well-being to the occupants of
substitute Property.
(V) RESERVED.
(w) Lender Shall have received evidence reasonably satisfactory to
Lender (including, without limitation, a zoning endorsement, property and zoning
report, and/or municipality letter substantially on Lender's then current form)
that the Substitute Property and its use comply in all material respects with
Applicable Laws.
(x) Lender shall have received evidence which would be satisfactory
to a prudent institutional mortgage loan lender to the effect that all material
building and operating licenses and permits necessary for the use and occupancy
of the Substitute Property including, but not limited to, current certificates
of occupancy, have been obtained and are in full force and effect.
(y) Lender shall have received and approved a certified copy of a
property management agreement if the Substitute Property is not otherwise
self-managed by a lessee that has been approved by Lender, with a manager
satisfactory to Lender (or an amendment to an existing approved management
agreement) for the Substitute Property which property management agreement shall
be terminable without cause, and satisfactory to Lender as to form and substance
and the manger shall have executed and delivered to Lender an assignment of
management agreement on Lender's then current standard form (or an amendment to
the existing Assignment of Management Agreement).
(z) Lender shall have received copies of all contracts and Security
Instruments relating to the leasing and operation of the Substitute Property,
each of which shall be in a form and substance which would be satisfactory to a
prudent institutional mortgage loan lender, together with a certification of
Borrower attached to each such contract or Security Instrument
Ply Gem Industries
-80-
certifying that the attached copy is a true and correct copy of such contract or
Security Instrument and all amendments thereto.
(aa) Lender shall have received such other approvals, opinions,
documents and information in connection with substitution as requested by the
Rating Agencies, Lender or the servicer or servicers of the Securitization, if
the Loan is part of a Securitization, or Lender if the Loan is not part of a
Securitization.
(bb) Lender shall have received certified copies of all material
consents, licenses and approvals, if any, required in connection with the
substitution and the Substitute Property, and evidence that such consents,
licenses and approvals are in full force and effect.
(cc) Lender shall have received satisfactory (i.e., showing no liens
other than Permitted Encumbrances) UCC searches, together with tax lien,
judgment and litigation searches with respect to the Substitute Property, the
Borrower and any Guarantor/Indemnitor, in the state where the Substitute
Property is located and the jurisdictions in which each person is/are organized
or resides.
(dd) If Borrower owns a leasehold estate in the Substitute Property,
Lender shall have received, (i) a certified copy of the ground lease for the
Substitute Property, together with all amendments and modifications thereto and
a recorded memorandum thereof, which ground lease would be reasonably
satisfactory in all respects to a prudent institutional mortgage loan lender and
which contains customary leasehold mortgagee provisions and protections, and
which shall provide, among other things, (A) for a remaining term of no less
than the greater of (1) 20 years from the Maturity Date or (2) 10 years from the
end of the scheduled amortization term of the Loan, (B) that the ground lease
shall not be terminated until Lender has received notice of a default
thereunder and has had a reasonable opportunity to cure or complete foreclosure,
and fails to do so in a diligent manner, (C) for a new lease on the same terms
to Lender as tenant if the ground lease is terminated for any reason, (D) the
non-merger of fee and leasehold interests, and (E) that insurance proceeds and
condemnation awards (from the fee interest as well, as the leasehold interest)
will be applied pursuant to the terms of the Security Instrument with respect to
the Substitute Property, and (ii) a ground lease estoppel executed by the fee
owner and ground lessor of the Substitute Property, reasonably acceptable to a
prudent institutional mortgage loan lender.
(ee) Borrower shall submit to Lender, not less than twenty (20)
business days prior to the date of such substitution, a release of lien (and
other Property-related Loan Documents) for the Release Property for execution by
Lender. Such release shall be in a form appropriate for the jurisdiction in
which the Release Property is located and shall contain standard provisions, if
any, protecting the rights of the releasing lender.
(ff) Borrower shall deliver a certificate certifying that the
requirements set forth in this section have been satisfied.
Ply Gem Industries
-81-
ARTICLE 20
LIST OF DEFINED TERMS
20.01. Definitions. The following words and phrases shall have meaning
specified below.
"ACCEPTABLE REPLACEMENT LEASE" means a replacement lease for the
entire Property with an Acceptable Replacement Tenant acceptable to Lender in
its sole discretion.
"ACCEPTABLE REPLACEMENT TENANT" shall mean a single-user tenant
acceptable to Lender in its sole discretion.
"Affiliate" of any Person means (a) any other Person which, directly
or indirectly, is in Control of, is Controlled by or is under common Control
with, such Person; (b) any other Person who is a director or officer of (i) such
Person, (ii) any subsidiary of such Person, or (iii) any Person described in
clause (a) above; or (c) any corporation, limited liability company or
partnership which has as a director any Person described in clause (b) above.
"APPLICABLE INTEREST RATE" has the meaning set forth in Section
2.02(b) of this Loan Agreement.
"APPROVED BUDGET" has the meaning set forth in Section 9.11(a)(v) of
this Loan Agreement.
"ASSIGNMENT OF LEASES AND RENTS" means the Assignment of Leases and
Rents dated as of the Closing Date from Borrower, as assignor, to Lender, as
assignee, assigning to Lender all of Borrower's right, title and interest in
and to the Leases and the Rents with respect to the Property.
"ASSIGNMENT OF PROPERTY MANAGEMENT CONTRACT" means any Assignment
of Property Management Contract and Subordination of Management Fees executed
pursuant to Section 9.14
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978 codified
as 11 U.S.C. Section 101 et. seq., and the regulations issued thereunder, both
as hereafter modified from time to time.
"BORROWER" has the meaning set forth in the introductory paragraph
of this Loan Agreement.
"BUSINESS DAY" or "BUSINESS DAY" means any day other than a
Saturday, a Sunday, or days when Federal Banks located in the State of New York
or Commonwealth of Pennsylvania are closed for a legal holiday or by government
directive. When used with respect.
-82-
Ply Gem Industries
to the Interest Rate Adjustment Date, "Business Day" shall mean a day on which
the banks are open for dealing in foreign currency and exchange in New York
City and London.
"CAPITAL EXPENDITURES" means any hard or soft costs spent to add,
improve or expand property, plant and equipment assets (including, without
limitation, the Capital Improvements and Replacements contemplated under the
Loan) and/or amounts budgeted for the future for the same purposes.
"CASH" shall mean the coin or currency of the United States or
immediately available federal funds, including such funds delivered by wire
transfer.
"CASH FLOW AVAILABLE FOR DEBT SERVICE" means, for a specified
period, (a) the Operating Income less (b) Operating Expenses as determined by
Lender.
"CASUALTY" means the occurrence of damage or destruction to the
Property, or any part thereof, by fire, flood, vandalism, windstorm, hurricane,
earthquake, acts of terrorism or any other casualty.
"CLOSING DATE" means October 22, 2004.
"CONDEMNATION" means the taking by any Governmental Authority of the
Property or any part thereof through eminent domain or otherwise (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of such taking).
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person
whether through ownership of voting securities, beneficial interests, by
contract or otherwise. The definition is to be construed to apply equally to
variations of the word "Control" including "Controlled," "Controlling" or
"controlled by."
"DATA DELIVERY FAILURE" means, without reference to any cure period
under Article 11, each instance that any of the following occur: (a) failure to
deliver any of the reports, information, statements or other materials required
under Section 9.11 within five (5) business days after written notice from
Lender, (b) failure to provide the Compliance Certificate within five (5)
business days after written notice from Lender, or (c) failure to permit
Lender or its representatives to inspect or copy books and records within two
(2) business days of Lender's written request.
"DATA DELIVERY FAILURE FEE" means an amount of Two Thousand Five
Hundred Dollars ($2,500.00) for the first failure, Five Thousand Dollars
($5,000.00) for the second failure, Ten Thousand Dollars ($10,000.00) for the
third failure and each failure thereafter.
"DEBT" means the aggregate of all principal and interest payments
that accrue or are due and payable in accordance with the Loan Agreement,
together with any other amounts
Ply Gem Industries
- 83 -
due under the Loan Documents. The terms "Debt" and "Loan" have to same meaning
whenever used in the Loan Documents.
"DEBT SERVICE COVERAGE RATIO" means, as to a specific period, the
ratio of (a) the Cash Flow Available for Debt Service, to (b) the principal and
interest that would be due and payable under the Note based on the then current
Applicable Interest Rate.
"DEFAULT RATE" has the meaning set forth in Section 2.04(e) of this
Loan Agreement.
"DEFEASANCE" has the meaning set forth in Section 2.05(b)(i) of this
Loan Agreement.
"DEFEASANCE COLLATERAL" has the meaning set forth in Section
2.05(b)(iii) of this Loan Agreement.
"DEFEASANCE PLEDGE AGREEMENT" has the meaning set forth in Section
2.05(b)(ii) of this Loan Agreement.
"DISBURSEMENT REQUEST" means a written request from Borrower
delivered to Lender, substantially in the form attached hereto as Exhibit A,
signed, by a Responsible Officer of Borrower and requesting Lender to disburse
funds from a Reserve Account. Each Disbursement Request shall describe in
reasonable detail the use of the funds requested by the Disbursement Request and
shall have attached to it, as applicable: (a) the invoices for all items or
materials purchased or services performed which are to be funded by the
Disbursement Request, and (b) with respect to any final disbursement, copies of
all permits, licenses and approvals, if any, by any Governmental Authority
confirming completion of the Reserve Items, IF an original invoice is not
available. Borrower shall be required to evidence, to Lender's satisfaction, the
amounts expended for which reimbursement is requested.
"DISCLOSURE DOCUMENTS" has the meaning set forth in Section 15.03 of
this Loan Agreement.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
Agreement dated as of the Closing Date from Borrower and the other Environmental
Indemnitors named therein to Lender.
"EQUITY INTERESTS" means (a) Partnership interests (whether general
or limited) in an entity which is a partnership; (b) membership interests in an.
entity which if a limited liability company; or (c) the shares or stock
interests in an entity which is a corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and the regulations issued thereunder, all as amended or restated from time to
time.
Ply Gem Industries
-84-
"EVENT OF DEFAULT" means any of the events specified in Section
11.01 of this Loan Agreement.
"FRB RELEASE" has the meaning set forth in Section 2.05(c) of this
Loan Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof, and any Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to such government.
"GUARANTOR" means the following Person: Corporate Property
Associates 16 Global Incorporated, who is executing Guaranty as guarantor and
the Environment Indemnity as indemnitor.
"GUARANTY" means the Guaranty of Exceptions to Nonrecourse Liability
dated as of the Closing Date from Guarantor to Lender.
"IMMEDIATE REPAIRS" means the repairs or improvements to the
property identified on Exhibit B hereto.
"IMMEDIATE REPAIR DEPOSIT" has the meaning set forth in Section
4.04(b) of this Loan Agreement, subject to adjustment as set forth in Section
4.04(d).
"IMMEDIATE REPAIR ESCROW ACCOUNT" means an account held by Lender,
or Lender's designee, in which the Immediate Repair Deposit will be held, which
shall not constitute a trust fund.
"IMPROVEMENTS" has the meaning set forth in the Security Instrument.
"INDEMNIFIED CLAIM" means the basis for the Indemnified party's
claim for indemnification under Article 13 hereof.
"INDEMNIFIED PARTIES" means Lender, together with its successors
and assigns, which shall include, without limitation, any owner or prior owner
or holder of Note, any servicer of the Loan, any investor, or holder of a full
or partial interest in the Loan, any receiver or other fiduciary appointed in a
foreclosure or other proceeding under any Requirements of Law regarding
creditors' rights, any officers, directors, shareholders, partners, members,
employees, agents, servants, representatives, contractors, subcontractors,
Affiliates of any and all of the foregoing, in all cases whether during the
term, of the Loan of as part of, or following, a foreclosure of the Security
Instrument.
Ply Gem Industries
- 85 -
"INDEPENDENT DIRECTOR" means an individual who shall not have been at the time
been of such individual's initial appointment, and may not have been at any time
during the preceding five years, and shall not be at any time while serving as
an Independent Director of the SPE Equity Owner or Borrower if a single member
limited liability company or, if applicable, either (a) a shareholder of, or an
officer, director, partner or employee of, Borrower or SPE Equity Owner or any
of their respective shareholders, partners members, subsidiaries or
Affiliates,(b) a customer of, or supplier to, Borrower or SPE Equity Owner or
any of their respective shareholders, partners, members, subsidiaries or
Affiliates, (c) a person or other entity Controlling or under common Control
with any such shareholder, officer, director, partner, member, employee,
supplier or customer, or (d) a member of the immediate family of any such
shareholder, officer, partner, member, employee, supplier or customer.
"INDEX" has the meaning set forth in Section 2.05(c).
"INSURANCE PREMIUMS" means the premiums for the insurance Borrower is
required to provide pursuant to Section 9.03 of this Loan Agreement.
"INSURANCE PREMIUM ESCROW ACCOUNT" means an account held by Lender, or
Lender's designee, in which Borrower's initial deposit for Insurance Premiums
paid on the Closing Date and the Monthly Insurance Deposits will be held.
"ISSUER GROUP" has the meaning set forth in Section 15.05 of this Loan
Agreement.
"ISSUER PERSON" has the meaning set forth in Section 15.05 of this Loan
Agreement.
"LAND" has the meaning set forth in the Security Instrument.
"LARGE LOAN STATEMENTS" has the meaning provided in Section 15.06 of this
Loan Agreement.
"LEASE" has the meaning set forth in the Security Instrument.
"LEASE GUARANTY" has the meaning set forth in the Security Instrument.
"LEASING COMMISSIONS" means leasing commissions incurred by Borrower in
connection with the leasing of any Individual Property or any portion thereof
(including any so-called "override" leasing commissions which may be due to any
leasing or rental agent engaged by Borrower for the Property if an agent other
than such agent also is entitled to a leasing commission, but excluding
commissions due any principal, member, general partner or shareholder of
Borrower or any Affiliate of Borrower).
"LENDER" has the meaning in the introductory paragraph of this Loan
Agreement.
Ply Gem Industries
- 86 -
"LETTERS OF CREDIT" means those certain letters of credit issued by UBS AG
at the request of Ply Gem Industries, Inc. in the amount of $1,500,000.00 and
$100,000.00, respectively and further described in Section 39 of the Ply Gem
Lease.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, the filing of any financing statement under the UCC or
comparable law of any jurisdiction in respect of any of the foregoing and a
mechanics' or materialman's lien).
"LOAN" means the aggregate of all principal and interest payments that
accrue or are due and payable in accordance with the Loan Agreement, together
with any other amounts due under the Loan Documents. The terms "Loan" and "Debt"
have the same meaning whenever used in the Loan Documents.
"LOAN AGREEMENT" means this Loan Agreement.
"LOAN DOCUMENT" means, collectively, this Loan Agreement, the Note, the
Security Instrument, the Assignment of Leases and Rents, the Assignment of
Property Management Contract, the Environmental Indemnity, the Guaranty and any
and all other documents and agreements executed in connection with the Loan, as
each such agreement may be modified, supplemented, consolidated, extended or
reinstated from time to time.
"LOAN TO VALUE RATIO" means with respect to the specified period, the
ratio obtained by dividing (a) the Maximum Loan Amount, by (b) either, as
selected in Lender's discretion, the "as-is" or "as-stabilized" value of the
Property as set forth in the appraisal obtained by Lender in connection with its
underwriting of the Loan or any update thereto, whichever is most recent;
provided however, that should the Operating Income or market rents for the
Property as underwritten by Lender be reduced by ten percent (10%) or more
during the period in question, Lender may obtain a new appraisal at Borrower's
expense.
"LOCKOUT PERIOD EXPIRATION DATE" has the meaning set forth in Section
2.05(b)(i).
"LOSSES" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities and liabilities under federal and state
securities laws), actions, proceedings, obligations, debts, damages, losses,
costs, expenses, fines, penalties, charges, fees, judgments, awards, and
amounts paid in settlement of whatever kind or nature (including without
limitation reasonable legal fees and other costs of defense).
"MAJOR LEASE" means any Lease (excluding any sublease which is otherwise
permitted under the terms of the Ply Gem Lease or an Acceptable Replacement
Lease) covering ten percent (10%) or more rentable square feet of any Individual
Property including any
Ply Gem Industries
- 87 -
expansion options or which has a term of more than five (5) years including any
extension or options to renew. Lender may, in Lender's sole discretion,
aggregate any and all Leases to Affiliated to determine whether such Leases
should be treated as a Major Leases.
"MATERIAL ADVERSE EFFECTS" means, with respect to any circumstance, act,
condition or event of whatever nature (including any adverse determination in
any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event, act, condition
circumstances, whether or not related, in Lender's reasonable judgment, a
material adverse change in, or a materially adverse effect upon (a) the
business, operations, prospects or financial condition of Borrower or Guarantor;
(b) the ability of Borrower or Guarantor to perform its obligations under any
Loan Document to which it is a party; (c) the value or condition of the
Property; (d) compliance of the Property with any Requirements of Law; (e) the
validity, priority or enforceability of any Loan Document or the liens, rights
(including, without limitation, recourse against the Property) or remedies of
Lender hereunder or thereunder; or (f) the occupancy rate of the Property.
"MATURITY DATE" has the meaning set forth in Section 2.03(c) of this Loan
Agreement.
"MAXIMUM LOAN AMOUNT" means the maximum principal amount of
$17,650,000.00, in lawful money of the United States of America, to be advanced
to Borrower pursuant to this Loan Agreement. References in the Loan Agreement to
"Maximum Loan Amount" mean the maximum principal amount, irrespective of actual
principal amount outstanding or actually advanced to Borrower during the term of
the Loan.
"MONTHLY INSURANCE DEPOSIT" means, with respect to the specified period,
an amount equal to one-twelfth (1/12) of the Insurance Premiums that Lender
estimates will be payable during the next ensuing twelve(12) months, subject to
adjustment as set forth in Section 4.03(d) of this Loan Agreement.
"MONTHLY REPLACEMENT RESERVE DEPOSIT" has the meaning set forth in Section
4.05(b) of this Loan Agreement, subject to adjustment as set forth Section
4.05(d).
"MONTHLY TAX DEPOSITS" means, with respect to the specified period, an
amount equal to one-twelfth (1/12) of the Taxes that Lender estimates will be
payable during the next ensuring twelve (12) months, subject to adjustment as
set forth in Section 4.02(d) of this Loan Agreement.
"MONTHLY TI/LC DEPOSIT" has the meaning set forth in Section 4.06(b) of
this Loan Agreement, subject to adjustment as set forth in Section 4.06(d).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.
Ply Gem Industries
- 88 -
"NET WORTH" means, as of a given date, a Person's equity calculated
in conformance with GAAP by subtracting total liabilities from total tangible
assets.
"NOTE" means the Promissory Note dated as of the Closing Date from
Borrower to the order of Lender in the original principal amount equal to the
Maximum Loan Amount.
"OBLIGATIONS" means the Loan, and all other obligation and
liabilities of the Borrower to Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with the Loan the Loan Documents,
whether on account of principal, interest, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees and disbursements
of legal counsel) or otherwise.
"OFAC LIST" means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and any other similar list
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
pursuant to any Requirements of Law, including, without limitation, trade
embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States. The OFAC List is accessible through the
internet website ▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇▇▇.▇▇▇.
"OHIO LETTER OF CREDIT" means that certain letter of credit issued
by USBAG at the request of Ply Gem Industries, Inc. in the amount of
$7,210,000.00 and further described in that certain Agreement to Convey dated
August 27, 2004 between Ply Gem Industries, Inc., a Delaware corporation, Kroy
Building Products, Inc., a Delaware corporation, MWM Holding, Inc., a Delaware
corporation, Great Lakes Window, Inc., an Ohio corporation, MW Manufactures
Holding Corp., a Delaware corporation, MW Manufacturers Inc., a Delaware
corporation, NAPCO Window System, Inc., a Delaware corporation, NAPCO, Inc., a
Delaware corporation, Thermal-Gard, Inc., a Pennsylvania corporation and
Variform, Inc., a Missouri corporation, as tenants, and Borrower, as landlord.
"OPEN DATE" has the meaning set forth in Section 2.05(a) of this
Loan Agreement.
"OPERATING AGREEMENTS" has the meaning set forth in the Security
Instrument.
"OPERATING EXPENSES" means all cash expenses actually incurred by or
charged to Borrower (appropriately pro-rated for any expenses that, although
actually incurred in a particular period, also relate to other periods), with
respect to the ownership, operation, leasing and management of the Property in
the ordinary course of business, determined in accordance with GAAP, and
adjusted by Lender in accordance with Lender's customary underwriting procedures
and policies then in effect which Operating Expenses are also adjusted to
include any underwritten reserves for Replacements, Tenant Improvements and
Leasing Commissions and any other underwritten reserves as determined by Lender
whether or not required to be reserved.
Ply Gem Industries
- 89 -
Operating Expenses shall specifically exclude (1) costs of Tenant Improvements
and Leasing Commissions, (2) capital expenditures, (3) depreciation, (4)
payments made in connection with the payment of the outstanding principal
balance of the Loan, (5) costs of Restoration following a Casualty or
Condemnation, (6) funds disbursed from any Reserve Account, and (7) any other
non-cash items.
"OPERATING INCOME" means all gross cash income, revenues and
consideration received or paid to or for the account or benefit of Borrower
resulting from or attributable to the operation or leasing of the Property
determined in accordance with GAAP and adjusted by Lender in accordance with
Lender's customary underwriting procedures and policies then in effect but
excluding any income and revenues from a sale, refinancing, Casualty or
Condemnation, payment of rents more than one (1) month in advance, lease
termination payments, or payments from any other events not related to the
ordinary course of operations of the Property.
"ORGANIZATIONAL CHART" means the chart attached hereto as Exhibit C
which shows all persons or entities having an ownership interest in Borrower and
in the SPE Equity Owner.
"OTHER CHARGES" means all ground rents, maintenance charges,
impositions (other than Taxes) and similar charges (including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property), now or hereafter assessed or imposed
against the Property, or any part thereof, together with any penalties thereon.
"PARTIAL RELEASE" has the meaning set forth in Section 10.03 of this
Loan Agreement.
"PARTIAL RELEASE DATE" has the meaning set forth in Section 10.03 of
this Maximum Loan Agreement.
"PARTIAL RELEASE PRICE" means the portion of the Maximum Loan Amount
allocated to the following portions of the Property as set forth below:
Release Property Partial Release Price
---------------- ---------------------
1. Kearney, Missouri $ 3,643,750.00
2. Fair Bluff, North Carolina $ 1,000,000.00
3. York, Nebraska $ 1,062,500.00
4. Toledo, Ohio $ 5,462,500.00
5. Middlesex Township, Pennsylvania $ 2,337,500.00
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ $ 4,500,000.00
Play Gem Industries
- 90 -
7. Martinsburg, West Virginia $4,056,250.00
"PAYMENT DUE DATE" has the meaning set forth in Section 2.03(b) of
this Loan Agreement. It is the date that a regularly scheduled payment of
principal and interest (or interest if the loan payments are interest-only) is
due.
"PERMITTED ENCUMBRANCES" means only those exceptions shown in the
Title Insurance Policy and each other Lien which has been approved in writing by
Lender.
"PERMITTED TRANSFER" means each of the following:
(a) Except as otherwise permitted in the following clause (c),
Transfers of Equity Interests which, in the aggregate over the term of the Loan
(i) do not exceed forty-nine percent (49%) of the total interests in Borrower or
in SPE Equity Owner or in Guarantor, as applicable; (ii) do not result in any
Person holding an Equity Interest in Borrower or SPE Equity Owner, as
applicable, which exceeds forty-nine percent (49%) of the total Equity Interests
in Borrower or in SPE Equity Owner, as applicable; and (iii) do not result in a
change of Control.
(b) Transfers with respect to any Person whose stocks or
certificates are traded on a nationally recognized stock exchange.
(c) Transfers which have been approved by Lender in accordance with
Section 10.02(a) of this of Loan Agreement or which are permitted under Section
10.02(b) of this Loan Agreement.
(d) Permitted Encumbrances.
(e) All Transfers of worn out or obsolete furnishings, fixtures or
equipment that are promptly replaced with property of equivalent value and
functionality.
(f) All Major Leases which have been approved by Lender in
accordance with this Loan Agreement.
(g) All Leases which are not Major Leases and which have been
approved by the Lender pursuant to Section 9.06 or that not require Lender's
approval pursuant to Section 9.06.
(h) The sale, transfer, assignment, encumbrance or pledge of shares
by any current or future shareholder in Corporate Property Associates 16
Incorporated, or any Affiliate that shall become the Guarantor, or the issuance
of additional shares by any of the foregoing.
"PERSON" means an individual, partnership, limited partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, governmental authority or
other entity of whatever nature.
Ply Gem Industries
- 91 -
"PERSONAL PROPERTY" has the meaning set forth in the Security
Instrument.
"PLY GEM" shall mean, individually and collectively, the following parties
that comprise the tenant under the Ply Gem Lease: Ply Gem Industries, Inc., a
Delaware corporation; MWM Holding, Inc., a Delaware corporation; Great Lakes
Window, Inc., an Ohio corporation; MW Manufacturers Holding Corp., a Delaware
corporation; MW Manufacturers Inc., a Delaware corporation, NAPCO Window
Systems, Inc., a Delaware corporation; Kroy Building Products, Inc., a Delaware
corporation; NAPCO, Inc., a Delaware corporation; Thermal-Gard, Inc., a
Pennsylvania corporation; and Variform, Inc., a Missouri corporation.
"PLY GEM LEASE" means that Deed of Lease Agreement dated as of
August 27, 2004 between Borrower and Ply Gem with respect to the Property.
"PROHIBITED PREPAYMENT" has the meaning set forth in Section 2.05(c)
of this Loan Agreement.
"PROHIBITED PREPAYMENT FEE" has the meaning set forth in Section
2.05(c) of this Loan Agreement.
"PROPERTY" means collectively, all Individual Properties securing
the Loan, as described on Exhibit G attached hereto, or one or more of the
Individual Properties, as the context requires.
"PROPERTY MANAGEMENT CONTRACT" means any agreement between Borrower
and Property Manager and approved by Lender, which provides for the management
of the Property for Borrower by Property Manager.
"PROPERTY MANAGER" means a property manager approved by Lender.
"PV" has the meaning set forth in Section 2.05(c).
"RATING AGENCIES" means Fitch, Inc., ▇▇▇▇▇'▇ and S&P, or any
Successor entity of the forgoing, or any other nationally recognized statistical
rating organization to the extent that any of the foregoing have been or will be
engaged by lender or its designees in connection with or in anticipation of
Securitization or any other sale or grant of participation interest in the Loan
(or any Part thereof.)
"RATING CONFIRMATION" means a written confirmation from each of the
Rating Agencies (unless otherwise agreed by Lender) that an action shall not
result in a downgrade, withdrawal or qualification of any securities issued in
connection with a Securitization.
"RELEASE" has the meaning set forth in Section 2.05(b) of this Loan
Agreement.
Ply Gem Industries
- 92 -
"RELEASE DATE" has the meaning set forth in Section 2.05(b) of this Loan
Agreement.
"RELEASE INSTRUMENTS" has the meaning set forth in Section 2.05(b)(ii) of
this Loan Agreement.
"RELEASE PARCEL TRANSFEREE" has the meaning set forth in Section 10.03 of
this Loan Agreement.
"RELEASE PROPERTY" means each portion of the Property identified as
"Release Property" above in the definition of Partial Release Price.
"REMAINING PROPERTY" has the meaning set forth in Section 10.03(e) of this
Loan Agreement.
"RENT ROLL" means a written statement from Borrower, substantially in the
form attached hereto as Exhibit D, detailing the names of all tenants of the
Property, the portion of Property occupied by each tenant, the base rent and
any other charges payable under each Lease, the term of each Lease , the
beginning date and expiration date of each Lease, whether any tenant is in
default under its Lease (and detailing the nature of such default), and any
other information as is reasonably required by Lender, all certified by a
Responsible Officer to be true, correct and complete.
"RENTS" has the meaning set forth in the Security Instrument.
"REPLACEMENT RESERVE ACCOUNT" means an account held by Lender, or
Lender's designee, in which the Monthly Replacement Reserve Deposits will be
held, which shall not constitute a trust fund.
"REPLACEMENTS" means the scheduled repairs and replacements to the
Property identified on Exhibit E hereto.
"REQUIREMENTS OF LAW" means (a) the organizational documents of an entity,
and (b) any law, regulation, ordinance, code, decree, treaty, ruling or
determination of an arbitrator, court or other Governmental Authority, or any
Executive Order issued by the President of the United States, in each case
applicable to or binding upon such Person or to which such Person, any of its
property or the conduct of its business is subject including, without
limitation, laws, ordinances and regulations pertaining to the zoning, occupancy
and subdivision of real property.
"RESERVE ACCOUNTS" means, individually and collectively, as the context
requires, the Tax Escrow Account, the Insurance Premiums Escrow Account, the
Immediate Repair Escrow Account, the Replacement Reserve Account and the TI/LC
Reserve Account.
Ply Gem Industries
- 93 -
"RESERVE ITEM" means, individually and collectively, as the context
requires, the Immediate Repairs or any alternative to an Immediate Repair which
is otherwise acceptable to Leader in its sole discretion, the Replacements,
the Tenant Improvements and the Leasing Commissions.
"RESPONSIBLE OFFICERS" means, as to any person, an individual who is a
managing member, a general partner, the chief executive officer, the president
or any vice president of such Person or, with respect to financial matters, the
chief financial officer or treasurer of such Person or any other officer
authorized by such Person to deliver documents with respect to financial matters
pursuant to this Loan Agreement.
"RESTORATION" means the repairs, replacements, improvements, or rebuilding
of or to the Property following a Casualty or Condemnation.
"RESTORATION DEFICIENCY DEPOSIT" has the meaning set forth Section 9.04(d)
of this Loan Agreement. All amounts deposited by Borrower with Lender as the
Restoration Deficiency Deposit shall become a part of the Restoration Proceeds
and disbursed by Lender for Restoration on the same conditions applicable to
disbursement of Restoration Proceeds and, until so disbursed, are pledged to
Lender as security for the Loan and Obligations.
"RESTORATION HOLDBACK" has the meaning set forth in Section 9.04(e) of
this Loan Agreement.
"RESTORATION PROCEEDS" has the meaning set forth in Section 9.04(b) of
this Loan Agreement.
"S & P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"SECURITIES ACT" means the Securities Act of 1933 and any successor
statute thereto and the related regulations issued thereunder, all as amended
from time to time.
"SECURITIES LIABILITIES" has the meaning provided in Section 15.05 of this
Loan Agreement.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, and
any successor statute thereto and the related regulations issued thereunder, all
as amended from time to time.
"SECURITIZATION" or SECURITIZE" means the sale of the Loan, by itself or
as part of pool with other loans, in a transaction whereby mortgage pass-through
certificates or other securities evidencing a beneficial interest, backed by the
Loan or such pool of loans, will be sold as a rated or unrated public offering
or private placement.
Ply Gem Industries
- 94 -
"SECURITY INSTRUMENT" means the Mortgage Assignment of Rents and Leases,
Security Agreement and Fixture Filing, or the Deed of Trust, Assignment of Rents
and Leases, Security Agreement and Fixture filing, or the Deed of Secure
Debt, Assignment of Rents and Leases, Security Agreement and Fixture Filing as
applicable, encumbering the Property and executed by Borrower to Lender or to a
trustee for the benefits of Lender, as the case may be, to secure Borrower's
payment of the Loan and performance of the Obligations.
"SINGLE PURPOSE ENTITY" has the meaning set forth in Section 7.02 of this
Loan Agreement.
"SPE EQUITY OWNER" means PG (MULTI) QRS 16-7, Inc., a Delaware
corporation.
"STANDARD LEASE FORM" means, as applicable, the standard form of lease
agreement used by Borrower for the rental of commercial units at the Property
and the standard form of lease agreement used by Borrower for the rental of
residential units at the Property, in each case in the form certified to Lender
as of the Closing Date or subsequently approved by Lender in writing.
"SUBSTITUTE ALLOCATED LOAN AMOUNT" has the meaning set forth in Section
19.01(h) of this agreement.
"SUBSTITUTE PROPERTY" has the meaning set forth in Section 19.01 of this
Loan Agreement.
"SUCCESSOR BORROWER" has the meaning set forth in Section 2.05(b) of this
Loan Agreement.
"TAX CODE" means the Internal Revenue Code of 1986 and the related
Treasury Department regulations issued thereunder, including temporary
regulations, all as amended from time to time.
"TAX ESCROW ACCOUNT" means an account held by Lender, or Lender's
designee, in which Borrower's initial deposit for Taxes made on the Closing Date
and the Monthly Tax Deposits will be held, which shall not constitute a trust
fund.
"TAXES" means all real estate taxes, governments assessments or
impositions, lienable water charges, lienable sewer rents, assessments due
under owner association documents, ground rents, vault charges and license fees
for the use of vault chutes and all other charges (other than the Other
Charges), now or hereafter levied or assessed against the Land and Improvements.
Ply Gem Industries
-95-
"TENANT IMPROVEMENTS" means improvements made to the Property to prepare
the same for tenant occupancy in connection with each Lease and by Borrower in
conformity with the terms of the related Lease and this Loan Agreement.
"TERMINATION AMOUNT" has the meaning set forth in Section 2 of the Ply Gem
Lease.
"TI/LC RESERVE ACCOUNT" means an account held by Lender, OR Leader's
designee, in which the Monthly TI/LC Deposits will be held, which shall not
constitute a trust fund.
"TITLE INSURANCE POLICY" means the mortgagee title insurance policy
obtained by Lender in connection with the Loan, and, until the issuance of such
policy, the commitment for title insurance as marked-up as of the Closing Date
, in either case in form and substance (with such endorsements and affirmative
coverages) as is satisfactory to Lender, insuring that the Security Instrument
constitutes a perfected first Lien against the Property in the Maximum Loan
Amount, subject only to Permitted Encumbrances.
"TRANSFER" means any action by which either (a) the legal or beneficial
ownership of the Equity Interests in Borrower or in SPE Equity Owner or in the
Guarantor, or (b) the legal or equitable title to the Property, or any part
thereof, or (c) the cash flow from the Property or any portion thereof, are
sold, assigned, transferred, hypothecated, pledged or otherwise encumbered or
dispose of, in each case (a), (b) or (c) whether undertaken, directly or
indirectly, or occurring by operation of law or otherwise, including, without
limitation, each of the following actions:
(i) the sale, conveyance, assignment, grant of an option with respect to,
mortgage, deed in trust, pledge, grant of a security interest in, or any
other transfer, as security or otherwise, of the Property or with respect
to the Leases or Rents(or any thereof);
(ii) the grant of an easement across the Property (other than minor easements
not having a Material Adverse Effect) or any other agreement granting
rights in or restricting the use or development of the Property
(including, without limitation, air rights);
(iii) an installment sale wherein Borrower agrees to sell the Property for a
price to be paid in installments; or
(iv) an agreement by Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder; or
Ply Gem Industries
-96-
(v) the issuance of additional partnership, membership or other equity
interests, as applicable.
"UCC" means the Uniform Commercial Code in effect in the State where
the Property is located, as from time to time amended or restated. For purposes
of the UCC's application to the Reserve Accounts, the parties agree that the
Reserve Accounts shall be deemed located in the state where the Property is
located.
"UNDEFEASED NOTE" has the meaning set forth in Section 2.05 (b)(v)
of this Loan Agreement.
"UNDERWRITER GROUP" has the meaning provided in Section 15.05 of
this Loan Agreement.
"YIELD MAINTENANCE PREMIUM" has the meaning set forth in Section
2.05 (c).
ARTICLE 21
LOCAL LAW PROVISIONS
Intentionally Deleted.
[REMAINDER OF PAGE IS BLANK; SIGNATURES APPEAR ON NEXT PAGE.]
Ply Gem Industries
-97-
IN WITNESS WHEREOF, Lender and Borrower hereby sign, seal and deliver this Loan
Agreement. By signing below on behalf of Borrower, SPE Equity Owner also
consents, in its individual capacity, to the obligations of SPE Equity Owner set
forth Sections 7.02(b), 9.11(c) and Article 15 of this Loan Agreement.
LENDER: BORROWER:
GMAC COMMERCIAL MORTGAGE BANK, PG (MULTI-16) L.P.,
a Utah Industrial Bank a Delaware limited partnership
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: PG (MULTI-16) QRS 16-7, INC.
-------------------------- Its General Partner
Name : ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title : Authorised ▇▇▇▇▇▇
By :
----------------------------
Name
Title:
Borrower's State Identification No: 3837857
Borrower's Tax Id Number: ▇▇-▇▇▇▇▇▇▇
Attachments:
------------
Exhibit A Disbursement request Form
Exhibit B Immediate Repairs
Exhibit C Organizational Chart
Exhibit D Rent Roll
Exhibit E Replacements
Exhibit F Capital Improvements
Exhibit G List of Individual Properties
IN WITNESS WHEREOF, Lender and Borrower hereby sign, seal and deliver this Loan
Agreement. By signing below on behalf of Borrower, SPE Equity Owner also
consents, in its individual capacity, to the obligations of SPE Equity Owner set
forth Sections 7.02(b), 9.11(c) and Article 15 of this Loan Agreement.
LENDER: BORROWER:
GMAC COMMERCIAL MORTGAGE BANK, PG (MULTI-16) L.P.,
a Utah Industrial Bank a Delaware limited partnership
By: By: PG (MULTI-16) QRS 16-7, INC.
-------------------------- Its General Partner
Name :
Title :
By : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Borrower's State Identification No: 3837857
Borrower's Tax Id Number: ▇▇-▇▇▇▇▇▇▇
Attachments:
------------
Exhibit A Disbursement request Form
Exhibit B Immediate Repairs
Exhibit C Organizational Chart
Exhibit D Rent Roll
Exhibit E Replacements
Exhibit F Capital Improvements
Exhibit G List of Individual Properties
EXHIBIT A
DISBURSEMENT REQUEST FORM
Ply Gem Industries
A - 1
[GMAC LOGO]
ESCROW DISBURSEMENT REQUEST FORM
Project Name HOW TO SUBMIT A REQUEST FOR DISBURSEMENT:
1. Complete this Escrow Disbursement Request Form by
filling in ALL relevant information and signing the
certification below.
2. Accompany this form with Invoices, evidence of
payment, lien waivers, AND ANY OTHER DOCUMENTATION
REQUIRED UNDER THE LOAN DOCUMENTS.
When adding supporting documentation, PLEASE AVOID
USING STAPLES.
Loan Number 3. Mail this form and supporting documentation to:
Operation Reserve Group, GMAC Commercial Mortgage
Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
4. It will take approximately 15 BUSINESS DAYS from our
date of receipt to process your request if an
inspection and/or additional documentation are not
required.
PLEASE CHECK THE RESERVE ACCOUNT FROM WHICH FUNDS ARE BEING REQUESTED: (PLEASE
USE A SEPARATE FORM FOR EACH RESERVE ACCOUNT.)
[ ] Replacement Reserve/ [ ] Completion Repair/ [ ] Tenant Improvement/ [ ] Other ----------------------
Capital Improvements Deferred Maintenance Leasing Commission
GMACCM USE ONLY
-------------------
No. Item Description Unit/Area Vendor Name Invoice No. Check No. Amount Paid Explanation of Job % Complete Amt. Approved Code*
--- ---------------- --------- ----------- ----------- --------- ----------- ------------------ ---------- ------------- -----
1
2
3
4
5
6
7
8
9
10
Total Requested Amount:____________ Total Amount Approved:_____________
IMPORTANT NOTE: IF YOU REQUIRE ADDITIONAL SPACE OR YOU PREFER TO USE
YOUR OWN FORM TO LIST ITEMS, YOU MAY ATTACH AN
ADDITIONAL SHEET TO THIS FORM, HOWEVER
ALL OTHER FIELDS ON THIS FORM MUST BE COMPLETED AND YOUR
FORM MUST CONTAIN IDENTICAL COLUMN HEADING OR YOUR
REQUEST WILL BE RETURNED.
PLEASE PROVIDE THE ADDRESS WHERE A CHECK SHOULD BE MAILED: * REASON FOR DISAPPROVAL CODES:
Name ----------------------------------------------- Company --------------- 1 Not eligible for reimbursement
2 Need further description of Item.
Street Address ------------------------------------- City, State and Zip --- 3 Not Supported by an Invoice.
4 Not accompanied by evidence of payment.
5 Not accompanied by a lien waiver.
Mortgagor/Project Name
[as it should appear on check] --------------------- Telephone Number ------ 6 Duplicate request.
7 Other ---------------------------
---------------------------
E-mail Address ------------------------------------- Fax (optional) -------- 8 Other ---------------------------
---------------------------
9 Other ---------------------------
---------------------------
BORROWER'S CERTIFICATION:
The Undersigned hereby certifies that all of the attached invoices for the items
listed have been paid and that the work has been completed in a good,
workmanlike manner and in accordance with any plans and/or specifications
previously approved by the Lender, In addition the undersigned certifies that
all such repairs are in compliance with all applicable laws, ordinances, rules
and regulations of any governmental authority, agency, Instrumentally having
jurisdiction over the project. The undersigned also certifies that neither the
borrower nor its management firm have any ownership interest or profit sharing
agreement with any of the suppliers or vendors listed on this request, which has
not been disclosed on the back of this item or under separate cover attached to
this request.
Name (Please Print) Signature Date
[ ] ▇▇▇▇ here if additional page is attached.
EXHIBIT B
IMMEDIATE REPAIRS
(as further described in Exhibit I to the Ply Gem Lease)
1. Rocky Mount, VA premises:
Remediate, or cause to be remediated, the PCP and mineral spirit
contamination of soil and groundwater(if impacted) to applicable cleanup
standards and to the written approval of the applicable Governmental
Environmental Agency.
2. Valencia, PA premises:
If required by applicable law or governmental agency, investigate the area
of the former USTs, septic system and historic spills identified in the August
2004 "Environmental Review of Ply Gem Industries, Inc. and MS Manufacturers
Inc." prepared by ENVIRON and remediate any contamination to applicable cleanup
standards and to the written approval of the applicable environmental agency.
3. Martinsburg, WV premises:
If required by the West Virginia Department of Environmental
Protection("WVDEP"), address any comments from WVDEP to the closure report for
the used oil AST.
4. Rocky Mount, VA premises:
a) Provide secondary containment for the three USTs;
5. Valencia, PA premises:
a) Removal of approximately 150 empty drums stored on pavement west of
the hazardous waste storage area and approximately 400 drums stored on soil
north of the south wastewater treatment plant.
6. York, NE premises: N/A
7. Kearney, MO premises: N/A
8. Fair Bluff, NC premises: N/A
9. Valencia, PA premises:
a) Install secondary roof drains on EPDM roofs;
b) Install three (3) additional ADA compliant parking spaces with one (1)
meeting "Van Accessible" requirements;
c) File corrected subdivision map(executed by each adjoining landowner
and the appropriate governmental authorities) correcting "Subdivision No. 3 for
▇▇▇▇▇ ▇. ▇▇▇▇▇▇" to reflect and recognize the boundaries set forth in the legal
description on Exhibit "A" of this Lease with respect to the Valencia, PA
property or provide such other evidence that the referenced correction has been
made; and
d) Install two (2) ADA complaint restrooms on first level.
10. Toledo, OH premises:
a) Install nine (9) ADA compliant parking spaces with one (1) meeting the
"Van Accessible" requirements
Ply Gem Industries
B-1
11. Rocky Mount, VA premises:
a) Replace painted sprinkler heads;
b) Install sprinkler system in compactor area;
c) Lower stacking heights of stored plastic materials as recommended by
St. ▇▇▇▇ Travelers Insurance Company;
d) Install three (3) ADA compliant parking spaces with two (2) meeting
"Van Accessible" requirements;
e) Install ADA signage that directs personnel or visitors to ADA
complaint restrooms in the main buildings; and
f) Install ADA Convert one (1) restroom in the ▇▇▇▇▇▇ Building to a
Unisex ADA compliant restroom.
12. Fair Bluff, NC premises:
a) Install three (3) ADA compliant parking spaces with one (1) meeting
the "Van Accessible" requirements; and
b) Replace the broken locker-room faucets with lever style controls and
install pipe protection when the locker-rooms are renovated as
planned.
13. Martinsburg, WV premises:
a) Replace thru-wall units in QC lab;
b) Install scuppers in parapet of roof over offices;
c) Repair site
lighting controls;
d) Obtain drainage pipe easement for drainage pipe connected to
stormwater retainage pond or provide evidence that such pipe is
located on the Martinsburg, WV premises; and
e) Install ADA compliant parking spaces.
14. Kearney, MO premises:
a) Install an access ramp to the office entrance;
b) Install three (3) signs marking the ADA compliant parking spaces;
c) Stripe an additional one hundred sixty-nine (169) parking spaces;
and
d) Install a "Van Accessible" parking space meeting ADA requirements.
15. York, NE premises:
a) Improve office restroom at the office area;
b) Install an appropriate entrance door with grade level thresholds at
the office entrance; and
c) Install three (3) ADA compliant parking spaces with one (1) meeting
"Van Accessible" requirements.
Ply Gem Industries
B-2
EXHIBIT C
ORGANIZATIONAL CHART
B-1
PLY GEM -- U.S.
CORPORATE STRUCTURE
[FLOW CHART]
EXHIBIT D
RENT ROLL
D-1
\
RENT ROLL CERTIFICATION
PG (Multi-16) L.P. ("Borrower") hereby certifies in connection with that
certain $17,650,000 mortgage loan being made as of even date herewith by GMAC
Commercial Mortgage Bank to Borrower secured by property situate in Rocky Mount,
VA, Valencia, PA, Toledo, OH, York, NE, Fair Bluff, NC, Martinsburg, WV and
Kearney, MO that the only lease with respect to these properties to which
Borrower is a party is set forth below:
TENANTS DATE CURRENT ANNUAL RENT INITIAL TERM
EXPIRATION
DATE
See Schedule 1 8/27/04 $2,980,575.00 8/31/2024
PG (MULTI-16) L.P.
By: PG (Multi-16) QRS 16-7, Inc., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
Dated: October 18th, 2004
SCHEDULE 1
PLY GEM INDUSTRIES, INC.,
a Delaware corporation,
MWM HOLDING, INC.,
a Delaware corporation,
GREAT LAKES WINDOW, INC.,
an Ohio corporation,
MW MANUFACTURERS HOLDING CORP.,
a Delaware corporation,
MW MANUFACTURERS INC.,
a Delaware corporation,
NAPCO WINDOW SYSTEMS, INC.,
a Delaware corporation,
KROY BUILDING PRODUCTS, INC.,
a Delaware corporation,
NAPCO, INC.,
a Delaware corporation,
THERMAL-GARD, INC.,
a Pennsylvania corporation,
VARIFORM, INC.,
a Missouri corporation,
EXHIBIT E
REPLACEMENTS
NONE
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇-▇
EXHIBIT G
LIST OF INDIVIDUAL PROPERTIES
ROCKY MOUNT, VIRGINIA
MIDDLESEX TOWNSHIP, PENNSYLVANIA
TOLEDO, OHIO
YORK, NEBRASKA
FAIR BLUFF, NORTH CAROLINA
MARTINSBURG, WEST VIRGINIA
KEARNEY, MISSOURI
Ply Gem Industries
G-1