Exhibit 10.1
LOAN AGREEMENT
[LIBOR]
BETWEEN
PARKING COMPANY OF AMERICA AIRPORTS, LLC, A DELAWARE LIMITED LIABILITY COMPANY,
PARKING COMPANY OF AMERICA AIRPORTS PHOENIX, LLC, A DELAWARE LIMITED LIABILITY
COMPANY, PCAA SP, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND PCA AIRPORTS,
LTD., A TEXAS LIMITED PARTNERSHIP (COLLECTIVELY, BORROWER)
AND
CAPMARK FINANCE INC., A CALIFORNIA CORPORATION
(LENDER)
DATED AS OF SEPTEMBER 1, 2006
Loan Numbers: 54375, 55184, 55185, 55186 and 55187
TABLE OF CONTENTS
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ARTICLE 1 DEFINED TERMS AND CONSTRUCTION GUIDELINES...................... 2
1.01. Defined Terms.................................................. 2
1.02. General Construction........................................... 2
1.03. Borrower....................................................... 3
1.04. Property....................................................... 3
ARTICLE 2 LOAN AMOUNT; PAYMENT TERMS; ADVANCES........................... 3
2.01. Commitment to Lend............................................. 3
2.02. Calculation of Interest........................................ 3
2.03. Payment of Principal and Interest.............................. 5
2.04. Payments Generally............................................. 8
2.05. Prepayment Rights.............................................. 9
2.06. Right of First and Last Refusal................................ 10
2.07. Interest Rate Cap/Hedge........................................ 11
ARTICLE 3 CASH MANAGEMENT................................................ 13
3.01. Lockbox........................................................ 13
ARTICLE 4 ESCROW AND RESERVE REQUIREMENTS................................ 13
4.01. Creation and Maintenance of Escrows and Reserves............... 13
4.02. Tax Escrow..................................................... 15
4.03. Insurance Premium Escrow....................................... 16
4.04. Capital Improvements/Deferred Maintenance Escrow Account....... 16
4.05. Replacement Reserve Account.................................... 17
4.06. Intentionally Omitted.......................................... 18
4.07. Intentionally Omitted.......................................... 18
4.08. Leasehold Payment Reserve Account.............................. 18
4.09. Excess Cash Flow Reserve Account............................... 19
4.10. Swap Payments Reserve Account.................................. 19
ARTICLE 5 COMPLETION OF REPAIRS RELATED TO RESERVE ACCOUNTS; CONDITIONS
TO RELEASE OF FUNDS............................................ 20
5.01. Conditions Precedent to Disbursements from Certain Reserve
Accounts....................................................... 20
5.02. Waiver of Conditions to Disbursement........................... 21
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5.03. Direct Payments to Suppliers and Contractors................... 22
5.04. Performance of Reserve Items................................... 22
ARTICLE 6 LOAN SECURITY AND RELATED OBLIGATIONS.......................... 23
6.01. Security Instrument and Assignment of Rents and Leases......... 23
6.02. Assignment of Property Management Contract..................... 23
6.03. Assignment of Rate Cap Agreement............................... 23
6.04. Assignment of Operating Agreements............................. 23
6.05. Pledge as Property; Grant of Security Interest................. 23
6.06. Environmental Indemnity Agreement.............................. 24
6.07. Guaranty of Borrower Sponsors.................................. 25
6.08. Letter of Credit............................................... 24
ARTICLE 7 SINGLE PURPOSE ENTITY REQUIREMENTS............................. 25
7.01. Commitment to be a Single Purpose Entity....................... 25
7.02. Definition of Single Purpose Entity............................ 26
ARTICLE 8 REPRESENTATIONS AND WARRANTIES................................. 30
8.01. Organization; Legal Status..................................... 30
8.02. Power; Authorization; Enforceable Obligations.................. 31
8.03. No Legal Conflicts............................................. 31
8.04. No Litigation.................................................. 31
8.05. Business Purpose of Loan....................................... 31
8.06. Warranty of Title.............................................. 31
8.07. Condition of the Property...................................... 32
8.08. No Condemnation................................................ 32
8.09. Requirements of Law............................................ 32
8.10. Operating Permits.............................................. 32
8.11. Separate Tax Lot............................................... 32
8.12. Flood Zone..................................................... 32
8.13. Adequate Utilities............................................. 33
8.14. Public Access.................................................. 33
8.15. Boundaries..................................................... 33
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8.16. Mechanic Liens................................................. 33
8.17. Assessments.................................................... 33
8.18. Insurance...................................................... 33
8.19. Leases......................................................... 33
8.20. Management Agreement........................................... 34
8.21. Financial Condition............................................ 34
8.22. Taxes.......................................................... 34
8.23. No Foreign Person.............................................. 34
8.24. Federal Regulations............................................ 34
8.25. Investment Company Act; Other Regulations...................... 34
8.26. ERISA.......................................................... 34
8.27. No Illegal Activity as Source of Funds......................... 35
8.28. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-
Money Laundering Laws.......................................... 35
8.29. Brokers and Financial Advisors................................. 35
8.30. Equity Contribution............................................ 35
8.31. Complete Disclosure; No Change in Facts or Circumstances....... 35
8.32. Parking Leases................................................. 35
8.33. Survival....................................................... 37
8.34. Philadelphia Joint Operation................................... 37
ARTICLE 9 BORROWER COVENANTS............................................. 37
9.01. Payment of Debt and Performance of Obligations................. 37
9.02. Payment of Taxes and Other Lienable Charges.................... 37
9.03. Insurance...................................................... 38
9.04. Obligations upon Condemnation or Casualty...................... 42
9.05. Inspections and Right of Entry................................. 47
9.06. Leases and Rents............................................... 47
9.07. Use of Property................................................ 48
9.08. Maintenance of Property........................................ 48
9.09. Waste.......................................................... 49
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9.10. Compliance with Laws........................................... 49
9.11. Financial Reports, Books and Records........................... 49
9.12. Performance of Other Agreements................................ 51
9.13. Existence; Change of Name; Location as a Registered
Organization................................................... 52
9.14. Property Management............................................ 52
9.15. ERISA.......................................................... 52
9.16. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-
Money Laundering Laws.......................................... 53
9.17. Equity Contribution............................................ 53
9.18. Net Worth Covenant............................................. 53
9.19. Liquidity Covenant............................................. 53
9.20. Parking Lease Covenants........................................ 53
9.21. JFK Lease...................................................... 56
9.22. LGA Lease...................................................... 56
9.23. PCAA 7750 Property Lease....................................... 57
9.24. Rate Swap Covenants............................................ 57
9.25. Capital Improvements/Deferred Maintenance...................... 58
9.26. Environmental Remediation...................................... 58
ARTICLE 10 NO TRANSFERS OR ENCUMBRANCES; DUE ON SALE..................... 58
10.01. Prohibition Against Transfers.................................. 58
10.02. Lender Approval................................................ 58
10.03. Borrower Right to Partial Releases for Partial Release Price... 59
10.04. Right to Release Outparcels.................................... 61
10.05. Other Releases of the Mortgaged Property....................... 64
10.06. OFAC Compliance; Substantive Consolidation Opinion............. 64
ARTICLE 11 EVENTS OF DEFAULT; REMEDIES................................... 64
11.01. Events of Default.............................................. 64
11.02. Remedies....................................................... 67
11.03. Cumulative Remedies; No Waiver; Other Security................. 69
11.04. Enforcement Costs.............................................. 70
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11.05. Application of Proceeds........................................ 70
11.06. Cross-Default; Cross-Collateralization; Waiver of Marshalling
of Assets...................................................... 70
ARTICLE 12 NONRECOURSE - LIMITATIONS ON PERSONAL LIABILITY............... 71
12.01. Nonrecourse Obligation......................................... 71
12.02. Full Personal Liability........................................ 71
12.03. Personal Liability for Certain Losses.......................... 71
12.04. No Impairment.................................................. 72
12.05. No Waiver of Certain Rights.................................... 73
ARTICLE 13 INDEMNIFICATION............................................... 73
13.01. Indemnification Against Claims................................. 73
13.02. Duty to Defend................................................. 74
ARTICLE 14 SUBROGATION; NO USURY VIOLATIONS.............................. 74
14.01. Subrogation.................................................... 74
14.02. No Usury....................................................... 74
ARTICLE 15 SALE OR SECURITIZATION OF LOAN................................ 75
15.01. Splitting the Note............................................. 75
15.02. Lender's Rights to Sell or Securitize.......................... 75
15.03. Dissemination of Information................................... 76
15.04. Reserve Accounts............................................... 76
15.05. Securitization Indemnification................................. 77
15.06. Additional Financial Information for Large Loans............... 78
ARTICLE 16 BORROWER FURTHER ACTS AND ASSURANCES PAYMENT OF SECURITY
RECORDING CHARGES............................................. 78
16.01. Further Acts................................................... 78
16.02. Replacement Documents.......................................... 79
16.03. Borrower Estoppel Certificates................................. 79
16.04. Recording Costs................................................ 80
16.05. Publicity...................................................... 80
ARTICLE 17 LENDER CONSENT................................................ 80
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17.01. No Joint Venture; No Third Party Beneficiaries................. 80
17.02. Lender Approval................................................ 80
17.03. Performance at Borrower's Expense.............................. 81
17.04. Non-Reliance................................................... 81
ARTICLE 18 MISCELLANEOUS PROVISIONS...................................... 81
18.01. Notices........................................................ 81
18.02. Entire Agreement; Modifications; Time of Essence............... 82
18.03. Binding Effect; Joint and Several Obligations.................. 83
18.04. Duplicate Originals; Counterparts.............................. 83
18.05. Unenforceable Provisions....................................... 83
18.06. Governing Law.................................................. 83
18.07. Consent to Jurisdiction........................................ 83
18.08. WAIVER OF TRIAL BY JURY........................................ 83
18.09. Good Faith..................................................... 84
ARTICLE 19 LIST OF DEFINED TERMS......................................... 84
19.01. Definitions.................................................... 84
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LOAN NUMBERS: 54375, 55184, 55185, 55186 AND 55187
LOAN AGREEMENT
(LIBOR RATE LOAN)
THIS LOAN AGREEMENT is made as of this 1st day of September, 2006 by
PARKING COMPANY OF AMERICA AIRPORTS, LLC, a Delaware limited liability company
("PCAA"), PARKING COMPANY OF AMERICA AIRPORTS PHOENIX, LLC, a Delaware limited
liability company ("PCAA PHOENIX"), PCAA SP, LLC, a Delaware limited liability
company ("PCAA SP") and PCA AIRPORTS, LTD., a Texas limited partnership ("PCAA
TEXAS" and, together with PCAA, PCAA Phoenix, and PCAA SP, each individually as
an "Individual Borrower" collectively as the context requires, "BORROWER"), as
borrower, and CAPMARK FINANCE INC., (formerly known as GMAC Commercial Mortgage
Corporation) a California corporation (together with its successors and assigns
"LENDER"), as lender.
RECITALS
WHEREAS, Lender made a loan to PCAA, PCAA Phoenix and PCAA Texas
(collectively, the "2003 BORROWERS") in the original principal amount of
$126,000,000 (the "2003 LOAN"), pursuant to a certain Loan Agreement dated as of
October 1, 2003 by and between the 2003 Borrowers and Lender (the "2003 LOAN
AGREEMENT") and as evidenced by that certain Consolidated, Amended and Restated
Promissory Note dated October 1, 2003 in the face amount of $126,000,000 (the
"2003 NOTE").
WHEREAS, PCAA SP assumed and agreed to pay the 2003 Loan in accordance
with the terms of the 2003 Note, and the 2003 Borrowers reaffirmed their
obligations to pay the 2003 Loan in accordance with the terms of the 2003 Note
pursuant to the terms of a certain Assumption of Promissory Note (2003), dated
on or about the date hereof (the "2003 ASSUMPTION AGREEMENT"). Lender is the
owner and holder of the 2003 Note, upon which the principal amount of
$125,453,750.00 remains outstanding.
WHEREAS, CAPMARK BANK, a Utah industrial bank, formerly known as GMAC
Commercial Mortgage Bank ("BANK") made a loan to PCAA SP in the original
principal amount of $58,740,000 (the "2005 LOAN"), pursuant to a certain Loan
Agreement dated as of October 3, 2005 by and between PCAA SP and Bank (the "2005
LOAN AGREEMENT") and as evidenced by that certain Promissory Note dated October
3, 2005 originally in the face amount of $58,740,000 (the "ORIGINAL 2005 NOTE").
WHEREAS, the Original 2005 Note was subsequently split into Promissory
Note A-1 dated December 19, 2005 made by Borrower payable to the order of Bank
in the original principal amount of $29,370,000 ("2005 NOTE A-1") and into
Promissory Note A-2 dated December 19, 2005 made by Borrower payable to the
order of CAPITAL TRUST, INC., a Maryland corporation ("TRUST") in the original
principal amount of $29,370,000 ( "2005 NOTE A-2", and together with 2005 Note
A-1, collectively, the "2005 NOTE"). Each of Bank and Trust transferred its
interests in 2005 Note A-1 and 2005 Note A-2, respectively, 2005 Loan, and the
2005 Loan Agreement to Lender pursuant to those certain Assignment and
Assumption Agreements dated as of the date hereof.
WHEREAS, the 2003 Borrowers have assumed and agreed to pay the 2005
Loan in accordance with the terms of the 2005 Note, and PCAA SP has reaffirmed
its obligation to pay the 2005 Loan in accordance with the terms of the 2005
Note pursuant to the terms of a certain Assumption of 2005 Promissory Note,
dated on or about the date hereof (the "2005 ASSUMPTION AGREEMENT"). Lender is
the owner and holder of the 2005 Note, upon which the principal amount of $
58,740,000 remains outstanding.
WHEREAS, Borrower desires to obtain additional financing from Lender
in original principal amount of $10,806,250.00 (the "2006 LOAN") as evidenced by
that certain Gap Note dated as of the date hereof in the face amount of
$10,806,250.00 (the "GAP NOTE");
WHEREAS, Lender is the owner and holder of the 2003 Note, the 2005
Note and the Gap Note, on which the aggregate principal amount of
$195,000,000.00 remains outstanding. Lender and Borrower have agreed to
consolidate and combine the 2003 Note, the 2005 Note and the Gap Note to form a
single consolidated promissory note to evidence the Loan as set forth in that
certain Consolidated, Amended and Restated Promissory Note and Consolidation
Agreement dated as of the date hereof (the "CONSOLIDATED NOTE"). Lender and
Borrower have further agreed to replace the Consolidated Note with five (5)
replacement notes as set forth in that certain Note Severance and Modification
Agreement dated as of the date hereof ("SEVERANCE AGREEMENT"); and
WHEREAS, Lender and Borrower desire to modify, amend and restate the
terms, conditions, provisions, covenants, agreements, warranties and privileges
contained in the 2003 Loan Agreement and the 2005 Loan Agreement in certain
respects in the manner set forth herein;
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 do
hereby agree that the 2003 Loan Agreement and the 2005 Loan Agreement are hereby
amended and restated in their entirety 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 19 of this Loan Agreement unless otherwise
stated in any other provision hereof.
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 or 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, restated or reinstated from time to time.
The words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Loan Agreement as a whole and not to any particular subdivision;
and the words "Article" and
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"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. Borrower. The parties hereto acknowledge that the defined term
"Borrower" has been defined to collectively include each Individual Borrower. It
is the intent of the parties hereto in making any determination under this Loan
Agreement, including, without limitation, in determining whether (a) 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 this Loan Agreement, that any such
breach, occurrence or event with respect to any Individual Borrower shall be
deemed to be such a breach, occurrence or event with respect to all Individual
Borrowers and that all Individual Borrowers need not have been involved with
such breach, occurrence or event in order for the same to be deemed such a
breach, occurrence or event with respect to every Individual Borrower.
1.04. Property. The parties hereto acknowledge that the defined term
"Property" has been defined to collectively include each Individual Property.
All references to "Property" in this Loan Agreement shall be deemed to refer to
one or more Individual Properties, as the context requires. 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 this 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
LOAN AMOUNT; PAYMENT TERMS; ADVANCES
2.01. Commitment to Lend.
(a) 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 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 Loan Amount. On the Closing Date, Lender shall advance
the entire Loan Amount to Borrower.
2.02. Calculation of Interest.
(a) Calculation Basis. Interest due on the Loan shall be paid for each
Interest Accrual Period, calculated based on a 360-day year and paid for the
actual number of days elapsed for any whole or partial month in which interest
is being calculated.
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(b) Initial Applicable Interest Rate and Interest Rate Adjustment
Date. Interest shall accrue on outstanding principal at the rate ("APPLICABLE
INTEREST RATE") which is the LIBOR Rate plus one and nine tenths percent
(1.90%)(as the same may be increased pursuant to Section 2.03(d)(ii)(E) below,
"MARGIN"); provided, that the Margin applicable to each Note shall be as set
forth on Schedule 2.02(b) attached hereto, which collectively, prior to an Event
of Default and subject to Section 2.03(d)(ii)(E) below, shall not exceed the
Applicable Interest Rate. Adjustments to the Applicable Interest Rate in
connection with changes in the LIBOR Rate shall be made on the Interest Rate
Adjustment Date and effective as of the first day of the applicable Interest
Accrual Period, except that the initial Applicable Interest Rate shall be
determined two (2) Business Days prior to the Closing Date.
(c) LIBOR Unascertainable. Lender's obligation to maintain interest
based on the LIBOR Rate shall be suspended and the Applicable Interest Rate
shall be based on the Interest Rate Index (plus Margin) upon Lender's
determination, in good faith, that adequate and reasonable means do not exist
for ascertaining the LIBOR Rate or that a contingency has occurred which
materially and adversely affects the London Interbank Eurodollar Market at which
Lender prices loans (which determination by Lender shall be conclusive and
binding on Borrower in the absence of manifest error). Computation of the
Applicable Interest Rate based on the Interest Rate Index shall continue until
Lender determines that the circumstances giving rise to Lender's substitution of
the Interest Rate Index for the LIBOR Rate no longer exist. Lender shall
promptly notify Borrower of each such determination.
(d) Adjustment Due to Calculation Errors. If, at any time, Lender
determines that it has miscalculated the Applicable Interest Rate (whether
because of a miscalculation of the LIBOR Rate or otherwise), Lender shall
promptly notify Borrower of the necessary correction. If the corrected
Applicable Interest Rate represents an increase in the applicable monthly
payment, Borrower shall, within ten (10) days after receipt of such written
notice, pay to Lender the corrected amount. If the corrected Applicable Interest
Rate represents an overpayment by Borrower to Lender and no Event of Default
then exists, Lender shall refund the overpayment to Borrower or, at Lender's
option, credit such amounts against Borrower's payment next due hereunder.
(e) 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 any 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 such; this exclusion shall not apply to
a connection arising solely from Lender's having executed, delivered, performed
its obligations 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 these 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 before penalties or interest begin to accrue
thereon and promptly send Lender a certified copy of an original official
receipt
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showing payment thereof. If Borrower fails to pay such amounts before penalties
or interest begin to accrue thereon 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.
(f) Increased Costs of Maintaining Interest. If Lender determines that
the adoption of any law, regulation, rule or guideline (including, without
limitation, any change regarding the imposition or increase in reserve
requirements but excluding 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
such), whether or not having the force of law, does or will have the effect of
reducing Lender's rate of return on the Loan, then, from time to time, within
five (5) Business Days after written demand by Lender (which demand shall
include an itemized calculation of the additional amounts necessary to
compensate Lender for such reduction), Borrower shall pay Lender such additional
amount as will compensate Lender for its reduction. In addition, if any law,
regulation, rule or guideline hereafter is enacted or modified, whether or not
having the force of law, and compliance therewith results in an increase in the
cost to Lender (including, without limitation, a reduction in the income
received by Lender but excluding 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 such) in making, funding or maintaining interest on the Loan at the
rate herein provided, then, within five (5) Business Days after written demand
by Lender, Borrower shall pay Lender the additional amounts necessary to
compensate Lender for such increased costs.
(g) 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(e) or (f), Lender may elect to declare the unpaid principal
balance of the Loan, together with all unpaid interest accrued thereon and any
other amounts due hereunder, due and payable within one hundred twenty (120)
days after 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(e) or (f) 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
fifteenth (15th) day of a calendar month, Borrower shall pay to Lender at the
time of funding an interest payment calculated by multiplying (i) (x) if the
Closing Date is prior to the fifteenth (15th) day of a calendar month, the
number of days from and including the Closing Date to (but excluding) the
fifteenth (15th) day of the current month and (y) if the Closing Date is after
the fifteenth (15th) day of the month, the number of days from and including the
Closing Date to (but excluding) the fifteenth (15th) day of the next calendar
month by (ii) a daily rate based on the Applicable Interest Rate effective on
the Closing Date and calculated for a 360-day year.
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(b) Payment Dates. Commencing on the ninth (9th) day of October, 2006
and continuing on the ninth (9th) day of each and every successive month
thereafter, provided that, if the ninth (9th) day of any month is not a Business
Day, such payment shall be due and payable on the immediately following Business
Day (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 interest only, at the Applicable Interest Rate (determined on the
immediately preceding Interest Rate Adjustment Date), based on principal
advanced and outstanding during the Interest Accrual Period in which the
applicable Payment Due Date occurs and any amounts due pursuant to Section 2.02
of this Loan Agreement.
(c) Maturity Date. Subject to Section 2.03(d) below, on the ninth
(9th) day of September, 2009 ("MATURITY DATE"), Borrower shall pay the entire
outstanding principal balance of the Loan, together with all accrued but unpaid
interest thereon through the end of the then-current Interest Accrual Period and
all other amounts due under this Loan Agreement, the Note or any other Loan
Document; provided that, if the ninth (9th) day of such month is not a Business
Day, such payment shall be due and payable on the immediately preceding Business
Day.
(d) Extension of Maturity Date.
(i) Extension Option. Borrower has the right to extend the
Maturity Date of the Loan for two (2) additional,
consecutive, twelve-month terms (each an "EXTENSION TERM"),
with the first additional term having twelve (12) months
("FIRST EXTENSION TERM") and extending the Maturity Date to
September 9, 2010 ("FIRST EXTENDED MATURITY DATE"), and the
second additional term having twelve (12) months ("SECOND
EXTENSION TERM") and extending the First Extended Maturity
Date to September 9, 2011 ("SECOND EXTENDED MATURITY DATE").
Upon Borrower's proper and timely exercise of its rights
under this Section 2.03(d), the term "Maturity Date" shall
be deemed to mean the First Extended Maturity Date and, as
applicable, the Second Extended Maturity Date.
(ii) Conditions Precedent to Maturity Date Extension. Each of the
following conditions must be satisfied in a manner
reasonably acceptable to Lender (or waived in writing by
Lender) as a condition precedent to extension of the
Maturity Date:
(A) Borrower delivers written notice to Lender not more than
ninety (90) days and not less than thirty (30) days prior to the expiring
Maturity Date advising that Borrower is exercising its extension option,
together with all materials needed by Lender to confirm that the Property
satisfies the performance criteria identified in subsection (D) below.
(B) Intentionally omitted.
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(C) No Event of Default exists as of the date Borrower
exercises such extension option and as of the commencement date of the relevant
Extension Term.
(D) Borrower demonstrates to Lender's satisfaction that the
Property achieved and maintained, prior to the commencement date of the relevant
Extension Term, the following performance criteria: (1) for the First Extension
Term, a Debt Service Coverage Constant Ratio of at least 1.10:1.00 and (2) for
the Second Extension Term, a Debt Service Coverage Constant Ratio of at least
1.20:1.00. Notwithstanding the foregoing, Lender reserves the right at least
thirty (30) days prior to the expiring Maturity Date, to reconfirm that the
Property continues to achieve the foregoing performance criteria, based upon the
most recently available financial statements, and to condition the extension on
such performance criteria being sustained until the commencement of the
Extension Term. If such performance criteria have not been achieved as of the
date Borrower exercises its extension option or any subsequent verification
thereof made by Lender at least thirty (30) days prior to the expiring Maturity
Date and the Lender notifies the Borrower of such failure to achieve the
performance criteria not less than thirty (30) days prior to the expiring
Maturity Date, prior to commencement of the Extension Term, Borrower may extend
the Maturity Date provided that Borrower pays to Lender a portion of the
outstanding principal in such amount necessary for the Property to achieve the
foregoing performance criteria as of the commencement date of the Extension
Term.
(E) Effective as of September 15, 2009, and ending on the
First Extended Maturity Date, the Margin shall be equal to two and one tenths
percent (2.10%), and effective as of September 15, 2010 and ending on the Second
Extended Maturity Date, the Margin shall be equal to two and three tenths
percent (2.30%).
(F) With respect to the First Extension Term, Borrower (i)
unless a Rate Swap Agreement is in effect, or in combination with a Rate Swap
Agreement, in each case as set forth in Section 2.07 of the Loan Agreement,
obtains, and assigns to the benefit of Lender, a Rate Cap which (1) will be
effective as of the commencement of the first Interest Accrual Period of such
Extension Term and will remain effective through the end of the Interest Accrual
Period in which the First Extended Maturity Date occurs, and provide for
payments whenever the LIBOR Rate exceeds a strike price determined by Lender for
the Extension Term such that a minimum Debt Service Coverage Constant Ratio of
1.10:1.00 is maintained, (2) with a notional amount equal to the Outstanding
Loan Amount and (3) otherwise satisfies all requirements of Section 2.07 of this
Loan Agreement, (ii) if a Rate Cap is then in effect, provides evidence,
satisfactory to Lender in its sole discretion, that the Rate Cap has been
extended until the First Extended Maturity Date, (iii) if a Rate Swap Agreement
is then in effect, provides evidence, satisfactory to Lender in its sole
discretion, that the term of the Rate Swap Agreement has been extended to a date
not earlier than the First Extended Maturity Date or (iv) obtains a Rate Swap
Agreement with a notional amount at least equal to the Outstanding Loan Amount
and a fixed rate such that a minimum Debt Service Coverage Constant Ratio of
1.10:1.00 is maintained which shall meet the requirements set forth in Section
2.07 of the Loan Agreement for the First Extension Term and collaterally assigns
such Rate Swap Agreement to Lender pursuant to an assignment of interest rate
swap agreement in substantially the same form as the Rate Swap Assignment.
7
(G) Borrower executes and delivers to Lender an amendment to
this Loan Agreement, reasonably acceptable to Lender in all respects, which
confirms the date to which the Maturity Date has been extended, the principal
and interest amounts payable during the Extension Term and such other matters as
Lender may reasonably require.
(H) Borrower reimburses Lender for all out-of-pocket costs
reasonably incurred by Lender in processing the extension request, including,
without limitation, reasonable legal fees and expenses and, if the Loan has been
included in a Securitization, a Rating Confirmation.
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 to Lender at Lender's
office located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: Servicing - Accounting Manager, or at such other place as Lender may
designate to Borrower in writing from time to time in immediately available
funds. 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 within ten (10) days
prior to the date on which such payment is due, and 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.
(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 on the Payment Due Date, Borrower shall pay to Lender,
immediately and without demand, a late fee equal to five percent (5%) of such
delinquent amount (provided, however, that Lender agrees to waive the late
charge provided in this subsection (d) if and only if (i) such payment is
received by Lender within five (5) days after the applicable Payment Due Date
and (ii) Borrower's failure to make the payment on the Payment Due Date occurs
no more than once in any calendar year during the term of the Loan).
(e) Default Interest Rate. If the Loan is not paid in full on or
before the Maturity Date (subject to any extension thereto properly exercised by
Borrower in accordance with this Loan Agreement) or, if the Loan is accelerated
following an Event of Default and
8
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 (the "DEFAULT RATE") and continue to accrue at the Default Rate
until full payment is received or such Event of Default is waived in writing by
Lender. In addition, Lender shall have the right, without acceleration of the
Loan, to collect interest at the Default Rate on any other payment not described
in the first sentence of this subsection (e) due hereunder (including, without
limitation, late charges and fees for legal counsel) which is not received by
Lender within five (5) days of the date on which such payment originally was
due, taking into account any applicable grace, notice and/or cure periods.
Interest at 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
(including, without limitation, any interest at the Default Rate), and then to
reduction of the outstanding principal. Prior to an Event of Default, all
payments will be applied to Note ▇-▇, ▇▇▇▇ ▇-▇, ▇▇▇▇ ▇-▇, ▇▇▇▇ ▇-▇ and Note B-2,
on a pro-rata basis. 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 from 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) Intentionally Omitted.
(b) Prepayment. Borrower may prepay principal in whole or in part, on
any Payment Due Date as long as each of the following conditions are satisfied:
(i) Borrower provides written notice to Lender of its intent to
prepay not more than sixty (60) days and not less than
thirty (30) days prior to the intended prepayment date.
(ii) No Event of Default exists as of the date Borrower delivers
notice of intent to prepay and as of the date such
prepayment is made.
(iii) Borrower pays the following prepayment consideration
("PREPAYMENT FEE") with such prepayment:
(A) one percent (1.00%) of the amount prepaid if the
prepayment is made on or before the twelfth (12th) Payment Due Date;
9
(B) one-half of one percent (0.50%) of the amount prepaid if
the prepayment is made after the Payment Due Date stated in clause (A) above but
on or before the eighteenth (18th) Payment Due Date; and
(C) zero percent (0.00%) of the amount prepaid if the
prepayment is made after the eighteenth (18) Payment Due Date stated in clause
(B) above but on or before the Maturity Date.
(iv) Borrower pays with such prepayment all accrued interest
through the end of the then-current Interest Accrual Period
and all other outstanding amounts then due and unpaid under
this Loan Agreement and the other Loan Documents.
(v) Lender acknowledges that the above Prepayment Fee shall not
be due in connection with a refinancing of the Loan or a
portion thereof, in the event that Lender and/or its
affiliates refinance the Loan or such portion thereof.
(vi) Notwithstanding anything to contrary, such prepayment shall
be accompanied by evidence, satisfactory to Lender, of the
payment of the Swap Breakage (if any) to the Rate Swap
Provider.
(c) Intentionally Omitted.
(d) Prepayment as a Result of a Casualty or Condemnation or Charges on
Lender. 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, or as set forth in Section 2.02(g) may be made
without payment of the Prepayment Fee.
(e) Notice Irrevocable. Notwithstanding any provision of this Loan
Agreement to the contrary, Borrower's notice of prepayment 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 or about the
date specified in such notice.
2.06. Right of First and Last Refusal. In consideration for Lender's
agreement to waive its customary exit fee, during the first eighteen (18) months
of the term of the Loan, Borrower agrees to grant to Lender the right of first
and last refusal to refinance the Loan unless such refinancing is provided by
the Macquarie Group and further agrees in the event of the sale of all or part
of the Property, to introduce Lender to the prospective purchaser of all or part
of the Property. Borrower reserves the sole and exclusive right to select the
source(s) of all refinancing proposals. If Lender does not agree, in writing, to
refinance the Loan upon the same terms set forth in any bona fide refinancing
proposal received by Borrower (a "REFINANCING PROPOSAL") within seven (7) days
after Borrower gives Lender written notice of the terms of such Refinancing
Proposal, Lender's rights under this Section shall terminate, provided, however,
that if the material economic terms set forth in the Refinancing Proposal are
modified in any material way adverse to Borrower prior to the closing of the new
loan, Borrower shall once again notify Lender of same, and Lender shall have
seven (7) days to notify Borrower of its intent to match
10
the revised Refinancing Proposal. If Lender does not so notify Borrower within
such seven (7) day period, Lender's rights under this Section shall terminate.
2.07. Interest Rate Cap/Hedge. On or before the date hereof, Borrower must
obtain and deliver to Lender a Rate Cap, a Rate Swap or a combination thereof,
in each case satisfying the requirements of this Section 2.07.
(a) Initial Interest Rate Cap. If Borrower elects to provide a Rate
Cap, then on or before the date hereof, Borrower shall obtain a Rate Cap with a
notional amount equal to the Loan Amount (less any amount provided by the Rate
Swap) for the benefit of Lender which provides for payments to be made by the
Rate Cap Provider if, at any time during the term of the Loan, the LIBOR Rate
exceeds the Strike Rate. Each Rate Cap required hereunder must: (i) be issued by
a Rate Cap Provider that satisfies the credit criteria set forth below in
Section 2.07(d); (ii) be fully effective as of the Closing Date; (iii) permit
Borrower's interest in the Rate Cap to be assigned to Lender without the payment
of fees or costs and without the Rate Cap Provider's consent; (iv) contain no
cross-defaults to any other agreements among any Borrower, Rate Cap Provider and
Lender, or any of their respective Affiliates; (v) contain no performance
obligations of Borrower or Lender beyond Borrower's payment of a one-time fee at
the effective date of the Rate Cap Agreement; (vi) be evidenced by a Rate Cap
Agreement acceptable to Lender in all respects and delivered to Lender on the
Closing Date, fully executed, along with a legal opinion from Rate Cap
Provider's counsel (which maybe in-house counsel) as to the authorization,
execution and delivery by Rate Cap Provider and enforceability in accordance
with its terms (vii) comply with criteria issued by any of the Rating Agencies
regarding interest rate cap agreements including, without limitation, the
requirement for additional legal opinions from Rate Cap Provider's counsel;
(viii) otherwise be reasonably satisfactory to Lender in all respects; and (ix)
have a notional amount equal to the Loan Amount (less any amount provided by the
Rate Swap).
(b) Initial Interest Rate Swap. If Borrower elects to provide a Rate
Swap, then on or before the date HEREOF, Borrower shall obtain a Rate Swap with
a notional amount equal to the Loan Amount (less any amount provided by the Rate
Cap) with a per annum rate equal to the Swap Fixed Rate for the benefit of
Lender which shall be coterminous with the initial term of the Loan. Each Rate
Swap required hereunder must: (i) be issued by a Rate Swap Provider that
satisfies the credit criteria set forth below in Section 2.07(d); (ii) be fully
effective as of the Closing Date; (iii) permit Borrower's interest in the Rate
Swap to be assigned to Lender without the payment of fees or costs and without
the Rate Swap Provider's consent; (iv) contain no cross-defaults to any other
agreements among any Borrower, Rate Swap Provider and Lender, or any of their
respective Affiliates; (v) be evidenced by a Rate Swap Agreement acceptable to
Lender in all respects and delivered to Lender on the Closing Date, fully
executed, along with a legal opinion from Rate Swap Provider's counsel (which
maybe in-house counsel) as to the authorization, execution and delivery by Rate
Swap Provider and enforceability in accordance with its terms (vi) comply with
criteria issued by any of the Rating Agencies regarding interest rate swap
agreements including, without limitation, the requirement for additional legal
opinions from Rate Swap Provider's counsel; and (vii) otherwise be reasonably
satisfactory to Lender in all respects.
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(c) Assignment to Lender as Collateral. The Rate Cap or Rate Swap, as
applicable, and each replacement of a Rate Cap or Rate Swap and each Rate Cap or
Rate Swap that Borrower is required to provide in connection with the extension
of the Maturity Date shall be assigned to Lender as collateral. Borrower
acknowledges that Borrower's assignment of the Rate Cap or Rate Swap, as
applicable, to Lender shall not be deemed completed until such time as Borrower
has delivered to Lender a written acknowledgement from the Rate Cap Provider or
Rate Swap Provider of Borrower's assignment of the Rate Cap or Rate Swap, as
applicable, to Lender that is acceptable to Lender in all respects. All payments
made by the Rate Cap Provider or Rate Swap Provider shall be made directly to
the Deposit Account. Failure by the Rate Cap Provider or Rate Swap Provider to
make any payment under the Rate Cap or Rate Swap shall not relieve Borrower of
any of its obligations to make any payments hereunder or any other Loan
Documents.
(d) Credit Rating of Rate Cap Provider and Rate Swap Provider;
Replacement Upon Adverse Change in Rating. The Rate Cap or Rate Swap, as
applicable, must be issued by a Rate Cap Provider or Rate Swap Provider having
(i) a long term unsecured debt rating of at least "A-" from S & P; or (ii) a
short-term unsecured debt rating of at least "A-1" from S & P; or (iii) an
equivalent rating by a Rating Agency approved by Lender. If, at any time during
the term of the Loan, the Rate Cap Provider's or Rate Swap Provider's credit
rating falls below that required in the previous sentence, Lender shall have the
right to require that Borrower, at Borrower's expense, provide a replacement
Rate Cap or Rate Swap from a different Rate Cap Provider or Rate Swap Provider
which satisfies the required credit rating. Each replacement Rate Cap or Rate
Swap shall satisfy all requirements of this Section 2.07 and, unless otherwise
agreed by Lender, shall be substantially in the form of the Rate Cap Agreement
or Rate Swap Agreement assigned to Lender as of the Closing Date. Each
replacement Rate Cap or Rate Swap and all required documents must be delivered
to Lender within ten (10) Business Days of Lender's notification that a
replacement Rate Cap or Rate Swap is required.
(e) Borrower's Payment of Lender Review Expenses. Borrower shall pay
all reasonable, out-of-pocket expenses incurred by Lender in connection with
Lender's review and approval of the initial Rate Cap, Rate Cap Provider, initial
Rate Swap, and Rate Swap Provider, each Rate Cap and/or Rate Swap due in
connection with an extension of the Maturity Date, and each replacement of a
Rate Cap and/or Rate Swap that is required under the terms of this Loan
Agreement, including, without limitation, reasonable out-of-pocket legal fees
and expenses
(f) PCAA SP Initial Interest Rate Cap. Borrower acknowledges and
agrees that the initial Rate Cap has been purchased solely in the name of PCAA
SP. In the event that PCAA SP is released from its obligations under this Loan
Agreement while the Loan is outstanding pursuant to the provisions hereof or
otherwise and the initial Rate Cap is still in effect, PCAA SP shall promptly
transfer the initial Rate Cap to the remaining Individual Borrowers or the
remaining Individual Borrowers shall promptly obtain a replacement Rate Cap or
Rate Swap in accordance with all requirements of this Section 2.07 and, unless
otherwise agreed by Lender, shall be substantially in the form of the Rate Cap
Agreement or Rate Swap Agreement assigned to Lender as of the Closing Date.
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ARTICLE 3
CASH MANAGEMENT
3.01. Lockbox. Borrower acknowledges that all Operating Income from the
Property is deposited into the Collection Accounts with the Collection Account
Banks by Borrower no less than twice weekly and, Borrower shall cause such
Property Manager to do likewise. Borrower shall direct all Collection Account
Banks to make deposits of all Operating Income (other than ▇▇▇▇▇ cash not to
exceed $1,000 per Collection Account, and amounts necessary to satisfy the
minimum balance requirements of the Collection Account Banks, if any) to the
Deposit Account pursuant to the Lockbox Agreement in accordance with existing
practices, but no less than once weekly. Borrower acknowledges that it has sent
Credit Card Issuer Letters to all Credit Card Issuers. Prior to an Event of
Default, Borrower shall have access to the Deposit Account in accordance with
the terms and conditions of the Lockbox Agreement. Borrower agrees and covenants
not to (i) change the identity of the Collection Account Banks, or (ii) alter or
modify the terms and conditions governing the operation of the blocked accounts
at the Collection Account Banks in any material respect without Lender's prior
written consent, not to be unreasonably withheld, conditioned or delayed.
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 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 the Tax Escrow Account and the Insurance Premium Escrow
Account. The Reserve Accounts, other than the Tax Escrow Account and the
Insurance Premium Escrow Account, shall be interest-bearing accounts, provided,
however, that interest paid or payable with respect to any Reserve Account held
by or on behalf of Lender may not be based on the highest rate of interest
payable by Lender on deposits and shall not be calculated based on any
particular external interest rate or interest rate index, nor shall any such
interest reflect the interest rate utilized by Lender to calculate interest
payable on deposits held with respect to any particular loan or borrower or
class of loans or borrowers, and Lender shall have no liability with respect to
the amount of interest paid and/or loss of principal. All interest earned on the
Reserve Accounts (other than the Tax Escrow Account and Insurance Premium Escrow
Account) by Lender shall be credited to such accounts. 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
13
in any order as determined by Lender in its sole discretion. If and to the
extent that, as of the Maturity Date, Borrower has previously deposited into any
of the Reserve Accounts any sums that have (a) not been applied to the payment
of the amounts with respect to which such Reserve Accounts were created or to
the payment of subsequent monthly deposits required to be made into the
applicable Reserve Accounts or (b) not repaid by Lender to Borrower, then such
amounts shall be applied to the then-outstanding principal balance of the Loan,
together with all accrued and unpaid interest and other charges then payable
thereon.
(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 from one Reserve Account to pay for Reserve Items contemplated by
another Reserve Account. For example, (i) funds held in the Capital
Improvements/Deferred Maintenance Escrow Account shall not be used to pay for
Replacements and (ii) funds held in the Replacement Reserve Account shall not be
used to pay for Capital Improvements/Deferred Maintenance.
(c) Release of Reserves Upon Payment of Debt. Upon payment in full of
the Loan, Lender shall disburse to Borrower all unapplied funds, including any
accrued and unpaid interest thereon, 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 Capital Improvements/Deferred Maintenance Escrow Account upon receipt of
evidence reasonably 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 (other than Liens granted in favor of
Lender) 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 any such 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 Account. Notwithstanding that
Lender has the right to require Borrower to pay any deficiency in a Reserve
Account if Lender 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
14
obligation to perform in full each of its: (i) obligations and covenants under
this Loan Agreement or (ii) agreements or covenants as tenant under the Parking
Leases.
4.02. Tax Escrow.
(a) Deposits to Tax Escrow Account. On the Closing Date, Borrower has
deposited such amount as is noted on the Closing Statement for Taxes to the Tax
Escrow Account which is the amount determined by Lender that is necessary to pay
when due Borrower's obligation for Taxes upon the due dates established by the
appropriate tax or assessing authorities during the next ensuing twelve (12)
months, taking into consideration the Monthly Tax Deposits to be collected from
the first Payment Due Date to the due date for payment of Taxes. Thereafter,
beginning on the first Payment Due Date 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
Escrow 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 return the excess to Borrower
or, in its discretion, 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 after Borrower's receipt of such
notice, 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 three (3) 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 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 first Payment Due Date
following such notice from Lender, Borrower shall make deposits at the increased
amount of the Monthly Tax Deposit.
15
4.03. Insurance Premium Escrow.
(a) Deposits to Insurance Premium Escrow Account. On the Closing Date,
Borrower has deposited such amount as is noted on the Closing Statement for
Insurance Premiums to the Insurance Premium Escrow Account which is the amount
determined by Lender that is necessary to pay when due Borrower's obligation for
twenty-five percent (25%) of the annual expected Insurance Premiums.
(b) Payments of Insurance Premiums. Borrower shall pay the Insurance
Premiums as they become due on their respective due dates and shall provide
Lender with proof of such payment promptly following such payment.
(c) Intentionally Omitted.
(d) Changes in Insurance Premium Amounts. 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 copies of 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 for twenty-five percent (25%) of the annual expected Insurance
Premiums, Lender shall notify Borrower of such determination and of the increase
needed to the Insurance Premium Escrow Account. Promptly following such notice,
but in no event more than thirty (30) days following such notice, Borrower shall
make the required deposit. Following any failure of Borrower to provide evidence
of the required monthly payment (following notice and a five (5) day cure
period), or at any time following an Event of Default, Lender may require, in
its sole discretion, change to the procedures for the escrow and payment of
Insurance Premiums, to include monthly escrows for same. If Lender requires
monthly escrows, Borrower shall deposit such amount as is determined by Lender
that is necessary to pay when due Borrower's obligation for Insurance Premiums
during the next ensuing twelve (12) months, taking into consideration the
Monthly Insurance Deposits to be collected from the next succeeding Payment Due
Date to the due date for payment of such Insurance Premiums. Thereafter,
beginning on the next succeeding Payment Due Date and on each Payment Due Date
thereafter, Borrower shall deliver to Lender the Monthly Insurance Deposit.
4.04. Capital Improvements/Deferred Maintenance Escrow Account.
(a) Capital Improvements/Deferred Maintenance Escrow Generally.
Amounts in the Capital Improvements/Deferred Maintenance Escrow Account are to
be used for the purpose of funding the Capital Improvements/Deferred
Maintenance.
(b) Deposit to the Capital Improvements/Deferred Maintenance Escrow
Account. On the Closing Date, Borrower shall deposit $0.00 with Lender as the
reserve for completion of the Capital Improvements/Deferred Maintenance
described on Exhibit C hereto ("CAPITAL IMPROVEMENTS/DEFERRED MAINTENANCE
DEPOSIT").
16
(c) Disbursements from the Capital Improvements/Deferred Maintenance
Escrow Account. Lender shall make disbursements from the Capital
Improvements/Deferred Maintenance Escrow Account upon Borrower's performance, to
Lender's satisfaction, of all conditions to disbursement set forth in Article 5
of this Loan Agreement.
(d) Reassessment of Required Deposit. If at any time Lender reasonably
determines that the Capital Improvements/Deferred Maintenance Deposit will not
be sufficient to pay the cost of the Capital Improvements/Deferred Maintenance,
Lender may notify Borrower of such determination and of the amount estimated by
Lender to make-up such deficiency. Within ten (10) days after receipt of such
notice from Lender, Borrower shall deliver the deficiency amount to Lender, and
Lender shall deposit in the Capital Improvements/Deferred Maintenance Escrow
Account and hold and administer same in accordance with this Loan Agreement.
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
Replacements Borrower covenants and agrees to perform in accordance with the
terms of this Loan Agreement, and within the time periods shown on Exhibit F
attached hereto.
(b) Deposits to the Replacement Reserve Account. On the Closing Date,
Borrower shall deposit $380,510.00 with Lender as an initial deposit to the
Replacement Reserve Account. Beginning on the first Payment Due Date and on each
Payment Due Date thereafter, Borrower shall pay $31,709.00 ("MONTHLY REPLACEMENT
RESERVE DEPOSIT") to Lender as a deposit to the Replacement Reserve Account.
Provided no Event of Default exists, the amounts on deposit in the
Replacement Reserve Account shall not exceed $380,510.00 (the "REPLACEMENT
RESERVE CAP"). Notwithstanding the foregoing, the Replacement Reserve Cap may be
increased not more than once annually upon mutual agreement of Borrower and
Lender. If Lender and Borrower are unable, after using good faith efforts, to
agree upon whether any increase in the Replacement Reserve Cap is necessary,
and, if so, the amount of any such increase, Lender may, but not more frequently
than once per year, engage an independent inspector at Borrower's expense to
inspect the Property and to determine whether an increase in the Replacement
Reserve Cap is necessary to fund replacements of the nature described in Section
4.05(d)(i) or (ii) below. In such event, the determination of the independent
inspector shall be final absent manifest error.
Borrower's Monthly Reserve Deposit shall be suspended at such time as
and only for so long as, the amounts on deposit in the Replacement Reserve
Account equals or exceeds the Replacement Reserve Cap. At such time as amounts
on deposit in the Replacement Reserve Account are less than the Replacement
Reserve Cap, Borrower's obligation to make the Monthly Replacement Reserve
Deposit shall be reinstated until such time as and only for so long as, the
amount on deposit in the Replacement Reserve Account equals the Replacement
Reserve Cap. Borrower may, at its option, provide a Letter of Credit which
complies with the terms and conditions of Section 6.08 of this Loan Agreement,
in the amount of the Replacement Reserve Cap, in fulfillment of its obligations
under this Section 4.05, provided that, upon disbursement of
17
funds under such Letter of Credit, Borrower provides Lender with a replacement
Letter of Credit in the amount of the Replacement Reserve Cap.
(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 disbursement set
forth in Article 5 hereof.
(d) Reassessment of Required Monthly Deposits. The amount of the
Monthly Replacement Reserve Deposit may be increased upon the mutual agreement
of Lender and Borrower if an increase is necessary (i) to fund replacements not
listed as part of the Replacements (and not intended to be covered by the
Capital Improvements/Deferred Maintenance Escrow 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 intended to be
covered by the Capital Improvements/Deferred Maintenance Escrow Account) which
will reach the end of its useful life within two (2) years of the date of
Lender's inspection. If Lender and Borrower are unable, after using good faith
efforts, to agree upon whether any increase in the Monthly Replacement Reserve
Deposit is necessary, and, if so, the amount of any such increase, Lender may,
but not more frequently than once per year, engage an independent inspector at
Borrower's expense to inspect the Property and to determine whether an increase
in the Monthly Replacement Reserve Deposit is necessary to fund replacements of
the nature described in clause (i) or clause (ii) above. In such event, the
determination of the independent inspector shall be final absent manifest error.
Promptly following such determination, whether by mutual agreement or following
the determination by the independent inspector, but in no event more than thirty
(30) days following such notice, Borrower shall commence paying the increased
Monthly Replacement Reserve Deposit.
4.06. Intentionally Omitted.
4.07. Intentionally Omitted.
4.08. Leasehold Payment Reserve Account.
(a) Intentionally Omitted.
(b) Deposits into the Leasehold Payment Reserve Account. On the
Closing Date, Borrower shall deposit $722,244.00 ("LEASEHOLD PAYMENT RESERVE
DEPOSIT") with Lender for the Leasehold Payment Reserve Account, which is the
amount determined by Lender that is necessary to pay when due Borrower's
obligations under the Parking Leases for a minimum of one (1) month.
(c) Payments of Leasehold Rents. Borrower shall pay all amounts due
under the Parking Leases on their respective due dates, and each month during
the term of the Loan shall promptly provide Lender with a certification which
provides reasonable proof of all such payments during the month.
(d) Deposit Reassessment. Lender may, from time to time, based on
Lender's review of the Parking Leases, reassess the amount determined by Lender
that is
18
necessary to pay when due Borrower's obligations under the Parking Leases for a
minimum of one (1) month 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 all amounts likely to arise with
respect to the Parking Leases for a minimum of one (1) month. Following any
failure of Borrower to provide evidence of the required monthly payment, or
following an Event of Default, Lender may require, in its sole discretion,
changes to the procedures for the escrow and payment of amounts due under the
Parking Leases, to include monthly escrows for same.
4.09. Excess Cash Flow Reserve Account.
(a) Deposits to the Excess Cash Flow Reserve Account. Beginning on the
third (3rd) Payment Due Date and at three (3) month intervals thereafter (each
such date, a "PERFORMANCE TEST DATE") the Property will be required to achieve a
Debt Service Coverage Constant Ratio of 1.00 to 1.00 (the "PERFORMANCE
CRITERIA"), as determined by Lender with respect to the twelve (12) month period
immediately preceding the applicable Performance Test Date. In the event the
Property fails to meet the Performance Criteria on the applicable Performance
Test Date, Lender shall provide to Borrower written notice of such failure and
beginning on such Performance Test Date, in addition to the interest payments
required pursuant to Section 2.03 hereof, on each Payment Due Date following
such notice, Borrower shall pay to Lender for deposit in the Excess Cash Flow
Reserve Account all Excess Cash Flow from the Property, or all Excess Cash Flow
shall be deposited into the Excess Cash Flow Reserve Account in accordance with
the provisions of Section 6.02(e) of the Lockbox Agreement, as applicable, until
the Property meets the Performance Criteria on any following Performance Test
Date. Together with each payment required under this Section 4.09(a), Borrower
shall provide to Lender evidence reasonably satisfactory to Lender of the
calculation of Excess Cash Flow due on such Payment Due Date, together with any
necessary supporting information.
(b) Excess Cash Flow Reserve Generally. Amounts in the Excess Cash
Flow Reserve Account may be applied as follows, as determined by Lender in
Lender's sole discretion: (i) held in the Excess Cash Flow Reserve Account as
additional collateral for the Loan or (ii) applied to the outstanding principal
amount of the Loan until such time as Borrower satisfies the Performance
Criteria; provided, however, no Prepayment Fee shall apply to such application.
In the event of a Cash Flow Trigger Cure, provided no Event of Default then
exists, to the extent that any funds are then held as additional collateral in
the Excess Cash Flow Reserve Account, such funds shall be released to the
Borrower.
4.10. Swap Payments Reserve Account.
(a) Swap Payments Reserve Account. Borrower shall make all Swap
Payments directly to the Rate Swap Provider in accordance with the terms of the
Rate Swap Agreement. Following the failure to satisfy the Performance Criteria
on any Performance Test Date, Borrower shall make Swap Payments into the Swap
Payments Reserve Account. Provided amounts in the Swap Payments Reserve Account
are sufficient to pay such amounts as required pursuant to the Rate Swap
Agreement then due (other than Swap Breakage), which have been certified as
correct to Lender by the Rate Swap Counterparty, and no Event of Default exists,
Lender shall pay such amounts as they become due on their respective due
19
dates on behalf of Borrower by applying the funds held in the Swap Payments
Reserve Account to the payments then due to the Rate Swap Counterparty.
(b) Swap Gain. Following (i) the failure to satisfy the Performance
Criteria on any Performance Test Date or (ii) an Event of Default, any Swap Gain
shall be paid by Borrower to Lender to be held by Lender in the Swap Payments
Reserve Account, provided, however, following a Cash Sweep Trigger Cure and
provided, further, that no Event of Default then exists, Lender shall disburse
such Swap Gain to Borrower within a reasonable time after receipt of Swap Gain
(not to exceed ten (10) Business Days).
ARTICLE 5
COMPLETION OF REPAIRS RELATED TO RESERVE ACCOUNTS; CONDITIONS
TO RELEASE OF FUNDS
5.01. Conditions Precedent to Disbursements from Certain Reserve Accounts.
The following provisions apply to each request for disbursement from the Capital
Improvements/Deferred Maintenance Escrow Account and the Replacement 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. 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) 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 respond to, more than one (1) Disbursement Request for each Reserve Account
during any calendar quarter. No Disbursement Request shall be made for less than
$10,000 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.
(e) 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 (i) Borrower
has engaged an architect or engineer
20
or (ii) the disbursement requested is for a work which is structural in nature),
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 in all material
respects, and if the attachment is a copy of the original,
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) Subject to Section 5.03, each party that supplied
materials, labor or services has been paid in full (for the
portion for which disbursement is sought in the case of
disbursements authorized in accordance with Section 5.01(b)
hereof); and
(iv) 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
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 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 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
out-of-pocket expenses incurred by Lender in good faith in processing Borrower's
Disbursement Request, provided such costs are customary in the industry,
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.
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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, unless such dispute is conducted by Borrower
in accordance with the applicable provisions of Section 9.02(b). Each
disbursement so made by Lender shall satisfy Lender's obligation under this Loan
Agreement.
5.04. Performance of Reserve Items.
(a) Performance of Reserve Items. Borrower agrees to commence each
Reserve Item by its required commencement date stated on the applicable Exhibit
to this Loan Agreement identifying such Reserve Item and to pursue completion
diligently of each Reserve Item on or before its completion date stated on such
Exhibit and, in the absence of a commencement date or completion date being
specified, 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. Borrower shall complete each Reserve Item in a good
and workmanlike manner, using only 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.
(b) Contracts. Borrower shall promptly provide to Lender copies of all
contracts or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Reserve Items. Borrower shall not enter into any such contract or work order for
$50,000 or more without Lender's prior written approval, which approval shall
not be unreasonably withheld, conditional or delayed.
(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 upon prior notice to Borrower (notice to be
given not less than (2) Business Days prior to entry by Lender or its agents
unless an Event of Default or an emergency exists, as determined by Lender in
good faith).
(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 following an Event of Default (but not the obligation) to
complete or perform the Reserve Items for which amounts have been reserved under
this Loan Agreement and for such
22
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, watchman, 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 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.
6.02. Assignment of Property Management Contract. Borrower and any 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 Rate Cap Agreement. Borrower shall execute and deliver
at closing the assignment and consent with respect to the Rate Cap as
contemplated by Section 2.07 of this Loan Agreement and abide by its obligations
thereunder.
6.04. 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, to the extent assignable, all of Borrower's
right, title and interest in and to the Operating Agreements to Lender for
security purposes.
6.05. Pledge as 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) each of the Reserve Accounts and
each of the Collection Accounts, (b) all funds and monies
23
from time to time deposited or held in each of the Reserve Accounts and each of
the Collection Accounts, and (c) all interest accrued, if any, with respect to
the Reserve Accounts and each of the Collection Accounts; provided that Lender
shall make disbursements from each of the Reserve Accounts when, as and to the
extent required by this Loan Agreement. The parties agree that each of the
Reserve Accounts and each of the Collection Accounts is 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
or in any of the Collection Accounts nor permit any Lien to attach thereto,
except as may be created in favor of Lender in connection with the Loan.
6.06. Environmental Indemnity Agreement. Borrower and each Guarantor will
be required to execute at closing the Environmental Indemnity and to abide by
their obligations thereunder.
6.07. Guaranty of Borrower Sponsors. Each Guarantor will be required to
execute at closing the Guaranty and to abide by its obligations thereunder.
6.08. Letter of Credit. In lieu of making cash deposits into the
Replacement Reserve Account, Borrower may, as security for its obligations under
Section 4.05 of this Loan Agreement, deliver to Lender on the Closing Date an
irrevocable letter of credit (payable on sight draft) in an amount equal to
Three Hundred Eighty Thousand Five Hundred Ten and 00/100 Dollars ($380,510.00)
("LETTER OF CREDIT"), naming Lender as the sole beneficiary thereof. The 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 "AA" or such other 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.
If Borrower elects, in lieu of making deposits to the Replacement Reserve
Account to deliver to Lender a Letter of Credit. Borrower shall cause the Letter
of Credit to remain valid and effective at all times while the Loan is
outstanding plus an additional thirty (30) days following the full payment of
the Loan unless and to the extent the Letter of Credit is drawn upon by Lender
and paid in the amount of such draw. The Letter of Credit shall be effective and
delivered as of the Closing Date. Lender shall have the right to draw in full or
in part upon the Letter of Credit, without notice to Borrower: (i) upon the
occurrence of an Event of Default; (ii) if Lender has not received, at least
thirty (30) days prior to the date on which the then outstanding Letter of
Credit is scheduled to expire, a renewal or replacement Letter of Credit that
satisfies all requirements of this Section 6.08 and Borrower has not deposited
into the Replacement Reserve Account the amounts that Borrower is obligated to
deposit pursuant to Section 4.05; (iii) upon a transfer of the Loan by Lender
(within the meaning of Article 15 hereof) to another party ("TRANSFEREE"),
Lender or is Transferee has not been delivered within ten (10) days of Lender's
notice of such transfer, for any reason, either an endorsement to any Letter of
Credit by the issuing financial institution evidencing Transferee as the new
beneficiary thereunder or a substitute Letter of Credit naming Transferee as
beneficiary
24
thereunder and Borrower has not deposited into the Replacement Reserve Account
the amounts that Borrower is obligated to deposit pursuant to Section 4.05; (iv)
if Borrower fails to cooperate in any manner deemed appropriate or advisable by
Lender in order for Lender to obtain an endorsement or substitute Letter of
Credit and Borrower has not deposited into the Replacement Reserve Account the
amounts that Borrower is obligated to deposit pursuant to Section 4.05; (v) if
Borrower fails to pay any transfer fee due in connection with transferring the
Letter of Credit to the Transferee and Borrower has not deposited into the
Replacement Reserve Account the amounts that Borrower is obligated to deposit
pursuant to Section 4.05; or (vi) if Lender has not received within ten (10)
Business Days of the earlier of (A) Lender's notice to Borrower that the
financial institution issuing the Letter of Credit ceases to meet the rating
requirement set forth in this Section 6.08, or (B) Borrower finding out that the
financial institution issuing the Letter of Credit ceases to meet the rating
requirement set forth in this Section 6.08, a replacement Letter of Credit that
satisfies all requirements of this Section 6.08 and Borrower has not deposited
into the Replacement Reserve Account the amounts that Borrower is obligated to
deposit pursuant to Section 4.05. Lender shall be entitled to charge Borrower a
reasonable processing fee for administering and reviewing any renewal,
replacement or release of the Letter of Credit which Borrower is required to
provide pursuant to this Loan Agreement, provided Borrower has not deposited
into the Replacement Reserve Account the amounts that Borrower is obligated to
have on deposit pursuant to Section 4.05.
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 has been a Single Purpose Entity at all times since its
formation and will continue to be a Single Purpose Entity at all times until the
Loan has been paid in full. Borrower has at all times since its formation been
in material compliance with the Borrower criteria set forth in Section 7.02(a)
hereof.
(b) Texas Equity Owner has been a Single Purpose Entity at all times
since its formation and will continue to be a Single Purpose Entity at all times
until the Loan has been paid in full.
(c) As of the Closing Date, the Organizational Chart attached to this
Loan Agreement as Exhibit D is true, complete and correct.
(d) All of the factual assumptions made in the substantive
nonconsolidation opinion delivered by Borrower's counsel to Lender, of even date
herewith, are true and correct in all material respects.
(e) The "single purpose entity" provisions included in the
organizational documents of Borrower and Texas Equity Owner shall not, without
Lender's prior written consent, be amended, rescinded or otherwise revoked until
the Loan has been paid in full.
25
(f) Prior to the withdrawal or the disassociation of the Texas Equity
Owner from PCAA Texas, PCAA Texas shall immediately appoint a new general
partner or managing member whose organizational documents are substantially
similar to those of the original Texas Equity Owner and, if an opinion letter
pertaining to substantive nonconsolidation was required at closing, deliver a
new substantive nonconsolidation opinion letter with respect to the new Texas
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.)
(g) Prior to the withdrawal or the disassociation of the Equity Owner
from PCAA, PCAA SP and/or PCAA Phoenix (the "LLC BORROWERS"), the applicable LLC
Borrower, shall immediately appoint a new general partner or managing member
whose organizational documents are substantially similar to those of the
original Equity Owner and, if an opinion letter pertaining to substantive
nonconsolidation was required at closing, deliver a new substantive
nonconsolidation opinion letter with respect to the new 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 engaged 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, including, without limitation, the
operation and leasing of Additional Overflow Parking Lots;
(ii) has not acquired or owned and shall not acquire or own any
assets other than with respect to Borrower, the Property and
such incidental Personal Property as may be necessary for
the operation of the Property and Additional Overflow
Parking Lots. Except as expressly provided in this Loan
Agreement, Borrower may not acquire additional property
(whether through purchase or lease of additional land)
without the prior written consent of Lender, which consent
may be conditioned upon receipt of a Rating Confirmation;
(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 had
and shall have at least one (1) member that satisfies the
requirements of Section 7.02(b) below and such member is its
managing member, or (B) a limited
26
partnership, all of its general partners have satisfied and
shall satisfy the requirements of Section 7.02(b) below,
and, in the event of either (A) or (B), shall have at least
one (1) Independent Director/Manager on its board of
directors/managers; provided however if this Loan becomes
part of a securitization and any Rating Agency's criteria at
such time requires at least two (2) Independent
Directors/Managers, Borrower shall appoint, or cause the
appointment of, a second Independent Director/Manager;
(iv) if such entity is a single member limited liability company,
(A) such entity shall be 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
limited liability company opinions acceptable in all
respects to Lender and to the Rating Agencies); and (B) such
entity shall have at least one (1) Independent
Director/Manager on its board of directors/managers;
provided however if this Loan becomes part of a
securitization and any Rating Agency's criteria at such time
requires at least two (2) Independent Directors/Managers,
Borrower shall appoint, or cause the appointment of, a
second Independent Director/Manager;
(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's criteria at such time
require at least two (2) Independent Directors, Borrower
shall appoint, or cause the appointment of, a second
Independent Director;
(vi) has preserved 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) has not merged or consolidated 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; to
sell, transfer or otherwise dispose of all or substantially
all of its assets; to change its legal structure; transfer
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;
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(ix) shall not, without the unanimous written consent of all
Borrower's partners, members, or shareholders, as
applicable, and the written consent of one hundred percent
(100%) of the members of the board of directors of the
Equity Owner or board of managers in the case of a single
member limited liability company, including without
limitation the Independent Director(s)/Manager(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;
(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) shall not incur any debt, secured or unsecured, direct or
contingent (including, without limitation, guaranteeing any
obligation), other than (A) the Loan, (B) customary
unsecured trade payable incurred in the ordinary course of
owning and operating the Property, or capital leases or
installment financing contracts for shuttle buses, provided
the same do not exceed, in the aggregate, at any time a
maximum amount of four percent (4%) of the outstanding
principal balance of the Loan, and are paid within ninety
(90) days of the date incurred (other than the capital
leases or installment financing contracts which shall be
paid in accordance with their terms) and (C) the obligations
under the Rate Swap Agreement;
(xiv) shall maintain its records, books of account, financial
statements, accounting records and other entity documents
separate and apart from those of any other Person and
maintain its bank accounts separate and apart from those of
any other Person who is not a Borrower. Borrower agrees, if
requested by Lender, to establish separate bank accounts for
all operating and collection accounts, all such accounts to
be in accordance with the terms and conditions of the
Lockbox Agreement;
(xv) shall only enter into any contract or 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
28
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,
other than the liability which each of the four Borrowers
hereunder, jointly and severally, have with respect to the
Loan;
(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;
(xx) shall hold itself out to the public as a legal entity
separate and distinct from any other Person, shall conduct
its business solely in its own name or any Trademark listed
on Schedule 7.02(a)(xx) 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, if any, to pay
on behalf of Borrower from Borrower's funds) 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) Texas Equity Owner Criteria. With respect to Texas Equity Owner, a
"SINGLE PURPOSE ENTITY" means a corporation or a Delaware single member limited
liability company 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)(i) - (xxiv), except that:
29
(i) with respect to Section 7.02(a)(i) the Texas 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 PCAA Texas and owning its Equity
Interest in PCAA Texas;
(ii) with respect to Section 7.02(a)(ii), the Texas Equity Owner
has not and shall not acquire or own any assets other than
its Equity Interest in PCAA Texas; and
(iii) with respect to Section 7.02(a)(xiii) the Texas Equity
Owner has not and shall not incur any debt, secured or
unsecured, direct or contingent (including, without
limitation, guaranteeing any obligation).
(c) Equity Owner Criteria. With respect to Equity Owner, a "SINGLE
PURPOSE ENTITY" means a corporation or a Delaware single member limited
liability company 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)(i) - (xxiv), except that:
(i) with respect to Section 7.02(a)(i) the 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 LLC Borrowers and owning its Equity Interest in the
LLC Borrowers;
(ii) with respect to Section 7.02(a)(ii), the Equity Owner has
not and shall not acquire or own any assets other than its
Equity Interest in the LLC Borrowers; and
(iii) with respect to Section 7.02(a)(xiii) the Equity Owner has
not and shall not incur any debt, secured or unsecured,
direct or contingent (including, without limitation,
guaranteeing any obligation).
(d) Additional Criteria. So long as the Texas Equity Owner and each
LLC Borrower remains a single member limited liability company formed and
organized under Delaware law and otherwise complies 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 to the Rating Agencies and Independent Director or equivalent, Equity Owner,
their respective, single member, need not comply with the provisions of Sections
7.02(a) or (c).
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that, as of the Closing Date:
30
8.01. Organization; Legal Status. Borrower, Texas Equity Owner and Equity
Owner are each 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 each state where the Property is located;
and (b) other than as set forth on Schedule 8.01 attached hereto, has all
necessary approvals, governmental and otherwise, and full 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 signing 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.
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 or 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 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; or (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 each 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. Except as set forth on Schedule 8.04 attached hereto,
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,
Texas Equity Owner, 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.
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8.06. Warranty of Title. Borrower has good, marketable and insurable fee
simple or leasehold title of record to the Property, as applicable, 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 interferes with the benefits of the security
intended to be provided by the Security Instrument, (b) materially and adversely
affects 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 Permitted Encumbrances and 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 except the holders of Permitted
Encumbrances.
8.07. Condition of the Property. The Improvements are fit for the purpose
for which they are used, are structurally sound, in good repair and free of
material defects in materials and workmanship. All major building systems
located within the Improvements (including, without limitation, the heating and
air conditioning systems, the electrical systems, plumbing systems, and all
liquid and solid waste disposal, septic and sewer systems), if any, are in good
working order and condition and in compliance with all Requirements of Law. The
Property is free from damage caused by fire or other casualty.
8.08. No Condemnation. Except as set forth on Schedule 8.08 attached
hereto, 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. Except as set forth on Schedule 8.09 attached
hereto, 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 best of Borrower's knowledge upon due
inquiry, except as set forth on Schedule 8.10 attached hereto, Borrower 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. No event or condition
currently exists which could result in the revocation, suspension, or forfeiture
thereof. If Borrower determines that any additional Operating Permits are
required for the full use, occupancy and/or operation of the Property and the
conduct of its business thereat (collectively, the "OPERATING PERMITS"),
Borrower shall obtain such Operating Permits within thirty (30) days of the date
hereof. If Borrower determines
32
that any of its activities on the Property require any additional Operating
Permits, Borrower shall immediately terminate such activities until it has
obtained the necessary Operating Permits.
8.11. Separate Tax Lot. Except as set forth on Schedule 8.11 attached
hereto, 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.
8.12. Flood Zone. Except as otherwise disclosed on the surveys 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. 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 or contemplated use thereof have been completed,
are serviceable and all-weather, and are physically and legally open for use by
the public.
8.15. Boundaries. Except as set forth on Schedule 8.15 attached hereto, all
of the Improvements lie wholly within the boundaries and 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. No improvements on adjacent properties encroach
upon the Property.
8.16. Mechanic Liens. No mechanics', materialmens' or similar liens or
claims have been, or 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 and delivered to Lender all
insurance policies Lender has required pursuant to Section 9.03 of this Loan
Agreement, reflecting the insurance coverages, amounts and other requirements
set forth in this Loan Agreement. 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.
8.19. Leases. With respect to the Leases: (a) except as disclosed on
Schedule 8.19(a), the Property is not subject to any Leases; (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) 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);
33
(d) except as disclosed on Schedule 8.19(d), all of the Leases are bona fide,
arms-length agreements with tenants unrelated to Borrower; (e) none of the Rents
have been collected for more than one (1) month in advance (and for such
purpose, a security deposit shall not be deemed rent collected in advance); (f)
all security deposits, if any, have been collected and are being held by
Borrower in the full amount; (g) all work to be performed by Borrower, if any,
under each Lease has been performed as required and has been accepted
unconditionally by the applicable tenant; (h) no offsets or defenses exist in
favor of any tenant under any Lease to the payment of any portion of the Rents
and Borrower has no monetary obligation to any tenant under any Lease; (i)
Borrower has not received notice from any tenant under any Lease challenging the
validity or enforceability of the applicable Lease; (j) all payments due from
tenants under the Leases are current; (k) no tenant under any Lease is in
default thereunder, or is a debtor in any bankruptcy, reorganization, insolvency
or similar proceeding, or has demonstrated a history of payment problems which
suggest financial difficulty; (l) no Lease contains an option to purchase, right
of first refusal to purchase, or any other similar provision; and (m) no
brokerage commissions, finders fees or similar payment obligations are due and
unpaid by Borrower or any Affiliate of Borrower regarding any Lease.
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, Texas Equity Owner, 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 and acknowledged by Lender in
writing.
8.22. Taxes. Borrower, Texas Equity Owner and 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.
34
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 does not maintain, contribute to, or
have any obligation to contribute to, an "employee benefit plan," as defined in
Section 3(3) of ERISA, subject to Title I of ERISA, a "plan" as defined in and
subject to Section 4975 of the Code, and subject thereto, or a "governmental
plan" within the meaning of Section 3(3) of ERISA; (b) none of the assets of
Borrower constitute "plan assets" of one or more such plans within the meaning
of 29 C.F.R. Section 2510.3; and (c) Borrower is not subject to state statutes
regulating investments 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, Texas Equity Owner, Equity Owner, Guarantor, the
Property Manager, and to the best of Borrower's knowledge, after having made
reasonable inquiry (a) each Person owning an interest in Borrower, Texas Equity
Owner, Equity Owner, a Guarantor, or the Property Manager (if the Property
Manager is an Affiliate of Borrower) and (b) any tenant whose rent exceeds 20%
of the total revenue generated by relevant Parking Lot Operation: (i) is not
currently identified on 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. As of the
Closing Date, Borrower has implemented procedures, and will consistently apply
those procedures throughout the term of the Loan, to ensure the foregoing
representations and warranties remain true and correct during the term of the
Loan.
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, including but not limited to, a fee to Macquarie Securities
(USA), Inc. for financial advisory services rendered in connection with the
contemplated transaction. To the extent any fee due under this Section 8.29 is
not paid at Closing, Borrower shall deposit a like sum with Lender at Closing to
be held in escrow pending the payment of such obligation.
8.30. Equity Contribution. As of the Closing Date, Borrower has satisfied
the condition set forth Section 9.17.
8.31. 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 or
supplied in connection 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.
35
8.32. Parking Leases.
(a) Recording. Except as set forth on Schedule 8.32(a) attached
hereto, a memorandum of ground lease or its equivalent has been duly recorded
for each Parking Lease. Each Parking Lease contains the entire agreement of the
landlord thereunder (the "PARKING LEASE LESSOR") and the Borrower pertaining to
Borrower's interest under the respective Parking Lease. Except as described on
Schedule 8.32(a) attached hereto, since the date on which each such memorandum
was recorded, the applicable Parking Lease has not been amended or modified so
as to render the memorandum thereof inaccurate in any material respect. Except
for overflow parking leases identified on Schedule 8.32(a) and as otherwise set
forth on Schedule 8.32(a), each Parking Lease permits the interest of the lessee
thereunder to be encumbered by the Security Instrument.
(b) No Senior Liens. Except for the Permitted Encumbrances, Borrower's
interest in each Parking Lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the Security Instrument, other than the
fee interest of the Parking Lease Lessor thereunder and any fee mortgage liens
thereon.
(c) Parking Lease Assignable. Except for overflow parking leases set
forth on Schedule 8.32(c), Borrower's interest in each Parking Lease is
assignable to Lender upon notice to, but without the consent of, the Parking
Lease Lessor thereunder and, in the event that it is so assigned, it is further
assignable to the trustee in a Securitization upon notice to, but without a need
to obtain the consent of, such Parking Lease Lessor.
(d) Default. Except as disclosed on Schedule 8.32(d) attached hereto,
to the best of Borrower's knowledge upon due inquiry, each Parking Lease is in
full force and effect and no default has occurred under any Parking Lease and
there is no existing condition which, but for the passage of time or the giving
of notice, would result in a default under the terms of the Parking Lease.
(e) Notice. Except as disclosed on Schedule 8.32(e) attached hereto,
each Parking Lease requires the Parking Lease Lessor thereunder to give notice
of any default by Borrower to Lender and provides that notice of termination
given under the Parking Lease is not effective against such mortgagee unless a
copy of the notice has been delivered to the Lender in the manner described in
the Parking Lease.
(f) Cure. Except as disclosed on Schedule 8.32(f) attached hereto,
Lender is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of Borrower under each
Parking Lease) to cure any default under each Parking Lease, which is curable
after the receipt of notice of the default before the Parking Lease Lessor
thereunder may terminate the applicable Parking Lease.
(g) Term. Except as disclosed on Schedule 8.32(g) attached hereto,
Each Parking Lease has a term, inclusive of renewal options, which extends not
less than twenty (20) years beyond the Maturity Date.
(h) New Lease. Except as disclosed on Schedule 8.32(h) attached
hereto, each Parking Lease requires the Parking Lease Lessor thereunder to enter
into a new lease
36
upon termination of any Parking Lease for any reason, including rejection of the
applicable Parking Lease in a bankruptcy proceeding, provided that Lender cures
any defaults which are susceptible to being cured.
(i) Parking Lease Insurance Proceeds. Except as disclosed in Schedule
8.32(i) attached hereto, under the terms of each Parking Lease and the Security
Instrument, taken together, any insurance proceeds will be applied either to the
repair or restoration of the affected Individual Property with Lender having the
right to hold and disburse the proceeds as the repair or restoration progresses,
or, to the extent not so used, to the payment of the outstanding principal
balance of the Loan together with any accrued interest thereon.
(j) Parking Lease Subleasing. Except as disclosed in Schedule 8.32(j)
attached hereto, the Parking Leases do not impose commercially unreasonable
restrictions on subletting, however, each Parking Lease requires the prior
consent of the related Parking Lease Lessor.
8.33. Survival. The representations and warranties contained in this
Article 8 survive for so long as the Loan remains payable and any Obligation
remains to be performed.
8.34. Philadelphia Joint Operation. Lender and Borrower acknowledge that
PCAA leases and operates a parking facility located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ("PCAA 7750 PROPERTY") adjacent to an Individual
Property owned by PCAA SP and located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ("PCAA SP 7060 PROPERTY"). To minimize administrative costs and
expenses, PCAA SP and PCAA have agreed to operate such properties as a single
operating unit. Accordingly, Cash Flow Available for Debt Service calculated for
the combined PCAA 7750 Property and PCAA SP 7060 Property shall be allocated 90%
to PCAA SP and 10% to PCAA.
ARTICLE 9
BORROWER COVENANTS
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. 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 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. Subject to Section 9.02(b) below,
Borrower shall promptly cause to be paid and discharged any Lien which may be or
become a Lien against the Property (including, without limitation, mechanics' or
materialmens' liens). Except to the extent sums sufficient to pay Taxes or Other
Charges have been deposited with Lender in accordance with this Loan Agreement,
37
Borrower shall furnish to Lender, upon request, evidence reasonably satisfactory
to Lender that all Taxes and Other Charges have been paid and are not
delinquent. Provided (i) the Tax Escrow Account has sufficient funds to pay
Taxes and Other Charges, and (ii) no Event of Default has occurred and is then
continuing, Lender shall pay such Taxes and Other Charges on Borrower's behalf
from funds in the Tax Escrow Account.
(b) Right to Contest. After prior written notice to Lender, Borrower,
at its own expense, may contest by appropriate legal proceedings, 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 proceedings suspend 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 which Lender deems (together with
all funds then existing in the Tax Escrow Account) 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 (after crediting all amounts then existing in the
Tax Escrow Account which are not otherwise reserved for other known Taxes or
Other Charges due or to become due); (v) Borrower furnishes to Lender all other
items reasonably requested by Lender; and (vi) upon a final determination
thereof, Borrower, subject to the provisions of the following sentence, promptly
pays the amount of any such Taxes or Other Charges, together with all costs,
interest and penalties which may be payable in connection therewith. Lender
shall pay over any security held by Lender pursuant to this Section to the
claimant entitled thereto at any time when, in Lender's reasonable 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 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
38
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 "special perils" and in an amount 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
$5,000,000.00, 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 deductible shall not exceed $10,000.00 for each
Individual Property.
(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 $10,000.00 for each Individual
Property.
(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
39
as a 100-year flood zone or special hazard area. The
required coverage amount shall be equal to the full
replacement cost of the Improvements and Personal Property
(without taking into account any depreciation and exclusive
of excavations, footings and foundations, landscaping and
paving). Such coverage may need to be purchased through
excess carriers if the required coverage exceeds the maximum
insurance available for the Property 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.
(v) Business Interruption. Business interruption insurance must
be maintained in an amount sufficient to provide the lost
Operating Income for the Property for a period of not less
than one (1) year from the date of Casualty, with a six (6)
month extended period of indemnity (but a minimum of
eighteen (18) months with a six (6) month extended period of
indemnity at all times during which the outstanding
principal balance of the Note is greater than $25,000,000
and a minimum of eighteen (18) months with a twelve (12)
month extended period of indemnity at all times during which
the outstanding principal balance of the Note is greater
than $50,000,000). 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 to the Property but in no
event for a combined single limit of less than $27,000,000
aggregate and $26,000,000 per occurrence. 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, Lender may require umbrella coverage which
will be evaluated on a case-by-case basis, but in no event
less than $25,000,000.
(vii) Workers' Compensation Insurance. Workers' compensation
insurance must be maintained with respect to all employees
40
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 insurance must be
maintained in an amount equal to the full replacement value
of the Property and for loss of revenues and be in form,
amount and with deductibles satisfactory to Lender but in no
event greater than 10% of the Allocated Loan Amount.
(ix) Garage Keeper's Insurance. Garage keeper's insurance in form
and substance acceptable to Lender must be maintained in the
amount of $2,500,000 for each Individual Property and must
name Lender as an insured mortgagee under a standard
mortgage clause.
(x) Automobile Insurance. Comprehensive automobile liability
insurance must be maintained for all owned and non-owned
vehicles used in connection with the operation, maintenance,
or management of the Property and in an amount of not less
than $1,000,000 per occurrence.
(xi) 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,
"dram shop" or similar coverage if alcoholic beverages are
sold at the Property, fidelity bond coverage for employees
handling Rents and other income from the Property,
environmental insurance, sinkhole coverage and other
insurance with respect to the Property or on any
replacements or substitutions thereof or additions thereto
against 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.
(b) Qualified Insurers; Lender's Consent. All insurance must be issued
under valid and enforceable policies of insur ance 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 (but a minimum rating of "AA" at all
times during which the outstanding principal balance of the Note is $25,000,000
or more unless Borrower obtains an acceptable "cut through" endorsement from a
properly-rated reinsurer) from S & P and/or equivalent ratings from one or more
Rating Agencies acceptable to Lender. 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.
41
(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 omission 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. To the extent not specified above, the
deductibles and loss payees under each policy shall be subject to Lender's
reasonable approval. 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 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 or (ii) a copy of such policy certified by the insurance
agent to be a true, correct and complete copy of the original. Insurance binders
or certificates will not be accepted. Evidence of the required coverage for the
first year of the Loan (as well as proof of payment of the premium for the first
year) must be delivered to Lender on or before the Closing Date and thereafter
not less than thirty (30) 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 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 will not
breach any 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:
(a) Generally. Borrower shall promptly notify Lender, in writing, of
any actual or threatened Condemnation or of any Casualty that damages or renders
unusable the
42
Property or any part thereof and, except as otherwise provided below, shall
promptly and diligently pursue 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 Lender agrees not to unreasonably withhold or delay). Borrower
shall not accept any settlement of insurance proceeds with respect to a Casualty
without Lender's prior written consent (which Lender agrees not to unreasonably
withhold or delay). 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. If the amount of any claim arising
with respect to Casualty or Condemnation exceeds $250,000, Lender may elect, at
Lender's option, 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, 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 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 endorse any agreements, instruments or drafts received in
connection with a Casualty or Condemnation. If any portion of the insurance
proceeds or Condemnation award, 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 judgment 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. All expenses reasonably 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 (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
43
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 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. Provided the cost of
Restoration exceeds $250,000, 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, which Lender agrees not to
unreasonably withhold or delay. 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.
(iii) Borrower demonstrates to Lender's satisfaction that the
Restoration Proceeds are sufficient to pay in full the
estimated cost to complete Restoration and 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) Intentionally Omitted.
(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 Requirements of Law to
preserve the right to rebuild the Improvements as they
existed prior to the Casualty or Condemnation, (C) the
expiration of Borrower's business interruption insurance, or
(D) six (6) months prior to the Maturity Date (without
taking into consideration any unexercised extension).
44
(vi) If a Condemnation has occurred, (A) less than ten percent
(10%) of the Land is taken and the land taken is along the
perimeter or periphery of the Land, and (B) no portion of
any structural Improvements are taken which would have a
Material Adverse Effect.
(vii) If a Casualty has occurred, (A) less than 10% of the paved
parking area of the Individual Property is damaged or
rendered unusable by the Casualty, and (B) no portion of any
structural Improvements are damaged or rendered unusable
which would have a Material Adverse Effect.
(viii) Intentionally Omitted.
(ix) The Property and its use after completion of Restoration
will be in compliance in all material respects 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 (e)) is less than $250,000, Lender shall
disburse the entire amount of the Restoration Proceeds to Borrower, and Borrower
hereby covenants and agrees 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 $250,000 or
more than $250,000, Lender may retain the Restoration Proceeds in an interest
bearing escrow account and make periodic disbursements to 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 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 materialmens' 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
45
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 satisfactory evidence that Restoration has
been fully completed 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 Liens since the date of recordation of the
Security Instrument (other than the Permitted Encumbrances).
(D) Notwithstanding subsection I above, Lender may release
from the Restoration Holdback payments to a contractor or supplier if: (1)
Lender receives satisfactory evidence that such contractor has satisfactorily
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, Lender will disburse 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) then,
any Operating Expenses approved by Lender. Lender may
require satisfactory evidence that Operating Expenses to be
paid have been incurred and 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
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
46
held by Lender as the Restoration Deficiency Deposit shall
be disbursed in accordance with this Section 9.04.
(iv) Consequence of Event of Default. Lender shall not be
obligated to disburse Restoration Proceeds or amounts from
the Restoration Holdback when an Event of Default exists,
and upon the occurrence of an 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.
9.05. Inspections and Right of Entry. Lender and its agents may enter the
Property upon prior notice to Borrower (notice to be given not less than two (2)
Business Days prior to entry by Lender or its agents 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. Borrower may enter into new Leases
for space at the Property and renew or extend existing Leases only with Lender's
prior written consent, which shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Lender's approval shall not be required for
leases ("PERMITTED LEASES") which (i) are for non-parking related uses, (ii)
have a term of three (3) years or less, (iii) together with all other Leases
affecting the operation of the Individual Property in question, do not generate
in excess of five percent (5%) of the gross revenue attributable to such
operation of the Individual Property, and (iv) do not contain provisions
permitting tenant mortgages, options, rights of first refusal or offer,
exclusivity, or extension options in favor of the tenant thereunder. Borrower
shall promptly deliver to Lender a copy of each executed Lease. All subleases
shall be in accordance with the terms and conditions of the applicable existing
Leases.
47
(b) Leasing Decisions. Other than Permitted Leases, Borrower may not,
without Lender's prior written consent: (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 leased space); (ii) cancel or terminate any Lease; (iii)
consent to a tenant's assignment of its Lease or subleasing of space; or (iv)
amend, supplement, waive or terminate any Lease Guaranty; 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.
Termination of a Lease with a tenant who is in default beyond applicable notice
and grace/cure periods shall not be considered an 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 9.06 requires Lender's prior written approval, which may not be
unreasonably withheld or delayed, 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 9.06. 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 9.06 if the action taken is not in compliance
herewith.
(c) Observance of Lessor Obligations. Borrower (i) shall observe and
perform all obligations imposed upon the lessor under the Leases 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 shall send or receive (or may
have sent or received) under any non-residential Lease; (iii) shall 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;
(iv) shall not collect any Rents more than one (1) month in advance which, in
the aggregate, exceed $50,000 (and for this purpose a security deposit shall not
be deemed Rent collected 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).
9.07. Use of Property. Borrower shall not allow changes in the use of the
Property without Lender's prior written consent, which shall not be unreasonably
withheld, conditioned or delayed. 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 as of
the Closing Date. 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.
9.08. Maintenance of Property. Borrower shall 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)
without Lender's prior written consent.
48
Borrower shall promptly repair or replace any portion of the Property which may
become damaged, worn or dilapidated. Borrower shall obtain and maintain 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.
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 or invalidate the insurance coverage required hereunder to be
maintained by Borrower. Borrower will not, without Lender's prior written
consent, permit any drilling or 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 all Requirements of Law 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 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 proceeding shall not otherwise be
prohibited by any, and shall be conducted in accordance with all 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 liability on Lender or Borrower which has not
otherwise been accounted for by the reserve created under clause (v) below, or
any criminal or environmental liability on Lender or Borrower; (v) Borrower
deposits with Lender cash (or other security reasonably 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, if any, determined to be
applicable.
9.11. Financial Reports, Books and Records.
(a) Delivery of Financial Statements. Borrower shall keep adequate
books and records of account 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
49
as reasonably required by Lender and certified by a Responsible Officer to be
true, complete and correct:
(i) if requested by Lender (but not more often than once per
calendar quarter), a Rent Roll;
(ii) as soon as available, but in any event within sixty (60)
days after the end of each fiscal quarter, a quarterly
operating statement for Borrower detailing the Operating
Income received, Operating Expenses incurred, the cost of
all Capital Improvements/Deferred Maintenance and
Replacements performed or paid during such quarter, and the
Debt Service Coverage Ratio as of the end of such fiscal
quarter;
(iii) within sixty (60) days after the end of each fiscal
quarter, a quarterly, Compliance Certificate;
(iv) as soon as available, but in any event within one hundred
twenty (120) days after the close of Borrower's fiscal year,
(A) an annual operating statement for each Property
presented on a basis consistent with the quarterly operating
statements described above and audited by an independent
certified public accountant; (B) an annual balance sheet and
profit and loss statement for Borrower audited by an
independent certified public accountant; and (C) a statement
of change of financial position of Borrower, setting forth
in comparative form the figures for the previous fiscal
year;
(v) if requested by Lender, an annual operating budget for
Borrower 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; and
(vi) 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.
Notwithstanding the foregoing, (i) upon the request of Lender prior to a
Securitization or syndication of the Loan, (ii) following the failure to meet
the Performance Criteria on any Performance Test Date or (iii) following an
Event of Default, Borrower shall promptly provide monthly statements consistent
with the requirements of subsections (ii) and (iii) above, within twenty (20)
days following the end of each calendar month.
(b) Lender Audit Rights. Lender and its agents have the right, upon
prior written notice to Borrower (notice to be given at least two (2) Business
Days prior to such inspection unless an Event of Default exists), to examine the
records, books and other papers
50
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 or if the results of Lender's
audit disclose an error in the categories of total income, total expenses, total
assets or total liabilities 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, Texas Equity Owner and Equity
Owner. Borrower shall cause each Guarantor and, at Lender's request, the Texas
Equity Owner and the Equity Owner, to provide to Lender (i) within ninety (90)
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 certified by such
party to be accurate and complete; 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. If
a Data Delivery Failure occurs on more than two (2) separate occasions during
any twelve month period or on more than five (5) occasions while the Loan is
outstanding, it shall be an immediate Event of Default hereunder. 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.
9.12. Performance of Other Agreements. Borrower shall observe and perform
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 used in connection with the operation of the
Property (including, without limitation, the Operating Agreements and the
Parking Leases). 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 and the Parking Leases 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 and the Parking Leases to be performed or observed, and (c) not
terminate or amend, or waive compliance with, any of the Operating Agreements
and the Parking Leases without Lender's prior written consent, except as may be
(i) permitted pursuant to the respective terms thereof or (ii) absent the
existence of an Event of Default, done
51
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 use commercially reasonable efforts 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 any terminated Operating Agreement, the absence of which is likely
to have a Material Adverse Effect.
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 each
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. 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 the Property Manager to manage the Property
in a manner consistent with Borrower's past practices. 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 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 Assignment of
Property Management Contract. The property management fee and all other fees
payable under the Property Management Contract shall not exceed 3.5% of
Operating Income.
(b) Termination of Property Manager. Borrower agrees, that, if (i)
irrespective of whether an Event of Default exists, 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, (ii) an Event of Default exists, (iii) a default or event of
default exists under the Property Management Contract, or (iv) Property Manager
becomes insolvent, Lender may direct Borrower to terminate the Property
Management Contract and to replace Property Manager with a management company
acceptable to Lender, provided that, with respect to Section 9.14(b)(i) only,
prior to requiring the termination of the Property Management Contract, Lender
shall 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)
52
day period, Lender may direct Borrower to terminate the Property Management
Contract and to 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 in all material respects with all
Requirements of Law relating to money laundering, anti-terrorism, trade embargos
and economic sanctions, now or hereafter in effect. Upon Lender's request from
time to time during the term of the Loan, Borrower shall certify in writing to
Lender that Borrower's representations, warranties and obligations under Section
8.28 and this Section 9.16 remain true and correct in all material respects and
have not been breached. Borrower shall immediately notify Lender in writing if
any of such representations, warranties or covenants are no longer true or have
been breached or if Borrower has a reasonable basis to believe that they may no
longer be true or have been breached in any material respect. In connection with
such an event, Borrower shall comply in all material respects with all
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 an event. Borrower shall also reimburse Lender any reasonable
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
9.17. Equity Contribution. On the Closing Date, the equity owners of
Borrower shall provide satisfactory evidence to Lender that they have, as of the
Closing Date, an aggregate equity investment in Borrower in an amount not less
than $64,500,000 in a manner which is satisfactory to Lender.
9.18. Net Worth Covenant. Until the Loan is paid in full, Guarantor shall
maintain at all times a Net Worth at least equal to $40,000,000, and, within ten
(10) Business Days of Lender's request, Borrower shall demonstrate in writing
and to Lender's reasonable satisfaction, compliance with this Section.
9.19. Liquidity Covenant. Until the Loan is paid in full, Guarantor shall
maintain at all times a Liquidity (exclusive of any direct or indirect interest
in the Property) at least equal to $3,000,000, and, within ten (10) Business
Days of Lender's request, Borrower shall demonstrate in writing and to Lender's
reasonable satisfaction, compliance with this Section.
53
9.20. Parking Lease Covenants.
(a) Borrower covenants and agrees as follows: (i) promptly and
faithfully to observe, perform and comply in all material respects with all of
the terms, covenants and provisions of the Parking Leases; (ii) to refrain from
doing anything and not do or permit any act, event or omission, as a result of
which, there is likely to occur a default or breach under any Parking Lease;
(iii) to promptly give Lender notice of any default under any Parking Lease upon
learning of such default and immediately deliver to Lender a copy of each notice
of default and all responses to such notice of default and all other material
instruments, notices or demands received or delivered by Borrower under or in
connection with any Parking Lease; (iv) to promptly notify Lender in writing in
the event of the initiation of any litigation or arbitration proceeding
affecting Borrower or the Property under or in connection with any Parking
Lease; (v) within ten (10) Business Days of each request by Lender to furnish to
Lender an estoppel certificate from Borrower in such form as Lender may
reasonably request from time to time concerning Borrower's due observance,
performance and compliance in all material respects with the terms, covenants
and provisions of any Parking Lease; (vi) subject to Section 9.06 and 9.20(b),
it will not voluntarily or involuntarily, directly or indirectly, assign,
transfer or convey the Property or the Leasehold Estate, nor surrender,
terminate or cancel any Parking Lease nor, without the prior written consent of
Lender, fail to exercise in a timely manner any purchase option(s) or renewal
option(s) contained in the Parking Leases, if applicable, nor, without the prior
written consent of Lender; and (vii) shall not modify, alter or amend any
material term in any Parking Lease, either orally or in writing. Any assignment,
transfer, conveyance, surrender, termination, cancellation, modification,
alteration or amendment of any Parking Lease in contravention of the foregoing
shall be void and of no force and effect.
(b) Additional Covenants. Borrower further covenants and agrees that
it will not fail to exercise in a timely manner any renewal option(s) contained
in each Parking Lease, if reasonably required by Lender, nor, without the prior
written consent of Lender, modify, alter or amend any Parking Lease, either
orally or in writing, which consent (a) with respect to monetary or material
non-monetary provisions, may be granted, conditioned or withheld in Lender's
sole discretion and (b) with respect to non-monetary, non-material provisions,
may not be unreasonably withheld, conditioned or delayed. Any assignment,
transfer, conveyance, surrender, termination, cancellation, modification,
alteration or amendment of any Parking Lease in contravention of the foregoing
sentence shall be void and of no force and effect. For the purposes of this
Section 9.20(b), the phrase "material non-monetary" shall mean provisions with
respect to any of the following: (i) the term of any Parking Lease, (ii) any
economic matter (including costs passed through to Borrower) that would affect
the rent or any other charge thereunder, (iii) any security deposit, if any,
(iv) defaults, events of default and remedies, (v) termination or cancellation,
(vi) disposition of casualty or condemnation proceeds, (vii) transfer of the
leased premises, (viii) tenant mortgages, (ix) assignment and subletting (other
than as otherwise permitted in such lease and this Loan Agreement) or (x)
options, rights of first refusal or offer and extension options. Notwithstanding
the provisions set forth in Section 9.20(a) and 9.20(b), provided no Event of
Default then exists, Borrower shall have the right to modify, alter or terminate
overflow parking lot leases set forth on Schedule 9.20(b), provided that
Borrower shall provide to
54
Lender prompt notice of any material modification or alteration to, and any
termination of, any overflow parking lease.
(c) Notwithstanding anything to contrary in this Loan Agreement,
Borrower may terminate the Parking Lease for the property located at ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Locks, Connecticut (the "50 ▇▇▇▇ ▇▇▇▇▇▇ PROPERTY") at
any time upon prior written notice to Lender.
(d) Default. In the event of a default by Borrower under any Parking
Lease, then, in each and every such case, Lender may (but shall not be obligated
to), in its sole discretion and without notice to Borrower, cause such default
or defaults by Borrower to be remedied and otherwise take or perform such other
actions as Lender may reasonably deem necessary or desirable as a result thereof
or in connection therewith. Borrower shall, on demand, reimburse Lender for all
advances reasonably made and expenses reasonably incurred by Lender in curing
any such default(s) (including, without limitation, reasonable attorneys' fees),
together with interest thereon from the date if different until the same is paid
in full to Lender and all such sums so advanced shall be secured hereby. The
provisions of this subsection are in addition to any other right or remedy given
to or allowed Lender under each Parking Lease or otherwise.
(e) Cancellation or Termination. If any Parking Lease is cancelled or
terminated, Lender or its nominee shall acquire an interest in any new lease of
the Leasehold Estate by Borrower.
(f) Parking Lease Estoppel Certificate. Borrower shall from time to
time within ten (10) Business Days of Lender's request use its best efforts to
obtain and deliver (or cause to be delivered) to Lender, an estoppel
certificate, in a form reasonably acceptable to Lender, from each Parking Lease
Lessor.
(g) No Liability. Notwithstanding anything contained herein or
otherwise to the contrary, Lender shall not have any liability or obligation
under any Parking Lease, by virtue of its acceptance of this Security
Instrument. Borrower acknowledges and agrees that Lender shall be liable for the
obligations of the Borrower arising under each Parking Lease, as applicable, for
only that period of time, if any, during which Lender is in possession of the
Leasehold Estate, as applicable, or has acquired, by foreclosure, power of sale
or otherwise, and is holding, all of Borrower's right, title and interest as
tenant in either or both of the applicable Leasehold Estate.
(h) Bankruptcy. Notwithstanding anything contained herein or otherwise
to the contrary, Borrower hereby assigns, transfers and sets over to Lender any
and all rights and interests that may arise in favor of Borrower in connection
with or as a result of the bankruptcy or insolvency of the Parking Lease Lessor,
as applicable, including, without limitation, all of Borrower's right, title and
interest in, to and under Section 365 of the Bankruptcy Code (11 U.S.C. Section
365), as the same may be amended, supplemented or modified from time to time.
55
(i) Taxes. In the event that it is claimed by any governmental agency,
authority or subdivision that any tax or governmental charge or imposition is
due, unpaid or payable by Borrower upon or in connection with any Parking Lease,
Borrower shall promptly either (i) pay such tax, charge or imposition when due
and deliver to Lender reasonably satisfactory proof of payment thereof or (ii)
contest such tax in accordance with the applicable provisions of this Loan
Agreement. If liability for such tax is asserted against Lender, Lender will
give to Borrower prompt notice of such claim, and Borrower, upon complying with
the provisions of this Loan Agreement shall have full right and authority to
contest such claim of taxability.
9.21. JFK Lease. Borrower acknowledges that it occupies and operates
parking operations located at (i) 129th and 52nd Avenue, New York, New York (the
"129 LOCATION") and (ii) ▇▇▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "131
LOCATION" together with the 129 Location, the "JFK LOCATION"), adjacent to JFK
Airport. Borrower agrees to notify Lender within ten (10) days following any
termination of either Parking Lease at the JFK Location by the applicable
landlord and covenants not to terminate either Parking Lease at the JFK Location
without Lender's prior written consent. Any notice delivered by Borrower to
Lender pursuant to the preceding sentence shall include evidence, reasonably
satisfactory to Lender, regarding the impact which the loss of Borrower's right
to use and occupy the applicable portion of the JFK Location is expected to have
on Borrower's Operating Income. If Lender is satisfied, in its reasonable
discretion, based on evidence submitted by Borrower, that the loss of the
applicable porition of the JFK Location will have no Material Adverse Effect on
Borrower's Operating Income, Borrower shall not be required to take any further
action as a result of the loss of the JFK Location. If, however, Lender
concludes that the loss of the applicable portion of the JFK Location can
reasonably be expected to have a Material Adverse Effect on Borrower's Operating
Income, Lender shall so notify Borrower, at which time (i) Borrower may elect to
lease additional overflow lots in order to increase Borrower's parking capacity
at such properties in a manner reasonably satisfactory to Lender to recoup the
loss in Operating Income or (ii) in the event Borrower fails to so elect, or
fails to lease such additional overflow lots within a reasonable period
following its election, the termination shall be deemed a Partial Release
pursuant to Section 10.03(a) hereof, and the Allocated Loan Amount shall, solely
for the purposes of this Section 9.21, be (a) $3,462,000.00 with regard to the
129 Location, and (b) $1,154,000.00 with regard to the 131 Location. If Borrower
leases additional overflow lots in a manner which Lender reasonably believes
will recoup any loss in Operating Income resulting from the termination of the
applicable Parking Lease at the JFK Location, Borrower shall not be treated as
having experienced a Parking Lease termination pursuant to Section 10.03(a), and
shall not be required to repay any portion of the Loan.
9.22. LGA Lease. Borrower acknowledges that it occupies and operates
parking operations located at (i) ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "87
LOCATION") and (ii) ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "19 LOCATION"
together with the 87 Location, the "LGA LOCATION"), in the vicinity of LaGuardia
Airport. Borrower agrees to notify Lender within ten (10) days following any
termination of either Parking Lease at the LGA Location by the applicable
landlord and covenants not to terminate either Parking Lease at the LGA Location
without Lender's prior written consent. Any notice delivered by Borrower to
Lender pursuant to the preceding sentence shall include evidence, reasonably
satisfactory to Lender, regarding the impact which the loss of Borrower's right
to use and occupy the applicable portion of the LGA
56
Location is expected to have on Borrower's Operating Income. If Lender is
satisfied, in its reasonable discretion, based on evidence submitted by
Borrower, that the loss of the applicable portion of the LGA Location will have
no Material Adverse Effect on Borrower's Operating Income, Borrower shall not be
required to take any further action as a result of the loss of the applicable
portion of the LGA Location. If, however, Lender concludes that the loss of the
applicable portion of the LGA Location can reasonably be expected to have a
Material Adverse Effect on Borrower's Operating Income, Lender shall so notify
Borrower, at which time: (i) may elect to lease additional overflow lots in
order to increase Borrower's parking capacity at such property in a manner
reasonably satisfactory to Lender to recoup the loss in Operating Income or (ii)
in the event Borrower fails to so elect, or fails to lease such additional
overflow lots within a reasonable period following its election, the termination
shall be deemed a Partial Release pursuant to Section 10.03(a) hereof, and the
Allocated Loan Amount shall, solely for the purposes of this Section 9.22, be
(a) $509,000.00 with regard to the 87 Location, and (b) $509,000.00 with regard
to the 19 Location. If Borrower leases additional overflow lots in a manner
which Lender reasonably believes will recoup any loss in Operating Income
resulting from the termination of the applicable Parking Lease at the LGA
Location, Borrower shall not be treated as having experienced a Parking Lease
termination pursuant to Section 10.03(a), and shall not be required to repay any
portion of the Loan.
9.23. PCAA 7750 Property Lease. Borrower acknowledges that the Parking
Lease pursuant to which Borrower currently leases the PCAA 7750 Property shall
expire on October 31, 2006. In the event that Lender, in its sole discretion,
determines that on October 31, 2006 Lender no longer has a valid first priority
leasehold mortgage on the PCAA 7750 Property, within five (5) days of Lender's
notice, Borrower shall provide to Lender evidence, reasonably satisfactory to
Lender, regarding the impact which the loss of Borrower's right to use and
occupy the PCAA 7750 Property is expected to have on Borrower's Operating
Income. If Lender is satisfied, in its reasonable discretion, based on evidence
submitted by Borrower, that the loss of the PCAA 7750 Property will have no
Material Adverse Effect on Borrower's Operating Income, Borrower shall not be
required to take any further action as a result of the loss of the PCAA 7750
Property. If, however, Lender concludes that the loss of the PCAA 7750 Property
can reasonably be expected to have a Material Adverse Effect on Borrower's
Operating Income, Lender shall so notify Borrower, at which time: (i) Borrower
may elect to lease three hundred (300) additional parking spaces in
Philadelphia, Pennsylvania in a manner reasonably satisfactory to Lender to
recoup the loss in Operating Income relating to the PCAA 7750 Property, and
shall enter such lease(s) and grant to Lender such security interest therein as
reasonably required by Lender within thirty (30) days of such election, or (ii)
in the event Borrower fails to so elect, or fails to lease such additional
parking spaces within such thirty (30) day period following its election, the
expiration of the lease shall be deemed a Partial Release pursuant to Section
10.03(a) hereof, and the Allocated Loan Amount shall, solely for the purposes of
this Section 9.23, be $1,275,000. If Borrower leases additional overflow lots
within such thirty (30) day period, in a manner which Lender reasonably believes
will recoup any loss in Operating Income resulting from the termination of the
Parking Lease at the PCAA 7750 Property, Borrower shall not be treated as having
experienced a Parking Lease termination pursuant to Section 10.03(a), and shall
not be required to repay any portion of the Loan.
9.24. Rate Swap Covenants.
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(a) Borrower shall comply with all provisions contained in the Rate
Swap Agreement.
(b) Borrower shall not, without first obtaining Lender's written
consent: (i) sell, assign, grant a security interest in, or otherwise encumber
or transfer (directly or indirectly, voluntarily or involuntarily, by operation
of law or otherwise, and whether or not for consideration) any of its rights,
title or interest under the Rate Swap Agreement; (ii) modify, terminate or waive
any material term of the Rate Swap Agreement; or (iii) consent to any assignment
or transfer by Rate Swap Provider of the Rate Swap or Rate Swap Agreement.
(c) Borrower shall not change the payment instructions delivered to
Rate Swap Provider for its use in sending payments to Borrower under the Rate
Swap Agreement, without Lender's prior written consent to each new payment
instruction.
(d) Borrower, at Borrower's expense, shall take all actions reasonably
requested by Lender to enforce Borrower's rights under the Rate Swap Agreement
in the event of a default by Rate Swap Provider thereunder.
9.25. Capital Improvements/Deferred Maintenance. Borrower covenants and
agrees to complete the Capital Improvements/Deferred Maintenance set forth on
Exhibit C in accordance with the terms of this Loan Agreement not later than
nine (9) months from the date hereof
9.26. Environmental Remediation. Borrower covenants and agrees to complete
the Environmental Remediation set forth on Exhibit I in accordance with the
terms of this Loan Agreement, not later than the time frames set forth on
Exhibit I.
ARTICLE 10
NO TRANSFERS 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. Except as otherwise provided in this Section 10.02,
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 one (1) time 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 to a Qualified Transferee, 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, (ii)
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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-half of one percent (0.50%) of the outstanding
principal balance of the Loan, (iv) replacing the Guarantors with substitute
guarantors reasonably acceptable to Lender, (v) assumption in writing by the
transferee and a guarantor acceptable to Lender in its sole discretion of all
obligations of the transferor and 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 nonconsolidation
opinion, and other applicable opinions as required by Lender and the Rating
Agencies, (vii) adjusting amounts required for the Reserve Accounts, and (viii)
obtaining Rating Confirmations if a Securitization has occurred. Borrower agrees
to pay all of Lender's reasonable 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. 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. Lender acknowledges that Macquarie Infrastructure Company, Inc.
("MIC"), which is the parent of Macquarie Americas Parking Corporation ("MAPC"),
which is the parent of Parking Company of America Airports Holdings, LLC, which
is the parent of Equity Owner, is currently a borrower under that certain
Amended and Restated Credit Agreement (the "ARCA"), dated May 9, 2006 and as
amended from time to time, by and among MIC, as borrower, Macquarie
Infrastructure Company, LLC, the other lenders and issuers party thereto and
Citigroup North America, Inc., as administrative agent ("CITI"), pursuant to
which, MIC has pledged its equity interests in MAPC and may, in the future, seek
other credit facilities from other Comparable Financial Institutions
(collectively, the "CREDITORS"), including without limitation, replacements,
extensions, modifications, increases, amendments of existing credit facilities
and/or any new credit facilities (collectively and together with the ARCA, the
"CREDIT FACILITIES"). Notwithstanding any provision of this Loan Agreement to
the contrary, Lender consents to any existing or future pledge of MIC's (or any
of the Macquarie Group's) equity interest in MAPC to the Creditors to secure any
one or more such Credit Facilities, which consent does not include any transfer
of MIC's (or any of the Macquarie Group's) equity interest in MAPC to the
Creditors pursuant to any enforcement of such pledge or otherwise.
10.03. Borrower Right to Partial Releases for Partial Release Price.
(a) Right to Release. 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 not less than forty-five (45) days
prior written notice to Lender requesting a Partial Release and identifying the
Release Property and date upon which Borrower intends to have the Release
Property released ("PARTIAL RELEASE DATE"). Lender shall permit a Partial
Release, upon satisfaction to Lender's reasonable satisfaction of each of the
following conditions:
(i) No Event of Default shall exist at the time Borrower
requests a Partial Release or on the Partial Release Date.
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(ii) On or before the Partial Release Date, Borrower shall
deliver to Lender 125% of the applicable Allocated Loan
Amount (together with evidence, satisfactory to Lender, that
the applicable Swap Breakage (if any) has been paid to the
Rate Swap Provider) (the "PARTIAL RELEASE PRICE") allocated
to the Release Property under this Loan Agreement.
(iii) Borrower pays to Lender a release fee equal to (A) one
percent (1.00%) of the Partial Release Price for the
applicable Property during the first twelve (12) months of
the term of the Loan; (B) one-half of one percent (0.50%) of
the Partial Release Price for the applicable Property during
the thirteenth (13th) through the eighteenth (18th) months
of the term of the Loan; or (C) no release fee thereafter.
Such release fee is in lieu of any Prepayment Fee that might
otherwise be payable in connection with such Partial Release
Price under Section 2.05 of this Loan Agreement.
(iv) As of the Partial Release Date, and, after giving effect to
the Partial Release to occur on such date, (i) the Debt
Service Coverage Constant Ratio is at least 1.10:1.00, (ii)
the Debt Service Coverage Ratio is at least 1.60:1.00 and
(iii) the Loan to Value Ratio is at least 75%; each as
determined by Lender.
(v) The Property remaining after the Partial Release (and all
prior Partial Releases) continues to be in material
compliance with all Requirements of Law (including, without
limitation, all zoning and subdivision laws, setback
requirements, parking ratio requirements and use
requirements), has direct access to a public right of way
and is subject to no material encroachments from the Release
Property and the applicable requirements of any Leases, and
shall be assessed for real estate tax purposes as one or
more wholly independent tax lot or lots, separate from any
other property (including, without limitation, the Release
Property).
(vi) 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 reasonably satisfactory to
Lender in all respects.
(vii) Borrower has obtained a Rating Confirmation.
(viii) Borrower has delivered a Compliance Certificate along with
a certificate from a Responsible Officer certifying that the
requirements set forth in this Section 10.03 have been
satisfied in all material respects.
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(ix) Borrower has paid all amounts then due and payable under the
Loan Documents through (and including) the Release Date and
in connection with the Partial Release.
(x) Lender shall have received a copy of a deed conveying all of
the Borrower's right, title and interest in and to the
Release Property to a Person 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 reasonable, out-of-pocket 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 any prior 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 (or any prior Partial
Releases).
(d) Following a Partial Release under this Section 10.03 or an
Outparcel Release under Section 10.04, all references in the Loan Documents
shall be deemed to refer to the Property remaining after the Partial Release
and/or Outparcel Release, as applicable. Subject to the provisions of Sections
9.21, 9.22 and 9.23 hereof, any transfer or termination of any Parking Lease
(whether by expiration of the stated term or otherwise), or the loss of any
license or permit or zoning designation necessary to operate the Individual
Property as a parking lot (unless Borrower proves to Lender's reasonable
satisfaction that such license or permit can be obtained within a reasonable
period of time, or, in the alternative, such loss will not have a material
adverse impact on Borrower's Operating Income) shall be deemed a Partial Release
of such Property, and Borrower shall comply with all of the obligations set
forth in this Section 10.03 within five (5) days of such transfer or
termination.
10.04. Right to Release Outparcels.
(a) Borrower shall have the right, from time to time, to obtain an
outparcel release ("OUTPARCEL RELEASE") of a portion of the Oklahoma City
Property is excess land that
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is not being used by the Borrower, as shown on Exhibit H hereto (the
"OUTPARCEL") from the liens created by the Security Instrument, Assignment of
Rents and Leases and related UCC financing statements. Borrower must provide not
less than forty-five (45) days prior written notice to Lender requesting such
Outparcel Release and identifying the Outparcel and date upon which it desires
to have the Outparcel released ("OUTPARCEL RELEASE DATE"). Prior to Lender's
agreement to an Outparcel Release, each of the following conditions must be
satisfied to Lender's reasonable satisfaction:
(i) No Event of Default shall exist at the time Borrower
requests an Outparcel Release or on the Outparcel Release
Date.
(ii) No material portion of the Improvements (other than paved
parking surface) shall be located on the Outparcel, and no
material portion of the Operating Income of the Property
shall be derived from the Outparcel, and Lender determines
that the use of the Outparcel following the Outparcel
Release will not materially and adversely affect the use,
operation and value of, or the Operating Income from, the
Property remaining after the Outparcel Release or Borrower's
ability to perform its obligations under this Loan Agreement
and the other Loan Documents.
(iii) The Property remaining after the Outparcel Release
continues to be in compliance with all Requirements of Law
(including, without limitation, all zoning and subdivision
laws, setback requirements, parking ratio requirements and
use requirements), and the applicable requirements of any
Leases affecting such remaining Property.
(iv) Borrower has delivered to Lender an endorsements to the
Title Insurance Policy amending the legal description and
insuring the continuing priority of the Lien of this
Security Instrument, subject only to the Permitted
Encumbrances.
(v) Borrower has delivered to Lender evidence that as of the
Outparcel Release Date, the Property remaining after the
Outparcel Release shall be assessed for real estate tax
purposes as one or more wholly independent tax lot or lots,
separate from any other property (including, without
limitation, the Outparcel).
(vi) As of the Outparcel Release Date, the Property remaining
after the Outparcel Release shall have a legal description
that is separate from that of Outparcel and shall be
"self-contained" meaning that such legal description shall
not be in a form such that it refers to the legal
description of the Property prior to such Outparcel Release
"less and except" the Outparcel.
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(vii) Borrower has delivered to Lender an ALTA survey complying
with the then current survey requirements for the Property
remaining after the Outparcel Release, reflecting the new
legal description as set forth in clause (vi) above and
satisfactory to the title insurance company providing the
coverage required pursuant to subsection (v) above.
(viii) Borrower has delivered to Lender forms of all documents
necessary to release the Outparcel 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 Outparcel is located and
otherwise satisfactory to Lender in all respects.
(ix) Borrower has delivered a Compliance Certificate along with a
certificate from a Responsible Officer certifying that the
requirements set forth in this Section 10.04 have been
satisfied in all material respects.
(x) Borrower has paid all amounts then due and unpaid under the
Loan Documents through (and including) amounts due on the
Outparcel Release Date and in connection with the Outparcel
Release.
(xi) Lender shall have received a copy of a deed conveying all of
the Borrower's right, title and interest in and to the
Outparcel to a Person 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 Outparcel is located.
(xii) Borrower has delivered evidence to Lender that access to
the Property remaining after the Outparcel Release will not
be impaired.
(b) Reimbursement of Lender Expenses. Borrower agrees to pay all of
Lender's reasonable, out-of-pocket expenses incurred in connection with
reviewing and documenting such Outparcel 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 Outparcel 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 Outparcel
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 Outparcel
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Release (or any prior Outparcel 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 Outparcel Release. This
Security Instrument shall continue as a Lien and security interest on the
portion of the Property not included in an Outparcel Release (or any prior
Outparcel Releases).
10.05. Other Releases of the Mortgaged Property. In addition to the rights
granted to Borrower under Section 10.03 with respect to the Release Properties
and under Section 10.04 with respect to Outparcels, Lender may release any 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 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 10.05.
10.06. OFAC Compliance; Substantive Consolidation Opinion. Notwithstanding
anything to the contrary contained in this Article 10 (but without any Transfers
deemed permitted by solely this Section 10.06), (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 in Borrower, Texas Equity Owner or
Equity Owner (if such Person has not owned at least forty-nine percent (49%) of
the ownership interest in Borrower, Texas Equity Owner, or Equity Owner, as
applicable, prior to such transfer), Borrower shall, prior to such transfer,
deliver a new substantive consolidation opinion letter (if one was delivered in
connection with the closing of the Loan) 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 interest is not paid in full within five (5)
days after the Payment Due Date on which such payment is due;
(b) If any monthly payment required to be made to a Reserve Account is
not paid within five (5) days 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;
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(d) Intentionally Omitted;
(e) If the Prepayment Fee is not paid in full when required;
(f) If any representation or warranty made by Borrower, Texas Equity
Owner, Equity Owner or 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;
(g) If Borrower, Texas Equity Owner, Equity Owner or 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;
(h) If (i) Borrower, Texas Equity Owner, Equity Owner or 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 or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets; or (ii) there shall be commenced against
Borrower, Texas Equity Owner, Equity Owner or 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, Texas Equity Owner, Equity Owner or 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, Texas Equity
Owner, Equity Owner or 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;
(i) If Guarantor repudiates or revokes the Guaranty or Environmental
Indemnity;
(j) If any judgment for monetary damages is entered against Borrower,
Equity Owner or Guarantor which, in Lender's sole judgment, has a Material
Adverse Effect or is not covered to Lender's satisfaction by collectible
insurance proceeds;
(k) If Borrower or Equity Owner violates or fails to comply in any
material respect with any provision of Article 7 of this Loan Agreement
(captioned: Single Purpose Entity Requirements);
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(l) 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), Section 9.13 (captioned: Existence, Change of Name or Location as a
Registered Organization) or Section 9.22 (captioned: Rate Swap Covenants);
(m) If a Transfer (other than a Permitted Transfer) occurs without
Lender's prior written consent or in violation of the terms of Lender's consent;
(n) If Borrower abandons or ceases work on any Capital Improvement or
Replacement 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 or such cessation occurs in the
ordinary course of business and will not have a Material Adverse Effect;
(o) If a Lien (other than a Permitted Encumbrance or a Lien granted to
Lender) is filed against the Property, unless such Lien is promptly contested in
good faith by Borrower as permitted in accordance with Section 9.02 (b);
(p) If a Data Delivery Failure occurs as described in Section 9.11(d);
(q) If any of the material assumptions contained in the substantive
nonconsolidation opinion delivered to Lender in connection with the Loan, or in
any update thereof or in any additional substantive nonconsolidation opinion
delivered subsequent to the closing of the Loan, is or shall become untrue in
any material respect;
(r) If (i) any Rate Cap or Rate Swap is terminated for any reason by
Borrower or the Rate Cap Provider or Rate Swap Provider, or (ii) the Rate Cap
Provider or Rate Swap Provider defaults in the performance of its monetary
obligations under the Rate Cap or Rate Swap or (iii) the rating of the Rate Cap
Provider or Rate Swap Provider is subject to any downgrade, withdrawal or
qualification by a Rating Agency, and Borrower does not within ten (10) days (A)
replace such Rate Cap or Rate Swap with a replacement Rate Cap or Rate Swap
which satisfies all of the requirements of Section 2.07 of this Loan Agreement,
and is otherwise in the same notional amount and Strike Rate as the Rate Cap or,
with respect to any Rate Swap, has the same notional amount and Fixed Rate, it
is replacing and (b) deliver to Lender, in form and substance reasonably
satisfactory to Lender (x) an assignment of such Rate Cap or Rate Swap from the
replacement Rate Cap Provider or Rate Swap Provider, (y) an acknowledgment and
consent from such replacement Rate Cap Provider or Rate Swap Provider in
substantially the same form as the Rate Cap Provider Consent or Rate Swap
Provider Consent delivered to Lender as of the Closing Date and (z) any other
opinions or documents required pursuant to Section 2.07 of this Loan Agreement;
(s) if Borrower fails to make any Swap Payment on the date such
payment is due;
(t) if Borrower fails to make any Excess Cash Flow payment in
accordance with Section 4.09(a) of this Loan Agreement;
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(u) If Borrower fails to provide or revise, to Lender's reasonable
satisfaction, the Excess Cash Flow calculations and/or the supporting
information delivered in connection with any Excess Cash Flow Payment within ten
(10) days after written notice by Lender;
(v) If there is an event of default under any Parking Lease that
continues beyond any applicable grace period or, except as expressly permitted
herein, if any Parking Lease is amended, modified or terminated without Lender's
prior written consent; or
(w) Except for the specific defaults set forth in this Section 11.01,
if Borrower fails to perform fully and timely any obligation hereunder or under
any other Loan Document, or any other default occurs hereunder or under any
other Loan Document, in either case, which is not cured (i) in the case of any
failure or default which can be cured by the payment of a sum of money, within
five (5) days after written notice from Lender to Borrower, or (ii) in the case
of any other failure or default, within thirty (30) days after written notice
from Lender to Borrower; provided that if a failure or default under clause (ii)
cannot reasonably be cured within such thirty (30) day period and Borrower has
responsibly commenced to cure such failure or 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 necessary to permit Borrower,
in the exercise of due diligence, to cure such failure or default, but in no
event shall the entire cure period be more than sixty (60) days.
Notwithstanding the foregoing, a Guarantor's actions in subsections (g),
(h), (i) and (j) shall not result in an Event of Default hereunder, if (i)
Borrower provides a replacement Guarantor within ninety (90) days of the
occurrence of any event described in such subsections who satisfies Lender's
requirements as to creditworthiness, net worth and liquidity substantially
similar to those imposed by Lender on the existing Guarantor.
11.02. Remedies. If an Event of Default occurs, 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.
(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 entirety 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.
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(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 on 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, possession, control, management and operation of the
Property. Borrower hereby consents, to the extent permitted under applicable
law, to the appointment of a 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. 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 Personal 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, 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 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, 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
68
ratifying all that its said attorney shall do by virtue thereof) to surrender
such insurance policies and collect such Insurance Premiums.
(i) Application of Letter of Credit. Lender may draw on the Letter of
Credit, without prior notice to Borrower, and apply such amounts as a credit on
the Loan, in such priority and proportion as Lender deems appropriate.
(j) 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.
(k) Violation of Laws. If the Property is not, in any material
respect, 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.
(l) Purchase of Rate Cap by Lender. If the Loan has been accelerated
following an Event of Default and the Rate Cap obtained by Borrower expires
prior to Lender's receipt of full payment of the Loan or completion of a
foreclosure action (or acceptance of a deed-in-lieu of foreclosure), Lender may
purchase, at Borrower's expense, a Rate Cap upon such terms as Lender deems
necessary to guard against fluctuations of the interest rate of the Loan until
the Loan is paid in full or a foreclosure action (or acceptance of a
deed-in-lieu of foreclosure) is completed.
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, to the extent
permitted by applicable law, 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
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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.
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 commenced or whether legal action is
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 Instruments 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 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
70
of the net proceeds of the Property in preference to every other claimant
whatsoever. In addition, to the extent permitted by applicable law. Borrower,
for itself and its 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 of 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, in Section 15.05 or as 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 Section 12.01 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 and Guarantor if: (a) the Property
or any part thereof becomes an asset in a voluntary bankruptcy or other
voluntary insolvency proceeding; (b) an involuntary bankruptcy or other
involuntary insolvency proceeding is commenced against Borrower, Texas Equity
Owner or Equity Owner (by a party other than Lender) but only if Borrower, Texas
Equity Owner or Equity Owner has failed to use commercially reasonable efforts
to cause such proceeding to be dismissed or has consented to such proceeding;
(c) if Borrower, Texas Equity Owner, Equity Owner, Guarantor or any Affiliate or
agent of Borrower, Texas Equity Owner, Equity Owner or any Guarantor has acted
in concert with, colluded or conspired with any party to cause the filing of any
involuntary bankruptcy or other involuntary insolvency proceeding; or (d)
Borrower fails to comply with the financial reporting and budget approval
covenants of Section 9.11.
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 intentional misrepresentation or failure to disclose a
material fact by Borrower or any other agent or representative of Borrower 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;
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(b) A violation of any provision of Article 10 (captioned: No
Transfers or Encumbrances; Due On Sale);
(c) Any material breach by Borrower or the Equity Owner of Article 7
(captioned; Single Purpose Entity Requirements).
(d) Failure by Borrower, Texas Equity Owner or Equity Owner to comply
with any of the provisions of Section 9.13 (captioned: Existence, Change of Name
or Location as a Registered Organization) of the Loan Agreement;
(e) Misapplication or misappropriation of (i) insurance proceeds or
condemnation awards payable to Lender in accordance with the Loan Agreement;
(ii) Rent or other Operating Income received by Borrower, (iii) Rent paid in
advance by tenants under the Leases; (iv) tenant security deposits or other
refundable deposits held by or on behalf of Borrower in connection with Leases;
or (v) collateral, including but not limited to (x) removal of all or any
portion of the Personal Property in violation of the Loan Documents and (y) fees
or commissions paid by 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;
(f) Damage to or loss of all or any part of the Property as a result
of intentional, affirmative waste by Borrower, its agents or the affiliates of
Borrower or its agents;
(g) Criminal acts or gross negligence 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) Failure by Borrower to purchase and maintain a Rate Cap or Rate
Swap in accordance with the terms of this 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
(j) All amounts expended by Lender to protect its interest in the
Property or other collateral;
(k) All amounts expended by Lender for 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; and
(l) any liability arising under the Environmental Indemnity.
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
72
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 (i) to enforce any guaranty or indemnity provided
in connection with the Note, (ii) preserve or enforce its rights or remedies
against any Individual Property or (iii) or 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 Obligations of
Borrower 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 (other than, with respect to any Individual
Property, those Losses arising solely from a state of facts that first came into
existence after the date that Lender acquired title to such Individual Property
by foreclosure or deed in lieu of foreclosure) 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; (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
73
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 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 reasonably determines that the
strategic approach of the defense proposed or conducted by Borrower is
unsatisfactory 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 Indemnified Party, reimburse, the Indemnified Party for the
payment of Indemnified Party's costs and expenses (including, without
limitation, reasonable attorney fees, engineer fees, environmental consultant
fees, laboratory fees and the fees of other professionals in connection
therewith) in connection with the Indemnified Claim. Payment not made timely
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.
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
74
jurisdiction to be interest shall, to the extent permitted by 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.
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 in such denominations as
Lender determines in its sole discretion (including the creation of a mezzanine
loan secured by a collateral assignment of the Equity Interests in Borrower,
Texas Equity Owner and 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; provided, however, that if
Lender redefines the interest rate, the weighted average of the interest rates
contained in the severed promissory notes taken in the aggregate shall equal the
Applicable Interest Rate. 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, except that Lender may allocate specific
collateral given for the Loan as security for performance of specific promissory
notes, in each case with or without cross-default provisions. 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. 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. Notwithstanding the foregoing, any costs or expenses incurred
by Lender in connection with Borrower's cooperation with any restructuring of
the Loan shall be borne solely by Lender, to the extent that such costs exceed
$5,000.
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, (i) providing additional information regarding the Property,
Borrower, or any of its Affiliates (such information to include additional
appraisals, environmental reports, engineering reports and similar due
75
diligence materials and updates, and verifications and consents with respect to
such materials that were delivered at closing), (ii) delivering additional
landlord and/or tenant estoppel letters, subordination agreements or similar
agreements (subject, in all instances, to the terms and conditions of the
applicable leases), (iii) participating in meetings and presentations (including
the senior management of Borrower) to the Rating Agencies and prospective
investors (in each case as required by the Rating Agencies or prospective
investors), (iv) 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, (v) provide any updated
financial information with appropriate verification through auditors letters,
(vi) deliver revised organizational documents and counsel opinions satisfactory
to the Rating Agencies, (viii) execute amendments to the Loan Documents, and
(ix) review information contained in a preliminary or final private placement
memorandum, prospectus, prospectus supplements or other disclosure document,
providing a mortgagor estoppel certificate and such other information about
Borrower, Equity Owner, any Guarantor or the Property as Lender may require for
Lender's offering materials provided that no such modification, revision,
additional documents, or other action in connection with such cooperation shall
materially increase the obligations or materially decrease the rights of
Borrower pursuant to the Loan Documents. At the request of Lender, Borrower
shall make such representations and warranties as of the date of the
securitization as are customary in securitization transactions involving
properties of the same nature as the subject properties. Nothwithstanding the
foregoing, Borrower's obligation to obtain landlord estoppels with respect to
the Parking Leases shall be limited as follows: Borrower shall (i) obtain
estoppels for those Individual Properties listed on Schedule 15.02 and (ii) use
commerically resonable efforts to obtain estoopels for the remaining of the
Individal Properites. Notwithstanding the foregoing, any costs or expenses
incurred by Borrower or Lender in connection with Borrower's cooperation with
any restructuring of the Loan shall be borne solely by Lender, to the extent
that such costs exceed $5,000.
15.03. Dissemination of Information. Provided that Lender follows existing
customary confidentiality agreements or enters into customary confidentiality
agreements, other than with respect to information that is otherwise publicly
available, with such third parties, Borrower acknowledges that Lender may
provide to third parties with an existing 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,
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 any filing with the Securities and Exchange Commission
pursuant to the Securities Act or 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. Reserve 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
76
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. Each of Borrower and Guarantor
agrees to provide in connection with each Disclosure Document provided by Lender
to such parties, an indemnification certificate: (a) certifying that Borrower
and such Guarantor have reviewed such Disclosure Document, including, without
limitation, the sections entitled "Special Considerations," and/or "Risk
Factors," and "Certain Legal Aspects of the Mortgage Loan," or similar sections,
and all sections relating to Borrower, Texas Equity Owner, Equity Owner,
Guarantors, Property Manager, if any, 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 indemnitor'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), an "ISSUER PERSON"), and each director and officer of
any Issuer Person, and each Person or entity who 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 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 if and to the extent that (a) such
misstatement or omission is material and (b) Borrower, each Guarantor and their
respective Affiliates knew, or reasonably should have known after due inquiry,
at the time that Borrower, each Guarantor and their respective Affiliates
approved the Disclosure Document, that the Disclosure Document contained a
material misstatement or omission.. 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.
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15.06. Additional Financial Information for Large Loans.
(a) If required by law in connection with a Securitization, Borrower,
at Borrower's expense, shall provide Lender with all financial statements and
other financial, statistical or operating information, to the extent required
pursuant to Regulation S-X of the Securities Act or any other Requirements of
Law in connection with any Disclosure Document or Securities Filing. All
financial statements provided by Borrower pursuant to this Section shall be
prepared in accordance with GAAP and shall meet the requirements of Regulation
S-X and other applicable Requirements of Law. All financial statements reporting
for a full operating year (i) shall be audited by independent accountants in
accordance with generally accepted auditing standards, Regulation S-X and all
other applicable Requirements of Law, (ii) shall be accompanied by the manually
executed report of the independent accountants thereon, which report shall meet
the requirements of Regulation S-X and all other applicable Requirements of Law,
and (iii) shall be accompanied by a manually executed written consent of the
independent accountants, acceptable to Lender, that authorizes the inclusion of
such financial statements in any Disclosure Document or Securities Filing and
permits the use of the name of such independent accountants and reference to
such independent accountants as "experts" in any Disclosure Document and
Securities Filing, all of which shall be provided, at Borrower's expense, at the
same time as the related financial statements are required to be provided. All
other financial statements shall be certified by the chief financial officer of
Borrower, which certification shall state that such financial statements meet
the requirements set forth in the first sentence of this paragraph.
(b) If requested by Lender, Borrower shall provide Lender, promptly
upon request, with any other or additional financial statements or financial,
statistical or operating information as Lender determines to be required
pursuant to Regulation S-X or other legal requirements in connection with any
Disclosure Document or any filing under or pursuant to the Securities Exchange
Act in connection with or relating to a Securitization.
(c) If Lender determines in connection with a Securitization, that the
financial statements required in order to comply with Regulation S-X or other
legal requirements are other than as provided herein, then notwithstanding the
provisions of this Section, Lender may request, and Borrower shall promptly
provide, such combination of Acquired Property Statement and/or Large Loan
Statements or such other financial statements as Lender determines to be
necessary or appropriate for such compliance
ARTICLE 16
BORROWER FURTHER ACTS AND ASSURANCES PAYMENT OF SECURITY
RECORDING CHARGES
16.01. Further Acts. Borrower, at Borrower's expense, agrees to take such
further actions and execute such further documents as Lender reasonably 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,
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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 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.
16.03. Borrower Estoppel Certificates.
(a) Borrower Information. Borrower, within ten (10) days of Lender's
written request, but in any event not more than four (4) times annually, except
following an Event of Default, in which case such limitation shall not apply),
shall furnish to Lender or Lender's designee a statement, duly acknowledged and
certified by a Responsible Officer, setting forth: (i) the 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, the Maturity Date, any unexercised rights to extend the
Maturity Date and any exercised extension of the Maturity Date, if any; (v) the
date installments of interest and/or principal were last paid; (vi) that, except
as provided in such statement, no defaults or events exists 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; (vii) that the Loan Documents are
valid, legal and binding obligations and have not been modified or, if modified,
giving the particulars of such modification; (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) that all Leases are in full force and effect, and for Leases other than
residential Leases, have not been modified or if modified, setting forth all
modifications; (x) if requested, 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, including Borrower's due observance, performance and compliance with
the terms and conditions of the Parking Leases.
(b) Tenant Estoppels. Subject to the terms and conditions of the
applicable leases, Borrower shall deliver to Lender, promptly upon Lender's
written request (but in any event no later than fifteen (15) Business Days
following Lender's request, but in any event not more often than twice annually,
except following an Event of Default, in which case such limitation shall not
apply), duly executed estoppel certificates from tenants identified by Lender
which are paying $50,000 or more annually to Borrower under their respective
leases, 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
79
thereunder with giving of any applicable notice or the expiration of any
applicable grace or cure period or both; (ii), that none of the Rents have been
paid more than one month in advance, 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.
(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 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. Except as otherwise required by law, 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, subject,
however, to the terms of any confidentiality agreement between Borrower and
Lender.
ARTICLE 17
LENDER CONSENT
17.01. No 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 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 provide Lender the opportunity to approve or disapprove any action or
decision by Borrower, Lender is not 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).
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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 (provided, however, that
Lender shall only charge review or processing fees which Lender typically and
customarily charges to similarly situated Borrowers). 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 be deemed an agent of Lender.
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
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effective until written notice thereof actually is received by the party to whom
such address change is sent. Borrower and Lender hereby acknowledge and agree
that any notice and other communication under this Loan Agreement given to PCAA
Parent shall be deemed to have been given to each Indivudal Borrower. 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: Capmark Finance Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Servicing Accounting - Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With required copies to:
Capmark Finance Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: PLG Asset Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and Dechert LLP
▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for Borrower: PCAA Parent, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and PCAA Parent, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn : ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax : ▇▇▇-▇▇▇-▇▇▇▇
18.02. Entire Agre ement; Modifications; Time of Essence. This Loan
Agreement, together with the other Loan Documents, contain the entire agreement
between Borrower and
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Lender relating to the Loan and supersede and replace all prior discussions,
representations, communications and agreements (oral or written). If the terms
of any of the Loan Documents are in conflict, this Loan Agreement shall control
over all of the other Loan Documents unless otherwise expressly provided in such
other Loan Document. 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 extent expressly set forth in such writing. Time is of the essence with
respect to all of Borrower'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.) 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 extent 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 (without giving effect to rules regarding conflict of laws),
provided, however, that the creation, perfection and enforcement of the lien of
each Security Instrument and Assignment of Leases and Rents shall instead be
governed by the laws of the state in which the Individual Property encumbered by
such Security Instrument and Assignment of Leases and Rents is located.
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 of New York 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
83
ISSUE ARISING OUT OF THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE
RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER.
18.09. Good Faith. All decisions, consents and approvals required of Lender
under the Loan Documents, whether exercised in Lender's sole discretion or in
its reasonable discretion, shall be made in good faith by Lender.
ARTICLE 19
LIST OF DEFINED TERMS
19.01. Definitions. The following words and phrases shall have the meaning
specified below.
"19 LOCATION" shall have the meaning set forth in Section 9.21 a of
this Loan Agreement.
"87 LOCATION" shall have the meaning set forth in Section 9.21 a of
this Loan Agreement.
"129 LOCATION" shall have the meaning set forth in Section 9.22 a of
this Loan Agreement.
"131 LOCATION" shall have the meaning set forth in Section 9.22 a of
this Loan Agreement.
"50 ▇▇▇▇ ▇▇▇▇▇▇ PROPERTY" shall have the meaning set forth in Section
9.20 a of this Loan Agreement.
"2003 ASSUMPTION AGREEMENT" shall have the meaning set forth in the
Recitals of this Loan Agreement.
"2003 BORROWERS" shall have the meaning set forth in the Recitals of
this Loan Agreement.
"2003 LOAN" shall have the meaning set forth in the Recitals of this
Loan Agreement.
"2003 LOAN AGREEMENT" shall have the meaning set forth in the Recitals
of this Loan Agreement.
"2003 NOTE" shall have the meaning set forth in the Recitals of this
Loan Agreement.
"2005 ASSUMPTION AGREEMENT" shall have the meaning set forth in the
Recitals of this Loan Agreement.
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"2005 LOAN" shall have the meaning set forth in the Recitals of this
Loan Agreement.
"2005 LOAN AGREEMENT" shall have the meaning set forth in the Recitals
of this Loan Agreement.
"2005 NOTE" shall have the meaning set forth in the Recitals of this
Loan Agreement.
"2005 NOTE A-1" shall have the meaning set forth in the Recitals of
this Loan Agreement.
"2005 NOTE A-2" shall have the meaning set forth in the Recitals of
this Loan Agreement.
"2006 LOAN" shall have the meaning set forth in the Recitals of this
Loan Agreement.
"2006 NOTE" shall mean the Gap Note.
"ADDITIONAL OVERFLOW PARKING LOTS" shall mean any property acquired or
leased by Borrower following the Closing Date to be used in connection with any
Parking Lot Operation existing as of the Closing Date provided that: (i) the
Parking Lot Operation in connection with which such Additional Overflow Parking
Lot remains the primary Parking Lot Operation at that location, (ii) such
Additional Overflow Parking Lot may not be subject to a lease term greater than
(5) years, and (iii) Borrower's rental obligation for such Additional Overflow
Parking Lot cannot exceed five percent (5%) of the then current Operating Income
of the related Parking Lot Operation.
"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.
"ALLOCATED LOAN AMOUNT" means, for each Release Property, the amount
set forth on Exhibit E hereto.
"APPLICABLE INTEREST RATE" has the meaning set forth in Section
2.02(b) of this Loan Agreement. It is the interest rate from time to time
accruing on the Loan.
"APPROVED BUDGET" has the meaning set forth in Section 9.11(a)(v) of
this Loan Agreement.
"ARCA" has the meaning set forth in Section 10.02 of this Loan
Agreement.
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"ASSIGNMENT OF INTEREST RATE CAP" means the Assignment of Interest
Rate Cap Agreement dated as of the Closing Date from Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of Borrower's rights, title and
interest in and to the Rate Cap Agreement.
"ASSIGNMENT OF INTEREST RATE SWAP" means the Assignment of Interest
Rate Swap Agreement dated as of the Closing Date from Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of Borrower's rights, title and
interest in and to the Rate Cap Swap 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 an Assignment of
Property Management Contract and Subordination of Management Fees dated as of
the Closing Date from Borrower, as assignor, to Lender, as assignee, and
acknowledged by Property Manager or as applicable, any other Assignment of
Property Management Contract executed pursuant to Section 9.14.
"BANK" shall have the meaning set forth in the Recitals of this Loan
Agreement.
"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 to the Interest Rate Adjustment Date,
"Business Day" shall mean a day upon which United States dollar deposits may be
dealt in on the London and New York City interbank markets and commercial banks
and foreign exchange markets are open in London and New York City.
"CAPITAL IMPROVEMENTS/DEFERRED MAINTENANCE" means the capital
improvements to be made to the Property which are identified on Exhibit C
hereto.
"CAPITAL IMPROVEMENTS/DEFERRED MAINTENANCE 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).
"CAPITAL IMPROVEMENTS/DEFERRED MAINTENANCE ESCROW ACCOUNT" means an
account held by Lender, or Lender's designee, in which the Capital
Improvements/Deferred Maintenance Deposit will be held, which shall not
constitute a trust fund.
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"CASH FLOW AVAILABLE FOR DEBT SERVICE" means, for a specified period,
(a) actual Operating Income normalized for the following twelve (12) month
period less (b) actual Operating Expenses normalized for the following twelve
(12) month period less (c) reserves for Replacements underwritten at $10.00 per
parking stall. Operating Income and Operating Expenses will be normalized (i) in
accordance with the guidelines delivered to Borrower prior to the Closing Date,
provided that Lender shall have the right, in its sole and absolute discretion,
to amend or discontinue such guidelines from time to time, and (ii) based upon
information available to Lender at the time of such calculation which are
expected to effect such calculation, including but not limited to (x)
termination of a Lease or a Parking Lease, (y) changes in Borrower's obligations
under any Parking Lease or (z) receipt of a current tax ▇▇▇▇.
"CASH FLOW TRIGGER CURE" shall occur in the event the Performance
Criteria are met on any applicable Performance Test Date.
"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.
"CITI" has the meaning set forth in Section 10.02 of this Loan
Agreement.
"CLOSING DATE" means September, 1 2006.
"COLLECTION ACCOUNT" has the meaning set forth in the Lockbox
Agreement.
"COLLECTION ACCOUNT BANKS" has the meaning set forth in Lockbox
Agreement.
"COMPARABLE FINANCIAL INSTITUTIONS" shall mean (a) any lender under
the ARCA, an Affiliate of any lender under the ARCA, or an approved fund of any
lender under the ACRA, (b) a commercial bank having total assets in excess of
$5,000,000,000, (c) a finance company, insurance company or any other financial
institution or fund, in each case reasonably acceptable to CITI and regularly
engaged in making purchasing or investing in loans and having a net worth,
determined in accordance with GAAP, in excess of $250,000,000 (or, to the extent
net worth is less than such amount, a finance company, insurance company, other
financial institution or fund, reasonable acceptable to CITI and MIC) or (d) a
savings and loan association or savings bank organized under the laws of the
United States or any State thereof having a net worth, determined in accordance
with GAAP, in excess of $250,000,000; provided, that no Affiliate of MIC shall
constitute a Comparable Financial Institution at any time when the sale,
transfer, negotiation or assignment of loans or commitments to such Person would
result in Affiliates of MIC that are lenders under the ARCA holding,
collectively, greater than or equal to 50% of the outstanding loans or
commitments, as the case may be, under the ARCA.
"COMPLIANCE CERTIFICATE" means a compliance certificate substantially
in the form of Exhibit A hereto, signed by a Responsible Officer of Borrower.
"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).
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"CONSOLIDATED NOTE" shall have the meaning set forth in the Recitals
of this Loan Agreement.
"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."
"CREDIT CARD ISSUERS" has the meaning set forth in the Lockbox
Agreement.
"CREDIT CARD ISSUER LETTERS" has the meaning set forth in the Lockbox
Agreement
"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 after Lender giving of two written notices, the first written
notice to provide Borrower with thirty (30) days to cure, Borrower's failure and
the second notice to provide Borrower with an additional thirty (30) days to
cure, (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. Notwithstanding anything in this Loan
Agreement to the contrary, Borrower's failure to deliver any of the reports,
information, statements or other materials required under Section 9.11 on a
timely basis shall be excused by, and the respective dates by which Borrower
shall be required to provide such reports, information, statements or other
materials shall be extended for the period of any delay caused by any Force
Majeure Event.
"DATA DELIVERY FAILURE FEE" means an amount of Five Thousand Dollars
($5,000.00) for the first failure, Ten Thousand ($10,000.00) for the second
failure, Twenty-five Thousand Dollars ($25,000.00) 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 due under the Loan Documents. The terms "Debt" and "Loan"
have the 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, if
any, and interest that would be due and payable under the Note for the
corresponding period, based on the then current Applicable Interest Rate but
giving effect to the Rate Cap and/or Rate Swap.
"DEBT SERVICE COVERAGE CONSTANT RATIO" means, as to a specific period,
the ratio obtained by dividing (a) the Cash Flow Available for Debt Service, by
(b) a debt service payment obtained using the Loan Constant.
"DEPOSIT ACCOUNT" has the meaning set forth in the Lockbox Agreement.
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"DEFAULT RATE" has the meaning set forth in Section 2.04(e) of this
Loan Agreement.
"DISBURSEMENT REQUEST" means a written request substantially in the
form of Exhibit B from Borrower delivered to Lender, 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 original invoices for all items or materials
purchased or services performed which are to be funded by the Disbursement
Request, and (b) 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 "Indemnitors" named
therein to Lender.
"ENVIRONMENTAL REMEDIATION" means the environmental remediation to be
made to the Property which are set forth on Exhibit I hereto.
"EQUITY INTERESTS" means (a) partnership interests (whether general or
limited) in an entity which is a partnership; (b) membership interests in an
entity which is a limited liability company; or (c) the shares or stock
interests in an entity which is a corporation.
"EQUITY OWNER" means PCAA Parent.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the regulations issued thereunder, all as amended or restated from time to time.
"EXCESS CASH FLOW" shall mean, with respect to any calendar month, all
Operating Income plus Swap Gain in such month less Operating Expenses, Capital
Improvements approved by Lender, Swap Payments and debt service on the Loan and
reserve payments required under the Loan Documents.
"EXCESS CASH FLOW RESERVE ACCOUNT" means an account held by Lender, or
Lender's designee, in which the excess cash flow deposited in accordance with
the provisions of Section 4.09 of this Loan Agreement will be held, which shall
not constitute a trust fund.
"EVENT OF DEFAULT" means any of the events specified in Section 11.01
of this Loan Agreement.
"EXTENSION TERM" has the meaning set forth in Section 2.03(d) of this
Loan Agreement.
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"FIRST EXTENDED MATURITY DATE" has the meaning set forth in Section
2.03(d) of this Loan Agreement.
"FIRST EXTENSION TERM" has the meaning set forth in Section 2.03(d) of
this Loan Agreement.
"FORCE MAJEURE EVENT" means any act of God, act of war, insurrection,
terrorist activity, governmental restriction or any other cause beyond
Borrower's reasonable control.
"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 PCAA Parent, who is executing the Guaranty as the
guarantor, or, pursuant to the terms and conditions of this Loan Agreement and
the Guaranty, a replacement guarantor who satisfies Lender's requirements as to
creditworthiness, net worth and liquidity substantially similar to those imposed
by Lender on the foregoing named guarantor.
"GUARANTY" means the Guaranty (Exceptions to Nonrecourse Liability)
dated as of the Closing Date from Guarantor to Lender.
"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 the 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 or as part of, or following, a foreclosure of the Security
Instrument.
"INDEPENDENT DIRECTOR/MANAGER" means an individual who shall not have
been at the time 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/Manager of the Texas Equity Owner, 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, Texas Equity Owner or Equity Owner or any of their
respective shareholders, partners, members, subsidiaries or Affiliates, (b) a
customer of, or supplier to, Borrower, Texas Equity Owner or 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,
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member, employee, supplier or customer, or (d) a member of the immediate family
of any such shareholder, officer, director, partner, member, employee, supplier
or customer.
"INDIVIDUAL BORROWER" means each of the following: PCAA, PCAA Phoenix,
PCAA SP, and PCAA Texas.
"INDIVIDUAL PROPERTY" means fee title to, or a leasehold interest in,
as the case may be, of any of the properties described in Exhibit G.
"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,
pursuant to the provisions of Section 4.03 of this Loan Agreement.
"INSURANCE PREMIUMS" means the premiums for the insurance Borrower is
required to provide pursuant to Section 9.03 of this Loan Agreement.
"INTEREST ACCRUAL PERIOD" shall mean, with respect to any Payment Due
Date, the period beginning on the fifteenth (15th) day of the month prior to
such Payment Due Date, through and including the fourteenth (14th) day of the
month of such Payment Due Date. By way of example, for a Payment Due Date of
February 9, the Interest Accrual Period would run from January 15 through and
including February 14.
"INTEREST RATE ADJUSTMENT DATE" means the first day of any Interest
Accrual Period.
"INTEREST RATE INDEX" means the weekly average yield on United States
Treasury Securities adjusted to a constant maturity of one year, as made
available by the Federal Reserve Board forty-five (45) days prior to each
Interest Rate Adjustment Date.
"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.
"JFK LOCATION" has the meaning set forth in Section 9.21 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.
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"LEASEHOLD ESTATE" shall have the meaning set forth in the Security
Instrument.
"LEASEHOLD PAYMENT RESERVE ACCOUNT" means an account held by Lender,
or Lender's designee, in which the Leasehold Payment Reserve Deposit will be
held, which shall not constitute a trust fund.
"LEASEHOLD PAYMENT RESERVE DEPOSIT" has the meaning set forth in
Section 4.08(b) of this Loan Agreement, subject to adjustment as set forth in
Section 4.08(d).
"LENDER" has the meaning in the introductory paragraph of this Loan
Agreement.
"LETTER OF CREDIT" has the meaning set forth in Section 6.07 of this
Loan Agreement.
"LGA LOCATION" has the meaning set forth in Section 9.22 of this Loan
Agreement.
"LIBOR RATE" means the average of London Interbank Offered Rates (in
U.S. dollar deposits) for a term of one month determined solely by Lender as of
the date that is two (2) Business Days prior to the first day of the applicable
Interest Accrual Period. On each Interest Rate Adjustment Date, Lender will
obtain the close-of-business LIBOR Rate from "Page 3750" on the Telerate Service
(or such other page as may replace Page 3750 on that service) on the date that
is two (2) Business Days prior to the first day of the applicable Interest
Accrual Period. If Telerate Service ceases publication or ceases to publish the
LIBOR Rate, Lender shall select a comparable publication to determine the LIBOR
Rate and provide notice thereof to Borrower. The LIBOR Rate may or may not be
the lowest rate based upon the market for U.S. dollar deposits in the London
Interbank Eurodollar Market at which Lender prices loans on the date on which
the LIBOR Rate is determined by Lender as set forth above.
"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).
"LIQUIDITY" means cash and unencumbered, marketable securities.
"LLC BORROWERS" has the meaning set forth in Section 7.01(g) of this
Loan Agreement.
"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.
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"LOAN AMOUNT" means the principal amount of $195,000,000.00 (as
increased pursuant to the terms hereunder), in lawful money of the United States
of America, to be advanced to Borrower pursuant to this Loan Agreement.
Reference in the Loan Agreement to "Loan Amount" mean the maximum principal
amount, irrespective of actual principal amount outstanding or actually advanced
to Borrower during the term of the Loan.
"LOAN CONSTANT" means 10.09%.
"LOAN DOCUMENTS" 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, the
Lockbox Agreement, the Assignment of Interest Rate Cap Agreement, the Rate Cap
Provider Consent, the Assignment of Interest Rate Swap Agreement, the Rate Swap
Provider Consent and any and all other documents and agreements executed in
connection with the Loan, as each such agreement may be modified, supplemented,
consolidated, extended, restated or reinstated from time to time.
"LOAN TO VALUE RATIO" means with respect to the specified period, the
ratio obtained by dividing (a) the Outstanding 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.
"LOCKBOX AGREEMENT" means the Lockbox - Deposit Account and Control
Agreement dated as of the Closing Date between Borrower, PNC Bank and Lender.
"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).
"MACQUARIE BANK LIMITED" shall mean Macquarie Bank Limited.
"MACQUARIE GROUP" shall mean Macquarie Bank Limited, its direct or
indirect subsidiaries and any fund or entity that is managed or advised by any
direct or indirect subsidiary of Macquarie Bank Limited or another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with Macquarie Bank Limited, or any
direct or indirect subsidiary of any such legal entity, provided however, the
term "advised" shall mean advice in relation to the management of investments of
such legal entity which (other than in relation to actually making decision to
implement such advice) is substantially the same as the services which would be
provided by a fund manager of the relevant activity.
"MAJOR LEASE" means any Lease covering ten percent (10%) or more
rentable square feet of any Individual Property including any expansion options
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 Lease.
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"MARGIN" has the meaning set forth in Section 2.02(b) of this Loan
Agreement.
"MATERIAL ADVERSE EFFECT" 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. If Borrower has extended the Maturity Date in accordance with
this Loan Agreement, references thereafter in this Loan Agreement shall mean the
Maturity Date as so extended, unless the context otherwise requires.
"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 in
Section 4.05(d).
"MONTHLY TAX DEPOSIT" 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 ensuing twelve (12) months, subject to adjustment as set
forth in Section 4.02(d) of this Loan Agreement.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"NET WORTH" means, as of a given date, a Person's equity calculated in
conformance with GAAP by subtracting total liabilities from the total market
value of total tangible assets.
"NOTE" means, collectively, Note A and Note B.
"NOTE A" means, collectively, Note ▇-▇, ▇▇▇▇ ▇-▇ and Note A-3.
"NOTE A-1" means that certain Replacement Promissory Note A-1 dated as
of the Closing Date from Borrower payable to the order of Lender evidencing
$49,000,000.00 of the Loan Amount.
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"NOTE A-2" means that certain Replacement Promissory Note A-2 dated as
of the Closing Date from Borrower payable to the order of Lender evidencing
$49,000,000.00 of the Loan Amount.
"NOTE A-3" means that certain Replacement Promissory Note A-3 dated as
of the Closing Date from Borrower payable to the order of Lender evidencing
$49,000,000.00 of the Loan Amount.
"NOTE B" means, collectively, Note B-1 and Note B-2.
"NOTE B-1" means that certain Replacement Promissory Note B-1 dated as
of the Closing Date from Borrower payable to the order of Lender evidencing
$24,000,000.00 of the Loan Amount.
"NOTE B-2" means that certain Replacement Promissory Note B-2 dated as
of the Closing Date from Borrower payable to the order of Lender evidencing
$24,000,000.00 of the Loan Amount.
"OBLIGATIONS" means the Loan, and all other obligations 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 ▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇▇▇.▇▇▇.
"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, including,
without limitation: (A) personal property taxes and real estate taxes; (B) sales
taxes or any tax on rents (unless netted against Operating Income); (C) wages,
salaries, payroll taxes and employee benefits; (D) costs of utility services;
(E) maintenance, repair and custodial costs; (F) premiums payable for insurance
carried on or with respect to the Property; (G) office supplies, other
administrative expenses and professional fees; (H) costs of advertising and
marketing for the Property; (I) costs of telephone service; (J) costs of garbage
removal; (K) an allowance for income items that are determined to be
uncollectible; (L) if a property or asset manager has been engaged by Borrower,
any compensation, fees or reimbursements paid to such property or asset manager;
if a property or asset manager has not been engaged by Borrower, all
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management related and head office expenses and salaries incurred by Borrower
(but not less than 1.75% of Operating Income) and (M) ground rents.
Notwithstanding the foregoing, Operating Expenses specifically exclude (1)
capital expenditures, (2) depreciation and amortization, (3) payments made in
connection with the payment of the outstanding principal balance of the Loan,
(4) costs of Restoration following a Casualty or Condemnation, (5) funds
disbursed from any Reserve Account, (6) any other non-cash items, including
without limitation, allocation of rent in excess of scheduled lease payments and
corporate allocation of expenses amongst the Macquarie Group, (7) interest
expense and (8) all income tax expenses. Solely for purposes of calculating the
Debt Service Coverage Ratio under Sections 2.03(d)(ii)(F) and 10.03(a)(iv) and
the Debt Service Coverage Constant Ratio under Section 2.03(d)(ii)(D) and
10.03(a)(iv), Operating Expenses under clause (L) above shall be deemed capped
at the higher of (x) the actual management fee paid to any third party property
manager and (y) 1.75% of Operating Income.
"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, including, without limitation: (A) parking
revenues, rents from tenants, assignees, subtenants, ground lessee, or parties
to walkway agreements, provided such tenants, assignees or subtenants are in
actual occupancy pursuant to valid leases and paying rent; (B) amounts (to the
extent included in Operating Expenses) payable by tenants to Borrower on account
of maintenance or service charges, taxes, assessments, utilities and maintenance
of the Property; (C) rents and receipts from licenses, service contracts,
concessions, vending machines and similar items located at or operated from the
Property; (D) any Swap Gain, provided, however, Swap Gain shall not be included
in the calculation of Operating Income for purposes of calculating the Debt
Service Coverage Constant Ratio; and (E) interest income; but excluding any
income or 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.
"OPERATING PERMITS" has the meaning set forth in Section 8.10 of this
Loan Agreement.
"ORGANIZATIONAL CHART" means the chart attached hereto as Exhibit D
which shows all persons or entities having an ownership interest in Borrower and
in the Equity Owner.
"ORIGINAL 2005 NOTE" shall have the meaning set forth in the Recitals
of this Loan Agreement.
"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.
"OUTPARCEL" has the meaning set forth in Section 10.04 of this Loan
Agreement.
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"OUTPARCEL RELEASE" has the meaning set forth in Section 10.04 of this
Loan Agreement.
"OUTPARCEL RELEASE DATE" has the meaning set forth in Section 10.04 of
this Loan Agreement.
"OUTSTANDING LOAN AMOUNT" means the principal amount of the Loan
outstanding from time to time.
"PARKING LEASES" means Borrower's leasehold interest in the leases set
forth on Exhibit J hereto and any modifications, amendments, and supplements
thereto.
"PARKING LEASE LESSOR" has the meaning set forth in Section 8.32(a) of
this Loan Agreement.
"PARKING LOT OPERATIONS" means, collectively, the off-airport parking
lot businesses described on attached Exhibit K, which are operated on the
respective Individual Properties set forth opposite the names of the respective
Parking Lot Operations. Each off-airport parking lot business described on
attached Exhibit K is referred to as a "Parking Lot Operation."
"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 Loan Agreement.
"PARTIAL RELEASE PRICE" has the meaning set forth in Section 10.03 of
this Loan Agreement.
"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.
"PCAA" has the meaning set forth in the introductory paragraph of this
Loan Agreement.
"PCAA 7750 PROPERTY" has the meaning set forth in Section 8.34 of this
Loan Agreement.
"PCAA PARENT" shall mean PCAA Parent, LLC, a Delaware limited liabilty
company.
"PCAA PHOENIX" has the meaning set forth in the introductory paragraph
of this Loan Agreement.
"PCAA SP" has the meaning set forth in the introductory paragraph of
this Loan Agreement.
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"PCAA SP 7060 PROPERTY" has the meaning set forth in Section 8.34 of
this Loan Agreement.
"PCAA TEXAS" has the meaning set forth in the introductory paragraph
of this Loan Agreement.
"PERFORMANCE CRITERIA" has the meaning set forth in Section 4.09(a) of
this Loan Agreement.
"PERFORMANCE TEST DATE" has the meaning set forth in Section 4.09 of
this Loan Agreement.
"PERMITTED ENCUMBRANCES" means each of the following:
(a) Those exceptions shown in the Title Insurance Policy and each
other Lien which has been approved in writing by Lender.
(b) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which Borrower maintains
adequate reserves.
(c) Liens arising in the ordinary course of business (such as (1)
Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (2) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or being
contested in good faith by appropriate proceedings and not involving any
deposits or advances or borrower money or the deferred purchase price of
property or services and, in each case, for which Borrower maintains adequate
reserves.
(d) Liens arising in connection with capital leases (and attaching
only to the property being leased), subject to the limitations of Section
7.02(a)(xiii); and
(e) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens arising after the date hereof
which will not interfere in any material respect with the value, use or ordinary
conduct of the business of the Borrower.
"PERMITTED LEASE" has the meaning set forth in Section 9.06(a) of this
Loan Agreement.
"PERMITTED TRANSFER" means each of the following:
(a) 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 Texas Equity Owner or in Equity Owner or in
Guarantor, as applicable; (ii) do not result in any Person holding an Equity
Interest in Borrower or in Texas Equity Owner or in Equity Owner, as applicable,
which exceeds forty-nine percent (49%) of the total Equity Interests in
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Borrower or in Texas Equity Owner or in Equity Owner, as applicable; and (iii)
do not result in a change of Control.
(b) Transfers which have been approved by Lender in accordance with
Section 10.02 of this Loan Agreement.
(c) Permitted Encumbrances.
(d) All Transfers of worn out or obsolete furnishings, fixtures or
equipment that are promptly replaced with property of equivalent value and
functionality.
(e) All Major Leases which have been approved by Lender in accordance
with this Loan Agreement.
(f) 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.
(g) If the transferor is an individual, Transfers of Equity Interests
of such transferor to such transferor's immediate family members or trusts
established for the benefit of such family members for estate planning purposes,
provided that (i) Borrower provides prior written notice of such Transfers to
Lender, together with all supporting information and documentation required by
Lender in connection with such Transfers, (ii) Borrower pays any and all
Lender's costs in connection with the review of any such Transfer, and (iii) no
such Transfer results in a change of Control.
(h) Transfers of Equity Interests to any member of the Macquarie
Group, without the payment of any fee, provided that (i) Borrower provides prior
written notice of such Transfers to Lender, together with all supporting
information and documentation required by Lender in connection with such
Transfers, (ii) Borrower pays any and all Lender's reasonable out of pocket
expenses in connection with the review of any such Transfer, and (iii) no such
Transfer results in a change of Control.
"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.
"PERSONAL PROPERTY" has the meaning set forth in the Security
Instrument.
"PNC BANK" means PNC Bank, National Association.
"PREPAYMENT FEE" has the meaning set forth in Section 2.05(b) 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.
99
"PROPERTY MANAGEMENT CONTRACT" means that certain Operations Agreement
between Borrower and Property Manager which provides for the management of the
Property for Borrower by Property Manager.
"PROPERTY MANAGER" means Airport Parking Management, Inc., a Delaware
corporation or any third party property manager retained by Borrower at Lender's
direction or with Lender's approval, all as set forth in this Loan Agreement.
"QUALIFIED TRANSFEREE" shall mean one or more of the following:
(i) a real estate investment trust, bank, saving and loan association,
investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan, provided that any such Person referred to in this
clause (i) satisfies the Eligibility Requirements;
(ii) an investment company, money management firm or "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, or an institutional "accredited investor" within the meaning
of Regulation D under the Securities Act of 1933, as amended, provided that any
such Person referred to in this clause (ii) satisfies the Eligibility
Requirements;
(iii) an institution substantially similar to any of the foregoing
entities described in clauses (i) or (ii) that has total assets (in name or
under management) in excess of $600,000,000 and (except with respect to a
pension advisory firm or similar fiduciary) capital/statutory surplus or
shareholder's equity of $250,000,000 satisfies the Eligibility Requirements;
(iv) any entity controlled by any of the entities described in clauses
(i), (ii) or (iii) above; or
(v) an investment fund, limited liability company, limited partnership
or general partnership where a Permitted Fund Manager or an entity that is
otherwise a Qualified Transferee under clauses (i), (ii), (iii) or (iv) of this
definition acts as the general partner, managing member or fund manager and at
least 50% of the equity interests in such investment vehicle are owned, directly
or indirectly, by one or more entities that are otherwise Qualified Transferees
under clauses (i), (ii), (iii) or (iv) of this definition.
which entity also either satisfies or engages a property manager or employs a
management team which satisfies the following:
1) has at least five (5) years' experience in the management of
off-airport parking operations similar to the operation of the
Property.
2) operates at least ten (10) off-airport parking facilities which (i)
are located at a minimum of six (6) different airports nationally;
(ii) contain a minimum of 12,000 parking spaces in aggregate, and
(iii) generate a minimum revenue of $25 million annually.
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"RATE CAP" means an interest rate cap in the notional amount of the
Outstanding Loan Amount obtained by Borrower as protection against interest rate
fluctuations under the Loan, which interest rate cap shall remain in effect
until the Maturity Date.
"RATE CAP AGREEMENT" means the written agreement evidencing the
financial and performance terms of the Rate Cap purchased by Borrower from Rate
Cap Provider which satisfies all requirements of Section 2.07 of this Loan
Agreement.
"RATE CAP PROVIDER" means the counterparty issuing a Rate Cap to
Borrower.
"RATE CAP PROVIDER CONSENT" means the Rate Cap Provider Consent and
Acknowledgement to Assignment of Rate Cap with respect to the assignment of the
Rate Cap from Borrower to Lender, executed by the Rate Cap Provider in favor of
Lender.
"RATE SWAP" means an interest rate swap in the notional amount of the
Outstanding Loan Amount obtained by Borrower as protection against interest rate
fluctuations under the Loan, which interest rate swap shall remain in effect
until the Maturity Date.
"RATE SWAP AGREEMENT" means the written agreement evidencing the
financial and performance terms of the Rate Swap purchased by Borrower from Rate
Swap Provider which satisfies all requirements of Section 2.07 of this Loan
Agreement. Such Rate Swap Agreement will require Borrower to pay a fixed
interest rate on a monthly, actual/360 basis and receive the Applicable Interest
Rate on the same basis, which payments will be paid and received on a net basis.
"RATE SWAP PROVIDER" means the counterparty issuing a Rate Cap to
Borrower.
"RATE SWAP PROVIDER CONSENT" means the Rate Swap Provider Consent and
Acknowledgement to Assignment of Rate Swap with respect to the assignment of the
Rate Swap from Borrower to Lender, executed by the Rate Swap Provider in favor
of Lender.
"RATING AGENCIES" means Fitch, Inc., ▇▇▇▇▇'▇ Investors Service, Inc.
and S & P, or any successor entity of the foregoing, 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 interests 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 PROPERTY" means any group of Individual Properties assigned
one (1) Allocated Loan Amount as listed on Exhibit E. For the avoidance of
doubt, Borrower may only obtain a partial release of an Individual Property if
each Individual Property in the related Allocated Loan Amount group listed on
Exhibit E is also simultaneously released (for example, in order to effectuate a
release of the Property located at ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, the Property
located ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ must also be simultaneously be released).
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"RENT ROLL" means a statement from Borrower, in a form reasonably
acceptable to Lender, 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.
"REPLACEMENT RESERVE CAP" has the meaning set forth in Section
4.05(b).
"REPLACEMENTS" means the scheduled repairs and replacements to the
Property identified on Exhibit F 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 Premium Escrow Account,
the Replacement Reserve Account, the Capital Improvements/Deferred Maintenance
Escrow Account, the Leasehold Payment Reserve Account, the Excess Cash Flow
Reserve Account and the Swap Payments Reserve Account.
"RESERVE ITEM" means, individually and collectively, as the context
requires, the Replacements and the Capital Improvements/Deferred Maintenance.
"RESPONSIBLE OFFICER" 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 in 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
102
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.
"SECOND EXTENDED MATURITY DATE" has meaning set forth in Section
2.03(d) of this Loan Agreement.
"SECOND EXTENSION TERM" has meaning set forth in Section 2.03(d) of
this Loan Agreement.
"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 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.
"SECURITIES LIABILITIES" has the meaning provided in Section 15.05 of
this Loan Agreement.
"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.
"SECURITY INSTRUMENT" means those certain Mortgages, 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, as
applicable, encumbering the Property and executed by Borrower to Lender or to a
trustee for the benefit of Lender, as the case may be, to secure Borrower's
payment of the Loan and performance of the Obligations.
"SEVERANCE AGREEMENT" shall have the meaning set forth in the Recitals
of this Loan Agreement.
"SINGLE PURPOSE ENTITY" has the meaning set forth in Section 7.02 of
this Loan Agreement.
"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
103
each case in the form certified to Lender as of the Closing Date or subsequently
approved by Lender in writing.
"STRIKE RATE" means with respect to the period from and including the
Closing Date through the end of the Interest Accrual Period in which the
Maturity Date falls, six and five tenths percent (6.50%) or less. The Strike
Rate for any Extension Term shall be determined by Lender in accordance with
Section 2.03(d) hereof.
"SWAP BREAKAGE" means any breakage or termination charges or amounts
due from Guarantor in connection with any full or partial termination under any
Rate Swap Agreement.
"SWAP FIXED RATE" means six and five tenths percent (6.50%) or less.
"SWAP GAIN" means any (i) payment due Borrower pursuant to the Rate
Swap Agreement and (ii) net hedge gain due to Borrower in connection with any
full or partial termination under any Rate Swap Agreement.
"SWAP PAYMENT RESERVE ACCOUNT" means an account held by Lender, or
Lender's designee, in which the Swap Payments will be held, which shall not
constitute a trust fund.
"SWAP PAYMENTS" mean any payments required to be paid to the
applicable Rate Swap Provider pursuant to the Rate Swap 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, government 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.
"TEXAS EQUITY OWNER" means PCAA GP, LLC, a Delaware limited liability
company.
"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 Loan Amount,
subject only to Permitted Encumbrances.
104
"TRADEMARKS" means those trademarks listed on Schedule 7.02(a)(xx).
"TRANSFER" means any action other than a Permitted Transfer by which
either (a) the legal or beneficial ownership of the Equity Interests in Borrower
or in Texas Equity Owner or in Equity Owner or, if the Guarantor is an entity,
in the Guarantor (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 or disposed 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;
(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
(v) the issuance of additional partnership, membership or other
equity interests, as applicable.
"TRANSFEREE" has the meaning provided in Section 6.08 of this Loan
Agreement.
"TRUST" shall have the meaning set forth in the Recitals of this Loan
Agreement.
"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 laws of the State of New York.
"UNDERWRITER GROUP" has the meaning provided in Section 15.05 of this
Loan Agreement.
105
ATTACHMENTS:
Schedule 2.02(b) Margins
Schedule 7.02(a)(xx) Trademarks
Schedule 8.01 Exceptions to Required Approvals
Schedule 8.04 Litigation
Schedule 8.08 Condemnation Proceedings
Schedule 8.09 Exceptions to Compliance with Requirements of Law
Schedule 8.10 Exceptions to Required Licenses and Permits
Schedule 8.11 Exceptions to Separate Tax Lots
Schedule 8.15 Encroachments
Schedule 8.19(a) Leases
Schedule 8.19(d) Leases to Related Persons
Schedule 8.32(a) Leases for which no memorandum has been recorded and
Changes since Memorandum of Lease; Overflow Parking Leases
Schedule 8.32(c) Overflow Parking Leases That Do Not Permit Assignment
Schedule 8.32(d) Parking Lease Defaults
Schedule 8.32(e) Exceptions to Notice Requirement under Parking Leases
Schedule 8.32(f) Exceptions to Cure Provisions under Parking Leases
Schedule 8.32(g) Term and Extension Options of Parking Leases
Schedule 8.32(h) Restriction on New Lease
Schedule 8.32(i) Exceptions to Insurance/Condemnation Proceeds Application
under Parking Leases
Schedule 8.32(j) Restrictions to Subletting under Parking Leases
Schedule 9.20(b) Overflow Parking Leases for Which Modification or
Termination is Permitted
Schedule 15.02 Required Estoppels
Exhibit A Compliance Certificate Form
Exhibit B Disbursement Request Form
Exhibit C Capital Improvements/Deferred Maintenance
Exhibit D Organizational Chart
Exhibit E Allocated Loan Amount
Exhibit F Replacements
Exhibit G List of Properties
Exhibit H Outparcel [Oklahoma City Outparcel]
Exhibit I Environmental Remediation
Exhibit J Parking Leases
Exhibit K Parking Lot Operations
[REMAINDER OF PAGE IS BLANK; SIGNATURES APPEAR ON NEXT PAGE.]
IN WITNESS WHEREOF, Lender and Borrower hereby sign, seal and deliver
this Loan Agreement. By signing below on behalf of PCAA Texas, Texas Equity
Owner also consents, in its individual capacity, to the obligations of Texas
Equity Owner set forth in Sections 7.02(b), 7.02(d), 9.11(c), 8.21 and Article
15 of this Loan Agreement. By signing below on behalf the LLC Borrowers, Equity
Owner also consents, in its individual capacity, to the obligations of Equity
Owner set forth in Sections 7.02(c), 7.02(d), 9.11(c), 8.21 and Article 15 of
this Loan Agreement.
LENDER:
CAPMARK FINANCE INC., a California
Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
[Signatures continue on following page]
[Signature Page to Loan Agreement]
BORROWER:
PARKING COMPANY OF AMERICA AIRPORTS, PARKING COMPANY OF AMERICA AIRPORTS
LLC, a Delaware limited liability PHOENIX, LLC, a Delaware limited
company liability company
By: PCAA Parent, LLC, a Delaware By: PCAA Parent, LLC, a Delaware limited
limited liability company, its liability company, its sole member
sole member
By: Parking Company of America By: Parking Company of America
Airports Holdings, LLC, a Airports Holdings, LLC, a
Delaware limited liability Delaware limited liability
company, its Managing Member company, its Managing Member
By: Macquarie Americas By: Macquarie Americas
Parking Corporation, a Parking Corporation, a
Delaware corporation, its Delaware corporation, its
Managing Member Managing Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------- ------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President Title: President
State Identification Number: 3561583 State Identification Number: 3561638
Tax Identification Number: ▇▇-▇▇▇▇▇▇▇ Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
PCAA SP, LLC, a Delaware limited PCA AIRPORTS, LTD., a Texas limited
liability company partnership
By: PCAA Parent, LLC, a Delaware By: PCAA GP, LLC, a Delaware limited
limited liability company, its liability company, its general
sole member partner
By: Parking Company of America By: PCAA Parent, LLC, a Delaware
Airports Holdings, LLC, a limited liability company,
Delaware limited liability its sole member
company, its Managing Member
By: Parking Company of
By: Macquarie Americas America Airports
Parking Corporation, a Holdings, LLC, a Delaware
Delaware corporation, its limited liability
Managing Member company, its Managing
Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: Macquarie Americas
--------------------- Parking Corporation,
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ a Delaware
Title: President corporation, its
Managing Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
State Identification Number: 4005464 State Identification Number: ▇▇▇▇▇▇▇▇▇
Tax Identification Number: ▇▇-▇▇▇▇▇▇▇ Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
[Signature Page to Loan Agreement]
SCHEDULE 2.02(B)
MARGINS
FIRST EXTENSION TERM SECOND EXTENSION
NOTE AMOUNT INITIAL MARGIN MARGIN TERM MARGIN
---- -------------- -------------- -------------------- ----------------
NOTE A-1 $49,000,000.00 1.00% 1.11% 1.21%
NOTE A-2 $49,000,000.00 1.00% 1.11% 1.21%
NOTE A-3 $49,000,000.00 1.00% 1.11% 1.21%
NOTE B-1 $24,000,000.00 4.6563% 5.1319% 5.6381%
NOTE B-2 $24,000,000.00 4.6563% 5.1319% 5.6381%