Exhibit 10.88
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LOAN AGREEMENT
Dated as of October 14, 2003
Between
▇▇▇▇▇▇▇ PROPERTIES - 611 N. BRAND LLC
as Borrower
And
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Lender
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Specific Definitions.......................................... 1
Section 1.2 Index of Other Definitions.................................... 12
Section 1.3 Principles of Construction.................................... 15
ARTICLE 2
GENERAL LOAN TERMS
Section 2.1 The Loan...................................................... 15
Section 2.2 Interest; Monthly Payments.................................... 15
Section 2.3 Loan Repayment................................................ 16
Section 2.4 Release of Property........................................... 17
Section 2.5 Payments and Computations..................................... 18
ARTICLE 3
CASH MANAGEMENT AND RESERVES
Section 3.1 Cash Management Arrangements.................................. 18
Section 3.2 Required Repairs.............................................. 19
Section 3.3 Taxes and Insurance........................................... 19
Section 3.4 Rollover Reserves............................................. 20
Section 3.5 Casualty/Condemnation Subaccount.............................. 22
Section 3.6 Security Deposits............................................. 22
Section 3.7 Grant of Security Interest; Application of Funds.............. 23
Section 3.8 Property Cash Flow Allocation................................. 23
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Organization; Special Purpose............................... 24
Section 4.2 Authorization; Valid Execution and Delivery; Enforceability. 24
Section 4.3 No Conflict/Violation of Law................................ 25
Section 4.4 No Litigation............................................... 25
Section 4.5 No Defenses................................................. 25
Section 4.6 Title....................................................... 25
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Section 4.7 No Insolvency or Judgment; No Bankruptcy Filing............. 25
Section 4.8 Misstatements of Fact....................................... 26
Section 4.9 Tax Filings................................................. 26
Section 4.10 ERISA....................................................... 26
Section 4.11 Compliance with Applicable Laws and Regulations............. 27
Section 4.12 Contracts................................................... 27
Section 4.13 Federal Reserve Regulations; Investment Company Act......... 27
Section 4.14 Access/Utilities............................................ 28
Section 4.15 Condition of Improvements................................... 28
Section 4.16 Leases...................................................... 28
Section 4.17 Fraudulent Transfer......................................... 29
Section 4.18 Ownership of Borrower....................................... 29
Section 4.19 No Purchase Options......................................... 29
Section 4.20 Management Agreement........................................ 29
Section 4.21 Hazardous Substances........................................ 30
Section 4.22 Name; Principal Place of Business........................... 30
Section 4.23 No Other Obligations........................................ 31
Section 4.24 Defense of Usury............................................ 31
Section 4.25 Taxes Paid.................................................. 31
Section 4.26 Single Tax Lot.............................................. 31
Section 4.27 Special Assessments......................................... 31
Section 4.28 No Condemnation............................................. 31
Section 4.29 No Labor or Materialmen Claims.............................. 31
Section 4.30 Boundary Lines.............................................. 32
Section 4.31 Survey...................................................... 32
Section 4.32 Forfeiture.................................................. 32
Section 4.33 Borrower Entity Representations............................. 32
Section 4.34 REA......................................................... 34
ARTICLE 5
COVENANTS
Section 5.1 Existence................................................... 34
Section 5.2 Taxes and Other Charges..................................... 35
Section 5.3 Access to Property.......................................... 35
Section 5.4 Repairs; Maintenance and Compliance; Alterations............ 35
Section 5.5 Performance of Other Agreements............................. 37
Section 5.6 Cooperate in Legal Proceedings.............................. 37
Section 5.7 Further Assurances.......................................... 37
Section 5.8 Environmental Matters....................................... 37
Section 5.9 Title to the Property....................................... 39
Section 5.10 Leases...................................................... 39
Section 5.11 Estoppel Statement.......................................... 41
Section 5.12 Property Management......................................... 41
Section 5.13 Special Purpose Bankruptcy Remote Entity.................... 42
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Section 5.14 Assumption in Non-Consolidation Opinion..................... 42
Section 5.15 Change in Business or Operation of Property................. 42
Section 5.16 Debt Cancellation........................................... 42
Section 5.17 Affiliate Transactions...................................... 42
Section 5.18 Zoning...................................................... 42
Section 5.19 No Joint Assessment......................................... 43
Section 5.20 Principal Place of Business................................. 43
Section 5.21 Change of Name, Identity or Structure....................... 43
Section 5.22 Indebtedness................................................ 43
Section 5.23 Licenses.................................................... 43
Section 5.24 Compliance with Restrictive Covenants, etc.................. 43
Section 5.25 ERISA....................................................... 43
Section 5.26 Transfers................................................... 44
Section 5.27 Liens....................................................... 50
Section 5.28 Dissolution................................................. 51
Section 5.29 Expenses.................................................... 51
Section 5.30 Indemnity................................................... 51
ARTICLE 6
NOTICES AND REPORTING
Section 6.1 Notices..................................................... 52
Section 6.2 Borrower Notices and Deliveries............................. 53
Section 6.3 Financial Reporting......................................... 54
ARTICLE 7
INSURANCE; CASUALTY; AND CONDEMNATION
Section 7.1 Insurance................................................... 55
Section 7.2 Casualty.................................................... 60
Section 7.3 Condemnation................................................ 61
Section 7.4 Application of Proceeds or Award............................ 62
ARTICLE 8
DEFAULTS
Section 8.1 Events of Default........................................... 66
Section 8.2 Remedies.................................................... 68
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ARTICLE 9
SPECIAL PROVISIONS
Section 9.1 Sale of Note and Securitization............................. 69
ARTICLE 10
MISCELLANEOUS
Section 10.1 Exculpation................................................. 74
Section 10.2 Brokers and Financial Advisors.............................. 76
Section 10.3 Retention of Servicer....................................... 77
Section 10.4 Survival.................................................... 77
Section 10.5 Lender's Discretion......................................... 77
Section 10.6 Governing Law............................................... 77
Section 10.7 Modification, Waiver in Writing............................. 78
Section 10.8 Trial by Jury............................................... 79
Section 10.9 Headings/Exhibits........................................... 79
Section 10.10 Severability................................................ 79
Section 10.11 Preferences................................................. 79
Section 10.12 Waiver of Notice............................................ 79
Section 10.13 Remedies of Borrower........................................ 80
Section 10.14 Prior Agreements............................................ 80
Section 10.15 Offsets, Counterclaims and Defenses......................... 80
Section 10.16 Publicity................................................... 80
Section 10.17 No Usury.................................................... 80
Section 10.18 Conflict; Construction of Documents......................... 81
Section 10.19 No Third Party Beneficiaries................................ 81
Section 10.20 Yield Maintenance Premium................................... 81
Section 10.21 Assignment.................................................. 82
Section 10.22 Set-Off..................................................... 82
Section 10.23 Counterparts................................................ 82
Section 10.24 Partial Release............................................. 82
Schedule 1 - Required Repairs
Schedule 2 - Exceptions to Representations and Warranties
Schedule 3 - Rent Roll
Schedule 4 - Organization of Borrower
Schedule 5 - Definition of Special Purpose Bankruptcy Remote Entity
Schedule 6 - Release Parcel
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LOAN AGREEMENT
LOAN AGREEMENT dated as of October 14, 2003 (as the same may be
modified, supplemented, amended or otherwise changed, this "AGREEMENT") between
▇▇▇▇▇▇▇ PROPERTIES - 611 N. BRAND LLC, a Delaware limited liability company
(together with its permitted successors and assigns, "BORROWER"), and GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation (together with its
successors and assigns, "LENDER").
ARTICLE 1
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Specific Definitions. The following terms have the
meanings set forth below:
AFFILIATE: as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control with
such Person or is a director or officer of such Person or of an Affiliate of
such Person.
AFFILIATED MANAGER: any managing agent of the Property (other than
▇▇▇▇▇▇▇ Services, Inc.) in which Borrower or any Guarantor has, directly or
indirectly, any legal, beneficial or economic interest
APPROVED CAPITAL EXPENSES: Capital Expenses incurred by Borrower,
which Capital Expenses shall either be (i) included in the Approved Annual
Budget for the current calendar month or (ii) approved by Lender.
APPROVED LEASING EXPENSES: actual out-of-pocket expenses incurred by
Borrower and payable to third parties that are not Affiliates of Borrower or
Guarantor in leasing space at the Property pursuant to Leases entered into in
accordance with the Loan Documents, including brokerage commissions and tenant
improvements, which expenses (i) are (A) specifically approved by Lender in
connection with approving the applicable Lease, (B) incurred in the ordinary
course of business and on market terms and conditions in connection with Leases
which do not require Lender's approval under the Loan Documents, or (C)
otherwise approved by Lender, which approval shall not be unreasonably withheld
or delayed, and (ii) are substantiated by executed Lease documents and brokerage
agreements.
APPROVED OPERATING EXPENSES: operating expenses incurred by Borrower
which (i) are included in the Approved Annual Budget for the current calendar
month, (ii) are for real estate taxes, insurance premiums, electric, gas, oil,
water, sewer or other utility service to the Property or (iii) have been
approved by Lender.
AVAILABLE CASH: as of each Payment Date during the continuance of
Rollover Reserve Period, the amount of Rents, if any, remaining in the Deposit
Account after the application of all of the payments required under clauses (i)
through (v) of Section 3.9(a).
BORROWER REPRESENTATIVE: ▇▇▇▇▇▇▇ Properties - Glendale Center, LLC,
a California limited liability company.
BUSINESS DAY: any day other than a Saturday, Sunday or any day on
which commercial banks in New York, New York are authorized or required to
close.
CAPITAL EXPENSES: expenses that are capital in nature or required
under GAAP to be capitalized.
CODE: the Internal Revenue Code of 1986, as amended and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
CONTROL or CONTROLLED: with respect to any Person, ownership,
directly or indirectly, in the aggregate of more than fifty percent (50%) of the
beneficial ownership interest of such Person and the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ability to exercise voting power,
by contract or otherwise.
DEBT: the unpaid Principal, all interest accrued and unpaid thereon,
any Yield Maintenance Premium and all other sums due to Lender in respect of the
Loan or under any Loan Document.
DEBT SERVICE: with respect to any particular period, the scheduled
Principal and interest payments due under the Note in such period.
DEBT SERVICE COVERAGE RATIO: a ratio for the applicable period in
which: (A) the numerator is the Net Operating Income (excluding interest on
credit accounts) for such period as set forth in the statements required
hereunder and (B) the denominator is the aggregate amount of Debt Service
payable for such period under the Note.
DEFAULT: the occurrence of any event under any Loan Document which,
with the giving of notice or passage of time, or both, would be an Event of
Default.
DEFAULT RATE: a rate per annum equal to the lesser of (i) the
maximum rate permitted by applicable law, or (ii) 5% above the Interest Rate.
DEFAULT YIELD MAINTENANCE PREMIUM: an amount equal to the greater of
(i) one percent of the outstanding principal balance of the Loan at the time of
prepayment or (ii) an amount which, when added to the outstanding Principal,
would be sufficient to purchase U.S. Obligations which provide payments (a) on
or prior to, but as close as possible to, all successive scheduled payment dates
under this Agreement through the Stated Maturity Date and (b) in amounts equal
to the Monthly Debt Service Payment Amount required under this Agreement through
the Stated Maturity Date together with the outstanding principal balance of the
Note as of the Stated Maturity Date assuming all such Monthly Debt Service
Payments are made (including any servicing costs associated therewith). In no
event shall the Default Yield Maintenance Premium be less than zero.
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DEPOSIT BANK: Wachovia Bank, National Association, a national
banking association, or such other bank or depository selected by Lender in its
discretion.
ELIGIBLE INSTITUTION: a depository institution insured by the
Federal Deposit Insurance Corporation the short term unsecured debt obligations
or commercial paper of which are rated at least A-1 by S&P, P-1 by ▇▇▇▇▇'▇ and
F-1+ by Fitch in the case of accounts in which funds are held for thirty (30)
days or less or, in the case of Letters of Credit or accounts in which funds are
held for more than thirty (30) days, the long term unsecured debt obligations of
which are rated at least "AA" by Fitch and S&P and "Aa2" by ▇▇▇▇▇'▇.
ERISA: the Employment Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder.
ERISA AFFILIATE: all members of a controlled group of corporations
and all trades and business (whether or not incorporated) under common control
and all other entities which, together with Borrower, are treated as a single
employer under any or all of Section 414(b), (c), (m) or (o) of the Code.
GAAP: generally accepted accounting principles in the United States
of America as of the date of the applicable financial report or the method used
in connection with the financial statements of Borrower delivered to Lender in
connection with the closing of the Loan.
GOVERNMENTAL AUTHORITY: any court, board, agency, commission, office
or authority of any nature whatsoever for any governmental ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or otherwise) now or hereafter in existence.
GROSS INCOME FROM OPERATIONS: all income, computed in accordance
with GAAP, except as otherwise provided herein, derived from the ownership and
operation of the Property from whatever source, including, but not limited to,
rents, utility charges, escalations, forfeited security deposits, service fees
or charges, license fees, parking fees, and other pass-throughs or
reimbursements paid by tenants under Leases In Place with respect to the
Property of any nature (adjusted for projected increases in fixed expenses as
provided in the definition of "Expenses" herein) but excluding sales, use and
occupancy or other taxes on receipts required to be accounted for by Borrower to
any government or governmental agency, refunds and uncollectible accounts,
interest on credit accounts, any one-time or other non-periodic payments by
tenants under their respective Leases other than pre-paid rent by tenants
(except that such pre-paid rent shall not be deemed income until the occurrence
of the month in which such pre-paid rent was otherwise payable), proceeds of
casualty insurance and condemnation awards (other than business interruption or
other loss of income insurance) and any disbursements to Borrower from any
escrow fund established pursuant to any Loan Document.
GUARANTOR: the OP or any other guarantor of the Debt.
INTEREST PERIOD: (i) the period from the date hereof through the
first day thereafter that is the last day of a calendar month and (ii) each
period thereafter from the 1st day of each calendar month through the last day
of each such calendar month; except that the Interest Period, if any, that would
otherwise commence before and end after the Maturity Date shall end on the
Maturity Date.
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INTEREST RATE: a rate of interest equal to 5.727% per annum (or,
when applicable pursuant to the Note or any other Loan Document, the Default
Rate).
KEY PRINCIPAL(S): the OP and the REIT.
LEASES: all leases and other agreements or arrangements heretofore
or hereafter entered into affecting the use, enjoyment or occupancy of, or the
conduct of any activity upon or in, the Property or the Improvements, including
any guarantees, extensions, renewals, modifications or amendments thereof and
all additional remainders, reversions and other rights and estates appurtenant
thereunder.
LEASES IN PLACE: Leases of space at the Property under which the
tenant has accepted the demised premises, opened for business and is then
obligated to pay rent (provided that Borrower shall not receive credit for rent
payable under such Lease during the period commencing on the latter to occur of
the date that is twelve (12) months prior to the expiration of the Lease term or
the date that the renewal or extension option in the Lease, if any, expires, if
(1) the Lease has not been renewed or extended pursuant to and in accordance
with the Lease, or (2) a replacement tenant has not executed a Lease for all or
a portion of the space then subject to the related Lease in Place in accordance
with the provisions of this Agreement (but in the case of this clause (2),
Borrower shall only receive credit for rent payable under such Lease to the
extent of the space so re-let), and with respect to which no bankruptcy
proceeding has been commenced against the tenant that has not been dismissed;
provided that if a tenant that has a long-term unsecured debt rating of at least
"BBB-" or its equivalent ("investment grade") and no worse than a "stable"
outlook by any two of S&P, ▇▇▇▇▇'▇ and/or Fitch, such tenant shall not be
required to be open for business; provided, further, that if a Lease In Place is
subject to any unescrowed rent concession or credit, such unescrowed rent
concession or credit shall be deducted from the rent payable under such Lease In
Place when determining the rent payable under such Leases In Place, provided
that such rent concession or credit shall be amortized over the primary lease
term (excluding any extension options), provided such primary lease term shall
be reduced by assuming that any and all lease cancellation options contained in
such Lease are exercised. Above market rents payable under Leases In Place will
be adjusted, in Lender's reasonable determination, down to the applicable market
rents when determining the rent payable under such Lease In Place if the tenant
thereunder is not investment grade. (For purposes of this definition, Bank of
America, N.A. ("BANK OF AMERICA"), Disney Enterprises, Inc. ("DISNEY"), and Time
Warner Entertainment Co., L.P. ("TIME WARNER") will be deemed to constitute
investment grade tenants).
LETTER OF CREDIT: an irrevocable, unconditional, transferable, clean
sight draft letter of credit acceptable to Lender and the Rating Agencies
(either an evergreen letter of credit or one which does not expire until at
least thirty (30) days after the Maturity Date) for which Borrower shall have no
reimbursement obligation and which reimbursement obligation is not secured by
the Property or any other property pledged to secure the Note in favor of Lender
and entitling Lender to draw thereon in New York, New York, issued by a domestic
Eligible Institution or the U.S. agency or branch of a foreign Eligible
Institution.
LEGAL REQUIREMENTS: statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
affecting Borrower, any Loan
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Document or all or part of the Property or the construction, ownership, use,
alteration or operation thereof, whether now or hereafter enacted and in force,
and all permits, licenses and authorizations and regulations relating thereto,
and all covenants, agreements, restrictions and encumbrances contained in any
instrument, either of record or known to Borrower, at any time in force
affecting all or part of the Property.
LIEN: any mortgage, deed of trust, lien (statutory or otherwise),
pledge, hypothecation, easement, restrictive covenant, preference, assignment,
security interest or any other encumbrance, charge or transfer of, or any
agreement to enter into or create any of the foregoing, on or affecting all or
any part of the Property or any interest therein, or any direct or indirect
interest in Borrower or Borrower Representative, including any conditional sale
or other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic's, materialmen's and other similar liens and
encumbrances.
LOAN DOCUMENTS: this Agreement and all other documents, agreements
and instruments now or hereafter evidencing, securing or delivered to Lender in
connection with the Loan, including the following, each of which is dated as of
the date hereof: (i) the Note or Notes made by Borrower to Lender in the
aggregate principal amount equal to the Loan (the "NOTE"), (ii) the Deed of
Trust, Assignment of Leases and Rents and Security Agreement made by Borrower to
a trustee for the benefit of Lender which covers the Property (the "MORTGAGE"),
(iii) Assignment of Leases and Rents from Borrower to Lender, (iv) the Clearing
Account Agreement (the "CLEARING ACCOUNT AGREEMENT") among Borrower, Lender,
Manager and Clearing Bank, (v) the Deposit Account Agreement (the "DEPOSIT
ACCOUNT AGREEMENT") among Borrower, Lender, Manager and the Deposit Bank, and
(vi) the Guaranty of Recourse Obligations made by Guarantor; as each of the
foregoing may be (and each of the foregoing defined terms shall refer to such
documents as they may be) amended, restated, replaced, supplemented or otherwise
modified from time to time.
LOCKOUT RELEASE DATE: the earlier to occur of (i) the forty second
(42nd) Payment Date of the Term and (ii) the date that is two (2) years from the
"startup day" (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of the Loan.
MANAGEMENT AGREEMENT: the management agreement between Borrower and
Manager, pursuant to which Manager is to manage the Property, as same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with Section 5.12.
MANAGER: the OP or any successor, assignee or replacement manager
appointed by Borrower in accordance with Section 5.12.
MATERIAL LEASE: all Leases which individually or in the aggregate
with respect to the same tenant and its Affiliates (i) cover more than 25,000
square feet of the Improvements or (ii) have a gross annual rent of more than
10% of the total annual Rents or (iii) demise at least one full floor of the
Improvements.
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MATURITY DATE: the date on which the final payment of principal of
the Note becomes due and payable as therein provided, whether at the Stated
Maturity Date, by declaration of acceleration, or otherwise.
MINOR LEASE: any Lease that is not a Material Lease.
NET OPERATING INCOME: as of any date, (1) the annualized Gross
Income from Operations based on Leases In Place as of the most recently ended
calendar quarter less (2) the actual Operating Expenses incurred during the
preceding period of twelve consecutive calendar months ending on the last day of
the most recently ended calendar quarter (as adjusted pursuant to the definition
of "Operating Expenses" below), as reasonably determined by Lender and in
accordance with current Rating Agency criteria.
OFFICER'S CERTIFICATE: a certificate delivered to Lender by Borrower
which is signed by a senior executive officer of the Borrower Representative.
OP: ▇▇▇▇▇▇▇ Properties, L.P., a Maryland limited partnership.
OPERATING AGREEMENTS: the REA, including any other covenants,
restrictions or agreements of record relating to the construction, operation or
use of the Property.
OPERATING EXPENSES: the total of all expenditures by Borrower,
computed in accordance with GAAP, except as otherwise provided herein, of
whatever kind relating to the operation, maintenance and management of the
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, telecom costs, ordinary repairs and
maintenance, insurance, license fees, property taxes and assessments,
advertising and marketing expenses, legal (other than costs and expenses
relating to the Loan) and accounting fees, management fees, payroll and related
taxes, computer processing charges, operational equipment or other lease
payments as approved by Lender for expenditures not included in the Approved
Annual Budget (as defined in the Note) for the Property, and other similar costs
(with adjustments thereto with respect to changes in fixed costs based upon the
most recently available information to Borrower), but excluding capital
expenditures for the Property, tenant improvement costs and leasing commissions
for the Property, depreciation, debt service, contributions to any reserves
required under the Loan Documents and extraordinary, non-recurring expenses.
OTHER CHARGES: all ground rents, maintenance charges, impositions
other than Taxes, and any other charges, including vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Property, now
or hereafter levied or assessed or imposed against the Property or any part
thereof.
PAYMENT DATE: the 1st day of each calendar month or, upon Lender's
exercise of its right to change the Payment Date in accordance with Section
2.2.4, the New Payment Date (in either case, if such day is not a Business Day,
the Payment Date shall be the first Business Day thereafter). The first Payment
Date hereunder shall be December 1, 2003.
PERMITTED ENCUMBRANCES: (i) the Liens created by the Loan Documents,
(ii) all Liens and other matters disclosed in the Title Insurance Policy, (iii)
Liens, if any, for Taxes or
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Other Charges not yet due and payable and not delinquent, (iv) any workers',
mechanics' or other similar Liens on the Property provided that any such Lien is
bonded or discharged within 30 days after Borrower first receives notice of such
Lien and (v) such other title and survey exceptions as Lender approves in
writing in Lender's discretion.
PERMITTED INSTITUTIONAL TRANSFEREE: (a) 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, (ii) investment company, money management firm
or "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, (iii) an institution substantially similar
to any of the foregoing or (iv) any entity Controlled (hereinafter defined) by
any of the entities described in clauses (i), (ii) or (iii) above which in each
case (A) 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 and
(B) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial mortgage properties or (b) any entity
formed for the purpose of owning or investing in commercial property and issuing
syndication interests that is approved by Lender, such approval not to be
unreasonably withheld or delayed.
PERMITTED INVESTMENT: (a) subject to the provisions of subparagraph
(b) of this definition, any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, including those
issued by Servicer, the trustee under any Securitization or any of their
respective affiliates, payable on demand or having a maturity date not later
than the Business Day immediately prior to the first Payment Date following the
date of acquiring such investment (and in no event having maturities of more
than 365 days) and meeting one of the appropriate standards set forth below: (i)
obligations of, or obligations fully guaranteed as to payment of principal and
interest by, the United States or any agency or instrumentality thereof provided
such obligations are backed by the full faith and credit of the United States of
America including, without limitation, obligations of: the U.S. Treasury (all
direct or fully guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services Administration
(participation certificates), the U.S. Maritime Administration (guaranteed Title
XI financing), the Small Business Administration (guaranteed participation
certificates and guaranteed pool certificates), the U.S. Department of Housing
and Urban Development (local authority bonds) and the Washington Metropolitan
Area Transit Authority (guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (ii) Federal Housing Administration
debentures; (iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated system wide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations), the Federal National Mortgage
Association (debt obligations), the Financing Corp. (debt obligations), and the
Resolution Funding Corp. (debt obligations); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal
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due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an "r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (iv) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with maturities of not
more than 365 days of any bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency
(defined herein) (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities issued
in connection with a Securitization or any class thereof); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (v) fully Federal Deposit Insurance
Corporation-insured demand and time deposits in, or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the
highest short term rating category and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities (as defined in the
Cooperation Letter) or any class thereof); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (vi) debt obligations with maturities of
not more than three hundred sixty-five (365) days and at all times rated by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities or any class thereof) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change, (B) if rated by S&P, must
not have an "r" highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to liquidation
prior to their maturity; (vii) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) with maturities of not more than three hundred sixty-five
(365) days and that at all times is rated by each Rating Agency (or, if not
rated by all
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Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to
each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities or any
class thereof) in its highest short-term unsecured debt rating; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity; and (viii) other security,
obligation or investment which has been approved as a Permitted Investment in
writing by (a) Lender and (b) each Rating Agency, as evidenced by a written a
Rating Comfort Letter with respect to that the designation of such security,
obligation or investment as a Permitted Investment; provided, however, that no
obligation or security shall be a Permitted Investment if (A) such obligation or
security evidences a right to receive only interest payments or (B) the right to
receive principal and interest payments on such obligation or security are
derived from an underlying investment that provides a yield to maturity in
excess of one hundred twenty percent (120%) of the yield to maturity at par of
such underlying investment. Notwithstanding anything to the contrary contained
herein, the Permitted Investments (i) through (ix) above must have a ▇▇▇▇▇'▇
rating of (a) "A2 or P-1" if such investment has a maximum maturity of one (1)
month, (b) "A1 and P-1" if such investment has a maximum maturity of three (3)
months, (c) "Aa3 and P-1" if such investment has a maximum maturity of six (6)
months and (d) "AAA and P-1" if such investment has a maximum maturity of more
than six (6) months.
(b) At any time when Borrower is not permitted under the Loan
Documents to select Permitted Investments, "PERMITTED INVESTMENTS" shall mean
any one or more of the following obligations or securities acquired at a
purchase price of not greater than par, including those issued by Servicer
(defined herein), the trustee under any Securitization or any of their
respective Affiliates, payable on demand or having a maturity date not later
than the Business Day immediately prior to the first Payment Date following the
date of acquiring such investment (and in no event having maturities of more
than 365 days) and meeting one of the appropriate standards set forth below: (i)
obligations of, or obligations fully guaranteed as to payment of principal and
interest by, the United States or any Person controlled or supervised by and
acting as an instrumentality of the United States pursuant to authority granted
by the Congress of the United States provided such obligations are backed by the
full faith and credit of the United States of America and are one of the
following: obligations of: the U.S. Treasury (all direct or fully guaranteed
obligations), the General Services Administration (participation certificates),
the Small Business Administration (guaranteed participation certificates and
guaranteed pool certificates) or the U.S. Department of Housing and Urban
Development (local authority bonds); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an "r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (ii) Federal Housing Administration debentures; and (iii)
obligations of the following United States government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated system wide
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bonds and notes), the Federal Home Loan Banks (consolidated debt obligations)
and the Federal National Mortgage Association (debt obligations); provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity; provided, however, that no
obligation or security shall be a Permitted Investment if (A) such obligation or
security evidences a right to receive only interest payments or (B) the right to
receive principal and interest payments on such obligation or security are
derived from an underlying investment that provides a yield to maturity in
excess of one hundred twenty percent (120%) of the yield to maturity at par of
such underlying investment. Notwithstanding anything to the contrary contained
herein, the Permitted Investments (i) through (ix) above must have a ▇▇▇▇▇'▇
rating of (a) "A2 or P-1" if such investment has a maximum maturity of one (1)
month, (b) "A1 and P-1" if such investment has a maximum maturity of three (3)
months, (c) "Aa3 and P-1" if such investment has a maximum maturity of six (6)
months and (d) "AAA and P-1" if such investment has a maximum maturity of more
than six (6) months.
PERSON: any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
person or entity, and any federal, state, county or municipal government or any
bureau, department or agency thereof and any fiduciary acting in such capacity
on behalf of any of the foregoing.
PLAN: (i) an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate or to which Borrower or any ERISA
Affiliate makes or is obligated to make contributions and (ii) which is covered
by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
PRESCRIBED LAWS: collectively, (i) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (ii) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001, and
relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism, (iii) the International
Emergency Economic Power Act, 50 U.S.C. Section 1701 et. seq. and (iv) all other
legal requirements relating to money laundering or terrorism.
PROPERTY: the parcel of real property and Improvements thereon owned
by Borrower and encumbered by the Mortgage; together with all rights pertaining
to such real property and Improvements, and all other collateral for the Loan as
more particularly described in the Granting Clauses of the Mortgage and referred
to therein as the Mortgaged Property. The Property is located in Glendale,
California.
RATING AGENCY: each of Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), ▇▇▇▇▇'▇ Investors Service,
Inc. ("▇▇▇▇▇'▇"), and Fitch, Inc. ("FITCH")or any other nationally recognized
statistical rating organization to the extent any of the foregoing have been
engaged by Lender or its designee in connection with or in anticipation of any
Securitization.
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RATING COMFORT LETTER: a letter issued by each of the applicable
Rating Agencies which confirms that the taking of the action referenced to
therein will not result in any qualification, withdrawal or downgrading of any
existing ratings of Securities created in a Securitization. or, if a
Securitization has not occurred, any ratings to be assigned in connection with a
Securitization.
REA: that certain Parking Structure Expansion and Easement Agreement
between ▇▇▇▇▇▇▇ Properties - 611 N. Brand LLC and ▇▇▇▇▇▇▇ Properties - Glendale
II, LLC, dated April 17, 2001, as the same may be amended, restated,
supplemented or otherwise modified from time to time,
REIT: ▇▇▇▇▇▇▇ Properties, Inc., a Maryland corporation.
RELEASE PARCEL: shall mean the fee interest in the portion of the
Property identified as "Lot 3" on Schedule 6 attached to this Agreement ("LOT
3"). The parties agree that for purposes of defining Lot 3 and Lot 2 under this
Agreement, Borrower shall have the right to make minor adjustments to the lot
lines of Lot 3 and Lot 2 so long as such minor changes do not materially affect
the use, operation or development of the remainder of the Property.
REMIC TRUST: a "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code that holds the Note.
RENTS: all rents, rent equivalents, moneys payable as damages
(including payments by reason of the rejection of a Lease in a Bankruptcy
Proceeding) or in lieu of rent or rent equivalents, royalties (including all oil
and gas or other mineral royalties and bonuses), income, fees, receivables,
receipts, revenues, deposits (including security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
payment and consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower, Manager or any of their agents or
employees from any and all sources arising from or attributable to the Property
and the Improvements, including all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and occupancy of the Property or rendering
of services by Borrower, Manager or any of their agents or employees and
proceeds, if any, from business interruption or other loss of income insurance.
RESTRICTED PARTY: Borrower, the Guarantor, or any Affiliated Manager
or any shareholder, partner, member or non-member manager, or any direct or
indirect legal or beneficial owner, of Borrower, the Guarantor, or any
Affiliated Manager (other than the REIT) any Permitted Institutional Transferee
or any Person owning a direct or indirect interest in the REIT, the OP or any
Permitted Institutional Transferee).
SALE OR PLEDGE: a voluntary or involuntary sale, conveyance,
transfer or pledge of a legal or beneficial interest.
SERVICER: a servicer selected by Lender to service the Loan.
STATE: the state in which the Property is located.
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STATED MATURITY DATE: November 1, 2013, as such date may be changed
in accordance with Section 2.2.4.
TAXES: all real estate and personal property taxes, assessments,
water rates or sewer rents, maintenance charges, impositions, vault charges and
license fees, now or hereafter levied or assessed or imposed against all or part
of the Property.
TERM: the entire term of this Agreement, which shall expire upon
repayment in full of the Debt and full performance of each and every obligation
to be performed by Borrower pursuant to the Loan Documents.
TITLE INSURANCE POLICY: the ALTA mortgagee title insurance policy in
the form acceptable to Lender issued with respect to the Property and insuring
the Lien of the Mortgage.
TREASURY RATE: the annualized yield on securities issued by the
United States Treasury having a maturity corresponding to the remaining term to
the Permitted Prepayment Date, as quoted in Federal Reserve Statistical Release
H. 15(519) under the heading "U.S. Government Securities - Treasury Constant
Maturities" for the date which is five banking days prior to the scheduled
prepayment date, converted to a monthly equivalent yield.
UCC: the Uniform Commercial Code as in effect in the State or the
state in which any of the Cash Management Accounts are located, as the case may
be.
U.S. OBLIGATIONS: direct full faith and credit obligations of the
United States of America that are not subject to prepayment, call or early
redemption.
WELFARE PLAN: an employee welfare benefit plan, as defined in
Section 3(1) of ERISA.
YIELD MAINTENANCE PREMIUM: an amount equal to the greater of (i) one
percent of the outstanding Principal balance of the Loan at the time of
prepayment or (ii) the excess, if any, of (A) the amount of the monthly interest
which would otherwise be payable on the principal balance being prepaid from the
date of the first day of the calendar month immediately following the date of
prepayment to and including the Permitted Prepayment Date; over (B) the amount
of the monthly interest the Lender would earn if the principal balance being
prepaid were reinvested for the period from the first day of the calendar month
immediately following the date of prepayment (unless prepayment is tendered on
the first day of any calendar month during the term of the Loan, in which case
from the date of prepayment) to and including the Permitted Prepayment Date at
the Treasury Rate (as hereinafter defined), such difference to be discounted to
present value at the Treasury Rate.
Section 1.2 Index of Other Definitions. The following terms are
defined in the sections or Loan Documents indicated below:
"Approved Annual Budget" - 6.3.4
"Annual Budget" - 6.3.4
"Applicable Taxes" - 2.2.3
"Asbestos" - 5.8.2
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"Assignment of Leases and Rents" - 4.16
"Association" - 10.24(b)(B)
"Award" - 7.3.2
"Bank of America" - 1.1 (Definition of Lease in Place)
"Bankruptcy Proceeding" - 4.8
"Best" - 7.1.2
"Blanket Insurance Premium Financing Arrangements" - 7.1.4
"Borrower Parties" - 10.1
"Cash Management Accounts" - 3.7
"Casualty" - 7.2.1
"Casualty/Condemnation Prepayment" - 2.3.2
"Casualty/Condemnation Subaccount" - 3.5
"Casualty Consultant" - 7.4.1(e)
"Casualty Restoration" - 7.2.1
"Casualty Retainage" - 7.4.1(b)
"Clearing Account" - 3.1
"Clearing Account Agreement" - 1.1 (Definition of Loan Documents)
"Clearing Bank" 3.1
"Condemnation" - 7.3.1
"Condemnation Proceeds" - 7.4.1
"Condemnation Restoration" - 7.3.1
"Delinquency Date" - 5.2
"Deposit Account" - 3.1
"Deposit Account Agreement" - 1.1 (Definition of Loan Documents)
"Disclosure Document" - 9.1.2
"Disney" - 1.1 (Definition of Leases in Place)
"Eligible Account" - Deposit Account Agreement
"Endorsement" - 5.26.b(c)(iv)
"Environmental Laws" - 4.21
"Equipment" - Mortgage
"Event of Default" - 8.1
"Exchange Act" - 9.1.2
"Factory Mutual" - 7.1.5
"Financing Installment" - 7.1.4
"Fitch" - 1.1 (Definition of Rating Agency)
"Full Replacement Cost" - 7.1.1(j)
"Full Coverage" - 7.1.1(a)
"Hazardous Substances" - 4.21
"Improvements" - Mortgage
"Indemnified Liabilities" - 5.30
"Indemnified Party" - 5.30
"Indemnified Group" - 9.1.3
"Independent Director" - Schedule 5
"Insurance Premiums" - 7.1.3
"Insurance Proceeds" - 7.4.1
"Insured Casualty" - 7.2.2
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"Investor" - 9.1.1
"Late Payment Charge" - 2.5.3
"Lender's Consultant" - 5.8.1
"Liabilities" - 9.1.3
"Licenses" - 4.11
"Loan" - 2.1
"Lot 2" - 10.24(b)
"Lot 3" - 1.1 (Definition of Release Parcel)
"Monthly Debt Service Payment Amount" - 2.2.1
"Moody's" - 1.1 (Definition of Rating Agency)
"Mortgage" - 1.1 (Definition of Loan Documents)
"Net Proceeds" - 7.4(b)
"New Payment Date" - 2.2.4
"Non-Renewed Space" - 3.4.1
"Note" - 1.1 (Definition of Loan Documents)
"Notice" - 6.1
"Parent" - 9.1.1(a)
"Permitted Indebtedness" - 5.22
"Permitted Prepayment Date" - 2.3.3
"Phase I Report" - 4.21
"Policies" or "Policy" - 7.1.2
"Preliminary Release Documents" - 10.24(c)
"Principal" - 2.1
"Proceeds" - 7.2.2
"Provided Information" - 9.1.1
"Public Releases: - 10.16
"REA Amendment" - - 10.24(a).
"Registration Statement" - 9.1.3
"Related Party" or "Related Parties - 4.33(d)
"Release Date" - 10.24(a)(i).
"Remedial Work" - 5.8.3
"Rent Roll" - 4.16
"Rentable Space Percentage" - 7.4.1(c)(iii)
"Replacement Tenant(s)" - 3.4.4
"Required Leases" - 7.4.1(c)(iii)
"Required Repairs" - 3.2.1
"Required Repairs Subaccount" - 3.2.2
"Restoration" - 7.3.1
"Rollover Reserve Subaccount" - 3.4.1
"S&P" - 1.1 (Definition of Rating Agency)
"Securities" - 9.1.1
"Securities Act" - 9.1.2
"Securitization" - 9.1.1
"Securitization Information - 9.1.3(b)
"Security Deposit Account" - 3.6
"Security Deposit Subaccount" - 3.6
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"Significant Casualty" - 7.2.2
"Special Purpose Bankruptcy Remote Entity" - 5.13
"Subaccounts" - 3.1
"Subordination of Management Agreement" - 5.12.1
"Successor Borrower" - 2.3.3
"Survey" - 4.31
"Tax and Insurance Impound Fund" - 3.3
"Tax and Insurance Subaccount" - 3.3
"Tenant Estoppels" - 4.16
"Terrorism Acts" - 7.1.1(j)
"Threshold Amount" - 5.4.2
"Time Warner" - 1.1 (Definition of Leases in Place)
"Toxic Mold" - 4.21
"Transfer" - 5.26.3
"Transfer and Assumption" - 5.26.6(a)
"Transferee Borrower" - 5.26.6(a)
Section 1.3 Principles of Construction. Unless otherwise specified,
(i) all references to sections and schedules are to those in this Agreement,
(ii) the words "hereof," "herein" and "hereunder" and words of similar import
refer to this Agreement as a whole and not to any particular provision, (iii)
all definitions are equally applicable to the singular and plural forms of the
terms defined, (iv) the word "including" means "including but not limited to,"
and (v) accounting terms not specifically defined herein shall be construed in
accordance with GAAP. To the extent that the definitions of Net Operating
Income, Gross Income from Operations, Operating Expenses and Leases in Place
deviate from GAAP, the definitions of such terms contained herein shall govern.
ARTICLE 2
GENERAL LOAN TERMS
Section 2.1 The Loan. Lender is making a loan (the "LOAN") to
Borrower on the date hereof, in the original principal amount (the "PRINCIPAL")
of $80,000,000.00 which shall mature on the Stated Maturity Date. Borrower
acknowledges receipt of the Loan, the proceeds of which are being and shall be
used to (i) fund certain of the Subaccounts, and (ii) pay transaction costs. Any
excess proceeds may be used for any lawful purpose. No amount repaid in respect
of the Loan may be reborrowed.
Section 2.2 Interest; Monthly Payments.
2.2.1 Generally. From and after the date hereof, interest on the
unpaid Principal shall accrue at the Interest Rate and be payable as hereinafter
provided. On the date hereof, Borrower shall pay interest on the unpaid
Principal from the date hereof through and including October 31, 2003. On
December 1, 2003 and each Payment Date thereafter through and including October
1, 2013, the interest on the Principal at the Interest Rate shall be payable in
monthly installments (each such installment, the "MONTHLY DEBT SERVICE PAYMENT
AMOUNT"). The Monthly Debt Service Payment Amount due on any Payment Date shall
be applied to the
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payment of interest accrued during the preceding Interest Period. All accrued
and unpaid interest shall be due and payable on the Maturity Date. If the Loan
is repaid on any date other than on a Payment Date (whether prior to or after
the Stated Maturity Date), Borrower shall also pay interest that would have
accrued on such repaid Principal to but not including the next Payment Date.
2.2.2 Default Rate. After the occurrence and during the continuance
of an Event of Default, the entire unpaid Debt shall bear interest at the
Default Rate, and shall be payable, to the extent permitted by applicable law,
within ten (10) days after the date Lender makes written demand therefor.
2.2.3 Taxes. Any and all payments by Borrower hereunder and under
the other Loan Documents shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on Lender's income, and franchise taxes imposed on Lender by the law or
regulation of any Governmental Authority (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to in this Section 2.2.3 as "APPLICABLE TAXES"). If Borrower shall be
required by law to deduct any Applicable Taxes from or in respect of any sum
payable hereunder to Lender, the following shall apply: (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.2.3), Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions and (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
Payments pursuant to this Section 2.2.3 shall be made within ten (10) days after
the date Lender makes written demand therefor.
2.2.4 New Payment Date. Lender shall have the right, to be exercised
not more than once during the term of the Loan, to change the Payment Date to a
date other than the first day of each month (a "NEW PAYMENT DATE"), on 30 days'
written notice to Borrower; provided, however, that any such change in the
Payment Date: (i) shall not modify the amount of regularly scheduled monthly
principal and interest payments, except that the first payment of principal and
interest payable on the New Payment Date shall be accompanied by interest at the
interest rate herein provided for the period from the Payment Date in the month
in which the New Payment Date first occurs to the New Payment Date, and (ii)
shall extend the Stated Maturity Date to the New Payment Date occurring in the
month set forth in the definition of Stated Maturity Date.
Section 2.3 Loan Repayment.
2.3.1 Repayment. Borrower shall repay the entire outstanding
principal balance of the Note in full on the Maturity Date, together with
interest thereon to (but excluding) the date of repayment and any other amounts
due and owing under the Loan Documents. Borrower shall have no right to prepay
all or any portion of the Principal except in accordance with Section 2.3.2 and
Section 2.3.3 below. Except during the continuance of an Event of Default, all
proceeds of any repayment, including any prepayments of the Loan, shall be
applied by Lender as follows in the following order of priority: First, accrued
and unpaid interest at the Interest Rate; second, to Principal; and third, to
and any other amounts then due and owing under the
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Loan Documents. If prior to the Stated Maturity Date the Debt is accelerated by
reason of an Event of Default, then Lender shall be entitled to receive, in
addition to the unpaid Principal and accrued interest and other sums due under
the Loan Documents, an amount equal to the Yield Maintenance Premium applicable
to such Principal so accelerated. During the continuance of an Event of Default,
all proceeds of repayment, including any payment or recovery on the Property
(whether through foreclosure, deed-in-lieu of foreclosure, or otherwise) shall,
unless otherwise provided in the Loan Documents, be applied in such order and in
such manner as Lender shall elect in Lender's discretion.
2.3.2 Mandatory Prepayments. The Loan is subject to mandatory
prepayment in certain instances of Insured Casualty or Condemnation (each, a
"CASUALTY/CONDEMNATION PREPAYMENT"), in the manner and to the extent set forth
in Section 7.4.2. Each Casualty/Condemnation Prepayment, after deducting
Lender's costs and expenses (including reasonable attorneys' fees and expenses)
in connection with the settlement or collection of the Proceeds or Award, shall
be applied in the same manner as repayments under Section 2.3.1, and if such
Casualty/Condemnation Payment is made on any date other than a Payment Date,
then such Casualty/Condemnation Payment shall include interest that would have
accrued on the Principal prepaid to but not including the next Payment Date.
Provided that no Event of Default is continuing, any such mandatory prepayment
under this Section 2.3.2 shall be without the payment of the Yield Maintenance
Premium. Notwithstanding anything to the contrary contained herein, each
Casualty/Condemnation Prepayment shall be applied in inverse order of maturity
and shall not extend or postpone the due dates of the monthly installments due
under the Note or this Agreement, or change the amounts of such installments.
2.3.3 Optional Prepayments. Provided no Event of Default shall be
continuing, Borrower shall have the right on any Payment Date after the Lockout
Release Date and prior to the Permitted Prepayment Date to voluntarily prepay
the Principal in whole but not in part, provided that Borrower gives Lender at
least 15 days' prior written notice and that Borrower pays to Lender the Yield
Maintenance Premium. From and after the third Payment Date prior to the Stated
Maturity Date (the "PERMITTED PREPAYMENT DATE"), Borrower shall have the right
to prepay the Principal in whole but not in part, provided that Borrower gives
Lender at least 15 days' prior written notice thereof. If any such prepayment is
not made on a Payment Date, Borrower shall also pay interest that would have
accrued on such prepaid Principal to, but not including, the next Payment Date.
Any prepayment made on or after the Permitted Prepayment Date shall be made
without payment of the Yield Maintenance Premium.
2.3.4 Prepayments After Default. If after an Event of Default,
payment of all or any part of the principal of the Loan is tendered by Borrower,
a purchaser at foreclosure or any other Person, such tender shall be deemed an
attempt to circumvent the prohibition against prepayment set forth in Section
2.3.1 and Borrower, such purchaser at foreclosure or other Person shall pay the
Default Yield Maintenance Premium, in addition to the outstanding principal
balance, all accrued and unpaid interest and other amounts payable under the
Loan Documents.
Section 2.4 Release of Property.
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2.4.1 Release on Payment in Full. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of the Debt in
accordance herewith, release or, if requested by Borrower, assign to Borrower's
designee (without any representation or warranty by and without any recourse
against Lender whatsoever), the Lien of the Loan Documents if not theretofore
released.
Section 2.5 Payments and Computations.
2.5.1 Making of Payments. Each payment by Borrower shall be made in
funds settled through the New York Clearing House Interbank Payments System or
other funds immediately available to Lender by 4:00 p.m., New York City time, on
the date such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any such payment shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the first Business Day thereafter. All such payments shall be made
irrespective of, and without any deduction, set-off or counterclaim whatsoever
and are payable without relief from valuation and appraisement laws and with all
costs and charges incurred in the collection or enforcement thereof, including
attorneys' fees and court costs.
2.5.2 Computations. Interest payable under the Loan Documents shall
be computed on the basis of the actual number of days elapsed over a 360-day
year.
2.5.3 Late Payment Charge. If any Principal, interest or other sum
due under any Loan Document is not paid by Borrower on the date on which it is
due, Borrower shall pay to Lender (within ten (10) days after the date Lender
makes written demand therefor) an amount equal to the lesser of 5% of such
unpaid sum or the maximum amount permitted by applicable law (the "LATE PAYMENT
CHARGE"), in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Such amount shall be secured by the Loan
Documents.
ARTICLE 3
CASH MANAGEMENT AND RESERVES
Section 3.1 Cash Management Arrangements. Borrower shall cause all
Rents to be transmitted directly by non-residential tenants of the Property into
a trust account (the "CLEARING ACCOUNT") maintained by Borrower at a local bank
selected by Borrower, which shall at all times be an Eligible Institution (the
"CLEARING BANK") as more fully described in the Clearing Account Agreement.
Without in any way limiting the foregoing, all Rents received by Borrower or
Manager shall be deposited into the Clearing Account within one Business Day of
receipt. Funds deposited into the Clearing Account shall be swept by the
Clearing Bank on a daily basis into an Eligible Account at the Deposit Bank
controlled by Lender (the "DEPOSIT ACCOUNT") and applied and disbursed in
accordance with this Agreement. Funds in the Deposit Account shall be invested
at Lender's discretion only in Permitted Investments. Lender will also establish
subaccounts of the Deposit Account which shall at all times be Eligible Accounts
(and may be ledger or book entry accounts and not actual accounts) (such
subaccounts are referred to herein as "SUBACCOUNTS"). The Deposit Account and
any Subaccount will be under the sole
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control and dominion of Lender, and Borrower shall have no right of withdrawal
therefrom. Borrower shall pay for all expenses of opening and maintaining all of
the above accounts.
Section 3.2 Required Repairs.
3.2.1 Completion of Required Repairs. Borrower shall perform and
complete each item of the repairs and environmental remedial work at the
Property described on Schedule 1 (the "REQUIRED REPAIRS") within six (6) months
of the date hereof or such shorter period of time for such item set forth on
Schedule 1.
3.2.2 Required Repairs Reserves. Borrower shall deposit with Lender
on the date hereof the sum of Eleven Thousand Five Hundred and 00/100 Dollars
($11,500.00) which shall be held by Lender for Required Repairs and Lender shall
cause such amount to be transferred to a Subaccount (the "REQUIRED REPAIRS
SUBACCOUNT"). Lender shall make disbursements from the Required Repairs
Subaccount as requested by Borrower, and approved by Lender in its sole
discretion, no more frequently than once in any thirty (30) day period of no
less than $1,000.00 upon delivery by Borrower of Lender's standard form of draw
request accompanied by copies of invoices for the amounts requested and, if
required by Lender for requests in excess of $50,000.00 for a single item,
conditional lien waivers and releases from all parties furnishing materials
and/or services in connection with the requested payment. Lender may issue joint
checks payable to Borrower and the contractor or other person to whom payment is
due with respect to any requested payment. Lender may require an inspection of
the Property at Borrower's expense prior to making a monthly disbursement in
order to verify completion of repairs of items in excess of $50,000.00 for which
reimbursement or payment is sought. Upon completion of Required Repairs,
provided no Event of Default is then continuing, Lender shall disburse to
Borrower any and all funds remaining on deposit in the Required Repairs
Subaccount.
Section 3.3 Taxes and Insurance. Borrower shall pay to Lender (i)
(A) on the date hereof, an amount equal to $204,648.00 and (B) on each Payment
Date, one-twelfth of the Taxes that Lender estimates will be payable during the
next ensuing twelve (12) months in order to accumulate with Lender sufficient
funds to pay all such Taxes at least thirty (30) days prior to their Delinquency
Date, and (ii) (A) on the date hereof, an amount equal to $68,156.68 and (B) (1)
for so long as the applicable Blanket Insurance Premium Financing Arrangement
remains in full force and effect, on each Payment Date (as defined in the Note),
the Financing Installment for the next occurring payment under the applicable
Blanket Insurance Premium Financing Arrangement and/or (2) with respect to any
Insurance Premiums not covered by a Blanket Insurance Premium Financing
Arrangement, on each Payment Date, one-twelfth of the Insurance Premiums that
Lender estimates will be payable for the renewal of the coverage afforded by the
Policies upon the expiration thereof in order to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (said amounts in (i) and (ii) above
hereinafter called the "TAX AND INSURANCE IMPOUND FUND"). Such amounts will be
transferred by Lender to a Subaccount (the "TAX AND INSURANCE SUBACCOUNT").
Lender will apply the Tax and Insurance Impound Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Sections 5.2 and
7.1 hereof and/or to payments due to the applicable finance company under the
applicable Blanket Insurance Premium Financing Arrangement, as applicable. In
making any payment relating to
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the Tax and Insurance Impound Fund, Lender may do so according to any ▇▇▇▇,
statement or estimate procured from the appropriate public office (with respect
to Taxes) or insurer or agent (with respect to Insurance Premiums), 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. If the amount of the Tax and Insurance Impound Fund shall exceed the
amounts due for Taxes and Insurance Premiums pursuant to Section 5.2 and 7.1
hereof, Lender shall, in its sole discretion, return any excess to Borrower or
credit such excess against future payments to be made to the Tax and Insurance
Impound Fund. In allocating such excess, Lender may deal with the person shown
on the records of Lender to be the owner of the Property. If at any time Lender
determines that the Tax and Insurance Impound Fund is not or will not be
sufficient to pay the items set forth in (i) and (ii) above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender estimates is sufficient to make up the
deficiency at least thirty (30) days prior to delinquency of the Taxes and/or
expiration of the Policies, as the case may be. All earnings of interest on the
Tax and Insurance Impound Fund shall become part of the Tax and Insurance
Impound Fund and shall be disbursed in accordance with this Section 3.3. If
Lender so elects at any time, Borrower shall provide, at Borrower's expense, a
tax service contract for the Term issued by a tax reporting agency acceptable to
Lender. If Lender does not so elect, Borrower shall reimburse Lender for the
cost of making annual tax searches throughout the Term.
Section 3.4 Rollover Reserves.
3.4.1 Subject to the provisions of Section 3.4.2 and 3.4.3, in the
event that Disney or Bank of America shall fail to exercise their respective
renewal options under their respective Leases with Borrower prior to the
specific notification period required in their respective Leases, Borrower shall
pay to Lender on each Payment Date all Available Cash, until the amount
deposited in the Rollover Reserve Subaccount shall equal $30.00 per square foot
of the space leased to Disney and/or Bank of America that is not renewed (the
"NON-RENEWED SPACE") (any period during which Borrower is required to make such
deposits to the Rollover Reserve Subaccount being referred to herein as the
"ROLLOVER RESERVE PERIOD"), which shall be deposited with and held by Lender for
tenant improvement and leasing commission obligations incurred with respect to
the Non-Renewed Space. Lender shall transfer the amounts so deposited into a
Subaccount (the "ROLLOVER RESERVE SUBACCOUNT"). Lender shall make disbursements
from the Rollover Reserve Subaccount for expenses reasonably incurred by
Borrower for new Leases for the Non-Renewed Space, entered into by Borrower in
accordance with the provisions of Section 5.10, no more frequently than once in
any thirty (30) day period in increments of no less than $1,000.00 upon delivery
by Borrower of Lender's standard form of draw request accompanied by copies of
invoices for the amounts requested for tenant improvements and leasing
commissions, the newly executed Lease and any extension, renewal, or
modification (if not previously received by Lender) and, if required by Lender,
for requests in excess of $50,000 (multiple payments made with respect to one
tenant or contractor or other Person shall be aggregated for such $50,000
limit), conditional lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender may
issue joint checks payable to Borrower and the contractor or other person to
whom payment is due with respect to any requested payment. Lender may require an
inspection of the Property at Borrower's expense prior to making a monthly
disbursement in order to verify completion of improvements, replacements or
repairs for which reimbursement or payment is sought which
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costs in the aggregate exceed $50,000. Notwithstanding anything to the contrary
contained herein, the balance in the Rollover Reserve Subaccount, if any, shall
be released to Borrower to the extent that Disney or Bank of America renew their
respective Leases prior to the expiration of their respective terms.
3.4.2 In lieu of making the payments to the Rollover Reserve
Subaccount, Borrower may deliver to Lender one or more Letters of Credit in
accordance with the provisions of this Section 3.4.2. Additionally, Borrower may
deliver to Lender one or more Letters of Credit in accordance with the
provisions of this Section 3.2.4 in lieu of deposits previously made to the
Rollover Reserve Subaccount and upon such delivery, provided that no Event of
Default is then continuing, obtain the release of such amounts previously
deposited. The aggregate amount of proceeds available to be drawn under the
Letters of Credit and cash on deposit in the Rollover Reserve Subaccount shall
at all times be at least equal to the aggregate amount which Borrower is then
required to have on deposit in the Rollover Reserve Subaccount pursuant to this
Agreement. Borrower shall give Lender no less than thirty (30) days prior notice
of Borrower's election to deliver a Letter of Credit and Borrower shall pay to
Lender all of Lender's reasonable out-of-pocket costs and expenses in connection
therewith. Borrower shall not be entitled to draw upon any such Letter of
Credit. Upon thirty (30) days prior notice to Lender, Borrower may replace a
Letter of Credit with a cash deposit to the Rollover Reserve Subaccount. Prior
to the return of a Letter of Credit, Borrower shall deposit an amount equal to
the amount that would have accumulated in the Rollover Reserve Subaccount, and
not been disbursed in accordance with this Agreement, if such Letter of Credit
had not been delivered. Each Letter of Credit delivered under this Agreement
shall be additional security for the payment of the Debt. Upon the occurrence of
an Event of Default, Lender shall have the right, at its option, to draw on any
Letter of Credit and to apply all or any part thereof to the payment of the
items for which such Letter of Credit was established or to apply each such
Letter of Credit to payment of the Debt in such order, proportion or priority as
Lender may determine. On the Maturity Date, any such Letter of Credit may be
applied to reduce the Debt. In addition to any other right Lender may have to
draw upon a Letter of Credit pursuant to the terms and conditions of this
Agreement, unless Borrower has deposited cash in the applicable reserve fund
sufficient to replace the Letter of Credit as provided above, Lender shall have
the additional right to draw upon any Letter of Credit in full: (a) with respect
to any evergreen Letter of Credit, if Lender has received a notice from the
issuing bank that the Letter of Credit will not be renewed and a substitute
Letter of Credit is not provided at least ten (10) Business Days prior to the
date on which the outstanding Letter of Credit is scheduled to expire; (b) with
respect to any Letter of Credit with a stated expiration date, if Lender has not
received a notice from the issuing bank that it has renewed the Letter of Credit
at least ten (10) Business Days prior to the date on which such Letter of Credit
is scheduled to expire and a substitute Letter of Credit is not provided at
least ten (10) Business Days prior to the date on which the outstanding Letter
of Credit is scheduled to expire; (c) upon receipt of notice from the issuing
bank that the Letter of Credit will be terminated (except if the termination of
such Letter of Credit is permitted pursuant to the terms and conditions of this
Agreement or a substitute Letter of Credit is provided); or (d) if Lender has
received notice that the bank issuing the Letter of Credit shall cease to be an
Eligible Institution (as hereinafter defined) and Borrower has not provided a
substitute Letter of Credit or deposited cash to replace the Letter of Credit
within five (5) days after Lender has received such notice. In the event that
Lender draws upon any Letter of Credit as a result of any of the events
described in clauses (a)-(d) above, provided there is no Event of Default then
continuing, (x) Lender shall deposit all
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proceeds of such Letter of Credit in the Rollover Reserve Subaccount and (y) if
the proceeds of such Letter of Credit exceed the amount that would have
otherwise been on deposit in the Rollover Reserve Subaccount in the event that
Borrower had not posted such Letter of Credit, any excess amounts shall remain
on deposit in such reserve fund and shall be credited against Borrower's future
deposit obligations into the Rollover Reserve Subaccount. Notwithstanding
anything to the contrary contained in the above, Lender is not obligated to draw
any Letter of Credit upon the happening of an event specified in (a), (b), (c)
or (d) above and shall not be liable for any losses sustained by Borrower due to
the insolvency of the bank issuing the Letter of Credit if Lender has not drawn
the Letter of Credit.
3.4.3 Guaranty. In lieu of the deposit into the Rollover Reserve
Subaccount required pursuant to section 3.4.1, Borrower shall have the right to
deliver to Lender a Guaranty from the OP in form and substance satisfactory to
Lender in its sole discretion guaranteeing the Payment of all expenses for
tenant improvements and leasing commissions incurred by Borrower for new Leases
for the Non-Renewed Space and the performance by Borrower of all tenant
improvements in connection with the leasing of the Non-Renewed Space.
3.4.4 Release. Lender shall release any remaining amounts in the
Rollover Subaccount (or the Letter of Credit or the Guaranty, as applicable) at
such time as Lender shall have received evidence satisfactory to Lender that the
following conditions have been satisfied: (i) no Event of Default shall exist
and remain uncured and no event shall have occurred which, with the giving of
notice or the passage of time or both, would constitute an Event of Default,
(ii) the Non-Renewed Space is fully leased to a tenant or tenants approved by
Lender pursuant to a Lease or Leases approved or deemed approved by Lender
("REPLACEMENT TENANT(S)"), pursuant to the terms and provisions of this
Agreement, (iii) such Replacement Tenant(s) have taken occupancy of the
Non-Renewed Space, (iv) such Replacement Tenant(s) are paying rent, and (v) all
expenses for tenant improvements and leasing commissions incurred by Borrower
with respect to the leasing of the Non-Renewed Space have been paid in full.
Section 3.5 Casualty/Condemnation Subaccount. Borrower shall pay, or
cause to be paid, to Lender all Proceeds or Awards due to any Casualty or
Condemnation to be transferred to a Subaccount (the "CASUALTY/CONDEMNATION
SUBACCOUNT") in accordance with the provisions of Section 7. All amounts in the
Casualty/Condemnation Subaccount shall be disbursed in accordance with the
provisions of Section 7.
Section 3.6 Security Deposits. Borrower shall keep all security
deposits under Leases at a separately designated account under Borrower's
control at the Clearing Bank (and in the case of a letter of credit, assigned
with full power of attorney and executed sight drafts to Lender) so that the
security deposits shall not be commingled with any other funds of Borrower (such
account, the "SECURITY DEPOSIT ACCOUNT"). After the occurrence of an Event of
Default, Borrower shall, upon Lender's request, if permitted by applicable Legal
Requirements, turn over to Lender the security deposits (and any interest
theretofore earned thereon) under Leases, to be held by Lender in a Subaccount
(the "SECURITY DEPOSIT SUBACCOUNT") subject to the terms of the Leases. Security
deposits held in the Security Deposit Subaccount will be released by Lender upon
notice from Borrower together with such evidence as Lender may reasonably
request that such security deposit is required to be returned to a tenant
pursuant to the terms of a Lease or may be applied as Rent pursuant to the
rights of Borrower under the applicable Lease. Any letter
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of credit or other instrument that Borrower receives in lieu of a cash security
deposit under any Lease entered into after the date hereof shall (i) be
maintained in full force and effect in the full amount unless replaced by a cash
deposit as hereinabove described and (ii) if permitted pursuant to any Legal
Requirements, name Lender as payee or mortgagee thereunder (or at Lender's
option, be fully assignable to Lender).
Section 3.7 Grant of Security Interest; Application of Funds. As
security for payment of the Debt and the performance by Borrower of all other
terms, conditions and provisions of the Loan Documents, Borrower hereby pledges
and assigns to Lender, and grants to Lender a security interest in, all
Borrower's right, title and interest in and to all Rents and in and to all
payments to or monies held in the Clearing Account, the Deposit Account, all
Subaccounts created pursuant to this Agreement (collectively, the "CASH
MANAGEMENT ACCOUNTS"). Borrower hereby grants to Lender a continuing security
interest in, and agrees to hold in trust for the benefit of Lender, all Rents in
its possession prior to the (i) payment of such Rents to Lender or (ii) deposit
of such Rents into the Deposit Account. Borrower shall not, without obtaining
the prior written consent of Lender, further pledge, assign or grant any
security interest in any Cash Management Account, or permit any Lien to attach
thereto, or any levy to be made thereon, or any UCC Financing Statements, except
those naming Lender as the secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to be a security
agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums in any Cash
Management Account in any order and in any manner as Lender shall elect in
Lender's discretion without seeking the appointment of a receiver and without
adversely affecting the rights of Lender to foreclose the Lien of the Mortgage
or exercise its other rights under the Loan Documents. Cash Management Accounts
shall not constitute trust funds and may be commingled with other monies held by
Lender. Provided no Event of Default has occurred and is continuing, at the
direction of Borrower, Lender shall deposit the amounts held in the Cash
Management Account in Permitted Investments selected by Borrower. All investment
earnings which accrues on the funds in any Cash Management Account shall accrue
for the benefit of Borrower and shall be taxable to Borrower and shall be added
to and disbursed in the same manner and under the same conditions as the
principal sum on which said interest accrued. Lender shall not be responsible
for any losses resulting from the investment of the Funds or for obtaining any
specific level or percentage of earnings on such investment. Upon repayment in
full of the Debt, all remaining funds in the Subaccounts, if any, shall be
promptly disbursed to Borrower.
Section 3.8 Property Cash Flow Allocation. (a) all Rents deposited
into the Deposit Account during the immediately preceding Interest Period shall
be applied on each Payment Date as follows in the following order of priority:
(i) First, to make payments into the Tax and Insurance Subaccount as required
under Section 3.3; (ii) Second, to pay the monthly portion of the fees charged
by the Deposit Bank in accordance with the Deposit Account Agreement; (iii)
Third, to Lender to pay the Monthly Debt Service Payment Amount due on such
Payment Date (plus, if applicable, interest at the Default Rate and all other
amounts, other than those described under other clauses of this Section 3.8(a),
then due to Lender under the Loan Documents); (iv) Fourth, to Borrower the
monthly amount set forth in the Approved Budget for the following month as being
necessary for payment of Approved Operating Expenses and Approved Capital
Expenses at the Property for such month; (v) Fifth, after the consummation of a
Securitization, to pay the pro rata portion of the expenses described in Section
9.1.7; (vi) Sixth,
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during the continuation of a Rollover Reserve Period, to make payments in an
amount equal to all remaining Available Cash on such Payment Date into the
Rollover Reserve Subaccount in accordance with Section 3.4; and (ix) Lastly,
payments to Borrower of any remaining amounts.
(b) The failure of Borrower to make all of the payments required
under clauses (i) through (vi) of Section 3.8(a) in full on each Payment Date
shall constitute an Event of Default under this Agreement; provided, however, if
adequate funds are available in the Deposit Account for such payments, the
failure by the Deposit Bank to allocate such funds into the appropriate
Subaccounts shall not constitute an Event of Default.
(c) Notwithstanding anything to the contrary contained in this
Section 3.8, after the occurrence of a Default or an Event of Default, Lender
may apply all Rents deposited into the Deposit Account and other proceeds of
repayment in such order and in such manner as Lender shall elect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the date hereof
that, except to the extent (if any) disclosed on Schedule 2 with reference to a
specific Section of this Article 4:
Section 4.1 Organization; Special Purpose. Each of Borrower and
Borrower Representative has been duly organized and is validly existing and in
good standing under the laws of the state of its formation, with requisite power
and authority, and all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to own its properties and to transact the
business in which it is now engaged. Each of Borrower and Borrower
Representative is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
properties, business and operations. Borrower is a Special Purpose Bankruptcy
Remote Entity.
Section 4.2 Authorization; Valid Execution and Delivery;
Enforceability. Borrower has taken all necessary actions for the authorization
of the borrowing on account of the Loan and for the execution and delivery of
the Loan Documents, including, without limitation, that those members of
Borrower whose approval is required by the terms of Borrower's organizational
documents have duly approved the transactions contemplated by the Loan Documents
and have authorized execution and delivery thereof by the respective
signatories. To the best of Borrower's knowledge, no other consent by any local,
state or federal agency is required in connection with the execution and
delivery of the Loan Documents. All of the Loan Documents requiring execution by
Borrower have been duly and validly executed and delivered by Borrower. All of
the Loan Documents constitute valid, legal and binding obligations of Borrower
and are fully enforceable against Borrower in accordance with their terms by
Lender and its successors, transferees and assigns, subject only to bankruptcy
laws, and general principles of equity, insolvency, reorganization, arrangement,
moratorium, receivership or other similar laws relating to or affecting the
rights of creditors. All consents, approvals, authorizations, orders or filings
with any court or governmental agency or body, if any, required
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for the execution, delivery and performance of the Loan Documents by Borrower
have been obtained or made.
Section 4.3 No Conflict/Violation of Law. The execution, delivery
and performance of the Loan Documents by Borrower will not cause or constitute a
default under or conflict with the organizational documents of Borrower, any
Guarantor or any general partner or managing member of Borrower or any
Guarantor. The execution, delivery and performance of the obligations imposed on
Borrower under the Loan Documents will not cause Borrower to be in default,
including after due notice or lapse of time or both, under the provisions of any
agreement, judgment or order to which Borrower is a party or by which Borrower
is bound.
Section 4.4 No Litigation. Except as otherwise disclosed on Schedule
2, there are no pending actions, suits or proceedings, arbitrations or
governmental investigations against the Property, an adverse outcome of which
would materially affect Borrower's performance under the Note, this Agreement or
the other Loan Documents.
Section 4.5 No Defenses. The Note, this Agreement, the Mortgage and
the other Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense, nor would the operation of any of the terms of the
Note, this Agreement, the Mortgage or any of the other Loan Documents, or the
exercise of any right thereunder, render this Agreement or the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury.
Section 4.6 Title. Borrower has good and marketable fee simple title
to the Property, and good title to the Equipment, subject to no liens, charges
or encumbrances other than the Permitted Encumbrances and liens, charges or
encumbrances otherwise expressly permitted by the Loan Documents. The possession
of the Property has been peaceful and undisturbed and title thereto has not been
disputed or questioned to the best of Borrower's knowledge. The Permitted
Encumbrances do not and will not materially and adversely affect (1) the ability
of Borrower to pay in full the principal and interest on the Note in a timely
manner or (2) the use of the Property for the use currently being made thereof,
the operation of the Property as currently being operated or the value of the
Property. Upon the execution by Borrower and the recording of the Mortgage, and
upon the filing of UCC-1 financing statements or amendments thereto, the Lender
will have a valid first lien on the Property and a valid security interest in
the Equipment subject to no liens, charges or encumbrances other than the
Permitted Encumbrances and liens, charges or encumbrances otherwise expressly
permitted by the Loan Documents.
Section 4.7 No Insolvency or Judgment; No Bankruptcy Filing. Neither
Borrower, nor any general partner or member of Borrower, nor any Guarantor of
the Loan is currently (a) the subject of or a party to any completed or pending
bankruptcy, reorganization or insolvency proceeding; or (b) the subject of any
judgment unsatisfied of record or docketed in any court of the state in which
the Property is located or in any other court located in the United States. The
Loan will not render Borrower nor any general partner or member of Borrower
insolvent. As used herein, the term "INSOLVENT" means that the sum total of all
of an entity's liabilities (whether secured or unsecured, contingent or fixed,
or liquidated or unliquidated) is in excess of the value of all such entity's
non-exempt assets, i.e., all of the assets of the entity that
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are available to satisfy claims of creditors. Borrower is not contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency law or the liquidation of all or a major portion of its property (a
"BANKRUPTCY PROCEEDING"), and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it. In addition, neither
Borrower nor Borrower Representative nor any principal nor Affiliate of either
has been a party to, or the subject of a Bankruptcy Proceeding for the past ten
years.
Section 4.8 Misstatements of Fact. No statement of fact made in the
Loan Documents contains any untrue statement of a material fact or omits to
state any material fact known to Borrower or its Affiliates necessary to make
statements contained herein or therein not misleading. There is no fact
presently known to Borrower which has not been disclosed which materially
adversely affects, nor as far as Borrower can foresee, might materially
adversely affect the business, operations or condition (financial or otherwise)
of Borrower.
Section 4.9 Tax Filings. To the extent required, Borrower has filed
(or has obtained effective extensions for filing) all federal, state and local
tax returns required to be filed and have paid or made adequate provision for
the payment of all federal, state and local taxes, charges and assessments
payable by Borrower. Borrower believes that its tax returns (if any) properly
reflect the income and taxes of Borrower for the periods covered thereby,
subject only to reasonable adjustments required by the Internal Revenue Service
or other applicable tax authority upon audit.
Section 4.10 ERISA. (i) Borrower shall not engage in any transaction
which would cause any obligation, or action taken or to be taken, hereunder (or
the exercise by Lender of any of its rights under the Note, this Agreement and
the other Loan Document) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.
(ii) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the
term of the Loan, as requested by Lender in its sole discretion, that (A)
Borrower is not an "employee benefit plan" as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan"
within the meaning of Section 3(32) of ERISA; (B) Borrower is not subject
to state statutes regulating investments and fiduciary obligations with
respect to governmental plans; and (C) one or more of the following
circumstances is true:
(x) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(y) Less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan investors" within the meaning of
29 C.F.R. Section 2510.3-101(f)(2); or
(z) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e)
or an investment company registered under The Investment Company Act of 1940.
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(iii) As of the date hereof and throughout the term of this
Agreement, Borrower is not and will not be an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
and the assets of Borrower do not and will not constitute "plan assets" of
one or more such plans for purposes of Title I of ERISA. As of the date
hereof and throughout the term of this Agreement, Borrower is not and will
not be a "governmental plan" within the meaning of Section 3(32) of ERISA
and transactions by or with Borrower are not and will not be subject to
state statutes applicable to Borrower regulating investments of and
fiduciary obligations with respect to governmental plans.
Section 4.11 Compliance with Applicable Laws and Regulations. All of
the Improvements and the use of the Property comply in all material respects
with, and shall remain in compliance in all material respects with, all
applicable statutes, rules, regulations and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Property,
including all applicable Prescribed Laws and all applicable statutes, rules and
regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning and land
use. The Improvements comply in all material respects with, and shall remain in
compliance in all material respects with, applicable health, fire and building
codes. Borrower is not aware of any illegal activities relating to controlled
substances on the Property. All certifications, permits, licenses and approvals,
including, without limitation, certificates of completion and occupancy permits
required for the legal use, occupancy and operation of the Property as an office
building (collectively, the "LICENSES"), have been obtained and are in full
force and effect. All of the Improvements comply with all material requirements
of any applicable zoning and subdivision laws and ordinances. To the Borrower's
knowledge, in the event that all or any part of the Improvements are destroyed
or damaged, said Improvements can be legally reconstructed to their condition
prior to such damage or destruction, and thereafter exist for the same use
without violating any zoning or other ordinances applicable thereto and without
the necessity of obtaining any variances or special permits. No legal
proceedings are pending or, to the knowledge of Borrower, threatened with
respect to the zoning of the Property. Neither the zoning nor any other right to
construct, use or operate the Property is in any way dependent upon or related
to any property other than the Property. The use being made of the Property is
in conformity with the certificate of occupancy issued for the Property and all
other restrictions, covenants and conditions affecting the Property.
Section 4.12 Contracts. Except as set forth on Schedule 6, there are
no service, maintenance or repair contracts affecting the Property that are not
terminable on one month's notice or less without cause and without penalty or
premium. All service, maintenance or repair contracts affecting the Property
have been entered into at arms-length in the ordinary course of Borrower's
business and provide for the payment of fees in amounts and upon terms
comparable to existing market rates.
Section 4.13 Federal Reserve Regulations; Investment Company Act. No
part of the proceeds of the Loan will be used for the purpose of purchasing or
acquiring any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or for any other purpose that would be
inconsistent with such Regulation U or any other regulation of such Board of
Governors, or for any purpose prohibited by Legal Requirements or any Loan
Document. Borrower is not (i) an "investment company" or a company "controlled"
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by an "investment company," within the meaning of the Investment Company Act of
1940, as amended; (ii) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended; or (iii) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.
Section 4.14 Access/Utilities. The Property has adequate rights of
access to public ways and is served by adequate water, sewer, sanitary sewer and
storm drain facilities. Other than as disclosed on the Survey (as hereinafter
defined), all public utilities necessary to the continued use and enjoyment of
the Property as presently used and enjoyed are located in the public
right-of-way abutting the Property, and all such utilities are connected so as
to serve the Property without passing over other property. All roads necessary
for the full utilization of the Property for its current purpose have been
completed and dedicated to public use and accepted by all Governmental
Authorities or are the subject of access easements for the benefit of the
Property.
Section 4.15 Condition of Improvements. Except as may be expressly
disclosed in the engineering reports obtained and submitted to Lender, the
Property, including all Improvements, parking facilities, systems, Equipment and
landscaping, are in good condition, order and repair in all material respects;
there exists no structural or other material defect or damages to the Property,
whether latent or otherwise. Borrower has not received notice from any insurance
company or bonding company of any defect or inadequacy in the Property, or any
part thereof, which would adversely affect its insurability or cause the
imposition of extraordinary premiums or charges thereon or any termination of
any policy of insurance or bond. No portion of the Property is located in an
area as identified by the Federal Emergency Management Agency as an area having
special flood hazards. The Property has not been damaged by fire, water, wind or
other cause of loss which has not been fully restored in all material respects.
Section 4.16 Leases. The rent roll attached hereto as Schedule 3
together with the schedules and the exhibits attached to such rent roll
(collectively, the "RENT ROLL") is true, complete and correct and the Property
is not subject to any Leases other than the Leases described in the Rent Roll.
The Property is not subject to any Leases other than the Leases described in the
Rent Roll and any existing subleases thereunder. No Person has any possessory
interest in the Property or right to occupy the same except under and pursuant
to the provisions of the Leases (and any existing subleases thereunder). As of
the date hereof (i) Borrower is the owner and holder of the landlord's interest
under each Lease; (ii) there are no prior assignments of the landlord's interest
in any Lease or any portion of Rents which are presently outstanding and have
priority over the Assignment of Leases and Rents (the "ASSIGNMENT OF LEASES AND
RENTS"), dated the date hereof, given by Borrower to Lender and intended to be
duly recorded; (iii) true and correct copies of the Leases have been delivered
by Borrower to Lender and the Leases have not been further modified or amended,
except as disclosed to Lender in writing on or prior to the date hereof; (iv)
each Lease is in full force and effect; (v) except as disclosed on the Rent Roll
or in any tenant estoppels delivered to Lender in connection with the Loan
(collectively, the "TENANT ESTOPPELS"), neither Borrower nor, to Borrower's
knowledge, any tenant under any Lease is in default under any of the material
terms, covenants or provisions of the Lease, and, except as disclosed to Lender
in writing, Borrower knows of no event which, but
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for the passage of time or the giving of notice or both, would constitute an
event of default under any Lease; (vi) except as expressly set forth in the
Leases, the Tenant Estoppels or on the Rent Roll, there are no offsets or
defenses to the payment of any portion of the Rents; and (vii) except as
disclosed on the Rent Roll or in any Tenant Estoppel, all Rents due and payable
under each Lease have been paid in full and, except for estimated payments of
operating expenses and taxes made by tenants in accordance with their Leases, no
Rents have been paid more than one (1) month in advance of the due dates
thereof. For purposes of the preceding sentence, the term "Lease" shall exclude
subleases.
Section 4.17 Fraudulent Transfer. Borrower (1) has not entered into
the Loan or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor and (2) received reasonably equivalent value in exchange
for its obligations under the Loan Documents. Giving effect to the Loan
contemplated by the Loan Documents, the fair saleable value of Borrower's assets
exceed and will, immediately following the execution and delivery of the Loan
Documents, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed or contingent liabilities. The fair market
value of Borrower's assets is and will, immediately following the execution and
delivery of the Loan Documents, be greater than Borrower's probable liabilities,
including the maximum amount of its contingent liabilities or its debts as such
debts become absolute and matured. Borrower's assets do not and, immediately
following the execution and delivery of the Loan Documents will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to, and does not believe that it will,
incur debts and liabilities (including, without limitation, contingent
liabilities and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower).
Section 4.18 Ownership of Borrower. The sole member of Borrower is
the Borrower Representative. ▇▇▇▇▇▇▇ Properties - Glendale, LLC, a California
limited liability company, is the owner of all of the issued and outstanding
membership interests of the Borrower Representative, all of which membership
interests have been validly issued and fully paid and are nonassessable. There
are no other members of Borrower. The membership interests in Borrower and the
Borrower Representative are owned free and clear of all Liens, warrants, options
and rights to purchase. Borrower has no obligation to any Person to purchase,
repurchase or issue any ownership interest in it. The organizational chart
attached hereto as Schedule 4 is complete and accurate and illustrates all
Persons who have a direct or indirect ownership interest in Borrower.
Section 4.19 No Purchase Options. No tenant, person, party, firm,
corporation or other entity has an option to purchase the Property, any portion
thereof or any interest therein other than options, rights of first refusal and
similar rights to lease space in the Improvements granted to a tenant pursuant
to its respective Lease or in another writing otherwise delivered to Lender and
other than rights of first refusal contained in operating agreements of members
of Borrower in favor of members of the members of Borrower in the event of a
sale of the Property by Borrower.
Section 4.20 Management Agreement. The Management Agreement is in
full force and effect and there is no default or violation by any party
thereunder. The fee due under
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the Management Agreement, and the terms and provisions of the Management
Agreement, are subordinate to the Mortgage and Manager agrees to attorn to
Lender pursuant to and in accordance with that certain Assignment and
Subordination of Management Agreement dated of even date herewith by and among
Borrower, Manager and Lender.
Section 4.21 Hazardous ▇▇▇▇▇▇▇▇▇▇.▇▇ Borrower's knowledge, except as
disclosed in the report, dated August 18, 2003 prepared by Certified
Environments, Inc. (the "PHASE I REPORT") and delivered to Lender in connection
with the Loan: (a) the Property is not in violation of any local, state, federal
or other governmental authority, statute, ordinance, code, order, decree, law,
rule or regulation pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Resource Conservation and Recovery Act, as
amended, the Emergency Planning and Community Right-to-Know Act of 1986, as
amended, the Hazardous Substances Transportation Act, as amended, the Solid
Waste Disposal Act, as amended, the Clean Water Act, as amended, the Clean Air
Act, as amended, the Toxic Substance Control Act, as amended, the Safe Drinking
Water Act, as amended, the Occupational Safety and Health Act, as amended, any
state super-lien and environmental clean-up statutes (including with respect to
Toxic Mold) and all rules and regulations adopted in respect to the foregoing
laws whether presently in force or coming into being and/or effectiveness
hereafter (collectively, "ENVIRONMENTAL LAWS"); (b) the Property is not subject
to any private or governmental lien or judicial or administrative notice or
action or inquiry, investigation or claim relating to hazardous and/or toxic,
dangerous and/or regulated, substances, wastes, materials, raw materials which
include hazardous constituents, pollutants or contaminants including without
limitation, petroleum, tremolite, anthlophylie, actinolite or polychlorinated
biphenyls, toxic mold or fungus of a type that may pose a risk to human health
or the environment or would negatively impact the value of the Property ("TOXIC
MOLD") and any other substances or materials which are included under or
regulated by Environmental Laws or which are considered by scientific opinion to
be otherwise dangerous in terms of the health, safety and welfare of humans
(collectively, "HAZARDOUS SUBSTANCES"); (c) no Hazardous Substances are or have
been (including the period prior to Borrower's acquisition of the Property)
discharged, generated, treated, disposed of or stored on, incorporated in, or
removed or transported from the Property other than in compliance with all
Environmental Laws; (d) no Hazardous Substances are present in, on or under any
nearby real property which could migrate to or otherwise affect the Property and
which would reasonably be likely to result in a requirement under applicable
Environmental Laws to remediate the Property; and (e) no underground storage
tanks exist on any of the Property. Notwithstanding anything to the contrary in
this Section 4.21, Borrower may use and store ordinary amounts of Hazardous
Substances at the Property in compliance with all applicable Environmental Laws
if such use and storage is in connection with business supplies used by
Borrower, a tenant in accordance with the terms of its Lease or in connection
with the ordinary cleaning and maintenance of the Property.
Section 4.22 Name; Principal Place of Business. Borrower does not
use and will not use any trade name and has not done and will not do business
under any name other than its actual name set forth herein. The principal place
of business of Borrower is its primary address for notices as set forth in
Section 6.1, and Borrower has no other place of business.
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Section 4.23 No Other Obligations. Borrower has no material
financial obligation or contingent liabilities under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which Borrower
is a party or by which Borrower or the Property is otherwise bound, other than
obligations incurred in the ordinary course of the operation of the Property and
other than obligations under the Leases, this Agreement and the other Loan
Documents that would materially affect Borrower's performance under the Note,
this Agreement or the other Loan Documents.
Section 4.24 Defense of Usury. Borrower knows of no facts that would
support a claim of usury to defeat or avoid its obligation to repay the
principal of, interest on, and other sums or amounts due and payable under, the
Loan Documents.
Section 4.25 Taxes Paid. Borrower has filed all federal, state,
county and municipal tax returns required to have been filed by Borrower, and,
except as otherwise disclosed to Lender in writing, has paid all taxes prior to
their delinquency, pursuant to such returns or to any notice of assessment
received by Borrower, and Borrower has no knowledge of any basis for additional
assessment with respect to such taxes other than a possible reassessment of the
Property for real estate tax purposes resulting from transactions occurring in
connection with the contribution of an indirect interest in the Property to the
OP on or prior to the date hereof.
Section 4.26 Single Tax Lot. The Premises consists of a single lot
or multiple tax lots; no portion of said tax lot(s) covers property other than
the Premises or a portion of the Premises and no portion of the Premises lies in
any other tax lot.
Section 4.27 Special Assessments. Except as disclosed in the title
insurance policy, there are no pending or, to the knowledge of Borrower,
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor, to the knowledge of Borrower, are there any
contemplated improvements to the Property that may result in such special or
other assessments.
Section 4.28 No Condemnation. No part of any property subject to the
Mortgage has been taken in condemnation or other like proceeding to an extent
which would impair the value of the Property, the Mortgage or the Loan or the
usefulness of such property for the purposes for which it is currently being
operated, nor is any proceeding pending, threatened or known to be contemplated
for the partial or total condemnation or taking of the Property.
Section 4.29 No Labor or Materialmen Claims. Except for those
improvements and other work performed in the ordinary course of business with
respect to which any applicable payments are not more than sixty (60) days past
due, all parties furnishing labor and materials for which payment is due and
payable as of the date hereof have been paid in full and, except for such liens
or claims insured against by the policy of title insurance to be issued in
connection with the Loan, there are no mechanics', laborers' or materialmens'
liens or claims outstanding for work, labor or materials affecting the Property,
whether prior to, equal with or subordinate to the lien of the Mortgage.
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Section 4.30 Boundary Lines. Except as disclosed in the survey of
the Premises and Improvements delivered to Lender in connection with the funding
of the Loan (the "SURVEY"), to Borrower's knowledge, (i) all of the Improvements
which were included in determining the appraised value of the Property lie
wholly within the boundaries and building restriction lines of the Property,
(ii) no improvements on adjoining properties encroach upon the Property, and
(iii) no easements or other encumbrances upon the Premises encroach upon any of
the Improvements, so as to materially and adversely affect the value or
marketability of the Property except those which are insured against by title
insurance.
Section 4.31 Survey. To Borrower's knowledge, the Survey does not
fail to reflect any material matter affecting the Premises or the Improvements
or the title thereto.
Section 4.32 Forfeiture. There has not been and shall never be
committed by Borrower or, to Borrower's knowledge, any other person in occupancy
of or involved with the operation or use of the Property any act or omission
affording the federal government or any state or local government the right of
forfeiture as against the Property or any part thereof or any monies paid in
performance of Borrower's obligations under any of the Loan Documents.
Section 4.33 Borrower Entity Representations. Borrower hereby
represents, warrants, covenants, with respect to Borrower, from the date of
formation of Borrower on November 29, 2000, to the date of this Security
Instrument as follows:
(a) Borrower's business has been limited solely to (i) acquiring,
improving, developing, owning, holding, leasing, financing, operating and
managing the Property, (ii) entering into financings and refinancings of the
Property and (iii) transacting any and all lawful business that was incident,
necessary and appropriate to accomplish the foregoing.
(b) Borrower has not engaged in any business other than as set
forth in (a) above.
(c) Borrower has not owned any asset or property other than (i)
the Property, and (ii) incidental personal property reasonably necessary for and
used or to be used in connection with the ownership or operation of the
Property.
(d) Borrower has not entered into any contract or agreement with
any Affiliate of Borrower, any constituent party of Borrower, any owner of
Borrower, any guarantors of the obligations of Borrower or any Affiliate of any
such constituent party, owner or guarantor (individually, a "RELATED PARTY" and
collectively, the "RELATED PARTIES"), except upon terms and conditions that are
commercially reasonable.
(e) Borrower has not made any loans or advances to any Person and
has not acquired obligations or securities of any Related Party.
(f) Borrower has paid its debts and liabilities from its assets as
the same have become due.
(g) Borrower has done or caused to be done all things necessary to
observe organizational formalities and preserve its existence.
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(h) Borrower has maintained all of its books, records, financial
statements and bank accounts separate from those of any other Person and
Borrower's assets have not been listed as the assets of any other Person on the
financial statement of any other Person. Borrower has not filed a consolidated
federal income tax return with any other Person. Borrower has maintained its
books, records, resolutions and agreements as official records.
(i) Borrower has been, and at all times has held itself out to the
public as, a legal entity separate and distinct from any other Person (including
any Affiliate or other Related Party), has corrected any known misunderstanding
regarding its status as a separate entity, has conducted its business in its own
name, has not identified itself or any of its Affiliates as a division or part
of the other and has maintained and utilized separate stationery, invoices and
checks.
(j) Borrower has not commingled its assets with those of any other
Person and has held all of its assets in its own name.
(k) Borrower has not guaranteed or become obligated for the debts
of any other Person and has not held itself out as being responsible for the
debts or obligations of any other Person.
(l) Borrower has allocated fairly and reasonably any overhead
expenses that have been shared with an Affiliate, including paying for office
space and services performed by any employee of an Affiliate or Related Party.
(m) Borrower has not pledged its assets for the benefit of any
other Person other than with respect to loans secured by the Property and no
such pledge remains outstanding except in connection with the Loan.
(n) Borrower has maintained a sufficient number of employees in
light of its contemplated business operations and has paid the salaries of its
own employees from its own funds.
(o) Borrower has not made loans to any other Person or has bought
or held evidence of indebtedness issued by any other Person.
(p) Except as otherwise disclosed on Schedule 2, Borrower has no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority or other agency now pending or, threatened against or affecting
Borrower, which actions, suits or proceedings, if determined against Borrower,
would materially adversely affect any the financial condition or business of
Borrower.
(q) Borrower has not incurred any indebtedness that is still
outstanding other than indebtedness that is permitted under the Loan Documents.
(r) Borrower is not now party to any lawsuit, arbitration,
summons, or legal proceeding, except as otherwise disclosed in Schedule 2, and
any prior litigation related solely to the Property or the ownership in
Borrower.
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(s) Borrower has no judgments or liens of any nature against it
except for tax liens not yet due and liens disclosed in the title report.
(t) Borrower is in compliance with all laws, regulations, and
orders applicable to it and has received all permits necessary for it to
operate.
(u) Borrower is not involved in any dispute with any taxing
authority.
(v) Borrower has no material contingent or actual obligations not
related to the Property.
(w) Borrower is and has since its formation been duly formed,
validly existing, and in good standing in the state of its formation and in all
other jurisdictions where it is qualified to do business.
(x) Borrower has paid all taxes which Borrower owes pursuant to
Legal Requirements.
Section 4.34 REA. The REA is in full force and effect and neither
Borrower nor, to Borrower's knowledge, any other party to the REA, is in default
thereunder, and to the best of Borrower's knowledge, there are no conditions
which, with the passage of time or the giving of notice, or both, would
constitute a default thereunder. The REA has not been modified, amended or
supplemented.
All of the representations and warranties in this Article 4 and
elsewhere in the Loan Documents (i) shall survive for so long as any portion of
the Debt remains owing to Lender and (ii) shall be deemed to have been relied
upon by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf; provided, however, that, with regard to events or
conditions that occur or arise on the Property before Lender or any other Person
acquires the Property by foreclosure or deed in lieu of foreclosure, the
representations, warranties and covenants set forth in Section 4.21 shall
survive in perpetuity.
ARTICLE 5
COVENANTS
Until the end of the Term, Borrower hereby covenants and agrees with
Lender that:
Section 5.1 Existence. Each of Borrower and Borrower Representative
shall (i) do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its existence, rights, and franchises, (ii)
continue to engage in the business presently conducted by it, (iii) obtain and
maintain all Licenses, and (iv) qualify to do business and remain in good
standing under the laws of each jurisdiction, in each case as and to the extent
required for the ownership, maintenance, management and operation of the
Property.
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Section 5.2 Taxes and Other Charges. Borrower shall pay all Taxes on
or before the last date prior to which any interest, late fees or penalties
would begin to accrue thereon (the "DELINQUENCY DATE")and Other Charges as the
same become due and payable, and deliver to Lender receipts for payment or other
evidence satisfactory to Lender that the Taxes and Other Charges have been so
paid no later than the Delinquency Date (provided, however, that Borrower need
not pay such Taxes nor furnish such receipts for payment of Taxes paid by Lender
pursuant to Section 3.3). Borrower shall not suffer and shall promptly cause to
be paid and discharged any Lien against the Property, and shall promptly pay for
all utility services provided to the Property. After prior notice to Lender,
Borrower, at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application of any Taxes or Other Charges, provided that
(i) no Default or Event of Default has occurred and is continuing, (ii) such
proceeding shall suspend the collection of the Taxes or such Other Charges,
(iii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Borrower is subject and
shall not constitute a default thereunder, (iv) no part of or interest in the
Property will be in danger of being sold, forfeited, terminated, canceled or
lost, (v) Borrower shall have furnished such security as may be required in the
proceeding, or as may be requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon, which
shall not be less than 125% of the Taxes and Other Charges being contested, and
(vi) Borrower shall promptly upon final determination thereof pay the amount of
such Taxes or Other Charges, together with all costs, interest and penalties.
Lender may pay over any such security or part thereof held by Lender to the
claimant entitled thereto at any time when, in the judgment of Lender, the
entitlement of such claimant is established.
Section 5.3 Access to Property. Borrower shall permit agents,
representatives, consultants and employees of Lender to inspect the Property or
any part thereof at reasonable hours upon reasonable advance notice.
Section 5.4 Repairs; Maintenance and Compliance; Alterations.
5.4.1 Repairs; Maintenance and Compliance. Borrower shall at all
times maintain, preserve and protect all franchises and trade names, and
Borrower shall cause the Property to be maintained in a good and safe condition
and repair and shall not remove, demolish or alter the Improvements or Equipment
(except for alterations performed in accordance with Section 5.4.2 and normal
replacement of Equipment with Equipment of equivalent value and functionality).
Borrower shall promptly comply with all Legal Requirements, including, without
limitation, Prescribed Laws, and immediately cure properly any violation of a
Legal Requirement, including, without limitation, Prescribed Laws; provided,
however, that after prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, such Legal Requirement, provided
that (i) no Event of Default has occurred and is continuing; (ii) such
proceeding shall not be prohibited by the provisions of any other instrument to
which Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances; (iii) neither the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost; (iv) Borrower shall promptly upon final determination thereof comply with
such Legal
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Requirement and pay all costs, interest and penalties which may be payable in
connection therewith; and (v) such proceeding shall suspend the requirement of
Borrower to comply with such Legal Requirement. Borrower shall notify Lender in
writing within one Business Day after Borrower first receives notice of any such
non-compliance. Borrower shall promptly repair, replace or rebuild any part of
the Property that becomes damaged, worn or dilapidated and shall complete and
pay for any Improvements at any time in the process of construction or repair.
5.4.2 Alterations. Borrower shall obtain Lender's prior written
consent, which consent shall not be unreasonably withheld or delayed, to any
alterations to the Improvements (including, without limitation, any alterations
pursuant to the REA), the cost of which is reasonably anticipated to exceed
$2,000,000 (the "THRESHOLD AMOUNT") or that will have a material adverse effect
on Borrower's financial condition, the use, operation or value of the Property
or the Net Operating Income with respect to the Property, other than (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the date hereof, (b) tenant improvement work performed pursuant to the
terms and provisions of a Lease executed after the date hereof and not adversely
affecting any structural component of any Improvements, any utility or HVAC
system contained in any Improvements or the exterior of any building
constituting a part of any Improvements (it being understood that the foregoing
provision shall not require Lender's consent to tenants' exterior signage
pursuant to any Lease approved by Lender in accordance with the terms and
provisions of this Agreement) or (c) alterations performed in connection with
the restoration of the Property after the occurrence of a Casualty or
Condemnation in accordance with the terms and provisions of this Agreement. If
Lender fails to respond to a request for consent under this Section 5.4.2 within
ten (10) Business Days of receipt thereof, such consent shall be deemed granted,
provided that such request shall have been accompanied by all information
requested by Lender or reasonably necessary for Lender to evaluate such request
and shall have clearly stated, in 14 point type or greater, that if Lender fails
to respond to such request within ten (10) Business Days, Lender's consent shall
be deemed to have been granted. If Lender refuses to grant such consent, Lender
shall specify in writing the reasons for such refusal. Any approval by Lender of
the plans, specifications or working drawings for alterations of the Property
shall not create responsibility or liability on behalf of Lender for their
completeness, design, sufficiency or their compliance with applicable laws.
Lender may condition any such approval upon receipt of a certificate of
compliance with applicable laws from an independent architect, engineer, or
other Person reasonably acceptable to Lender. If the total unpaid amounts due
and payable with respect to alterations to the Improvements (other than such
amounts to be paid or reimbursed by tenants under the Leases or paid from escrow
accounts established hereunder) shall at any time exceed the Threshold Amount,
Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for Borrower's obligations under the Loan
Documents any of the following: (1) cash, (2) U.S. Treasury securities, (3)
other securities having a rating acceptable to Lender and with respect to which
the applicable Rating Agencies have delivered a Rating Comfort Letter, or (4) a
Letter of Credit. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements (other than
such amounts to be paid or reimbursed by tenants under the Leases or from escrow
accounts established hereunder) over the Threshold Amount. Upon completion of
the alterations to the satisfaction of Lender in its reasonable discretion
Lender shall promptly return to Borrower such additional security.
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Section 5.5 Performance of Other Agreements. Borrower shall observe
and perform each and every term to be observed or performed by it pursuant to
the terms of any agreement or instrument affecting or pertaining to the
Property, including the Loan Documents.
Section 5.6 Cooperate in Legal Proceedings. Borrower shall cooperate
fully with Lender with respect to, and permit Lender, at its option, to
participate in, any proceedings before any Governmental Authority which may in
any way affect the rights of Lender under any Loan Document.
Section 5.7 Further Assurances. Borrower shall, at Borrower's sole
cost and expense, (i) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the Debt and/or for the better and more effective
carrying out of the intents and purposes of the Loan Documents, as Lender may
reasonably require from time to time; and (ii) upon Lender's request therefor
given from time to time after the occurrence of any Default or Event of Default
pay for (a) reports of UCC, federal tax lien, state tax lien, judgment and
pending litigation searches with respect to Borrower and Borrower Representative
and (b) searches of title to the Property, each such search to be conducted by
search firms reasonably designated by Lender in each of the locations reasonably
designated by Lender.
Section 5.8 Environmental Matters.
5.8.1 Environmental Covenants. So long as Borrower owns or is in
possession of the Property, Borrower (i) shall keep or cause the Property to be
kept free from Hazardous Substances except those in compliance with all
Environmental Laws or any permits issued with respect thereto, (ii) shall
promptly notify Lender if Borrower shall become aware of any Hazardous
Substances on the Property and/or if Borrower shall become aware that the
Property is in violation of any Environmental Laws and/or if Borrower shall
become aware of any condition on the Property which shall pose a threat to the
health, safety or welfare of humans, and (iii) shall remove or remediate such
Hazardous Substances and/or cure such violations and/or remove or remediate such
threats, as applicable, as required by law (or as shall be reasonably required
by Lender in the case of removal or remediation which is not required by law,
but in response to the opinion of a licensed hydrogeologist, licensed
environmental engineer or other qualified consultant engaged by Lender
("LENDER'S CONSULTANT") provided that such removal, remediation or cure is
reasonably necessary to eliminate imminent danger to the health, safety or
welfare of humans and would customarily be performed by prudent owners of
properties similar to the Property in similar circumstances), promptly after
Borrower becomes aware of same, at Borrower's sole expense. Notwithstanding
anything to the contrary in this Section, Borrower, Manager and/or tenants on
the Property may use and store ordinary amounts of Hazardous Substances at the
Property if such use or storage is in connection with business supplies used by
Borrower, a tenant in accordance with the terms of its Lease or by Manager
pursuant to the Management Agreement or is in connection with the ordinary
cleaning and maintenance of the Property so long as such use and storage (A)
does not violate any applicable Environmental Laws and (B) is not the subject of
any specific recommendations in the Phase I Report that would prohibit such use
or storage. Nothing herein shall prevent Borrower from recovering such expenses
from any other party that may be liable for such removal or cure. The
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obligations and liabilities of Borrower under this Section 5.8.1 shall survive
any termination, satisfaction, or assignment of the Mortgage and the exercise by
Lender of any of its rights or remedies hereunder, including, without
limitation, the acquisition of the Property by foreclosure or a conveyance in
lieu of foreclosure.
5.8.2 Asbestos. Borrower represents and warrants that, to Borrower's
knowledge, no asbestos or any substance or material containing asbestos
(collectively, "ASBESTOS") is located on the Property except as may have been
disclosed in the Phase I Report delivered to Lender in connection with the Loan.
Borrower shall not install in the Property, nor permit to be installed in the
Property, Asbestos and shall remove any Asbestos promptly upon discovery to the
satisfaction of Lender, at Borrower's sole expense. Borrower shall in all
instances comply with, and ensure compliance by all occupants of the Property
with, all applicable federal, state and local laws, ordinances, rules and
regulations with respect to Asbestos, and shall keep the Property free and clear
of any liens imposed pursuant to such laws, ordinances, rules or regulations. In
the event that Borrower receives any notice or advice from any governmental
agency or any source whatsoever with respect to Asbestos on, affecting or
installed on the Property, Borrower shall promptly notify Lender. The
obligations and liabilities of Borrower under this Section 5.8.2 shall survive
any termination, satisfaction, or assignment of the Mortgage and the exercise by
Lender of any of its rights or remedies thereunder, including but not limited
to, the acquisition of the Property by foreclosure or a conveyance in lieu of
foreclosure.
5.8.3 Environmental Monitoring. Borrower shall give prompt written
notices to Lender of: (a) any proceeding or inquiry by any party with respect to
the presence of any Hazardous Substance or Asbestos on, under, from or about the
Property, (b) all claims made or threatened by any third party against Borrower
or the Property relating to any loss or injury resulting from any Hazardous
Substance or Asbestos, and (c) Borrower's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Property that
could reasonably be expected to cause the Property to be subject to any
investigation or cleanup pursuant to any Environmental Law. Borrower shall
permit Lender to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated with respect to the Property in connection with
any actual or alleged violation of Environmental Law or the presence of
Hazardous Substance at the Property, and Borrower shall pay all reasonable
attorneys' fees and disbursements incurred by Lender in connection therewith.
Upon Lender's request, at any time and from time to time while the Loan is
outstanding but not more frequently than once per calendar year, unless Lender
has determined (in the exercise of its good faith judgment) that reasonable
cause exists for the performance of an environmental inspection or audit of the
Property, Borrower shall provide at Borrower's sole expense, (i) an inspection
or audit of the Property prepared by a licensed hydrogeologist or licensed
environmental engineer approved by Lender indicating the presence or absence of
Hazardous Substances on, in or near the Property, and (ii) an inspection or
audit of the Property prepared by a duly qualified engineering or consulting
firm approved by Lender, indicating the presence or absence of Asbestos on the
Property; provided, however, any such inspection or audit requested by Lender,
during the Term, in excess of one (1) inspection during each five (5) year
period commencing upon the date hereof, shall be performed at Lender's expense
unless an Event of Default exists or Lender has determined (in the exercise of
its good faith judgment) that reasonable cause exists for the performance of an
environmental inspection or audit. If Borrower fails to provide such
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inspection or audit within sixty (60) days after such request Lender may order
same, and Borrower hereby grants to Lender and its employees and agents access
to the Property and a license to undertake such inspection or audit upon
reasonable prior notice to Borrower and in a manner that does not unreasonably
interfere with tenants or occupants thereof. The cost of such inspection or
audit obtained by Lender upon Borrower's failure to do so shall bear interest
from the date such costs are incurred by Lender until paid at the Default Rate
and shall be due and payable by Borrower to Lender within ten (10) days after
the date Lender makes written demand therefor, and if not so paid, may be added
to the Debt. In the event that any environmental site assessment report prepared
in connection with such inspection or audit recommends that an operations and
maintenance plan be implemented for Asbestos or any Hazardous Substance,
Borrower shall cause such operations and maintenance plan to be prepared and
implemented at Borrower's expense upon request of Lender. In the event that any
investigation, site monitoring, containment cleanup, removal, restoration, or
other work of any kind is reasonably necessary under an applicable Environmental
Law (the "REMEDIAL WORK"), Borrower shall promptly commence and thereafter
diligently prosecute to completion all such Remedial Work, provided that in any
event Borrower shall complete such Remedial Work within the time required by
applicable Environmental Law. All Remedial Work shall be performed by
contractors approved in advance by Lender, and under the supervision of a
consulting engineer approved by Lender. All costs and expenses of such Remedial
Work shall be paid by Borrower including, without limitation, Lender's
reasonable attorneys' fees and disbursements incurred in connection with
monitoring or review of such Remedial Work. In the event Borrower shall fail to
timely commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, Lender may, but shall not be required to, cause
such Remedial Work to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall bear interest from the date such costs
are incurred by Lender until paid at the Default Rate and shall be due and
payable by Borrower to Lender within ten (10) days after the date Lender makes
written demand therefor, and if not so paid, may be added to the Debt.
5.8.4 Underground Storage Tanks. Borrower shall not install or
permit to be installed on the Property any underground storage tank.
Section 5.9 Title to the Property. Borrower will warrant and defend
the title to the Property, and the validity and priority of all Liens granted or
otherwise given to Lender under the Loan Documents, subject only to Permitted
Encumbrances, against the claims of all Persons.
Section 5.10 Leases.
5.10.1 Generally.
5.10.2 All Leases shall be subordinate to the Mortgage and the
tenant thereunder shall agree to attorn to Lender either pursuant to the Lease
or a subordination, nondisturbance and attornment agreement executed by such
tenant and Lender. None of the Leases shall contain any option to purchase, any
right of first refusal to purchase or any right to terminate the lease term
(except for termination rights (i) set forth in Leases executed prior to, or on,
the date hereof or (ii) arising from a taking or the destruction of all or
substantially all of the Property or all or substantially all of a tenant's
demised premises). Leases executed after the date hereof shall not contain any
provisions which adversely affect the Property or which might adversely affect
the
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rights of any holder of the Loan without the prior written consent of Lender.
Each tenant shall conduct business only in that portion of the Property covered
by its Lease. Upon request, Borrower shall furnish Lender with executed copies
of all Leases.
5.10.3 Borrower shall not, without the prior consent of Lender,
which consent shall not be unreasonably withheld or conditioned (i) enter into
any Material Lease of all or any part of the Property, (ii) cancel, terminate
(other than as a result of a tenant default thereunder), abridge or otherwise
modify the terms of any Material Lease unless such action is required by the
terms thereof, or accept a surrender thereof, (iii) consent to any assignment of
or subletting under any Material Lease not in accordance with its terms, (iv)
cancel, terminate, abridge or otherwise modify any guaranty of any Material
Lease or the terms thereof, (v) accept prepayments of installments of Rents for
a period of more than one (1) month in advance (other than estimated payments of
reimbursable expenses paid by tenants pursuant to their Leases) or (vi) further
assign the whole or any part of the Leases or the Rents. If Lender fails to
respond to a request for consent under this Section 5.10.3 within ten (10)
Business Days of receipt thereof, such consent shall be deemed granted, provided
that such request shall have been accompanied by all information requested by
Lender or reasonably necessary for Lender to evaluate such request and shall
have clearly stated, in 14 point type or greater, that if Lender fails to
respond to such request within ten (10) Business Days, Lender's consent shall be
deemed to have been granted. In the event that Lender refuses to grant any such
consent, Lender shall specify in writing the reasons for such refusal. In
addition, Borrower shall not (A) lease all or any part of the Property, (B)
cancel, terminate (other than as a result of a tenant default thereunder),
abridge or otherwise modify the terms of any Lease, or accept a surrender
thereof, (C) consent to any assignment of or subletting under any Lease not in
accordance with its terms or (D) cancel, terminate, abridge or otherwise modify
any guaranty of any Lease or the terms thereof, unless such actions are
exercised for a commercially reasonable purpose in arms-length transactions for
market rate terms.
5.10.4 Borrower (i) shall observe and perform all the material
obligations imposed upon the lessor, grantor or licensor, as applicable, under
the Leases and shall not do or permit to be done anything to impair the value of
the Leases as security for the Debt; (ii) shall promptly send copies to Lender
of all notices of default which Borrower shall send or receive thereunder; (iii)
shall enforce all the material terms, covenants and conditions contained in the
Leases upon the part of the lessee, grantee or licensee, as applicable,
thereunder to be observed or performed, short of termination thereof (unless by
reason of default thereunder); (iv) shall not collect any of the Rents (other
than estimated payments of reimbursable expenses paid by tenants pursuant to
their Leases) more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor's interest in the Leases or the Rents; (vi)
shall, upon request of Lender, request and use commercially reasonable efforts
to obtain and deliver to Lender tenant estoppel certificates from each
commercial tenant at the Property in form and substance reasonably satisfactory
to Lender, provided that Borrower shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year; and (vii)
shall execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Property as Lender shall
from time to time reasonably require.
5.10.5 All security deposits of tenants, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and, if
cash, shall be deposited by
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Borrower at such commercial or savings bank or banks, or otherwise held in
compliance with applicable law, as may be reasonably satisfactory to Lender. Any
bond or other instrument which Borrower is permitted to hold in lieu of cash
security deposits under any applicable legal requirements shall be maintained in
full force and effect in the full amount of such deposits unless replaced by
cash deposits as hereinabove described, shall (if issued after the date hereof)
be fully assignable to Lender and shall, in all respects, comply with any
applicable legal requirements and otherwise be reasonably satisfactory to
Lender. Borrower shall, upon request, provide Lender with evidence reasonably
satisfactory to Lender of Borrower's compliance with the foregoing. Following
the occurrence and during the continuance of any Event of Default, Borrower
shall, upon Lender's request, if permitted by any applicable legal requirements,
turn over to Lender the security deposits (and any interest theretofore earned
thereon) with respect to all or any portion of the Property, to be held by
Lender subject to the terms of the Leases.
Section 5.11 Estoppel Statement. After request by Lender, Borrower
shall within ten days furnish Lender with a statement addressed to Lender, its
successors and assigns, duly acknowledged and certified, setting forth (i) the
unpaid Principal, (ii) the Interest Rate, (iii) the date installments of
interest and/or Principal were last paid, (iv) any offsets or defenses to the
payment of the Debt, and (v) that the Loan Documents are valid, legal and
binding obligations and have not been modified or if modified, giving
particulars of such modification.
Section 5.12 Property Management.
5.12.1 Management Agreement. Borrower shall maintain, or cause to be
maintained, the Management Agreement in full force and effect and timely perform
all of Borrower's obligations thereunder and enforce performance of all
obligations of the Manager thereunder, and except as otherwise permitted by the
Loan Documents, not permit the termination or amendment of the Management
Agreement unless the prior written consent of Lender is first obtained, which
consent shall not be unreasonably withheld, conditioned or delayed. Borrower
shall cause the Manager to enter into an assignment and subordination of the
management agreement in form satisfactory to Lender (the "SUBORDINATION OF
MANAGEMENT Agreement"). The Subordination of Management Agreement shall assign
and subordinate the Manager's interests in the Property and all fees and other
rights of the Manager pursuant to the Management Agreement to the rights of
Lender. Upon an Event of Default, Borrower shall, at Lender's request made at
any time while such Event of Default continues, terminate, or cause the
termination of, the Management Agreement. Borrower shall not enter into any
agreement relating to the management of the Property with any party without the
express written consent of Lender (which consent shall not be unreasonably
withheld to the extent that such manager is an affiliate of Borrower); provided,
however, with respect to a new manager such consent may also be conditioned upon
Borrower delivering (i) a Rating Comfort Letter with respect to such new manager
and management agreement, and (ii) evidence satisfactory to Lender (which shall
include, at the request of Lender, a legal non-consolidation opinion acceptable
to Lender) that the single purpose nature and bankruptcy remoteness of Borrower,
its shareholders, partners or members, as the case may be, after the engagement
of the new manager are in accordance with the requirements of the Rating
Agencies. If at any time Lender consents to the appointment of a new manager,
such new manager and Borrower shall, as a condition of Lender's consent, execute
an assignment and subordination of such management agreement in the form then
used by Lender.
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5.12.2 Termination of Manager. Borrower, upon the request of Lender,
shall terminate the Manager, without penalty or fee, if at any time during the
Loans (a) the Manager shall become insolvent or a debtor in any bankruptcy or
insolvency proceeding, (b) there exists an Event of Default for which Lender has
not accepted a cure thereof, (c) the Maturity Date has occurred and the Loans
have not been repaid or (d) the Manager's gross negligence, malfeasance or
willful misconduct or the occurrence of a default by Manager under the
Management Agreement and its continuance beyond any applicable notice or cure
period. At such time as the Manager may be removed pursuant to and in accordance
with the terms and provisions of the Loan Documents, a replacement manager and
management agreement acceptable to Lender and the applicable Rating Agencies in
their sole discretion shall assume management of the Property and shall receive
a property management fee not to exceed the then current market rates.
Section 5.13 Special Purpose Bankruptcy Remote Entity. Borrower
shall at all times be a Special Purpose Bankruptcy Remote Entity. Borrower shall
not, directly or indirectly, make any change, amendment or modification to its
organizational documents, or otherwise take any action which could result in
Borrower not being a Special Purpose Bankruptcy Remote Entity. A "SPECIAL
PURPOSE BANKRUPTCY REMOTE ENTITY" shall have the meaning set forth on Schedule 5
hereto.
Section 5.14 Assumption in Non-Consolidation Opinion. Borrower and
Borrower Representative shall each conduct its business so that the assumptions
(with respect to each Person) made in that certain substantive non-consolidation
opinion letter dated the date hereof delivered by Borrower's counsel in
connection with the Loan, shall be true and correct in all respects.
Section 5.15 Change in Business or Operation of Property. Borrower
shall not purchase or own any real property other than the Property and shall
not enter into any line of business other than the ownership and operation of
the Property, or make any material change in the scope or nature of its business
objectives, purposes or operations, or undertake or participate in activities
other than the continuance of its present business or otherwise cease to operate
the Property as an office property or terminate such business for any reason
whatsoever (other than temporary cessation in connection with renovations to the
Property).
Section 5.16 Debt Cancellation. Borrower shall not cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.
Section 5.17 Affiliate Transactions. Borrower shall not enter into,
or be a party to, any transaction with an Affiliate of Borrower or any of the
members of Borrower except in the ordinary course of business and on terms which
are fully disclosed to Lender in advance and are no less favorable to Borrower
or such Affiliate than would be obtained in a comparable arm's-length
transaction with an unrelated third party.
Section 5.18 Zoning. Borrower shall not initiate or consent to any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result
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in such use becoming a non-conforming use under any zoning ordinance or any
other applicable land use law, rule or regulation, without the prior consent of
Lender.
Section 5.19 No Joint Assessment. Borrower shall not suffer, permit
or initiate the joint assessment of the Property (i) with any other real
property constituting a tax lot separate from the Property, and (ii) with any
portion of the Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.
Section 5.20 Principal Place of Business. Borrower shall not change
its principal place of business or chief executive office without first giving
Lender 30 days' prior notice.
Section 5.21 Change of Name, Identity or Structure. Borrower shall
not change its name, identity (including its trade name or names) or Borrower's
corporate, partnership or other structure without notifying Lender of such
change in writing at least thirty (30) days prior to the effective date of such
change and, in the case of a change in Borrower's structure, without first
obtaining the prior written consent of Lender. Borrower shall execute and
deliver to Lender, prior to or contemporaneously with the effective date of any
such change, any financing statement or financing statement change required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the request of Lender, Borrower shall
execute a certificate in form satisfactory to Lender listing the trade names
under which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect to
the Property.
Section 5.22 Indebtedness. Borrower shall not directly or indirectly
create, incur or assume any indebtedness other than the Debt and unsecured trade
payables incurred in the ordinary course of business relating to the ownership
and operation of the Property which do not exceed, at any time, a maximum amount
of $1,000,000 and are paid within sixty (60) days of the date incurred
(collectively, "PERMITTED INDEBTEDNESS").
Section 5.23 Licenses. Borrower shall not Transfer any License
required for the operation of the Property.
Section 5.24 Compliance with Restrictive Covenants, etc.
Borrower will comply with all of the terms, conditions and provisions of the
REA. Borrower will not amend, modify, supplement, waive in any material respect,
cancel, terminate or release any Operating Agreement, easements, restrictive
covenants or other Permitted Encumbrances, including, without limitation, the
REA (except as specifically provided in Section 10.24(a)(v)), or suffer, consent
to or permit any of the foregoing, without Lender's prior written consent, which
consent may be granted or denied in Lender's sole discretion..
Section 5.25 ERISA.
(1) Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
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(2) Borrower shall not maintain, sponsor, contribute to or become
obligated to contribute to, or suffer or permit any ERISA Affiliate of Borrower
to, maintain, sponsor, contribute to or become obligated to contribute to, any
Plan or any Welfare Plan or permit the assets of Borrower to become "plan
assets," whether by operation of law or under regulations promulgated under
ERISA.
(3) Borrower shall deliver to Lender such certifications or other
evidence from time to time throughout the Term, as requested by Lender in its
sole discretion, that (A) Borrower is not and does not maintain an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or a "governmental plan" within the meaning of Section 3(3) of ERISA;
(B) Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; and (C) one or more of
the following circumstances is true:
(i) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding class
of equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. Section 2510.3-101(c)
or (e).
Section 5.26 Transfers.
5.26.1 Transfers Prohibited. Borrower shall not directly or
indirectly make, suffer or permit the occurrence of any Transfer except as
expressly permitted pursuant to Section 5.26.5 and Section 5.26.6.
5.26.2 Lender's Reliance. Borrower acknowledges that Lender has
examined and relied on the creditworthiness and experience of Borrower in owning
and operating properties such as the Property in agreeing to make the Loan, and
that Lender will continue to rely on Borrower's ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt. Borrower acknowledges that Lender has a valid interest in maintaining the
value of the Property so as to ensure that, should Borrower default in the
repayment of the Debt, Lender can recover the Debt by a sale of the Property.
5.26.3 Transfer Defined. "TRANSFER" shall mean a sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, lease, grant of
options with respect to, or other transfer or disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) the Property or any part thereof
or any legal or beneficial interest therein or a Sale or Pledge of an interest
in any Restricted Party, other than pursuant to Leases of space in the
Improvements to tenants in accordance with the provisions of Section 5.10. A
Transfer shall include, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Property or any part thereof for a
price to be paid in installments; (ii) an agreement by Borrower leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder or a sale, assignment or
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other transfer of, or the grant of a security interest in, Borrower's right,
title and interest in and to any Leases or any Rents; (iii) if a Restricted
Party is a corporation, any merger, consolidation or Sale or Pledge of such
corporation's stock or the creation or issuance of new stock such that more than
ten percent (10%) of such corporation's stock shall be vested in a party or
parties who are not stockholders as of the date hereof; (iv) if a Restricted
Party is a limited or general partnership or joint venture, any merger or
consolidation of such Restricted Party or the change, removal, resignation or
addition of a general partner thereof or the Sale or Pledge of the partnership
interest of any general partner of such Restricted Party or any profits or
proceeds relating to such partnership interest, or the Sale or Pledge of limited
partnership interests of such Restricted Party or any profits or proceeds
relating to such limited partnership interests or the creation or issuance of
new limited partnership interests of such Restricted Party; (v) if a Restricted
Party is a limited liability company, any merger or consolidation of such
Restricted Party or the change, removal, resignation or addition of a managing
member or non-member manager (or if no managing member, any member) of such
Restricted Party or the Sale or Pledge of the membership interest of a managing
member (or if no managing member, any member) of such Restricted Party or any
profits or proceeds relating to such membership interest, or the Sale or Pledge
of non-managing membership interests of such Restricted Party or the creation or
issuance of new non-managing membership interests of such Restricted Party such
that more than ten percent (10%) of such limited liability company's
non-managing membership interest shall be vested in a party or parties who are
not members as of the date hereof; (vi) if a Restricted Party is a trust or
nominee trust, any merger, consolidation or the Sale or Pledge of the legal or
beneficial interest in a Restricted Party or the creation or issuance of new
legal or beneficial interests; or (vii) the removal or the resignation of the
managing agent (including, without limitation, an Affiliated Manager) without
Lender's consent other than in accordance with Section 5.12.
5.26.4 No Impairment Required. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
any Transfer in violation of this Section 5.26 without Lender's consent. This
provision shall apply to every Transfer regardless of whether voluntary or not,
or whether or not Lender has consented to any previous Transfer. Lender's
consent to one Transfer shall not be deemed to be a waiver of Lender's right to
require such consent to any future Transfer. Any Transfer made in contravention
of this Section 5.26 shall be null and void and of no force and effect. Borrower
agrees to bear and shall pay or reimburse Lender on demand for all reasonable
expenses (including, without limitation, reasonable attorneys' fees and
disbursements, title search costs and title insurance endorsement premiums)
incurred by Lender in connection with the review, approval and documentation of
any such Transfer.
5.26.5 Permitted Transfers. Notwithstanding anything to the contrary
contained in this Section 5.26, the following Transfers shall not require the
prior written consent of Lender:
(a) Transfers of direct or indirect interests in any Restricted
Party provided that the following conditions are satisfied:
(i) after taking into account any prior Transfers pursuant to this
subsection, whether to the proposed transferee or otherwise, no such
Transfer (or series of Transfers) shall result in (1) the proposed
transferee, together with all members of his/her immediate
-45-
family or any Affiliates thereof, owning in the aggregate (directly,
indirectly or beneficially) more than forty-nine percent (49%) of the
interests in Borrower (or any entity directly or indirectly holding an
interest in Borrower that is a Restricted Party), or (2) a Transfer in the
aggregate of more than forty-nine percent (49%) of the interests in
Borrower as of the date hereof, except in either case for Transfers to a
direct or indirect interest holder of Borrower as of the date hereof, or
any Affiliate thereof, provided that if reasonably requested by Lender or
if requested by any Rating Agency, Borrower shall deliver a
non-consolidation opinion acceptable to Lender and the Rating Agencies
with respect to such transferee which may be relied upon by Lender, the
Rating Agencies and their respective counsel and successors and assigns;
(ii) after giving effect to such Transfer, the REIT shall continue
to own not less than a fifty-one percent (51%) direct general and/or
limited partnership interest in the OP and the REIT shall continue to
Control Borrower and, subject to the rights of Manager under the
Management Agreement (or any replacement manager under a replacement
management agreement with respect to the Property, each as approved by
Lender in accordance with Section 5.12 of this Agreement), the day-to-day
operations of the Property;
(iii) Borrower shall give Lender notice of such Transfer together
with copies of all instruments effecting such transfer not less than ten
(10) days prior to the date of such Transfer;
(iv) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(v) the single purpose nature and bankruptcy remoteness of
Borrower and its shareholders, partners or members after such transfer,
shall satisfy Lender's then current applicable underwriting criteria and
requirements; and
(vi) Lender shall have received payment of, or reimbursement for,
all costs and expenses incurred by Lender in connection with such Transfer
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
Notwithstanding the foregoing, in the event that such Transfer is by
a limited partner of the OP of such limited partner's limited partnership
interest in the OP, then Borrower shall not be required to satisfy subsections
(a)(iii) or (a)(vi) above so long as Borrower has satisfied subsections (a)(i),
(a)(ii), (a)(iv) and (a)(v) above.
(b) Transfers of direct or indirect interests in any Restricted
Party to a Permitted Institutional Transferee provided that the following
conditions are satisfied:
(i) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(ii) After such Transfer, fifty-one percent (51%) or greater of the
direct or indirect interests of Borrower shall be owned by a Permitted
Institutional Transferee;
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(iii) Borrower shall deliver to Lender a non-consolidation opinion
acceptable to Lender and the Rating Agencies which may be relied upon by
Lender, the Rating Agencies and their respective counsel and successor and
assigns;
(iv) Lender shall have received a Rating Comfort Letter with
respect to such Transfer;
(v) Borrower shall give Lender notice of such transfer together
with copies of all instruments effecting such transfer not less than ten
(10) days prior to the date of such Transfer;
(vi) the single purpose nature and bankruptcy remoteness of
Borrower and its shareholders, partners or members after such Transfer,
shall satisfy Lender's then current applicable underwriting criteria and
requirements; and
(vii) Lender shall have received payment of, or reimbursement for,
all costs and expenses incurred by Lender in connection with such Transfer
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
(c) (A) the Transfer or issuance of any securities, options,
warrants or other interests in the REIT or any entity owning an interest in the
REIT, (B) the merger or consolidation of the REIT or (C) the merger or
consolidation of the OP, provided that in the case of each of (B) and (C) above,
the surviving entity shall be the REIT and/or the OP, as applicable, and after
giving effect to such merger or consolidation, the REIT shall continue to own
not less than a fifty-one percent (51%) direct general and/or limited
partnership interest in the OP and the REIT shall continue to Control Borrower
and, subject to the rights of Manager under the Management Agreement (or any
replacement manager under a replacement management agreement with respect to the
Property, each as approved by Lender in accordance with Section 5.12.1 of this
Agreement), the day to day operations of the Property.
(d) pledges by the REIT, the OP or any entity holding any direct
or indirect interests in the REIT or the OP of their indirect ownership
interests in Borrower to any Permitted Institutional Transferee providing a
corporate line of credit or other financing to the REIT, the OP or any entity
holding any direct or indirect interests in the REIT or the OP, provided that
the indirect interests in Borrower that are pledged as collateral comprise no
more than thirty-three percent (33%) of the total value of the collateral for
such line of credit or other financing, and provided that the following
conditions are met:
(i) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default shall have
occurred and remain uncured; and
(ii) Lender shall have received payment of, or reimbursement for,
all costs and expenses incurred by Lender in connection with such pledges
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
(e) transfers by the REIT, the OP and/or their respective
Affiliates of up to seventy-five percent (75%) of the direct or indirect
ownership interests in Borrower and/or other
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indirect ownership interests in the Property to a Permitted Institutional
Transferee provided that the following conditions are met:
(i) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(ii) Lender shall have received a Rating Comfort Letter with
respect to such Transfer;
(iii) Borrower shall deliver to Lender a non-consolidation opinion
acceptable to Lender and the Rating Agencies which may be relied upon by
Lender, the Rating Agencies and their respective counsel and successor and
assigns;
(iv) the REIT and/or its Affiliates shall continue to act as
property manager and leasing agent and manage the day to day operations of
the Property; and
(v) Lender shall have received payment of, or
reimbursement for, all costs and expenses incurred by Lender in connection
with such transfer (including, but not limited to, reasonable attorneys'
fees and costs and expenses of the Rating Agencies).
(f) the restructuring of the ownership interests in the Property
held by the REIT, the OP or any entity holding any direct or indirect interests
in the REIT or the OP, provided that the following conditions are met:
(i) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(ii) such restructuring does not reduce the REIT's or the OP's
aggregate ownership interests in the Property;
(iii) in the event that such restructuring shall result in any
Person, together with any Affiliates thereof, that prior to such
restructuring, owned in the aggregate (directly, indirectly or
beneficially) less than forty-nine percent (49%) of the interests in
Borrower (or any entity directly or indirectly holding an interest in
Borrower), owning in the aggregate (directly, indirectly or beneficially)
more than forty-nine percent (49%) of the interests in Borrower (or any
entity directly or indirectly holding an interest in Borrower), then
Borrower shall deliver a non-consolidation opinion acceptable to Lender
and the Rating Agencies with respect to such entity which may be relied
upon by Lender, the Rating Agencies and their respective counsel and
successors and assigns;
(iv) In the event that such restructuring requires a new
non-consolidation opinion pursuant to subsection (iii) above, Borrower
shall give Lender notice of such restructuring together with copies of all
instruments effecting such restructuring not less than ten (10) days prior
to the date of such restructuring;
(v) In the event that such restructuring requires a new
non-consolidation opinion pursuant to subsection (iii) above, Lender shall
have received payment of, or reimbursement for, all costs and expenses
incurred by Lender in connection with such
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restructuring (including, but not limited to, reasonable attorneys' fees
and costs and expenses of the Rating Agencies).
(g) pledges of Borrower's interests in equipment and/or personal
property in connection with purchase money financing of such equipment and/or
personal property provided that any indebtedness secured in accordance with the
subsection (g) shall not exceed $250,000.
Lender shall respond to any requests made by Borrower pursuant to this Section
5.26.5 in a prompt manner. In the event that Lender claims that Borrower has not
satisfied any of the requirements of this Section 5.26.5, Lender shall specify
in writing the reason why any conditions are deemed not satisfied.
5.26.6 Transfer and Assumption. (a) Notwithstanding the foregoing,
Borrower shall have a one-time right to Transfer the Property to another party
(the "TRANSFEREE BORROWER") and have the Transferee Borrower assume all of
Borrower's obligations under the Loan Documents, and have replacement guarantors
and indemnitors assume all of the obligations of the indemnitors and guarantors
of the Loan Documents (collectively, a "TRANSFER AND ASSUMPTION"). Borrower may
make a written application to Lender for Lender's consent to the Transfer and
Assumption, subject to the conditions set forth in paragraphs (b) and (c) of
this Section 5.26.6. Together with such written application, Borrower will pay
to Lender the reasonable review fee then required by Lender. Borrower also shall
pay on demand all of the reasonable costs and expenses incurred by Lender,
including reasonable attorneys' fees and expenses, and including the fees and
expenses of Rating Agencies and other outside entities, in connection with
considering any proposed Transfer and Assumption, whether or not the same is
permitted or occurs.
(b) Lender's consent to a Transfer and Assumption, which shall not
be unreasonably withheld, shall be subject to the following conditions:
(i) No Default or Event of Default has occurred and is continuing;
(ii) Borrower has submitted to Lender true, correct and complete
copies of any and all information and documents of any kind requested by
Lender concerning the Property, Transferee Borrower, replacement
guarantors and indemnitors and Borrower;
(iii) Evidence satisfactory to Lender has been provided showing that
the Transferee Borrower and such of its Affiliates as shall be designated
by Lender comply and will comply with Section 5.13 hereof, as those
provisions may be modified by Lender taking into account the ownership
structure of Transferee Borrower and its Affiliates;
(iv) If the Loan, by itself or together with other loans, has been
the subject of a Securitization, then Lender shall have received a Rating
Comfort Letter from the applicable Rating Agencies;
(v) If the Loan has not been the subject of a Securitization, then
Lender shall have determined in its reasonable discretion (taking into
consideration such factors as Lender may determine, including the
attributes of the loan pool in which the Loan might
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reasonably be expected to be securitized) that no rating for any
securities that would be issued in connection with such securitization
will be diminished, qualified, or withheld by reason of the Transfer and
Assumption;
(vi) Borrower shall have paid all of Lender's reasonable costs and
expenses in connection with considering the Transfer and Assumption, and
shall have paid the amount requested by Lender as a deposit against
Lender's costs and expenses in connection with effecting the Transfer and
Assumption;
(vii) Borrower, the Transferee Borrower, and the replacement
guarantors and indemnitors shall have indicated in writing in form and
substance reasonably satisfactory to Lender their readiness and ability to
satisfy the conditions set forth in subsection (c) below; and
(viii) The identity, experience, and financial condition of the
Transferee Borrower and the replacement guarantors and indemnitors shall
be satisfactory to Lender.
(c) If Lender consents to the Transfer and Assumption, the
Transferee Borrower and/or Borrower as the case may be, shall immediately
deliver the following to Lender concurrently with the consummation of such
Transfer and Assumption:
(i) Borrower shall deliver to Lender an assumption fee in the
amount of 1.00% of the then unpaid Principal less any review fees, costs
and expenses previously paid by Borrower pursuant to the provision of
Section 5.26.6(a) and (b)(vi);
(ii) Borrower, Transferee Borrower and the original and replacement
guarantors and indemnitors shall execute and deliver to Lender any and all
documents reasonably required by Lender, in form and substance reasonably
required by Lender, ;
(iii) Counsel to the Transferee Borrower and replacement guarantors
and indemnitors shall deliver to Lender opinions in form and substance
satisfactory to Lender as to such matters as Lender shall require, which
may include opinions as to substantially the same matters and were
required in connection with the origination of the Loan;
(iv) Borrower shall cause to be delivered to Lender, an endorsement
(relating to the change in the identity of the vestee and execution and
delivery of the Transfer and Assumption documents) to the Title Insurance
Policy in form and substance acceptable to Lender, in Lender's reasonable
discretion (the "ENDORSEMENT"); and
(v) Borrower shall deliver to Lender a payment in the amount of
all remaining unpaid costs incurred by Lender in connection with the
Transfer and Assumption, including but not limited to, Lender's reasonable
attorneys fees and expenses, all recording fees, and all fees payable to
the title company for the delivery to Lender of the Endorsement.
Section 5.27 Liens. Without Lender's prior written consent, Borrower
shall not create, incur, assume, permit or suffer to exist any Lien on all or
any portion of the Property or any direct or indirect legal or beneficial
ownership interest in Borrower or Borrower
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Representative, except Liens in favor of Lender and Permitted Encumbrances,
unless such Lien is bonded or discharged within 30 days after Borrower first
receives notice of such Lien.
Section 5.28 Dissolution. Borrower shall not (i) engage in any
dissolution (to the fullest extent such prohibition is permitted by law),
liquidation or consolidation or merger with or into any other business entity,
(ii) engage in any business activity not related to the ownership and operation
of the Property or (iii) transfer, lease or sell, in one transaction or any
combination of transactions, all or substantially all of the property or assets
of Borrower except to the extent expressly permitted by the Loan Documents.
Section 5.29 Expenses. Borrower shall reimburse Lender, within ten
(10) days after demand therefor, for all reasonable out-of-pocket costs and
expenses (including reasonable attorneys' fees and disbursements) incurred by
Lender in connection with the Loan, including (i) the preparation, negotiation,
execution and delivery of the Loan Documents and the consummation of the
transactions contemplated thereby and all the costs of furnishing all opinions
by counsel for Borrower; (ii) Borrower's and Lender's ongoing performance under
and compliance with the Loan Documents, including confirming compliance with
environmental and insurance requirements; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications of or under any Loan Document and any other documents or
matters requested by Lender; (iv) filing and recording of any Loan Documents;
(v) title insurance, surveys, inspections and appraisals; (vi) the creation,
perfection or protection of Lender's Liens in the Property and the Cash
Management Accounts (including fees and expenses for title and lien searches,
intangibles taxes, personal property taxes, Mortgage, recording taxes, due
diligence expenses, travel expenses, accounting firm fees, costs of appraisals,
environmental reports and Lender's Consultant, surveys and engineering reports);
(vii) enforcing or preserving any rights in response to third party claims or
the prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting Borrower, the Loan Documents, the
Property, or any other security given for the Loan; (viii) fees charged by
Rating Agencies in connection with the Loan or any modification thereof; and
(ix) enforcing any obligations of or collecting any payments due from Borrower
under any Loan Document or with respect to the Property or in connection with
any refinancing or restructuring of the Loan in the nature of a "work-out," or
any insolvency or bankruptcy proceedings. Any costs and expenses due and payable
to Lender hereunder which are not paid by Borrower within ten (10) days after
demand therefor may be paid from any amounts in the Deposit Account, with notice
thereof to Borrower. The obligations and liabilities of Borrower under this
Section 5.29 shall survive the Term and the exercise by Lender of any of its
rights or remedies under the Loan Documents, including the acquisition of the
Property by foreclosure or a conveyance in lieu of foreclosure.
Section 5.30 Indemnity. Borrower shall defend, indemnify and hold
harmless Lender and each of its Affiliates and their respective successors and
assigns, including the directors, officers, partners, members, shareholders,
participants, employees, professionals and agents of any of the foregoing
(including any Servicer) and each other Person, if any, who Controls Lender, its
Affiliates or any of the foregoing (each, an "INDEMNIFIED PARTY"), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for an Indemnified Party in connection with any
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investigative, administrative or judicial proceeding commenced or threatened,
whether or not Lender shall be designated a party thereto, court costs and costs
of appeal at all appellate levels, investigation and laboratory fees, consultant
fees and litigation expenses), that may be imposed on, incurred by, or asserted
against any Indemnified Party (collectively, the "INDEMNIFIED LIABILITIES") in
any manner, relating to or arising out of or by reason of the Loan, including:
(i) any breach by Borrower of its obligations under, or any misrepresentation by
Borrower contained in, any Loan Document; (ii) the use or intended use of the
proceeds of the Loan; (iii) any information provided by or on behalf of
Borrower, or contained in any documentation approved by Borrower; (iv) ownership
of the Mortgage, the Property or any interest therein, or receipt of any Rents;
(v) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (vi) any use,
nonuse or condition in, on or about the Property or on adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (vii)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property; (viii) the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release, or threatened release
of any Hazardous Substance on, from or affecting the Property; (ix) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Substance; (x) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Substance; (xi) any violation of the Environmental Laws which is based upon or
in any way related to such Hazardous Substance, including the costs and expenses
of any Remedial Work; (xii) any failure of the Property to comply with any Legal
Requirement; (xiii) any claim by brokers, finders or similar persons claiming to
be entitled to a commission in connection with any Lease or other transaction
involving the Property or any part thereof, or any liability asserted against
Lender with respect thereto; and (xiv) the claims of any lessee of any portion
of the Property or any Person acting through or under any lessee or otherwise
arising under or as a consequence of any Lease; provided, however, that Borrower
shall not have any obligation to any Indemnified Party hereunder to the extent
that it is finally judicially determined that such Indemnified Liabilities arise
from the gross negligence, illegal acts, fraud or willful misconduct of such
Indemnified Party. Any amounts payable to any Indemnified Party by reason of the
application of this Section 5.30 shall be payable on demand and shall bear
interest at the Default Rate from the date loss or damage is sustained by any
Indemnified Party until paid. The obligations and liabilities of Borrower under
this Section 5.30 shall survive the Term and the exercise by Lender of any of
its rights or remedies under the Loan Documents, including the acquisition of
the Property by foreclosure or a conveyance in lieu of foreclosure.
ARTICLE 6
NOTICES AND REPORTING
Section 6.1 Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document (a "NOTICE")
shall be given in writing and shall be effective for all purposes if either hand
delivered with receipt acknowledged, or by a nationally recognized overnight
delivery service (such as Federal Express), or by certified or registered United
States mail, return receipt requested, postage prepaid, or by facsimile and
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confirmed by facsimile answer back, in each case addressed as follows (or to
such other address or Person as a party shall designate from time to time by
notice to the other party):
If to Lender:
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage Loan Department
Telecopier (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower:
▇▇▇▇▇▇▇ Properties - 611 N. Brand LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III and ▇▇▇▇ ▇. Lammas, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇.
A notice shall be deemed to have been given: (i) in the case of hand
delivery, at the time of delivery; (ii) in the case of registered or certified
mail, when delivered or the first attempted delivery on a Business Day; (iii) in
the case of overnight delivery, upon the first attempted delivery on a Business
Day; or (iv) in the case of facsimile, upon the confirmation of such facsimile
transmission. Any party may change the address to which any such Notice is
delivered, by furnishing ten (10) days written notice of such change to the
other parties in accordance with the provisions of this Section 6.1. Notice for
either party may be given by its respective counsel.
Section 6.2 Borrower Notices and Deliveries. Borrower shall (a) give
prompt written notice to Lender of: (i) any litigation, governmental proceedings
or claims or investigations pending or threatened against Borrower or Borrower
Representative which might materially adversely affect Borrower's or Borrower
Representative's condition (financial or
-53-
otherwise) or business or the Property; (ii) any material adverse change in
Borrower's or Borrower Representative's condition, financial or otherwise, or of
the occurrence of any Default or Event of Default of which Borrower has
knowledge; and (b) furnish and provide to Lender: (i) any Securities and
Exchange Commission or other public filings, if any, of Borrower, Borrower
Representative, Manager, or any Affiliate of any of the foregoing within two (2)
Business Days of such filing and (ii) all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, reasonably
requested, from time to time, by Lender. In addition, after request by Lender
(but no more frequently than twice in any year), Borrower shall furnish to
Lender (x) within ten days, a certificate addressed to Lender, its successors
and assigns reaffirming all representations and warranties of Borrower set forth
in the Loan Documents as of the date requested by Lender or, to the extent of
any changes to any such representations and warranties, so stating such changes,
and (y) within 30 days, tenant estoppel certificates addressed to Lender, its
successors and assigns from each tenant at the Property in form and substance
reasonably satisfactory to Lender.
Section 6.3 Financial Reporting.
6.3.1 Financial Statements. The financial statements heretofore
furnished to Lender are, as of the dates specified therein, complete and correct
in all material respects and fairly present in all material respects the
financial condition of Borrower and any other persons or entities that are the
subject of such financial statements, and are prepared in accordance with GAAP.
Since the date of such financial statements, there has been no materially
adverse change in the financial condition, operation or business of Borrower
from that set forth in said financial statements.
6.3.2 Quarterly Reports. Borrower will maintain full and accurate
books of accounts and other records reflecting the results of the operations of
the Property and will furnish to Lender on or before forty-five (45) days after
the end of each calendar quarter the following items, each certified by Borrower
as being true and correct in all material respects: (i) a written statement
(rent roll) dated as of the last day of each such calendar quarter identifying
each of the Leases (excluding subleases) by the term, space occupied, rental
required to be paid, security deposit paid, any rental concessions, and a report
identifying any defaults or payment delinquencies thereunder; (ii) monthly and
year to date operating statements prepared for each calendar month during each
such calendar quarter, noting Net Operating Income, Gross Income from
Operations, and Operating Expenses, and including an itemization of actual (not
pro forma) capital expenditures and other information necessary and sufficient
under generally accepted accounting practices to fairly represent the financial
position and results of operation of the Property during such calendar month,
all in form satisfactory to Lender; (iii) a property balance sheet for each such
calendar quarter; (iv) a comparison of the budgeted income and expenses and the
actual income and expenses for year to date together with a detailed explanation
of any variances of five percent (5%) or more between budgeted and actual
amounts for such year to date period; and (v) a calculation reflecting the Debt
Service Coverage Ratio as of the last day of each such calendar quarter. Until a
Securitization has occurred, Borrower shall furnish monthly each of the items
listed in the immediately preceding sentence within thirty (30) days after the
end of such month.
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6.3.3 Annual Reports. Within one hundred twenty (120) days following
the end of each calendar year (provided, however, if requested by Lender,
Borrower shall use commercially reasonable efforts to provide Lender with any
unaudited annual statements prior to such date), Borrower shall furnish
statements of its financial affairs and condition including a balance sheet and
a statement of profit and loss for Borrower in such detail as Lender may
reasonably request, and setting forth the financial condition and the income and
expenses for the Property for the immediately preceding calendar year, which
statements shall be prepared by Borrower. Borrower's annual financial statements
shall include (x) a list of the tenants, if any, occupying more than twenty
(20%) percent of the total floor area of the Improvements, and (y) a breakdown
showing the year in which each Lease then in effect expires and the percentage
of total floor area of the Improvements and the percentage of base rent with
respect to which Leases shall expire in each such year, each such percentage to
be expressed on both a per year and a cumulative basis. Borrower's annual
financial statements shall be accompanied by a certificate executed by a
financial officer of Borrower or the REIT, as applicable, stating that each such
annual financial statement presents fairly the financial condition of the
Property being reported upon and shall be audited by a "Big Four" accounting
firm or other independent certified public accountant reasonably acceptable to
Lender, which audited financial statements may be in the form of schedules to
the audited consolidated financial statements of the REIT. Each such annual
financial statement shall be prepared in accordance with GAAP. At any time and
from time to time Borrower shall deliver to Lender or its agents such other
financial data as Lender or its agents shall reasonably request with respect to
the ownership, maintenance, use and operation of the Property.
6.3.4 Annual Budget. Not later than each December 15 during the term
of the Loans, Borrower shall submit to Lender a detailed budget (an "ANNUAL
BUDGET") for the Property covering the calendar year commencing on the following
January 1, each of which budgets shall be subject to Lender's approval, not to
be unreasonably withheld, (provided that Borrower shall have the option to
submit to Lender a revised budget not later than June 30 of each year during the
term of the Loans to adjust such budget on the basis of the actual results of
Borrower to such point in such calendar year) (each such budget, when so
approved, is referred to as an "APPROVED ANNUAL BUDGET"). Until such time that
Lender approves a proposed Annual Budget, Borrower may operate under the most
recently Approved Annual Budget (adjusted to reflect actual increases in real
estate taxes, insurance premiums, utilities expenses, labor costs, interest and
other fixed costs with respect to the ownership, operation and financing of the
Property).
ARTICLE 7
INSURANCE; CASUALTY; AND CONDEMNATION
Section 7.1 Insurance.
7.1.1 Coverage. Borrower shall maintain insurance for Borrower and
the Property providing at least the following coverages:
(a) comprehensive all risk insurance on the Improvements and the
Equipment, including contingent liability from Operation of Building Laws,
Demolition Costs and Increased
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Cost of Construction Endorsements, in each case (A) in an amount equal to the
greater of (x) one hundred percent (100%) of the "FULL REPLACEMENT COST," which
for purposes of this Agreement shall mean actual replacement value (exclusive of
costs of excavations, foundations, underground utilities and footings) with a
waiver of depreciation and (y) the original principal amount of the Loan; (B)
containing an agreed amount endorsement with respect to the Improvements and
Equipment waiving all co-insurance provisions; (C) providing for no deductible
in excess of $50,000; and (D) containing an "Ordinance or Law Coverage" or
"Enforcement" endorsement if any of the Improvements or the use of the Property
shall at any time constitute legal non-conforming structures or uses. In
addition, Borrower shall obtain: (x) Flood Insurance in an amount of not less
than $25,000,000 each occurrence; (y) earthquake insurance in an amount at least
equal to one multiplied by a Probable Maximum Loss of 11% of total replacement
value and a deductible of 5% of the Total Insured Value (which includes annual
rental value) at the Property, and otherwise in form and substance reasonably
satisfactory to Lender; and (z) coastal windstorm insurance in amounts and in
form and substance satisfactory to Lender in the event the Property is located
in any coastal region, provided that the insurance pursuant to clauses (x), (y)
and (z) hereof shall be on terms consistent with the comprehensive all risk
insurance policy required under this subsection (a) and rental interruption
insurance under subsection (c);
(b) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Property, such insurance (A) to be on the so-called "occurrence" form
with a combined limit of not less than Two Million and No/100 Dollars
($2,000,000) in the aggregate and One Million and No/100 Dollars ($1,000,000)
per occurrence; (B) to continue at not less than the aforesaid limit until
required to be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least the
following hazards: (1) premises and operations; (2) products and completed
operations on an "if any" basis; (3) independent contractors; (4) blanket
contractual liability for all legal contracts; and (5) liability that may arise
from acts of terrorism;
(c) rental interruption insurance (A) with loss payable to Lender
(allowing reimbursement to Borrower for reasonable operating costs during the
interruption); (B) covering all risks required to be covered by the insurance
provided for in subsection (a) above; (C) containing an unlimited period of
restoration and extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and Equipment has been repaired, the
continued loss of rental income will be insured until such rental income either
returns to the same level it was at prior to the loss, or the expiration of
twelve (12) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period, provided that the unlimited
period of restoration endorsement may be limited to the length of time required
with the exercise of due diligence and dispatch to rebuild, repair or replace
the damaged or destroyed property; and (D) in an amount equal to one hundred
percent (100%) of the projected gross income from the Property for a period of
twelve (12) months from the date that the Property is repaired or replaced and
operations are resumed. The amount of such rental interruption insurance shall
be determined prior to the date hereof and at least once each year thereafter
based on Borrower's reasonable estimate of the gross income from the Property
for the succeeding twelve (12) month period. Subject to the rights of Lender and
subject to the
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provisions of Section 7.4.1(j) below, all proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained shall be deemed
to relieve Borrower of its obligations to pay the obligations secured by the
Loan Documents on the respective dates of payment provided for in the Note and
the other Loan Documents except to the extent such amounts are actually paid out
of the proceeds of such rental interruption insurance;
(d) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
property coverage form does not otherwise apply, (A) owner's contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (a) above written in a
so-called builder's risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to subsections (a) and (c) above, (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(e) Worker's Compensation insurance, as required by any
governmental authority or any Legal Requirements and Employer's Liability
Insurance of not less than One Million and No/100 Dollars ($1,000,000) for each
occurrence;
(f) comprehensive boiler and machinery insurance in an amount of
not less than Fifty Million and No/100 Dollars ($50,000,000) each occurrence on
terms consistent with the commercial property insurance policy required under
subsections (a) and (c) above;
(g) umbrella liability insurance in an amount not less than One
Hundred Million and No/100 Dollars ($100,000,000) per occurrence, on terms
consistent with the commercial general liability insurance policy required under
subsection (b) above, on a portfolio basis naming the Property and all other
properties owned by the OP and/or its Affiliates; provided, that such insurance
may be provided under a blanket insurance Policy so long as the coverage
required pursuant to this clause is not reduced below the per occurrence limit
set forth in this clause;
(h) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, of Five Million and No/100 Dollars
($5,000,000);
(i) if the Property is or becomes a legal "non-conforming" use,
ordinance or law coverage and insurance coverage to compensate for the cost of
demolition or rebuilding of the undamaged portion of the Property along with any
reduced value and the increased cost of construction in amounts as requested by
Lender;
(j) if "certified acts of terrorism", as declared by the United
States Government, are now or hereafter excluded from Borrower's comprehensive
all risk insurance policy or business income coverage, Borrower shall obtain an
endorsement to such policies, or separate policies, insuring against all such
"certified acts of terrorism" (such acts or events so excluded, "TERRORISM
ACTS", at Borrower's option, either (A) in an amount not less than Three
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and No/100 Dollars ($300,000,000) on an aggregate basis covering
the Property and all other properties owned by the OP and/or its Affiliates and
providing for a deductible not exceeding $1,000,000.00 or (B) in a total amount
not less than Three Hundred and Fifty Million and No/100 Dollars ($350,000,000)
on an aggregate basis covering the Property and all other properties owned by
the OP and/or its Affiliates as of the date hereof and providing for a
deductible of not in excess of 5% of the full replacement value of the Property;
in either case, the endorsement or policy shall be (x) in form and substance
reasonably satisfactory to Lender; and (y) non-cancelable (to the extent such
non-cancelable insurance is available in the marketplace) (insurance meeting
such requirements being referred to herein as "FULL COVERAGE"); provided
Borrower shall not be required to spend in excess of Three Million and No/100
Dollars ($3,000,000.00) per annum for such coverage and, in the event that Full
Coverage is not available at a cost of $3,000,000 per annum, then Borrower shall
purchase insurance covering Terrorism Acts in an amount equal to the principal
balance of the Loan, but shall not be required to maintain the full amount of
such coverage if such coverage is not available at a cost of $3,000,000 per
annum or less, provided that in the event that $3,000,000 is not sufficient to
purchase such coverage in an amount equal to the principal balance of the Loan,
then Borrower shall obtain the greatest amount of coverage obtainable at a cost
of $3,000,000 per annum;
In the event that the limits of insurance in place covering Terrorism Acts on a
portfolio basis are exhausted by damage to a property other than the Property,
then Borrower shall restore the coverage provided for in clause (x) above (or
any lesser amount of coverage that is available if such coverage is not
available), to the extent such insurance is commercially available; and
(k) upon sixty (60) days' written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the Property located in or
around the region in which the Property is located.
7.1.2 Policies. All insurance provided for in Section 7.1.1 shall be
obtained under valid and enforceable policies (collectively, the "POLICIES" or
in the singular, the "POLICY" and shall be subject to the reasonable approval of
Lender as to insurance companies, amounts, deductibles, loss payees and
insureds. The Policies (or a "cut-through" endorsement, approved by Lender, with
respect to any such Policy) shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and, except in the
case of flood hazard insurance and earthquake insurance, having either (i) a
claims paying ability rating of "A" or better by S&P and an equivalent rating by
▇▇▇▇▇'▇ or (ii) if the Policies are provided through a syndicate of companies,
(A) at least 75% of the coverage and first layer of coverage shall have a claims
paying ability rating of "A, X" or better (and the equivalent thereof) by A.M.
Best's Key Rating Guide ("BEST"), (B) no more than 15% of the Policies shall
have a claims paying ability rating of "A, VIII" or less by Best and (C) no more
than 10% of the Policies shall have a claims paying ability rating of "A-, VII"
or less by Best's. The Policies described in Section 7.1.1 (other than those
strictly limited to liability protection) shall designate Lender as loss payee
and Lender shall be an additional named insured, as its interests may appear.
Not less than ten (10) days prior to the expiration dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder shall be delivered by Borrower to Lender.
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7.1.3 Insurance Premiums. Subject to the provisions of Section 3.3
hereof, Borrower shall pay the premiums for such Policies (the "INSURANCE
PREMIUMS") as the same become due and payable and shall furnish to Lender
evidence of the renewal of each of the Policies with receipts for the payment of
the Insurance Premiums or other evidence of such payment reasonably satisfactory
to Lender (provided, however, that Borrower is not required to furnish such
evidence of payment to Lender in the event that such Insurance Premiums have
been paid by Lender pursuant to Section 3.3 hereof). If Borrower is required to
furnish such evidence and receipts pursuant to the preceding sentence and
Borrower does not furnish such evidence and receipts at least fifteen (15) days
prior to the expiration of any expiring Policy, then Lender may procure, but
shall not be obligated to procure, such insurance and pay the Insurance Premiums
therefor, and Borrower agrees to reimburse Lender for the cost of such Insurance
Premiums promptly on demand. Within thirty (30) Business Days after request by
Lender, Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices of owners of property similar to the Property
located in or around the region in which the Property is located and as may be
available at commercially reasonable rates. Lender acknowledges that the
Policies, delivered with respect to the Property as of the date hereof satisfy
the requirements of this Section 7. Such approval shall continue in effect until
the expiration or termination of such Policies, provided that there is not a
downgrade by S&P, ▇▇▇▇▇'▇ or Best of any insurer providing such Policies and, as
a result thereof, Borrower fails to satisfy the rating criteria set forth in
Section 7.1.2. Any renewal or replacement of such Policies, however, shall
require Lender's approval as provided above in this Section 7.1.2 unless (i) the
companies providing such renewal or replacement Policies are licensed to do
business in the state where the Property is located and have a claims paying
ability rating by S&P, ▇▇▇▇▇'▇ and Best's Insurance Reports that satisfy the
requirements set forth in Section 7.1.2 above or that, subject to the provisions
of Section 7.1.5 below, such rating is no less than the rating as of the date
hereof of the company providing the insurance approved by Lender as of the date
hereof, (ii) the coverage provided by such renewal or replacement Policies is no
less than the coverage approved by Lender as of the date hereof, (iii) such
renewal or replacement Policies contain in all material respects the same terms
and conditions as the Policies approved by Lender as of the date hereof and (iv)
Lender has not notified Borrower in accordance with this Section 7.1 that the
requirements for the Policies have changed since the date hereof.
7.1.4 Blanket Policies. The insurance coverage required under this
Section 7.1 may be effected under one or more blanket Policies covering the
Property and other property and assets not constituting a part of the Property;
provided that any blanket Policy shall specify, except in the case of general
liability insurance, the portion of the total coverage of such blanket Policy
that is allocated exclusively to the Property and shall comply in all respects
with the requirements of this Section 7. Lender hereby confirms that it approves
(i) the terms of the existing Property Insurance Sharing Agreement among
Borrower and certain of its Affiliates, and (ii) that the Insurance Premiums are
financed through one or more finance companies (individually and/or
collectively, the "BLANKET INSURANCE PREMIUM FINANCING ARRANGEMENT") to whom
Borrower pays Borrower's allocable share of the annual initial deposit and the
monthly payments due for each blanket Policy to the applicable finance company
(with respect to each blanket Policy, such monthly payment, together with
one-twelfth (1/12th) of the allocable share
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of the annual initial deposit necessary to accumulate such allocable share for
such Policy at least thirty (30) days prior to its due date, each, a "FINANCING
INSTALLMENT").
7.1.5 Factory Mutual. Notwithstanding anything to the contrary
contained in this Section 7, Lender shall accept an "all-risk" Policy issued by
Factory Mutual Insurance Company ("FACTORY MUTUAL"), so long as (I) Factory
Mutual maintains a general policy rating of "BBB" or better and a financial
class of "XIV" or better by Best and a claims paying ability rating of "A+" or
better by Fitch, and (II) in connection with any Securitization, Lender confirms
that, in Lender's reasonable determination based on information provided by any
Rating Agency, the ratings assigned to the portion of the Securitization
represented by the Loan will not be adversely affected as a result of such
"all-risk" Policy being issued by Factory Mutual. In the event that both of the
conditions set forth in clause (I) and (II) above are not being met at all
times, then Borrower shall at all times, at its sole cost and expense, maintain
an "all risk" policy that is otherwise in compliance with all of the applicable
provisions of this Section 7 and applicable Rating Agency requirements; provided
that Borrower shall have thirty (30) days (or such shorter period if the
existing policies would lapse prior to the end of such 30-day period) after the
earlier of (A) the failure of the condition in clause (I) above or (B) the date
Lender notifies Borrower of Lender's confirmation pursuant to clause (II) above
to obtain an "all risk" Policy meeting such applicable provisions and
requirements (which may be obtained through the issuance of a so-called
"cut-through" endorsement).
Section 7.2 Casualty.
7.2.1 Notice; Restoration. If the Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a "CASUALTY"),
Borrower shall give prompt notice thereof to Lender. Following the occurrence of
a Casualty, Borrower, regardless of whether insurance proceeds are available,
shall promptly proceed to restore, repair, replace or rebuild the same to be of
at least equal value and of substantially the same character as prior to such
damage or destruction (a "CASUALTY RESTORATION"), all to be effected in
accordance with applicable law
7.2.2 Settlement of Proceeds. If a Casualty covered by any of the
Policies (an "INSURED CASUALTY") occurs where the loss does not exceed
$1,000,000, provided no Default or Event of Default has occurred and is
continuing, Borrower may settle and adjust any claim without the prior consent
of Lender; provided such adjustment is carried out in a competent and timely
manner, and Borrower is hereby authorized to collect and receipt for the
Insurance Proceeds (as hereinafter defined). In the event of an Insured Casualty
where the loss exceeds $1,000,000 (a "SIGNIFICANT CASUALTY"), Lender may, in its
sole discretion, settle and adjust any claim without the consent of Borrower and
agree with the insurer(s) in a commercially reasonable manner on the amount to
be paid on the loss, and the Proceeds shall be due and payable solely to Lender
and held by Lender in the Casualty/Condemnation Subaccount and disbursed in
accordance herewith. If Borrower or any party other than Lender is a payee on
any check representing Proceeds with respect to a Significant Casualty, Borrower
shall immediately endorse, and cause all such third parties to endorse, such
check payable to the order of Lender. Borrower hereby irrevocably appoints
Lender as its attorney-in-fact, coupled with an interest, to endorse such check
payable to the order of Lender. The expenses incurred by Lender in the
settlement, adjustment and collection of the Proceeds shall become part of the
Debt and shall be reimbursed by Borrower to Lender within ten (10) days
following demand. Notwithstanding
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anything to the contrary contained herein, if in connection with a Casualty any
insurance carrier makes a payment under a property insurance Policy that
Borrower proposes be treated as business or rental interruption insurance, then,
notwithstanding any designation (or lack of designation) by the insurance
carrier as to the purpose of such payment, as between Lender and Borrower, such
payment shall not be treated as business or rental interruption insurance
proceeds unless Borrower has demonstrated to Lender's reasonable satisfaction
that the remaining net Proceeds that will be received from the property
insurance carriers are sufficient to pay 100% of the cost of fully restoring the
Improvements or, if such net Proceeds are to be applied to repay the Debt in
accordance with the terms hereof, that such remaining net Proceeds, together
with any portion of the amount treated as business or rental interruption
insurance that will be paid to Lender, will be sufficient to pay the Debt in
full.
Section 7.3 Condemnation.
7.3.1 Notice; Restoration. Borrower shall promptly give Lender
written notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding (a "CONDEMNATION") and shall deliver to Lender copies
of any and all papers served in connection with such Condemnation. Following the
occurrence of a Condemnation, Borrower, regardless of whether an Award
(hereinafter defined) is available, shall promptly proceed to restore, repair,
replace or rebuild the same to the extent practicable to be of at least equal
value and of substantially the same character as prior to such Condemnation (a
"CONDEMNATION RESTORATION", together with a Casualty Restoration, collectively a
"RESTORATION"), all to be effected in accordance with applicable law.
7.3.2 Collection of Award. Lender is hereby irrevocably appointed as
Borrower's attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and retain any award or payment ("AWARD") for any taking
accomplished through a Condemnation (a "TAKING") and to make any commercially
reasonable compromise or settlement in connection with any such Condemnation,
subject to the provisions of this Agreement. Notwithstanding the foregoing,
Borrower shall have the right, provided no Default or Event of Default has
occurred and is continuing, to compromise and collect or receive any award that
does not exceed $1,000,000. Notwithstanding any Taking by any public or
quasi-public authority (including, without limitation, any transfer made in lieu
of or in anticipation of such a Taking), Borrower shall continue to pay the Debt
at the time and in the manner provided for in the Note, in this Agreement and
the other Loan Documents and the Debt shall not be reduced unless and until any
Award shall have been actually received and applied by Lender to expenses of
collecting the Award and to discharge of the Debt. Lender shall not be limited
to the interest paid on the Award by the condemning authority but shall be
entitled to receive out of the Award interest at the rate or rates provided in
the Note. Borrower shall cause any Award that is payable to Borrower to be paid
directly to Lender. The expenses incurred by Lender in the adjustment and
collection of the Award shall become part of the Debt and be secured hereby and
shall be reimbursed by Borrower to Lender within ten (10) days after the date
Lender makes written demand therefor.
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Section 7.4 Application of Proceeds or Award.
7.4.1 Application to Restoration. The following provisions shall
apply in connection with the Restoration of the Premises and Improvements:
(a) If the Net Proceeds shall be less than $1,000,000 and the
costs of completing the Restoration shall be less than $1,000,000, the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all
of the conditions set forth in Section 7.4.1(c)(i) are met and Borrower delivers
to Lender a written undertaking to expeditiously commence and to satisfactorily
complete with due diligence the Restoration in accordance with the terms of this
Agreement.
(b) If the Net Proceeds are equal to or greater than $1,000,000 or
the costs of completing the Restoration is equal to or greater than $1,000,000
Lender shall make the Net Proceeds available for the Restoration in accordance
with the provisions of this Section 7.4. The term "NET PROCEEDS" shall mean: (A)
the net amount of all insurance proceeds received by Lender pursuant to Section
7.1.1(a), (d), (f), (i) and (j) (and any similar or comparable types of
insurance obtained pursuant to Section 7.1.1(i) as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same
("INSURANCE PROCEEDS"), or (B) the net amount of the Award, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, actually incurred in collecting same ("CONDEMNATION
PROCEEDS"), whichever the case may be.
(c) The Net Proceeds shall be made available to Borrower for
Restoration provided that each of the following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
(ii) (1) in the event the Net Proceeds are Insurance Proceeds, less
than thirty percent (30%) of the total floor area of the Improvements has
been damaged, destroyed or rendered unusable as a result of such fire or
other casualty or (2) in the event the Net Proceeds are Condemnation
Proceeds, less than fifteen percent (15%) of the land constituting the
Premises is taken, and such land is located along the perimeter or
periphery of the Premises, and no portion of the Improvements is located
in such land;
(iii) The Required Leases and Leases demising in the aggregate a
percentage amount equal to or greater than the Rentable Space Percentage
of the total rentable space in the Improvements shall remain in full force
and effect during and after the completion of the Restoration,
notwithstanding the occurrence of any such fire or other casualty or
taking, whichever the case may be, and will require the tenants thereunder
to make all necessary repairs and restorations thereto at their sole cost
and expense. The term (x) "RENTABLE SPACE PERCENTAGE" shall mean (1) in
the event the Net Proceeds are Insurance Proceeds, a percentage amount
equal to seventy-five percent (75%) and (2) in the event the Net Proceeds
are Condemnation Proceeds, a percentage amount equal to seventy-five
percent (75%) which Rentable Space Percentage shall, in each case, include
each of the Required Leases. The "REQUIRED LEASES" shall mean,
collectively, the
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Leases with Disney, Bank of America and Time Warner or any replacement
Lease executed and delivered in accordance with the terms and provisions
of Section 5.10 hereof with respect to the space demised to any of the
foregoing tenants, provided such replacement Lease is a Material Lease;
(iv) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than ninety (90) days after such damage
or destruction or taking, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion;
(v) Lender shall be reasonably satisfied that any operating
deficits, including all scheduled payments of principal and interest under
the Note, which will be incurred with respect to the Property as a result
of the occurrence of any such fire or other casualty or taking, whichever
the case may be, will be covered out of (1) the Net Proceeds, (2) the
insurance coverage referred to in Section 7.1.1(c), if applicable, or (3)
by other funds of Borrower;
(vi) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months prior
to the Maturity Date, (2) the earliest date required for such completion
under the terms of any Required Lease, (3) such time as may be required
under applicable zoning law, ordinance, rule or regulation in order to
repair and restore the Property to the condition it was in immediately
prior to such fire or other casualty or to as nearly as possible the
condition it was in immediately prior to such taking, as applicable or (4)
the expiration of the insurance coverage referred to in Section 7.1.1(c);
(vii) the Property and the use thereof after the Restoration will be
in compliance with and permitted under all applicable zoning laws,
ordinances, rules and regulations and all necessary operating or
reciprocal easement agreements for the operation and maintenance of the
Property are, or remain, in effect;
(viii) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable
governmental laws, rules and regulations (including, without limitation,
all applicable environmental laws); and
(ix) such fire or other casualty or taking, as applicable, does not
result in a material loss of access to the Property.
(d) Unless such amounts are payable to Borrower pursuant to
Section 7.2 or 7.3, the Net Proceeds shall be held by Lender in an
interest-bearing account for the benefit of Borrower (which interest shall be
added to and become a part of the Net Proceeds) and, until disbursed in
accordance with the provisions of this Section 7.4, shall constitute additional
security for the Debt and other obligations under the Loan Documents. The Net
Proceeds shall be disbursed by Lender 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 (A) all materials installed and work and
labor performed (except to the extent that they are to be paid for out of the
requested disbursement) in connection with the Restoration have been paid for in
full, and
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(B) there exist no notices of pendency, stop orders, mechanic's or materialman's
liens or notices of intention to file same, or any other liens or encumbrances
of any nature whatsoever on the Property arising out of the Restoration which
have not either been fully bonded to the satisfaction of Lender and discharged
of record or in the alternative fully insured to the reasonable satisfaction of
Lender by the title company issuing the title insurance policy.
(e) All plans and specifications required in connection with any
Restoration following a Casualty or Condemnation resulting in Net Proceeds of
$2,000,000 or more shall be subject to prior review and reasonable acceptance in
all respects by Lender and by an independent consulting engineer selected by
Lender (the "CASUALTY CONSULTANT") provided that if the correspondence from
Borrower to Lender requesting approval of any such plans and specifications (or
contractors, subcontractors or materialmen in connection therewith) contains a
bold faced, conspicuous legend at the top of the first page stating that "IF YOU
FAIL TO RESPOND TO THIS REQUEST FOR APPROVAL IN WRITING WITHIN 15 BUSINESS DAYS,
YOUR APPROVAL SHALL BE DEEMED GIVEN", and if Lender fails to respond to such
request for approval in writing within fifteen (15) Business Days after receipt
by Lender of such written request, the related plans and specifications and all
information reasonably required in order to adequately review the same, then
such approval will be deemed given. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors, subcontractors
and materialmen engaged in any Restoration following a Casualty or Condemnation
resulting in Net Proceeds of $2,500,000 or more, as well as the contracts under
which they have been engaged, shall be subject to prior review and acceptance by
Lender and the Casualty Consultant, which acceptance shall not be unreasonably
withheld, conditioned or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration including,
without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant's fees, shall be paid by Borrower.
(f) In no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually incurred
from time to time for work in place as part of the Restoration, as certified by
the Casualty Consultant, minus the Casualty Retainage. The term "CASUALTY
RETAINAGE" shall mean an amount equal to ten percent (10%) of the hard costs
actually incurred for work in place as part of the Restoration, as certified by
the Casualty Consultant, until the Restoration has been completed. The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this clause (f), be less than the amount actually held back by
Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 7.4.1 and that all approvals
necessary for the re-occupancy and use of the Property have been obtained from
all appropriate governmental and quasi-governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
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materialman's contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the title insurance policy, and Lender
receives an endorsement to the title insurance policy insuring the continued
priority of the lien of the Mortgage and evidence of payment of any premium
payable for such endorsement. If required by Lender, the release of any such
portion of the Casualty Retainage shall be approved by the surety company, if
any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(g) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
(h) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs which
are estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the "NET
PROCEEDS DEFICIENCY") with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 7.4 shall constitute additional security for the Debt and other
obligations under the Loan Documents.
(i) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 7.4.1, and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing under the Note, this Agreement or any of the other Loan Documents.
(j) Notwithstanding the last sentence of Section 7.1.1(c) and
provided no Event of Default exists hereunder, proceeds received by Lender on
account of the rental or business interruption insurance specified in Section
7.1.1(c) above with respect to any Casualty shall be deposited by Lender
directly into the Deposit Account and allocated as Rents in accordance with
Section 3.8(i) through (vi) but (a) only to the extent it reflects a replacement
for (i) lost Rents that would have been due under Leases existing on the date of
such Casualty, and/or (ii) lost Rents under Leases that had not yet been
executed and delivered at the time of such Casualty which Borrower has proven to
the insurer under the related Policy would have been due under such Leases (and
then only to the extent such proceeds disbursed by such insurer reflect a
replacement for such past due Rents) and (b) only to the extent necessary to
fully make the disbursements required by Section 3.8(i) through (vi). All other
such proceeds shall be held by Lender and disbursed in accordance with this
Section 7.4.
7.4.2 Application to Debt. All Net Proceeds not required (i) to be
made available for the Restoration or (ii) to be returned to Borrower as excess
Net Proceeds pursuant to Section 7.4.1(i) may be retained and applied by Lender
toward the payment of the Debt
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whether or not then due and payable in such order, priority and proportions as
Lender in its sole discretion shall deem proper, or, at the discretion of
Lender, the same may be paid, either in whole or in part, to Borrower for such
purposes as Lender shall designate, in its discretion. So long as no Event of
Default has occurred and is continuing, any application of Net Proceeds to the
Debt shall not require any payment of the Yield Maintenance Premium or any other
premium or penalty.
ARTICLE 8
DEFAULTS
Section 8.1 Events of Default. An "Event of Default" shall
exist with respect to the Loan if any of the following shall occur:
(a) if any portion of the Debt that is due on a Payment Date is
not paid on or before the related Payment Date or, for any payment other than
payments due on a Payment Date, the date on which such payment is due;
(b) subject to Borrower's right to contest as provided herein, if
any of the Taxes are not paid prior to the date that any interest, late fees or
other penalties would accrue thereon or any of the Other Charges are not paid
when the same are due and payable (unless sums equaling the amount of Taxes and
Other Charges then due and payable have been delivered to Lender in accordance
with Section 3.3 hereof);
(c) if the Policies are not kept in full force and effect, or if
the Policies or certificates evidencing such Policies are not delivered to
Lender within fifteen (15) days after request;
(d) except as expressly permitted by the terms of this Agreement
or the other Loan Documents, a Transfer occurs without Lender's prior written
consent;
(e) if any representation or warranty of Borrower, or of any
Guarantor, made herein or in any other Loan Document or in any certificate,
report, financial statement or other instrument or document furnished to Lender
in connection with the Loan shall have been false or misleading in any material
respect when made, provided that if such misrepresentation was not intentional,
is susceptible to cure and Lender will not be adversely affected by a delay in
enforcing its remedy under the Loan Documents, Borrower shall have thirty (30)
days after notice thereof to cure such default;
(f) if Borrower or any Guarantor shall make an assignment for the
benefit of creditors or if Borrower shall generally not be paying its debts as
they become due;
(g) if a receiver (other than a receiver appointed by Lender),
liquidator or trustee of Borrower or of any Guarantor shall be appointed or if
Borrower or any Guarantor shall be adjudicated a bankrupt or insolvent, or if
any petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Borrower or any Guarantor or if any
proceeding
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for the dissolution or liquidation of Borrower or of any Guarantor shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower or such Guarantor, upon the
same not being discharged, stayed or dismissed within ninety (90) days;
(h) Borrower breaches any covenant contained in Section 5.12.1,
5.13, 5.15, 5.22, 5.25 or 5.28;
(i) if Borrower shall be in default under any other deed of trust
or security agreement covering any part of the Property whether it be superior
or junior in lien to the Mortgage;
(j) subject to Borrower's right to contest as provided herein, if
the Property becomes subject to any mechanic's, materialman's or other lien that
is not otherwise permitted by the Loan Documents and such lien is not removed of
record within thirty (30) days of the filing or recording of such lien (except a
lien for local real estate taxes and assessments or special taxes not then due
and payable);
(k) if Borrower fails to cure properly any violations of laws or
ordinances affecting or which may be interpreted to affect the Property within
thirty (30) days after Borrower first receives notice of any such violations;
provided, however, that if such violation is reasonably susceptible of cure, but
not within such thirty (30) day period and the applicable law or ordinance
permits such longer period within which to cure such violation, then Borrower
shall be permitted up to an additional sixty (60) days to cure such violation
provided that Borrower diligently and continuously pursues such cure;
(l) except as permitted in this Agreement, the alteration,
improvement, demolition or removal of any of the Improvements without the prior
consent of Lender;
(m) if Borrower shall continue to be in default under any term,
covenant, or provision of the Note or any of the other Loan Documents, beyond
applicable notice and/or cure periods contained in those documents;
(n) if Borrower fails to cure a default under any other term,
covenant or provision of this Agreement within thirty (30) days after Borrower
first receives notice of any such default; provided, however, if such default is
reasonably susceptible of cure, but not within such thirty (30) day period, then
Borrower may be permitted up to an additional sixty (60) days to cure such
default provided that Borrower diligently and continuously pursues such cure;
(o) if without Lender's prior written consent, except as otherwise
expressly permitted by the Loan Documents, (i) the Management Agreement is
terminated, (ii) the ownership, management or control of Manager is transferred,
(iii) there is a material change in the Management Agreement, or (iv) there
shall be a material default by Borrower under the Management Agreement that is
not cured within any applicable notice or cure period provided under the
Management Agreement;
(p) if Borrower ceases to continuously operate the Property or any
material portion thereof as office or retail space for any reason whatsoever
(other than temporary
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cessation in connection with any repair or renovation thereof undertaken with
the consent of Lender);
(q) if any of the assumptions contained in the Insolvency Opinion,
or in any other "non-consolidation" opinion delivered to Lender in connection
with the Loan, or in any other "non-consolidation" delivered subsequent to the
closing of the Loan, is or shall become untrue in any respect; or
(r) if Borrower fails to comply with the covenants as to
Prescribed Laws set forth in Section 5.4.1 hereof.
Section 8.2 Remedies.
8.2.1 Acceleration. Upon the occurrence of an Event of Default
(other than an Event of Default described in paragraph (f) or (g) of Section
8.1) and at any time and from time to time thereafter, in addition to any other
rights or remedies available to it pursuant to the Loan Documents or at law or
in equity, Lender may take such action, without notice or demand, that Lender
deems advisable to protect and enforce its rights against Borrower and in and to
the Property including declaring the Debt to be immediately due and payable
(including unpaid interest, Default Rate interest, Late Payment Charges, Yield
Maintenance Premium and any other amounts owing by Borrower), without notice or
demand; and upon any Event of Default described in paragraph (f) or (g) of
Section 8.1, the Debt (including unpaid interest, Default Rate interest, Late
Payment Charges, Yield Maintenance Premium and any other amounts owing by
Borrower) shall immediately and automatically become due and payable, without
notice or demand, and Borrower hereby expressly waives any such notice or
demand, anything contained in any Loan Document to the contrary notwithstanding.
8.2.2 Remedies Cumulative. Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under the Loan Documents or at law
or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared, or be automatically,
due and payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth in the Loan Documents. Without limiting the
generality of the foregoing, Borrower agrees that if an Event of Default is
continuing, (i) to the extent permitted by applicable law, Lender is not subject
to any "one action" or "election of remedies" law or rule, and (ii) all Liens
and other rights, remedies or privileges provided to Lender shall remain in full
force and effect until Lender has exhausted all of its remedies against the
Property, the Mortgage has been foreclosed, the Property has been sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in
full. To the extent permitted by applicable law, nothing contained in any Loan
Document shall be construed as requiring Lender to resort to any portion of the
Property for the satisfaction of any of the Debt in preference or priority to
any
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other portion, and Lender may seek satisfaction out of the entire Property or
any part thereof, in its discretion.
8.2.3 Severance. Lender shall have the right from time to time to
sever the Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents in such denominations and priorities of
payment and liens as Lender shall determine in its discretion for purposes of
evidencing and enforcing its rights and remedies. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect such severance, Borrower ratifying all that such attorney
shall do by virtue thereof.
8.2.4 Delay. No delay or omission to exercise any remedy, right or
power accruing upon an Event of Default, or the granting of any indulgence or
compromise by Lender shall impair any such remedy, right or power hereunder or
be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
one Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon. Notwithstanding any other provision of this Agreement,
Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim in connection with the foreclosure of the Mortgage to the extent necessary
to foreclose on all or any portion of the Property, the Rents, the Cash
Management Accounts or any other collateral.
8.2.5 Lender's Right to Perform. If Borrower fails to perform any
covenant or obligation contained herein and such failure shall continue for a
period of five Business Days after Borrower's receipt of written notice thereof
from Lender, without in any way limiting Lender's right to exercise any of its
rights, powers or remedies as provided hereunder, or under any of the other Loan
Documents, Lender may, but shall have no obligation to, perform, or cause
performance of, such covenant or obligation, and all costs, expenses,
liabilities, penalties and fines of Lender incurred or paid in connection
therewith shall be payable by Borrower to Lender within ten (10) days after the
date Lender makes written demand therefor and, if not paid, shall be added to
the Debt (and to the extent permitted under applicable laws, secured by the
Mortgage and other Loan Documents) and shall bear interest thereafter at the
Default Rate. Notwithstanding the foregoing, Lender shall have no obligation to
send notice to Borrower of any such failure.
ARTICLE 9
SPECIAL PROVISIONS
Section 9.1 Sale of Note and Securitization.
9.1.1 Cooperation in Securitization. At the request of the holder of
the Note and, to the extent not already required to be provided by Borrower
under the Note, Loan
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Agreement or other Loan Documents, Borrower and its respective affiliates shall
use reasonable efforts to comply with the requests of the holder of the Note or
to take such action as may be required by a purchaser, transferee, assignee,
servicer, participant or other potential investor (collectively, the "INVESTOR")
or by the Rating Agencies in connection with one or more sales, transfers or
assignments of the Loan (or portions thereof or interests therein), or grants of
participation interests therein, in connection with one or more securitizations
of such Note, or portions thereof or interests therein (each such sale and/or
securitization, a "SECURITIZATION") involving the issuance of rated or unrated
single-class or multi-class securities (the "SECURITIES") secured by or
evidencing direct or indirect ownership interests in, among other things, the
Note (or any portion thereof or interests therein) and the Loan Agreement. Such
efforts, with respect to each Securitization may include, without limitation,
to:
(a) (i) provide such financial and other information with respect
to the Property, the OP, the REIT (the OP and the REIT being individually or
collectively referred to herein as the "PARENT") and the manager of the Property
as reasonably determined by the holder of the Note to be necessary or
appropriate in connection with the Securitization (including, without
limitation, existing audited or unaudited financial statements or at no expense
to Borrower or any Parent, audited or unaudited financial statements), (ii)
provide budgets relating to the Property (iii) at no expense to Borrower or any
Parent, perform or permit or cause to be performed or permitted such site
inspections, appraisals, market studies, environmental reviews and reports
(Phase I's and, if appropriate, Phase II's), engineering reports and other due
diligence investigations of the Property, as may be reasonably requested by the
holder of the Note, the Rating Agencies, and/or Investors in the Securities, or
as may be reasonably necessary or appropriate in connection with the
Securitization in a manner which does not unreasonably interfere with the
tenants or occupants thereof (such information in clauses (i), (ii) and (iii)
being collectively referred to as the "PROVIDED INFORMATION"), together with
appropriate verification and/or consents with respect to the Provided
Information through letters of auditors or opinions of counsel of independent
attorneys acceptable to the holder of the Note and the Rating Agencies;
(b) prepare a presentation for the Rating Agencies describing
Borrower, Parent, the Property, management of the Property and such other
matters as are customary for securitizations such as the Securitization, in each
case as may be reasonably requested by the holder of the Note, the Rating
Agencies and/or Investors in the Securities or as may be reasonably determined
by the holder of the Note to be necessary or appropriate in connection with the
Securitization;
(c) cause counsel to render opinions, which may be relied upon by
the holder of the Note, the Rating Agencies, Investors and/or other participants
in the Securitization and their respective counsel, agents and representatives,
as to non-consolidation, fraudulent conveyance, and true sale or any other
opinion customary in securitization transactions with respect to the Property,
Borrower, Parent and their respective affiliates, which counsel and opinions
shall be reasonably satisfactory to the holder of the Note, the Rating Agencies
and/or Investors in the Securities;
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(d) work with and, if requested, supervise third-party service
providers engaged by Borrower to obtain, collect and deliver information
reasonably required by the Rating Agencies in connection with the
Securitization;
(e) if required by the Rating Agencies, use commercially
reasonable efforts to deliver such additional tenant estoppel letters,
subordination agreements or other agreements from parties to agreements that
affect the Property, which estoppel letters, subordination agreements or other
agreements shall be reasonably satisfactory to Lender and the Rating Agencies;
(f) make such representations and warranties as of the closing
date of the Securitization with respect to the Property, Borrower, Parent, the
Note, Loan Agreement and other Loan Documents as may be reasonably requested by
the holder of the Note, the Rating Agencies and/or Investors in the Securities
and as are consistent with the facts covered by such representations and
warranties as they exist on the date thereof, including the representations and
warranties made in the Note, Loan Agreement and other Loan Documents; and
(g) execute such amendments to the Note, Loan Agreement, other
Loan Documents and organizational documents as may be reasonably requested by
the holder of the Note, the Rating Agencies and/or Investors in the Securities
or otherwise to effect one or more Securitizations (including, without
limitation, such amendments as shall be necessary or advisable to sever the Note
(and/or any then existing component thereof) into one or more notes and/or one
or more components and allocate Principal amounts thereof in order to effectuate
one or more sales of the Note (and/or the resulting notes or components thereof)
and/or to correspond to the related classes of Securities in one or more
Securitizations so long as, in all such cases, the overall duration-weighted
interest rate over all of the notes and components shall equal the Interest
Rate); provided, however, that Borrower shall not be required to modify or amend
the Note, Loan Agreement or any other Loan Documents if such modification or
amendment would (i) have a material adverse economic effect on Borrower or its
Affiliates, (ii) modify or amend the loan term, amortization or any other
economic term of the Loan or (iii) otherwise materially increase the obligations
or materially decrease the rights of Borrower or the other parties pursuant to
the Note, Loan Agreement and other Loan Documents (including, but not limited
to, modifying the transfer, recourse, prepayment, event of default or remedy
provisions of the Loan Documents or the organizational documents of Borrower or
its Affiliate).
9.1.2 Costs and Expenses. Borrower, the REIT and their Affiliates
will bear their own internal costs of cooperation required by this letter
agreement in connection with any Securitization, but Lender shall be responsible
for all other out-of-pocket costs and expenses in connection with any
Securitization after the closing of the Loan.
9.1.3 Indemnification. Borrower and its respective Affiliates
understand that certain of the Provided Information may be included in
disclosure documents in connection with each Securitization, including, without
limitation, a prospectus, prospectus supplement, private placement memorandum,
collateral term sheets, structured term sheets and computational materials
(each, a "DISCLOSURE DOCUMENT") and may also be included in filings with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "SECURITIES ACT"), or the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"),
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or provided or made available to Investors in the Securities, the Rating
Agencies and service providers relating to such Securitization. In the event
that such Disclosure Document is required to be revised prior to the sale of all
Securities, Borrower, and its respective Affiliates will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects; provided, however that this provision shall be limited to
those portions of the Disclosure Statement that described Borrower or any of its
Affiliates, the Property, the Loan or the other Loan Documents.
(a) In the case of each Securitization, Borrower agrees to
cooperate in connection with (i) the preparation of a preliminary and a final
private placement memorandum and/or (ii) the preparation of a preliminary and
final prospectus or prospectus supplement, as applicable, and (iii) the
execution of an indemnification certificate (A) certifying that Borrower has
carefully examined in each such memorandum or prospectus, as applicable, all
sections containing information relating to the Property, Parent, Borrower, any
Affiliates of Parent, Borrower, or the Loan, and that such information included
therein (collectively, the "SECURITIZATION INFORMATION"), does not contain any
untrue statement of a material fact or omit to state a material fact known to
Borrower that is 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 9.1.3, Lender hereunder shall include
its officers, directors and employees), the Person who acts as depositor, issuer
and/or registrant who may have filed a registration statement relating to the
Securitization, each underwriter or placement agent involved in the
Securitization, each of their respective directors and officers and each Person
who controls such Person within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (collectively, the "INDEMNIFIED GROUP"), for
any losses, claims, damages or liabilities (collectively, the "LIABILITIES") to
which any of the Indemnified Group may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Securitization Information which untrue or
alleged untrue statement is not expressly disclosed to Lender by Borrower after
Borrower has been given an opportunity to review the Securitization Information,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (C) agreeing to reimburse each Person in the
Indemnified Group for any legal or other expenses incurred by each such Person
in connection with investigating or defending the Liabilities for which an
indemnity is owed hereunder; provided, however, that Borrower will be liable in
any such case under clauses (B) or (C) above only to the extent that any such
Liability arises out of or is based upon any Provided Information or upon the
omission or alleged omission to state therein a material fact known to Borrower
that is required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or any other information furnished to Lender or any other Person
in the Indemnified Group by Borrower or an affiliate in connection with the
preparation of any Disclosure Document or in connection with the underwriting of
the Debt, including, without limitation, financial statements of Borrower,
operating statements, rent rolls, environmental site assessment reports and
Property condition reports with respect to the Property. This indemnity
agreement will be in addition to any liability which Borrower may otherwise
have.
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(b) In the case of each Securitization, in connection with filings
under the Exchange Act, Borrower agrees to indemnify (i) each Person in the
Indemnified Group for Liabilities to which each such Person may become subject
insofar as the Liabilities arise out of or are based upon an untrue statement or
an alleged untrue statement in the Provided Information or an omission or
alleged omission to state in the Provided Information a material fact known to
Borrower that is necessary in order to make the statements in the Provided
Information, in light of the circumstances under which they were made, not
misleading, which untrue or alleged untrue statement or omission or alleged
omission is not expressly disclosed to Lender by Borrower after Borrower has
been given an opportunity to review such filings under the Exchange Act and (ii)
each Person in the Indemnified Group for any reasonable legal or other expenses
incurred by each such Person in connection with defending or investigating the
Liabilities for which an indemnity is owed hereunder.
(c) Promptly after receipt by a party seeking indemnification
hereunder of notice of the commencement of any action, suit or proceeding
against such party in respect of which a claim is to be made under this Section
3, such party will notify Borrower in writing of the commencement thereof, but
the omission to so notify Borrower will not relieve Borrower from any liability
which Borrower may have to any indemnified party hereunder except to the extent
that failure to notify causes prejudice to Borrower. In the event that any
action is brought against any indemnified party, and it notifies Borrower of the
commencement thereof, Borrower will be entitled to participate therein and, to
the extent that Borrower may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from Borrower to such
indemnified party hereunder, Borrower shall be responsible for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified party
and Borrower and the indemnified party shall have reasonably concluded that
there are any legal defenses available to it and/or other indemnified parties
that are different from or in addition to those available to Borrower, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Borrower shall not be
liable for the expenses of more than one separate counsel unless an indemnified
party shall have reasonably concluded that there may be legal defenses available
to Borrower that are different from or additional to those available to another
indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which any indemnification provided for under this Section 9.1.3
is for any reason held to be unenforceable, unavailable or insufficient to hold
harmless an indemnified party in respect of any Liabilities which would
otherwise be indemnifiable hereunder, Borrower shall contribute to the amount
paid or payable by the indemnified party as a result of such Liabilities;
provided, however, that if any indemnified party is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) it
shall not be entitled to contribution from Borrower if Borrower was not guilty
of such fraudulent misrepresentation. In determining the amount of contribution
to which the respective parties are entitled, the following factors shall be
considered: (i) the relative knowledge and access to information concerning the
matter with respect to which a claim was asserted; (ii) the opportunity to
correct and prevent any statement or
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omission; and (iii) any other equitable considerations appropriate in the
circumstances. Lender and Borrower hereby agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation.
(e) The liabilities and obligations of Borrower and its Affiliates
hereunder shall survive the termination of the Note, Loan Agreement and other
Loan Documents and the satisfaction and discharge of the Debt.
(f) Each Person in the Indemnified Group is an intended third
party beneficiary of the obligations of Borrower herein.
9.1.4 Rating Surveillance. Lender will retain the Rating Agencies to
provide rating surveillance services on Securities. The pro rata expenses of
such surveillance will be paid for by Borrower based on the applicable
percentage of such expenses determined by dividing the then outstanding
Principal by the then aggregate outstanding amount of the pool created in the
Securitization which includes the Loan.
9.1.5 Severance of Loan. Lender shall have the right, at any time
(whether prior to, in connection with, or after any Securitization), with
respect to all or any portion of the Loan, to modify, split and/or sever all or
any portion of the Loan as hereinafter provided. Without limiting the foregoing,
Lender may (i) cause the Note and the Mortgage to be split into a first and
second mortgage loan, (ii) create one more senior and subordinate notes (i.e.,
an A/B or A/B/C structure), (iii) create multiple components of the Note or
Notes (and allocate or reallocate the Principal balance of the Loan among such
components) or (iv) otherwise sever the Loan into two or more loans secured by
mortgages and by a pledge of partnership or membership interests (directly or
indirectly) in Borrower (i.e., a senior loan/mezzanine loan structure), in each
such case, in whatever proportion and whatever priority Lender determines;
provided, however, in each such instance the outstanding Principal balance of
all the Notes evidencing the Loan (or components of such Notes) immediately
after the effective date of such modification equals the outstanding Principal
balance of the Loan immediately prior to such modification and the weighted
average of the interest rates for all such Notes (or components of such Notes)
immediately after the effective date of such modification equals the interest
rate of the original Note immediately prior to such modification. If requested
by Lender, Borrower (and Borrower's constituent members, if applicable, and
Guarantor) shall execute within two (2) Business Days after such request, such
documentation as Lender may reasonably request to evidence and/or effectuate any
such modification or severance.
ARTICLE 10
MISCELLANEOUS
Section 10.1 Exculpation. Subject to the qualifications below,
Lender shall not enforce the liability and obligation of Borrower or its
constituent members, partners, shareholders, directors, employees or agents or
the direct or indirect constituent members, partners, shareholders, directors,
employees or agents thereof (collectively, the "BORROWER PARTIES") or any other
Person, to perform and observe the obligations contained in this Agreement, the
Note or any of the other Loan Documents by any action or proceeding wherein a
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money judgment shall be sought against any of the Borrower Parties or any other
Person, except that Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon the Property, the Rents or any other
collateral given to Lender pursuant to this Agreement and the other Loan
Documents; provided, however, that, except as specifically provided herein, any
judgment in any such action or proceeding shall be enforceable against the
Borrower Parties only to the extent of their interest in the Property, the Rents
and in any other collateral given to Lender, and Lender, by accepting this
Agreement, the Note and the other Loan Documents, agrees that it shall not ▇▇▇
for, seek or demand any deficiency judgment against any of the Borrower Parties
or any other Person in any such action or proceeding under or by reason of or in
connection with this Agreement, the Note or any of the other Loan Documents. The
provisions of this paragraph shall not, however, (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by this Agreement,
the Note or any of the other Loan Documents; (ii) impair the right of Lender to
name any of the Borrower Parties, as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (iii) affect the validity or
enforceability of any guaranty made in connection with the Loan or any rights
and remedies of Lender thereunder; (iv) impair the right of Lender to obtain the
appointment of a receiver; (v) impair the enforcement of the Assignment of
Leases and Rents executed in connection herewith; or (vi) constitute a waiver of
the right of Lender to enforce the liability and obligation of Borrower (but not
against any members of Borrower or their direct or indirect constituent members
or partners or any other Person), by money judgment or otherwise, to the extent
of any loss, damage, cost, expense, liability, claim or other obligation
incurred by Lender (including attorneys' fees and costs reasonably incurred)
arising out of or in connection with the following:
(a) fraud or intentional misrepresentation by Borrower or any
Guarantor in connection with the Loan;
(b) intentional physical waste (including, but not limited to,
waste due to gross negligence) by Borrower or any affiliate thereof; provided,
however, such physical waste shall exclude wear and tear to the Property that
occurs in the ordinary course of business of the Property by Borrower or any
affiliate thereof;
(c) the material breach of any representation, warranty, covenant
or indemnification provision in that certain Environmental and Hazardous
Substance Indemnification Agreement of even date herewith given by Borrower to
Lender or in this Agreement concerning Environmental Laws, Hazardous Substances
and Asbestos;
(d) the removal or disposal by Borrower or any affiliate thereof
of any portion of the Property after an Event of Default, unless such portion of
the Property is replaced by an item of equal or greater value as determined by
Lender in its reasonable discretion;
(e) the misapplication or conversion by Borrower or any affiliate
thereof of (i) any insurance proceeds paid by reason of any loss, damage or
destruction to the Property, (ii) any awards or other amounts received in
connection with the condemnation of all or a portion of the Property, (iii) any
Rents following an Event of Default or (iv) any Rents paid more than one month
in advance;
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(f) failure to pay charges for labor or materials or taxes or
other charges that can create liens superior to the lien of the Mortgage on any
portion of the Property unless such taxes or other charges are being contested
in accordance herewith; and
(g) any security deposits collected by Borrower or any affiliate
thereof with respect to the Property which are not delivered to Lender upon a
foreclosure of the Property or action in lieu thereof, except to the extent any
such security deposits were applied in accordance with the terms and conditions
of any of the Leases prior to the occurrence of the Event of Default that gave
rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in any of the Loan
Documents (i) Lender shall not be deemed to have waived any right which Lender
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Debt or to
require that all collateral shall continue to secure all of the Debt owing to
Lender in accordance with the Loan Documents, and (ii) the Debt shall become
fully recourse to Borrower (but not its members or other direct or indirect
constituent members or partners or any other Person) in the event that: (A) the
first full Monthly Payment Amount (as defined in the Note) under the Note is not
paid when due; (B) other than in connection with a default under subsection (x)
of the definition of Special Purpose Bankruptcy Remote Entity set forth in
Schedule 5 hereof, Borrower fails to maintain its status as a Special Purpose
Bankruptcy Remote Entity in accordance with the provisions of this Agreement and
such failure results in the substantive consolidation of Borrower with another
Person; (C) except as otherwise permitted pursuant to the Loan Documents,
Borrower fails to obtain Lender's prior written consent to any subordinate
financing or other voluntary lien encumbering the Property; (D) except as
otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain
Lender's prior written consent to any assignment, transfer, or conveyance of the
Property or any interest therein as and to the extent required by this Agreement
or the Mortgage; or (E) (1) a receiver (other than a receiver appointed by
Lender), liquidator or trustee of Borrower or Guarantor shall be appointed which
is not dismissed within ninety (90) days, or (2) if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by Borrower or Guarantor, or (3) if
Borrower or Guarantor files an answer consenting to, or otherwise joining in,
any involuntary petition for bankruptcy, reorganization or arrangement pursuant
to federal bankruptcy law, or any similar federal or state law filed against it
by any other Person, or is found pursuant to a final, unappealable order of a
court of competent jurisdiction to have solicited or caused to be solicited
creditors to file any involuntary petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law against Borrower or Guarantor, or (4) if Borrower or Guarantor are found,
pursuant to a final unappealable order of a court of competent jurisdiction, to
have been in collusion with creditors that initiate a bankruptcy action or
proceeding against Borrower or Guarantor.
Section 10.2 Brokers and Financial Advisors. Borrower hereby
represents that, with the exception of Eastdil Realty, it has dealt with no
financial advisors, brokers, underwriters, placement agents, agents or finders
in connection with the Loan. Borrower shall indemnify and hold Lender harmless
from and against any and all claims, liabilities, costs and expenses (including
attorneys' fees, whether incurred in connection with enforcing this indemnity or
defending claims of third parties) of any kind in any way relating to or arising
from
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a claim by any Person that such Person acted on behalf of Borrower in connection
with the transactions contemplated herein. The provisions of this Section 10.2
shall survive the expiration and termination of this Agreement and the repayment
of the Debt.
Section 10.3 Retention of Servicer. Lender reserves the right to
retain the Servicer to act as its agent hereunder with such powers as are
specifically delegated to the Servicer by Lender, whether pursuant to the terms
of this Agreement, any pooling and servicing agreement or similar agreement
entered into as a result of a Securitization, the Deposit Account Agreement or
otherwise, together with such other powers as are reasonably incidental thereto.
Borrower shall pay any reasonable fees and expenses of the Servicer in
connection with a release of the Property, assumption or modification of the
Loan, enforcement of the Loan Documents or any other action taken by Servicer
hereunder on behalf of Lender.
Section 10.4 Survival. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as any of the Debt is unpaid or such longer period if
expressly set forth in this Agreement. All Borrower's covenants and agreements
in this Agreement shall inure to the benefit of the respective legal
representatives, successors and assigns of Lender.
Section 10.5 Lender's Discretion. Whenever pursuant to this
Agreement or any other Loan Document, Lender exercises any right given to it to
approve or disapprove, or consent or withhold consent, or any arrangement or
term is to be satisfactory to Lender or is to be in Lender's discretion, the
decision of Lender to approve or disapprove, to consent or withhold consent, or
to decide whether arrangements or terms are satisfactory or not satisfactory, or
acceptable or unacceptable or in Lender's discretion shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.
Section 10.6 Governing Law.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
VALIDITY AND THE ENFORCEABILITY
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OF ALL LOAN DOCUMENTS AND THE DEBT. TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO Section 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN NEW YORK COUNTY, NEW YORK AND BORROWER WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT CORPORATION TRUST COMPANY AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS
BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND
AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE OF BORROWER MAILED OR DELIVERED TO BORROWER IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD OF SERVICE), IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (i) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE
DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (iii) SHALL PROMPTLY
DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN
NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 10.7 Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement or of any other Loan Document, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
a writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances. Neither any
failure nor any delay on the part of Lender in insisting upon strict performance
of any term, condition, covenant or agreement, or exercising any right, power,
remedy or privilege hereunder, or under any other Loan Document, shall operate
as or constitute a waiver thereof, nor shall a single or partial exercise
thereof preclude any other future exercise, or the exercise of any other right,
power, remedy or privilege. In particular, and not by way of limitation, by
accepting payment after the due date of any amount
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payable under any Loan Document, Lender shall not be deemed to have waived any
right either to require prompt payment when due of all other amounts due under
the Loan Documents, or to declare an Event of Default for failure to effect
prompt payment of any such other amount.
Section 10.8 Trial by Jury. BORROWER AND LENDER HEREBY AGREE NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY THE OTHER.
Section 10.9 Headings/Exhibits. The Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. The Exhibits attached
hereto, are hereby incorporated by reference as a part of the Agreement with the
same force and effect as if set forth in the body hereof.
Section 10.10 Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
Section 10.11 Preferences. Upon the occurrence and continuance of
an Event of Default, Lender shall have the continuing and exclusive right to
apply or reverse and reapply any and all payments by Borrower to any portion of
the Debt. To the extent Borrower makes a payment to Lender, or Lender receives
proceeds of any collateral, which is in whole or part subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent of such payment
or proceeds received, the Debt or part thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds
had not been received by Lender. This provision shall survive the expiration or
termination of this Agreement and the repayment of the Debt.
Section 10.12 Waiver of Notice. Borrower shall not be entitled to
any notices of any nature whatsoever from Lender except with respect to matters
for which this Agreement or any other Loan Document specifically and expressly
requires the giving of notice by Lender to Borrower and except with respect to
matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which no
Loan Document specifically and expressly requires the giving of notice by Lender
to Borrower.
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Section 10.13 Remedies of Borrower. If a claim or adjudication is
made that Lender or any of its agents, including Servicer, has acted
unreasonably or unreasonably delayed acting in any case where by law or under
any Loan Document, Lender or any such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that neither Lender
nor its agents, including Servicer, shall be liable for any monetary damages,
and Borrower's sole remedy shall be to commence an action seeking injunctive
relief or declaratory judgment. Any action or proceeding to determine whether
Lender has acted reasonably shall be determined by an action seeking declaratory
judgment. Borrower specifically waives any claim against Lender and its agents,
including Servicer, with respect to actions taken by Lender or its agents on
Borrower's behalf.
Section 10.14 Prior Agreements. This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements, understandings and negotiations among or between such parties,
whether oral or written, are superseded by the terms of this Agreement and the
other Loan Documents.
Section 10.15 Offsets, Counterclaims and Defenses. Borrower
hereby waives the right to assert a counterclaim, other than a mandatory or
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents, including Servicer, or otherwise offset any obligations to
make payments required under the Loan Documents. Any assignee of Lender's
interest in and to the Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which Borrower may otherwise have against any
assignor of such documents, and no such offset, counterclaim or defense shall be
interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents, and any such right to interpose or assert any
such offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower.
Section 10.16 Publicity. All news releases, publicity or
advertising through any media intended to reach the general public
(collectively, "PUBLIC RELEASES") issued by Borrower or its Affiliates that
refer to the Loan Documents, the Loan, Lender or any member of the Indemnified
Group, a Loan purchaser, the Servicer or the trustee in a Securitization shall
be subject to the prior written approval of Lender. Lender shall have the right
to issue any Public Releases without Borrower's approval.
Section 10.17 No Usury. Borrower and Lender intend at all times
to comply with applicable state law or applicable United States federal law (to
the extent that it permits Lender to contract for, charge, take, reserve or
receive a greater amount of interest than under state law) and that this Section
10.17 shall control every other agreement in the Loan Documents. If the
applicable law (state or federal) is ever judicially interpreted so as to render
usurious any amount called for under the Note or any other Loan Document, or
contracted for, charged, taken, reserved or received with respect to the Debt,
or if Lender's exercise of the option to accelerate the maturity of the Loan or
any prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by applicable law, then it is Borrower's and Lender's
express intent that all excess amounts theretofore collected by Lender shall be
credited against the unpaid Principal and all other Debt (or, if the Debt has
been or would thereby be paid in full, refunded to Borrower), and the provisions
of the Loan Documents immediately be deemed reformed and the
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amounts thereafter collectible thereunder reduced, without the necessity of the
execution of any new document, so as to comply with applicable law, but so as to
permit the recovery of the fullest amount otherwise called for thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the Loan shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Loan
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained in any Loan Document, it is not the intention
of Lender to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.
Section 10.18 Conflict; Construction of Documents. In the event
of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties
hereto acknowledge that each is represented by separate counsel in connection
with the negotiation and drafting of the Loan Documents and that the Loan
Documents shall not be subject to the principle of construing their meaning
against the party that drafted them.
Section 10.19 No Third Party Beneficiaries. The Loan Documents
are solely for the benefit of Lender and Borrower and nothing contained in any
Loan Document shall be deemed to confer upon anyone other than the Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained therein.
Section 10.20 Yield Maintenance Premium. Borrower acknowledges
that (a) Lender is making the Loan in consideration of the receipt by Lender of
all interest and other benefits intended to be conferred by the Loan Documents
and (b) if payments of Principal are made to Lender prior to the Stated Maturity
Date, for any reason whatsoever, whether voluntary, as a result of Lender's
acceleration of the Loan after an Event of Default, by operation of law or
otherwise, Lender will not receive all such interest and other benefits and may,
in addition, incur costs. For these reasons, and to induce Lender to make the
Loan, Borrower agrees that, except as expressly provided in Section 7, all
prepayments, if any, whether voluntary or involuntary, will be accompanied by
the Yield Maintenance Premium. Such Yield Maintenance Premium shall be required
whether payment is made by Borrower, by a Person on behalf of Borrower, or by
the purchaser at any foreclosure sale, and may be included in any bid by Lender
at such sale. Borrower further acknowledges that (A) it is a knowledgeable real
estate developer and/or investor; (B) it fully understands the effect of the
provisions of this Section 10.20, as well as the other provisions of the Loan
Documents; (C) the making of the Loan by Lender at the Interest Rate and other
terms set forth in the Loan Documents are sufficient consideration for
Borrower's obligation to pay a Yield Maintenance Premium (if required); and (D)
Lender would not make the Loan on the terms set forth herein without the
inclusion of such provisions. Borrower also acknowledges that the provisions of
this Agreement limiting the right of prepayment and providing for the payment of
the Yield Maintenance Premium and other charges specified herein were
independently negotiated and bargained for, and constitute a specific material
part of the consideration given by Borrower to Lender for the making of the Loan
except as expressly permitted hereunder.
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Section 10.21 Assignment. The Loan, the Note, the Loan Documents
and/or Lender's rights, title, obligations and interests therein may be assigned
by Lender and any of its successors and assigns to any Person at any time in its
discretion, in whole or in part, whether by operation of law (pursuant to a
merger or other successor in interest) or otherwise. Upon such assignment, all
references to Lender in this Agreement and in any Loan Document shall be deemed
to refer to such assignee or successor in interest and such assignee or
successor in interest shall thereafter stand in the place of Lender. Borrower
may not assign its rights, title, interests or obligations under this Agreement
or under any of the Loan Documents except as specifically provided in Sections
5.26.5 and 5.26.6 of this Agreement.
Section 10.22 Set-Off. In addition to any rights and remedies of
Lender provided by this Loan Agreement and by law, Lender shall have the right,
without prior notice to Borrower, any such notice being expressly waived by
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by Lender or any Affiliate
thereof to or for the credit or the account of Borrower. Lender agrees promptly
to notify Borrower after any such set-off and application made by Lender;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
Section 10.23 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 10.24 Partial Release.
(a) The parties acknowledge that the Release Parcel is being
encumbered by the Lien of the Mortgage solely by reason of the fact that the
Release Parcel has not been legally subdivided and is not a separate tax lot and
that it is the intent of the parties to release the Release Parcel upon the
completion of the subdivision and Borrower's compliance with the provisions of
this Section 10.24. Provided no Event of Default shall have occurred and remain
uncured and provided Borrower desires to transfer title to the Release Parcel to
an entity in which the REIT has at least a twenty percent (20%) direct or
indirect ownership interest and whose day-to-day operations are controlled by
the REIT. Borrower shall have the right to obtain a release of the lien of the
Mortgage (and related Loan Documents) as to the Release Parcel for development
by such entity consistent with other properties owned or operated by the REIT
and, if necessary to satisfy the conditions set forth in this Section 10.24, a
modification of the REA in connection with such release (the "REA AMENDMENT")
upon satisfaction of the following conditions precedent:
(i) Borrower shall provide Lender not less than thirty (30) days
notice (A) giving a brief narrative description of the proposed use of any
improvements to be constructed on the Release Parcel, and (B) specifying
the date (the "RELEASE DATE") on which the partial release is to occur
provided, however, that Borrower may postpone the
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Release Date from time to time as long as the extended date is at least
ten (10) Business Days after Notice of such extension;
(ii) Borrower shall deliver to Lender an opinion of counsel for
Borrower that is standard in commercial lending transactions and subject
only to customary qualifications, assumptions and exceptions opining, that
if a Securitization of any portion of the Loan has occurred, the REMIC
Trust formed pursuant to such Securitization will not fail to maintain its
status as a "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code as a result of the partial release pursuant to
this Section 10.24 and Lender shall provide to Borrower's counsel such
documents as Borrower's counsel shall reasonably request in order to give
such opinion;
(iii) Borrower shall have delivered to Lender an Officer's
Certificate certifying that the partial release pursuant to this Section
10.24 does not violate any of the provisions of the Leases or the
Operating Agreements, including, without limitation, provisions relating
to the availability of parking at the Property;
(iv) Borrower shall have delivered to Lender (A) at Borrower's
option, (x) an endorsement to the Title Insurance Policy, (y) an opinion
of counsel (from counsel reasonably acceptable to Lender) or (z) a
certificate of an architect (from an architect reasonably acceptable to
Lender and licensed to practice in the State) indicating that each legal
lot of the Release Parcel has been legally subdivided for zoning lot
purposes from the remainder of the Property pursuant to a zoning lot
subdivision in accordance with applicable law, (B) at Borrower's option,
(x) an endorsement to the Title Insurance Policy, (y) an opinion of
counsel (from counsel reasonably acceptable to Lender) or (z) a
certificate of an architect (from an architect reasonably acceptable to
Lender and licensed to practice in the State) indicating that the balance
of the Property separately conforms to and is in material compliance with
all applicable Legal Requirements pertaining to zoning and the subdivision
and constitutes one or more separate tax lot(s), and (C) an Officer's
Certificate with supporting documentation indicating that either (y)
sufficient parking remains on the remainder of the Property to comply with
all Leases of such remainder and with all Operating Agreements and which
is adequate for the proper use and enjoyment of the balance of the
Property or (z) reservations of parking (in favor of such remainder) in
the Release Parcel are sufficient (when added to parking otherwise
available to the remainder) to comply with all Leases of such remainder
and with all Operating Agreements and which are adequate for the proper
use and enjoyment of the remainder of the Property;
(v) To the extent that an amendment to the REA is necessary to
satisfy any of the requirements of this Section 10.24, Borrower shall have
delivered a copy of any REA Amendment to be executed on or prior to the
Release Date which will provide for any of the reservations required by
Section 10.24(a)(iv) and which will otherwise conform to the other
requirements of this Section 10.24 and may contain cross-easements for the
benefit of the Release Parcel and the remainder of the Property in respect
of access, driveways, parking, utilities, drainage flows, storm and
sanitary sewers, and other customary purposes. The REA Amendment will
contain only those provisions which (x) are necessary or desirable to
accommodate the proposed development described in this
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Section 10.24 and (y) are consistent with Borrower's obligations under the
Loan Documents;
(vi) The Debt Service Coverage Ratio for the Loan, after taking
into account any improvement which is proposed to be built on the Release
Parcel and its effect on income and expenses at the Property, will not be
less than 1.10:1.0;
(vii) Borrower shall have delivered a metes and bounds description
of each of ▇▇▇ ▇, ▇▇▇ ▇ and Lot 3 of the Property and a survey of the
Release Parcel and the remainder of the Property which would be standard
in commercial lending transactions;
(viii) Borrower shall have delivered to Lender on the date of the
release an endorsement to the policy or policies of title insurance
insuring the Mortgage reflecting the release of the Release Parcel and (A)
insuring Lender's interest in any easements created in connection with the
Release, (B) extending the effective date of the policy or policies to the
effective date of the release, and (C) confirming no change in the
priority of the Mortgage on the remainder of the Property or in the amount
of the insurance or the coverage under the policy or policies;
(ix) Borrower shall deliver to Lender an Officer's Certificate
certifying that the requirements set forth in this Section 10.24 have been
satisfied;
(x) Borrower shall deliver to Lender an agreement from the
transferee of the Release Parcel that the transferee will not actively
solicit existing tenants of the remainder of the Property to relocate from
the remainder of the Property to the improvements to be constructed on the
Release Parcel unless Borrower shall have executed a Lease with a
replacement tenant for such space being vacated which replacement tenant
is of the same general quality as the vacating tenant and which Lease with
such replacement tenant is of equal or better economic benefit (excluding
initial tenant inducements) to Borrower when compared to the remaining
term of the Lease of the tenant being replaced;
(xi) Borrower shall deliver to Lender a Rating Comfort Letter as to
the partial release of the Release Parcel; and
(xii) Borrower shall pay all out-of-pocket costs and expenses of
Lender incurred in connection with the partial release, including Lender's
reasonably attorneys' fees and expenses.
(b) (A) In connection with the release of the Release Parcel,
Lender shall consent to the transfer of an undivided tenancy in common interest
in the portion of the Property identified as "Lot 2" on Schedule 6 ("LOT 2") to
the transferee of Lot 3 and shall release the Lien of the Mortgage (and related
Loan Documents) as to such tenancy in common interest, provided that Borrower
shall have satisfied the following conditions:
(i) The undivided tenancy in common interest to be released shall
be the same fractional interest as the rentable area of the improvements
to be constructed on Lot 3 divided by the aggregate of the rentable area
of the improvements to be constructed on
-84-
Lot 3 plus the then rentable area of the improvements on the remaining
portion of the Property encumbered by the Mortgage after the Release;
(ii) The tenancy in common agreement shall (1) include a waiver of
any partition rights that the parties thereto may have, (2) provide for an
option in favor of the owner of Lot 1 to purchase Lot 2 or the co-tenancy
interest of the owner of Lot 3 in Lot 2 for nominal consideration in the
event that the Lot 3 owner seeks a partition of the tenancy in common
under California law or in the event the bankruptcy trustee of the
debtor's estate in a Bankruptcy Proceeding with respect to the Lot 3 owner
seeks a partition of the tenancy in common under the federal bankruptcy
code, and (3) provide that the operation of the parking garage and all
decisions pertaining thereto shall be in accordance with the provisions of
the REA and (4) otherwise be in form and substance that would be standard
in similar agreements with respect to comparable commercial transactions
and not contain any non-standard provisions that are materially adverse to
the interests of Lender;
(iii) The holder of the tenancy in common interest shall be the
transferee of Lot 3 and shall be a Special Purpose Bankruptcy Remote
Entity whose only purpose is to own, develop, finance, operate and dispose
of Lot 3 and to hold the tenancy in common interest in Lot 2;
(iv) Borrower shall deliver to Lender an opinion of counsel in form
and substance that is standard in commercial lending transactions that the
Lot 3 Owner's waiver of partition rights under California law is
enforceable, which opinion may be a reasoned analysis subject to customary
qualifications of reasoned opinions;
(v) Borrower shall have delivered to Lender on the date of the
release of the tenancy in common interest, an endorsement to the Title
Insurance Policy reflecting such release and (1) insuring Lender's
interest in Borrower's tenancy in common interest in Lot 2, (2) extending
the effective date of the Title Insurance Policy to the effective date of
such release, (3) confirming that no change has occurred in the priority
of the Lien of the Mortgage encumbering Borrower's tenancy in common
interest in Lot 2, and (4) confirming the Lien of the Mortgage on the
rights of Borrower under the REA; and
(vi) Borrower shall amend its organizational documents to permit
Borrower to own the tenancy in common interest in Lot 2.
(B) In the event that Borrower elects not to satisfy the
conditions for the release of the tenancy in common interest pursuant to clause
(A) above, Lender shall consent to the transfer of Lot 2 to a separate
association (the "ASSOCIATION") in which Borrower shall own not less than a
fifty percent (50%) interest, and the release of the Mortgage as to Lot 2,
provided that the following conditions have been satisfied.
(i) The owners of Lot 1 shall own not less than a fifty percent
(50%) interest in the Association;
(ii) The organizational documents of the Association shall (1)
provide that the owner of Lot 1 shall have the right to reasonably approve
the budget for the parking
-85-
garage and all major decisions, (2) provide that the interests in the
Association shall not be transferred separate from the ownership interests
in Lot 1 or Lot 3, as applicable, (3) provide that the operation of the
parking garage and all decisions pertaining thereto shall be in accordance
with the provisions of the REA, (4) provide that such organizational
documents may not be amended without Lender's consent and (5) otherwise be
in form and substance that would be standard in similar agreements with
respect to comparable commercial transactions and not contain any
non-standard provisions that are materially adverse to the interests of
Lender;
(iii) The Association shall be Special Purpose Bankruptcy Remote
Entity whose only purpose is to own Lot 2 and operate the parking
structure located thereon;
(iv) Following the transfer of Lot 2 to the Association, Lot 2
shall remain subject to the REA, and Lender shall be granted a first
priority security interest in Borrower's ownership interest in the
Association;
(v) Borrower shall have delivered to Lender on the date of the
transfer to the Association an endorsement to the Title Insurance Policy
(or separate coverage) reflecting the transfer to the Association and (1)
extending the effective date of the Title Insurance Policy to the
effective date of the transfer, and (2) confirming no change in the
priority of the Mortgage encumbering Lot 1 has occurred;
(vi) Borrower shall amend its organizational documents to permit
Borrower to own the interests in the Association;
(vii) Borrower shall have delivered to Lender a Rating Comfort
Letter as to the matters described in this Section (B); and
(viii) Borrower shall have delivered to Lender the items described
in clauses (A) and (B) of Section 10.24(a)(iv) with respect to Lot 2; and
(ix) Borrower shall have delivered to Lender an agreement from the
Association which provides that the Association shall maintain the
Policies required by the terms of this Agreement with respect to Lot 2,
that alterations to Lot 2 shall be performed in accordance with the terms
of this Agreement, and that Casualty Proceeds and Condemnation Proceeds
with respect to Lot 2 shall be applied in accordance with the terms of the
REA but shall be held by Lender and disbursed pursuant to the terms of
this Agreement.
(C) In the event that Borrower shall fail to satisfy the
requirements of Section 10.24(b)(A) or (B), then until such time as Borrower
satisfies the requirements of Section 10.24(b)(A) or (B), the entire fee
interest in Lot 2 shall remain in the name of Borrower, subject to the Mortgage
and the REA.
(c) If Borrower has elected to release the Release Parcel and the
requirements of this Section 10.24 have been satisfied, the Release Parcel shall
be released from the Lien of the Mortgage (and related Loan Documents), the REA
Amendment (if applicable) may be executed and Lender shall consent and
subordinate the Lien of the Mortgage thereto. In
-86-
connection with the release of the Lien, Borrower shall submit to Lender, not
less than fifteen (15) days prior to the Release Date (or such shorter time as
is acceptable to Lender in its sole discretion), a release of Lien (and related
Loan Documents) for execution by Lender and a consent and subordination to the
REA Amendment (if applicable) for execution by Lender. Such release and consent
and subordination shall be in a form appropriate in the jurisdiction in which
the Property is located. Borrower shall pay all costs, taxes and expenses
associated with the release of the Lien of the Mortgage, including Lender's
reasonable attorneys' fees. Borrower shall cause title to the Release Parcel so
released from the Lien of the Mortgage to be transferred to and held by a Person
other than Borrower.
(d) Not less than thirty (30) days prior to the Release Date (or a
shorter period of time if permitted by the Lender in its sole discretion),
Borrower shall provide the Preliminary Release Documents (as hereinafter
defined) to the Lender. For purposes of this Section 10.24(c), the term
"PRELIMINARY RELEASE DOCUMENTS" shall mean the following documents: (A) Executed
documents satisfying the requirements of Sections 10.24(a)(ii) and (iii); and
(B) Pro-forma (unexecuted) documents meeting the requirements of Sections
10.24(a)(iv),(v), (vii), (viii), (ix) and (x).
-87-
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
BORROWER:
▇▇▇▇▇▇▇ PROPERTIES - 611 N. BRAND LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇▇ PROPERTIES - GLENDALE CENTER, LLC,
a California limited liability company,
its Member
By: ▇▇▇▇▇▇▇ PROPERTIES - GLENDALE, LLC,
a California limited liability company,
its Member
By: ▇▇▇▇▇▇▇ PROPERTIES, L.P.,
a Maryland limited partnership,
its Member
By: ▇▇▇▇▇▇▇ PROPERTIES, INC.,
a Maryland corporation,
its General Partner
By: /s/ ▇▇▇▇ ▇. Lammas
___________________________
Name: ▇▇▇▇ ▇. Lammas
Title: Senior Vice
President and
Secretary
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
LENDER:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
SCHEDULE 1
REQUIRED REPAIRS
Sch. 1-1
SCHEDULE 2
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
Section 4.12
▇▇▇▇ Elevator (elevator maintenance)
Cisco Systems Capital (phone equipment lease)
Section 4.22
Prior to the name change to Borrower's current name, Borrower operated under the
name "▇▇▇▇▇▇▇ Partners -- 611 N. Brand LLC."
Section 4.33(d)
Except for the Ground Lease.
Sch. 2-1
SCHEDULE 3
RENT ROLL
Sch. 3-1
SCHEDULE 4
ORGANIZATION OF BORROWER
Sch. 4-1
SCHEDULE 5
DEFINITION OF SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY
A "SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY" means (x) a limited
liability company that is a Single Member Bankruptcy Remote LLC or (y) a
corporation, limited partnership or limited liability company which at all times
since its formation and at all times thereafter (i) was and will be organized
solely for the purpose of (A) owning the Property or (B) acting as a general
partner of the limited partnership that owns the Property or member of the
limited liability company that owns the Property; (ii) has not engaged and will
not engage in any business unrelated to (A) the ownership of the Property, (B)
acting as general partner of the limited partnership that owns the Property or
(C) acting as a member of the limited liability company that owns the Property,
as applicable; (iii) has not had and will not have any assets other than those
related to the Property or its partnership or member interest in the limited
partnership or limited liability company that owns the Property, as applicable;
(iv) has not engaged, sought or consented to and will not engage in, seek or
consent to any dissolution, winding up, liquidation, consolidation, merger,
asset sale (except as expressly permitted by this Agreement), transfer of
partnership or membership interests or the like, or amendment of its limited
partnership agreement, articles of incorporation, articles of organization,
certificate of formation or operating agreement (as applicable); (v) if such
entity is a limited partnership, has and will have, as its only general
partners, Special Purpose Bankruptcy Remote Entities that are corporations; (vi)
if such entity is a corporation, has and will have at least one Independent
Director, and has not caused or allowed and will not cause or allow the board of
directors of such entity to take any action requiring the unanimous affirmative
vote of 100% of the members of its board of directors unless all of the
directors and all Independent Directors shall have participated in such vote;
(vii) if such entity is a limited liability company, has and will have at least
one member that has been and will be a Special Purpose Bankruptcy Remote Entity
that has been and will be a corporation and such corporation is the managing
member of such limited liability company; (viii) if such entity is a limited
liability company, has and will have articles of organization, a certificate of
formation and/or an operating agreement, as applicable, providing that (A) such
entity will dissolve only upon the bankruptcy of the managing member, (B) the
vote of a majority-in-interest of the remaining members is sufficient to
continue the life of the limited liability company in the event of such
bankruptcy of the managing member and (C) if the vote of a majority-in-interest
of the remaining members to continue the life of the limited liability company
following the bankruptcy of the managing member is not obtained, the limited
liability company may not liquidate the Property without the consent of the
applicable Rating Agencies for as long as the Loan is outstanding; (ix) has not,
and without the unanimous consent of all of its partners, directors or members
(including all Independent Directors), as applicable, will not, with respect to
itself or to any other entity in which it has a direct or indirect legal or
beneficial ownership interest (A) file a bankruptcy, insolvency or
reorganization petition or otherwise institute insolvency proceedings or
otherwise seek any relief under any laws relating to the relief from debts or
the protection of debtors generally, (B) seek or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official for such entity or for all or any portion of such entity's properties,
(C) make any assignment for the benefit of such entity's creditors or (D) take
any action that might cause such entity to become insolvent; (x) has remained
and will remain solvent and has maintained and will
Sch. 5-1
maintain adequate capital in light of its contemplated business operations; (xi)
has not failed and will not fail to correct any known misunderstanding regarding
the separate identity of such entity; (xii) has maintained and will maintain its
accounts, books and records separate from any other Person and will file its own
tax returns; (xiii) has maintained and will maintain its books, records,
resolutions and agreements as official records; (xiv) has not commingled and
will not commingle its funds or assets with those of any other Person; (xv) has
held and will hold its assets in its own name; (xvi) has conducted and will
conduct its business in its name; (xvii) has maintained and will maintain its
financial statements, accounting records and other entity documents separate
from any other Person; (xviii) has paid and will pay its own liabilities,
including the salaries of its own employees, out of its own funds and assets;
(xix) has observed and will observe all partnership, corporate or limited
liability company formalities, as applicable; (xx) has maintained and will
maintain an arm's-length relationship with its Affiliates; (xxi) (a) if such
entity owns the Property, has and will have no indebtedness other than the Loan
and unsecured trade payables in the ordinary course of business relating to the
ownership and operation of Property which (1) do not exceed, at any time, a
maximum amount of 1% of the original amount of the Principal and (2) are paid
within sixty (60) days of the date incurred, or (b) if such entity acts as the
general partner of a limited partnership which owns the Property, has and will
have no indebtedness other than unsecured trade payables in the ordinary course
of business relating to acting as general partner of the limited partnership
which owns the Property which (1) do not exceed, at any time, $10,000 and (2)
are paid within thirty (30) days of the date incurred, or (c) if such entity
acts as a managing member of a limited liability company which owns the
Property, has and will have no indebtedness other than unsecured trade payables
in the ordinary course of business relating to acting as a member of the limited
liability company which owns the Property which (1) do not exceed, at any time,
$10,000 and (2) are paid within thirty (30) days of the date incurred; (xxii)
has not and will not assume or guarantee or become obligated for the debts of
any other Person or hold out its credit as being available to satisfy the
obligations of any other Person except for the Loan; (xxiii) has not and will
not acquire obligations or securities of its partners, members or shareholders;
(xxiv) has allocated and will allocate fairly and reasonably shared expenses,
including shared office space, and uses separate stationery, invoices and
checks; (xxv) except in connection with the Loan, has not pledged and will not
pledge its assets for the benefit of any other Person; (xxvi) has held itself
out and identified itself and will hold itself out and identify itself as a
separate and distinct entity under its own name and not as a division or part of
any other Person; (xxvii) has maintained and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person; (xxviii) has not
made and will not make loans to any Person; (xxix) has not identified and will
not identify its partners, members or shareholders, or any Affiliate of any of
them, as a division or part of it; (xxx) has not entered into or been a party
to, and will not enter into or be a party to, any transaction with its partners,
members, shareholders or Affiliates except in the ordinary course of its
business and on terms which are intrinsically fair and are no less favorable to
it than would be obtained in a comparable arm's-length transaction with an
unrelated third party; (xxxi) has and will have no obligation to indemnify its
partners, officers, directors, members or Special Members, as the case may be,
or has such an obligation that is fully subordinated to the Debt and will not
constitute a claim against it if cash flow in excess of the amount required to
pay the Debt is insufficient to pay such obligation; and (xxxii) will consider
the interests of its creditors in connection with all corporate, partnership or
limited liability actions, as applicable.
Sch. 5-2
"INDEPENDENT DIRECTOR" means (x) in the case of a Single Member
Bankruptcy Remote LLC: a natural person selected by Borrower and reasonably
satisfactory to Lender who shall not have been at the time of such individual's
appointment as an Independent Director of the Single Member Bankruptcy Remote
LLC, does not thereafter become while serving as an Independent Director (except
pursuant to an express provision in the Single Member Bankruptcy Remote LLC's
limited liability company agreement providing for the Independent Director to
become a Special Member (defined below) upon the sole member of such Single
Member Bankruptcy Remote LLC ceasing to be a member in such Single Member
Bankruptcy Remote LLC) and shall not have been at any time during the preceding
five years (i) a shareholder/partner/member of, or an officer or employee of,
Borrower or any of its shareholders, subsidiaries or Affiliates, (ii) a director
(other than as an Independent Director) of any shareholder, subsidiary or
Affiliate of Borrower, (iii) a customer of, or supplier to, Borrower or any of
its shareholders, subsidiaries or Affiliates, (iv) a Person who Controls any
such shareholder, supplier or customer, or (v) a member of the immediate family
of any such shareholder/ director/partner/member, officer, employee, supplier or
customer or of any director of Borrower (other than as an Independent Director);
and (y) in the case of a corporation, an individual selected by Borrower and
reasonably satisfactory to Lender who shall not have been at the time of such
individual's appointment as a director, does not thereafter become while serving
as an Independent Director and shall not have been at any time during the
preceding five years (i) a shareholder/partner/member of, or an officer,
employee, consultant, agent or advisor of, Borrower or any of its shareholders,
subsidiaries, members or Affiliates, (ii) a director of any shareholder,
subsidiary, member, or Affiliate of Borrower other than Borrower's general
partner or managing member, (iii) a customer of, or supplier to, Borrower or any
of its shareholders, subsidiaries or Affiliates that derives more than 10% of
its purchases or income from its activities with Borrower or any Affiliate of
Borrower, (iv) a Person who Controls any such shareholder, supplier or customer,
or (v) a member of the immediate family (including a grandchild or sibling) of
any such shareholder/director/partner/member, officer, employee, supplier or
customer or of any other director of Borrower's general partner or managing
member.
"SINGLE MEMBER BANKRUPTCY REMOTE LLC" means a limited liability
company organized under the laws of the State of Delaware which at all times
since its formation and at all times thereafter (i) complies with the following
clauses of the definition of Special Purpose Bankruptcy Remote Entity above:
(i)(A), (ii)(A), (iii), (iv), (ix), (x), (xi) and (xiii) through (xxxii); (ii)
has maintained and will maintain its accounts, books and records separate from
any other person; (iii) has and will have an operating agreement which provides
that the business and affairs of Borrower shall be managed by or under the
direction of a board of one or more directors designated by Sole Member, and at
all times there shall be at least two duly appointed Independent Directors on
the board of directors, and the board of directors will not take any action
requiring the unanimous affirmative vote of 100% of the members of its board of
directors unless, at the time of such action there are at least two members of
the board of directors who are Independent Directors, and all of the directors
and all Independent Directors shall have participated in such vote; (iv) has and
will have an operating agreement which provides that, as long as any portion of
the Debt remains outstanding, (A) upon the occurrence of any event that causes
Sole Member to cease to be a member of Borrower (other than (x) upon an
assignment by Sole Member of all of its limited liability company interest in
Borrower and the admission of the transferee, if permitted pursuant to the
organizational documents of Borrower and the Loan Documents, or (y) the
resignation of Sole Member and the admission of an additional member of
Sch. 5-3
Borrower, if permitted pursuant to the organizational documents of Borrower and
the Loan Documents), the person acting as an Independent Director of Borrower
shall, without any action of any Person and simultaneously with Sole Member
ceasing to be a member of Borrower, automatically be admitted as the sole member
of Borrower (the "SPECIAL MEMBER") and shall preserve and continue the existence
of Borrower without dissolution, (B) no Special Member may resign or transfer
its rights as Special Member unless (x) a successor Special Member has been
admitted to Borrower as a Special Member, and (y) such successor Special Member
has also accepted its appointment as an Independent Director and (C) except as
expressly permitted pursuant to the terms of this Agreement, Sole Member may not
resign and no additional member shall be admitted to Borrower; (v) has and will
have an operating agreement which provides that, as long as any portion of the
Debt remains outstanding, (A) Borrower shall be dissolved, and its affairs shall
be would up only upon the first to occur of the following: (x) the termination
of the legal existence of the last remaining member of Borrower or the
occurrence of any other event which terminates the continued membership of the
last remaining member of Borrower in Borrower unless the business of Borrower is
continued in a manner permitted by its operating agreement or the Delaware
Limited Liability Company Act (the "ACT") or (y) the entry of a decree of
judicial dissolution under Section 18-802 of the Act; (B) upon the occurrence of
any event that causes the last remaining member of Borrower to cease to be a
member of Borrower or that causes Sole Member to cease to be a member of
Borrower (other than (x) upon an assignment by Sole Member of all of its limited
liability company interest in Borrower and the admission of the transferee, if
permitted pursuant to the organizational documents of Borrower and the Loan
Documents, or (y) the resignation of Sole Member and the admission of an
additional member of Borrower, if permitted pursuant to the organizational
documents of Borrower and the Loan Documents), to the fullest extent permitted
by law, the personal representative of such member shall be authorized to, and
shall, within 90 days after the occurrence of the event that terminated the
continued membership of such member in Borrower, agree in writing to continue
the existence of Borrower and to the admission of the personal representative or
its nominee or designee, as the case may be, as a substitute member of Borrower,
effective as of the occurrence of the event that terminated the continued
membership of such member in Borrower; (C) the bankruptcy of Sole Member or a
Special Member shall not cause such member or Special Member, respectively, to
cease to be a member of Borrower and upon the occurrence of such an event, the
business of Borrower shall continue without dissolution; (D) in the event of
dissolution of Borrower, Borrower shall conduct only such activities as are
necessary to wind up its affairs (including the sale of the assets of Borrower
in an orderly manner), and the assets of Borrower shall be applied in the
manner, and in the order of priority, set forth in Section 18-804 of the Act;
and (E) to the fullest extent permitted by law, each of Sole Member and the
Special Members shall irrevocably waive any right or power that they might have
to cause Borrower or any of its assets to be partitioned, to cause the
appointment of a receiver for all or any portion of the assets of Borrower, to
compel any sale of all or any portion of the assets of Borrower pursuant to any
applicable law or to file a complaint or to institute any proceeding at law or
in equity to cause the dissolution, liquidation, winding up or termination of
Borrower.
Sch. 5-4
SCHEDULE 6
RELEASE PARCEL
Sch. 6-1
CASH MANAGEMENT AGREEMENT
(this "AGREEMENT"),
dated as of October 14, 2003
among
▇▇▇▇▇▇▇ PROPERTIES - 611 N. BRAND LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("BORROWER"),
▇▇▇▇▇▇▇ PROPERTIES, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "MANAGER")
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(together with its successors and
assigns, the "LENDER")
and
WACHOVIA BANK, NATIONAL ASSOCIATION
8739 Research Drive, URP4
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(the "DEPOSIT BANK")
WHEREAS, pursuant to that certain Loan Agreement, dated as of the
date hereof (the "LOAN AGREEMENT"), by and between Borrower and Lender, the
Lender has provided financing (the "LOAN") to the Borrower secured by the
property owned by the Borrower and commonly known as the Glendale Center,
Glendale, California (the "PROPERTY"); and
WHEREAS, the Lender shall deliver to the bank (the "CLEARING BANK")
maintaining the operating account of the Borrower (the "CLEARING ACCOUNT") a
Clearing Bank Instruction Letter in the form attached as Exhibit A hereto
(together with any modifications, amendments or replacements thereof, the
"INSTRUCTION LETTER"), which provides that all Rents (as defined in the Loan
Agreement) be deposited in such Clearing Account upon delivery of the
Instruction Letter, and swept periodically into the accounts established
hereunder.
NOW THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
(a) As used herein the following capitalized terms shall have the
respective meanings set forth below:
"ACCOUNT PROCEEDS" shall mean any and all Rents and other revenue in
connection with the Property that is deposited by any Clearing Bank, the
Borrower, the Manager or otherwise into the Cash Collateral Account from time to
time.
"BORROWER REMAINDER ACCOUNT" shall mean the account of Borrower to
which monies in the Borrower Remainder Sub-account are allocated in accordance
with the terms hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
any day on which commercial banks in New York, New York or the City in which the
Deposit Bank is located are required or permitted by law to be closed.
"CASH COLLATERAL ACCOUNT" shall have the meaning ascribed to such
term in Section 2 hereof.
"CERTIFICATES" means the securities issued in connection with a
Securitization of the Loan.
"CLEARING ACCOUNT" shall have the meaning given such term in the
Recitals.
"CLEARING BANK" shall have the meaning given such term in the
Recitals.
"COLLATERAL" shall mean each of the items pledged by Borrower in
Section 6(c) hereof.
"COLLECTION PERIOD" with respect to any Payment Date, shall mean the
period of days from the Payment Date occurring during the month immediately
preceding the Payment Date to the day immediately preceding such Payment Date.
With respect to the first Payment Date, the Collection Period shall commence on
and include the date hereof and end on and include the day immediately preceding
such first Payment Date.
"DEED OF TRUST" shall mean that certain Deed of Trust, Assignment of
Leases and Rents and Fixture Filing, dated as of the date hereof, made by
Borrower for the benefit of Lender.
"DEPOSIT BANK" shall mean Wachovia Bank, National Association or
such other bank or banks selected by the Lender to maintain the Cash Collateral
Account.
"ELIGIBLE ACCOUNT" either (i) an account or accounts maintained with
an Eligible Bank or (ii) a Trust Account. Eligible Accounts shall bear interest.
"ELIGIBLE BANK" shall mean a bank that (i) satisfies the Rating
Criteria and (ii) insures deposits held by such bank through the Federal Deposit
Insurance Corporation.
"INSTRUCTION LETTER" shall have the meaning ascribed to such term in
the Recitals.
"LOAN" shall have the meaning ascribed to such term in the Recitals.
"LOAN AGREEMENT" shall have the meaning ascribed to such term in the
Recitals.
"LOAN DOCUMENTS" shall have the meaning set forth for such term in
the Loan Agreement.
"LOAN SATISFACTION EVENT" shall mean the satisfaction in full of the
Obligations.
"LOAN SUB-ACCOUNTS" shall have the meaning ascribed to such term in
Section 2(c).
"MONTHLY PAYMENT AMOUNT" shall have the meaning given to such term
in the Note.
"NOTE" shall mean that certain Promissory Note of even date
herewith, in the original principal amount of $80,000,000, made by the Borrower
in favor of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
"OBLIGATIONS" shall mean any and all debt, liabilities and
obligations of the Borrower to the Lender pursuant to or in connection with the
Loan, whether now or hereafter existing, including without limiting the
generality of the foregoing, the indebtedness evidenced by the Note, all
interest accruing thereon, and any and all debt, liabilities and obligations of
the Borrower under the Loan Documents.
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"OPERATING EXPENSES" shall mean, collectively, the Approved
Operating Expenses and Approved Capital Expenses (as defined in the Loan
Agreement).
"PAYMENT DATE" shall have the meaning given to such term in the
Note.
"PERMITTED INVESTMENTS" shall have the meaning given to such term in
the Loan Agreement.
"PERSON" shall mean any individual, sole proprietorship,
partnership, limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party or government (whether territorial, national, federal, state,
county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"PROPERTY" shall have the meaning ascribed to such term in the
Recitals.
"RATING AGENCIES" shall mean (i) any nationally-recognized
statistical rating organizations that provide a rating on any Certificates on
the date of issuance of the Certificates or (ii) prior to the issuance of the
Certificates, ▇▇▇▇▇'▇ (as defined in the Loan Agreement), S&P (as defined in the
Loan Agreement) and any other nationally-recognized statistical rating
organizations that have been designated by the Lender in its sole discretion.
"RATING CRITERIA" with respect to any Person, shall mean that (i)
the short-term unsecured debt obligations of such Person are rated at least
"A-1" by S&P, "P-1" by ▇▇▇▇▇'▇ and, if rated by another Rating Agency, are rated
in an equivalent category by such other Rating Agency, if deposits are held by
such person for a period of less than 30 days, or (ii) the long-term unsecured
debt obligations of such Person are rated at least "AA-" by S&P, "Aa2" by
▇▇▇▇▇'▇ and, if rated by another Rating Agency, are rated in an equivalent
category by such other Rating Agency, if deposits are held by such person for a
period of 30 days or more.
"RECONCILIATION DATE" shall mean, as applicable, January 31st, April
30th, July 31st, and October 31st of each year that the Loan remains
outstanding.
"RENTS" shall have the meaning ascribed to such term in the Deed of
Trust.
"SECURITIZATION" shall have the meaning given to such term in the
Loan Agreement.
"SERVICER" shall mean a servicer or account administrator of the
Lender designated by and acting for the benefit of the Lender.
"TRUST ACCOUNT" shall mean a segregated trust account maintained by
a corporate trust department of a federal depository institution or a state
chartered depository institution subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the Code of Federal Regulations Section
9.10(B) which has corporate trust powers and is acting in its fiduciary
capacity.
-3-
(b) The meanings given to capitalized terms defined herein shall
be equally applicable in both singular and plural forms of such terms.
(c) Capitalized terms used and not defined herein shall have the
respective meanings given to such terms in the Loan Agreement.
SECTION 2. ESTABLISHMENT OF THE CASH COLLATERAL ACCOUNT.
(a) The Lender has established and will maintain while the Loan is
outstanding a cash collateral account (which account shall be an Eligible
Account or may be a book-entry sub-account of an Eligible Account) at the
Deposit Bank (the "CASH COLLATERAL ACCOUNT") which shall be entitled "Greenwich
Capital Financial Products, Inc. as Beneficiary of ▇▇▇▇▇▇▇ Properties - 611 N.
Brand LLC Cash Collateral Account". In connection with a Securitization, the
Lender shall have the right to cause Deposit Bank to entitle the Cash Collateral
Account with such other designation as the Lender may select in its reasonable
discretion to reflect such assignment or transfer. The Lender shall, or shall
cause the Servicer to, cause the Deposit Bank to deposit into the Cash
Collateral Account, all Rents and other amounts transferred to the Deposit Bank
from the Clearing Bank.
(b) The Cash Collateral Account shall be an interest bearing
Eligible Account. The interest rate with respect to funds held in the Cash
Collateral Account shall be the rate for such deposits as is customarily paid by
the Deposit Bank. All interest income or other earnings on funds, if any,
remaining in the Cash Collateral Account shall be for the benefit of the
Borrower and credited to, and become a part of, the Cash Collateral Account. The
Cash Collateral Account shall be assigned the federal tax identification number
of the Borrower, which number is ▇▇-▇▇▇▇▇▇▇. Borrower shall provide Lender or
the Deposit Bank, at any time upon request of Lender, with a Form W-8 or W-9 to
evidence Borrower is not subject to any back-up withholding under the United
States Internal Revenue Code. Prior to application in accordance with the terms
hereof, all amounts in the Cash Collateral Account shall remain an asset of
Borrower, subject to the lien and security interest granted Lender hereunder,
and subject to all of the terms and conditions of this Agreement and the other
Loan Documents.
(c) The following sub-accounts (collectively, the "LOAN
SUB-ACCOUNTS") of the Cash Collateral Account shall be maintained on a
ledger-entry basis:
(i) "Tax and Insurance Sub-account";
(ii) "Monthly Debt Service Sub-account";
(iii) "Required Repairs Sub-account;
(iv) "Rollover Reserve Sub-account";
(v) "Borrower Remainder Sub-account";
(vi) "Operating Expense Sub-account";
(vii) "Casualty and Condemnation Proceeds Sub-account";
-4-
(viii) "Security Deposit Subaccount"; and
(ix) "Extraordinary Receipts Sub-account".
Amounts allocated to the Loan Sub-accounts shall be disbursed in
accordance with the terms of this Agreement and the Loan Agreement.
(d) (i) The Lender shall deliver one or more executed Instruction
Letters to the Clearing Bank. If the Clearing Bank shall request any changes,
modifications or supplements to any Instruction Letter to conform to the
Clearing Bank's customary practice or requirements, as the same may change from
time to time, then if such changes, modifications or supplements are reasonably
acceptable to Lender, Borrower shall execute and deliver to Lender such
instruments as the Clearing Bank shall reasonably request to effectuate such
modifications or changes. In the event the Borrower fails to execute such
Instruction Letter as provided above within three (3) Business Days after
receipt of written request for such execution, Borrower hereby appoints the
Lender as its attorney-in-fact with full authority to enter into replacement
Instruction Letter(s) and to execute on behalf of the Borrower any new modified
Instruction Letter acceptable to the proposed Clearing Bank. All costs and
expenses incurred by the Lender to negotiate and execute any modified
Instruction Letter shall be paid by the Borrower.
(ii) If the Clearing Bank fails to perform its obligations as
set forth in the Instruction Letter, then, upon the request of Lender, within
ten (10) Business Days, the Borrower will establish a new Eligible Account
(which shall become the Clearing Account) at a bank selected by the Borrower and
reasonably acceptable to Lender and shall cause all funds in the existing
Clearing Account to be transferred to the new Clearing Account and any future
Rents from the Property to be deposited in such new Clearing Account.
(iii) In the event that Borrower requests that a new Clearing
Account be established (which new Clearing Account shall be an Eligible
Account), and Lender consents to such change, which consent shall not be
unreasonably withheld or delayed, Borrower shall, prior to the establishment of
such account, execute a replacement Instruction Letter to cover the new account,
which replacement Instruction Letter shall be in the form of the Instruction
Letter annexed hereto as Exhibit A with such changes thereto as may be requested
by such new Clearing Bank in order to conform such Instruction Letter with such
new bank's customary practice. The existing Clearing Account shall remain in
effect until Borrower has executed a replacement Instruction Letter for the new
Clearing Account and the new Clearing Bank has acknowledged receipt of such
replacement Instruction Letter and has agreed to comply with the instructions
contained therein by executing an Acknowledgment in the form of Schedule I
attached to Exhibit A attached hereto, and Borrower may rescind its request for
a new Clearing Account in the event Borrower does not approve of any changes to
the form of the Instruction Letter annexed hereto as Exhibit A requested by such
new Clearing Bank.
(e) The Lender or the Servicer shall, at the direction of
Borrower, direct the Deposit Bank to invest amounts allocated to the Cash
Collateral Account in Permitted Investments selected by the Borrower. All
earnings on such Permitted Investments on funds allocated to the Cash Collateral
Account shall be (a) added to and become part of the Cash Collateral Account,
(b) taxed as income of the Borrower, (c) for the benefit of the Borrower,
-5-
subject to Lender's rights pursuant to this Agreement, and (d) remitted to
Borrower jointly once per calendar quarter, provided that no Event of Default
has occurred and is continuing, to the extent not already disbursed or applied
in accordance with this Agreement. Borrower shall have liability for any loss in
investments of funds that are invested in Permitted Investments and no such loss
or liability shall affect Borrower's obligations to make all payments and
deposits required to be made by Borrower under the Loan Documents.
Notwithstanding anything to the contrary in this Agreement or in any of the
other Loan Documents, upon the occurrence and during the continuance of an Event
of Default, Borrower shall have no right to select Permitted Investments.
(f) It is the intention of the parties hereto that the entire
amounts deposited in the Cash Collateral Account (or as much thereof as the
Lender may reasonably arrange to invest) may be invested in Permitted
Investments selected by the Borrower, and, in such event, that the Cash
Collateral Account shall be a so-called "zero balance" account (unless it is a
Trust Account). All funds in the Cash Collateral Account that are invested in a
Permitted Investment are deemed to be held in the Cash Collateral Account for
all purposes of the Loan Agreement and the other Loan Documents.
(g) In order to further secure the performance by the Borrower of
the Obligations and as a material inducement for the Lender to make the Loan in
accordance with the terms of the Loan Documents, the Borrower hereby (i)
requests that the Cash Collateral Account be established on its behalf at the
Deposit Bank in the name set forth above and (ii) acknowledges that (A) the Cash
Collateral Account will be subject to the sole dominion, control and discretion
of the Lender (which may be exercised through the Servicer), subject to the
terms, covenants and conditions of this Agreement and the Loan Agreement, (B)
the Lender shall have the sole right to make withdrawals or transfers of funds
from the Cash Collateral Account and (C) neither the Borrower nor any other
Person claiming on behalf of or through the Borrower shall have any right or
authority, whether express or implied, to make use of, or withdraw any funds,
investments or other properties from, the Cash Collateral Account, or to give
any instructions with respect to the Cash Collateral Account.
(h) Deposit Bank will send a monthly report to Borrower (in a
manner consistent with Deposit Bank's standard practice) by regular U.S. mail at
the Borrower's address specified above, which monthly report shall specify the
balance of, and credits and charges to, the Cash Collateral Account and each
Sub-account thereof for each calendar day of the previous month. Deposit Bank
will send to the Lender (in a manner consistent with Deposit Bank's standard
practices), by regular U.S. mail at the Lender's address specified, copies of
all correspondence, notices, account statements and other information (but not
canceled checks) which Deposit Bank is obligated to send to Borrower. Deposit
Bank also agrees to provide to each of Borrower and the Lender (as a service
under this Agreement) copies of account statements and other account
information, including account balances, by telephone and by computer
communication, to the extent practicable and as shall have been requested by
Borrower or by Lender. Borrower shall be deemed at all times to have consented
to Deposit Bank's release of such account information to Lender. Deposit Bank's
liability for failure to comply with this Section shall not exceed the cost of
providing such information.
-6-
SECTION 3. ALLOCATION AND DISBURSEMENT OF FUNDS IN THE CASH COLLATERAL ACCOUNT.
(a) With respect to each Collection Period, the Lender or the
Servicer shall allocate, and shall cause the Deposit Bank to allocate, from time
to time during such Collection Period the amounts deposited in the Cash
Collateral Account in the order and priority set forth in Section 3.8 of the
Loan Agreement, such allocation to be done promptly upon receipt of any
deposits.
(i) Amounts deposited in connection with certain Required
Repairs pursuant to Section 3.2 of the Loan Agreement shall be allocated to the
Required Repairs Sub-account.
(ii) Amounts deposited in the Tax and Insurance Impound Fund
pursuant to Section 3.3 of the Loan Agreement shall be allocated to the Tax and
Insurance Sub-account.
(iii) Amounts deposited in connection with certain Rollover
Reserves pursuant to Section 3.4 of the Loan Agreement shall be allocated to the
Rollover Reserve Sub-account.
(iv) Amounts deposited in connection with any Casualty or
Condemnation pursuant to Section 3.5 of the Loan Agreement shall be allocated to
the Casualty/Condemnation Sub-account.
(v) Amounts deposited in the Security Deposit Account
pursuant to Section 3.6 of the Loan Agreement shall be allocated to the Security
Deposit Sub-account.
(b) Each Collection Period, the Lender or the Servicer shall
disburse or cause the Deposit Bank to disburse:
(i) Amounts allocated to the Required Repairs Sub-account as
set forth in Section 3.2 of the Loan Agreement;
(ii) Amounts allocated to the Tax and Insurance Sub-account
as set forth in Section 3.3 of the Loan Agreement;
(iii) Amounts allocated to the Rollover Reserve Sub-account as
set forth in Section 3.4 of the Loan Agreement;
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(iv) Amounts allocated to the Operating Expense Sub-account
on each Business Day to the following bank account (the "OPERATING ACCOUNT")
(the amount to be sent to such Operating Account to be determined in accordance
with Section 3.8 of the Loan Agreement and pursuant to the Approved Annual
Budget for Borrower as such Approved Annual Budget may be adjusted in accordance
with Section 6.3.4 of the Loan Agreement):
Bank: Bank of America
ABA #: ▇▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Account: ▇▇▇▇▇▇▇ Properties - 611 N. Brand LLC, Operating Acct BMO
Account #: 1420883889
(v) Amounts allocated to the Borrower Remainder Sub-account
to the following bank account:
Bank: Bank of America
ABA #: ▇▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Account: ▇▇▇▇▇▇▇ Properties - 611 N. Brand LLC, Borrower Remainder
Account #: 1420683885
SECTION 4. FEES.
(a) The Borrower agrees to pay the fees of the Clearing Bank and
Deposit Bank in accordance with the customary fees charged by the Clearing Bank
and Deposit Bank for the services described herein, as such fees are established
from time to time.
(b) Upon the request of the Borrower, the Clearing Bank and
Deposit Bank shall include their fees and the payment status thereof in an
account analysis statement.
SECTION 5. TERMINATION.
(a) The Lender may replace the Deposit Bank with a new Deposit
Bank upon five days' notice to the Borrower. The Borrower hereby agrees that it
shall take all reasonable action necessary to facilitate the transfer of the
respective obligations, duties and rights of the Deposit Bank to the successor
thereof selected by the Lender in its sole discretion.
(b) The Lender shall terminate this Agreement upon the occurrence
of a Loan Satisfaction Event and return to Borrower all monies then held in the
Cash Collateral Account promptly after liquidating all Permitted Investments.
(c) This Agreement may be terminated by Deposit Bank at any time
on not less than thirty (30) days' prior written notice to each of the Borrower
and the Lender. Deposit Bank's rights to receive reimbursement from the Borrower
under Section 4 of this Agreement and Borrower's indemnification of Deposit Bank
under Section 14 of this Agreement shall survive any termination of this
Agreement. Upon termination of this Agreement, all funds
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remaining in the Cash Collateral Account shall be forwarded by Deposit Bank
directly to Lender, unless Deposit Bank shall have received written instruction
from the Lender prior to the expiration of the thirty (30) day period set forth
above directing Deposit Bank to send such funds to the Borrower or another
depository institution approved in writing by the Lender and the Borrower.
SECTION 6. MATTERS CONCERNING THE BORROWER.
(a) Borrower hereby represents, warrants and covenants to Lender
that:
(i) Intentionally deleted.
(ii) The Borrower or the Manager shall, within three (3)
Business Days of the date hereof or within three (3) Business Days of the date
such accounts are opened, whichever is later, instruct all Persons that
presently or hereafter maintain open accounts with Borrower or the Manager, or
with whom the Manager or the Borrower presently or hereafter does business on an
"accounts receivable" basis with respect to the Property, to deliver all
payments due under such accounts to the Clearing Bank at a lock box address at
the Clearing Bank (the "LOCK BOX ADDRESS") in the form of checks or equivalent
instruments for the payment of money. Neither the Borrower nor the Manager shall
direct any such Person to make payments due under such accounts in any other
manner.
(iii) Pursuant to an instruction letter in the form of Exhibit
B hereto (a "LESSEE PAYMENT DIRECTION Letter"), the Borrower or the Manager
shall, within three (3) Business Days of the date hereof, notify and advise, or
will, for Leases executed after the date hereof, promptly notify and advise,
each tenant of the Property (collectively, the "TENANTS") under each lease with
respect to the Property (whether such lease is presently effective or executed
after the date hereof), to send directly to the Lockbox Address promptly when
due all payments, whether in the form of checks, cash, drafts, money orders or
any other type of payment whatsoever of rent or any other item payable to the
Borrower as landlord under such Leases. The foregoing requirements need not be
satisfied with respect to any Lease executed after the date hereof to the extent
the terms and conditions of the Lessee Payment Direction Letter are incorporated
in the applicable Lease.
(iv) If notwithstanding the provisions of this Section 6(a),
Borrower or Manager (or any affiliate thereof) receives any Rents then (x)
Borrower or Manager (or such affiliate) shall be deemed to hold such Rents in
trust for Lender and (y) Borrower or Manager shall deposit with the Clearing
Bank within one (1) Business Day of receipt all such Rents received by Borrower
or Manager (or such affiliate).
(b) Upon request of Lender, Borrower shall deliver to Lender such
evidence as Lender may reasonably request to evidence that Borrower is complying
with the provisions of this Section 6(a). Without the prior written consent of
the Lender, neither the Borrower nor the Manager shall (i) terminate, amend,
revoke or modify any Lessee Payment Direction Letter in any manner or (ii)
direct or cause any Tenant to pay any amount in any manner other than as
provided specifically in the Lessee Payment Direction Letter.
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(c) The Borrower hereby pledges, transfers and assigns to the
Lender, and grants to the Lender, as additional security for the payment and
performance of the Obligations, a continuing perfected first priority security
interest in and to, and a first lien upon, (i) the Cash Collateral Account, the
Clearing Account, the Operating Account and all of the Borrower's right, title
and interest in and to all cash, property or rights transferred to or deposited
therein from time to time, (ii) all earnings, investments and securities held in
the Cash Collateral Account in accordance with this Agreement and (iii) any and
all proceeds of the foregoing. This Agreement and the pledge, assignment and
grant of security interest made hereby shall secure payment of all amounts
payable by the Borrower to the Lender under the Note and the other Obligations.
The Borrower acknowledges that the Servicer, Clearing Bank and Deposit Bank are
acting as the agent of, and at the direction of, the Lender in connection with
the subject matter of this Agreement. The Borrower further agrees to execute,
acknowledge, deliver, file or do at its sole cost and expense, all other acts,
assignments, notices, agreements or other instruments as the Lender may
reasonably require in order to effectuate, assure, convey, secure, assign,
transfer and convey unto the Lender any of the rights granted by this Agreement
and to more fully perfect and protect any lien or security interest granted
hereby.
(d) In its sole discretion, the Borrower may, from time to time
deposit amounts into the Cash Collateral Account in respect of any Loan
Sub-account and/or the Operating Account from sources of the Borrower other than
those received by the Clearing Bank with respect to the then-current Collection
Period; provided, that if the Borrower deposits such amounts, the amounts
deposited shall be subject to all of the terms hereof as if not separately
deposited by the Borrower, and may not be withdrawn except as otherwise provided
for in this Agreement. Nothing contained herein shall impair or otherwise limit
Borrower's obligations to timely make the payments (including, without
limitation, interest and principal) required by the Note, the Loan Agreement and
the other Loan Documents, it being understood that such payments shall be so
timely made in accordance with the Loan Documents regardless of the amounts on
deposit in the Clearing Account or Cash Collateral Account.
(e) The Borrower hereby covenants and agrees that amounts
allocated to the Operating Expense Sub-account with respect to the payment of
operating expenses or capital expenditures shall be used only for payment of
checks made by the Borrower for the payment of operating expenses or capital
expenditures incurred in the ownership and operation of the Property and
reasonably approved by the Lender or permitted by the Loan Documents. In any
month, Borrower shall be entitled to receive and use for Cash Expenses an amount
in excess of the budgeted amount ("BUDGET VARIANCES") for such month set forth
in the Approved Annual Budget by requesting the same in writing not less than
three (3) Business Days prior to the first day of the Collection Period during
which such Budget Variances are to be disbursed so long as the aggregate amount
of all such Budget Variances so requested by Borrower in any month does not
exceed an amount that, together with any Budget Variances previously disbursed
to Borrower in such calendar year, is greater than five percent (5%) of the
total budgeted expenditures (excluding any contingency line item) for such
calendar year as set forth in the then current Approved Annual Budget.
(f) On or before the last day of each calendar quarter, Borrower
shall prepare and deliver to Lender a financial statement (the "ACTUAL
EXPENDITURE STATEMENT") in form and substance satisfactory to Lender in all
material respects setting forth all amounts expended for
-10-
Operating Expenses during the immediately preceding calendar quarter, including
showing variances from budget and setting forth a short explanation of any
variance in excess of ten percent (10%) of the budget line item in question and
identifying any payment made to an affiliate and the reasons therefor. Each
Actual Expenditure Statement shall be certified by an officer of Borrower or the
REIT as being true, correct and complete in all material respects and include a
certification that all amounts transferred to the Operating Account pursuant to
this Agreement were expended for Operating Expenses substantially in accordance
with this Agreement or shall be credited against or returned to the Cash
Collateral Account as provided below. Borrower shall promptly deliver to Lender
such further documentation (including, without limitation, invoices, canceled
checks or copies of contracts) and information as Lender may reasonably request
regarding any payments described in the Actual Expenditure Statement. On each
Reconciliation Date during the term of the Loan, if the Actual Expenditure
Statements for the immediately preceding calendar quarter indicate that the
Operating Expenses actually incurred and paid during such calendar quarter, plus
the amount necessary to maintain the Operating Account Balance Floor (as
hereinafter defined) in the Operating Account as of the last day of such
calendar quarter, were less than the amount disbursed to the Operating Account
during such calendar quarter (the positive difference in the amount disbursed to
the Operating Account and the amount actually spent on Operating Expenses is
hereafter referred to as the "EXPENSE SURPLUS"), then the funds allocated for
Operating Expenses to be disbursed to the Operating Expense Sub-account on the
next occurring Payment Date in accordance with the Approved Annual Budget (as
defined in the Note) (the "ALLOCATED DISBURSEMENT AMOUNT") shall be reduced by
an amount equal to the Expense Surplus; provided, further, that if the Allocated
Disbursement Amount is less than the Expense Surplus, then Borrower, prior to
the next occurring Payment Date, shall deposit into the Cash Collateral Account
the amount by which the Expense Surplus exceeds the Allocated Disbursement
Amount (the "ALLOCATION SURPLUS"). If Borrower shall fail to, within the
described required time periods, (i) so deposit any such Allocation Surplus into
the Cash Collateral Account, or (ii) provide the Actual Expenditure Statements
required by the terms hereof or (iii) after written request of Lender, provide
evidence of expenditures or (iv) provide to Lender the items described in
paragraph 18(b) of the Loan Agreement in accordance with the terms of such
paragraph 18(b) and (in the case of any of (i), (ii), (iii) or (iv)) such
failure continues for ten (10) or more days after notice of such failure, then
in addition to any other remedies which Lender may have with respect thereto,
Lender may elect not to fund the Operating Expense Sub-account from monies in
the Cash Collateral Account or Lender may continue to hold the funds in the
Operating Expense Sub-account until such failure is cured.
SECTION 7. CERTAIN MATTERS REGARDING THE LENDER.
(a) The parties agree that the Deposit Bank shall pay over to the
Lender all amounts deposited in any account maintained hereunder on demand,
provided, that in making such demand, the Lender gives notice to Borrower of
such demand, in writing, signed by the Lender or an authorized agent thereof,
and that an Event of Default under the Loan Agreement has occurred and is
continuing. Notwithstanding the foregoing, the Borrower shall not be deemed to
have waived any rights the Borrower may have against the Lender if it is
determined that the Lender acted improperly.
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(b) Upon the occurrence and during the continuance of an Event of
Default, Lender may exercise in respect of the Collateral all rights and
remedies available to Lender hereunder or under the other Loan Documents or
otherwise available at law or in equity. Without limiting the generality of the
foregoing or the provisions of paragraph (a) above, upon the occurrence and
during the continuance of an Event of Default, Borrower acknowledges and agrees
that it will have no further right to request or otherwise require Lender to
disburse funds from the Clearing Account or the Cash Collateral Account in
accordance with the terms of this Agreement, it being agreed that Lender may, at
its option, (i) direct the Deposit Bank to continue to hold the funds in the
Cash Collateral Account and/or (ii) continue from time to time to apply all or
any portion of the funds held in the Cash Collateral Account to any payment(s)
which such funds could have been applied to prior to such Event of Default (or
to pay Cash Expenses, Approved Capital Expenses (as defined in the Loan
Agreement), to the extent and in such order and manner as Lender in its sole
discretion may determine, and/or (iii) direct that the Deposit Bank or Clearing
Bank from time to time disburse all or any portion of the funds held in the Cash
Collateral Account or other Collateral then or thereafter held by the Deposit
Bank or Clearing Bank, as applicable, to Lender, in which event Lender may apply
the funds held in the Cash Collateral Account or other Collateral to the
Obligations in any order and in such manner as Lender may determine in its sole
discretion.
(c) Upon the occurrence and during the continuance of any Event of
Default, Lender may, at any time or from time to time, subject to the
requirements of applicable law, collect, appropriate, redeem, realize upon or
otherwise enforce its rights with respect to the Collateral, and without the
need to institute any legal action, make demand, exhaust any other remedies or
otherwise proceed to enforce its rights, provided that Lender gives notice to
Borrower, in writing, that an Event of Default has occurred and is continuing.
(d) No failure on the part of Lender to exercise, and no delay in
exercising, any right under this Agreement or the Loan Agreement shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right under this Agreement or the other Loan Documents. The remedies provided in
this Agreement, the Note, the Loan Agreement and the other Loan Documents are
cumulative and not exclusive of any remedies provided at law or in equity.
SECTION 8. MATTERS CONCERNING THE DEPOSIT BANK.
(a) Borrower hereby authorizes and directs Deposit Bank to comply,
and Deposit Bank agrees to comply, with instructions originated by the Lender in
accordance with this Agreement directing the disposition of funds from time to
time in the Cash Collateral Account or as to any other matters relating to the
Cash Collateral Account without further consent by Borrower, but subject to the
terms of this Agreement.
(b) All defenses of Deposit Bank under the Agreement and Articles
3, 4, and 4A of the Uniform Commercial Code (as adopted in the State where the
respective Account is located) as to the payment and collection of items shall
also be applicable to and enforceable against the Lender. Each of Borrower and
the Lender hereby authorizes and instructs Deposit Bank to supply Borrower's or
the Lender's endorsement, as appropriate, to any items that Deposit Bank
receives and deposits for collection to the Cash Collateral Account.
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(c) Deposit Bank will not exercise any security interest (except
for the security interest provided in Section 4-210 of the Uniform Commercial
Code as adopted in the State where the Cash Collateral Account is located),
lien, right of setoff, deduction, recoupment or banker's lien or any other
interest in or against the Cash Collateral Account, and Deposit Bank hereby
subordinates any such security interest, lien or right which it may have against
the Cash Collateral Account, except that Deposit Bank may set off and charge
against the Cash Collateral Account for (i) the face amount of each Returned
Item (hereinafter defined), (ii) all usual and customary service charges, (iii)
account maintenance fees, (iv) transfer fees, (v) out-of-pocket fees and
expenses incurred by Deposit Bank in connection with the enforcement of this
Agreement, (vi) adjustments or corrections of posting or encoding errors, and
(vii) any other items normally chargeable to an account, whether incurred before
or after the date of this Agreement. As used in this Agreement, "RETURN ITEM"
shall mean (i) any items deposited into the Cash Collateral Account either
before or after the date of this Agreement and returned unpaid or otherwise
uncollected, whether for insufficient funds or for any other reason, and without
regard to the timeliness of such return or the occurrence or timeliness of any
drawee's notice of nonpayment; (ii) any items subject to a claim against Deposit
Bank for breach of transfer or presentment warranty under the Uniform Commercial
Code (as adopted in the State where the Cash Collateral Account is located),
(iii) any ACH entry credited to the Cash Collateral Account and returned unpaid
or subject to an adjustment entry under applicable clearing house rules, whether
for insufficient funds or for any other reason, and without regard to the
timeliness of such return or adjustment; (iv) any credit to the Cash Collateral
Account from a merchant card transaction against which a contractual demand for
chargeback has been made; and (v) any credit to the Cash Collateral Account made
in error.
(d) Deposit Bank shall be entitled to rely conclusively upon any
notice or instruction it receives from the Lender and which Deposit Bank
believes in good faith to be a notice or instruction from the Lender, and
Deposit Bank shall have no obligation to investigate or verify the authenticity
or correctness of any such notice or instruction. Deposit Bank shall have no
liability to Borrower for honoring any instruction Deposit Bank receives from
the Lender regarding the Cash Collateral Account. Deposit Bank shall be fully
discharged from liability with respect to any funds on deposit in the Cash
Collateral Account to the extent that Deposit Bank honors and follows
instructions it receives from the Lender and transfers any of such funds to, or
on the instructions of, the Lender.
(e) In the event a third party shall assert an adverse claim by
legal process against the Cash Collateral Account or any sums on deposit
therein, whether such claim shall arise by tax lien, execution of judgment,
attachment, garnishment, levy, claim of a trustee in bankruptcy or
debtor-in-possession, or a competing lien creditor or other judicial or
regulatory order or process (each, a "CLAIM"), Deposit Bank may, in addition to
other remedies it may possess under this Agreement or at law or in equity, (i)
suspend disbursements from the Cash Collateral Account reasonably sufficient to
satisfy such Claim without any liability until Deposit Bank shall have received
an appropriate court order or other assurances acceptable to Deposit Bank in its
sole discretion establishing that funds may continue to be disbursed according
to instructions then applicable to the Cash Collateral Account, and/or (ii)
immediately interplead all such funds in the Cash Collateral Account into the
registry of the appropriate court located in the State where the Cash Collateral
Account is maintained, and Borrower and the Lender, jointly and severally, shall
pay promptly all of Deposit Bank's costs, expenses and attorneys' reasonable
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fees incurred in connection with such Claim. If a bankruptcy or insolvency
proceeding shall have been commenced by or against Borrower, Deposit Bank shall
be entitled to refuse to permit deposits to, or withdrawals and/or transfers
from, the Cash Collateral Account without any liability until Deposit Bank shall
have received an appropriate court order or other assurances acceptable to
Deposit Bank in its sole discretion establishing that continued deposits to, or
withdrawals and/or transfers from, the Cash Collateral Account are authorized
and do not and will not violate any law, regulation, or order of any court.
SECTION 9. CASUALTY AND CONDEMNATION PROCEEDS SUB-ACCOUNT; EXTRAORDINARY
RECEIPTS SUB-ACCOUNT.
Notwithstanding anything to the contrary contained herein, the
following items of Rents shall be deposited and held in the Loan Sub-accounts
described below and shall be applied in the order of priority set forth in this
Section 9, and Borrower shall advise Lender at the time of receipt thereof of
the nature of such Receipt so that Lender shall have sufficient time to instruct
the Deposit Bank to deposit and hold such amounts in the appropriate Loan
Sub-account:
(a) Proceeds of any insurance, including, without limitation, rent
or business interruption insurance, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Loan Agreement applicable thereto.
(b) Condemnation awards, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Loan Agreement applicable thereto.
(c) Real estate tax refunds (net of any reasonable and customary
fees and disbursements of tax certiorari counsel deducted from such refund to
pay such counsel's fee), which amount shall be deposited in the Extraordinary
Receipts Sub-account and shall thereafter be transferred (by instructions of
Lender to the Deposit Bank) to the Operating Account to the extent required to
pay refunds due to any tenants of the Property (based on a certificate of
Borrower as to the tenants entitled to receive such refunds and the amounts
thereof), except Lender reserves the right to pay (or have the Servicer pay) any
such tenant directly using monies so deposited in the Extraordinary Receipts
Sub-account, in lieu of transferring such monies to the Operating Account for
such payment. Lender or Servicer shall apply any excess, after the aforesaid
payment, as if ordinary Rents deposited in the Cash Collateral Account.
(d) Damages or other payments in excess of $250,000 in settlement
of claims by Borrower against any tenant in connection with the Property and
arising out of such tenant's Lease, including, without limitation, pertaining to
any rejection, termination or cancellation of any Lease (including in any
bankruptcy case), Lease buy-out, and surrender payments from tenants or any
holdover rents or use and occupancy fees from tenants or former tenants shall be
deposited in the Extraordinary Receipts Sub-account. With respect to any monies
deposited in the Extraordinary Receipts Sub-account pursuant to this paragraph
(d), Lender shall direct Deposit Bank to apply the amount so deposited (or the
portion thereof specified below) as if ordinary Rents to be applied in
accordance with the terms of this Agreement for the month in
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question as follows: (i) if the amount so deposited was paid under or with
respect to a Lease, either (x) each month, that portion of the amount so
deposited that equals the total amount paid divided by the number of months
remaining in the term of such Lease (at the time of any such cancellation,
termination or rejection) or (y) if Borrower shall satisfy Lender that the event
resulting in such payment did not materially adversely affect the fair market
value of the Property and that the Property would satisfy a Debt Service
Coverage Ratio test at least equal to 1.10:1.0 (provided that such Debt Service
Coverage Ratio test shall exclude any rents from the Lease from which such
payments were received and which payments are the subject of the requested
disbursement), the entire amount so deposited shall, provided no Event of
Default is then continuing, be disbursed on the next Payment Date to the
Borrower Remainder Sub-account and (ii) with respect to any other amount
deposited in the Extraordinary Receipts Sub-account pursuant to this paragraph
(d), (x) if insufficient funds exist during any month to make all payments to be
made for such month prior to the disbursement to the Borrower Remainder
Sub-account, the portion of the amount so deposited as is necessary to eliminate
any such deficiency or (y) if Borrower shall satisfy Lender that the event
resulting in such payment did not materially adversely affect the fair market
value of the Property and that the Property would satisfy a Debt Service
Coverage Ratio test at least equal to 1.10:1.0 (provided that such Debt Service
Coverage Ratio test shall exclude any rents from the Lease from which such
payments were received and which payments are the subject of the requested
disbursement), the entire amount so deposited shall, provided no Event of
Default is then continuing, be disbursed on the next Payment Date to the
Borrower Remainder Sub-account.
(e) All sums paid with respect to a modification of any Lease or
otherwise paid in connection with Borrower taking any action under any Lease
(e.g., granting a consent) or waiving any provision thereof, but only to the
extent any such payment exceeds $250,000 (if such sums paid do not exceed
$250,000, such payment shall be deposited in the Clearing Account and applied as
ordinary Rents) shall be deposited in the Extraordinary Receipts Sub-account and
shall be applied (by instruction of Lender or Servicer to Deposit Bank) as
provided in any consent of Lender given in connection with any such action, or,
if no such direction is given, shall (i) in the case of any modification which
reduces the rent paid under any Lease or shortens the term of such Lease, either
(x) be applied as Rents available for distribution in accordance with the
provisions of this Agreement for the month in question only as to that portion
of the amount so deposited with Lender as Lender, in its reasonable discretion,
shall determine represents reduced rent or lost rent in the applicable month
under any such Lease as a result of any such modification or (y) if Borrower
shall satisfy Lender that the event resulting in such payment did not materially
adversely affect the fair market value of the Property and that the Property
would satisfy a Debt Service Coverage Ratio test at least equal to 1.10:1.0
(provided that such Debt Service Coverage Ratio test shall exclude any rents
from the Lease from which such payments were received and which payments are the
subject of the requested disbursement), the entire amount so deposited shall,
provided no Event of Default is then continuing, be disbursed on the next
Payment Date to the Borrower Remainder Sub-account and (ii) in all other cases,
only be applied as Rents available for distribution in accordance with the
provisions of this Agreement for the month in question if and to the extent
either subclause (x) or (y) of paragraph (d)(ii) above shall be applicable.
If the fees and disbursements of tax certiorari counsel described in
paragraph (c) above shall not have been deducted from the real estate tax
refunds by such
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counsel prior to payment of such refunds to Borrower, then such fees and
disbursements may be paid as part of Approved Cash Expenses, provided such fees
and disbursements are commercially reasonable. References to application of any
amounts received by Borrower by reason of any action taken by Borrower under or
with respect to a Lease, or otherwise, is not intended in any manner to allow
Borrower to take such action in prohibition of any other provision of the Loan
Documents. Except as expressly set forth in any judgment of any court exercising
jurisdiction thereover or in any agreement with the Tenant approved by Lender,
Lender shall in its reasonable judgment determine the amount of any payment
described in paragraph (d) that falls within clause (i)(x) or (ii)(x) thereof as
opposed to clause (i)(y) or (ii)(y) thereof.
SECTION 10. INTENTIONALLY OMITTED.
SECTION 11. SUCCESSORS AND ASSIGNS; ASSIGNMENTS; AGENTS.
(a) This Agreement shall bind and inure to the benefit of and be
enforceable by the Borrower, the Lender and the Manager and their respective
successors and assigns.
(b) The Lender shall have the right to assign or transfer rights
and obligations under this Agreement without limitation. Any assignee or
transferee of Lender shall be entitled to all the benefits afforded the Lender
under this Agreement; provided, that such assignee or transferee shall upon
written request deliver to the other parties hereto written confirmation that
such assignee or transferee agrees to be bound by the terms of this Agreement
and is also the assignee or transferee of the Note and the other Loan Documents.
(c) The Borrower shall have the right to assign and transfer its
rights and obligations hereunder only with the prior written consent of the
Lender.
(d) Any duties or actions of the Lender hereunder may be performed
by the Lender or its agent(s), including without limitation, any Servicer or
trustee in a Securitization, which includes the Loan.
SECTION 12. AMENDMENT.
This Agreement may be amended from time to time in writing by all
parties hereto. All amendments to this Agreement shall be in writing.
SECTION 13. NOTICES.
Notices to the parties hereto shall be addressed and delivered in
the manner set forth in the Loan Agreement. Unless otherwise expressly provided
herein, all such notices, to be effective, shall be in writing (including by
facsimile), and shall be deemed to have been duly given or made (a) when
delivered by hand or by nationally recognized overnight carrier, (b) upon
receipt after being deposited in the mail, certified mail and postage prepaid or
(c) in the case of facsimile notice, when sent and electronically confirmed,
addressed as set forth above.
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SECTION 14. LIMITATION ON LIABILITY.
(a) Lender shall not be liable for any acts, omissions, errors in
judgment or mistakes of fact or law, including, without limitation, acts,
omissions, errors or mistakes with respect to the Collateral, except for those
arising as a result of Lender's active gross negligence, illegal acts or willful
misconduct. Without limiting the generality of the foregoing, except as
otherwise expressly provided for herein or as required by applicable law, Lender
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not Lender has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other right pertaining to any
Collateral. Lender is hereby authorized by Borrower to act on any written
instruction believed by Lender in good faith to have been given or sent by
Borrower.
(b) The provisions of Section 10.1 of the Loan Agreement are
hereby incorporated by reference as if fully set forth herein.
(c) Deposit Bank will use the due care in performing its duties
and responsibilities under this Agreement and shall only be responsible for the
loss that a court having jurisdiction over the Cash Collateral Account shall
have determined, in a final and unappealable judgment, had been incurred by
Borrower or the Lender solely as a result of Deposit Bank's gross negligence or
willful misconduct. Deposit Bank shall have no liability to any party for
failure of, or delay in, its performance under this Agreement as a result of any
act of God, fire, other catastrophe, force majeure, electrical or computer or
telecommunications failure, any event beyond the control of Deposit Bank, or
fraud committed by any third party. Nothing in this Agreement shall create any
agency, fiduciary, joint venture or partnership relationship between Deposit
Bank and Borrower or the Lender. Borrower hereby indemnifies Deposit Bank and
holds it harmless against any loss, damage or expense (including attorneys'
reasonable fees and expenses, court costs and other expenses) including, but not
limited to, unpaid charges, fees, and Returned Items for which the Lender and/or
Borrower originally received credit or remittance, which loss, damage or expense
Deposit Bank may suffer as a result of entering into, or acting pursuant to,
this Agreement, honoring any instruction Deposit Bank receives from the Lender
with respect to the Cash Collateral Account or, to the extent required by this
Agreement, not honoring any instructions it receives from Borrower with respect
to the Cash Collateral Account, except for those losses, damages, or expenses
that a court having jurisdiction shall have determined in a final and
unappealable judgment resulted solely from Deposit Bank's gross negligence or
willful misconduct. In no event shall Deposit Bank be liable to any other party
under this Agreement for lost profits or special, indirect, exemplary,
consequential or punitive damages, even if Deposit Bank shall have been advised
of the possibility of such damages.
SECTION 15. MORTGAGEE-IN-POSSESSION.
Borrower hereby confirms and agrees that notwithstanding the
provisions of this Agreement, Borrower retains sole control of the operation and
maintenance of the Property, subject to the obligations of Borrower under the
Loan Agreement, the Assignment of Leases and
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Rents and the other Loan Documents, and Lender is not and shall not be deemed to
be a mortgagee in possession.
SECTION 16. GOVERNING LAW.
WITH REGARD TO THE OPERATION OF THE CASH COLLATERAL ACCOUNT AND THE
PAYMENT OF CHECKS AND OTHER ITEMS AGAINST THE CASH COLLATERAL ACCOUNT, THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. WITH REGARD TO ISSUES OF PERFECTION, PRIORITY AND SECURITY
INTEREST, REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR PURPOSES OF
THE UCC (AS DEFINED IN THE LOAN AGREEMENT), DEPOSIT BANK AGREES THAT NEW YORK
SHALL BE DEEMED TO BE DEPOSIT BANK'S JURISDICTION (WITHIN THE MEANING OF
SECTIONS 8-110 AND 9-304 OF THE UCC), EXCEPT AS SET FORTH ABOVE, THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 17. DUPLICATE ORIGINALS; COUNTERPARTS.
This Agreement may be executed in any number of duplicate originals
and each duplicate original shall be deemed to be an original. This Agreement
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Agreement. The failure of any party hereto to execute this Agreement, or
any counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.
SECTION 18. WAIVER OF JURY TRIAL. EXCEPT AS MAY BE PROHIBITED BY APPLICABLE LAW,
EACH OF THE LENDER, DEPOSIT BANK AND BORROWER IRREVOCABLY WAIVES THE RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY COUNTERCLAIM) OF ANY
TYPE IN WHICH THE LENDER, DEPOSIT BANK OR BORROWER IS A PARTY AS TO ALL MATTERS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
in several counterparts (each of which shall be deemed an original) as of the
date first above written.
BORROWER:
▇▇▇▇▇▇▇ PROPERTIES - 611 N. BRAND LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇▇ PROPERTIES - GLENDALE CENTER, LLC,
a California limited liability company,
its Member
By: ▇▇▇▇▇▇▇ PROPERTIES - GLENDALE, LLC,
a California limited liability company,
its Member
By: ▇▇▇▇▇▇▇ PROPERTIES, L.P.,
a Maryland limited partnership,
its Member
By: ▇▇▇▇▇▇▇ PROPERTIES, INC.,
a Maryland corporation,
its General Partner
By: /s/ ▇▇▇▇ ▇. Lammas
__________________________
Name: ▇▇▇▇ ▇. Lammas
Title: Senior Vice
President and
Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
MANAGER:
▇▇▇▇▇▇▇ PROPERTIES, L.P.,
a Maryland limited partnership
By: ▇▇▇▇▇▇▇ PROPERTIES, INC.,
a Maryland corporation,
its sole general partner
By: /s/ ▇▇▇▇ ▇. Lammas
______________________________
Name: ▇▇▇▇ ▇. Lammas
Title: Senior Vice President
and Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
DEPOSIT BANK:
WACHOVIA BANK, NATIONAL ASSOCIATION,
a national bank association
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Associate
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
ACKNOWLEDGED AND AGREED:
LENDER:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President