EXHIBIT 10.18
$195,000,000 SENIOR LOAN AGREEMENT
Dated: September 13, 2002
BETWEEN
▇▇▇▇▇▇▇ PARTNERS-355 S. GRAND, LLC,
a Delaware limited liability company,
as Borrower
AND
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
as Original Senior Lender
AND
DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent and Collateral Agent
TABLE OF CONTENTS
PAGE
----
RECITALS ................................................................................ 1
ARTICLE I DEFINITIONS .......................................................... 2
1.1 Defined Terms .............................................................. 2
1.1.1 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ .......................................... 2
1.1.2 444 S. Flower Covenant ........................................ 2
1.1.3 Actual Income ................................................. 2
1.1.4 Administrative Agent .......................................... 2
1.1.5 Affected Senior Lender ........................................ 2
1.1.6 Affiliate ..................................................... 2
1.1.7 Agency Agreement .............................................. 2
1.1.8 Aggregate Pro Rate Share ...................................... 3
1.1.9 Agreement ..................................................... 3
1.1.10 Applicable Interest Rate ...................................... 3
1.1.11 Appraisal ..................................................... 3
1.1.12 Appraised Value ............................................... 3
1.1.13 Approved Closing Statement .................................... 3
1.1.14 Approved LAUSD Extension ...................................... 3
1.1.15 Approved Lease Expenses ....................................... 3
1.1.16 Approved Lease Form ........................................... 3
1.1.17 Approved Operating Budget ..................................... 3
1.1.18 Approved REIT ................................................. 3
1.1.19 Asset ......................................................... 4
1.1.20 Assignment of Licenses, Contracts and Permits ................. 4
1.1.21 Assignment of Parking Agreement ............................... 4
1.1.22 Assignment of Property Management Agreement ................... 4
1.1.23 Assignments of Rents .......................................... 4
1.1.24 Assumption Agreement .......................................... 4
1.1.25 Bankruptcy Code ............................................... 4
1.1.26 Bankruptcy Recourse Obligations ............................... 4
1.1.27 Base Rate ..................................................... 4
1.1.28 Borrower ...................................................... 4
1.1.29 Budgeted Operating Expenses ................................... 5
1.1.30 Business Day .................................................. 5
1.1.31 Cap Provider .................................................. 5
1.1.32 Cap Security Agreement ........................................ 5
1.1.33 Capital Lease ................................................. 5
1.1.34 Carve-out Recourse Obligations ................................ 5
1.1.35 Cash Collateral Account ....................................... 5
1.1.36 Cash Collateral Account Agreement ............................. 5
1.1.37 Cash Management Bank .......................................... 5
1.1.38 Cash Sweep Condition and Cash Sweep Conditions ................ 5
1.1.39 Closing ....................................................... 5
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1.1.40 Closing Date .................................................. 5
1.1.41 Code .......................................................... 5
1.1.42 Collateral .................................................... 5
1.1.43 Collateral Agency Agreement ................................... 5
1.1.44 Collateral Agent .............................................. 6
1.1.45 Collateral Agent's Payment Office ............................. 6
1.1.46 Collateral Documents .......................................... 6
1.1.47 Contingent Obligation ......................................... 6
1.1.48 Contractual Obligations ....................................... 6
1.1.49 Debt Service .................................................. 6
1.1.50 Debt Service Coverage Ratio or DSCR ........................... 6
1.1.51 Default ....................................................... 6
1.1.52 Default Rate .................................................. 6
1.1.53 Delayed Amortization Event .................................... 6
1.1.54 Diminution in Value ........................................... 6
1.1.55 Disbursement Date ............................................. 7
1.1.56 Disbursement Request .......................................... 7
1.1.57 Disposition ................................................... 7
1.1.58 Distributions ................................................. 7
1.1.59 Dollars, dollars and $ ........................................ 7
1.1.60 DSCR Cash Sweep Condition ..................................... 7
1.1.61 DSCR Test ..................................................... 7
1.1.62 Eligible Assignee ............................................. 7
1.1.63 Engineering Report ............................................ 8
1.1.64 Environmental Claims .......................................... 8
1.1.65 Environmental Indemnity Agreement ............................. 8
1.1.66 Environmental Laws ............................................ 8
1.1.67 Environmental Permits ......................................... 8
1.1.68 Environmental Report .......................................... 8
1.1.69 Equity Interests .............................................. 8
1.1.70 ERISA ......................................................... 9
1.1.71 Event of Default .............................................. 9
1.1.72 Evidence of Withholding ....................................... 9
1.1.73 Excess Cash Flow .............................................. 9
1.1.74 Extension Cap Rate ............................................ 9
1.1.75 Extension Notice .............................................. 9
1.1.76 Extension Period .............................................. 9
1.1.75 Extraordinary Capital and Leasing Expenses .................... 9
1.1.78 Federal Funds Rate ............................................ 9
1.1.79 Fees .......................................................... 9
1.1.80 Financing Statements ......................................... 10
1.1.81 Foreign Lender ............................................... 10
1.1.82 Funds-Based Rate ............................................. 10
1.1.83 Further Taxes ................................................ 10
1.1.84 GAAP ......................................................... 10
1.1.85 Governmental Authority ....................................... 10
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1.1.86 Gross Revenues ............................................... 10
1.1.87 Guaranties ................................................... 10
1.1.88 Guarantor and Guarantors ..................................... 10
1.1.89 Guaranty Obligation .......................................... 10
1.1.90 Hazardous Materials .......................................... 11
1.1.91 Holders ...................................................... 11
1.1.92 Impositions .................................................. 11
1.1.93 Improvements ................................................. 11
1.1.94 Indebtedness ................................................. 11
1.1.95 Indemnified Liabilities ...................................... 11
1.1.96 Indemnified Person ........................................... 11
1.1.97 Indemnity and Contribution Agreement ......................... 11
1.1.98 Initial Maturity Date ........................................ 12
1.1.99 Insolvency Proceeding ........................................ 12
1.1.100 Insolvent .................................................... 12
1.1.101 Interest Rate Protection ..................................... 12
1.1.102 Junior Assignment of Licenses, Contracts and Permits ......... 12
1.1.103 Junior Assignment of Parking Agreement ....................... 12
1.1.104 Junior Assignment of Property Management Agreement ........... 12
1.1.105 Junior Assignment of Rents ................................... 12
1.1.106 Junior Cap Security Agreement ................................ 12
1.1.107 Junior Collateral ............................................ 13
1.1.108 Junior Collateral Documents .................................. 13
1.1.109 Junior Debt Service .......................................... 13
1.1.110 Junior Environmental Indemnity Agreement ..................... 13
1.1.111 Junior Financing Statements .................................. 13
1.1.112 Junior Mortgage .............................................. 13
1.1.113 Junior Note .................................................. 13
1.1.114 Junior Note Amount ........................................... 14
1.1.115 Junior Notice of Security Interest ........................... 14
1.1.116 Junior Obligations ........................................... 14
1.1.117 Junior Principal Balance ..................................... 14
1.1.118 Junior Recourse Guaranty ..................................... 14
1.1.119 Junior Recourse Obligations .................................. 14
1.1.120 Junior Rent Roll Certificate ................................. 14
1.1.121 Junior Title Policy .......................................... 14
1.1.122 Knowledge .................................................... 15
1.1.123 KPMG ......................................................... 15
1.1.124 KPMG Lease ................................................... 15
1.1.125 LAUSD ........................................................ 15
1.1.126 LAUSD Cash Sweep Condition ................................... 15
1.1.127 LAUSD Lease .................................................. 15
1.1.128 Leases ....................................................... 15
1.1.129 Leasing Reserve .............................................. 15
1.1.130 Leasing Reserve Account ...................................... 15
1.1.131 LIBOR-Based Rate ............................................. 15
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1.1.132 LIBOR Rate ................................................... 15
1.1.133 Lien ......................................................... 16
1.1.134 Limited Recourse Guarantors .................................. 16
1.1.135 Limited Recourse Guaranty .................................... 16
1.1.136 Loan ......................................................... 16
1.1.137 Loan Agreement ............................................... 16
1.1.138 Loan Amount .................................................. 16
1.1.139 Loan Documents ............................................... 16
1.1.140 Loan Month ................................................... 16
1.1.141 Loan Party and Loan Parties .................................. 16
1.1.142 Loan Year .................................................... 16
1.1.143 Lockbox Account .............................................. 16
1.1.144 Lockbox Agreement ............................................ 17
1.1.145 Lockbox Bank ................................................. 17
1.1.146 Losses ....................................................... 17
1.1.147 LTV Ratio .................................................... 17
1.1.148 LTV Ratio Test ............................................... 17
1.1.149 ▇▇▇▇▇▇▇ Partners SCS ......................................... 17
1.1.150 ▇▇▇▇▇▇▇ South Tower .......................................... 17
1.1.151 Makers ....................................................... 17
1.1.152 Margin Stock ................................................. 17
1.1.153 Material Adverse Effect ...................................... 17
1.1.154 Material CC&Rs ............................................... 17
1.1.155 Material Lease ............................................... 18
1.1.156 Maturity Date ................................................ 18
1.1.157 Maximum Rate ................................................. 18
1.1.158 Member and Member of Borrower ................................ 19
1.1.159 Mezzanine Maker .............................................. 19
1.1.160 Modifications or Modify ...................................... 19
1.1.161 Monthly Debt Service Payment ................................. 19
1.1.162 Maker ........................................................ 19
1.1.163 Mortgages .................................................... 19
1.1.164 Mortgaged Property ........................................... 19
1.1.165 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ............................................... 19
1.1.166 MP-WFC Holdings .............................................. 19
1.1.167 Net Operating Income ......................................... 19
1.1.168 Non-▇▇▇▇▇▇▇ Equity Interests ................................. 20
1.1.169 North Tower Owner ............................................ 20
1.1.170 North Tower Owner Estoppel ................................... 20
1.1.171 North Tower Property ......................................... 20
1.1.172 Northern Trust ............................................... 20
1.1.173 Northern Trust Lease ......................................... 20
1.1.174 Note Purchase Agreement ...................................... 20
1.1.175 Note Purchase Documents ...................................... 20
1.1.176 Notes ........................................................ 20
1.1.177 Notice ....................................................... 20
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1.1.178 Notice of Lien ............................................... 20
1.1.179 Obligations .................................................. 20
1.1.180 Office Project ............................................... 20
1.1.181 Official Records ............................................. 21
1.1.182 Operating Budget ............................................. 21
1.1.183 Operating Expenses ........................................... 21
1.1.184 Operating Expense Disbursement Request ....................... 22
1.1.185 Operative Lease .............................................. 22
1.1.186 Ordinary Course of Business .................................. 22
1.1.187 Organizational Documents ..................................... 22
1.1.188 Original Senior Lender ....................................... 23
1.1.189 Other Taxes .................................................. 23
1.1.190 Overall Spread ............................................... 23
1.1.191 Parking Agreement ............................................ 23
1.1.192 Parking Covenants ............................................ 23
1.1.193 Parking Facility Operator .................................... 23
1.1.194 Participant .................................................. 23
1.1.195 Permitted Liens .............................................. 23
1.1.196 Permitted Title Exceptions ................................... 23
1.1.197 Permitted Transfer ........................................... 23
1.1.198 Person ....................................................... 23
1.1.199 Pledges ...................................................... 23
1.1.200 Pledgor and Pledgors ......................................... 24
1.1.201 Prime Lending Rate ........................................... 24
1.1.202 Principal Balance ............................................ 24
1.1.203 Pro Rata Share ............................................... 24
1.1.204 Projected Net Operating Income ............................... 24
1.1.205 Property Manager ............................................. 24
1.1.206 Property Management Agreement ................................ 24
1.1.207 Purchaser .................................................... 25
1.1.208 REA .......................................................... 25
1.1.209 Recourse Guaranties .......................................... 25
1.1.210 Recourse Guarantor ........................................... 25
1.1.211 REIT ......................................................... 25
1.1.212 Release ...................................................... 25
1.1.213 Replacement Note ............................................. 25
1.1.214 Required DSCR ................................................ 25
1.1.215 Required LTV Ratio ........................................... 25
1.1.216 Requirement of Law ........................................... 25
1.1.217 Requisite Holders ............................................ 25
1.1.218 Responsible Officer .......................................... 26
1.1.219 Retained Funds ............................................... 26
1.1.220 Scheduled Upgrades ........................................... 26
1.1.221 SEC .......................................................... 26
1.1.222 Security Deposit Account ..................................... 26
1.1.223 Security Deposits ............................................ 26
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1.1.224 Senior Assignment of Licenses, Contracts and Permits ......... 26
1.1.225 Senior Assignment of Parking Agreement ....................... 26
1.1.226 Senior Assignment of Property Management Agreement ........... 26
1.1.227 Senior Assignment of Rents ................................... 26
1.1.228 Senior Cap Security Agreement ................................ 26
1.1.229 Senior Collateral ............................................ 27
1.1.230 Senior Collateral Documents .................................. 27
1.1.231 Senior Debt Service .......................................... 27
1.1.232 Senior Environmental Indemnity Agreement ..................... 27
1.1.233 Senior Financing Statements .................................. 27
1.1.234 Senior Lender or Senior Lenders .............................. 27
1.1.235 Senior Lender Parties ........................................ 27
1.1.236 Senior Loan .................................................. 28
1.1.237 Senior Loan Agreement ........................................ 28
1.1.238 Senior Loan Amount ........................................... 28
1.1.239 Senior Loan Documents ........................................ 28
1.1.240 Senior Loan Exposure ......................................... 28
1.1.241 Senior Mortgage .............................................. 28
1.1.242 Senior Notes or Senior Note .................................. 28
1.1.243 Senior Notice of Security Interest ........................... 28
1.1.244 Senior Obligations ........................................... 28
1.1.245 Senior Principal Balance ..................................... 29
1.1.246 Senior Recourse Guaranty ..................................... 29
1.1.247 Senior Recourse Obligations .................................. 29
1.1.248 Senior Rent Roll Certificate ................................. 29
1.1.249 Senior Title Policy .......................................... 29
1.1.250 Single-Purpose Entity ........................................ 29
1.1.251 Spread ....................................................... 30
1.1.252 Subsequent Market Transaction ................................ 30
1.1.253 Survey ....................................................... 30
1.1.254 Target Principal Balance ..................................... 30
1.1.255 Taxes ........................................................ 30
1.1.256 Tenant ....................................................... 30
1.1.257 Tenant Payments .............................................. 31
1.1.258 Title Company ................................................ 31
1.1.259 Title Policies ............................................... 31
1.1.260 Transfer ..................................................... 31
1.1.261 Transfer Restrictions ........................................ 31
1.1.262 UCC .......................................................... 31
▇.▇.▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ................................................ 31
1.1.264 X-2 Garage ................................................... 31
1.2 Other Interpretive Provisions ............................................. 31
1.2.1 Defined Terms ................................................ 31
1.2.2 The Agreement ................................................ 31
1.2.3 Certain Common Terms ......................................... 31
1.3 Accounting Principles ..................................................... 32
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ARTICLE II THE LOAN; ADDITIONAL AGREEMENTS AND COVENANTS ....................... 32
2.1 The Senior Loan ........................................................... 32
2.2 Senior Note ............................................................... 33
2.3 Term ...................................................................... 33
2.4 Extension ................................................................. 33
2.5 Interest Rate ............................................................. 35
2.5.1 Increased Costs, Illegality, Etc. ............................ 35
2.5.2 Maximum Rate ................................................. 38
2.5.3 Compensation for Late Payments ............................... 38
2.5.4 Default Rate ................................................. 39
2.6 Optional Prepayments ...................................................... 39
2.7 PROVISIONS RELATING TO PREPAYMENT ......................................... 40
2.8 Repayment ................................................................. 40
2.9 Interest Rate Cap ......................................................... 43
2.10 Taxes ..................................................................... 44
2.11 Payments by Borrower ...................................................... 45
2.12 Reserved .................................................................. 46
2.13 Reserved Funds for Tenant Improvements and Leasing Commissions ............ 46
2.14 Cash Management ........................................................... 48
2.15 Security and Guaranties ................................................... 53
ARTICLE III CONDITIONS PRECEDENT ................................................ 54
3.1 Loan Documents ............................................................ 54
3.1.1 Senior Notes ................................................. 54
3.1.2 Senior Mortgage .............................................. 54
3.1.3 Senior Assignment of Rents ................................... 54
3.1.4 Senior Recourse Guaranty ..................................... 54
3.1.5 Senior Cap Security Agreement ................................ 55
3.1.6 Lockbox Agreement ............................................ 55
3.1.7 Senior Assignment of Licenses, Contracts and Permits ......... 55
3.1.8 Senior Assignment of Property Management Agreement ........... 55
3.1.9 Senior Assignment of Parking Agreement ....................... 55
3.1.10 North Tower Owner Estoppel ................................... 55
3.1.11 Senior Environmental Indemnity Agreement ..................... 55
3.1.12 Indemnity and Contribution Agreement ......................... 55
3.1.13 Senior Financing Statements .................................. 55
3.1.14 Note Purchase Documents ...................................... 55
3.1.15 Other Documents .............................................. 55
3.2 Property Specific Conditions .............................................. 55
3.2.1 Appraisal .................................................... 55
3.2.2 Survey ....................................................... 56
3.2.3 Insurance .................................................... 56
3.2.4 UCC Searches ................................................. 56
3.2.5 Engineering Report ........................................... 56
3.2.6 Seismic Report ............................................... 56
3.2.7 Environmental Assessment ..................................... 56
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3.2.8 Licenses, Permits and Approvals .............................. 56
3.2.9 Zoning and Other Laws ........................................ 56
3.2.10 Reserved ..................................................... 56
3.2.11 Flood Zone ................................................... 56
3.2.12 Utilities .................................................... 57
3.2.13 Schedule of Furnishings, Fixtures and Equipment .............. 57
3.2.14 Title Policies ............................................... 57
3.2.15 Material Agreements .......................................... 57
3.2.16 Property Management Agreement ................................ 57
3.2.17 Rent Roll .................................................... 57
3.2.18 Tenant Estoppel Certificates ................................. 57
3.2.19 SNDAs ........................................................ 57
3.2.20 Special Leasing Conditions ................................... 57
3.3 Additional Requirements ................................................... 57
3.3.1 Opinions ..................................................... 57
3.3.2 Borrower's Organizational Documents .......................... 58
3.3.3 Organizational Documents Relating to Other Loan Parties ...... 58
3.3.4 Financial Statements ......................................... 58
3.3.5 Litigation ................................................... 58
3.3.6 Cash Management Provisions ................................... 58
3.3.7 Other Items .................................................. 58
3.4 No Orders, Judgments or Decrees ........................................... 58
3.5 No Default ................................................................ 58
3.6 Payment of Fees ........................................................... 58
3.7 Other Loan Documents ...................................................... 59
ARTICLE IV REPRESENTATIONS AND WARRANTIES ...................................... 59
4.1 Existence and Power ....................................................... 59
4.2 Authorization; No Contravention ........................................... 59
4.3 Governmental Authorization ................................................ 60
4.4 Binding Effect ............................................................ 60
4.5 Litigation ................................................................ 60
4.6 No Default ................................................................ 60
4.7 Use of Proceeds ........................................................... 60
4.8 Certain Representations Related to Single-Purpose Entities ................ 61
4.9 Taxes ..................................................................... 61
4.10 Financial Condition ....................................................... 61
4.11 Environmental Matters ..................................................... 62
4.12 Collateral Documents ...................................................... 62
4.13 Regulated Entities ........................................................ 63
4.14 Requirement of Law ........................................................ 63
4.15 Solvency .................................................................. 63
4.16 Labor Relations ........................................................... 63
4.17 Copyrights, Patents, Trademarks and Licenses, etc ......................... 63
4.18 Subsidiaries .............................................................. 63
4.19 Broker's Fees; Transaction Fees ........................................... 63
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4.20 Permits ................................................................... 64
4.21 Title ..................................................................... 64
4.22 Zoning .................................................................... 64
4.23 Agreements Affecting the Mortgaged Property ............................... 64
4.24 Condemnation .............................................................. 65
4.25 Exempt Transaction ........................................................ 65
4.26 Access .................................................................... 65
4.27 Tax Division .............................................................. 65
4.28 ERISA ..................................................................... 65
4.29 Bankruptcy ................................................................ 65
4.30 Leases .................................................................... 65
4.31 Physical Condition of Mortgaged Property .................................. 66
4.32 Mechanics' Liens .......................................................... 66
4.33 Full Disclosure ........................................................... 67
4.34 Initial Deposits into Lockbox ............................................. 67
4.35 Material CC&Rs ............................................................ 67
4.36 Shuttles .................................................................. 67
4.37 Special Leasing Conditions ................................................ 67
ARTICLE V AFFIRMATIVE COVENANTS ............................................... 67
5.1 Payment of Indebtedness ................................................... 68
5.2 Financial Statements and Operating Reports ................................ 68
5.3 Certificates; Other Information ........................................... 69
5.4 Notices ................................................................... 70
5.5 Preservation of Corporate Existence, Etc .................................. 71
5.6 Maintenance of Property ................................................... 72
5.7 Insurance ................................................................. 72
5.8 Payment of Obligations .................................................... 73
5.9 Compliance with Laws ...................................................... 73
5.10 Inspection of Books and Records ........................................... 73
5.11 Environmental Laws ........................................................ 74
5.12 Use of Proceeds ........................................................... 74
5.13 Solvency .................................................................. 74
5.14 As-Built Plans ............................................................ 74
5.15 Leases .................................................................... 74
5.16 Property Management Agreement ............................................. 75
5.17 Further Assurances ........................................................ 75
5.18 Scheduled Upgrades ........................................................ 76
5.19 Performance under Material CC&Rs .......................................... 76
5.20 Title to Shuttles ......................................................... 77
5.21 Recordation of Parking Covenants .......................................... 77
5.22 Cost Sharing Agreement .................................................... 77
5.23 Asbestos Survey ........................................................... 77
ARTICLE VI NEGATIVE COVENANTS .................................................. 78
6.1 Limitation on Liens ....................................................... 78
6.2 Disposition of Assets ..................................................... 78
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6.3 Consolidations and Mergers ................................................ 78
6.4 Loans and Investments ..................................................... 78
6.5 Limitation on Indebtedness ................................................ 78
6.6 Transactions with Affiliates .............................................. 79
6.7 Use of Proceeds ........................................................... 79
6.8 Contingent Obligations .................................................... 79
6.9 Lease Obligations ......................................................... 80
6.10 Reserved .................................................................. 80
6.11 Maintenance of Organizational Documents ................................... 80
6.12 Property Management Agreement; Parking Agreement .......................... 80
6.13 No Transfer ............................................................... 80
6.14 Accounting Changes ........................................................ 82
6.15 Performance under Material CC&Rs .......................................... 82
ARTICLE VII EVENTS OF DEFAULT ................................................... 83
7.1 Event of Default .......................................................... 83
7.1.1 Payment of Obligations ....................................... 83
7.1.2 Representation or Warranty ................................... 83
7.1.3 Specific Defaults ............................................ 83
7.1.4 Other Defaults ............................................... 83
7.1.5 Insolvency; Voluntary Proceedings ............................ 84
7.1.6 Involuntary Proceedings ...................................... 84
7.1.7 Collateral ................................................... 84
7.1.8 Laws Affecting Obligations and Indebtedness .................. 84
7.1.9 Judgment ..................................................... 84
7.1.10 Dissolution or Termination ................................... 84
7.1.11 Cross-Default ................................................ 85
7.1.12 Default Under Other Mortgage ................................. 85
7.1.13 Other Real Estate ............................................ 85
7.1.14 Separateness Covenants ....................................... 85
7.1.15 Debt Service Coverage ........................................ 85
7.1.16 Concerning Recourse Guarantor ................................ 85
7.2 Remedies .................................................................. 85
7.3 Rights to Cure ............................................................ 86
7.4 Rights Not Exclusive ...................................................... 86
7.5 Collateral Agent's Powers ................................................. 86
ARTICLE VIII COLLATERAL AGENT AND ADMINISTRATIVE AGENT ........................... 86
8.1 Appointment ............................................................... 86
8.2 Undivided Interest and Committed Share, Etc. .............................. 87
8.3 Powers; General Immunity .................................................. 87
8.3.1 Duties Specified ............................................. 87
8.3.2 No Responsibility for Certain Matters ........................ 88
8.3.3 Exculpatory Provisions ....................................... 88
8.3.4 Collateral Agent and Administrative Agent Entitled to
Act as Holder ................................................ 88
8.4 Collection and Distribution ............................................... 89
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8.5 Representations and Warranties, No Responsibility For Appraisal of
Creditworthiness .......................................................... 90
8.6 Right to Indemnity ........................................................ 90
8.7 Successor Administrative Agent ............................................ 90
8.8 Amendments to Agreements Among Senior Lenders and Among
Senior Lenders and Administrative Agent ................................... 91
ARTICLE IX MISCELLANEOUS ....................................................... 91
9.1 Assignments and Participations in Loans ................................... 91
9.1.1 General ...................................................... 91
9.1.2 Assignments .................................................. 92
(A) Amounts and Terms of Assignments ........................... 92
(B) Assignment to Trust ........................................ 92
(C) Acceptance by Administrative Agent ......................... 93
9.1.3 Participations ............................................... 93
9.1.4 Assignments to Federal Reserve Banks ......................... 94
9.1.5 Borrower Cooperation ......................................... 94
9.2 Amendments and Waivers .................................................... 95
9.3 Notices ................................................................... 95
9.4 No Waiver; Cumulative Remedies ............................................ 96
9.5 Costs and Expenses ........................................................ 96
9.6 Indemnity ................................................................. 97
9.6.1 Obligations .................................................. 97
9.6.2 Survival; Defense ............................................ 97
9.7 Marshalling; Payments Set Aside ........................................... 97
9.8 Ratable Sharing ........................................................... 97
9.9 Successors and Assigns .................................................... 98
9.10 Set-off ................................................................... 98
9.11 Automatic Debits of Fees .................................................. 98
9.12 Counterparts .............................................................. 99
9.13 Severability .............................................................. 99
9.14 No Third Parties Benefited ................................................ 99
9.15 Time ...................................................................... 99
9.16 Governing Law and Jurisdiction ............................................ 99
9.17 Waiver of Jury Trial ..................................................... 100
9.18 Reserved ................................................................. 100
9.19 Entire Agreement ......................................................... 100
9.20 Interpretation ........................................................... 100
9.21 Limitation on Recourse ................................................... 100
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LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A Permitted Liens
SCHEDULE 1.1.164 Items Excluded From Mortgaged Property
Schedule 1.1.168 Non-▇▇▇▇▇▇▇ Equity Interests
Schedule 2.13.1(A) Leasing Reserve Account
Schedule 2.13.1(B) Leases/Prospective Leases Containing Approved Leases Expenses
Schedule 4.5 Pending or Threatened Litigation
Schedule 4.8.3 Contractual Obligations of Borrower
Schedule 4.10.2 Material Adverse Effects (▇▇▇▇▇▇▇ South Tower or Guarantor)
Schedule 4.11 Existing Non-Compliance With Environmental Laws
Schedule 4.16 Labor Relations Disclosures
Schedule 4.19 Broker Fees Payable by Borrower
Schedule 4.22 Zoning Exceptions
Schedule 4.30 Lease Disclosures
Schedule 4.35 Other Documents Relating to the Material CC&Rs
Schedule 4.36 Description of the Shuttles
Schedule 5.18 Scheduled Upgrades
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SENIOR LOAN AGREEMENT
THIS SENIOR LOAN AGREEMENT (this "Agreement") is made and entered
into as of September 13, 2002, by and among ▇▇▇▇▇▇▇ PARTNERS-355 S. GRAND, LLC,
a Delaware limited liability company, with an office and principal place of
business at c/o Maguire Partners, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III ("Borrower"), THE SENIOR LENDERS
FROM TIME TO TIME PARTY HERETO (each individually, together with its successor
and assigns, a "Senior Lender", and collectively, the "Senior Lenders"), and
DEUTSCHE BANK AG NEW YORK BRANCH, having an address of c/o Deutsche Bank
Securities Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn: Loan
Administrator, as administrative agent for the Holders (in such capacity,
together with its successor and assigns, "Administrative Agent") and as
Collateral Agent for the Holders described herein (in such capacity, together
with its successor and assigns, "Collateral Agent").
RECITALS
A. Borrower desires to borrow from Senior Lenders the amount of ONE
HUNDRED NINETY-FIVE MILLION AND NO/100 DOLLARS ($195,000,000.00) (the "Senior
Loan Amount") to pay certain Collateral Agent-approved costs and for certain
other purposes described herein. The Senior Loan shall be evidenced by one or
more Senior Notes (as defined herein).
B. Concurrently herewith, Borrower and MP-355 S. Grand Mezzanine, LLC, a
Delaware limited liability company ("Mezzanine Maker", and together with
Borrower, in their capacities as Makers under the Note Purchase Agreement
defined below, collectively, "Makers"), Deutsche Bank AG Cayman Island Branch,
as Purchaser (together with its successors and assigns, "Purchaser", and
Collateral Agent are entering into that certain Note Purchase Agreement (as it
may be Modified, the "Note Purchase Agreement"), pursuant to which Purchaser is
purchasing a note from Makers in the original principal amount of THIRTY-SEVEN
MILLION AND NO/100 DOLLARS ($37,000,000.00) (as more fully described below, the
"Junior Obligations"), which Junior Obligations shall be subordinate to the
Senior Loan.
C. Senior Lenders, Purchaser, Administrative Agent and Collateral Agent
have entered into, or will in the future enter into, a Collateral Agency and
Intercreditor Agreement (as the same may be Modified, the "Collateral Agency
Agreement"), pursuant to which Collateral Agent will hold all Collateral (as
defined below) for the Senior Notes (as defined below) and the Junior Note as
Collateral Agent for the benefit of the Senior Lenders, Purchaser, and their
respective successors and assigns (the Senior Lenders and Purchaser, together
with their respective successors and assigns, are referred to herein
collectively as the "Holders").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants, conditions and agreements herein contained, Borrower, Senior
Lenders, Administrative Agent and Collateral Agent agree as follows:
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ARTICLE I
DEFINITIONS
1.1 Defined Terms. In this Agreement, the following terms shall have the
following meanings (each initially-capitalized term used herein and not
otherwise defined shall have the meaning ascribed to that term in the Senior
Notes, as defined below):
1.1.1 "338 ▇. ▇▇▇▇ Covenant" means that certain Covenant and
Agreement Regarding Maintenance of Off-Street Parking Space dated as of July 25,
1988, executed by System Parking Inc., a California corporation, and Cullen-Los
Angeles, Inc., a California corporation, and recorded in the Official Records on
November 22,1989, as Instrument No. 89-1888018.
1.1.2 "444 S. Flower Covenant" means that certain Covenant and
Agreement Regarding Maintenance of Off-Street Parking Space dated as of July
12,1988, executed by ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Partners-South Tower, a California limited
partnership, and recorded in the Official Records on July 28, 1988, as
Instrument No. ▇▇-▇▇▇▇▇▇▇.
1.1.3 "Actual Income" means for any period, all revenues and
receipts of every kind received by or for the account of Borrower in connection
with the operation of the Mortgaged Property; provided, however. that Actual
Income shall not include contributions from Member of Borrower, insurance
proceeds or condemnation awards (including all "Proceeds" and "Awards", as such
terms are defined in the Mortgages) payable on account of any casualty or
condemnation affecting the Mortgaged Property (which proceeds and awards shall
be applied in accordance with provisions of the Mortgages), nor shall Actual
Income include any Security Deposits made by Tenants pursuant to Leases (which
Security Deposits shall be applied in accordance with the provisions of SECTION
2.14.5 and the provisions of the Lockbox Agreement).
1.1.4 "Administrative Agent" has the meaning ascribed to that
term in the Recitals.
1.1.5 "Affected Senior Lender" has the meaning ascribed to that
term in SECTION 2.5.1(B) below.
1.1.6 "Affiliate" means as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. With
respect to Borrower, Mezzanine Maker, Guarantor and any Pledgor, their
Affiliates shall include, without limitation, any director, executive officer or
beneficial owner, directly or indirectly, of ten percent (10%) or more of the
Equity Interests of such Person. In no event shall Administrative Agent,
Collateral Agent or any Holder be deemed an "Affiliate" of any Loan Party.
1.1.7 "Agency Agreement" means any agency, intercreditor, or
other agreement, including, without limitation, the Collateral Agency Agreement,
between or among
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Collateral Agent and/or Administrative Agent and the Holders relating to the
Loan and the rights and obligations of such parties with respect to each other.
1.1.8 "Aggregate Pro Rata Share" means, with respect to
Administrative Agent, on behalf of the Senior Lenders, the percentage obtained
by dividing (x) the Senior Principal Balance by (y) the Principal Balance; and
with respect to Purchaser, the percentage obtained by dividing (x) the Junior
Principal Balance by (y) the Principal Balance.
1.1.9 "Agreement" means this Agreement, as the same may be
Modified.
1.1.10 "Applicable Interest Rate" means, subject to SECTION
2.5.2: (A) the LIBOR-Based Rate; or (B) to the extent applicable under SECTION
2.5.1 or otherwise provided in this Agreement, the Funds-Based Rate; or (C) to
the extent applicable under SECTION 2.5.4 or otherwise provided in this
Agreement, the Default Rate.
1.1.11 "Appraisal" means a real estate appraisal conducted in
accordance with the Uniform Standards of Professional Appraisal Practice (as
promulgated by the Appraisal Standards Board of the Appraisal Foundation) and
all Requirements of Law applicable to Holders, including in conformity with
FIRREA, undertaken by an independent appraisal firm satisfactory to Collateral
Agent in its sole and absolute discretion, and providing an assessment of fair
market value of an Asset.
1.1.12 "Appraised Value" means, on any date of determination, the
fair market value of the Mortgaged Property as determined according to an
Appraisal.
1.1.13 "Approved Closing Statement" has the meaning ascribed to
such term in SECTION 2.14.6.
1.1.14 "Approved LAUSD Extension" means an extension of the LAUSD
Lease (or a new Lease) for not less than 185,000 square feet of the space being
leased by LAUSD as of the date of this Agreement, which extension (or such new
Lease) shall (A) provide for an annual net effective rental rate of not less
than $18.00 per square foot, (B) have a term of not less than five (5)
additional years, (C) in the case of a new Lease, be with a tenant acceptable to
Collateral Agent in its sole and absolute discretion, and (D) otherwise contain
terms and conditions acceptable to Collateral Agent in its sole and absolute
discretion.
1.1.15 "Approved Lease Expenses" has the meaning ascribed to such
term in SECTION 2.13.1.
1.1.16 "Approved Lease Form" has the meaning ascribed to such
term in SECTION 5.15.1.
1.1.17 "Approved Operating Budget" means an Operating Budget
approved by Collateral Agent in accordance with the provisions of Section 5.2.3.
1.1.18 "Approved REIT" means a REIT (including the operating
partnership thereof) to be formed by Recourse Guarantor and its Affiliates and
with respect to which: (A) Collateral Agent shall have approved the
Organizational Documents; (B) Recourse Guarantor
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shall (1) own and control, directly or indirectly, not less than five percent
(5%) of the Equity Interests in such REIT or in the operating partnership
thereof, and (2) serve as Chairman of the Board of Directors; (C) Collateral
Agent shall have approved (which approval shall be granted or withheld in
accordance with SECTION 6.13.3 below) the management structure; (D) Collateral
Agent shall have approved (which approval shall be granted or withheld in
accordance with SECTION 6.13.3 below) all offering materials and memoranda,
prospectuses, SEC filings and other filings and reports provided to any other
Governmental Authority or other Person in connection with any public offering of
Equity Interests in such entity; and (E) Collateral Agent shall have received
satisfactory evidence that upon the capitalization of such REIT through the
initial public offering of its Equity Interests, such REIT shall have (1) a
minimum market capitalization of not less than $1,250,000,000.00, and (2)
stockholder's equity of not less than $250,000,000.00, each as determined by
Collateral Agent in its sole and absolute discretion.
1.1.19 "Asset" means any estate or interest in any kind of
property or asset, whether real, personal or mixed, and whether tangible or
intangible, and with respect to Borrower, shall include, without limitation, the
Mortgaged Property.
1.1.20 "Assignment of Licenses, Contracts and Permits" means,
collectively, the Senior Assignment of Licenses, Contracts and Permits and the
Junior Assignment of Licenses, Contracts and Permits.
1.1.21 "Assignment of Parking Agreement" means, collectively, the
Senior Assignment of Parking Facility Operator Agreement and the Junior
Assignment of Parking Facility Operator Agreement.
1.1.22 "Assignment of Property Management Agreement" means,
collectively, the Senior Assignment of Property Management Agreement and the
Junior Assignment of Property Management Agreement.
1.1.23 "Assignments of Rents" means, collectively, the Senior
Assignment of Rents and the Junior Assignment of Rents.
1.1.24 "Assumption Agreement" has the meaning ascribed to that
term in SECTION 9.1.1.
1.1.25 "Bankruptcy Code" means the United States Bankruptcy Code
and any similar state or federal law now or hereafter in effect relating to
bankruptcy, reorganization, insolvency, or the arrangement or adjustment of
debts.
1.1.26 "Bankruptcy Recourse Obligations" has the meaning set
forth in SECTION 9.21.3.
1.1.27 "Base Rate" means, at anytime, the greater of (i) the
Prime Lending Rate and (ii) the Federal Funds Rate.
1.1.28 "Borrower" has the meaning ascribed to that term in the
Recitals.
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1.1.29 "Budgeted Operating Expenses" means with respect to the
Mortgaged Property, for any period of determination, all expenses paid, accrued,
or payable by Borrower as shown on an Approved Operating Budget.
1.1.30 "Business Day" means any day other than a Saturday, Sunday
or legal holiday on which commercial banks are authorized or required to be
closed in New York or London.
1.1.31 "Cap Provider" means the financial institution providing
the Interest Rate Cap to Borrower.
1.1.32 "Cap Security Agreement" means, collectively, the Senior
Cap Security Agreement and the Junior Cap Security Agreement.
1.1.33 "Capital Lease" means all monetary obligations of a Person
under any leasing or similar arrangement which, in accordance with GAAP, is
classified as a capital lease.
1.1.34 "Carve-out Recourse Obligations" has the meaning set forth
in SECTION 9.21.2.
1.1.35 "Cash Collateral Account" has the meaning ascribed to such
term in the Cash Collateral Account Agreement.
1.1.36 "Cash Collateral Account Agreement" means that certain
Cash Collateral Account Agreement dated as of the date hereof by and among
Borrower, Collateral Agent and Cash Management Bank, as the same may be
Modified.
1.1.37 "Cash Management Bank" means Bank of the West, or a
successor Cash Management Bank under the Cash Collateral Account Agreement as
may be approved from time to time by Collateral Agent.
1.1.38 "Cash Sweep Condition" and "Cash Sweep Conditions" means,
individually and collectively, the DSCR Cash Sweep Condition and the LAUSD Cash
Sweep Condition.
1.1.39 "Closing" means the satisfaction or waiver of all
conditions precedent set forth in SECTION 3.1, to be determined by Collateral
Agent in its sole and absolute discretion.
1.1.40 "Closing Date" means the date on which the Closing occurs.
1.1.41 "Code" means the Internal Revenue Code of 1986, as
amended, and the Regulations promulgated thereunder.
1.1.42 "Collateral" means, collectively, the Senior Collateral
and the Junior Collateral.
1.1.43 "Collateral Agency Agreement" has the meaning ascribed to
that term in the Recitals.
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1.1.44 "Collateral Ascent" has the meaning ascribed to that term
in the Recitals.
1.1.45 "Collateral Agent's Payment Office" means 1251 Avenue of
the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as
Collateral Agent may from time to time specify in accordance with SECTION 9.3.
1.1.46 "Collateral Documents" means, collectively, the Senior
Collateral Documents and the Junior Collateral Documents.
1.1.47 "Contingent Obligation" means, as to any Person, (A) any
Guaranty Obligation of that Person; and (B) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (1) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, or (2) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof.
1.1.48 "Contractual Obligations" means, as to any Person, any
obligation or requirement under any security issued by such Person or under any
agreement, undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by which it
or any of its property is bound.
1.1.49 "Debt Service" means, for any period, the sum of Senior
Debt Service and Junior Debt Service.
1.1.50 "Debt Service Coverage Ratio" or "DSCR" means, for any
period, the ratio of Net Operating Income (or, where specified, Projected Net
Operating Income) to Debt Service.
1.1.51 "Default" means any condition which, with the giving of
notice by Collateral Agent or the passage of time, or both, would constitute an
Event of Default.
1.1.52 "Default Rate" shall mean a rate per annum equal to five
percent (5%) plus the LIBOR-Based Rate (or, to the extent applicable pursuant to
SECTION 2.5.1, the Funds-Based Rate) in effect from time to time, not to exceed
the Maximum Rate.
1.1.53 "Delayed Amortization Event" has the meaning set forth in
SECTION 2.8.2.
1.1.54 "Diminution in Value" means any diminution in value of the
Mortgaged Property arising from or relating to the Release of Hazardous
Materials at, in, on, under, over, from or affecting the Mortgaged Property;
provided, however, that the amount recovered by Collateral Agent and the Holders
in respect of any Diminution in Value as provided in the Loan
6
Documents, when combined with other amounts recovered by Collateral Agent and
the Holders in respect of the Collateral or from any Loan Party shall not exceed
the sum of (i) the Principal Balance and other amounts due under the Loan
(including all accrued and unpaid interest through the Maturity Date, all Fees
and all late charges), plus (ii) all costs and expenses incurred by Collateral
Agent and the Holders in exercising their remedies under the Loan Documents
following an Event of Default thereunder (including the costs and expenses
incurred by Collateral Agent in acquiring title to any Mortgaged Property), plus
(iii) any sums advanced by Collateral Agent or the Holders to operate, maintain
and protect the Mortgaged Properties during the period Collateral Agent's (or
its designee's) ownership thereof (including costs and expenses incurred by
Collateral Agent in the investigation, removal, clean-up or remediation of
Hazardous Substances during such period), plus (iv) interest accruing at the
Default Rate from and after the occurrence of an Event of Default on the amounts
described in clauses (i), (ii) and (iii) above.
1.1.55 "Disbursement Date" has the meaning set forth in SECTION
2.14.7.
1.1.56 "Disbursement Request" has the meaning ascribed to such
term in SECTION 2.13.1.
1.1.57 "Disposition" means the sale, lease, conveyance or other
disposition of Assets.
1.1.58 "Distributions" means any distribution of funds or other
Assets to or for the benefit of any partner, shareholder or other holder of
Equity Interests of or in Borrower, as applicable.
1.1.59 "Dollars", "dollars" and "$" means lawful money of the
United States.
1.1.60 "DSCR Cash Sweep Condition" means, at any time, the
Mortgaged Property has failed to achieve a Debt Service Coverage Ratio of at
least 1.25:1 for the consecutive three (3) Loan Months immediately preceding the
date of determination, which Debt Service Coverage Ratio shall be determined by
Collateral Agent (in its sole and absolute discretion) on the basis of Net
Operating Income and actual Debt Service for said three (3) Loan Months.
1.1.61 "DSCR Test" has the meaning set forth in SECTION 2.4.1(I).
1.1.62 "Eligible Assignee" means any one or more of the
following: (A) subject to the approval of Collateral Agent (not to be
unreasonably withheld), (1) a commercial bank organized under the laws of the
United States of America or any state thereof, (2) a savings and loan
association or savings bank organized under the laws of the United States of
America or any state thereof, (3) a commercial bank organized under the laws of
any other country or a political subdivision thereof (provided that (a) such
bank is acting through a branch or agency located in the United States of
America or (b) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country), and (4) any other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans or notes as one of its businesses, including
insurance companies, mutual funds and lease financing companies; (B) any Holder
and any Affiliate of any Holder; and (C) any trust to which the Loan (or any
7
portion thereof) is transferred in accordance with SECTION 9.1.2(B); provided,
that neither Borrower nor any Affiliate of Borrower shall be an Eligible
Assignee.
1.1.63 "Engineering Report" means that certain engineering report
prepared by Certified Environments, Inc., and dated as of August 15, 2002, Job
No. CEI-376-007-0202.
1.1.64 "Environmental Claims" means any claims, actions
(including civil and criminal actions), proceedings, losses, costs, damages
(including punitive damages), liabilities, obligations, causes of action, fines,
penalties or expenses (including reasonable attorneys' fees and expenditures and
expenses relating to the investigation, enforcement, removal, clean-up or
remediation of the Mortgaged Property or any other property or any natural
resources) alleged or asserted by any Governmental Authority or other Person and
arising from or relating to (A) any Release at, in, on, under, over, from or
affecting the Mortgaged Property, or (B) any circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law.
1.1.65 "Environmental Indemnity Agreement" means, collectively,
the Senior Environmental Indemnity Agreement and the Junior Environmental
Indemnity Agreement.
1.1.66 "Environmental Laws" means all federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to the preservation, conservation,
regulation, health or safety of the environment (including soil, water,
groundwater, and indoor and ambient air conditions), and in each case as may be
now or hereafter enacted, amended or modified, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601,
et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et
seq.), the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal
Act, the Emergency Planning and Community Right-to-Know Act, the Toxic Substance
Control Act of 1976 (15 U.S.C. Section 2601 et seq.), the Clean Water Act (33
U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7901 et seq.)
and any so-called "Superfund" or "Superlien" law, the California Solid Waste
Management, Resource Recovery and Recycling Act (California Government Code
Section 66700 et seq.), California Health & Safety Code Sections 25117, 25281,
25316 and 25501, and California Water Code Section 13050.
1.1.67 "Environmental Permits" has the meaning ascribed to that
term in SECTION 4.11.2.
1.1.68 "Environmental Report" means, collectively, those certain
Phase I environmental reports prepared by Certified Environments, Inc., Job Nos.
CEI #376-007-0202 and CEI #376-006b-0302, dated as of April 17, 2002, and April
18, 2002, respectively.
1.1.69 "Equity Interests" means the capital stock of a
corporation, the membership or limited liability company interests of a limited
liability company, the partnership interests in a partnership, the joint venture
interests in a joint venture, the interests of a beneficiary under a trust or
business trust, and all other evidence or instruments of ownership in
8
any legal entity or trust, together with (A) any rights to receive distributions
or payments from such corporation, limited liability company, partnership, joint
venture, trust, business trust or other legal entity, and all other economic
rights and interests of any nature owing by or arising from such Person, (B) any
management and voting rights with respect to such corporation, limited liability
company, partnership, joint venture, trust, business trust or other legal
entity, and (C) all other rights of and benefits of any nature arising or
accruing with respect to such corporation, limited liability company,
partnership, joint venture, trust, business trust or other legal entity.
1.1.70 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
1.1.71 "Event of Default" shall have the meaning ascribed to that
term in Section 7.1.
1.1.72 "Evidence of Withholding" shall have the meaning ascribed
to that term in SECTION 2.10.5.
1.1.73 "Excess Cash Flow" means amounts remaining in the Cash
Collateral Account following payment of the sums described in SECTIONS
2.14.7(a), 2.14.7(b) AND 2.14.7(c).
1.1.74 "Extension Cap Rate" has the meaning set forth into that
term in SECTION 2.9.2.
1.1.75 "Extension Notice" has the meaning ascribed to that term
in SECTION 2.4.1.
1.1.76 "Extension Period" has the meaning ascribed to that term
in SECTION 2.4.1.
1.1.77 "Extraordinary Capital and Leasing Expenses" has the
meaning ascribed to that term in SECTION 2.14.8 below.
1.1.78 "Federal Funds Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Collateral Agent from three Federal Funds brokers of
recognized standing selected by Collateral Agent.
1.1.79 "Fees" means all fees or other compensation due to any of
the Senior Lender Parties or their respective Affiliates from Borrower or its
Affiliates with respect to the Loan, including any commitment, loan, advisory,
arranger, structuring, closing or exit fees or consideration, but excluding any
payments of principal or interest under the Loan or sums advanced by Collateral
Agent or any of the Senior Lenders or their respective Affiliates to protect the
Collateral.
9
1.1.80 "Financing Statements" means, collectively, the Senior
Financing Statements and the Junior Financing Statements.
1.1.81 "Foreign Lender" means any Senior Lender that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code).
1.1.82 "Funds-Based Rate" has, with respect to the Senior Loan
Documents, the meaning set forth in the Senior Notes, and with respect to the
Note Purchase Documents, the meaning set forth in the Junior Notes.
1.1.83 "Further Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including net income taxes and franchise taxes), and all liabilities
with respect thereto, imposed by any jurisdiction on account of amounts payable
or paid pursuant to SECTION 2.10.
1.1.84 "GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such other entity as may
be in general use by significant segments of the U.S. accounting profession,
which are applicable to the circumstances as of the date of determination and
which are consistent with GAAP.
1.1.85 "Governmental Authority" means any nation or federal
government, any state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
1.1.86 "Gross Revenues" means, for any period, all revenues and
receipts of every kind actually earned and received from the customary operation
of the Mortgaged Property, including rents and other license, lease and
concession fees (not including gross receipts of licensees, lessees and
concessionaires) and proceeds, if any, from business interruption or other loss
of income insurance, and all refunds or reimbursements of Operating Expenses;
provided, however, that Gross Revenues shall not include interest income and
shall be reduced by the amount of any refunds paid to licensees or any other
third party relating to revenues from any previous period. Gross Revenues shall
be calculated in accordance with GAAP.
1.1.87 "Guaranties" means, collectively, (A) the Recourse
Guaranties and (B) the Limited Recourse Guaranty.
1.1.88 "Guarantor" and "Guarantors" means, individually and
collectively, the Recourse Guarantor and the Limited Recourse Guarantors.
1.1.89 "Guaranty Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, letter of credit
10
or other obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person, whether or not contingent,
(A) to purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (B) to advance or
provide funds (1) for the payment or discharge of any such primary obligation,
or (2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (C) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (D) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof. The
amount of any Guaranty Obligation shall be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
1.1.90 "Hazardous Materials" means asbestos, asbestos-containing
materials, polychlorinated biphenyl, polychlorinated biphenyl containing
materials, and all those substances (whether solid, liquid or gas) which are
regulated by, or which may form the basis of liability under, any Environmental
Law, including all substances (whether solid, liquid or gas) identified under
any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, radioactive waste, special waste, hazardous substance, hazardous
material, toxic substance, or petroleum or petroleum derived substance or waste.
1.1.91 "Holders" has the meaning ascribed to that term in the
Recitals.
1.1.92 "Impositions" means, collectively, all (A) real estate and
personal property taxes and all other taxes, assessments, fees and governmental
charges, (B) all water and sewer rates and charges, and (C) all charges for any
easement or agreement maintained for the benefit of the Mortgaged Property,
which, in the case of any of the foregoing, at any time prior to or after the
execution of the Loan Documents may be assessed, levied, or imposed upon or
against the Mortgaged Property or the other Collateral or the rent or income
received therefrom or any use or occupancy thereof.
1.1.93 "Improvements" means all improvements, fixtures and
structures situated on the land encumbered by the Mortgages.
1.1.94 "Indebtedness" means, with respect to any Person, without
duplication and on a consolidated basis, all long-term and short-term debt of
the referenced person calculated in accordance with GAAP.
1.1.95 "Indemnified Liabilities" has the meaning ascribed to that
term in Section 9.6.1.
1.1.96 "Indemnified Person" has the meaning ascribed to that term
in SECTION 9.6.1.
1.1.97 "Indemnity and Contribution Agreement" means that
certain Indemnity and Contribution Agreement dated concurrently herewith,
executed by MP-WFC Holdings and MP-Bunker Hill in favor of Borrower and
Mezzanine Maker, as the same may be Modified.
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1.1.98 "Initial Maturity Date" means August 31, 2005.
1.1.99 "Insolvency Proceeding" means (A) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (B) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case (A) and (B) undertaken under U.S. Federal, State or
foreign law, including the Bankruptcy Code.
1.1.100 "Insolvent" with respect to a Person has the meaning
ascribed to that term (or any similar term, including "Insolvency") in the
Federal Bankruptcy Code and any applicable state fraudulent conveyance laws.
Such meaning shall include, without limitation, the following, with respect to
any Person: (A) the sum of the Person's total liabilities, including all
Contingent Obligations, at fair valuation is greater than all of such Person's
total assets at fair valuation, (B) the Person is engaged or about to engage in
any business or transaction for which the remaining assets of such Person (or
any property remaining with such Person) are unreasonably small (or constitute
unreasonably small capital) in relation to such business or transaction, (C) the
Person is making a transfer or incurring an obligation with the actual intent to
hinder, delay or defraud its creditors or any entity to which such Person is or
will become, on or after the date that such transfer is made or such obligation
in incurred, indebted, or (D) the Person is generally not paying its debts as
they become due.
1.1.101 "Interest Rate Cap" means that certain Letter Agreement
between Cap Provider and Borrower and dated as of September 12, 2002, and all
Modifications thereto (including any replacement thereof in accordance with
SECTION 2.9).
1.1.102 "Junior Assignment of Licenses, Contracts and Permits"
means that certain Assignment of Licenses, Contracts and Permits (Junior) from
Mortgage Maker to Collateral Agent, dated substantially concurrently herewith,
as the same may be Modified.
1.1.103 "Junior Assignment of Parking Agreement" means that
certain Assignment and Subordination of Parking Facility Operator Agreement and
Attornment Agreement (Junior) among Mortgage Maker, Property Manager Operator,
and Collateral Agent, dated substantially concurrently herewith, as the same may
be Modified.
1.1.104 "Junior Assignment of Property Management Agreement"
means that certain Assignment and Subordination of Property Management Agreement
(Junior) among Mortgage Maker, Property Manager, and Collateral Agent, dated
substantially concurrently herewith, as the same may be Modified.
1.1.105 "Junior Assignment of Rents" means that certain
Assignment of Leases and Rents (Junior) dated substantially concurrently
herewith from Mortgage Maker in favor of Collateral Agent, pursuant to the Note
Purchase Agreement, as the same may be Modified.
1.1.106 "Junior Cap Security Agreement" means that certain
Interest Rate Cap Security Agreement (Junior) dated substantially concurrently
herewith made by Mortgage Maker
12
for the benefit of Collateral Agent, creating in favor of Collateral Agent a
second priority assignment and pledge of the Interest Rate Cap, as the same may
be Modified.
1.1.107 "Junior Collateral" means all property and interests in
property and proceeds thereof now owned or hereafter acquired by Makers or any
Loan Party and subject to, or otherwise described as "collateral" in, the Junior
Collateral Documents, which Junior Collateral is collateral for, or secures or
supports, the Junior Obligations or any other obligation or liability under the
Note Purchase Documents.
1.1.108 "Junior Collateral Documents" means (A) the Note Purchase
Agreement, (B) the Junior Mortgage, (C) the Junior Assignment of Rents, (D) the
Pledges, (E) the Junior Cap Security Agreement, (F) the Junior Assignment of
Property Management Agreement, (G) the Junior Assignment of Parking Agreement,
(H) the Junior Assignment of Licenses, Contracts and Permits, (I) the Lockbox
Agreement, (J) the Cash Collateral Account Agreement, (K) the Junior Financing
Statements, (L) all other security agreements, assignments, pledges and other
similar agreements executed by any Loan Party in favor of Collateral Agent now
or hereafter delivered to Collateral Agent pursuant to or in connection with the
transactions contemplated by the Note Purchase Agreement, and all Junior
Financing Statements associated therewith, and (M) any Modifications to any of
the foregoing; provided, however, that "Junior Collateral Documents" shall not
include the Junior Note, the Limited Recourse Guaranty, the Junior Recourse
Guaranty, or the Junior Environmental Indemnity Agreement.
1.1.109 "Junior Debt Service" means, for any period, all sums due
and owing in connection with the Junior Obligations in accordance with the terms
of the Note Purchase Documents, including all payments of interest and scheduled
monthly principal amortization payments, if any, required pursuant to Section
2.8 of the Note Purchase Agreement, but excluding any Fees and any amortization
paid from Excess Cash Flow pursuant to SECTION 2.14.7.
1.1.110 "Junior Environmental Indemnity Agreement" means that
certain Environmental Indemnity Agreement (Junior) dated concurrently herewith,
executed by Makers in favor of Collateral Agent and the other Indemnified
Persons identified therein, as the same may be Modified.
1.1.111 "Junior Financing Statements" means the UCC-1 Financing
Statements filed pursuant to the Note Purchase Agreement, naming Makers or the
other Loan Parties, as applicable, as debtor, and Collateral Agent, as secured
party, and filed with the offices of the Secretary of the State in each state in
which Makers or such other Loan Party is organized.
1.1.112 "Junior Mortgage" means that certain Junior Deed of
Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing
dated as of even date herewith, executed pursuant to the Note Purchase Agreement
by Mortgage Maker, as trustor, for the benefit of Collateral Agent, as
beneficiary, securing the obligations of Makers under the Note Purchase
Documents, as the same may be Modified.
1.1.113 "Junior Note" or "Junior Notes" means that certain Junior
Note dated concurrently herewith executed by Makers to the order of Purchaser in
the face amount of the
13
Junior Note Amount, together with any Replacement Notes issued pursuant to the
Note Purchase Agreement, as the same may be Modified.
1.1.114 "Junior Note Amount" means THIRTY SEVEN MILLION AND
NO/100 DOLLARS ($37,000,000.00), which is the original principal amount of the
Junior Note and which has been fully funded as of the Closing Date.
1.1.115 "Junior Notice of Security Interest" means that certain
Notice of Security Interest and Acknowledgment dated concurrently herewith,
executed by Mortgage Maker, Collateral Agent, and Cap Provider in connection
with the Junior Cap Security Agreement.
1.1.116 "Junior Obligations" means, collectively, (A) the
principal of, all accrued interest on and all fees and other amounts, payments
and premiums of any kind and nature (including any indemnification obligations)
due from Makers or their Affiliates to Collateral Agent and/or Purchaser under
the Junior Notes and the other Note Purchase Documents (including any
Modifications thereto), and (B) any and all of the covenants, promises and other
obligations made or owing by Makers or any of their Affiliates to, or due to,
Collateral Agent and/or Purchaser under the Junior Notes and the other Note
Purchase Documents (including any Modifications thereto), in each case whether
now existing or hereafter arising, whether or not evidenced by any note,
guaranty or other instrument or agreement, whether direct or indirect (including
those acquired by assignment), whether absolute or contingent, whether due or to
become due, and however acquired.
1.1.117 "Junior Principal Balance" means the balance of the
following sums outstanding from time to time: (A) the Junior Note Amount, plus
(B) any other sums advanced in respect of the Junior Obligations under the
Junior Collateral Documents, less (C) any applicable reduction in the
outstanding principal balance of the Junior Note made in accordance with the
terms of the Note Purchase Documents.
1.1.118 "Junior Recourse Guaranty" means that certain
Unconditional Guaranty (Carve-outs) (Junior) dated as of even date herewith,
executed by Recourse Guarantor in favor of Collateral Agent, as the same may be
Modified.
1.1.119 "Junior Recourse Obligations" means, collectively, the
Carve-out Recourse Obligations and the Bankruptcy Recourse Obligations of
Mortgage Maker and Mezzanine Maker under and as defined in the Note Purchase
Agreement and the other Note Purchase Documents.
1.1.120 "Junior Rent Roll Certificate" means that certain Rent
Roll Certificate (Junior) dated concurrently herewith, executed by Mortgage
Maker for the benefit of Collateral Agent in connection with the Note Purchase
Agreement.
1.1.121 "Junior Title Policy" means, collectively, the
mortgagee's loan policies of title insurance issued on the 1970 ALTA form by the
Title Company, in the aggregate face amount of the Junior Note Amount, together
with such reinsurance and direct access agreements as Collateral Agent may
request, insuring the Junior Mortgage to be a valid second-priority lien
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on Mortgage Maker's fee simple interest in the Mortgaged Property (including any
easements appurtenant thereto), subject only to the Senior Mortgage and the
Permitted Title Exceptions.
1.1.122 "Knowledge" means, with respect to a Person, the
knowledge of such Person after reasonable inquiry and investigation.
1.1.123 "KPMG" means KPMG Peat Marwick LLP, a Delaware limited
liability partnership.
1.1.124 "KPMG Lease" means that certain Office Lease between
Borrower and KPMG dated as of June 1, 1998, together with that certain Letter
Agreement dated as of November 23,1998.
1.1.125 "LAUSD" means the Los Angeles Unified School District.
1.1.126 "LAUSD Cash Sweep Condition" means that both of the
following shall have occurred: (A) the Maturity Date shall have been extended
for the first Extension Period pursuant to SECTION 2.4.1, and (B) Borrower and
LAUSD (or another tenant, as applicable) shall have failed to execute and
deliver an Approved LAUSD Extension.
1.1.127 "LAUSD Lease" means that certain Office Lease between
Borrower and LAUSD dated as of February 6, 1995, as amended by that certain
Amendment to Storage Lease and Office Lease dated March 1, 1996, that certain
Second Amendment to Lease and Agreement Re Additional Space dated December 10,
1997, that certain Third Amendment to Lease and Agreement Re Second Additional
Space dated March 2, 1998, that certain Fourth Amendment dated December 10,
1998, that certain Fifth Amendment to Lease Agreement dated February 28, 1999,
that certain Sixth Amendment to Lease dated June 5, 2000, that certain Seventh
Amendment to Lease dated October 1, 2000, that certain Eighth Amendment to Lease
dated April 1, 2001, that certain Amendment to Lease and Agreement Re 16th Floor
Additional Space dated December 10, 2001, and that certain Amended and Restated
Office Lease dated as of August 13, 2002.
1.1.128 "Leases" means any and all leases, subleases, licenses,
concessions, use agreements or grants of other possessory interests or use
rights now or hereafter in force, oral or written, covering or affecting the
Mortgaged Property, or any part thereof.
1.1.129 "Leasing Reserve" has the meaning ascribed to such term
in SECTION 2.13.1.
1.1.130 "Leasing Reserve Account" has the meaning ascribed to
such term in SECTION 2.13.1.
1.1.131 "LIBOR-Based Rate" has, with respect to the Senior Loan
Documents, the meaning set forth in the Senior Notes, and with respect to the
Note Purchase Documents, the meaning set forth in the Junior Notes.
1.1.132 "LIBOR Rate" means the average of interbank offered rates
for 30-day dollar deposits in the London market as set forth on page 3750 (i.e.,
the LIBOR page), or any
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successor page, of the Telerate News Services, titled "British Banker
Association Interest Settlement Rates."
1.1.133 "Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, monetary encumbrance,
lien (statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable law)
and any contingent or other agreement to provide any of the foregoing.
1.1.134 "Limited Recourse Guarantors" means, collectively,
MP-Bunker ▇▇▇▇, ▇▇-WFC Holdings, ▇▇▇▇▇▇▇ Partners SCS, Recourse Guarantor and
each and all other parties that now or hereafter execute any Limited Recourse
Guaranty pursuant to the Note Purchase Agreement.
1.1.135 "Limited Recourse Guaranty" means, collectively, (a) that
certain Unconditional Guaranty (Limited Recourse) dated concurrently herewith,
executed by ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and MP-WFC Holdings, in favor of Collateral Agent for
the benefit of Purchaser; and (b) that certain Unconditional Guaranty (Limited
Recourse) dated concurrently herewith, executed by ▇▇▇▇▇▇▇ Partners SCS and
Recourse Guarantor, in favor of Collateral Agent for the benefit of Purchaser.
1.1.136 "Loan" means, collectively, the Senior Loan and the
Junior Obligations.
1.1.137 "Loan Agreement" means, collectively, the Senior Loan
Agreement and the Note Purchase Agreement.
1.1.138 "Loan Amount" means the sum of the Senior Loan Amount
plus the Junior Note Amount.
1.1.139 "Loan Documents" means, collectively, the Senior Loan
Documents and the Note Purchase Documents.
1.1.140 "Loan Month" means any full calendar month during term of
the Loan, with the first Loan Month being September 2002, which first Loan Month
shall consist of the partial month commencing on the Closing Date of the Loan.
1.1.141 "Loan Party" and "Loan Parties" means, individually and
collectively, Borrower, Mezzanine Maker, Guarantors and Pledgors.
1.1.142 "Loan Year" means the 12-month period commencing on
September 1 of each calendar year.
1.1.143 "Lockbox Account" means the account established and
maintained pursuant to the Lockbox Agreement.
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1.1.144 "Lockbox Agreement" means that certain Lockbox Agreement
dated as of the date hereof by and among Borrower, Collateral Agent and Cash
Management Bank, as the same may be Modified.
1.1.145 "Lockbox Bank" means Bank of the West, or a "Substitute
Lockbox Bank" (as such term is defined in the Lockbox Agreement) designated
pursuant to the Lockbox Agreement.
1.1.146 "Losses" means any and all claims, actions, proceedings,
losses, damages, liabilities, obligations, causes of action, fines, penalties,
costs and expenses (including reasonable attorneys' fees and expenditures and
expenses relating to the investigation, removal, clean-up or remediation of
Hazardous Substances), and Diminution in Value.
1.1.147 "LTV Ratio" means the ratio that results by dividing (A)
the outstanding Principal Balance of the Notes as of the date on which the ratio
is calculated, by (B) the value of the Mortgaged Property as of the date on
which the ratio is calculated, as determined by Collateral Agent in its sole and
absolute discretion.
1.1.148 "LTV Ratio Test" has the meaning set forth in SECTION
2.4.1(J).
1.1.149 "▇▇▇▇▇▇▇ Partners SCS" means ▇▇▇▇▇▇▇ Partners SCS, Inc.,
a California corporation.
1.1.150 "▇▇▇▇▇▇▇ South Tower" means ▇▇▇▇▇▇▇ Partners-South Tower,
LLC, a Delaware limited liability company.
1.1.151 "Makers" has the meaning ascribed to that term in the
Recitals.
1.1.152 "Margin Stock" means "margin stock" as that term is
defined in Regulation T, U or X of the Federal Reserve Board.
1.1.153 "Material Adverse Effect" means a material adverse change
in, or a material adverse effect upon, any of (A) the operations, business,
properties, or condition (financial or otherwise) of Borrower or any other Loan
Party; (B) the ability of Borrower or any Loan Party to perform under any Loan
Document; (C) the legality, validity, binding effect or enforceability of any
Loan Document; or (D) the perfection or priority of any Lien granted to
Collateral Agent under any of the Collateral Documents.
1.1.154 "Material CC&Rs" means collectively, (A) that certain
Reciprocal Easement Agreement dated as of December 20,1982, by and between
▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties Phase I, a California limited partnership,
and ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties-South Tower, a California limited
partnership, recorded in the Official Records on December 22, 1982, as
Instrument No. ▇▇-▇▇▇▇▇▇▇, as Modified by that certain First Amendment to
Reciprocal Easement and Operating Agreement dated as of June 28,1985, and
recorded in the Official Records on August 26, 1987, as Instrument No.
▇▇-▇▇▇▇▇▇▇; (B) that certain Covenant and Agreement Re Central Plant dated as of
December 20,1982, by and between ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties Phase I, a
California limited partnership, and ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties-South
Tower, a California limited partnership, recorded in the Official Records on
17
December 22, 1982 as Instrument No. ▇▇-▇▇▇▇▇▇▇; (C) that certain Covenant and
Agreement Regarding Maintenance of Off-Street Parking Space dated as of July 12,
1988, executed by ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Partners-South Tower, a California limited
partnership, and recorded in the Official Records on July 28, 1988, as
Instrument No. ▇▇-▇▇▇▇▇▇▇; (D) that certain Covenant and Agreement Regarding
Maintenance of Off-Street Parking Space dated as of July 25, 1988, executed by
System Parking Inc., a California corporation, and Cullen-Los Angeles, Inc., a
California corporation, and recorded in the Official Records on November
22,1989, as instrument No. 89-1888018; (E) that certain Reciprocal Grant of
Easements and Declaration of Establishment of Restrictions and Covenants -
Parcels X-2(a) and X-2(b) dated as of September 25, 1981, by and between ▇▇▇▇▇▇▇
Partners-▇▇▇▇▇▇▇ Properties-South Tower, a joint venture, The RHF Bunker Hill
Corporation, a California non-profit corporation, and The Community
Redevelopment Agency of the City of Los Angeles, California, a public body
corporate and politic, and recorded in the Official Records on February 12,
1982, as Instrument No. 82-160076; and (F) that certain Covenant and Agreement
Regarding Maintenance of Off-Street Parking Space dated as of July 11, 1988,
executed by ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Partners-South Tower, a California limited
partnership, and recorded in the Official Records on July 28, 1988, as
Instrument No. ▇▇-▇▇▇▇▇▇▇.
1.1.155 "Material Lease" means a Lease entered into by Borrower with
respect to the Mortgaged Properly where any one of the following applies: (A)
such Lease is for space that exceeds 25,000 net rentable square feet; (B) the
rental rate to be charged under such Lease is less than $18.00 (net of any
concessions) per net rentable square foot; (C) leasing commissions to be paid by
Borrower or any Affiliate in respect of such Lease exceed (1) if more than one
broker is involved, six and one-half percent (6.5%) of gross rental proceeds
scheduled to be collected in accordance with the terms of such Lease during the
primary lease term, not including any extensions (with further limits of four
percent (4%) of gross rental proceeds if such commissions are to be paid to any
outside broker and two and one-half percent (2.5%) of such gross rental proceeds
if such commissions are to be paid to any in-house broker), or (2) if only one
broker is involved, four percent (4%) of gross rental proceeds scheduled to be
collected in accordance with the terms of such Lease during the primary lease
term, not including any extensions; (D) tenant improvements costs in respect of
such Lease are anticipated to exceed (i) $27.50 per net rentable square foot for
new Leases or (ii) $15.00 per net rentable square foot for renewals of existing
Leases; (E) tenant improvement and leasing commission costs in respect of such
Lease are anticipated to exceed twenty-five percent (25%) of the gross rental
proceeds scheduled to be collected in accordance with the terms of such Lease
during the primary lease term, not including any extensions; or (F) such Lease
provides the tenant thereunder with, or results in such tenant having, a right
of purchase, right of first offer to purchase or similar right with respect to
the Mortgaged Property.
1.1.156 "Maturity Date" means, the Initial Maturity Date, as the
same may be accelerated or extended in accordance with the terms of this
Agreement.
1.1.157 "Maximum Rate" means the maximum interest rate allowed by
applicable New York law or, to the extent applicable and in the event such rate
would impose a lower maximum interest rate under applicable law, United States
law, as amended from time to time, in effect on the date for which a
determination of interest accrued hereunder is made.
18
1.1.158 "Member" and "Member of Borrower" means Mezzanine Maker, in
its capacity as the sole member of Borrower.
1.1.159 "Mezzanine Maker" has the meaning ascribed to that term in
the Recitals.
1.1.160 "Modifications" or "Modify" means any amendments,
supplements, modifications, renewals, replacements, consolidations, severances,
substitutions and extensions of any document or instrument from time to time;
"Modify", "Modified," or related words shall have meanings correlative thereto.
1.1.161 "Monthly Debt Service Payment" shall mean, with respect to
any Loan Month, the amount of Debt Service required pursuant to the Loan
Documents to be paid by Borrower and Makers during such Loan Month.
1.1.162 "Mortgage Maker" means Borrower in its capacity as "Mortgage
Maker" under the Junior Note and the other Note Purchase Documents.
1.1.163 "Mortgages "means, collectively, the Senior Mortgage and the
Junior Mortgage.
1.1.164 "Mortgaged Property " means the land and real property
interests described on Exhibit A attached to the Mortgages, and the improvements
and other property more fully described in (and Collateral under) the Mortgages;
provided, however, Mortgaged Property shall not include the items of personal
property set forth on SCHEDULE 1.1.164 attached hereto.
1.1.165 "MP-Bunker Hill" means ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd., a
California limited partnership.
1.1.166 "MP-WFC Holdings" means ▇▇▇▇▇▇▇ Partners-WFC Holdings, LLC,
a Delaware limited liability company.
1.1.167 "Net Operating Income" means, with respect to the Mortgaged
Property, for any period, the Gross Revenues for such period, less Operating
Expenses for such period, in each case as set forth on operating statements
satisfactory to Collateral Agent in its sole and absolute discretion. Net
Operating Income shall be calculated in accordance with GAAP; provided, however.
that notwithstanding the foregoing, neither Net Operating Income, nor the
components thereof, shall include (A) any condemnation or insurance proceeds
(but shall include rent or business interruption insurance proceeds applied to
such period), (B) any proceeds resulting from the sale, exchange, transfer,
financing or refinancing of all or any portion of the Mortgaged Property, (C)
amounts received from tenants as security deposits, (D) any type of income
otherwise included in Net Operating Income but paid directly by any tenant to a
Person other than Borrower or its agents or representatives, or (E) any
adjustment in (whether by addition to or deduction from) rental revenue on
account of "straight-line rent" accounting such that Net Operating Income fails
to reflect the actual receipt of rent under the Leases.
19
1.1.168 "Non-▇▇▇▇▇▇▇ Equity Interests" means each of the direct and
indirect Equity Interests in MP-Bunker Hill which, on the Closing Date, is (a)
owned by an individual other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III who is a current or
former partner or employee of ▇▇▇▇▇▇▇ Partners, or (b) owned by an entity which
is controlled by such an individual, in each case as such Equity Interests are
shown on SCHEDULE 1.1.168 attached hereto.
1.1.169 "North Tower Owner" means North Tower, LLC, a Delaware
limited liability company.
1.1.170 "North Tower Owner Estoppel" means that certain Estoppel
Certificate executed by North Tower Owner.
1.1.171 "North Tower Property" means the real property owned by
North Tower Owner located adjacent to the Mortgaged Property, commonly known as
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
1.1.172 "Northern Trust" means Northern Trust of California, N.A.
1.1.173 "Northern Trust Lease" means that certain Office Lease
between Borrower and Northern Trust dated as of April 9, 1992, as amended by
that certain Amendment to Lease dated as of January 1, 1995.
1.1.174 "Note Purchase Agreement" means that certain Note Purchase
Agreement dated concurrently herewith, among Makers, Purchaser, and Collateral
Agent, as the same may be Modified.
1.1.175 "Note Purchase Documents" means, collectively, (A) the Note
Purchase Agreement, (B) the Junior Note, (C) the Junior Recourse Guaranty, (D)
the Junior Environmental Indemnity, (E) the Limited Recourse Guaranty, (F) the
Junior Collateral Documents, (G) the Junior Notice of Security Interest, (H) the
Junior Rent Roll Certificate, and (I) such other documents and agreements
entered into by or between Collateral Agent or Purchaser, on the one hand, and
one or more Loan Parties, on the other hand, which evidence, secure or support
the Junior Obligations, each as the same may be Modified.
1.1.176 "Notes" means, collectively, the Senior Notes and the Junior
Notes.
1.1.177 "Notice" has the meaning ascribed to that term in SECTION
9.3.
1.1.178 "Notice of Lien" means any "notice of lien" or similar
document intended to be filed or recorded with any court, registry, recorder's
office, central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
1.1.179 "Obligations" means, collectively, the Senior Obligations
and the Junior Obligations.
1.1.180 "Office Project" means the use of the Mortgaged Property for
the purposes of leasing space for general office and retail uses, parking and
related uses.
20
1.1.181 "Official Records" means the Office of the County Recorder
for the County of Los Angeles, California
1.1.182 "Operating Budget" has the meaning ascribed to that term in
SECTION 5.2.3.
1.1.183 "Operating Expenses" means with respect to the Mortgaged
Property, for any period of determination, all expenses paid, accrued, or
payable by Borrower, as determined in accordance with GAAP, during such period
(including, without limitation, the pro rata portion of all such expenses
attributable to, but not paid during, such period) in connection with the
operation of the Mortgaged Property, in all events to the extent such expenses
are approved by Collateral Agent (including as part of an Approved Operating
Budget). Subject to the foregoing, Operating Expenses may include, without
duplication:
(A) expenses for cleaning, repair, maintenance, decoration and
painting of the Mortgaged Property (including parking lots and roadways), net of
any insurance proceeds in respect of any of the foregoing;
(B) wages (including overtime payments), benefits, payroll taxes
and all other related expenses for Borrower's on-site personnel engaged in the
repair, operation and maintenance of the Mortgaged Property and service to
tenants and on-site personnel engaged in audit and accounting functions
performed by Borrower;
(C) management fees pursuant to the Property Management
Agreement;
(D) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, utility or similar item and
the cost of building and cleaning supplies;
(E) rent, liability, casualty, workmen's compensation and other
required insurance premiums;
(F) legal, accounting and other professional fees and expenses
payable to third parties;
(G) real estate and personal property taxes (but not any income
taxes);
(H) advertising and other marketing costs and expenses;
(I) rent and other payments owing by Borrower under any lease
agreements; and
(J) the costs of lock changes, storage, moving, market surveys,
permits (and the application or registration therefor) and licenses (and the
application or registration therefor).
Notwithstanding the foregoing, Operating Expenses shall not include (i)
depreciation, amortization or other non-cash expenses of the Property, (ii) Debt
Service, (iii) any amounts required to be applied to principal amortization
pursuant to SECTION 2.14 below, (iv) any capital expenses, or (v) the cost of
any leasing commissions and tenant improvements incurred by Borrower pursuant to
executed Leases (except to the extent revenues from tenant work orders
associated with such tenant improvements are included in Gross Revenue).
21
1.1.184 "Operating Expense Disbursement Request" means a
certificate, in form and substance satisfactory to Collateral Agent, executed by
a Responsible Officer of Borrower and delivered to Collateral Agent not less
than ten (10) days (nor more than fifteen (15) days) prior to the Disbursement
Date on which Borrower is requesting a disbursement of Operating Expenses, which
certificate shall include the following: (A) a request for disbursement from the
Cash Collateral Account of the amount of Operating Expenses incurred by Borrower
for the Loan Month immediately preceding the Loan Month in which such
Disbursement occurs pursuant to the Approved Operating Budget then in effect
(other than Operating Expenses which are to be paid from disbursements of the
Leasing Reserve), which amount shall take into account any surplus or deficit
from the prior Loan Month's disbursement of Operating Expenses as shown in the
reconciliation referred to in clause (C) below; (B) a certification by such
Responsible Officer that the disbursement of Operating Expenses which Borrower
is requesting shall be used by Borrower solely to pay its creditors for costs
and expenses relating to the Mortgaged Property incurred in such prior Loan
Month in accordance with the current Approved Operating Budget; (C) a budget
variance report (certified by such Responsible Officer as being true and
correct) reconciling the disbursement of Operating Expenses in the prior Loan
Month with the actual Operating Expenses incurred and paid (or, if not paid,
with an explanation for such failure to pay) by Borrower in such prior Loan
Month; and (D) a certification by such Responsible Officer that all amounts
previously disbursed to Borrower pursuant to SECTION 2.14.7 to pay Operating
Expenses have been properly paid to the persons providing goods and services to
the Mortgaged Property in accordance with the Approved Operating Budget and
Borrower's prior Operating Expense Disbursement Requests (except for claims that
Borrower is contesting in accordance with SECTION 6.5.2 and except as shown on
the budget variance report referred to in clause (C) above).
1.1.185 "Operative Lease" means each existing Lease and each Lease
approved by Collateral Agent in accordance with the Loan Documents (or as to
which no approval of Collateral Agent is required under the Loan Documents),
pursuant to which the tenant thereunder has begun occupying the demised premises
and is obligated to pay rent, and with respect to which no material default has
occurred and is continuing beyond the applicable cure period thereunder.
1.1.186 "Ordinary Course of Business" means, with respect to a
specific Person, the ordinary course of such Person's business, substantially as
conducted by any such Person prior to and as of the Closing Date, and (A)
undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in any Loan Document, and (B) which shall not in any
event interfere with the ongoing operation of the Assets of such Person in a
manner consistent with similar properties and shall not interfere with the
day-to-day operations of such Assets as contemplated in the Loan Documents.
1.1.187 "Organizational Documents" means (A) for any corporation,
the certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, and all applicable resolutions of the board of directors (or
any committee thereof) of such corporation, (B) for any partnership, the
partnership agreement, any certificate of formation, and any other instrument or
agreement relating to the rights between the partners or pursuant to which such
partnership is formed, (C) for any limited liability company, the operating or
limited liability company agreement, any
22
articles of organization or certificate of formation, and any other instrument
or agreement relating to the rights between the members, pertaining to the
manager, or pursuant to which such limited liability company is formed, and (D)
for any trust, the trust agreement and any other instrument or agreement
relating to the rights between the trustors, trustees and beneficiaries, or
pursuant to which such trust is formed.
1.1.188 "Original Senior Lender" means Deutsche Bank AG Cayman
Islands Branch and the other Senior Lenders listed on the signature pages
hereof, each in its capacity as a Senior Lender.
1.1.189 "Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with respect
to, this Agreement or any other Loan Document.
1.1.190 "Overall Spread" means the weighted average of (a) the
Spread under the Senior Notes, and (b) the Spread under the Junior Note (taking
into consideration the interest rate and principal amount of all Notes).
1.1.191 "Parking Agreement" means that certain Parking Facility
Operator Agreement dated as of November 7, 2000, between Property Manager and
Parking Facility Operator.
1.1.192 "Parking Covenants" means, collectively, the ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ and the ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
1.1.193 "Parking Facility Operator" means Ampco System Parking.
1.1.194 "Participant" has the meaning ascribed to that term in
SECTION 9.1.3.
1.1.195 "Permitted Liens" means the Liens encumbering title to the
Mortgaged Property that are set forth on EXHIBIT A attached hereto.
1.1.196 "Permitted Title Exceptions" means the Permitted Liens and
title exceptions with respect to the Mortgaged Property approved by Collateral
Agent, as reflected in the Title Policy or the Survey, and such other matters
affecting title to the Mortgaged Property as may be approved in writing by
Collateral Agent pursuant to the Loan Documents from time to time after the
dated hereof.
1.1.197 "Permitted Transfer" has the meaning ascribed to that term
in SECTION 6.13.2.
1.1.198 "Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock association, trust,
unincorporated association, joint venture or Governmental Authority.
1.1.199 "Pledges" means, collectively, (a) that certain Pledge and
Security Agreement dated concurrently herewith, executed by ▇▇▇▇▇▇▇ Partners SCS
and Recourse
23
Guarantor, in favor of Collateral Agent, granting a security interest in such
Pledgors' respective Equity Interests in MP-WFC Holdings; (b) that certain
Pledge and Security Agreement dated concurrently herewith, executed by MP-WFC
Holdings and MP-Bunker Hill, in favor of Collateral Agent, granting a security
interest in such Pledgors' respective Equity Interests in Member of Borrower;
and (c) that certain Pledge and Security Agreement dated concurrently herewith,
executed by Member of Borrower, in favor of Collateral Agent, granting a
security interest in Member of Borrower's Equity Interests in Borrower.
1.1.200 "Pledgor" and "Pledgors" means, individually and
collectively, Member, MP-WFC Holdings, MP-Bunker Hill, ▇▇▇▇▇▇▇ Partners SCS,
Recourse Guarantor, and each and all other parties that now or hereafter execute
any Pledge of their respective direct or indirect Equity Interests in Borrower
in favor of Collateral Agent pursuant to the Note Purchase Agreement.
1.1.201 "Prime Lending Rate" means the rate which Deutsche Bank AG
New York Branch announces from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. Deutsche Bank AG New York Branch
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate.
1.1.202 "Principal Balance" means the sum of the Senior Principal
Balance plus the Junior Principal Balance.
1.1.203 "Pro Rata Share" means, with respect to each Senior Lender,
the percentage obtained by dividing (x) the Senior Loan Exposure of that Senior
Lender by (y) the sum of the Senior Loan Exposures of all Senior Lenders.
1.1.204 "Projected Net Operating Income" means, for any period,
forecasted Gross Revenues less forecasted Operating Expenses, as determined by
Collateral Agent in its sole and absolute discretion, where: (A) Gross Revenues,
with respect to Leases, shall take into account Gross Revenues only from
Operative Leases to the extent such Operative Leases are scheduled to remain in
effect during the forecast period, as determined by Collateral Agent in its sole
and absolute discretion; and (B) forecasted Operating Expenses shall include
only those Operating Expenses which are included in an Approved Operating Budget
for the forecast period; provided, however, in determining the Debt Service
Coverage Ratio for purposes of SECTION 2.4.1(1), the management fee for the
Mortgaged Property shall be deemed to be equal to two and one-half percent
(2.5%) of gross revenues, notwithstanding that the actual management fee payable
by Borrower may be more or less than such amount.
1.1.205 "Property Manager" means ▇▇▇▇▇▇▇ Partners Development, Ltd.,
a California limited partnership, or any replacement property manager approved
by Collateral Agent pursuant to SECTION 5.16.
1.1.206 "Property Management Agreement" means that certain
Management and Leasing Agreement dated as of September 13, 2002, by and between
Borrower and Property
24
Manager relating to the Mortgaged Property, or any replacement property
management agreement approved by Collateral Agent in accordance with SECTION
5.16.
1.1.207 "Purchaser" has the meaning ascribed to that term in the
Recitals.
1.1.208 "REA" means that certain Reciprocal Easement Agreement dated
as of December 20, 1982, by and between ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties
Phase I, a California limited partnership, and ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇
Properties-South Tower, a California limited partnership, recorded in the
Official Records on December 22, 1982, as Instrument No. ▇▇-▇▇▇▇▇▇▇, as Modified
by that certain First Amendment to Reciprocal Easement and Operating Agreement
dated as of June 28, 1985, and recorded in the Official Records on August 26,
1987, as Instrument No. ▇▇-▇▇▇▇▇▇▇.
1.1.209 "Recourse Guaranties" means, collectively, the Senior
Recourse Guaranty and the Junior Recourse Guaranty.
1.1.210 "Recourse Guarantor" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, an
individual.
1.1.211 "REIT" means a domestic trust or corporation that qualifies
as a real estate investment trust under the provisions of Sections 856, et seq.
of the Code and the Equity Interests in which are traded on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market System (or
any successor thereof).
1.1.212 "Release" means the presence, placement, discharge, deposit,
emission, disposal, burial, dumping; injection, spillage, leakage, seepage,
release or contamination of any Hazardous Material, whether intentional or
unintentional, negligent or non-negligent, sudden or non-sudden, accidental or
non-accidental presence.
1.1.213 "Replacement Note" has the meaning ascribed to that term in
SECTION 2.2.
1.1.214 "Required DSCR'" has the meaning ascribed to that term in
SECTION 2.4.1(1).
1.1.215 "Required LTV Ratio" has the meaning ascribed to that term
in SECTION 2.4.1(J).
1.1.216 "Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
1.1.217 "Requisite Holders" means with respect to any action to be
taken by Collateral Agent, those Holders holding the requisite percentage of the
Loan to take designated actions in accordance with the Collateral Agency
Agreement; and with respect to any action to be taken by Administrative Agent,
Senior Lenders collectively having or holding fifty-one percent (51 %) or more
of the aggregate Senior Loan Exposure of all Senior Lenders.
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1.1.218 "Responsible Officer" means the chief executive officer or
president of ▇▇▇▇▇▇▇ Partners SCS (or any successor thereto permitted
hereunder), or any other officer thereof having substantially the same authority
and responsibility with respect to Member and Borrower (and their direct or
indirect managing constituents), or, with respect to financial matters, the
chief financial officer or the treasurer of ▇▇▇▇▇▇▇ Partners SCS (or any
successor thereto permitted hereunder), or any other officer having
substantially the same authority and responsibility with respect to Member and
Borrower (and their direct or indirect managing constituents).
1.1.219 "Retained Funds" has the meaning ascribed to such term in
SECTION 2.14.6.
1.1.220 "Scheduled Upgrades" has the meaning ascribed to such term
in SECTION 5.18.
1.1.221 "SEC" means the Securities and Exchange Commission, or any
successor thereto.
1.1.222 "Security Deposit Account" has the meaning ascribed to such
term in the Lockbox Agreement.
1.1.223 "Security Deposits" means any security deposits, letters of
credit, or other collateral paid or given as security for obligations of Tenants
under Leases.
1.1.224 "Senior Assignment of Licenses, Contracts and Permits" means
that certain Assignment of Licenses, Contracts and Permits (Senior) from
Borrower to Collateral Agent, dated substantially concurrently herewith, as the
same may be Modified.
1.1.225 "Senior Assignment of Parking Agreement" means that certain
Assignment and Subordination of Parking Facility Operator Agreement and
Attornment Agreement (Senior) among Borrower, Property Manager Operator, and
Collateral Agent, dated substantially concurrently herewith, as the same may be
Modified.
1.1.226 "Senior Assignment of Property Management Agreement" means
that certain Assignment and Subordination of Property Management Agreement
(Senior) among Borrower, Property Manager, and Collateral Agent, dated
substantially concurrently herewith, as the same may be Modified.
1.1.227 "Senior Assignment of Rents" means that certain Assignment
of Leases and Rents (Senior) dated substantially concurrently herewith from
Borrower in favor of Collateral Agent, pursuant to the Senior Loan Agreement, as
the same may be Modified.
1.1.228 "Senior Cap Security Agreement" means that certain Interest
Rate Cap Security Agreement (Senior) dated substantially concurrently herewith
made by Borrower for the benefit of Collateral Agent, creating in favor of
Collateral Agent a first priority assignment and pledge of the Interest Rate
Cap, as the same may be Modified.
26
1.1.229 "Senior Collateral" means all property and interests in
property and proceeds thereof now owned or hereafter acquired by Borrower or any
Loan Party and subject to, or otherwise described as "collateral" in, the Senior
Collateral Documents, which Senior Collateral is collateral for, or secures or
supports, the Senior Loan or any other obligation or liability under the Senior
Loan Documents.
1.1.230 "Senior Collateral Documents" means (A) this Agreement, (B)
the Senior Mortgage, (C) the Senior Assignment of Rents, (D) the Senior Cap
Security Agreement, (E) the Senior Assignment of Property Management Agreement,
(F) the Senior Assignment of Parking Agreement, (G) the Senior Assignment of
Licenses, Contracts and Permits, (H) the Lockbox Agreement, (I) the Cash
Collateral Account Agreement, (J) the Senior Financing Statements, (K) all other
security agreements, assignments, pledges and other similar agreements executed
by any Loan Party in favor of Collateral Agent now or hereafter delivered to
Collateral Agent pursuant to or in connection with the transactions contemplated
by the Senior Loan Documents, and all Senior Financing Statements associated
therewith, and (L) any Modifications to any of the foregoing; provided. however,
that "Senior Collateral Documents" shall not include the Senior Notes, the
Senior Recourse Guaranty, or the Senior Environmental Indemnity Agreement.
1.1.231 "Senior Debt Service" means, for any period, all sums due
and owing in connection with the Senior Loan in accordance with the terms of the
Senior Loan Documents, including all payments of interest and scheduled monthly
principal amortization payments, if any, required pursuant to Section 2.8 of the
Senior Loan Agreement, but excluding any Fees and any amortization paid from
Excess Cash Flow pursuant to SECTION 2.14.7.
1.1.232 "Senior Environmental Indemnity Agreement" means that
certain Environmental Indemnity Agreement (Senior) dated concurrently herewith,
executed by Borrower in favor of Collateral Agent and the other Indemnified
Persons identified therein, as the same may be Modified.
1.1.233 "Senior Financing Statements" means the UCC-1 Financing
Statements filed pursuant to this Agreement, naming Borrower or the other Loan
Parties, as applicable, as debtor, and Collateral Agent, as secured party, and
filed with the offices of the Secretary of the State in each state in which
Borrower or such other Loan Party is organized or, if required, in which the
Mortgaged Property is located.
1.1.234 "Senior Lender" or "Senior Lenders" means each Original
Senior Lender party to this Agreement and any Person that hereafter acquires an
interest in the Senior Note (from an Original Senior Lender or otherwise) and is
made a party hereto pursuant to the terms hereof. Upon any Senior Lender's full
assignment of its interest in the Senior Loan in accordance with the terms of
this Agreement, such Person shall no longer constitute a Senior Lender
hereunder.
1.1.235 "Senior Lender Parties" means Senior Lenders, Administrative
Agent and Collateral Agent.
27
1.1.236 "Senior Loan" means the loan made pursuant to the Senior
Loan Agreement.
1.1.237 "Senior Loan Agreement" means this Agreement, as at may be
Modified.
1.1.238 "Senior Loan Amount" means ONE HUNDRED NINETY-FIVE MILLION
AND NO/100 DOLLARS ($195,000,000.00), which is the original aggregate principal
amount of the Senior Notes and which has been fully funded as of the Closing
Date.
1.1.239 "Senior Loan Documents" means, collectively, (A) this
Agreement, (B) the Senior Notes, (C) the Senior Recourse Guaranty, (D) the
Senior Environmental Indemnity, (E) the Senior Collateral Documents, (F) the
Senior Notice of Security Interest, (G) the Senior Rent Roll Certificate, and
(H) such other documents and agreements entered into by or between Collateral
Agent, Administrative Agent or Senior Lenders, on the one hand, and one or more
Loan Parties, on the other hand, which evidence, secure or support the Senior
Loan, each as the same may be Modified.
1.1.240 "Senior Loan Exposure" means, with respect to any Senior
Lender, the outstanding principal amount of the Senior Loan funded by such
Senior Lender under this Agreement.
1.1.241 "Senior Mortgage" means that certain Senior Deed of Trust,
Security Agreement, Assignment of Leases and Rents and Fixture Filing dated as
of even date herewith, executed pursuant to this Agreement by Borrower, as
trustor, for the benefit of Collateral Agent, as beneficiary, securing the
obligations of Borrower under the Senior Loan Documents, as the same may be
Modified.
1.1.242 "Senior Notes" or "Senior Note" means the Promissory Note or
Notes made by Borrower (including any Replacement Notes) to the order of Senior
Lenders in the aggregate stated principal amount of the Senior Loan Amount, in
connection with the Senior Loan, as the same may be Modified.
1.1.243 "Senior Notice of Security Interest" means that certain
Notice of Security Interest and Acknowledgment dated concurrently herewith,
executed by Borrower, Collateral Agent, and Cap Provider in connection with the
Senior Cap Security Agreement.
1.1.244 "Senior Obligations" means, collectively, (A) the principal
of, all accrued interest on and all fees and other amounts, payments and
premiums of any kind and nature (including any indemnification obligations) due
from Borrower or its Affiliates to Collateral Agent and/or Senior Lenders under
the Senior Notes and the other Senior Loan Documents (including any
Modifications thereto), and (B) any and all of the covenants, promises and other
obligations made or owing by Borrower or any of its Affiliates to, or due to,
Collateral Agent and/or Senior Lenders under the Senior Notes and the other
Senior Loan Documents (including any Modifications thereto), in each case
whether now existing or hereafter arising, whether or not evidenced by any note,
guaranty or other instrument or agreement, whether direct or indirect (including
those acquired by assignment), whether absolute or contingent, whether due or to
become due, and however acquired.
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1.1.245 "Senior Principal Balance" means the balance of the
following sums outstanding from time to time: (A) the Senior Loan Amount, plus
(C) any other sums advanced in respect of the Senior Loan under the Senior
Collateral Documents, less (D) any applicable reduction in the outstanding
principal balance of the Senior Loan made in accordance with the terms of the
Senior Loan Documents.
1.1.246 "Senior Recourse Guaranty" means that certain Unconditional
Guaranty (Carve-outs) (Senior) dated as of even date herewith, executed by
Recourse Guarantor in favor of Collateral Agent, as the same may be Modified.
1.1.247 "Senior Recourse Obligations" means, collectively, the
Carve-out Recourse Obligations and the Bankruptcy Recourse Obligations of
Borrower under and as defined in this Agreement and the other Senior Loan
Documents.
1.1.248 "Senior Rent Roll Certificate" means that certain Rent Roll
Certificate (Senior) dated concurrently herewith, executed by Borrower for the
benefit of Collateral Agent in connection with the Senior Loan Agreement.
1.1.249 "Senior Title Policy" means, collectively, the mortgagee's
loan policies of title insurance issued on the 1970 ALTA form by the Title
Company, in the aggregate face amount of the Senior Loan, together with such
reinsurance and direct access agreements as Collateral Agent may request,
insuring the Senior Mortgage to be a valid first-priority lien on Borrower's fee
simple interest in the Mortgaged Property (including any easements appurtenant
thereto), subject only to the Permitted Title Exceptions.
1.1.250 "Single-Purpose Entity" means a Person, other than an
individual, which (A) is formed or organized solely for the purpose of holding,
directly or indirectly, an ownership interest in the Mortgaged Property or
Equity Interests in Persons holding directly or indirectly, ownership interests
in the Mortgaged Property, (B) does not engage in any business unrelated to (i)
in the case of a Person owning such Mortgaged Property, the Mortgaged Property
(including the operation and management of such Mortgaged Property and the
financing thereof pursuant to the Loan Documents), and (ii) in the case of a
Person owning such Equity Interests, such Equity Interests, (C) has not and will
not have any Assets other than those related to its interest in such Mortgaged
Property (including any financing thereof) or such Equity Interests, as
applicable, and has not or will not have any Indebtedness other than, as
applicable, the Indebtedness permitted pursuant to SECTION 6.5, (D) maintains
its own separate books and records and its own accounts, in each case which are
separate and apart from the books and records and accounts of any other Person,
(E) holds itself out as being a Person, separate and apart from any other
Person, (F) does not and will not commingle its funds or assets with those of
any other Person, (G) conducts its own business in its own name, (H) maintains
separate financial statements and files its own tax returns (or, if on a
consolidated basis, such consolidated return shall clearly note that such Person
and any other Person required hereunder to be a Single Purpose Entity are each a
separate legal entity for all purposes other than federal tax reporting and that
their respective Assets and credit are not available to satisfy the debts or
obligations of any other Person), (I) pays its own debts and liabilities when
they become due out of its own funds, (J) observes all partnership, corporate,
limited liability company or trust formalities, as applicable, and does all
things necessary to preserve its existence, (K) except as expressly permitted by
the Loan Documents, maintains an
29
arm's-length relationship with its Affiliates and shall not enter into any
Contractual Obligations with any Affiliates except upon terms and conditions
that are intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than an Affiliate,
(L) pays the salaries of its own employees and maintains a sufficient number of
employees (if any) in light of its contemplated business operations (or
otherwise provides for such labor from its own funds), (M) does not guarantee or
otherwise obligate itself with respect to the debts of any other Person, or hold
out its credit as being available to satisfy the obligations of any other
Person, except as expressly contemplated by the Loan Documents, (N) does not
acquire obligations or securities of its partners, members or shareholders, (O)
allocates fairly and reasonably shared expenses, including any overhead for
shared office space, (P) uses separate stationery, invoices, and checks, (Q)
does not and will not pledge its assets for the benefit of any other Person
(except in connection with the Indebtedness permitted pursuant to SECTION 6.5)
or make any loans or advances in the nature of Indebtedness to any other Person
other than tenant improvement allowances and other leasing concessions pursuant
to Leases approved or deemed approved in accordance with the Loan Documents, (R)
does and will correct any known misunderstanding regarding its separate
identity, (S) maintains adequate capital in light of its contemplated business
operations, and (T) has and will have a partnership or operating agreement,
certificate of incorporation or other organizational document which complies
with the requirements set forth in this definition.
1.1.251 "Spread" has, with respect to the Senior Loan Documents, the
meaning set forth in the Senior Notes, and with respect to the Note Purchase
Documents, the meaning set forth in the Junior Notes.
1.1.252 "Subsequent Market Transaction" means any of (A) the sale of
the Senior Loan Documents to one or more investors, (B) the transfer of a
participation interest in the Senior Loan to one or more investors, (C) a
deposit of the Senior Loan Documents with one or more trusts or other entities
which may sell certificates or other instruments to investors evidencing an
ownership interest in the assets of such trust or other entity, (D) any
transactions contemplated by SECTION 9.1, or (E) other sales or transfers of the
Senior Obligations evidenced or secured by the Senior Loan Documents or any
interest therein to one or more investors.
1.1.253 "Survey" means that certain ALTA/ACSM Land Title Survey
prepared with respect to the Mortgaged Property by Mullenhauer Group under Job
No. 18077.01 and dated August 29, 2002.
1.1.254 "Target Principal Balance" means Two Hundred Twenty-Five
Million Dollars (225,000,000.00).
1.1.255 "Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar charges,
and all liabilities with respect thereto, excluding taxes imposed on or measured
by each Holders' respective net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Holder is organized or
maintains a lending office.
1.1.256 "Tenant" means any tenant of the Mortgaged Property under a
Lease.
30
1.1.257 "Tenant Payments" means all payments by Tenants pursuant to
a Lease or otherwise (including, without limitation, all rents), whether in the
form of checks, cash, drafts, money orders, credit, set-off, or any other
payments of any kind whatsoever; provided, however, Tenant Payments shall not
include Security Deposits except to the extent actually applied to amounts owing
under Leases.
1.1.258 "Title Company" means Commonwealth Land Title Insurance
Company, and each of the reinsurers/co-insurers under the Title Policy.
1.1.259 "Title Policies" means, collectively, the Senior Title
Policy and the Junior Title Policy.
1.1.260 "Transfer" means the meaning ascribed to such term in
SECTION 6.13.1.
1.1.261 "Transfer Restrictions" means the restrictions on Transfer
set forth in SECTION 6.13.2.
1.1.262 "UCC" means the Uniform Commercial Code as in effect in New
York, Delaware and California, as applicable.
1.1.263 "United States" and "U.S." means the United States of
America.
1.1.264 "X-2 Garage" means a portion of the Mortgaged Property
located at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, more fully described as
"Parcel C" on Exhibit A to each of the Mortgages.
1.2 Other Interpretive Provisions.
1.2.1 Defined Tenors. Unless otherwise specified herein or therein,
all terms defined in this Agreement shall have the defined meanings when used in
any certificate, Loan Document, or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the singular
and plural forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein and that are defined in the UCC shall have the meanings
therein described.
1.2.2 The Agreement. Unless the context otherwise requires, the
words "hereof", "herein", "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and Section, schedule and exhibit
references are to this Agreement unless otherwise specified.
1.2.3 Certain Common Terms.
(A) Documents. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(B) Including. The team "including" is not limiting and means
"including without limitation."
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(C) Performance; Time. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including". If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
interpreted to encompass any and all means, direct or indirect, of taking, or
not taking, such action.
(D) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent Modifications, but only to the extent such Modifications
are not prohibited by the terms of any Loan Document.
(E) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory Modifications thereof.
(F) Captions. The captions and headings of this Agreement are
for convenience of reference only and shall not affect the construction of this
Agreement.
(G) Independence of Provisions. The parties acknowledge that
this Agreement and other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
(H) Making. The terms "making" and "extending" and similar words
when used to refer to the Senior Loan are intended to refer to the Loan made
pursuant to this Agreement and obligations incurred by Makers pursuant to the
Note Purchase Agreement, as the context may require.
1.3 Accounting Principles.
1.3.1 Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
1.3.2 References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of Borrower.
ARTICLE II
THE LOAN; ADDITIONAL AGREEMENTS AND COVENANTS
2.1 The Senior Loan. Senior Lenders agree, on the terms and conditions
hereinafter set forth, to make the Senior Loan to Borrower on the Closing Date,
and Borrower agrees to
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accept the Senior Loan and to repay the same in accordance with the terms
hereof. Amounts borrowed under the Senior Loan that are repaid or prepaid by
Borrower may not be reborrowed.
2.2 Senior Note. The Senior Loan shall be evidenced by one or more
notes, including the Senior Notes executed substantially concurrently herewith,
payable to the order of each Senior Lender in an aggregate amount equal to the
Senior Loan Amount. In accordance with the provisions of SECTION 9.1.2 below,
any Senior Lender shall have the right to substitute one or more new notes
executed by Borrower (each, a "Replacement Note") upon assignment of all or any
portion of such Senior Lender's interest in the Senior Obligations and to have
Replacement Notes issued by Borrower pursuant to ARTICLE IX.
2.3 Term. The Senior Loan shall mature on the Initial Maturity Date,
subject to acceleration by Collateral Agent of the Senior Loan pursuant to the
terms of the Senior Loan Documents, and subject to Borrower's rights to extend
the Initial Maturity Date pursuant to SECTION 2.4 below.
2.4 Extension.
2.4.1 Borrower shall have the right to extend the Initial Maturity
Date of the Notes for two (2) additional periods of twelve (12) consecutive
months each (each, an "Extension Period"), provided that Borrower strictly
complies with all of the following conditions precedent:
(A) Borrower shall have delivered to Collateral Agent a written
notice (an "Extension Notice") containing Borrower's election to extend the term
of the Loan, which Extension Notice shall be delivered not less than sixty (60)
days nor more than one hundred twenty (120) days prior to the scheduled Maturity
Date;
(B) no Default or Event of Default exists on the date such
Extension Notice is delivered or on the scheduled Maturity Date;
(C) Borrower shall have purchased an Interest Rate Cap for the
Extension Period in accordance with SECTION 2.9.2 below;
(D) Borrower shall pay an extension fee to Collateral Agent
equal to three-eighths of one percent (0.375%) of the then current Senior
Principal Balance as of the scheduled Maturity Date (provided however, in the
event that (1) the Junior Obligations have been unconditionally, irrevocably and
indefensibly paid and performed in full on or before March 31, 2003, and (2) the
Permitted Transfer described in SECTION 6.13.2 has been consummated in
accordance with the terms and conditions of this Agreement, the extension fee
payable by Borrower under this SECTION 2.4.1(D) shall be one-quarter of one
percent (0.25%) of the then current Senior Principal Balance as of the scheduled
Maturity Date);
(E) Collateral Agent shall have received, at Borrower's expense,
such title endorsements insuring the continued first-lien priority of the Senior
Mortgage (subject only to the Permitted Title Exceptions) as Collateral Agent
may require;
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(F) Borrower and all Loan Parties shall have ratified and
reaffirmed their respective obligations under the applicable Senior Loan
Documents in writing in form satisfactory to Collateral Agent in its sole and
absolute discretion;
(G) Borrower shall have paid any costs and expenses incurred by
Collateral Agent in connection with the requested extension (including, without
limitation, attorneys fees and costs);
(H) if the Junior Obligations have not been previously repaid,
the Junior Obligations shall be extended concurrently with the Senior Loan;
(I) the Mortgaged Properly shall meet the following test (the
"DSCR Test"): the projected Debt Service Coverage Ratio for the applicable
Extension Period shall not be less than 1.40:1 (as the same may be adjusted as
provided below, the "Required DSCR"), which Debt Service Coverage Ratio shall be
determined by Collateral Agent (in its sole and absolute discretion) on the
basis of Projected Net Operating Income for the applicable twelve (12) month
Extension Period and assuming an interest rate under the Loan at the greater of
(i) eight percent (8.0%) per annum or (ii) the weighted average of the
Applicable Interest Rate under both the Senior Notes and the Junior Notes in
effect during the Loan Month immediately prior to the beginning of the
applicable Extension Period; provided, however, that in the event the Principal
Balance has been reduced below the Target Principal Balance, the Required DSCR
shall be ratably increased by the percent reduction of the Principal Balance
below the Target Principal Balance, if any, up to a maximum Required DSCR of
1.65:1; provided further, in the event the Required DSCR is not achieved, so
long as there is no Event of Default, Borrower may prepay a portion of the Loan
(subject to and in accordance with the terms and conditions of SECTIONS 2.6.2
and 2.63 below) sufficient to cause the Mortgaged Property to achieve the
Required DSCR (which prepayment shall (A) not affect the Required DSCR for the
then current DSCR Test, and (B) be applied pro rata to the Senior Principal
Balance and the Junior Principal Balance in the proportions that each bear to
the Principal Balance);
(J) the Mortgaged Property shall meet the following test (the
"LTV Ratio Test"): the LTV Ratio at the commencement of the first Extension
Period shall not exceed seventy-five percent (75.0%) and at the commencement of
the second Extension Period shall not exceed seventy percent (70.0%) (in each
case, as the same may be adjusted as provided below, the "Required LTV Ratio");
provided however, that in the event the Principal Balance has been reduced below
the Target Principal Balance, the Required LTV Ratio shall be ratably decreased
for each applicable Extension Period by the percent reduction of the Principal
Balance below the Target Principal Balance, if any, but shall in no event be
less than sixty-five percent (65.0%) at the commencement of any Extension
Period; provided further, in the event the Required LTV Ratio is not met, so
long as there is not Event of Default, Borrower may prepay a portion of the Loan
(subject to and in accordance with the terms and conditions of SECTIONS 2.6.2
and 2.63 below) sufficient to meet the applicable Required LTV Ratio (which
prepayment shall (A) not affect the Required LTV Ratio for the then current LTV
Ratio Test, and (B) be applied
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pro rata to the Senior Principal Balance and the Junior Principal
Balance in the proportions that each bear to the Principal Balance); and
(K) Prior to the commencement of the second Extension Period,
Borrower and LAUSD (or another tenant, as applicable) shall have
executed and delivered an Approved LAUSD Extension.
2.4.2 If the Initial Maturity Date is extended, all the terms and
conditions of the Senior Notes and the Senior Loan Documents shall continue to
apply, except that Borrower shall have no further option to extend the Maturity
Date beyond the expiration of the second Extension Period.
2.5 Interest Rate. Subject to SECTION 2.5.1 below, from the date of the
original Senior Notes to and excluding the Maturity Date, the Senior Principal
Balance shall bear interest at the Applicable Interest Rate from time to time in
effect. The Applicable Interest Rate shall be adjusted monthly, commencing on
the first day of the calendar month immediately following the date hereof and on
the first day of each succeeding month thereafter to and including the first day
of the month in which the Maturity Date occurs; provided, however, that to the
extent such Applicable Interest Rate shall be based on the LIBOR Rate, it shall
be based on the LIBOR Rate in effect on the last Business Day of the preceding
calendar month. Interest shall be calculated using the actual days the Senior
Principal Balance is outstanding hereunder divided by 360 days and multiplied by
the Applicable Interest Rate. The Applicable Interest Rate shall be adjusted
from time to time in accordance with the following provisions.
2.5.1 Increased Costs, Illegality, Etc.
(A) In the event that Administrative Agent or any Senior
Lender shall have determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by Administrative Agent):
(i) by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the Applicable Interest Rate on the basis
provided for in the definition of LIBOR-Based Rate; or
(ii) that such Senior Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder with respect to
any LIBOR-Based Rate because of (a) any change since the date of this Agreement
in any applicable law or governmental rule, regulation, order, guideline or
request (whether or not having the force of law) or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, for
example, but not limited to, (1) a change in the basis of taxation of payment to
any Senior Lender of the principal of or interest on such LIBOR-Based Rate or
any other amounts payable hereunder (except for changes in the rate of tax on,
or determined by reference to, the net income or net profits of such Senior
Lender, or any franchise tax based on the net income or net profits of a Senior
Lender, in either case pursuant to the laws of the jurisdiction in which such
Senior Lender is organized or in
35
which such Senior Lender's principal office or applicable lending office is
located or any subdivision thereof or therein), or (2) a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the LIBOR Rate,
and/or (b) other circumstances since the date of this Agreement affecting such
Senior Lender or the interbank Eurodollar market or the position of such Senior
Lender in such market;
then, and in any such event, such Senior Lender (or
Administrative Agent, in the case of clause (i) above) shall promptly give
notice (by telephone confirmed in writing) to Borrower and, except in the case
of clause (i) above, to Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each of the other Senior
Lenders). Thereafter (x) in the case of clause (i) above, LIBOR-Based Rates
shall no longer be available and the Funds-Based Rate shall apply (subject to
SECTION 2.5.4) until such time as Administrative Agent notifies Borrower and the
Senior Lenders that the circumstances giving rise to such notice by
Administrative Agent no longer exists (and if any such conversion occurs on a
day that is not the last day of the then-current 30-day LIBOR Rate period,
Borrower shall reimburse any Senior Lender for any breakage costs incurred by
such Senior Lender in connection with such conversion), and (y) in the case of
clause (ii) above, and provided that such Senior Lender is generally exercising
rights similar to those set forth in this SECTION 2.5.1(A) against borrowers
similarly situated to Borrower, Borrower shall pay to such Senior Lender, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Senior Lender in its sole and absolute discretion shall determine) as shall be
required to compensate such Senior Lender for such increased costs or reductions
in amounts received or receivable hereunder (a written notice as to the
additional amounts owed to such Senior Lender, showing the basis for the
calculation thereof, submitted to Borrower by such Senior Lender in good faith
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto). Collateral Agent and each Senior Lender agrees that if it gives
notice to Borrower of any of the events described in clause (i) above, it shall
promptly notify Borrower and, in the case of any such Senior Lender, Collateral
Agent, if such event ceases to exist.
(B) At any time that any LIBOR-Based Rate is affected by
the circumstances described in SECTION 2.5.1(A)(II), Borrower may, upon at least
three (3) Business Days' written notice to Administrative Agent, require the
affected Senior Lender to convert such LIBOR-Based Rate to a Funds-Based Rate
(and if any such conversion occurs on a day that is not the last day of the
then-current 30-day LIBOR Rate period, Borrower shall reimburse any Senior
Lender for any breakage costs incurred by such Senior Lender in connection with
such conversion), provided that, if more than one Senior Lender is affected at
any time, then all affected Senior Lenders must be treated the same pursuant to
this SECTION 2.5.1(B). Additionally, as promptly as reasonably practicable after
any Senior Lender becomes aware of any event or condition that would entitle
such Senior Lender to receive payments under SECTION 2.5.1(A)(II) above because
of a change in a foreign law or foreign governmental rule, regulation, order,
guideline or request, such Senior Lender (an "Affected Senior Lender") will use
reasonable efforts: (i) to maintain its portion of the Senior Loan through
another lending office of such Affected Senior Lender or (ii) take such other
measures as such Affected Senior Lender may deem reasonable, if as a result
thereof the additional amounts which would otherwise be required to be paid to
such Affected Senior Lender pursuant to SECTION 2.5.1(A)(II)
36
above would be materially reduced or eliminated, and if, as determined by such
Affected Senior Lender in its sole and absolute discretion, the maintaining of
such portion of the Senior Loan through such other lending office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect the interests of such Affected Senior Lender. If
Borrower receives a notice pursuant to SECTION 2.5.1(A)(ii) above stating that
an Affected Senior Lender is unable to maintain its portion of the Senior Loan
through another lending office or take such other measures as described above in
order to reduce or eliminate the amounts required to be paid by Borrower
pursuant to Section 2.5.1(A)(ii) above (and the reason for such inability is not
generally applicable to all Senior Lenders), so long as (1) no Event of Default
has occurred and is continuing, (2) Borrower has obtained a commitment from
another Senior Lender that is not an Affected Senior Lender or from an Eligible
Assignee to purchase at par such Affected Senior Lender's portion of the Senior
Loan and all accrued interest and fees and to assume all obligations of the
Affected Senior Lender, and (3) such Affected Senior Lender to be replaced is
unwilling to withdraw the notice delivered to Borrower pursuant to SECTION
2.5.1(A)(ii), upon thirty (30) days' prior written notice to such Affected
Senior Lender, Administrative Agent, and Collateral Agent, Borrower may, at
Borrower's expense, require the Affected Senior Lender giving such notice to
assign, without recourse, all of its portion of the Senior Loan and all accrued
interest and fees to such other Senior Lender or Eligible Assignee pursuant to
the provisions SECTION 9.2 below.
(C) If at any time any Senior Lender determines that, after
the date of this Agreement, the introduction of or any change in any applicable
law or governmental rule, regulation, order, guideline, directive or request
(whether or not having the force of law and including those announced or
published prior to the Closing Date) concerning capital adequacy, or any change
in interpretation or administration thereof by any governmental authority,
central bank or comparable agency, will have the effect of increasing the amount
of capital required or expected to be maintained by such Senior Lender or any
corporation controlling such Senior Lender based on the existence of the Senior
Obligations or such Senior Lender's obligations hereunder, then Borrower shall
pay to such Senior Lender, upon its written demand therefor, such additional
amounts as shall be required to compensate such Senior Lender or such other
corporation for the increased cost to such Senior Lender or such other
corporation or the reduction in the rate of return to such Senior Lender or such
other corporation as a result of such increase of capital. In determining such
additional amounts, each Senior Lender will act reasonably and in good faith and
will use averaging and attribution methods which are reasonable, provided that
such Senior Lender's reasonable good faith determination of compensation owing
under this SECTION 2.5.1(C) shall, absent manifest error, be final and
conclusive and binding on all parties hereto. Each Senior Lender, upon
determining that any additional amounts will be payable pursuant to this SECTION
2.5.1(C), will give prompt written notice thereof to Borrower, which notice
shall show the basis for calculation of such additional amounts. In addition,
each such Senior Lender, upon determining that the circumstances giving rise to
the payment of additional amounts pursuant to this Section 2.5.1(C) cease to
exist, will give prompt written notice thereof to Borrower.
(D) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Senior Lender to make
LIBOR-based loans hereunder, or to determine the Applicable
37
Interest Rate based upon the LIBOR-Based Rate, then, on notice thereof and
demand therefor by Collateral Agent or such Senior Lender to Borrower, (1) the
Applicable Interest Rate will automatically, upon such demand, be determined
with reference to the Funds-Based Rate, and (2) the obligation of such Senior
Lender to make advances hereunder (if any) under the LIBOR-Based Rate shall be
suspended until Collateral Agent shall notify Borrower that such Senior Lender
has determined that the circumstances causing such suspension no longer exist,
and (3) if any such conversion to a Funds-Based Rate occurs on a day which is
not the last day of the then current 30-day LIBOR Rate, Borrower shall reimburse
any Senior Lender for any breakage costs incurred by such Senior Lender in
connection with such conversion.
2.5.2 Maximum Rate. All agreements between Borrower and the Senior
Lenders or their Affiliates, whether now existing or hereafter arising and
whether written or oral, are hereby expressly limited so that in no contingency
or event, whether by reason of acceleration of the maturity of the Senior Notes
or otherwise, shall the amount paid, or agreed to be paid to the Senior Lenders
or their Affiliates for the use, forbearance, or detention of the money to be
loaned under the Senior Loan or otherwise or for the payment or performance of
any covenant or obligation contained herein or in any other document evidencing,
securing or pertaining to the Senior Loan exceed the Maximum Rate. If from any
circumstances whatsoever fulfillment of any provision hereof or any of such
other agreements shall cause the amount paid to exceed the Maximum Rate, then
ipso facto, the amount paid to Collateral Agent shall be reduced to the Maximum
Rate, and if from any such circumstances Collateral Agent shall ever receive
interest or an amount which might be deemed interest under applicable law which
exceeds the Maximum Rate, such amount which would be excessive interest shall be
applied to the reduction of the Principal Balance (without the payment of any
prepayment premiums) and not to the payment of interest, or if such excessive
interest exceeds the unpaid Principal Balance such excess shall be refunded to
Borrower. All sums paid or agreed to be paid to Collateral Agent for the use,
forbearance or detention of the indebtedness of Borrower to Senior Lenders
shall, to the extent permitted by applicable law, (A) be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment
in full so that the actual rate of interest on account of such indebtedness does
not exceed the Maximum Rate now or as hereafter amended, throughout the term
thereof, (B) be characterized as a fee, expense or other charge other than
interest, and/or (C) exclude any voluntary prepayments and the effects thereof.
The terms and provisions of this paragraph shall control and supersede every
other provision of all agreements between Senior Lenders and Borrower.
2.5.3 Compensation for Late Payments. Time is of the essence hereof
and if any of the Senior Principal Balance or interest on the Senior Loan or
other sum due hereunder is not paid within ten (10) days of when due, Borrower
shall, at Collateral Agent's sole option, pay to Collateral Agent a late charge
payment of five percent (5%) of the amount of such installment as specified in a
written demand for same. Such late charge shall not be applicable to the total
payment due on the Maturity Date; provided, however, no grace or cure period
shall apply to such final payment. Such late charge shall be paid without
prejudice to the right of Collateral Agent to collect any other amounts provided
to be paid or to declare an Event of Default under this Agreement or the other
Senior Loan Documents. Any late charges that may accrue shall be due and payable
not later than the date the next monthly installment is due under the Senior
Loan. Borrower agrees that the late charge is intended to compensate Collateral
Agent for damages Collateral Agent and Senior Lenders will suffer as a result of
Borrower's late payment.
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Such damages include additional expenses in servicing the Senior Loan, sending
out notices, computing interest, segregating delinquent sums and accounting and
data processing costs. Borrower agrees that such damages are difficult or
impractical to ascertain, and the late charge is a fair and reasonable
approximation of the amount of damages sustained by Collateral Agent and Senior
Lenders for each late payment. Notwithstanding anything herein to the contrary,
the 10-day grace period is only applicable with respect to the assessment of the
late charge, and should not be construed as a modification or waiver of the due
date otherwise specified for any sums due Collateral Agent hereunder or under
the other Senior Loan Documents. Failure to pay said late charge following
written demand shall constitute an Event of Default.
2.5.4 Default Rate. Upon the occurrence of any Event of Default, and
at the option of Collateral Agent without any advance notice, the outstanding
installment plus all amounts then unpaid under the Senior Note and any of the
other Senior Loan Documents shall each bear interest at the Default Rate for so
long as the Event of Default shall remain uncured, payable monthly on the same
day of each month that monthly payments of interest (and, when payable under the
Senior Loan Documents, principal) are due under SECTION 2.8. In addition,
Collateral Agent, at its option and without further notice, demand or
presentment for payment to Borrower or others, may declare immediately due and
payable the unpaid Senior Principal Balance and interest accrued thereon
together with all other sums owed by Borrower under the Senior Note and the
other Senior Loan Documents (including, but not limited to attorneys' fees and
other costs of enforcement as provided in SECTION 9.5), anything in the Senior
Note and the other Senior Loan Documents to the contrary notwithstanding.
Payment of such sums may be enforced and recovered in whole or in part at any
time by one or more of the remedies provided to Collateral Agent in this
Agreement or the other Senior Loan Documents.
2.6 Optional Prepayments.
2.6.1 Provided no Event of Default has occurred, and subject to the
payment of the prepayment premium described in SECTION 2.6.3 below, Borrower may
make a one-time prepayment of the Principal Balance in an amount, together with
any prepayment made under the Note Purchase Documents, not greater than the
amount sufficient to reduce the Principal Balance at the time of such prepayment
to One Hundred Seventy-Four Million Dollars ($174,000,000.00). Such prepayment
must be made, if at all, on or before December 31, 2002; provided however, that
so long as no Event of Default has occurred and is then continuing, and so long
as Borrower and its Affiliates are pursuing the formation and capitalization of
an Approved REIT, such prepayment may be made, if at all, on or before March 31,
2003. Provided no Event of Default has occurred and is then continuing, any such
prepayment shall be applied first to the payment of the Junior Obligations until
the Junior Obligations are paid in full, and second, to the extent any portion
of such prepayment amount remains, to the payment of the Senior Obligations.
2.6.2 Without limiting the provisions of SECTION 2.6.1, the Notes
may be prepaid, concurrently, in whole, but not in part (except as expressly
provided herein), at any time upon not less than thirty (30) days prior written
notice to Collateral Agent. The Senior Notes may be prepaid in part only (A) in
the event of a casualty or condemnation or other involuntary occurrence as more
fully set forth in the Senior Mortgage, and in such event, only with the
Proceeds of any such casualty or the Award resulting from any such condemnation,
(B) in
39
accordance with SECTIONS 2.4.1(I) and (J), (C) in accordance with SECTION 2.8,
and (D) in accordance with SECTION 2.14.7.
2.6.3 Except as otherwise expressly provided herein, any prepayment
of the outstanding Senior Principal Balance permitted hereunder, whether
voluntary or involuntary, shall be accompanied by interest accrued to the date
of such prepayment and a prepayment premium equal to the outstanding amount of
the Senior Principal Balance being prepaid multiplied by (A) one percent (1.0%)
if such prepayment is received by Collateral Agent during the first (1st) Loan
Month through and including the twelfth (12th) Loan Month, (B) one-half of one
percent (0.5%) if such prepayment is received by Collateral Agent during the
thirteenth (13th) Loan Month through and including the twenty-fourth (24th) Loan
Month, and (C) zero percent (0%) thereafter, provided, however, there shall be
no prepayment premium or penalty applicable to any prepayment made from (i) the
proceeds of casualty insurance, title insurance or condemnation claims, (ii)
scheduled principal amortization payments made pursuant to SECTIONS 2.8.2,
2.8.3, or 2.8.4, (iii) any prepayment pursuant to SECTION 2.13, and (iv)
principal amortization payments made pursuant to SECTIONS 2.14.7(d), 2.14.7(I)
OR 2.14.7(II). In addition, any prepayment made on a date which is other than
the last day of a Loan Month shall be accompanied by LIBOR-related breakage
costs, if any, incurred by any Senior Lender, including any loss incurred in
obtaining, liquidating or employing deposits.
2.7 PROVISIONS RELATING TO PREPAYMENT. BORROWER HEREBY EXPRESSLY (A)
WAIVES ANY RIGHTS IT MAY HAVE UNDER LAW TO PREPAY THE SENIOR NOTES, IN WHOLE OR
IN PART, WITHOUT PENALTY, UPON ACCELERATION OF THE MATURITY DATE, AND (B) AGREES
THAT IF, FOR ANY REASON, A PREPAYMENT OF ALL OF ANY PORTION OF THE SENIOR
PRINCIPAL BALANCE IS MADE INCLUDING UPON OR FOLLOWING ANY ACCELERATION OF THE
MATURITY DATE BY COLLATERAL AGENT ON ACCOUNT OF ANY DEFAULT BY BORROWER,
INCLUDING ANY TRANSFER, DISPOSITION, OR FURTHER ENCUMBRANCE PROHIBITED OR
RESTRICTED BY THE SENIOR LOAN DOCUMENTS, THEN BORROWER MAY BE OBLIGATED TO PAY
CONCURRENTLY WITH SUCH PREPAYMENT THE PREPAYMENT PREMIUM SPECIFIED ABOVE.
BORROWER HEREBY DECLARES THAT (1) EACH OF THE FACTUAL MATTERS SET FORTH IN THIS
PARAGRAPH IS TRUE AND CORRECT, (2) SENIOR LENDERS' AGREEMENT TO MAKE THE SENIOR
LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS AGREEMENT
CONSTITUTES ADEQUATE CONSIDERATION FOR THIS WAIVER AND AGREEMENT, AND HAS BEEN
GIVEN INDIVIDUAL WEIGHT BY BORROWER AND EACH SENIOR LENDER, (3) BORROWER IS A
SOPHISTICATED AND KNOWLEDGEABLE REAL ESTATE INVESTOR WITH COMPETENT AND
INDEPENDENT LEGAL COUNSEL, AND (4) BORROWER FULLY UNDERSTANDS THE EFFECT OF THIS
WAIVER AND AGREEMENT.
2.8 Repayment. From the date hereof, the Senior Principal Balance and
interest thereon shall be due and shall be payable as follows:
2.8.1 Commencing on October 1, 2002, and continuing thereafter on
the first day of each succeeding Loan Month to and including the first day of
the twenty-fourth (24th)
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Loan Month (i.e., August 1, 2004), Borrower shall pay to Collateral Agent
monthly in arrears, interest only on the Senior Principal Balance at the
Applicable Interest Rate; and
2.8.2 Commencing on the first day of the twenty-fifth (25th) Loan
Month (i.e., September 1, 2004) and on the first day of each succeeding Loan
Month to and including the thirty-sixth (36th) Loan Month (i.e., August 1,
2005), Borrower shall (A) continue to pay, monthly in arrears, all interest
having accrued on the Senior Principal Balance at the Applicable Interest Rate,
and (B) in addition, unless the Principal Balance has been reduced to
$195,000,000.00 or less as of the last day of the twenty-fourth (24th) Loan
Month (i.e., August 31, 2004) (such event, the "Delayed Amortization Event"),
Borrower shall pay to Collateral Agent a monthly installment of principal
amortization in an amount to be determined by Collateral Agent based upon (i)
the outstanding Principal Balance as of the first day of the twenty-fifth (25th)
Loan Month, (ii) an interest rate of ten percent (10.0%), and (iii) a 25-year
amortization schedule, with such monthly installments of principal amortization
being fixed as the average of the principal payments due during Loan Months
twenty-five (25) through thirty-six (36) in an amortization schedule resulting
from the foregoing assumptions (e.g., if the Principal Balance as of the first
day of the twenty-fifth (25th) Loan Month is $225,000,000.00, the monthly
installments of principal amortization due would be $216,703.53); and
2.8.3 In the event the Initial Maturity Date has been extended for
the first Extension Period in accordance with the terms and conditions of
SECTION 2.4 above, commencing on the first day of the thirty-seventh (37th) Loan
Month (i.e., September 1, 2005) and on the first day of each succeeding Loan
Month to and including the forty-eighth (48th) Loan Month (i.e., August 1,
2006), Borrower shall (A) continue to pay monthly, in arrears, all interest
having accrued on the Senior Principal Balance at the Applicable Interest Rate,
and (B) in addition, Borrower shall pay to Collateral Agent a monthly
installment of principal amortization in an amount to be determined by
Collateral Agent based upon (1) in the event that the Delayed Amortization Event
has occurred, (a) the outstanding Principal Balance as of the first day of the
thirty-seventh (37th) Loan Month, (b) an interest rate of ten percent (10.0%),
and (c) a 25-year amortization schedule, with such monthly installments of
principal amortization being fixed as the average of the principal payments due
during Loan Months thirty-seven (37) through forty-eight (48) in an amortization
schedule resulting from the foregoing assumptions or (2) in the event that the
Delayed Amortization Event has not occurred, an amount based upon (a) the
outstanding Principal Balance as of the first day of the thirty-seventh (37th)
Loan Month, (b) an interest rate of ten percent (10.0%), and (c) a 20-year
amortization schedule, with such monthly installments of principal amortization
being fixed as the average of the principal payments due during Loan Months
thirty-seven (37) through forty-eight (48) in an amortization schedule resulting
from the foregoing assumptions; and
2.8.4 In the event the Initial Maturity Date (as extended for the
first Extension Period) has been extended for the second Extension Period in
accordance with the terms and conditions of SECTION 2.4 above, commencing on the
first day of the forty-ninth (49th) Loan Month (i.e., September 1, 2006) and on
the first day of each succeeding Loan Month to and including the sixtieth (60th)
Loan Month (i.e., August 1, 2007), Borrower shall (A) continue to pay monthly,
in arrears, all interest having accrued on the Senior Principal Balance at the
Applicable Interest Rate, and (B) in addition, Borrower shall pay to Collateral
Agent a monthly installment of principal amortization in an amount to be
determined by Collateral Agent based
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upon (i) in the event that the Delayed Amortization Event has occurred, (a) the
outstanding Principal Balance as of the first day of the forty-ninth (49th) Loan
Month, (b) an interest rate of ten percent (10.0%), and (c) a 25-year
amortization schedule, with such monthly installments of principal amortization
being fixed as the average of the principal payments due during Loan Months
forty-nine (49) through sixty (60) in an amortization schedule resulting from
the foregoing assumptions or (ii) in the event that the Delayed Amortization
Event has not occurred, an amount based upon (a) the outstanding Principal
Balance as of the first day of the forty-ninth (49th) Loan Month, (b) an
interest rate of ten percent (10.0%), and (c) a 20-year amortization schedule,
with such monthly installments of principal amortization being fixed as the
average of the principal payments due during Loan Months forty-nine (49) through
sixty (60) in an amortization schedule resulting from the foregoing assumptions;
and
2.8.5 In addition to the payments of principal and interest
otherwise required under SECTIONS 2.8.1, 2.8.2, 2.8.3, and 2.8.4 above, Excess
Cash Flow shall be applied to the Principal Balance in accordance with and
subject to the terms and conditions of SECTION 2.14 below; and
2.8.6 On the Maturity Date, as the same may be extended by Borrower
pursuant to SECTION 2.4, Borrower shall make a final payment to Collateral
Agent, which payment shall include all of the following:
(A) all unpaid amounts of the Senior Principal Balance;
(B) all accrued and unpaid interest thereon at the Applicable
Interest Rate;
(C) any Fees due to Administrative Agent, Collateral Agent,
Senior Lenders, or their respective Affiliates; and
(D) all other sums due to Senior Lenders, Administrative Agent
or Collateral Agent under this Agreement and the other Senior Loan Documents.
2.8.7 Subject to the provisions of SECTION 2.14, each payment of
principal and interest (including the final payment pursuant to SECTION 2.8.6)
received by Collateral Agent from Borrower pursuant to this SECTION 2.8 with
respect to the Senior Notes shall be applied in the following order: First, to
any prepayment premiums due and payable hereunder; second, to the payment of any
late charges due and payable hereunder; third, to the repayment of any amounts
advanced by Collateral Agent in accordance with the Senior Mortgage or any of
the Senior Collateral Documents for insurance premiums, taxes, assessments or
for preservation or protection of the Collateral and to the payment of all costs
and expenses incurred by Collateral Agent in connection with the collection of
the Senior Notes (including all attorneys' fees payable hereunder); fourth, to
the payment of accrued and unpaid interest; fifth, to fund any reserves or
escrows required by Collateral Agent in accordance with the terms of the Senior
Mortgage or any of the Senior Collateral Documents; sixth, to payment of any
LIBOR breakage costs incurred by Senior Lenders on account of such payment; and
seventh, to reduction of the Senior Principal Balance. Notwithstanding the
foregoing, (A) if an Event of Default has occurred and is continuing, Collateral
Agent may apply any payments received thereby to the Obligations in
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such order or proportion as Collateral Agent, in Collateral Agent's sole and
absolute discretion, may determine, and (B) as among Holders, such payments
shall be applied in accordance with SECTION 8.2 below. All payments by Borrower
shall be made by wire transfer in accordance with instructions delivered by
Collateral Agent from time to time. Payments shall be deemed made when good
funds are received by Collateral Agent.
2.9 Interest Rate Cap.
2.9.1 As of the Closing, Borrower shall purchase and, during the
initial term of the Senior Loan, maintain, an Interest Rate Cap in the amount of
the Senior Loan Amount, pursuant to which the Cap Provider shall pay to Borrower
(or, upon an Event of Default, directly to Collateral Agent) funds to the extent
the LIBOR Rate exceeds six percent (6.0%) per annum during the initial term of
the Senior Loan. The Interest Rate Cap shall provide for monthly or quarterly
settlements, as required by Collateral Agent. Borrower shall pledge its right,
title and interest in and to the Interest Rate Cap to Collateral Agent pursuant
to the Senior Cap Security Agreement.
2.9.2 If Borrower elects to extend the Maturity Date in accordance
with the terms of SECTION 2.4 above, then prior to the commencement of the
applicable Extension Period, Borrower shall purchase and pledge to Collateral
Agent pursuant to the Senior Cap Security Agreement a one-year Interest Rate Cap
in a notional amount equal to the Senior Principal Balance as of the
commencement of such Extension Period, whereunder the Cap Provider agrees to pay
to Borrower (or, upon an Event of Default, directly to Collateral Agent) funds
to the extent the LIBOR Rate exceeds that interest rate per annum (the
"Designated Cap Rate") to be determined by Collateral Agent not less than
fifteen (15) days prior to the date such Interest Rate Cap is required to be
purchased (the "Extension Cap Rate") that would provide for a Debt Service
Coverage Ratio of at least 1.10:1, which Debt Service Coverage Ratio shall be
calculated on the basis of (A) Net Operating Income for the consecutive twelve
(12) Loan Month period ending one Loan Month prior to the beginning of the
Extension Period, (B) imputed debt service equal to the sum of (i) scheduled
principal amortization payments, if any, required pursuant to the Loan Agreement
during the applicable twelve (12) month Extension Period, and (ii) interest
payments for the twelve (12) month Extension Period in an amount equal to (1)
the Designated Cap Rate plus (2) the Overall Spread, multiplied by (3) the
Principal Balance as of the beginning of the applicable twelve (12) month
Extension Period.
2.9.3 All Interest Rate Caps required to be purchased pursuant to
this SECTION 2.9 shall be in form and substance satisfactory to Collateral Agent
in its good faith discretion and shall be provided by a Cap Provider acceptable
to Collateral Agent in Collateral Agent's reasonable discretion. Without
limiting the foregoing, each Interest Rate Cap shall provide for quarterly or
monthly settlement, as required by Collateral Agent. Each Interest Rate Cap
shall be pledged to and controlled by Collateral Agent in accordance with the
Senior Cap Security Agreement. Upon the occurrence of an Event of Default, any
and all proceeds from the Interest Rate Cap shall, upon instruction from
Collateral Agent to the Cap Provider, be paid directly to Collateral Agent, who
may, in its sole and absolute discretion, apply all or any portion thereof to
the amounts owing by Borrower under the Senior Loan Documents. Collateral Agent
and Senior Lenders acknowledge and agree that Borrower may satisfy its
obligations under this SECTION 2.9 to purchase an Interest Rate Cap in the
notional amount of the Senior Loan by
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purchasing, in its capacity as Borrower hereunder and as Mortgage Maker under
the Note Purchase Agreement, a single Interest Rate Cap in the notional amount
of the Loan, and pledging the same to Collateral Agent pursuant to the Cap
Security Agreement.
2.10 Taxes.
2.10.1 Any and all payments by Borrower to Collateral Agent under
this Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for, any Taxes. In addition, Borrower shall pay
all Other Taxes.
2.10.2 If Borrower shall be required by law to deduct or withhold
any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to Collateral Agent, then:
(A) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this SECTION 2.10),
Collateral Agent receives and retains an amount equal to the sum it would have
received and retained had no such deductions or withholdings been made;
(B) Borrower shall make such deductions and withholdings;
(C) Borrower shall pay the full amount deducted or withheld to
the relevant taxing authority or other authority in accordance with applicable
law; and
(D) Borrower shall also pay to Collateral Agent at the time
interest is paid, Further Taxes in the amount that Collateral Agent specifies as
necessary to preserve the after-tax yield Collateral Agent would have received
if such Taxes, Other Taxes or Further Taxes had not been imposed.
2.10.3 Borrower agrees to indemnify and hold harmless Collateral
Agent for the full amount of (A) Taxes, (B) Other Taxes, and (C) Further Taxes
in the amount that Collateral Agent specifies as necessary to preserve the
after-tax yield that Collateral Agent would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within thirty (30) days after the date Collateral Agent (as applicable) makes
written demand therefor.
2.10.4 Within thirty (30) days after the date of any payment by
Borrower of Taxes, Other Taxes or Further Taxes, Borrower shall furnish to
Collateral Agent, the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to Collateral Agent.
2.10.5 Each Foreign Lender shall deliver to Borrower (with copies to
Administrative Agent) on or before the date hereof (or in the case of a Foreign
Lender who became a Senior Lender by way of an assignment, on or before the date
of the assignment) or at least five (5) Business Days prior to the first date
for any payment herewith to such Foreign
44
Lender, and from time to time as required for renewal under applicable law, such
certificates, documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto, including, without limitation, Internal
Revenue Service Form W-8BEN or W-ECI, as appropriate, and any other certificate
or statement of exemption required by Section 871(h) or Section 881(c) of the
Code or any subsequent version thereof, properly completed and duly executed by
such Foreign Lender establishing that payments to such Foreign Lender hereunder
are not subject to withholding under the Code ("Evidence of No Withholding ).
Each Foreign Lender shall promptly notify Borrower and Administrative Agent of
any change in its applicable lending office and upon written request of Borrower
or Administrative Agent shall, prior to the immediately following due date of
any payment by Borrower hereunder or under any other Loan Document, deliver
Evidence of No Withholding to Borrower and Administrative Agent. Borrower shall
be entitled to rely on such forms in their possession until receipt of any
revised or successor form pursuant to this Section 2.10.5. If a Foreign Lender
fails to provide Evidence of No Withholding as required pursuant to this Section
2.10.5, then (i) Borrower (or Administrative Agent) shall be entitled to deduct
or withhold from payments to Administrative Agent or such Foreign Lender as a
result of such failure, as required by law, and (ii) Borrower shall not be
required to make payments of additional amounts with respect to such withheld
Taxes pursuant to Section 2.10.1 to the extent such withholding is required
solely by reason of the failure of such Foreign Lender to provide the necessary
Evidence of No Withholding.
2.11 Payments by Borrower.
2.11.1 All payments (including prepayments) to be made by Borrower
on account of principal, interest, and other amounts required hereunder shall be
made without set-off or counterclaim and shall, except as otherwise expressly
provided herein, be made to Collateral Agent at Collateral Agent's Payment
Office, in dollars and in immediately available funds, no later than 1:00 pm.
(New York time) on the date specified herein. Any payment which is received by
Collateral Agent later than 2:00 p.m. (New York time) shall be deemed to have
been received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.
2.11.2 Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
2.11.3 Collateral Agent shall disburse payments received from
Borrower or otherwise in respect of the Loan between Administrative Agent (for
further distribution to the Senior Lenders) and to Purchaser in accordance with
the terms of SECTION 8.2 below and the applicable Agency Agreement. Aggregate
principal and interest payments and prepayment fees, if any, disbursed by
Collateral Agent to Administrative Agent in accordance with the applicable
Agency Agreement shall be apportioned by Administrative Agent proportionately to
Senior Lenders' respective Pro Rata Shares. Administrative Agent shall promptly
distribute to each Senior Lender, at its primary address set forth below its
name on the appropriate signature page hereof or at such other address as such
Senior Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent.
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2.12 Reserved.
2.13 Reserved Funds for Tenant Improvements and Leasing Commissions.
2.13.1 Concurrently with the Closing, Borrower shall deposit with
Collateral Agent the sum of Nine Million Five Hundred Forty-Five Thousand Seven
Hundred Three Dollars and 07/100ths Dollars ($9,545,703.07) (such amount, the
"Leasing Reserve"). The Leasing Reserve shall be held in the account maintained
with Collateral Agent in Collateral Agent's name and more fully described on
SCHEDULE 2.13.1(A), or in such other account as may be established from time to
time in Collateral Agent's name for such purpose (such account, and any such
successor account, the "Leasing Reserve Account"). The Leasing Reserve shall be
available to pay or reimburse Borrower for the actual costs of tenant
improvements, tenant improvement allowances, leasing commissions, and lease
take-over payments required to be performed or paid pursuant to the Leases and
prospective Leases described on SCHEDULE 2.13.1(B) attached hereto and such
other leasing-related expenses as may be approved by Collateral Agent in its
sole and absolute discretion from time to time (collectively, the ("Approved
Lease Expenses"). Each disbursement of the Leasing Reserve is subject to
satisfaction of each of the following conditions:
(A) Disbursements shall be utilized solely for Approved Lease
Expenses and shall be in an amount no greater than the actual cost of the
Approved Lease Expenses;
(B) Disbursements shall not be made more frequently than
monthly, and each disbursement (if any) shall be in an amount not less than
$50,000.00 (unless the disbursement represents the final disbursement of the
Leasing Reserve or the final disbursement for a particular tenant improvement);
(C) Not less than ten (10) days prior to the requested funding
date for a disbursement, Collateral Agent shall have (1) received a written
request for such disbursement, which request shall specify the date on which
Borrower requests the disbursement to be made and the Person(s) or account(s) to
whom such disbursement should be made (such duly completed request is referred
to herein as a "Disbursement Request"); and (2) received, reviewed and approved
(to the extent such approval is required under the terms of the Loan Documents
and has not already been provided) all executed Leases (and, if applicable,
commission agreements) pursuant to which Borrower has incurred leasing
commissions or tenant improvement costs for which Borrower is seeking such
disbursement;
(D) Not less than ten (10) days prior to each disbursement for
tenant improvement costs, Collateral Agent and, if applicable, Title Company
shall have received, reviewed and approved (i) a certificate executed by
Borrower or, if such Person was engaged for such work, Borrower's architect or
engineer, certifying that, to the Knowledge of such Person, the work for which
such disbursement is being requested has been completed to the percentage of
completion specified in the Disbursement Request substantially in accordance
with the applicable plans and specifications therefor and in a good and
workmanlike manner; (ii) sworn statements and conditional lien waivers from
46
all contractors, subcontractors and materialmen with respect to such
work; (iii) sworn statements and final lien waivers from all contractors
and subcontractors and materialmen with respect to work theretofore
completed and for which a disbursement was made to Borrower in a prior
month; (iv) copies of paid invoices for prior disbursements and open
invoices for requested disbursements, and an all bills paid affidavit
from Borrower; (v) with respect to the final payment for a work of
improvement, certificates of occupancy (or similar documentation), as
required by applicable law, relating to the work for which such
disbursement is being made; and (vi) such other supporting documentation
as may be reasonably required by Collateral Agent or Title Company, all
in form and substance reasonably satisfactory to Collateral Agent and
Title Company;
(E) Title Company shall be irrevocably committed to issue
to Collateral Agent a title insurance endorsement or continuation paid
for by Borrower satisfactory to Collateral Agent in its sole and
absolute discretion insuring the continuing first-lien priority (subject
to the Permitted Title Exceptions) of the Senior Mortgage and the
continuing second-lien priority of the Junior Mortgage (subject to the
Permitted Title Exceptions) with respect to each such disbursement or
such other evidence satisfactory to Collateral Agent in its sole and
absolute discretion that such lien priority of the Mortgages with
respect to said disbursement is insured;
(F) If required by Collateral Agent, for any Disbursement
Request in excess of $100,000, Collateral Agent's inspecting engineer
shall have inspected, any tenant improvement for which a disbursement is
being sought by Borrower (the reasonable costs of such inspection to be
paid by Borrower) and Collateral Agent's inspecting engineer shall have
approved such work (such approval to be solely for the benefit of
Collateral Agent and not as a representation to Borrower or any third
party as to the adequacy or quality of such work);
(G) No Event of Default shall have occurred and be
continuing at the time of any disbursement; and
(H) The Mortgaged Property shall not have been condemned,
materially damaged or destroyed
2.13.2 In the event that any portion of the Leasing Reserve
(other than that portion of the Leasing Reserve held on account of the
occurrence of an LAUSD Sweep Condition, to which sums this SECTION 2.13.2 shall
not apply) remains undisbursed upon the earlier of (A) the payment or
reimbursement in full of the Approved Leasing Expenses, or (B) the end of the
eighteenth (18th) Loan Month, then (1) in the event the Principal Balance has
been reduced to or below the Target Principal Balance, such remaining portion
shall be applied to the Senior Principal Balance (without payment of any
prepayment premium), or (2) in the event the Principal Balance has not been
reduced to or below the Target Principal Balance, such remaining portion shall
be applied to the Junior Principal Balance (without payment of any prepayment
premium). In either event with respect to the foregoing clauses (1) and (2), the
Holders shall have no obligation to re-lend such funds.
47
2.13.3 Collateral Agent shall not be deemed to be a trustee of
the Leasing Reserve or to be obligated to pay any amounts in excess of the
amount of Leasing Reserve actually on deposit with Collateral Agent. Amounts on
deposit in the Leasing Reserve Account shall bear interest in accordance with
Collateral Agent's usual practices for similar accounts or, at Borrower's
election (provided Borrower gives Collateral Agent not less than ten (10) days'
prior notice of such election) may be invested in one of the following funds:
(a) Deutsche Bank AG's Institutional Treasury Money Fund, or (b) Deutsche Bank
AG's Money Market Fund. Any interest earned on the funds held in the Leasing
Reserve Account shall be added thereto and become a part thereof.
2.13.4 The Leasing Reserve Account shall be under the sole
dominion and control of Collateral Agent, and Borrower shall have no authority
or power to make or demand withdrawals therefrom except in accordance with this
Agreement. Borrower hereby pledges, transfers and assigns and grants to
Collateral Agent, for the benefit of the Holders, as additional security for the
payment and performance of the Obligations, a continuing perfected security
interest in and to, and a general first lien upon, all of Borrower's right,
title and interest in and to the Leasing Reserve and all cash, property or
rights held in, transferred to or deposited in the Leasing Reserve Account from
time to time by or on behalf of Borrower, and all proceeds (as defined in the
UCC) of the foregoing. Borrower agrees to execute, acknowledge, deliver, file or
do at its sole cost and expense, all other acts, assignments, notices,
agreements or other instruments as Collateral Agent may reasonably require in
order to perfect, effectuate, assure, convey, secure, assign, transfer and
convey unto Collateral Agent any of the rights granted by this SECTION 2.13.4,
and Borrower hereby authorizes Collateral Agent to undertake and perform the
foregoing on Borrower's behalf.
2.14 Cash Management.
2.14.1 On or prior to the Closing Date: (A) Collateral Agent
shall establish with a depository institution selected by Borrower and
reasonably acceptable to Collateral Agent, the Cash Collateral Account; (B)
Borrower shall establish with a depository institution selected by Borrower and
reasonably acceptable to Collateral Agent, the Lockbox Account; and (C) Borrower
shall establish with a depository institution selected by Borrower and
reasonably acceptable to Collateral Agent, the Security Deposit Account. The
Cash Collateral Account shall be in the name of Collateral Agent, and the
Lockbox Account and the Security Deposit Account shall each be named "▇▇▇▇▇▇▇
Partners-355 South Grand, LLC Account No. ______ at Cash Management Bank for the
benefit of Deutsche Bank AG New York Branch, as Collateral Agent for the
Holders". The Lockbox Account and the Cash Collateral Account shall each be
under the sole dominion and control of Collateral Agent, and Borrower shall have
no authority or power to make withdrawals from the Cash Collateral Account or
the Lockbox Account. The Security Deposit Account shall be under the sole
dominion and control of Collateral Agent, provided that Borrower shall have the
right to make withdrawals therefrom as more fully provided in SECTION 2.14.5 and
the Lockbox Agreement. Without limiting the provisions of this SECTION 2.14, all
deposits into the Lockbox Account and the Security Deposit Account, on the one
hand, and the Cash Collateral Account, on the other, shall be made in accordance
with the terms and provisions of the Lockbox Account Agreement and the Cash
Collateral Account Agreement, respectively.
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2.14.2 From and after the Closing Date, Borrower shall: (A) cause
(and cause Property Manager to cause) all Actual Income to be deposited directly
into the Lockbox Account as and when received; (B) direct (and cause Property
Manager to direct) in writing all Tenants to make all Tenant Payments directly
to the Lockbox Account; (C) if any Tenant Payment is delivered to Borrower or
Property Manager notwithstanding the instructions contained in any prior notice
to Tenants, within two (2) Business Days deposit (and cause Property Manager to,
within two (2) Business Days, deposit) such Tenant Payment in the Lockbox
Account; (D) not terminate, amend, revoke or alter the payment directions given
to Tenants (and prohibit Property Manager from doing the same) pursuant to this
SECTION 2.14.2, whether prior to or on or after the date hereof.
2.14.3 Borrower and/or Property Manager shall: (A) cause each new
Tenant to deliver all payments to the address set forth in the Payment Direction
Letter and otherwise in accordance with this Agreement, and (B) deposit in the
Lockbox Account (i) all Tenant Payments, duly endorsed, which Borrower or the
Property Manager may receive, and (ii) any other Actual Income which Borrower or
Property Manager may receive, in each case within two (2) Business Days after
such party's receipt thereof (or, with respect to any Tenant Payments (which
shall be duly endorsed), or payments of other Actual Income in such party's
possession or control on the date of this Agreement, on or within one (1)
Business Day after the Closing Date).
2.14.4 All amounts on deposit in the Lockbox Account shall be
deposited daily into the Cash Collateral Account in accordance with the
provisions of the Lockbox Agreement.
2.14.5 On the Closing Date, Borrower shall deposit into the
Security Deposit Account an amount equal to all outstanding cash Security
Deposits (which amount shall be set forth in the Approved Closing Statement)
held pursuant to existing Leases. From and after the Closing Date, Borrower
shall (and shall cause Property Manager to) deposit into the Security Deposit
Account all cash Security Deposits received from Tenants. Provided no Event of
Default has occurred, Borrower shall be permitted to make withdrawals from the
Security Deposit Account for purposes of refunding or applying Security Deposits
in accordance with the terms of Leases approved or deemed approved by Collateral
Agent; provided, that Borrower shall provide Collateral Agent with written
notice of such withdrawals concurrently therewith. Following the occurrence and
during the continuance of an Event of Default, Borrower shall not be permitted
to make withdrawals from the Security Deposit Account without the prior written
consent of Collateral Agent, which consent may be withheld in Collateral Agent's
sole and absolute discretion. Promptly upon receipt by Borrower or Property
Manager (and in any event within two (2) Business Days), Borrower shall deliver
(or cause Property Manager to deliver, as the case may be) any letter of credit
or other non-cash Security Deposit given in connection with any Lease, and shall
execute such documents, agreements and instruments as Collateral Agent may
reasonably require in order to obtain an assignment thereof and perfected
security interest therein; provided, however, that so long as no Event of
Default has occurred and is then continuing, such non-cash Security Deposits
will be returned to Borrower as and when necessary to allow Borrower to return,
apply or realize upon such non-cash Security Deposits in accordance with the
terms of Leases approved or deemed approved by Collateral Agent and the Loan
Documents. Borrower shall, within two (2) Business Days after the Closing,
deliver to Collateral Agent all letters of credit held by Mortgage Maker as of
the Closing Date as Security
49
Deposits pursuant to Leases (including, without limitation, the letters of
credit identified on SCHEDULE 4.30 attached hereto), which letters of credit
shall be assigned to Collateral Agent for security purposes pursuant to
assignment agreements acceptable to Collateral Agent in its sole and absolute
discretion, and which assignment agreements shall be acknowledged by each bank
or financial institution that issued such letter of credit.
2.14.6 On the Closing Date, the following sums shall be deposited
into the following accounts:
(a) To the Lockbox Account, all Tenant Payments received
in respect of periods beginning on or after September 1, 2002; and
(b) To the Security Deposit Account, an amount equal to
all cash Security Deposits held by Mortgage Maker (or transferred to Mortgage
Maker by ▇▇▇▇▇▇▇ South Tower) with respect to Leases (which amount shall be set
forth in the Approved Closing Statement); and
(c) To an account to be determined by Collateral Agent, an
additional sum in an amount sufficient to fund the first installment of
Impositions and insurance premiums required to be impounded by Collateral Agent
pursuant to the Loan Documents, all as shown on the Approved Closing Statement,
Additionally, Borrower shall deposit in its operating
account an amount to be shown on the closing statement to be prepared in
connection with the Closing and approved by Collateral Agent (an "Approved
Closing Statement") which shall be sufficient to pay and discharge all Operating
Expenses and other obligations and liabilities incurred with respect to the
Mortgaged Property through August 31, 2002 (such retained amount, the "Retained
Funds"). Borrower agrees to use the Retained Funds only to pay and discharge all
such Operating Expenses and other obligations and liabilities incurred with
respect to the Mortgaged Property through August 31, 2002 (other than
Impositions and insurance premiums). In no event shall Borrower be entitled to
any disbursements from the Lockbox Account or the Cash Collateral Account to pay
for any Operating Expenses or other obligations or liabilities of Borrower
incurred on or before August 31, 2002.
2.14.7 Commencing on October 5, 2002, and on the fifth (5th) day
of each Loan Month thereafter (each such date, for purposes of this SECTION
2.14, a "Disbursement Date"), provided no Event of Default has occurred, and
subject to SECTION 2.14.12, Collateral Agent shall transfer from the Cash
Collateral Account (or authorize such transfer) prior to 1:00 p.m. New York Time
to the extent sufficient funds are available therein, the following payments in
the following order of priority:
(a) to Collateral Agent, the amount of Impositions and
insurance premiums required to be deposited with Collateral Agent pursuant to
Section 5.1.3 of the Mortgages;
(b) to Collateral Agent, the Monthly Debt Service Payment
for the Loan, which amount shall immediately be available and payable to
Collateral Agent;
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(c) to Borrower, an amount equal to the amount requested
by Borrower pursuant to an Operating Expense Disbursement Request (which shall
comply with the requirements set forth in the definition of Operating Expense
Disbursement Request) to pay Operating Expenses (including amounts requested in
respect of any Extraordinary Capital and Leasing Expenses and approved by
Collateral Agent in accordance with SECTION 2.14.8 below) incurred in the prior
Loan Month;
(d) to Borrower, the following sums on the following
dates:
(i) on the Disbursement Date occurring in October
2002, the sum of One Million Two Hundred
Fifty Thousand and No/100ths Dollars
($1,250,000.00);
(ii) on the Disbursement Date occurring in
November 2002, the sum of Seven Hundred
Thousand and No/100ths Dollars ($700,000.00);
(iii) on the Disbursement Date occurring in
December 2002, the sum of Four Hundred
Thousand and No/100ths Dollars
($400,000.00); and
(iv) on the Disbursement Date occurring in January
2003, the sum of Two Hundred Fifty Thousand
and No/100ths Dollars ($250,000.00);
(e) commencing on the Disbursement Date occurring in
January 2003, so long as no Cash Sweep Condition has occurred, until such time
as the Principal Balance has been reduced to or below the Target Principal
Balance, to Collateral Agent, any funds remaining in the Cash Collateral Account
to be applied to the Junior Principal Balance; and
(f) so long as no Event of Default or Cash Sweep Condition
has occurred, following such time as the Principal Balance has been reduced to
or below the Target Principal Balance, to Borrower or its designee, as Borrower
shall direct, any funds remaining in the Cash Collateral Account.
Notwithstanding the foregoing, upon the occurrence and during the continuance of
a Cash Sweep Condition, all Excess Cash Flow shall be applied as follows:
(I) Subject to clause (II) below, upon the occurrence and
during the continuance of an LAUSD Cash Sweep Condition, (A) if the
Principal Balance has not been reduced to or below the Target Principal
Balance, all Excess Cash Flow shall be paid to Collateral Agent for
application to the Principal Balance in such order or priority as
Collateral Agent may determine in its sole and absolute discretion (but
as among the Holders and without any further rights of Borrower, subject
to any applicable Agency Agreement), and (B) if the Principal Balance
has been reduced to or below the Target Principal Balance, all Excess
Cash Flow shall be deposited into the Leasing Reserve and applied in
accordance with the terms thereof; and
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(II) Upon the occurrence and during the continuance of a
DSCR Cash Sweep Condition, notwithstanding that the Principal Balance
has not been reduced to or below the Target Principal Balance or that an
LAUSD Cash Sweep Condition has occurred, all Excess Cash Flow shall be
paid to Collateral Agent for application to the Principal Balance in
such order or priority as Collateral Agent may determine in its sole and
absolute discretion (but as among the Holders and without any further
rights of Borrower, subject to any applicable Agency Agreement).
Notwithstanding the first clause of this SECTION 2.14.7, the transfers described
in clauses (c) through (f) shall be made by the Cash Management Bank on the
tenth (10th) day of each Loan Month.
2.14.8 Notwithstanding the provisions of SECTION 2.14.7(c) above,
Borrower may include in an Operating Expense Disbursement Request a request for
disbursement of an amount to pay (a) leasing commissions and tenant improvement
costs and expenses (other than those to be paid from the Leasing Reserve)
incurred by Borrower pursuant to Leases which are approved or deemed approved by
Collateral Agent in accordance with the Loan Documents, and (b) capital
expenditures (including, without limitation, the Scheduled Upgrades) with
respect to the Mortgaged Property which, other than in the case of the Scheduled
Upgrades, have been approved in writing by Collateral Agent (such approval not
to be unreasonably withheld), in either case which are not included in an
Approved Operating Budget (such expenses, "Extraordinary Capital and Leasing
Expenses"). Any such request(s) shall be accompanied by a certification from a
Responsible Officer (which shall be included in the applicable Operating Expense
Disbursement Request) that such additional amount requested is required to pay
Extraordinary Capital and Leasing Expenses, as applicable, together with such
supporting information and documentation relating thereto as Collateral Agent
may reasonably request. Borrower shall not submit more than one Operating
Expense Disbursement Request with respect to any Loan Month.
2.14.9 If, on any Disbursement Date the amount on deposit in the
Cash Collateral Account is insufficient to make all of the transfers described
in SECTIONS 2.14.7(a) through (c) above in full on the applicable Disbursement
Date (or, in the case of SECTIONS 2.14.7(c) within ten (10) days following the
Disbursement Date), Borrower shall (without the need for any notice or demand
from Collateral Agent) deposit or cause to be deposited into the Cash Collateral
Account on such Disbursement Date (or, in the case of SECTIONS 2.14.7(A), within
ten (10) days following the Disbursement Date) the amount of such deficiency.
Borrower's failure to make such deposit shall constitute an Event of Default
and, in addition to all other rights and remedies provided for hereunder,
Collateral Agent may disburse and apply the amounts in the Cash Collateral
Account in such manner and order of priority as Collateral Agent may elect in
its sole and absolute discretion (but as among the Holders and without any
further rights of Borrower, subject to the provisions of any Collateral Agency
Agreement).
2.14.10 Notwithstanding any provision of this SECTION 2.14, all
insurance proceeds and condemnation awards (including all "Proceeds" and
"Awards", as such terms are defined in the Mortgages) payable on account of any
casualty or condemnation affecting the Mortgaged Property shall be applied in
accordance with the terms of the Mortgages.
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2.14.11 Borrower hereby pledges, transfers and assigns and grants
to Collateral Agent, for the benefit of the Holders, as additional security for
the payment and performance of the Obligations, a continuing perfected security
interest in and to, and a general first lien upon, all of Borrower's right,
title and interest in and to all cash, property or rights held in, transferred
to or deposited in the Lockbox Account, the Security Deposit Account, and the
Cash Collateral Account from time to time by or on behalf of Borrower, and all
proceeds (as defined in the UCC) of the foregoing. Borrower agrees to execute,
acknowledge, deliver, file or do at its sole cost and expense, all other acts,
assignments, notices, agreements or other instruments as Collateral Agent may
reasonably require in order to perfect, effectuate, assure, convey, secure,
assign, transfer and convey unto Collateral Agent any of the rights granted by
this SECTION 2.14.11, and Borrower hereby authorizes Collateral Agent to
undertake and perform the foregoing on Borrower's behalf.
2.14.12 Notwithstanding anything to the contrary contained herein
or in any other Loan Document, upon the occurrence and during the continuance of
an Event of Default, Collateral Agent shall have no obligation to (although
Collateral Agent in its sole and absolute discretion may) disburse funds from
the Cash Collateral Account. Upon the occurrence and during the continuance of
an Event of Default, the provisions of SECTION 2.14.7 shall no longer be
applicable and, without limiting any of its other rights and remedies under the
Loan Documents, Collateral Agent may apply the sums on deposit in the Lockbox
Account and the Cash Collateral Account in such manner and such order of
priority as Collateral Agent shall elect in its sole and absolute discretion
(but as among the Holders and without any further rights of Borrower, subject to
the provisions of any Collateral Agency Agreement). Without limiting the
forgoing, notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon the occurrence of an Event of Default, Collateral
Agent may apply (subject to the provisions of any Collateral Agency Agreement)
sums on deposit in the Lockbox Account and the Cash Collateral Account to the
Senior Obligations prior to applying such sums to the Junior Obligations until
such time as the Senior Obligations have been indefeasibly paid and performed in
full.
2.15 Security and Guaranties.
2.15.1 All Senior Obligations of Borrower under this Agreement,
the Senior Notes and all other Senior Loan Documents shall be secured (unless
otherwise specified therein) in accordance with the Senior Collateral Documents.
Notwithstanding anything to the contrary contained in any of the Loan Documents,
in no event shall any of the Senior Collateral Documents be deemed to secure (A)
the Senior Recourse Guaranty, (B) the Senior Environmental Indemnity Agreement,
or (C) the Note Purchase Documents. Notwithstanding anything to the contrary
contained in the Note Purchase Documents, all of the Liens with respect to the
Senior Collateral created by the Senior Collateral Documents are and shall at
all times remain superior and prior to the Liens on the same Collateral created
by the Junior Collateral Documents.
2.15.2 The Senior Recourse Obligations shall be guaranteed by
Recourse Guarantor pursuant to and subject to the terms and conditions of the
Senior Recourse Guaranty. In the event of a Permitted Transfer of one hundred
percent (100%) of the indirect Equity Interests in Borrower to an Approved REIT
pursuant to and in accordance with SECTION 6.13
53
below, provided no Event of Default has occurred and is then outstanding,
Borrower shall be permitted to substitute such Approved REIT in place and stead
of Recourse Guarantor upon: (a) the execution and delivery by such Approved REIT
of a guaranty of the Senior Recourse Obligations on substantially the same form
as the Senior Recourse Guaranty and otherwise acceptable to Collateral Agent in
its sole and absolute discretion; (b) the delivery to Collateral Agent of such
opinions of counsel to Borrower and the Approved REIT as Collateral Agent may
require in form and substance acceptable to Collateral Agent in its sole and
absolute discretion; (c) the execution and delivery of such Modifications,
ratifications and reaffirmations of the Loan Documents by Borrower and the other
Loan Parties as Collateral Agent may require; (d) the payment by Borrower of all
costs and expenses (including, without limitation, reasonable attorneys' fees
and costs) incurred by Collateral Agent in connection therewith; and (e)
confirmation that no Material Adverse Effect has occurred (or will occur as a
result of the Permitted Transfer) with respect to any Loan Party (assuming for
purposes of this SECTION 2.15.2 that such Approved REIT is a Loan Party for
purposes of determining whether such Material Adverse Effect has occurred). In
the event such Approved REIT is substituted as and in place of Recourse
Guarantor, such Approved REIT shall be required to maintain at all times (i) a
minimum market capitalization of not less than $1,250,000,000.00, and (ii)
stockholder's equity of not less than $250,000,000.00, each as determined by
Collateral Agent in its sole and absolute discretion.
ARTICLE III
CONDITIONS PRECEDENT
The obligation of Senior Lenders to make the Senior Loan hereunder is
subject to satisfaction in full of each of the conditions hereinafter set forth
in this ARTICLE III, all to the satisfaction of Collateral Agent and its
counsel.
3.1 Loan Documents. Simultaneously with the execution and delivery of
this Agreement and the Closing of the Loan (except as expressly noted to the
contrary), Borrower shall execute and deliver or cause to be duly executed and
delivered to Collateral Agent this Agreement and the following Loan Documents,
all of which shall be in form and substance satisfactory to Collateral Agent in
its sole and absolute discretion:
3.1.1 Senior Notes. One or more Senior Notes from Borrower to
Senior Lenders, as directed by Collateral Agent.
3.1.2 Senior Mortgage. The Senior Mortgage securing the Senior
Notes, which instrument shall be a lien on the Mortgaged Property, subject only
to the Permitted Title Exceptions.
3.1.3 Senior Assignment of Rents. The Senior Assignment of Rents
from Borrower in favor of Collateral Agent.
3.1.4 Senior Recourse Guaranty. The Senior Recourse Guaranty from
the Recourse Guarantor in favor of Collateral Agent.
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3.1.5 Senior Cap Security Agreement. The Senior Cap Security
Agreement from Borrower in favor of Collateral Agent.
3.1.6 Lockbox Agreement. The Lockbox Agreement among Borrower,
Collateral Agent, Property Manager and the Lockbox Bank.
3.1.7 Senior Assignment of Licenses, Contracts and Permits. The
Senior Assignment of Licenses, Contracts and Permits from Borrower to Collateral
Agent.
3.1.8 Senior Assignment of Property Management Agreement. The
Senior Assignment of Property Management Agreement among Borrower, Property
Manager, and Collateral Agent.
3.1.9 Senior Assignment of Parking Agreement. The Senior
Assignment of Parking Agreement among Borrower, Property Manager, Parking
Facility Operator, and Collateral Agent.
3.1.10 North Tower Owner Estoppel. The North Tower Owner Estoppel
from North Tower Owner for the benefit of Collateral Agent.
3.1.11 Senior Environmental Indemnity Agreement. The Senior
Environmental Indemnity Agreement from Borrower in favor of Collateral Agent.
3.1.12 Indemnity and Contribution Agreement. The Indemnity and
Contribution Agreement from MP-WFC Holdings and MP-Bunker Hill in favor of
Borrower and Mezzanine Maker.
3.1.13 Senior Financing Statements. The Senior Financing
Statements covering the Mortgaged Property and the Senior Cap Security
Agreement.
3.1.14 Note Purchase Documents. Each of the Note Purchase
Documents executed by Mortgage Maker, Mezzanine Maker and the other Loan
Parties, as applicable, in favor of Purchaser and/or Collateral Agent, as
applicable.
3.1.15 Other Documents. All other Loan Documents and such other
documents or instruments as Collateral Agent may require. Each of the documents
described herein shall refer to such documents as Modified from time to time
hereafter.
3.2 Property Specific Conditions. In addition to delivery of the Loan
Documents, prior to the Closing, Borrower shall deliver or cause to be delivered
to Collateral Agent each of the following documents and information, all of
which shall be in form and substance satisfactory to Collateral Agent in its
sole and absolute discretion, and each of which shall have otherwise complied
with each of the following conditions:
3.2.1 Appraisal. An Appraisal of the Mortgaged Property
establishing an Appraised Value of the Mortgaged Property of not less than
$300,000,000.00 on an "as is" basis.
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3.2.2 Survey. An "as built" survey of the Mortgaged Property
prepared by a surveyor satisfactory to Collateral Agent and registered in the
state in which the Mortgaged Property is located, which survey shall (1) be
dated not more than fourteen (14) days prior to the Closing Date, (2) contain
the minimum detail for land surveys as most recently adopted by ALTA/ACSM, (3)
comply with Collateral Agent's survey requirements, and (4) be certified to
Collateral Agent and the Title Company using Collateral Agent's standard form of
certification.
3.2.3 Insurance. Certificates of insurance evidencing compliance
with the insurance requirements of this Agreement and the Mortgages.
3.2.4 UCC Searches. UCC searches made in the States of Delaware,
California and each other State in which the Collateral or a Loan Party is
organized, showing no filings relating to (1) any portion of the Collateral
other than those made in favor of Collateral Agent or the other holders of
Permitted Liens, or (2) any other assets or property of Borrower.
3.2.5 Engineering Report. An engineering report assessing the
physical condition of the Mortgaged Property prepared by an engineer
satisfactory to Collateral Agent in its sole and absolute discretion.
3.2.6 Seismic Report. A seismic report assessing the seismic
condition of the Mortgaged Property, including the maximum probable loss to the
Mortgaged Property in the event of a seismic disturbance, prepared by a seismic
engineer satisfactory to Collateral Agent in its sole and absolute discretion.
3.2.7 Environmental Assessment. An Environmental Report
environmental site assessment with respect to the Mortgaged Property prepared by
an environmental consultant satisfactory to Collateral Agent in its sole and
absolute discretion.
3.2.8 Licenses, Permits and Approvals. True and correct copies of
all of the certificates of occupancy and other licenses, permits and approvals
of a discretionary nature (as described in SECTION 4.20 hereof) respecting the
Mortgaged Property that are necessary to own, occupy and use the Mortgaged
Property in accordance with all requirements of applicable Governmental
Authorities.
3.2.9 Zoning and Other Laws. Satisfactory evidence that the
Mortgaged Property complies with all applicable zoning and land use
requirements, building codes and other laws affecting the use and operation of
the Mortgaged Property (including the Americans With Disabilities Act),
including all applicable environmental protection laws.
3.2.10 Reserved.
3.2.11 Flood Zone. Satisfactory evidence as to whether the
Mortgaged Property is located in a flood zone and, if the Mortgaged Property is
located in a flood zone, evidence of flood insurance in such amounts and upon
such terms and conditions as Collateral Agent may require.
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3.2.12 Utilities. Satisfactory evidence that full public or
municipal utility services, not subject to interruption, are available to the
Mortgaged Property and that all utilities are operational, which evidence may be
in the form of currently paid utility bills.
3.2.13 Schedule of Furnishings, Fixtures and Equipment. A
schedule listing all chattels, furnishings, furniture, fixtures and equipment
which are used in the operation or maintenance of any portion of the Mortgaged
Property and which have an initial cost of (a) $1,000 or more if owned by
Borrower, or (b) $5,000 or more if not owned by Borrower.
3.2.14 Title Policy. The Title Policy with respect to the
Mortgaged Property.
3.2.15 Material Agreements. Copies of all service, equipment and
labor contracts and other agreements relating to the Mortgaged Property.
3.2.16 Property Management Agreement. A certified copy of the
Property Management Agreement, which shall be satisfactory to Collateral Agent
in its sole and absolute discretion.
3.2.17 Rent Roll. A certified rent roll for the Mortgaged
Property.
3.2.18 Tenant Estoppel Certificates. Fully-executed tenant
estoppel certificates, in form and substance acceptable to Collateral Agent in
its sole and absolute discretion, from the Tenants under all existing Leases.
3.2.19 SNDAs. Fully-executed subordination, non-disturbance and
attornment agreements, each in form and substance satisfactory to Collateral
Agent in its sole and absolute discretion, with respect to all existing Leases.
3.2.20 Special Leasing Conditions. Satisfactory evidence that:
(A) At least (i) ninety-six percent (96.0%) of the net rentable space in the
Mortgaged Property shall be leased by Tenants pursuant to Leases; (ii)
ninety-three percent (93.0%) of the net rentable space in the Mortgaged Property
shall be occupied by Tenants pursuant to Operative Leases, and (iii) the
Mortgaged Property shall be generating monthly Gross Revenues of not less than
$2,900,000.00; (B) LAUSD shall have executed and delivered an extension to the
LAUSD Lease in form and substance acceptable to Collateral Agent in its sole
discretion; (C) Northern Trust shall have executed a letter-of-intent or
extension to the Northern Trust Lease in form and substance acceptable to
Collateral Agent in its sole and absolute discretion; and (D) KPMG shall have
executed an amendment to the KPMG Lease in form and substance acceptable to
Collateral Agent in its sole and absolute discretion.
3.3 Additional Requirements. In addition to the Loan Documents and the
items described in SECTION 3.2, prior to the Closing, Borrower shall deliver or
cause to be delivered to Collateral Agent each of the following, all of which
shall be in form and substance satisfactory to Collateral Agent in its sole and
absolute discretion:
3.3.1 Opinions. An opinion of counsel to each Loan Party dated as
of the Closing Date and relating to such matters with respect to this Agreement
and the transaction contemplated hereby as Collateral Agent may require,
including matters relating to the due
57
formation and authority of, execution and delivery of the Loan Documents by, and
enforceability of the Loan Documents against, each Loan Party.
3.3.2 Borrower's Organizational Documents. A certified copy of
the Organizational Documents of Borrower, together with such other organization
and formation documents as Collateral Agent may require, including certified
copies of any necessary filings with the State of formation of Borrower relating
to the formation of Borrower, evidence of Borrower's good standing in the State
where Borrower is formed and in the States where Borrower does business
(including the State where the Mortgaged Property is located), and resolutions
authorizing the Loan transaction contemplated by this Agreement.
3.3.3 Organizational Documents Relating to Other Loan Parties.
With respect to each Loan Party other than Borrower, certified copies of
applicable Organizational Documents, together with such other organization and
formation documents as Collateral Agent may require, including certified copies
of any necessary filings with the State of formation of such Person relating to
the formation of such Person, certificates of good standing for the State in
which such Person is organized and the States in which such Person does
business, and original resolutions and certificates of incumbency with specimen
signatures for the authorized officer.
3.3.4 Financial Statements. Current, certified copies of the
financial statements and tax returns of each Loan Party and operating and cash
flow statements for the Mortgaged Property.
3.3.5 Litigation. Copies of all pleadings and such other
information as Collateral Agent may request with respect to the matters shown on
SCHEDULE 4.5.
3.3.6 Cash Management Provisions. Borrower shall have satisfied
the conditions set forth in SECTION 2.14.6.
3.3.7 Other Items. Such other documents and/or information as
Collateral Agent may require.
3.4 No Orders, Judgments or Decrees. It shall be a condition to Senior
Lenders' obligation to make the Senior Loan that no order, judgment or decree of
any Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain Collateral Agent or Senior Lenders from making the Senior Loan, nor
shall any Requirement of Law applicable to Collateral Agent or Senior Lenders or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Collateral Agent or Senior Lenders
prohibit or request that Collateral Agent or Senior Lenders refrain from, making
loans in general or the making of the Senior Loan in particular.
3.5 No Default. It shall be a condition to Senior Lenders' obligation to
make the Senior Loan that no occurrence or event shall have occurred which, upon
Closing, would constitute a Default or Event of Default under any of the Loan
Documents.
3.6 Payment of Fees. Prior to or at the Closing, Borrower shall have
paid all costs, accrued and unpaid fees and expenses incurred by Collateral
Agent, to the extent then due and payable on the Closing Date, including all
out-of-pocket expenses incurred by Collateral Agent
58
and fees and costs of legal counsel and consultants, incurred by Collateral
Agent, to the extent invoiced prior to or on the Closing Date, together with
such additional amounts of legal costs as shall constitute a reasonable estimate
of legal costs incurred or to be incurred through the closing proceedings,
provided that such estimate shall not thereafter preclude final settling of
accounts between Borrower and Collateral Agent.
3.7 Other Loan Documents. Prior to the Closing, Borrower shall have
satisfied each and every other condition to Closing set forth in the other Loan
Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
As a material inducement for Senior Lenders, Administrative Agent and
Collateral Agent to enter into this Agreement and to and for Senior Lenders to
make the Senior Loan, Borrower represents and warrants to Senior Lenders,
Administrative Agent and Collateral Agent that:
4.1 Existence and Power. Borrower and each of the other Loan Parties
(other than Recourse Guarantor):
4.1.1 is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization;
4.1.2 has the trust, partnership, limited liability company, or
corporate (as applicable) power and authority and all necessary governmental
licenses, authorizations, consents and approvals to own its Assets, to carry on
its business and to execute, deliver, and perform its obligations under the Loan
Documents;
4.1.3 is duly qualified as a foreign association, partnership,
limited liability company, or corporation (as applicable), licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification; and
4.1.4 is in compliance with all Requirements of Law.
4.2 Authorization; No Contravention. The execution, delivery and
performance by Borrower of this Agreement, and by Borrower and the other Loan
Parties of any other Loan Documents to which any such Person is party, have been
duly authorized by all necessary trust, partnership, limited liability company
or corporate (as applicable) action, and do not and will not:
4.2.1 contravene any of the terms of such Person's Organizational
Documents;
4.2.2 conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or
59
4.2.3 violate any Requirement of Law.
4.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings or filings in connection with the
Liens granted to Collateral Agent under the Collateral Documents is necessary or
required in connection with the execution, delivery or performance by Borrower
or any of the other Loan Parties of this Agreement or any other Loan Document.
No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority (except for recordings or filings
in connection with the Liens granted to Collateral Agent under the Collateral
Documents and except, as applicable, as may be required by the Securities Act of
1933 or the Securities Exchange Act of 1934, and any and all rules and
regulations promulgated thereunder and any Modifications thereto) is necessary
or required in connection with the enforcement against Borrower or any of the
other Loan Parties of this Agreement or any other Loan Document.
4.4 Binding Effect. This Agreement and the other Loan Documents to which
Borrower or any of the other Loan Parties is a party have each been duly
executed and delivered, and each constitutes the legal, valid and binding
obligation of Borrower and such other Loan Parties to the extent they are a
party thereto, enforceable against such Persons in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally, or by equitable principles relating to enforceability.
4.5 Litigation. Except as specifically disclosed on SCHEDULE 4.5, (A)
there are no actions, suits, proceedings, claims or disputes pending, or to
Borrower's Knowledge, threatened, at law, in equity, in arbitration or before
any Governmental Authority, against Borrower or Member of Borrower, or any of
their respective Assets, or with respect to this Agreement or any of the other
Loan Documents or any of the transactions contemplated hereby or thereby; (B) no
judgment, decree or order of any court or governmental or administrative agency
or instrumentality has been issued against Borrower or Member of Borrower; (C)
there are no actions, suits, proceedings, claims or disputes pending, or to
Borrower's Knowledge, threatened at law, in equity, in arbitration or before any
Governmental Authority, against any other Loan Party, or any of their respective
Assets which would reasonably be expected to have a Material Adverse Effect; and
(D) no judgment, decree or order of any court or governmental or administrative
agency or instrumentality has been issued against any other Loan Party which
would reasonably be expected to have a Material Adverse Effect.
4.6 No Default. No Default or Event of Default exists or would result
from the incurring of any of the Obligations by Borrower. Neither Borrower nor
any other Loan Party is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse Effect. All
representations and warranties in the Loan Documents are true and correct as of
this date.
4.7 Use of Proceeds. The proceeds of the Loans are intended to be and
shall be used solely for the purposes set forth in and permitted by SECTION
5.12.
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4.8 Certain Representations Related to Single-Purpose Entities.
4.8.1 Borrower is a Single-Purpose Entity formed for the sole
purpose of owning and operating the Mortgaged Property. Member of Borrower is a
Single-Purpose Entity formed for the sole purpose of owning one hundred percent
(100%) of the Equity Interests in, and acting as the sole member of, Borrower.
4.8.2 The Assets of Borrower consist solely of the Mortgaged
Property, and its liabilities are limited to those created under the Loan
Documents, unsecured trade payables incurred in the Ordinary Course of Business
in amounts that do not exceed the limitations set forth in SECTION 6.5.2, lease
financing and Indebtedness not exceeding the limitations set forth in SECTION
6.5.3, and the Contractual Obligations set forth in SECTION 4.8.3. The Assets of
Member of Borrower consist solely of its one hundred percent (100%) of the
Equity Interests in Borrower, and its liabilities consist solely of those
created under the Note Purchase Documents and its obligations incurred in the
Ordinary Course of Business as the owner of one hundred percent (100%) of the
Equity Interests in Borrower.
4.8.3 Other than the Property Management Agreement, the Loan
Documents, the Organizational Documents of Borrower, contracts assumed or
entered into in the Ordinary Course of Business in compliance with the terms and
conditions of the Loan Documents, Permitted Title Exceptions, Permitted Liens,
the Leases, and the other agreements set forth on SCHEDULE 4.8.3, Borrower is
not subject to any Contractual Obligations. Without limiting the foregoing,
Borrower is not subject to any Indebtedness to an Affiliate or, except as set
forth on SCHEDULE 4.8.3 attached hereto, any Contractual Obligations with an
Affiliate. Other than the Note Purchase Documents, the Organizational Documents
of Member of Borrower, the Organizational Documents of Borrower, and contracts
assumed or entered into in the Ordinary Course of Business in compliance with
the terms and conditions of the Note Purchase Documents, Member of Borrower is
not subject to any Contractual Obligations or any Indebtedness.
4.9 Taxes. Borrower and Member of Borrower have filed all Federal and
other material tax returns and reports required to be filed by either of them,
and have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their respective Assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded with
respect to any such Assets. There is no proposed tax assessment against the
Mortgaged Property or any Loan Party that would, if the assessment were made,
have a Material Adverse Effect.
4.10 Financial Condition.
4.10.1 The financial statements of ▇▇▇▇▇▇▇ South Tower and
Guarantor, dated June 30, 2002, and, in the case of ▇▇▇▇▇▇▇ South Tower, the
related statements of operations, shareholders' equity and cash flows (as
applicable) as of such date:
(A) in the case of the ▇▇▇▇▇▇▇ South Tower financial
statement and in the case of the property-level financial statements which have
been submitted as support for the
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assets described as "Completed Projects" in the Guarantor's financial statement,
were prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein;
(B) are complete, accurate in all material respects and
fairly present the financial condition of the Persons included therein as of the
date thereof and results of operations for the period covered thereby; and
(C) show all material indebtedness and other material
liabilities, direct or contingent, of ▇▇▇▇▇▇▇ South Tower and Guarantor,
respectively, as of the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations.
4.10.2 Since the date of the last financial statements for
▇▇▇▇▇▇▇ South Tower and Guarantor provided to Collateral Agent, except as set
forth on SCHEDULE 4.10.2, there has been no Material Adverse Effect with respect
to ▇▇▇▇▇▇▇ South Tower or Guarantor.
4.11 Environmental Matters.
4.11.1 Except as specifically disclosed in SCHEDULE 4.11 or in
the Environmental Report, to Borrower's Knowledge, the on-going operations of
Borrower complies in all respects with all applicable Environmental Laws.
4.11.2 Except as specifically disclosed in the Environmental
Report, each of Borrower and Member of Borrower has obtained all licenses,
permits, authorizations and registrations required under any applicable
Environmental Law ("Environmental Permits") and necessary for its operations in
the Ordinary Course of Business, all such Environmental Permits are in good
standing, and each of Borrower and Member of Borrower is in compliance with the
terms and conditions of such Environmental Permits.
4.11.3 Except as specifically disclosed in the Environmental
Report, neither Borrower nor Member of Borrower nor any of their respective
Assets or operations is subject to any outstanding written order from or
agreement with any Governmental Authority nor subject to any judicial or
docketed administrative proceeding, in each case respecting any Environmental
Law or Environmental Claim.
4.11.4 Except as specifically disclosed in the Environmental
Report, there are no Hazardous Materials or other conditions or circumstances
existing with respect to the Mortgaged Property that would reasonably be
expected to give rise to Environmental Claims. In addition, there are no
underground storage tanks located on the Mortgaged Property. Borrower has not
notified its employees of the existence of any health hazard arising from the
conditions of their employment, and Borrower has met all applicable notification
requirements under Title III of CERCLA and all other applicable Environmental
Laws.
4.12 Collateral Documents. The provisions of the Mortgage are effective
to create, in favor of Collateral Agent, a legal, valid and enforceable security
interest in the Mortgaged Property. The Lien of the Mortgages constitute a
perfected, security interest of the priority specified therein in all right,
title and interest of Borrower in the Mortgaged Property.
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4.13 Regulated Entities. Neither Borrower nor any other Loan Party is
(A) an "Investment Company" within the meaning of the Investment Company Act of
1940; or (B) subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
4.14 Requirement of Law. No Requirement of Law applicable to Borrower or
any other Loan Party as of the date hereof could reasonably be expected to have
a Material Adverse Effect.
4.15 Solvency. Neither Borrower nor any of the other Loan Parties is
Insolvent, and no Insolvency Proceedings have been initiated or threatened in
writing with respect to any such Person. The execution, delivery and performance
by Borrower and each of the Loan Parties of the Loan Documents to which such
Person is a party (i) is not done with an intent to hinder, delay or defraud
present or future creditors and (ii) is not done at a time when such Person will
incur Indebtedness beyond the ability of such Person to repay as such
Indebtedness matures or otherwise becomes due.
4.16 Labor Relations. Except as set forth on SCHEDULE 4.16 attached
hereto, there are no strikes, lockouts or other labor disputes against Borrower
or Member of Borrower, or, to Borrower's Knowledge, threatened against or
affecting Borrower or Member of Borrower, and no significant unfair labor
practice complaint is pending against Borrower or Member of Borrower or, to
Borrower's Knowledge, threatened against any of them before any Governmental
Authority.
4.17 Copyrights, Patents, Trademarks and Licenses, etc. Borrower and
Member of Borrower own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, franchises,
authorizations and other rights that are reasonably necessary for the operation
of their respective businesses, without conflict with the rights of any other
Person. To Borrower's Knowledge, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed by Borrower or Member of Borrower infringes upon any
rights held by any other Person, no claim or litigation regarding any of the
foregoing is pending or, to Borrower's Knowledge, threatened.
4.18 Subsidiaries. All of the Equity Interests in Borrower are owned by
Member of Borrower. All of the Equity Interests in Member are owned by MP-WFC
Holdings and MP-Bunker Hill. All of the Equity Interests in MP-WFC Holdings are
owned by ▇▇▇▇▇▇▇ SCS and Recourse Guarantor. Except for Member of Borrower's
ownership of the Equity Interests in Borrower, neither Borrower nor Member of
Borrower has any Subsidiaries or equity investments in any other Person. Except
for the Liens created by the Loan Documents, there are, and after the Closing
Date will be, no Liens on any of the Equity Interests in Borrower, and, except
for the Liens created by the Loan Documents and the Permitted Liens, there are,
and after the Closing Date will be, no Liens on the Mortgaged Property.
4.19 Broker's Fees; Transaction Fees. Neither Borrower nor any other
Loan Party has any obligation to any Person in respect of any finder's, broker's
or investment banker's fee in
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connection with the transactions contemplated hereby, other than fees payable to
Senior Lenders, Collateral Agent, Administrative Agent, their respective
Affiliates, and the Persons set forth on SCHEDULE 4.19 (in the amounts set forth
thereon). Borrower shall indemnify, defend and hold harmless Senior Lenders,
Administrative Agent, Collateral Agent, and their respective officers,
directors, shareholders, agents, successors and assigns from and against all
claims for fees, commissions, or other compensation claimed to be due any other
broker, finder or intermediary with whom Borrower or any Loan Party may have
dealt in connection with the Loan.
4.20 Permits. All necessary and required franchises, licenses,
authorizations, registrations, permits and approvals for the use and occupancy
of the Mortgaged Property have been obtained from all Governmental Authorities
having jurisdiction over the Mortgaged Property so as to permit the operation of
the Mortgaged Property as herein contemplated. Borrower has provided Collateral
Agent a true and correct list of all of the certificates of occupancy for the
building shell and common areas and other material licenses, permits and
approvals respecting the Mortgaged Property (and such list is attached to the
Senior Assignment of Licenses, Contracts and Permits), and such licenses,
permits and approvals remain in full force and effect without modification or
exception.
4.21 Title. Borrower holds good and marketable fee simple title to the
Mortgaged Property, free and clear of all Liens, claims, assessments,
encumbrances and rights of others other than the Permitted Title Exceptions.
Borrower shall preserve such title to the Mortgaged Property and will forever
warrant and defend the same and the validity and priority of the Mortgage to
Collateral Agent against all claims whatsoever.
4.22 Zoning. The Mortgaged Property is zoned under a use classification
which allows such Mortgaged Property to be used in accordance with its present
or anticipated usage, which zoning is final, unconditional (except for
conditions, if any, set forth in the permits listed in the Senior Assignment of
Licenses, Contracts and Permits) and in full force and effect. The Mortgaged
Property is in compliance with all applicable zoning and land use laws,
regulations and ordinances. In the event that all or any part of the
Improvements on the Mortgaged Property are destroyed or damaged, zoning laws in
effect at the time this representation is made do not prohibit the Improvements
from being legally reconstructed to their condition prior to such damage or
destruction and thereafter existing for the same use without violating any
zoning or other ordinances applicable thereto. Except as set forth on SCHEDULE
4.22, the Mortgaged Property contains a sufficient number of permanent parking
spaces to satisfy all requirements imposed by applicable laws with respect to
parking. No legal proceedings are pending or, to Borrower's Knowledge,
threatened with respect to the zoning of the Mortgaged Property. Except as set
forth on SCHEDULE 4.22, neither the zoning nor any other right to construct, use
or operate the Mortgaged Property is in any way dependent upon any real estate
other than the Mortgaged Property. No tract map, parcel map, condominium plan,
condominium declaration, or plat of subdivision will be recorded with respect to
the Mortgaged Property without Collateral Agent's prior written consent.
4.23 Agreements Affecting the Mortgaged Property. Borrower has provided
Collateral Agent with true and complete copies of each material contract and
agreement affecting the Mortgaged Property (including, each Lease, material
service contract, Property Management
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Agreement, and the Parking Agreement) relating to the occupation, maintenance,
development, operation or management thereof.
4.24 Condemnation. Neither Borrower nor any other Loan Party has
received any notice from any Governmental Authority or from any Person with
respect to any actual or threatened taking of the Mortgaged Property, or any
portion thereof, by the exercise of the right of condemnation or eminent domain
or of any moratorium which may affect the use, or operation of the Mortgaged
Property.
4.25 Exempt Transaction. The Loan is an exempt transaction under the
Truth-in-Lending Act (15 U.S.C.A. Sections 1601, et seq.).
4.26 Access. The Mortgaged Property has access to and full utilization
of completed public roads necessary for access to and full utilization of the
Mortgaged Property for its intended purposes.
4.27 Tax Division. A tax division has been effected with respect to the
Mortgaged Property so that it is taxed for ad valorem taxation without regard to
or inclusion of any other property. No subdivision or other approval is
necessary with respect to any of the Mortgaged Property in order for Borrower to
mortgage, convey and otherwise deal with the Mortgaged Property as a separate
lot or parcel.
4.28 ERISA. Borrower is not a party to any plan defined and regulated
under ERISA or Section 4975 of the Code, as amended. None of the assets of
Borrower are "plan assets" as defined in 29 C.F.R. Section 2509.75 or Section
2510.3.
4.29 Bankruptcy. No Insolvency Proceeding has ever been initiated or
threatened in writing against Borrower or any other Loan Party.
4.30 Leases.
4.30.1 Except as set forth on SCHEDULE 4.30, all Leases (except
subleases) are described on the certified rent roll dated as of the Closing Date
delivered by Borrower to Collateral Agent. Except for Permitted Liens, neither
Borrower nor any other Loan Party has executed any prior assignment of the
Leases, nor has it performed any act or executed any other instrument which
might prevent Collateral Agent from operating under or enforcing any of the
terms and conditions of the Mortgage applicable to Collateral Agent's security
interest in such Leases or which would limit Collateral Agent in such operation.
4.30.2 Except as set forth on SCHEDULE 4.30, and except as
disclosed in the certified rent roll for the Mortgaged Property, (a) Borrower is
the sole owner of the entire lessor's interest in all Leases; (b) all Leases are
valid and enforceable; (c) the terms of all alterations, modifications and
amendments to the Leases are reflected in the certified rent roll; (d) the
Leases are valid and enforceable against Borrower and the Tenants set forth
therein; and (e) no Person has any possessory interest in, or right to occupy,
the Mortgaged Property except under and pursuant to a Lease.
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4.30.3 Except as (1) disclosed in the certified rent roll for the
Mortgaged Property, (2) disclosed in the tenant estoppel certificates delivered
to Collateral Agent in connection with the Loan, or (3) set forth on SCHEDULE
4.30 attached hereto, (a) none of the Rents have been collected for more than
one (1) month in advance (except for Security Deposits and real estate taxes and
other operating expenses estimated and collected from tenants in advance
pursuant to the Leases); (b) the premises demised under the Leases have been
completed and the tenants under the Leases have accepted the same and have taken
possession of the same on a rent-paying basis; (c) to Borrower's Knowledge,
there exist no offsets or defenses to the payment of any portion of the rents
under any Lease; (d) Borrower has received no notice from any tenant challenging
the validity or enforceability of any Lease; (e) all payments due under the
Leases are current and are consistent with the certified rent roll; (f) to
Borrower's knowledge, no tenant under any Lease is in default thereunder; (g) to
Borrower's Knowledge, no tenant is a debtor in any bankruptcy, reorganization,
insolvency or similar proceeding, or has demonstrated a history of payment
problems which suggest financial difficulty; (h) there are no agreements with
the Tenants under the Leases other than expressly set forth in each Lease; (i)
no Lease contains an option to purchase, right of first refusal to purchase, or
any other similar provision; (j) no brokerage commissions or finders fees are
currently due and payable regarding any Lease; (k) there are no subleases in
effect at the Mortgaged Property for which Borrower or Property Manager has
given its approval (to the extent such approval is required pursuant to the
Lease), and (1) no Tenant has delivered any non-cash Security Deposit to
Borrower or Property Manager, or if any Tenant has, the same has been delivered
to Collateral Agent on or before the Closing Date.
4.31 Physical Condition of Mortgaged Property. Except as set forth in
the Engineering Report, all of the Improvements situated on the Mortgaged
Property are in good condition and repair and there are no latent or patent
structural or other significant defects or deficiencies in the Improvements.
City water supply, storm and sanitary sewers, and electrical, gas and telephone
utilities are available to the Mortgaged Property within the boundary lines of
the Mortgaged Property, and are sufficient to meet the reasonable needs of the
Mortgaged Property as now used or contemplated to be used; no other utility
facilities are necessary to meet the reasonable needs of the Mortgaged Property
as now used; and, the as-built condition of the Mortgaged Property is such that
surface and storm water does not accumulate in other than insubstantial
quantities on the Mortgaged Property and does not drain from the Mortgaged
Property across land of adjacent property owners. Except as shown on the "as
built" survey for the Mortgaged Property, no part of any of the Mortgaged
Property is within a flood plain and none of the Improvements on any of the
Mortgaged Property create an encroachment over, across or upon any of the
Mortgaged Property's boundary lines, rights of way or easements, and no building
or other improvement on adjoining land create such an encroachment. Since the
date of the inspection described in the Engineering Report, there has been no
Material Adverse Effect with respect to the Mortgaged Property.
4.32 Mechanics' Liens. There are no mechanics' or materialmen's liens,
alienable bills or similar claims that may constitute or result in a Lien on the
Mortgaged Property or any part thereof, and no work for which any such lien
could be asserted has been performed within the last ninety (90) days, a claim
for which has not been insured against under the Title Policy relating to the
Mortgaged Property.
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4.33 Full Disclosure. None of the representations or warranties made by
Borrower or any of the other Loan Parties in the Loan Documents as of the date
such representations and warranties are made or deemed made, and to Borrower's
Knowledge, none of the statements contained in each exhibit, report, statement
or certificate furnished by or on behalf of Borrower or any of the other Loan
Parties in connection with the Loan Documents, contains any untrue statement of
a material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading.
4.34 Initial Deposits into Lockbox. The Retained Funds are sufficient to
pay (A) all Operating Expenses shown on the Approved Budget through August 31,
2002, and (B) all other obligations required to paid and discharged by Borrower
pursuant to SECTION 2.14.6.
4.35 Material CC&Rs. The Material CC&Rs are in full force and effect,
have not been Modified or terminated, and are enforceable in accordance with
their terms (subject to applicable provisions of bankruptcy law and principles
of equity). Borrower has not received any written notice of a default by
Borrower under the Material CC&Rs nor does Borrower have any Knowledge of any
such default or any default by any other Person that is a party to, or whose
property is encumbered by, the Material CC&Rs. Except as set forth on SCHEDULE
4.35 attached hereto, there are no other documents, agreements (oral or
written), or instruments that Modify the Material CC&Rs.
4.36 Shuttles. Borrower is the owner and record title holder (or
co-owner and co-record title holder to the extent set forth on SCHEDULE 4.36) of
the vehicles described on Schedule 436, which vehicles are subject only to the
Liens set forth on SCHEDULE 4.36.
4.37 Special Leasing Conditions. As of the Closing Date: (A) At least
(i) ninety-six percent (96.0%) of the net rentable space in the Mortgaged
Property is leased by Tenants pursuant to Leases; (ii) ninety-three percent
(93.0%) of the net rentable space in the Mortgaged Property is occupied by
Tenants pursuant to Operative Leases; and (iii) the Mortgaged Property is
generating monthly Gross Revenues of not less than $2,900,000.00; (B) LAUSD has
executed and delivered an extension to the LAUSD Lease, which extension becomes
effective automatically upon the expiration of the current term of the LAUSD
Lease; (C) Northern Trust has executed a letter-of-intent or extension to the
Northern Trust Lease and a substantially final version of the same has been
delivered to Collateral Agent prior to the Closing; and (D) KPMG has executed an
amendment to the KPMG Lease and a substantially final version of the same has
been delivered to Collateral Agent prior to the Closing.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Senior
Obligations shall remain unpaid or unsatisfied, unless Collateral Agent, in its
sole and absolute discretion, waives compliance in writing:
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5.1 Payment of Indebtedness. Borrower shall promptly pay or cause to be
paid the Senior Obligations as and when same shall be due and payable under the
Senior Loan Documents.
5.2 Financial Statements and Operating Reports. Borrower shall deliver
to Collateral Agent, in form and detail satisfactory to Collateral Agent, the
following:
5.2.1 As soon as available, but not later than ninety (90) days
after the end of each fiscal year of the reporting party, copies of the audited
balance sheet of Borrower and unaudited balance sheet of Guarantor (together
with audited property-level financial statements as support for the assets
described as "Completed Projects" or any similar subsequent description (other
than for the project identified as "17th & Grand", which may be unaudited) in
the Recourse Guarantor's balance sheet) as of the end of such fiscal year and,
in the case of Borrower, the related statements of income, owners' equity, cash
flows and statement of operations (profit and loss) for such fiscal year (as
applicable), setting forth in each case in comparative form the figures for the
previous year, and accompanied by the opinion (in the case of Borrower) of KPMG
or another nationally-recognized independent public accounting firm reasonably
acceptable to Collateral Agent, which report shall state that such financial
statements present fairly the financial position of Borrower for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. The Guarantors' financial statements shall be prepared on a tax basis,
applied on a basis consistently maintained throughout the period involved (or in
the case of Recourse Guarantor, on a fair value basis) and shall be accompanied
by a certification from a Responsible Officer (or in the case of Recourse
Guarantor, from Recourse Guarantor) certifying that such financial statements
present fairly the financial position of Guarantor for the periods indicated and
have been prepared in conformity with prior years. Additionally, all such
financial statements shall be accompanied by a certification from a Responsible
Officer certifying that all such amounts were calculated in accordance with this
Agreement and present correctly, in accordance with such terms, the items shown
therein.
5.2.2 As soon as available, but not later than thirty (30) days
after the end of each fiscal quarter of each fiscal year, with respect to
Borrower and the Mortgaged Property, as applicable: (A) a statement of income
and expenses, a balance sheet and a statement of cash flow relating to Borrower
and the Mortgaged Property for such period, (B) a rent roll for the Mortgaged
Property for such period, and (C) a delinquency report and accounts receivable
aging for the Mortgaged Property for such period. Each of the foregoing shall be
certified by an appropriate Responsible Officer as being complete and correct
and, in the case of any financial statements, as fairly presenting, in
accordance with GAAP, the financial position and the results of operations of
the Mortgaged Property.
5.2.3 As soon as available, but not later than thirty (30) days
prior to the beginning of each calendar year, a detailed operating budget for
the Mortgaged Property for the upcoming calendar year, including a budget of
anticipated Gross Revenues, Operating Expenses and proposed capital
improvements, together with such other financial data and other information as
Collateral Agent may reasonably request with respect thereto (the "Operating
Budget"). Such Operating Budget shall be subject to Collateral Agent's written
approval, which approval shall not be unreasonably withheld. Borrower shall
operate the Mortgaged Property in accordance with the Approved Operating Budget
and shall not make any revisions thereto
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without Collateral Agent's prior written consent; provided, however, that
Borrower may deviate from an Approved Operating Budget by an amount not to
exceed (A) an aggregate amount of five percent (5%) of the total amount of the
Approved Operating Budget and (B) an aggregate amount of ten percent (10%) of
any one category. Such deviation shall be identified in the Disbursement Request
submitted in the Loan Month in which the deviation is anticipated to occur, and
such Disbursement Request shall reconcile any disbursements made with respect to
any deviation from the Approved Budget occurring in the previous Loan Month. If
any proposed Operating Budget is not approved prior to the beginning of the
calendar year to which it relates, Borrower shall operate the Mortgaged Property
in accordance with the last Approved Operating Budget until such time as a new
Operating Budget is approved by Collateral Agent, which last Approved Operating
Budget may be adjusted to reflect actual increases from such last Approved
Operating Budget in Impositions, insurance premiums, utility expenses, and other
fixed costs beyond Borrower's control (for which, in each case, Borrower has
provided Collateral Agent with satisfactory evidence of such increase). Without
limiting the foregoing requirements, in connection with Collateral Agent's
disbursement of sums with respect to an Approved Operating Budget for January
2003, Collateral Agent shall disburse the sum of Two Hundred Fifty Thousand
Dollars ($250,000.00) to Borrower (which sum shall be identified in such
Operating Budget as a "working capital reserve"), which sum shall be used by
Borrower as a working capital reserve solely to pay Operating Expenses incurred
with respect to the Mortgaged Property.
5.2.4 Without limiting anything contained in SECTION 5.7 below or
in the Senior Mortgage, within sixty (60) days after the close of each fiscal
year of Borrower, Borrower shall furnish to Collateral Agent a statement in form
and substance satisfactory to Collateral Agent setting forth the amounts of
insurance maintained in compliance with the Senior Loan Documents, the risks
covered by such insurance, and of the insurance company or companies which carry
such insurance, which statement shall be accompanied by copies of all
certificates of insurance evidencing the required coverages and endorsements.
5.2.5 As soon as available, but not later than thirty (30) days
after the end of each Loan Month, with respect to the Mortgaged Property: (a) a
statement of income and expenses, a balance sheet and a statement of cash flow
relating to the Mortgaged Property for such period; (b) a rent roll for the
Mortgaged Property for such period; and (c) a delinquency report and accounts
receivable aging for the Mortgaged Property for such period. Each of the
foregoing shall be certified by an appropriate Responsible Officer as being
complete and correct and, in the case of any financial statements, as fairly
presenting, in accordance with GAAP, the financial position and the results of
operations of the Mortgaged Property.
5.3 Certificates; Other Information. Borrower shall furnish to
Collateral Agent and to Senior Lenders:
5.3.1 concurrently with the delivery of the financial statements
referred to in SECTION 5.2.1 through and including 5.2.3 above, and otherwise
upon fifteen (15) Business Days' written notice from Collateral Agent, a
certificate of a Responsible Officer stating that Borrower, during such period,
has observed and performed all of its covenants and other agreements contained
in the Loan Documents, and satisfied every condition contained in this Agreement
to
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be observed or performed or satisfied by it, and that such Responsible Officer
has obtained no Knowledge of any Default or Event of Default except as specified
in such certificate; and
5.3.2 promptly, such additional business, financial, corporate
affairs and other information as Collateral Agent may from time to time
reasonably request.
5.4 Notices. Borrower shall promptly (and in any event not later than
five (5) Business Days after such event unless another time period is specified
below) give notice to Collateral Agent and Senior Lenders:
5.4.1 of the occurrence of any Default or Event of Default;
5.4.2 of (A) any breach or non-performance of, or any default
under, any Contractual Obligation of Borrower or Member of Borrower, (B) any
dispute, litigation, investigation, proceeding or suspension which may exist at
any time between Borrower or Member of Borrower, on the one hand, and any
Governmental Authority, on the other hand, (C) any breach of or non-performance
of, or any default under, any Contractual Obligation of any other Loan Party
which breach, non-performance, dispute, litigation, investigation, proceeding,
suspension, or default would reasonably be expected to have a Material Adverse
Effect, (D) any dispute, litigation, investigation, proceeding or suspension
which may exist at any time between any other Loan Party, on the one hand, and
any Governmental Authority, on the other hand, which dispute, litigation,
investigation, proceeding or suspension would reasonably be expected to have a
Material Adverse Effect, or (E) any breach, non-performance or default by
Borrower or the tenant under any Lease for which the leased premises exceeds
25,000 square feet;
5.4.3 of (A) the commencement of any litigation or proceeding
affecting (1) Borrower or Member of Borrower (a) in which injunctive or similar
relief is sought, (b) in which the relief sought is an injunction or other stay
of the performance of this Agreement or any other Loan Document, or (c) in which
the amount of damages claimed exceed, in any one instance, $250,000; or (2) any
other Loan Party which would reasonably be expected to have a Material Adverse
Effect; and (B) any material development in any of the foregoing litigation or
proceedings where the claim is (1) uninsured or (2) insured but exceeds, in any
one instance, $500,0000.
5.4.4 of (A) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against
Borrower pursuant to any applicable Environmental Laws, (B) all other
Environmental Claims against Borrower or Member of Borrower, (C) any Release in
violation of applicable Environmental Laws or any permits issued pursuant
thereto at, in, on, under, over, from or affecting the Mortgaged Property, (D)
any environmental or similar condition on any real property adjoining or in the
vicinity of the Mortgaged Property that could reasonably be anticipated to cause
the Mortgaged Property or any part thereof to be subject to any restrictions on
ownership, occupancy, transferability or use under any Environmental Laws, or
(E) any Environmental Claim against any other Loan Party that could reasonably
be expected to have a Material Adverse Effect;
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5.4.5 of any Material Adverse Effect subsequent to the date of
the most recent audited financial statements of Borrower or any other Loan Party
delivered to Collateral Agent and Senior Lenders pursuant to SUBSECTION 5.3.1;
5.4.6 of any change in accounting policies or financial reporting
practices by Borrower or Member of Borrower; and
5.4.7 of any labor controversy resulting in or threatening to
result in any strike, work stoppage, boycott, shutdown or other labor disruption
against or involving Borrower or Member of Borrower which could reasonably be
expected to have a Material Adverse Effect, or any labor controversy resulting
in or threatening to result in any strike, work stoppage, boycott, shutdown or
other labor disruption against or involving any other Loan Party which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this SECTION 5.4 shall be accompanied by
a written statement by a Responsible Officer of Borrower setting forth details
of the occurrence referred to therein, and stating what action Borrower proposes
to take with respect thereto and at what time.
5.5 Preservation of Corporate Existence. Etc. Borrower and Member of
Borrower shall:
5.5.1 preserve and maintain in full force and effect its
corporate, partnership, or limited liability company existence and good standing
under the laws of its state or jurisdiction of incorporation;
5.5.2 preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except in connection with sales
of Assets permitted by SECTION 6.2 or where the failure to do so would not have
a Material Adverse Effect;
5.5.3 use its reasonable efforts, in the Ordinary Course of
Business, to preserve the goodwill and business of the customers, suppliers and
others having material business relations with it, except where the failure to
do so would not have a Material Adverse Effect;
5.5.4 preserve or renew all of its registered trademarks, trade
names and service marks, except when the failure to do so would not have a
Material Adverse Effect;
5.5.5 preserve and maintain each of Borrower and Member of
Borrower as a Single-Purpose Entity; and
5.5.6 except with the unanimous consent of all of the members,
partners or directors, as applicable, of Borrower and Member of Borrower and the
approval of Collateral Agent, not, with respect to itself or any Loan Party, do
any of the following (A) initiate, consent to, or suffer to exist an Insolvency
Proceeding with respect to such Person or all or any portion of such Person's
property, or take any action that might cause such Person to become insolvent,
(B) except as permitted by Collateral Agent in connection with the consummation
of a Permitted Transfer in accordance with SECTION 6.13, cause such Person to
dissolve or terminate its existence, (C) cause Borrower or Member to merge or
consolidate with any other Person, (D)
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except as permitted by Collateral Agent in connection with the consummation of a
Permitted Transfer in accordance with SECTION 6.13, cause such Person to
transfer or dispose of all or substantially all of its Assets, or (E) except for
Modifications approved by Collateral Agent in its reasonable discretion in
connection with a Permitted Transfer consummated in accordance with SECTION
6.13, Modify such Person's Organizational Documents in any manner prohibited
under the terms of the Loan Documents.
5.6 Maintenance of Property. Borrower shall maintain and preserve the
Mortgaged Property in good working order and condition, ordinary wear and tear
excepted, in a manner consistent with the standards of a first-class Office
Project in the metropolitan area where the Mortgaged Property is located, and
shall make all necessary repairs thereto and renewals and replacements thereof.
5.7 Insurance.
5.7.1 Borrower at its sole cost and expense, shall insure and
keep insured Borrower and all portions of the Mortgaged Property against such
liabilities, losses, perils and hazards (including without limitation, coverages
against damages caused by flood, earthquake, and losses due to acts of terror),
and including business interruption and loss of rents coverage, in such amounts
and with such limits, as Collateral Agent may from time to time reasonably
require, with insurance companies acceptable to Collateral Agent. At the time of
the Closing, Collateral Agent's and Senior Lenders' requirements for said
insurance are set forth in the Mortgage, which requirements Borrower
acknowledges are reasonable and customary.
5.7.2 All insurance required of Borrower under the Loan Documents
shall be evidenced by certificates of insurance acceptable to Collateral Agent.
Said certificates shall be delivered to Collateral Agent at or prior to Closing.
On or before the stated due date, Borrower shall pay all premiums and fees for
the insurance policies required hereunder. Borrower shall deliver certified
copies of all policies and renewals (or certificates evidencing the same) to
Collateral Agent at least twenty (20) days before the expiration of existing
policies. Each such policy shall provide that such policy may not be cancelled
or materially changed except upon thirty (30) days prior written notice of
intention of non-renewal, cancellation or material change to Collateral Agent,
and that no act or thing done by Borrower shall invalidate the policy as against
Senior Lenders.
5.7.3 Notwithstanding anything to the contrary contained herein
or in any provision of law, the proceeds of insurance policies coming into the
possession of Collateral Agent or Senior Lenders and which are not to be used
for the Work (as defined in the Senior Mortgage) shall not be deemed trust funds
and Collateral Agent and Senior Lenders shall be entitled to dispose of such
proceeds as provided in the Senior Mortgage (but as among the Holders and
without any further rights of Borrower, subject to any applicable Agency
Agreement). If Collateral Agent has not received satisfactory evidence of such
renewal or substitute insurance in the time frame herein specified, Collateral
Agent shall have the right, but not the obligation, to purchase such insurance
for Senior Lenders' interest only. Any amounts so disbursed by Collateral Agent
pursuant to this SECTION 5.7 shall be deemed to be a part of the Senior Loan and
shall bear interest at the Default Rate. Nothing contained in this SECTION 5.7
shall require Collateral Agent or Senior Lenders to incur any expense or take
any action
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hereunder, and inaction by Collateral Agent or Senior Lenders shall never be
deemed a waiver of any rights accruing to Senior Lenders on account of this
SECTION 5.7.
5.7.4 Borrower shall not carry any separate insurance on any of
the Mortgaged Property concurrent in kind or form with any insurance required
hereunder or contributing in the event of loss without Collateral Agent's prior
written consent, and any such policy shall have attached a standard
non-contributing mortgagee clause, with loss payable to Collateral Agent, and
shall meet all other requirements set forth herein.
5.8 Payment of Obligations. Borrower and Member of Borrower shall pay
and discharge, as the same shall become due and payable, all their respective
obligations and liabilities, including:
5.8.1 the Senior Obligations;
5.8.2 all tax liabilities, assessments and governmental charges
or levies upon it or its properties or Assets (except that real estate taxes and
assessments may be paid prior to delinquency), unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by Borrower or Member, as appropriate;
5.8.3 all lawful claims which, if unpaid, would by law become a
Lien upon its Assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by Borrower or Member, as appropriate; and
5.8.4 all other Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
5.9 Compliance with Laws. Each of Borrower and Member of Borrower shall
comply in all material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act). Without limiting any of Borrower's obligations under
this SECTION 5.9, Borrower shall have the right to contest the applicability of
any laws, ordinances, rules, regulations and requirements of a Governmental
Authority, so long as (i) Borrower contests such law, ordinance, rule,
regulation or requirement diligently and in good faith by appropriate legal
proceedings which shall operate to prevent the enforcement of the same against
Borrower and the Mortgaged Property, or any part thereof, or the imposition of
any Lien against the Assets of Borrower (including the Mortgaged Property or any
portion thereof), and (ii) such contest does not impair the Mortgaged Property
in any manner.
5.10 Inspection of Books and Records. Borrower and Member of Borrower
shall maintain proper books of record and account, in which full, true and
correct entries will be made of all financial transactions and matters involving
their respective assets and businesses (a) in the case of Borrower, in
conformity with GAAP consistently applied, and (b) in the case of Member of
Borrower, on a tax basis, applied on a basis consistently maintained throughout
the period involved. Borrower and Member of Borrower shall permit
representatives of Collateral Agent to
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visit and inspect any of their other respective Assets, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to Borrower;
provided, however, when an Event of Default exists, Collateral Agent may do any
of the foregoing at the expense of Borrower at any time during normal business
hours and without advance notice.
5.11 Environmental Laws.
5.11.1 Borrower shall conduct its operations and keep and
maintain the Mortgaged Property and all of its other Assets in compliance with
all applicable Environmental Laws, shall maintain all Environmental Permits in
good standing and comply with all the terms and conditions thereof, and shall
operate the Mortgaged Property and its Assets in a manner which does not give
rise to any Environmental Claims.
5.11.2 Upon the written request of Collateral Agent, Borrower
shall submit to Collateral Agent, at Borrower's sole cost and expense, at
reasonable intervals, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report required pursuant to SUBSECTION 5.4.4.
5.12 Use of Proceeds. Borrower shall use the proceeds of the Loan solely
to (A) refinance the existing mortgaged debt against the Mortgaged Property, (B)
fund the sums required to be escrowed pursuant to the Loan Documents, (C) pay
such other costs and fees relating to the closing of the Loan as approved by
Collateral Agent, and (D) the making of such other disbursements as are shown on
the closing statement approved by Collateral Agent.
5.13 Solvency. In no event shall Borrower initiate or suffer to exist an
Insolvency Proceeding with respect to itself or Member of Borrower.
5.14 As-Built Plans. Borrower shall maintain upon the Mortgaged Property
true and complete copies of all as-built plans and specifications with respect
to the Improvements now or hereafter in Borrower's (or the other Loan Parties')
possession or control. Borrower shall not remove such plans and specifications
from the Mortgaged Property. Collateral Agent shall have access to such plans
and specifications at all times. Upon request by Collateral Agent, Borrower
shall promptly provide copies of such plans and specifications to Collateral
Agent.
5.15 Leases.
5.15.1 All Leases entered into by Borrower after the date hereof
shall be substantially in either the lease form in use for the Mortgaged
Property at the time of the Closing or such other form of lease as may be
approved in advance in writing by Collateral Agent (an "Approved Lease Form"),
provided that Collateral Agent shall not unreasonably withhold its approval with
respect to changes in the Approved Lease Form. Without limiting the following
sentence, all new Material Leases and all renewals of or amendments to existing
Material Leases shall be consistent in form and substance in all material
respects with existing Leases. Any new Material Lease or renewal of an existing
Material Lease shall be subject to the prior written approval of Collateral
Agent, which approval may be withheld in Collateral Agent's sole and
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absolute, but which will be deemed granted if Collateral Agent has not responded
within ten (10) Business Days from the date Collateral Agent receives such
information and materials concerning Borrower's request as Collateral Agent may
reasonably request (and provided such proposed Lease is delivered to Collateral
Agent with correspondence indicating in bold-type face that Collateral Agent's
response is required under the Loan Documents within ten (10) Business Days).
Borrower will not, without the prior written consent of Collateral Agent, Modify
any Material Lease (but Borrower may, upon prior written notice to Collateral
Agent, terminate a Material Lease under which the Tenant is in material default
beyond applicable notice, grace and cure periods). All tenants under all new
Material Leases shall execute and deliver subordination, non-disturbance and
attornment agreements with Collateral Agent on Collateral Agent's then current
form or otherwise in form and substance satisfactory to Collateral Agent in its
good faith discretion.
5.15.2 Borrower will duly and punctually perform all material
covenants and agreements expressed as binding upon it under the Leases and other
material agreements to which it is a party with respect to the Mortgaged
Property or any part thereof, and will use commercially reasonable efforts to
enforce or secure the performance of each and every material obligation and
undertaking of the respective parties under such Leases and other agreements,
and Borrower will appear and defend, at its cost and expense, any action or
proceeding arising under or in any manner connected with (i) the Leases or the
obligations and undertakings of any lessee or other party thereunder, and (ii)
such other agreements or the obligations and undertakings of any party
thereunder.
5.16 Property Management Agreement. The Mortgaged Property shall at all
times be operated under a Property Management Agreement by Property Manager (or
by a replacement property manager approved by Collateral Agent (a) in its
reasonable discretion in the case of (i) a Person which is not an Affiliate of
Borrower or (ii) an Affiliate of Borrower, Recourse Guarantor, or an Approved
REIT, provided such Affiliate has entered into a Property Management Agreement
with Borrower on substantially the same terms as the Property Management
Agreement approved by Collateral Agent as of the Closing Date, and (b) in its
sole and absolute discretion in any other case. Any Modifications to any
Property Management Agreement shall require Collateral Agent's prior written
approval, which may be withheld in Collateral Agent's sole and absolute
discretion.
5.17 Further Assurances. Promptly upon request by Collateral Agent,
Borrower shall (and shall cause any of the other Loan Parties to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments Collateral Agent may
reasonably require from time to time in order (i) to carry out more effectively
the purposes of this Agreement or any other Loan Document, (ii) to subject to
the Liens created by any of the Collateral Documents or the Mortgaged Property
or other Collateral, rights or interests covered by any of the Collateral
Documents, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to Senior Lenders the rights granted
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or now or hereafter intended to be granted to Senior Lenders under any Loan
Document or under any other document executed in connection therewith.
5.18 Scheduled Upgrades. Borrower shall, at it sole cost and expense,
complete the capital improvements described on Schedule 5.18 attached hereto
(the "Scheduled Upgrades") on or before the one (1) year anniversary of the
Closing Date. Borrower shall cause the Scheduled Upgrades to be completed in a
good and workmanlike manner, free and clear of any Liens, to the reasonable
satisfaction of Collateral Agent.
5.19 Performance under Material CC&Rs.
5.19.1 Borrower shall, at its sole cost and expense, promptly and
timely perform and observe in all material respects all of the terms, covenants
and conditions required to be performed and observed by Borrower under the
Material CC&Rs (including, but not limited to, the payment of all assessments
and other charges required to be paid under the Material CC&Rs). Borrower shall
use reasonable efforts to enforce the Material CC&Rs against the parties thereto
and affected thereby and shall not grant any waivers of such Persons' material
obligations thereunder without Collateral Agent's prior written consent, which
consent shall not be unreasonably withheld. Consent to one amendment, change,
waiver, agreement or Modification shall not be deemed to be a waiver of the
right to require consent to other, future or successive amendments, changes,
waivers, agreements or Modifications.
5.19.2 If Borrower shall violate any of the covenants specified
in SECTION 5.19.1, Borrower grants Collateral Agent the right (but not the
obligation), to take any action as may be necessary to prevent or cure any
default of Borrower under the Material CC&Rs, and Collateral Agent shall have
the right to enter all or any portion of the Mortgaged Property at such times
and in such manner as Collateral Agent deems necessary, in order to prevent or
to cure any such default. Borrower shall promptly (and in any event within two
(2) Business Days) deliver to Collateral Agent any and all notices of alleged
default under the Material CC&Rs received by Borrower from any party thereunder.
5.19.3 No action or payment taken or made by Collateral Agent to
prevent any default by Borrower under the Material CC&Rs shall remove or waive,
as between Borrower and Collateral Agent, the Default which occurred hereunder
by virtue of the default by Borrower under the Material CC&Rs. All sums actually
expended by Collateral Agent in accordance with the terms of this Section 5.19
in order to cure any such default by Borrower under the Material CC&Rs shall be
paid by Borrower to Collateral Agent within two (2) Business Days following
Collateral Agent's written demand, with interest thereon at the Default Rate if
such payment is not received within such two (2) Business Day period.
5.19.4 Borrower shall, promptly (and in any event within two (2)
Business Days) upon obtaining actual knowledge thereof, notify Collateral Agent
in writing of the occurrence of any material default by any party under the
Material CC&Rs.
5.19.5 Borrower shall promptly (and in any event within two (2)
Business Days) notify Collateral Agent, in writing, upon learning of the
institution of any arbitration or legal proceedings involving rights or
obligations of Borrower under the Material CC&Rs. Collateral
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Agent shall have the right (but not the obligation) to intervene (at Borrower's
expense) in any such arbitration or legal proceedings and be made a party
thereto. Borrower shall promptly provide Collateral Agent with a copy of any
decision rendered in connection with such arbitration or legal or proceedings.
5.19.6 Borrower shall promptly execute, acknowledge and deliver to
Collateral Agent such instruments as may reasonably be required to permit
Collateral Agent (i) to cure any default by Borrower under the Material CC&Rs or
(ii) to take such other action required to enable Collateral Agent to cure or
remedy the matter in default. Borrower hereby irrevocably appoints Collateral
Agent as its true and lawful attorney-in-fact, coupled with an interest and with
full power of substitution, to do, in its name or otherwise, any and all acts
and to execute any and all documents (in each case only upon Borrower's failure
or refusal to do so) which are necessary to preserve any rights of Borrower
under or with respect to the Material CC&Rs, including, without limitation, the
right to effectuate any extension or renewal of the Material CC&Rs, or to
preserve any rights of Borrower whatsoever in respect of any part of the
Material CC&Rs.
5.20 Title to Shuttles. Borrower shall use reasonable efforts to create
and perfect first-priority Liens in favor of Collateral Agent on three (3) of
the vehicles described on SCHEDULE 436 within thirty (30) days after the
Closing. Such efforts shall include executing and delivering such additional
documents, agreements and instruments, and performing such other acts (including
seeking required consents from third parties), as are reasonably necessary to
create and perfect such Liens.
5.21 Recordation of Parking Covenants. Borrower shall (a) use reasonable
efforts to record or cause to be recorded against the property commonly known as
"338 South Hill Street, Los Angeles", a covenant substantially in the form of
the ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ within thirty (30) days after the Closing, and (b) in
the event that Borrower is unable to cause such covenant to be so recorded
within such period, Makers shall use reasonable efforts to cause the number of
parking spaces which burden the Mortgaged Property pursuant to the 444. S.
Flower Covenant to be reduced by ninety-seven (97) spaces, and to evidence such
reduction as a matter of record, within ninety (90) days after the Closing (or
such longer period as Collateral Agent may allow).
5.22 Cost Sharing Agreement. Borrower shall deliver to Collateral Agent,
within sixty (60) days after the Closing, a fully-executed and enforceable
written agreement between Borrower and North Tower Owner, in form and substance
satisfactory to Collateral Agent, setting forth the agreement by such parties to
share the common area operating expenses with respect to the Common Areas (as
defined in the REA) and the X-2 Garage in the manner and according to the
percentages set forth in the North Tower Owner Estoppel.
5.23 Asbestos Survey. Borrower shall cause an asbestos survey to be
performed with respect to the Mortgaged Property not later than ninety (90) days
after the Closing, and shall, promptly upon the completion thereof, deliver to
Collateral Agent copies of all surveys, reports and other materials prepared in
connection therewith. In the event that such survey reveals the presence of
asbestos or asbestos-containing materials at the Mortgaged Property, Borrower
shall cause an operation and maintenance plan to be prepared with respect
thereto, which operation and maintenance plan shall be subject to the review and
approval of Collateral Agent in its sole
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and absolute discretion (such plan, if approved by Collateral Agent, an
"Approved O&M Plan"). Borrower shall at all times operate the Mortgaged Property
in compliance with any Approved O&M Plan.
ARTICLE VI
NEGATIVE COVENANTS
Borrower hereby covenants and agrees that, so long as any portion of the
Senior Obligations shall remain unpaid or unsatisfied, unless Collateral Agent,
in its sole and absolute discretion, waives compliance in writing:
6.1 Limitation on Liens. Borrower shall not, directly or indirectly,
make, create, incur, assume or suffer to exist any Lien upon or with respect to
any part of the Mortgaged Property, whether now owned or hereafter acquired,
other than the following:
6.1.1 the Permitted Liens; and
6.1.2 any Lien created under any Loan Document; and
6.1.3 Liens expressly permitted pursuant to SECTION 6.5.3.
6.2 Disposition of Assets. Neither Borrower nor Member of Borrower
shall, directly or indirectly, effect or permit any Disposition (whether in one
or a series of transactions) of any portion of the Collateral, except as
otherwise expressly permitted by the Senior Loan Documents and except for the
sale of equipment to the extent that such equipment is exchanged for credit
against the purchase price of similar replacement equipment or the proceeds of
such sale are reasonably promptly applied to the purchase price of such
replacement equipment.
6.3 Consolidations and Mergers. Neither Borrower nor Member of Borrower
shall dissolve or terminate, or merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions), all or substantially all of its Assets (whether now
owned or hereafter acquired), to or in favor of any Person.
6.4 Loans and Investments. Neither Borrower nor Member of Borrower shall
purchase or acquire or make any commitment therefor, any capital stock, equity
interest, all or substantially all of the assets of, or any obligations or other
securities of, or any interest in, any Person, except as contemplated by this
Agreement. Neither Borrower nor Member of Borrower shall make any advance in the
nature of Indebtedness and not in the Ordinary Course of Business, loan,
extension of credit or capital contribution to or any other investment in, any
Person (except for capital contributions from Mezzanine Maker to Borrower),
except for tenant improvement allowances and other tenant concessions made
pursuant to Leases approved or deemed approved by Collateral Agent in accordance
with the Loan Documents.
6.5 Limitation on Indebtedness. Neither Borrower nor Member of Borrower
shall create, incur, assume, suffer to exist, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except:
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6.5.1 Borrower may incur the Senior Obligations pursuant to this
Agreement and the Junior Obligations pursuant to the Note Purchase Documents;
6.5.2 Borrower may incur Indebtedness in connection with accounts
payable to unsecured trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money) customarily
payable within sixty (60) days and incurred in the Ordinary Course of Business
of Borrower in accordance with customary terms and paid within the specified
time, unless contested in good faith by appropriate proceedings and reserved for
in accordance with GAAP; provided that, without the approval of Collateral
Agent, no single trade creditor shall be owed trade debt in excess of Two
Hundred Fifty Thousand Dollars ($250,000), and the aggregate amount of trade
debt outstanding shall not exceed One Million Five Hundred Thousand Dollars
($1,500,000);
6.5.3 Borrower shall be permitted to enter into lease financing
arrangements with respect to the Mortgaged Property; provided, however, that no
such financings shall give rise to any lien on the Mortgaged Property (except
for a Lien on the equipment or fixtures leased), and Borrower shall not incur
lease financing obligations that, in the aggregate, exceed Two Million Five
Hundred Thousand Dollars ($2,500,000.00).
6.5.4 Borrower may incur Indebtedness incurred in respect of the
Liens permitted under SECTION 6.1;
6.5.5 Borrower may incur Indebtedness in the form of tenant
improvement allowances and other leasing concessions pursuant to Leases approved
or deemed approved under the Loan Documents; and
6.5.6 Member of Borrower may incur (a) the Junior Obligations
pursuant to the Note Purchase Documents, and (b) trade payables in an amount not
to exceed Twenty-Five Thousand Dollars ($25,000) in the aggregate in any
calendar year.
6.6 Transactions with Affiliates. Neither Borrower nor Member of
Borrower shall enter into any transaction with any Affiliate of Borrower, except
(A) as expressly permitted by this Agreement (including the Property Management
Agreement and the Guaranties) or (B) in the case of Borrower, in the Ordinary
Course of Business and pursuant to the reasonable requirements of the business
of Borrower; in each case (A) and (B), upon fair and reasonable terms no less
favorable to Borrower or Member of Borrower than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of Borrower or Member of
Borrower.
6.7 Use of Proceeds. Borrower shall not use any portion of the Senior
Loan proceeds, directly or indirectly, (A) to purchase or carry Margin Stock,
(B) to repay or otherwise refinance indebtedness of Borrower or others incurred
to purchase or carry Margin Stock, (C) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (D) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act.
6.8 Contingent Obligations. Neither Borrower nor Member shall create,
incur, assume or suffer to exist any Contingent Obligations (other than those
created by the Loan Documents).
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6.9 Lease Obligations. Borrower shall not enter into any Leases other
than the Leases entered into after the date hereof in accordance with the terms
of this Agreement and the Senior Mortgage.
6.10 Reserved.
6.11 Maintenance of Organizational Documents. Neither Borrower nor
Member shall Modify any of its Organizational Documents (except as may be
necessary in connection with a Permitted Transfer and, in such case, only upon
approval by Collateral Agent of any such Modification).
6.12 Property Management Agreement; Parking Agreement. Borrower shall
not Modify the Property Management Agreement without the prior written consent
of Collateral Agent. Borrower shall not permit Property Manager to Modify the
Parking Agreement without the prior written consent of Collateral Agent.
6.13 No Transfer.
6.13.1 Borrower acknowledges that, in making the Senior Loan, Senior
Lenders have relied to a material extent upon the particular business
reputation, expertise, creditworthiness, and individual net worth of Borrower
and all of the other persons, partnerships, trusts, corporations or other
entities who have a direct or indirect interest in Borrower and upon the
continuing interest which such persons, partnerships, trusts, corporations or
other entities, as owners of direct or indirect interests in Borrower, will have
in the Mortgaged Property. An Event of Default shall occur hereunder, and
Collateral Agent shall have the right, in its sole and absolute discretion, to
declare the principal and interest under the Senior Notes and all sums provided
herein immediately due and payable if, without the prior written consent of
Collateral Agent, there is (A) directly and indirectly, any lease of the entire
property for more than one year, or, except as expressly permitted by the Senior
Loan Documents, any sale, transfer, assignment, agreement for deed, conveyance,
hypothecation or encumbrance, whether voluntary or involuntary, of all or part
of any Mortgaged Property or any interest therein, or (B) any sale, transfer,
assignment, pledge, hypothecation, or encumbrance of any of the direct or
indirect Equity Interest in Borrower or Member, or (C) a seizure of any
Mortgaged Property or any portion thereof, or attachment of any Lien on any
Mortgaged Property (other than a Permitted Lien) or any portion thereof, whether
voluntary or involuntary, which Lien has not been removed or bonded over to
Collateral Agent's sole satisfaction within sixty (60) days of such attachment
(each of the events described in clauses (A) through and including (C) above are
referred to hereinafter as a "Transfer"). Without limiting the foregoing, at all
times, (i) Mezzanine Maker shall own, directly, all of the Equity Interests in
Mortgage Maker; and (ii) MP-WFC Holdings and MP-Bunker Hill shall own, directly,
all of the Equity Interests in Mezzanine Maker.
6.13.2 Notwithstanding the provisions of SECTION 6.13.1, subject to
satisfying each of the conditions set forth in SECTION 6.13.3, the owners of the
direct and indirect Equity Interests in Member of Borrower may Transfer their
respective direct and indirect Equity Interests in Member of Borrower to an
Approved REIT (a "Permitted Transfer").
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6.13.3 The Transfer described in SECTION 6.13.2 above shall only be
permitted in the event each of the following conditions precedent have been
fully satisfied to Collateral Agent's satisfaction:
(A) Borrower shall have given Collateral Agent not less than
thirty (30) days prior written notice of the proposed Transfer;
(B) At the time of the proposed Transfer, Borrower, Guarantors
and Pledgors shall have ratified and reaffirmed their respective obligations
under the applicable Loan Documents (to the extent applicable) in writing in
form satisfactory to Collateral Agent in its sole discretion, and the Loan
Documents shall be Modified to reflect such changes in reporting requirements
applicable to Borrower and the other Loan Parties (including the Approved REIT)
as Collateral Agent may reasonably require;
(C) Collateral Agent shall have received evidence satisfactory
to it in its sole and absolute discretion that adequate provisions have been
made for the payment of all income, transfer and real property taxes (including
any increases in real property ad valorem taxes) arising from a Permitted
Transfer to an Approved REIT, and that the payment of such taxes will not cause
the occurrence of (1) a Default or Event of Default under the Loan Documents or
(2) a DSCR Cash Sweep Condition;
(D) No Event of Default shall have occurred and be continuing,
and no Default shall then exist under the Loan Documents;
(E) Collateral Agent shall have had not less than fifteen (15)
Business Days to review all Organizational Documents and other material and
information which Collateral Agent may request in connection with the formation
and capitalization of the proposed transferees and any proposed REIT (including
the operating partnership thereof), and all such Organizational Documents and
materials shall be acceptable to Collateral Agent in its good faith discretion.
(F) Each of Borrower and Member of Borrower shall at all times
be a Single-Purpose Entity, and
(G) Unless the Junior Obligations have been unconditionally,
irrevocably and indefensibly paid and performed in full, Collateral Agent shall
have received such guaranties, pledges, reaffirmations and other agreements and
instruments, in form and substance satisfactory to Collateral Agent in its sole
and absolute discretion, as Collateral Agent may require in its sole and
absolute discretion, together with such opinions of counsel to Makers and the
Loan Parties as Collateral Agent may require (in form and substance acceptable
to Collateral Agent in its sole and absolute discretion), to assure the
existence at all times of a first-priority, perfected security interest in favor
of Collateral Agent in one hundred percent (100%) of the Equity Interests in
Borrower, Member of Borrower, and any Single Purpose Entity owning, directly or
indirectly, Equity Interests in Borrower, subject in each case only to the
Permitted Liens.
In determining whether a proposed REIT is an Approved REIT,
Collateral Agent shall have the right to approve the management structure of the
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proposed REIT and all offering materials and memoranda, prospectuses,
SEC filings and other filings and reports provided to any other
Governmental Authority or other Person in connection with any public
offering of Equity Interests in such proposed REIT. Collateral Agent
shall not unreasonably withhold its approval of such matters and,
provided that such management structure and any S-11 are not materially
different from the draft S-11 dated as of September 3, 2002 (a copy of
which has been delivered to Collateral Agent), Collateral Agent shall be
deemed to have approved such management structure and S-11 within
fifteen (15) Business Days from the date Collateral Agent receives all
information concerning such management structure and S-11, as
applicable, as may be reasonably requested by Collateral Agent, unless
Collateral Agent shall have delivered to Borrower written notice of its
disapproval of the same within such 15-Business Day period).
6.13.4 Notwithstanding the provisions of SECTION 6.13.1, following
the consummation of a Permitted Transfer in accordance with the terms and
conditions of this SECTION 6.13, the sale, transfer, assignment, pledge,
hypothecation, or encumbrance of the direct Equity Interests in (1) the Approved
REIT to which the Equity Interests in Borrower were transferred pursuant to this
SECTION 6.13, and (2) the operating partnership of such Approved REIT, shall not
constitute a Transfer for the purposes hereof; provided, however, that ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ III shall at all times own and control, directly or indirectly, not less
than five percent (5%) of such Equity Interests in such Approved REIT or in the
operating partnership thereof. Further, notwithstanding the provisions of
SECTION 6.13.1, the owners of the Non-▇▇▇▇▇▇▇ Equity Interests may Transfer
their respective direct and indirect Equity Interests in MP-Bunker Hill without
restriction; provided, however, that (a) at no time shall the Non-▇▇▇▇▇▇▇ Equity
Interests own more than ten and sixty one hundredths percent (10.60%) of the
direct and indirect interests in Borrower and (b) at no time shall the owner of
any Non-▇▇▇▇▇▇▇ Equity Interests possess, directly or indirectly, the power to
direct or cause the direction of the management and policies of MP-Bunker Hill
or any other Loan Party.
6.13.5 Consent to a Transfer or, except as otherwise expressly
provided herein, consent to any other event requiring consent in accordance with
this SECTION 6.13 shall be granted or withheld in Collateral Agent's sole and
absolute discretion and, if granted, shall not constitute a waiver of the
requirement of Collateral Agent's consent for subsequent Transfers or other
events. Any Transfer not expressly permitted under this SECTION 6.13 shall be
deemed void. No Permitted Transfer permitted hereunder or otherwise permitted by
Collateral Agent shall release Borrower, Guarantor or any Pledgor from any
liability, if any, hereunder, or under the Senior Loan Documents. Borrower shall
immediately give written notice to Collateral Agent of any transaction or event
that might give rise to a Transfer.
6.14 Accounting Changes. Neither Borrower nor Member shall make any
material change in accounting treatment or reporting practices, except as
required by GAAP, nor shall Borrower or Member of Borrower change their
respective fiscal years.
6.15 Performance under Material CC&Rs. Borrower shall not (except as
required hereunder), without Collateral Agent's prior written consent, Modify,
terminate, forfeit, or suffer or permit the Modification, termination or
forfeiture of, the Material CC&Rs.
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ARTICLE VII
EVENTS OF DEFAULT
7.1 Event of Default. Any of the following shall constitute an "Event of
Default":
7.1.1 Payment of Obligations.
(A) Borrower shall fail to make any scheduled payment required
hereunder (including, without limitation, any payment of interest or principal
under SECTION 2.8) as and when the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment or by acceleration or
otherwise, and such failure shall continue for a period of ten (10) days
(provided, that failure to pay all outstanding Senior Obligations at the
Maturity Date shall immediately constitute an Event of Default hereunder); or
(B) Borrower shall fail to make any payment in respect of all
or any portion of the Senior Obligations (other than the Senior Obligations
covered under SECTION 7.1.1(A) above) as and when the same shall become due and
payable, and such failure shall continue for a period of ten (10) days following
written notice from Collateral Agent; or
7.1.2 Representation or Warranty. Any representation or warranty by or
on behalf of Borrower or any other Loan Party made or deemed made herein or in
any Loan Document, or which is contained in any certificate, document or
financial or other statement by Borrower or any other Loan Party, or their
respective Responsible Officers, furnished at any time under this Agreement, or
in or under any Loan Document, shall prove to have been inaccurate in any
material respect on or as of the date made (provided however, that so long as
such representation or warranty was made without Knowledge of such inaccuracy on
the part of Borrower or any other Loan Party, and so long as such inaccuracy
does not result in a Material Adverse Effect with respect to Borrower or any
Loan Party (or would not have resulted in a Material Adverse Effect with respect
to Borrower or any Loan Party at the time such representation or warranty was
made), Borrower shall have fifteen (15) days from the date that Borrower or any
Loan Party obtains knowledge (or should have obtained knowledge) of such
inaccuracy to cause such representation or warranty to be accurate in all
material respects as made; or
7.1.3. Specific Defaults. Borrower or Member, as applicable fails to
perform or observe any term, covenant or agreement contained in SECTIONS 2.14.9,
5.5.5, 5.5.6, 5.7, 6.2, 6.3, 6.11, 6.13 or 6.14; or
7.1.4 Other Defaults. Borrower or any other Loan Party fails to
perform or observe any other term, covenant or agreement contained in this
Agreement or any other Senior Loan Document, and such default shall continue
unremedied beyond the cure period specified in such Loan Document, or, if no
such cure period is specified, for a period of thirty (30) calendar days
following written notice thereof is given to Borrower by Collateral Agent;
provided, however, if such default arises solely as a result of a default by
Borrower or any other Loan Party in the performance of a non-monetary Obligation
and a cure of such default cannot reasonably be effected within such 30-day
period despite such Person's diligence in prosecuting such cure, then, provided
such Person commences cure within said 30-day period and diligently prosecutes
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said cure to completion, the cure period provided hereunder shall be extended to
such time as may be reasonably necessary to cure the default, which, in any
event, shall not exceed ninety (90) days from the date of the giving of such
notice; or
7.1.5 Insolvency; Voluntary Proceedings. Borrower or any other Loan
Party (A) is or becomes Insolvent; (B) voluntarily ceases to conduct its
business in the Ordinary Course of Business; (C) commences any Insolvency
Proceeding with respect to itself; or (D) takes any action to effectuate or
authorize any of the foregoing; or
7.1.6 Involuntary Proceedings.
(A) Any involuntary Insolvency Proceeding is commenced or
filed against Borrower or any other Loan Party or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of Borrower's or any other Loan Party's Assets and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within ninety (90) days after commencement, filing or levy; or
(B) Borrower or any other Loan Party admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or
(C) Borrower or any other Loan Party acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator (or agent
therefor), or other similar Person for itself or a substantial portion of its
Assets or business; or
7.1.7 Collateral. Any Senior Collateral Document shall for any
reason cease to be valid and binding on or enforceable or create the security
interest it purports to create against Borrower or any other Loan Party or any
Senior Collateral is transferred or assigned in breach of the terms of the
Senior Collateral Documents; or
7.1.8 Laws Affecting Obligations and Indebtedness. If, subsequent to
the date of this Agreement, any Governmental Authority in which any of the
Mortgaged Property is located passes any law (A) rendering payment of the
Indebtedness and/or performance of the Senior Obligations by Borrower or any
other Loan Party unlawful, or (B) prohibiting Collateral Agent from exercising
any of its essential rights and remedies under this Agreement or the Senior
Collateral Documents; or
7.1.9 Judgment. If a final judgment for the payment of money in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) shall be rendered
against Borrower or Member and the same shall not be transferred to the security
of a bond or shall remain unpaid for a period of sixty (60) consecutive days
after the same becomes final and non-appealable during which period execution
shall not be effectively stayed; or
7.1.10 Dissolution or Termination. The dissolution, liquidation, or
termination of Borrower or any Loan Party (except as permitted by Collateral
Agent in connection with the consummation of a Permitted Transfer in accordance
with SECTION 6.13); or
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7.1.11 Cross-Default. An "Event of Default" occurs under the Note
Purchase Documents; or
7.1.12 Default Under Other Mortgage. If the beneficiary of any
junior mortgage (including the Junior Mortgage) or any other lien on any
Mortgaged Property (without hereby implying Collateral Agent's consent to any
such junior mortgage or lien other than the Junior Mortgage) institutes
foreclosure or other proceedings for the enforcement of its remedies thereunder,
or if a default exists and is continuing beyond any applicable grace or cure
period under any other mortgage or lien on any Mortgaged Property.
Notwithstanding anything herein to the contrary, the filing of a foreclosure
proceeding or suit to collect the debt secured by any such mortgage or lien
shall immediately constitute an Event of Default hereunder; or
7.1.13 Other Real Estate. If Borrower owns real estate other than
the Mortgaged Property; or
7.1.14 Separateness Covenants. If Borrower or Member shall cease to
be a Single-Purpose Entity; or
7.1.15 Debt Service Coverage. If the Mortgaged Property shall fail
at any time to achieve a Debt Service Coverage Ratio of not less than 1.10:1,
which Debt Service Coverage Ratio shall be calculated on the basis of Net
Operating Income and actual Debt Service for the consecutive three (3) Loan
Months immediately preceding the date of determination; or
7.1.16 Concerning Recourse Guarantor. (A) The death, incapacitation
or disability of Recourse Guarantor and the failure by Borrower to provide a
replacement Recourse Guarantor acceptable to Collateral Agent in Collateral
Agent's sole and absolute discretion within sixty (60) days from the date of
such death, incapacitation or disability, or (B) the failure by Recourse
Guarantor at any time to maintain a net worth (as determined by Collateral Agent
in its sole and absolute discretion) of at least $50,000,000.00, or (C) in the
event that a Permitted Transfer has been consummated in accordance with SECTION
6.13.2 above, the failure of Recourse Guarantor at any time to own, directly or
indirectly, at least five percent (5%) of the Equity Interests of the Approved
REIT (taking into account Recourse Guarantor's ownership of the Equity Interests
in both the Approved REIT and the operating partnership thereof).
7.2 Remedies. If any Event of Default occurs, Collateral Agent, on
behalf of Senior Lenders, may:
7.2.1 declare the unpaid principal amount of the Senior Loan, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Senior Loan Document to be immediately due and
payable; without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by Borrower; and
7.2.2 exercise any and all remedies available to it under the Senior
Mortgage, including the powers of sale contained therein;
7.2.3 make demand under the Senior Recourse Guaranty upon and
subject to the terms thereof; and
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7.2.4 exercise all rights and remedies available to it under the
Senior Loan Documents or applicable law and all interest and other amounts as
aforesaid shall automatically become due and payable without further act of
Collateral Agent.
7.3 Rights to Cure. If Borrower or any other Person fails to make any
payment or to do any act as and in the manner provided in this Agreement or any
of the other Senior Loan Documents, then Collateral Agent, in its sole and
absolute discretion, without obligation to do so and without notice to or demand
upon Borrower and without releasing Borrower from any obligation, may make or do
the same in such manner and to such extent as it may deem necessary to protect
the Senior Collateral. Borrower shall, within two (2) Business Days following
demand therefor by Collateral Agent, pay all costs and expenses incurred by
Collateral Agent in connection with the exercise by Collateral Agent of the
foregoing right, including costs of evidence of title, court costs, appraisals,
surveys and attorneys' fees.
7.4 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
7.5 Collateral Agent's Powers. Collateral Agent, without affecting the
liability of any Person liable for the payment of any Obligation herein
mentioned (other than any Person expressly released from liability), and without
affecting the Liens or charges of the Collateral Documents upon any of the
security encumbered thereby or any other security instrument given as security
for the Loan upon any portion of the security encumbered thereby not then or
theretofore released as security for the full amount of all unpaid Obligations,
may, from time to time and without notice (i) release any Person so liable, (ii)
extend the maturity or alter any of the terms of any such Obligation, (iii)
grant other indulgences, (iv) release or reconvey, or cause to be released or
reconveyed at any time at Senior Lenders' option any portion or all of the
security for the Loan, (v) take or release any other or additional security for
any Obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto, or (vii) advance additional funds to protect
the security hereof and pay or discharge the obligations of Borrower hereunder
or under the other Loan Documents, and all amounts so advanced shall be deemed
to be part of the Principal Balance, and with interest thereon as provided in
the Notes and secured by the Collateral Documents. As between Collateral Agent
and Senior Lenders, all such actions under this Section shall be subject to the
terms of any Agency Agreement.
ARTICLE VIII
COLLATERAL AGENT AND ADMINISTRATIVE AGENT
8.1 Appointment. Deutsche Bank AG New York Branch is hereby appointed
Administrative Agent and Collateral Agent hereunder and under the other Loan
Documents and each Senior Lender hereby authorizes Administrative Agent and
Collateral Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Administrative Agent and Collateral
Agent agree to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Article VIII
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are solely for the benefit of Administrative Agent, Collateral Agent, and Senior
Lenders and Borrower shall have no rights as a third party beneficiary of any of
the provisions thereof. In performing its functions and duties under this
Agreement, Administrative Agent shall act solely as an agent of Senior Lenders
and Collateral Agent shall act solely as Collateral Agent for Holders and
neither Collateral Agent nor Administrative Agent assume nor shall be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Borrower or any other Loan Party. The Collateral Agent for the Senior Loan
Documents and the Note Purchase Documents shall at all times be the same Person.
8.2 Undivided Interest and Committed Share, Etc.
8.2.1 Upon the terms and provisions and subject to the conditions
contained in this Article, the Senior Lenders agree that (a) subject to the
terms of any applicable Agency Agreement, Administrative Agent, on behalf of
Senior Lenders, collectively, shall have an undivided fractional interest in the
amount of the Senior Lenders' Aggregate Pro Rata Share in all sums collected by
Collateral Agent in respect of the Loan and the other Senior Obligations under
the Loan Documents, any Collateral, and the rights, powers, privileges, remedies
and interests of Collateral Agent in and to the Loan Documents, as well as the
risks, liabilities and expenses related thereto; and (b) each Senior Lender has
an undivided interest in the amount of its respective Pro Rata Share, from time
to time, in the Senior Loan, the other Senior Obligations, the Senior
Collateral, and the rights, powers, privileges, remedies and interests of Senior
Lenders related thereto, as well as the risks, liabilities and expenses related
thereto.
8.2.2 Administrative Agent will ▇▇▇▇ its books and records to
reflect the respective interests of Senior Lenders, all payments received from
and made to each Senior Lender from time to time pursuant to this Agreement may
be recorded by Administrative Agent, and such records shall be presumptively
correct as to the existence and amounts thereof absent manifest error.
8.3 Powers; General Immunity.
8.3.1 Duties Specified. Each Senior Lender irrevocably authorizes
Collateral Agent and Administrative Agent to take such action on such Senior
Lender's behalf and to exercise such powers hereunder and under the other Loan
Documents as are specifically delegated to Collateral Agent and Administrative
Agent, respectively, by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto. Collateral Agent and Administrative Agent
shall have only those duties and responsibilities that are expressly specified
in this Agreement, and the other Loan Documents and they may perform such duties
by or through their agents or employees. Collateral Agent and Administrative
Agent shall not have, by reason of this Agreement, any applicable Agency
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Senior Lender; and nothing in this Agreement or any of the other
Loan Documents, expressed or implied, is intended to or shall be so construed as
to impose upon Collateral Agent and Administrative Agent any obligations in
respect of this Agreement or any of the other Loan Documents except as expressly
set forth herein or therein.
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8.3.2 No Responsibility for Certain Matters. Collateral Agent and
Administrative Agent shall not be responsible to any Senior Lender for the
execution, effectiveness, genuineness, validity, enforceability, collectability
or sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
Collateral Agent or Administrative Agent to Senior Lenders or by or on behalf of
Borrower to Collateral Agent and Administrative Agent or any Senior Lender in
connection with the Senior Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of Borrower or any
other Person liable for the payment of any Obligations, nor shall Collateral
Agent or Administrative Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loan or as to the existence or possible existence of any
Default or Event of Default. Anything contained in this Agreement to the
contrary notwithstanding, Collateral Agent and Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Loan.
8.3.3 Exculpatory Provisions. Neither Collateral Agent,
Administrative Agent, nor any of their officers, directors, employees or agents
shall be liable to Senior Lenders for any action taken or omitted by them under
or in connection with any of the Loan Documents except to the extent caused by
their own gross negligence or willful misconduct. If Collateral Agent or
Administrative Agent shall request instructions from Senior Lenders with respect
to any act or action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents, Collateral Agent and
Administrative Agent shall be entitled to refrain from such act or taking such
action unless and until Collateral Agent and Administrative Agent shall have
received instructions from Requisite Holders. Without prejudice to the
generality of the foregoing, (i) Collateral Agent and Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Borrower and the other Loan Parties),
accountants, experts and other professional advisors selected by it; and (ii) no
Senior Lender shall have any right of action whatsoever against Collateral Agent
or Administrative Agent as a result of such Person acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Holders. Collateral
Agent or Administrative Agent shall be entitled to refrain from exercising any
power, discretion or authority vested in it under this Agreement, any applicable
Agency Agreement, or any of the other Loan Documents unless and until they have
obtained the instructions of Requisite Holders.
8.3.4 Collateral Agent and Administrative Agent Entitled to Act as
Holder. The agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon, Collateral Agent
or Administrative Agent in their individual capacity as a Holder. With respect
to their participation in the Loan, Collateral Agent and Administrative Agent
shall have the same rights and powers hereunder as any other Holder and may
exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Holder" or "Holders" or any similar
term shall, unless the context clearly otherwise indicates, shall include
Collateral Agent and Administrative Agent in their
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individual capacity. Collateral Agent and Administrative Agent and their
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Borrower or
any other Loan Party as if they were not performing the duties specified herein,
and may accept fees and other consideration from Borrower for services in
connection with this Agreement and otherwise without having to account for the
same to Senior Lenders.
8.4 Collection and Distribution.
8.4.1 Except as otherwise provided in this Article or any applicable
Agency Agreement, Senior Lenders collectively, acting through Administrative
Agent, shall be entitled from time to time to a share of all payments of
principal, interest, and other amounts received in respect of the Senior
Obligations, as well as the net proceeds from all Collateral. With respect to
any such sums payable to Senior Lenders (through Administrative Agent) subject
to the terms of any applicable Agency Agreement, each individual Senior Lender
shall be entitled at any particular time to: (i) its Pro Rata Share of all
principal payments allocable to the Senior Loan to which any voluntary or
mandatory payments or prepayments are to be applied; (ii) its Pro Rata Share of
interest paid with respect to the Senior Loan; (iii) its Pro Rata Share of all
net proceeds and other amounts received from the Collateral following
acceleration of the Loans and allocable to the Senior Loan; and (iv) its Pro
Rata Share of all other amounts received in respect of the Senior Obligations.
8.4.2 Notwithstanding the provisions of SECTION 8.4.1, above, except
to the extent expressly provided in any applicable Agency Agreement, no other
Senior Lender shall be entitled to any share of: (i) any and all agency,
advisory, administrative or other fees payable to Administrative Agent or its
Affiliates pursuant to the fee letter agreements, if any, between Borrower and
Deutsche Bank AG Cayman Islands Branch, Deutsche Bank AG New York Branch, or
their Affiliates, executed in conjunction with the Loan, as the same may be
supplemented, modified, amended, restated or replaced from time to time; and
(ii) any payment, reimbursement or other indemnity to Administrative Agent or
any other indemnified person under this Agreement or any other Loan Document
with respect to any claims, liabilities, losses or expenses not theretofore
funded by the claiming Senior Lender(s). Furthermore, except as otherwise
provided in this Article and in any applicable Agency Agreement, any payment
received in respect of Borrower's obligation (if any) to reimburse the Senior
Lenders for certain increased costs and reduced receipts under SECTION 2.5.1 of
this Agreement, as well as any net proceeds from Collateral to be applied to
such Obligations, shall be shared by the Senior Lenders in proportion to their
respective increased costs and reduced receipts.
8.4.3 Except as otherwise provided in this Article, Collateral Agent
shall receive all payments of principal, interest, and other distributable
amounts in respect of the Obligations, all net proceeds realized from the
Collateral and all amounts received by the Holders and delivered to Collateral
Agent pursuant to the provisions of this Article and any applicable Agency
Agreement, and Collateral Agent shall hold each such amount in an account for
the benefit of all of the Holders until distributed to Administrative Agent (for
distribution to Senior Lenders provided herein) and Purchaser. As soon as
practicable after each such receipt from Collateral Agent, Administrative Agent
shall determine the respective amounts to be distributed and promptly thereafter
shall credit to itself the amount to which it is entitled and wire the
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amounts to which the other Senior Lenders are entitled to them in accordance
with such subsequent written instruction as a Senior Lender from time to time
may deliver to Administrative Agent.
8.5 Representations and Warranties. No Responsibility For Appraisal of
Creditworthiness. Each Senior Lender represents and warrants that it has made
its own independent investigation of the financial condition and affairs of
Borrower and the other Loan Parties in connection with the making of the Loan
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Borrower and the other Loan Parties. Collateral Agent
and Administrative Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Senior Lenders or to provide any Senior Lender with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Senior Loan or at any time or times
thereafter, and Collateral Agent and Administrative Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Senior Lenders.
8.6 Right to Indemnity. Each Senior Lender, in proportion to its
Aggregate Pro Rata Share, severally agrees to indemnify Collateral Agent, and in
proportion to its Pro Rata Share, severally agrees to indemnify Administrative
Agent, to the extent that they shall not have been reimbursed by Borrower, for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Collateral Agent and Administrative
Agent, respectively, in performing their duties hereunder or under the other
Loan Documents or otherwise in their respective capacities as Collateral Agent
and Administrative Agent in any way relating to or arising out of this Agreement
or the other Loan Documents; provided, however, that Senior Lenders,
collectively and individually, shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of Collateral Agent or Administrative Agent. If any indemnity
furnished to Collateral Agent or Administrative Agent for any purpose shall, in
their respective opinions, be insufficient or become impaired, Collateral Agent
or Administrative Agent, as applicable, may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
8.7 Successor Administrative Agent. Administrative Agent may resign at
any time by giving thirty (30) days' prior written notice thereof to Senior
Lenders and Borrower, and Administrative Agent may be removed at any time with
cause (as described in any applicable Agency Agreement) by an instrument or
concurrent instruments in writing delivered to Borrower and Administrative Agent
and signed by Requisite Holders. Upon any such notice of resignation or any such
removal, Requisite Holders shall have the right, upon five (5) Business Days'
notice to Borrower, to appoint a successor Administrative Agent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal
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hereunder as Administrative Agent, the provisions of this ARTICLE VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. The Fees paid by Borrower to
Deutsche Bank AG Cayman Islands Branch, Deutsche Bank AG New York Branch, or
their Affiliates, pursuant to this Agreement have been fully earned by such
Person and such Person shall have no obligation to pay any portion thereof to
any other Senior Lender or to any successor Administrative Agent under this
Agreement whether or not Deutsche Bank AG New York Branch resigns as
Administrative Agent or is removed as Administrative Agent. Subject to the last
sentence of SECTION 8.1, the applicable Agency Agreement shall provide for the
terms of succession with respect to Collateral Agent; provided, however, any
successor Collateral Agent shall have an office in the United States and shall
have adequate capability in the United States to perform the functions of
Collateral Agent hereunder, as determined by the Holders in their good faith
discretion.
8.8 Amendments to Agreements Among Senior Lenders and Among Senior
Lenders and Administrative Agent. Notwithstanding any other provisions of this
Agreement to the contrary, Collateral Agent, Administrative Agent and the Senior
Lenders may enter into any Agency Agreements or other agreement with respect to
the Loan that they determine to be appropriate and may amend the provisions of
this ARTICLE VIII and any other provision of this Agreement or any applicable
Agency Agreement that governs the relationship and rights among the Senior
Lenders and/or the relationship and rights among the Senior Lenders, Collateral
Agent, and Administrative Agent or amend any other related agreement, including,
but not limited to, any Assumption Agreement without notice to Borrower and
without the consent of Borrower.
ARTICLE IX
MISCELLANEOUS
9.1 Assignments and Participations in Loans.
9.1.1 General. Each Senior Lender shall have the right at any time
to (A) sell, assign, transfer, pledge, hypothecate, or collaterally assign to
any Eligible Assignee, (B) to vote on any actions to be taken by Administrative
Agent or Collateral Agent to the extent provided in any Agency Agreement or
separate agreements between Senior Lenders and Administrative Agent and/or
Collateral Agent, and (C) sell participations to any Person in, all or any part
of the Senior Loan made by it or any other interest herein or in any other
Senior Obligations owed to it; provided that no such sale, assignment, transfer
or participation shall, without the consent of Borrower, require Borrower to
file a registration statement with the SEC or apply to qualify such sale,
transfer or participation under the securities laws of any state; and provided
further that no such sale, assignment, transfer, foreclosure under any pledge or
hypothecation, or realization upon any collateral assignment described in clause
(A) above shall be effective unless and until an assignment and/or assumption
agreement in form and substance satisfactory to Collateral Agent (an "Assumption
Agreement") effecting such sale, assignment, transfer, foreclosure or
realization shall have been accepted by Administrative Agent. Except as
otherwise provided in this SECTION 9.1, no Senior Lender shall, as between
Borrower and such Senior Lender, be relieved of any of its obligations hereunder
as a result of any sale, assignment, transfer, pledge, hypothecation, or
collateral assignment of, or any granting of participations in, all or any part
of
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the Senior Loan or other Senior Obligations owed to such Senior Lender. Borrower
acknowledges that Senior Lenders' voting rights are matters between and among
Collateral Agent, Administrative Agent and Senior Lenders, Borrower has no
rights, as a third party beneficiary or otherwise, to intervene with respect
thereto, and Collateral Agent and Administrative Agent, subject to their
obligations under the Loan Documents, are free to act in accordance with any
such vote.
9.1.2 Assignments.
(A) Amounts and Terms of Assignments. The Senior Loan or any
portion of the Senior Loan may (i) be assigned in any amount to another Senior
Lender with the giving of notice to Borrower and Administrative Agent or to an
Affiliate of the assigning Senior Lender or another Senior Lender with notice to
Borrower and the consent of Administrative Agent (which consent shall not be
unreasonably withheld if such Affiliate is an Eligible Assignee); or (ii) be
assigned in an aggregate amount of not less than One Million Dollars
($1,000,000) (or such lesser amount as shall constitute the aggregate amount of
the Senior Loan and other Senior Obligations of the assigning Senior Lender) to
any other Eligible Assignee with the giving of notice to Borrower and with the
consent of Administrative Agent (which consent of Administrative Agent shall not
be unreasonably withheld). To the extent of any such assignment in accordance
with either clause (i) or (ii) above, the assigning Senior Lender shall be
relieved of its obligations with respect to portion of the Senior Loan or other
Senior Obligations or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to Administrative Agent, for its
acceptance, an Assumption Agreement, together with a processing fee of Five
Thousand Dollars ($5,000) and such forms, certificates or other evidence, if
any, with respect to federal income tax withholding matters as the assignee
under such Assumption Agreement may be required to deliver to Administrative
Agent pursuant hereto. Upon such execution, delivery and acceptance from and
after the effective date specified in such Assumption Agreement, (y) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assumption
Agreement, shall have the rights and obligations of a Senior Lender hereunder
and (z) the assigning Senior Lender thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such Assumption
Agreement, relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an Assumption Agreement covering all or the
remaining portion of an assigning Senior Lender's rights and obligations under
this Agreement, such Senior Lender shall cease to be a party hereto). If any
such assignment occurs after the issuance of the Senior Notes hereunder, the
assigning Senior Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its Senior Note to Administrative
Agent for cancellation, and thereupon Borrower shall issue new Replacement Notes
if so requested by Administrative Agent, the assignee and/or the assigning
Senior Lender, to the assignee and/or to the assigning Senior Lender to reflect
the outstanding portion of the Senior Loan of the assignee and/or the assigning
Senior Lender.
(B) Assignment to Trust. Borrower hereby irrevocably consents
to the sale, assignment or other transfer by Senior Lenders of Senior Notes
evidencing the entire Senior Loan Amount to any Affiliate of Senior Lenders or
Collateral Agent, including one or more trusts or other entities which may sell
certificates or other instruments to investors evidencing an ownership interest
in the assets of such trust or other entity for purposes of securitizing the
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Senior Loan or otherwise effecting a Subsequent Market Transaction. Upon any
such sale, assignment or other transfer, the transferring Senior Lender shall
have no obligations under this Agreement and shall cease to be a party hereto.
The principal amount and interest rate under such Senior Notes and the terms
pursuant to which any sums collected or allocated in respect thereto pursuant to
this Agreement and any applicable Agency Agreement by or among the Senior
Lenders or the Holders, shall be determined exclusively, by the Senior Lender
Parties, as applicable, and Borrower shall (i) have no rights to approve any
such actions; and (ii) shall cooperate in implementing any such Modifications
(including by executing any Replacement Notes consistent with the terms of this
Agreement as set forth in SECTION 9.1.5 below); provided, however, in no event
shall Borrower be required to Modify the Senior Notes or any other Senior Loan
Document in a manner contrary to the provisions of clauses (i)-(v) of SECTION
9.1.5 or in a manner which would increase the amount of interest due,
collectively, under the Senior Notes beyond the Applicable Interest Rate or the
amount of any Fees.
(C) Acceptance by Administrative Agent. Upon its receipt of an
Assumption Agreement executed by an assigning Senior Lender and an assignee
representing that it is an Eligible Assignee, together with the processing fee
referred to above and any forms, certificates or other evidence with respect to
federal income tax withholding matters that such assignee may be required to
deliver to Administrative Agent, Administrative Agent shall, if such Assumption
Agreement has been completed above and if Administrative Agent has consented to
the assignment evidenced thereby to the extent such consent is required above,
(a) accept such Assumption Agreement by executing a counterpart thereof as
provided therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), and (b) give prompt notice thereof to
Borrower. Administrative Agent shall maintain a copy of each Assumption
Agreement delivered to and accepted by it as provided in this Section.
9.1.3 Participations. Any Senior Lender may at any time sell to one
or more Persons (a "Participant") participating interests in the Loan and the
other interests of such Senior Lender hereunder and under the other Loan
Documents; provided, however, that (i) the Senior Lender's obligations under
this Agreement shall remain unchanged, (ii) the Senior Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower shall
continue to deal solely and directly with Collateral Agent (and, as applicable,
Senior Lender) in connection with the Senior Lender's rights and obligations
under this Agreement and the other Loan Documents, (iv) the Participant shall,
together with the Senior Lender, be entitled to the protections of SECTION 9.1
as though it were also a "Senior Lender" hereunder, and (v) no Senior Lender
shall transfer or grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any other Loan
Document except to the extent such amendment or waiver would (x) extend the
final scheduled maturity of any Note in which such Participant is participating,
or reduce the rate or extend the time of payment of interest thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the Participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of such participation, and that an increase in
the Loan shall be permitted without the consent of any Participant if the
Participant's participation is not increased as a result thereof), (y) consent
to the assignment or transfer by Borrower of any of its rights and obligations
under this Agreement or (z) release all or substantially all of the Collateral
supporting the Loans in which such Participant
93
is participating. In the case of any such participation, the Participant shall
not have any rights under this Agreement or any of the other Loan Documents (the
Participant's rights against such Senior Lender in respect of such participation
to be those set forth in the agreement executed by such Senior Lender in favor
of the Participant relating thereto) and all amounts payable by Borrower
hereunder shall be determined as if such Senior Lender had not sold such
participation.
9.1.4 Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of this
Section, any Senior Lender may assign and pledge all or any portion of its
Senior Loan, the other Senior Obligations owed to such Senior Lender, and its
Note(s) to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided that (i) no
Senior Lender shall, as between Borrower and such Senior Lender, be relieved of
any of its obligations hereunder as a result of any such assignment and pledge
and (ii) in no event shall such Federal Reserve Bank be considered to be a
"Senior Lender" or be entitled to require the assigning Senior Lender to take or
omit to take any action hereunder.
9.1.5 Borrower Cooperation. Borrower acknowledges that Collateral
Agent, Administrative Agent, Senior Lenders and their successors and assigns may
effectuate one or more Subsequent Market Transactions, including any combination
of the transactions described in SECTIONS 9.1.1 through and including 9.1.4
above. Borrower shall cooperate in good faith with Administrative Agent,
Collateral Agent and Senior Lenders in effecting any such Subsequent Market
Transactions, at no cost or expense to Borrower, and shall reasonably cooperate
in good faith to implement all requirements imposed by any Governmental
Authorities or rating agencies in any Subsequent Market Transaction. Such
cooperation may include, without limitation, any Modifications to the Loan
Documents necessary or appropriate to effect such transactions, as determined in
good faith by Collateral Agent, including, without limitation: (A) the issuance
of Replacement Notes as provided in this SECTION 9.1; (B) the execution of
supplements or amendments of the Mortgages, Guaranties, and other Loan Documents
as necessary to reflect that the Senior Obligations guaranteed, secured, or
otherwise supported by such instruments guaranty, secure or otherwise support
the Senior Obligations evidenced by any issuance of Replacement Notes or other
Modifications reasonably necessary to accommodate the Subsequent Market
Transaction; (C) delivery of jurats, acknowledgements, and notarizations with
respect to any Modified Loan Documents to be recorded or filed with any
Governmental Authority, and cooperation in effecting any such recordations or
filings; and (E) the execution of such ratifications and acknowledgements from
Guarantor and other Loan Parties as may be requested in good faith by Collateral
Agent or Senior Lenders to reflect the continuing validity of the Guaranties and
Collateral Documents, notwithstanding such Modifications described herein;
provided, however, that Borrower shall not be required to Modify any Loan
Documents which would (i) increase the Principal Balance, (ii) increase the
cumulative interest rate payable under the Notes (subject to the definition of
LIBOR-Based Rate), (iii) accelerate the Initial Maturity Date or eliminate or
materially modify the right to extend the same, (iv) change the amortization of
the principal amount of the Loan, or (v) Modify any other material economic term
of the Loan, including, without limitation, the Senior Recourse Obligations.
Borrower shall provide such information, and documents relating to Borrower,
Guarantor, the Mortgaged Property, and the Collateral as Collateral Agent may
reasonably request in connection with such Subsequent Market Transaction.
Collateral Agent shall be permitted to share all such information with the
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investment banking firms, rating agencies, accounting firms, law firms and other
third party advisory firms involved with the Loan Documents of the applicable
Subsequent Market Transaction. Borrower understands that the information
provided by Borrower to Collateral Agent may ultimately be incorporated into the
offering documents for the Subsequent Market Transaction and thus various
investors may also view some or all of such information. Administrative Agent,
Collateral Agent and all of the aforesaid third-party advisors and professional
firms shall be entitled to rely upon such information, and Borrower indemnifies
Administrative Agent and Collateral Agent as to any losses, claims, damages or
liabilities that arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such information or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated in such information or necessary in order to
make the statements in such information, or in light of the circumstances under
which they were made, not misleading. Administrative Agent and Collateral Agent
may publicize the existence of the Loan in connection with its marketing for a
Subsequent Market Transaction or otherwise as part of its business development.
9.2 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by Administrative Agent, Collateral Agent and Borrower and,
to the extent required by any applicable Agency Agreements, Requisite Holders,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which given.
9.3 Notices. Any notice, approval, demand, statement, request or consent
(a "Notice") made hereunder shall be in writing and shall be sent and be deemed
given (A) three (3) business days after being sent by registered or certified
mail, postage prepaid, return receipt requested, or (B) one (1) business day
after the date sent by Federal Express or other nationally recognized overnight
courier providing evidence of delivery, or (C) on the day of receipt if
delivered by facsimile on a Business Day and received prior to 5:00 p.m. of the
recipient's Business Day, if sent to the parties at their respective address, as
follows (or to such other address or addresses as Borrower, Collateral Agent,
Administrative Agent, or Senior Lenders, as the case may be, shall in like
manner designate in writing):
Borrower: ▇▇▇▇▇▇▇ Partners--355 S. Grand, LLC
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III and ▇▇▇▇ ▇. Lammas, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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Administrative Agent/ Deutsche Bank AG New York Branch
Collateral Agent: c/o Deutsche Bank Securities Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Loan Administrator
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(10566-00362)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
9.4 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising on the part of Senior Lenders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
9.5 Costs and Expenses. Borrower shall, whether or not the transactions
contemplated hereby shall be consummated:
9.5.1 pay or reimburse Administrative Agent or Collateral Agent
within five (5) Business Days after demand for all costs and expenses incurred
by Senior Lenders in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to, this Agreement, any other Loan Document and any other documents
prepared in connection herewith or therewith (unless related to effecting a
Subsequent Market Transaction), and the consummation of the transactions
contemplated hereby and thereby, including the reasonable attorney's fees
incurred by Senior Lenders with respect thereto;
9.5.2 pay or reimburse Administrative Agent or Collateral Agent
within five (5) Business Days after demand for all costs and expenses incurred
by Senior Lenders in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies (including in connection with any
"workout" or restructuring regarding the Loan) under this Agreement, any other
Loan Document, and any such other documents, including attorney's fees incurred
by Senior Lenders; and
9.5.3 pay or reimburse Administrative Agent or Collateral Agent
within five (5) Business Days after demand for all appraisal (including the
allocated cost of internal appraisal services), audit, environmental inspection
(to the extent otherwise required to be paid by Borrower pursuant to the Loan
Documents) and review (including the allocated cost of such internal services),
search and filing costs, fees and expenses, incurred or sustained by Senior
Lenders in connection with the matters referred to under SECTIONS 9.5.1 and
9.5.2 of this Section.
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9.6 Indemnity.
9.6.1 Obligations. Whether or not the transactions contemplated
hereby shall be consummated: Borrower shall pay, indemnify, and hold Collateral
Agent, Administrative Agent, Senior Lenders and each of their respective
officers, directors, employees, counsel, Affiliates, shareholders, Participants,
agents and attorneys-in-fact, and each of such Person's successors and assigns
(each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including attorney's fees but
excluding costs incurred in connection with a Subsequent Market Transaction) of
any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement and any other Loan
Documents, or the transactions contemplated hereby and thereby, and with respect
to any investigation, litigation or proceeding related to this Agreement or the
Loan or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
9.6.2 Survival; Defense. The obligations in this SECTION 9.6 shall
survive payment of all other Obligations. At the election of any Indemnified
Person, Borrower shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's reasonable discretion,
at the sole cost and expense of Borrower. All amounts owing under this SECTION
9.6 shall be paid within 30 days after demand.
9.7 Marshalling; Payments Set Aside. Neither Collateral Agent nor Senior
Lenders shall be under any obligation to marshal any assets in favor of Borrower
or any other Person or against or in payment of any or all of the Obligations.
To the extent that Borrower makes a payment or payments to Senior Lenders, or
Collateral Agent or Senior Lenders enforces their Liens or exercises their right
of set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any Insolvency Proceeding, or
otherwise, then to the extent of such recovery the Obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
9.8 Ratable Sharing. Subject to the terms of any applicable Agency
Agreement, Senior Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right, including, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to that Senior
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Senior Lender) which is greater than the proportion
received by any other Senior Lender in respect of the Aggregate Amounts Due to
such other Senior Lender, then the Senior Lender receiving such proportionately
greater payment shall (i) notify Collateral Agent and each other Senior Lender
of
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the receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Senior Lenders so that
all such recoveries of Aggregate Amounts Due shall be shared by all Senior
Lenders in proportion to the Aggregate Amounts Due to them; provided that if all
or part of such proportionately greater payment received by such purchasing
Senior Lender is thereafter recovered from such Senior Lender upon the
bankruptcy or reorganization of Borrower or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Senior Lender ratably to the extent of such recovery, but
without interest. Borrower expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights, including by counterclaim with respect to any and all monies owing by
Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
9.9 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of Collateral Agent.
9.10 Set-off. With the prior written consent of Collateral Agent and the
Requisite Holders, Senior Lenders shall be authorized at any time and from time
to time, without prior notice to Borrower, any such notice being waived by
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing to, Senior Lenders to or
for the credit or the account of Borrower against any and all Senior Obligations
owing to Senior Lenders, now or hereafter existing, irrespective of whether or
not Senior Lenders shall have made demand under this Agreement or any other
Senior Loan Document and although such Senior Obligations may be contingent or
unmatured. Collateral Agent agrees promptly to notify Borrower after any such
set-off and application made by Senior Lenders; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of Senior Lenders under this SECTION 9.10 are in
addition to the other rights and remedies (including other rights of set-off)
which Senior Lenders may have. Any sums recovered with respect to such set-off
shall be distributed in accordance with any applicable Agency Agreement.
9.11 Automatic Debits of Fees. With respect to any fee, or any other
cost or expense (including attorney's fees) due and payable to Collateral Agent
under the Senior Loan Documents, Borrower hereby irrevocably authorizes
Collateral Agent to debit any deposit account of Borrower with Collateral Agent
in an amount such that the aggregate amount debited from all such deposit
accounts does not exceed such fee or other cost or expense incurred hereunder
and under the Note Purchase Agreement. Collateral Agent will endeavor to
promptly provide Borrower with notice of such debit and the purpose thereof;
provided, however, that the failure to give such notice shall not affect the
validity of such debit. If there are insufficient funds in such deposit accounts
to cover the amount of the fee or other cost or expense then due, such debits
will be reversed (in whole or in part, in Collateral Agent's sole and absolute
discretion) and such amount not debited shall be deemed to be unpaid. No such
debit under this SECTION 9.11 shall be deemed a setoff.
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9.12 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument.
9.13 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.14 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of Borrower, Collateral Agent,
Administrative Agent and Senior Lenders and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary of,
or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Senior Loan Documents. None of Administrative
Agent, Collateral Agent or Senior Lenders shall have any obligation to any
Person not a party to this Agreement or the other Senior Loan Documents.
9.15 Time. Time is of the essence as to each term or provision of this
Agreement and each of the other Senior Loan Documents.
9.16 Governing Law and Jurisdiction.
9.16.1 THIS AGREEMENT AND THE OTHER SENIOR LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK;
PROVIDED THAT THE SENIOR LENDERS, ADMINISTRATIVE AGENT AND COLLATERAL AGENT
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
9.16.2 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF BORROWER, COLLATERAL AGENT, ADMINISTRATIVE AGENT AND EACH
SENIOR LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
JURISDICTION OF THOSE COURTS. EACH OF BORROWER, COLLATERAL AGENT, ADMINISTRATIVE
AGENT AND EACH SENIOR LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. BORROWER, COLLATERAL AGENT, ADMINISTRATIVE AGENT AND EACH SENIOR
LENDER EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
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9.17 Waiver of Jury Trial. BORROWER, COLLATERAL AGENT, ADMINISTRATIVE
AGENT AND EACH SENIOR LENDER EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER SENIOR LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. BORROWER,
COLLATERAL AGENT, ADMINISTRATIVE AGENT AND EACH SENIOR LENDER EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
SENIOR LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT AND THE OTHER SENIOR LOAN DOCUMENTS.
9.18 Reserved.
9.19 Entire Agreement. This Agreement, together with the other Senior
Loan Documents, embodies the entire Agreement and understanding among Borrower,
Collateral Agent, Administrative Agent and Senior Lenders, and supersedes all
prior or contemporaneous Agreements and understandings of such Persons, verbal
or written, relating to the subject matter hereof and thereof, except for any
prior arrangements made with respect to the payment by Borrower of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of Senior Lenders.
9.20 Interpretation. This Agreement is the result of negotiations
between and has been reviewed by counsel to Borrower, Collateral Agent,
Administrative Agent and Senior Lenders, and is the product of all parties
hereto. Accordingly, this Agreement and the other Senior Loan Documents shall
not be construed against Collateral Agent, Administrative Agent or Senior
Lenders merely because of Collateral Agent's, Administrative Agent's and Senior
Lenders' involvement in the preparation of such documents and agreements.
9.21 Limitation on Recourse.
9.21.1 Without impairing the rights, powers, privileges, liens or
security interests of Collateral Agent, Administrative Agent and the Senior
Lenders pursuant to this Agreement, the Senior Notes or any other documents
existing as security for the payment hereof, Senior Lenders agree that, for
enforcement of payment of the Senior Notes and for enforcement of Senior
Obligations under the Senior Mortgage and the other Senior Loan Documents, it
will look solely to the Mortgaged Property as described in the Mortgages and
such other Collateral as may now or hereafter be given to secure the payment of
the Senior Notes, and no other property or Assets of Borrower or any other
Person shall be subject to levy, execution or other enforcement
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procedure for the satisfaction of the remedies of Senior Lenders, or for any
payment required to be made under the Senior Notes or under the Senior Mortgage
or the Senior Collateral Documents or for the performance of any of the
covenants or warranties contained therein or herein; provided, however,
Collateral Agent (on behalf of Senior Lenders) may pursue all of its and the
Senior Lenders' rights and remedies against the property of Borrower described
in the Senior Mortgage and the Senior Collateral Documents, including the
Mortgaged Property, to the full extent of such rights and remedies at law or in
equity, including all such rights and remedies as set forth in the Senior
Mortgage, the Senior Notes and the Senior Collateral Documents.
9.21.2 The provisions of this SECTION 9.21 shall not affect in any
way the validity or enforceability of any Guaranty (whether of payment and/or
performance) given to Collateral Agent or any Senior Lender in connection with
the Senior Loan or constitute a waiver by Collateral Agent or Senior Lenders of
any rights to damages or other monetary relief or any other remedy at law or
equity against Borrower by reason of any actual loss, liability, damage, cost or
expense (including reasonable attorneys' fees) incurred or to be incurred by
Senior Lenders, Administrative Agent or Collateral Agent from any one or more of
the following (all such losses, liabilities, damages, costs or expenses,
collectively, the "Carve-Out Recourse Obligations"):
(A) from Borrower's failure to properly account to Collateral
Agent as mortgagee for any proceeds of insurance or awards of condemnation as
required by the Senior Mortgage, or from Borrower's failure to apply same in
accordance with the terms and provisions of the Senior Loan Documents, or from
Borrower's misapplication or misappropriation of condemnation or insurance
proceeds, or from Borrower's use without the prior written consent of Collateral
Agent of condemnation or insurance proceeds after the occurrence of an Event or
Default; or
(B) because of Borrower's intentional attempts to interfere
with Senior Lenders' validly exercised rights and remedies under the Senior Loan
Documents; or
(C) because Borrower (1) misappropriates or fails to deposit
any Actual Income into the Lockbox Account, or interferes with the transfer of
the same to and from the Cash Collateral Account in accordance with the Senior
Loan Documents; (2) misappropriates or fails to deposit any cash Security
Deposits in the Security Deposit Account or fails to deliver any non-cash
Security Deposit to Collateral Agent as required herein, or fails to apply any
cash Security Deposit or non-cash Security Deposit in accordance with the terms
and conditions of the applicable Lease and the Loan Documents; or (3) fails to
apply any sums disbursed from the Leasing Reserve or the Cash Collateral Account
in accordance with the Senior Loan Documents; or
(D) from Borrower's failure to (1) pay for any loss,
liability, damage, cost or expense (including attorneys' fees) incurred by
Senior Lenders in connection with any Release in, on, over, under or from the
Mortgaged Property of any Hazardous Materials, or (2) perform its obligations
pursuant to the terms of the Senior Environmental Indemnity Agreement; or
(E) from any fraud, intentional misrepresentation,
misstatement and/or omission, or breach of material representation or warranty
(including those related to the
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environmental condition of the Mortgaged Property) of Borrower, whether
contained in the Senior Loan Documents or other writing delivered to Collateral
Agent or Senior Lenders in connection with the Senior Loan; or
(F) because of any physical waste (ordinary wear and tear
excepted) committed by Borrower with respect to the Mortgaged Property; or
(G) because of Borrower's failure to purchase and maintain the
insurance required by the terms of the Senior Mortgage; or
(H) as a result of Borrower's failure to observe the covenants
set forth in SECTION 6.1 (to the extent any unpermitted Liens are voluntarily
created by Borrower), SECTION 6.2 (to the extent any such Disposition is
voluntary) or SECTION 6.5 (to the extent Borrower voluntarily becomes obligated
for such Indebtedness); or
(I) from any claims arising from or relating to operating
expense audits conducted by or for the benefit of International Business
Machines with respect to its past or present occupancy of any portion of the
Mortgaged Property pursuant to that certain Lease dated October 1,1982, as
amended (including any claims arising from that certain Lease Consulting
Inspection Report for Year 1998 prepared for International Business Machines by
Deloitte & Touche).
9.21.3 In addition, in the event (A) Borrower or any Loan Party
files any petition or commences any Insolvency Proceeding, or (B) any Insolvency
Proceeding is commenced or filing made with respect to Borrower or any Loan
Party by (1) any other Loan Party, (2) any Affiliate of Borrower or any Loan
Party, or (3) any such Person, or any other Person acting, directly or
indirectly, in concert with one or more of the foregoing, then Borrower and
Recourse Guarantor shall be personally liable on a full recourse basis for all
amounts payable pursuant to the Senior Notes and the other Senior Loan Documents
(including, without limitation, the Senior Obligations) and for all losses,
costs and expenses of any nature, including reasonable attorneys' fees and
disbursements, paid or incurred by Senior Lenders in connection with or arising
out of such petition or proceeding (all of the foregoing amounts, losses, costs
and expenses, collectively, the "Bankruptcy Recourse Obligations").
9.21.4 The foregoing limitations on personal liability set forth in
SECTION 9.21.1 shall in no way impair or constitute a waiver of the validity of
the Senior Notes, the Indebtedness secured by the Mortgaged Property or the
liens on or security interests in the Mortgaged Property or the right of Senior
Lenders (or Collateral Agent on behalf of the Senior Lenders), as mortgagee or
secured party, to foreclose and/or enforce their rights with respect to the
Mortgaged Property after an Event of Default. Nothing herein shall be deemed to
be a waiver of any right which Senior Lenders may have under the United States
Bankruptcy Code to file a claim for the full amount of the debt owing to Senior
Lenders by Borrower or to require that all Mortgaged Property shall continue to
secure all of the Indebtedness owing to Senior Lenders in accordance with the
Senior Loan Documents. Senior Lenders (through Collateral Agent) may seek a
judgment on the Senior Notes (and, if necessary, name Borrower in such suit) as
part of judicial proceedings to foreclose under the Senior Mortgage or to
foreclose pursuant to any other instrument securing the indebtedness evidenced
by the Senior Notes, or as a prerequisite to any
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such foreclosure or to confirm any foreclosure or sale pursuant to power of sale
thereunder, and in the event any suit is brought on the Senior Notes, or with
respect to any indebtedness evidenced by the Senior Notes or secured by the
Senior Mortgage or any judgment rendered in such judicial proceedings, such
judgment shall constitute a lien on and will be and can be enforced on and
against the Mortgaged Property conveyed by the Senior Mortgage or any such
Senior Collateral Documents and the rents, profits, issues, products and
proceeds thereof. Nothing herein stated shall impair the right of the Senior
Lenders (through Collateral Agent) to accelerate the maturity of the Senior
Notes (or to avail itself of any of its other rights and remedies) upon the
occurrence of an Event of Default or under any other instrument securing or
evidencing the indebtedness represented by the Senior Notes, nor shall anything
herein stated impair or be construed to impair the right of Senior Lenders
(through Collateral Agent) to seek personal judgments and all rights and
remedies to enforce same allowed by law, jointly and severally against Recourse
Guarantor to the extent allowed by the Senior Recourse Guaranty. The provisions
set forth in this SECTION 9.21 are not intended as any release or discharge of
the Obligations, or any monies due under the Senior Notes or under any Senior
Collateral Documents, but are intended as a limitation on Senior Lenders' right
to ▇▇▇ for deficiency or personal judgment against Borrower and the other Loan
Parties except to the extent provided in this Section.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, Borrower, Senior Lenders, Administrative Agent and
Collateral Agent have caused this Agreement to be executed by their duly
authorized representatives as of the day, month and year first above written.
BORROWER: ▇▇▇▇▇▇▇ PARTNERS-355 S. GRAND, LLC,
a Delaware limited liability company
By: MP-355 S. Grand Mezzanine, LLC, a Delaware limited
liability company, Sole Member
By: ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd., a California
limited partnership, Manager
By: ▇▇▇▇▇▇▇ Partners BGHS, LLC, a California
limited liability company, General Partner
By: ▇▇▇▇▇▇▇ Partners SCS, Inc., a California
corporation, Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Title: President
[Signatures continued on next page.]
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ADMINISTRATIVE AGENT AND
COLLATERAL AGENT: DEUTSCHE BANK AG NEW YORK BRANCH,
in its capacity as Administrative Agent and
Collateral Agent
By: /s/ ALEXANDER B.V. ▇▇▇▇▇▇▇
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Name: Alexander B.V. ▇▇▇▇▇▇▇
Title: Managing Director
ORIGINAL SENIOR LENDER: DEUTSCHE BANK AG CAYMAN ISLANDS
BRANCH, in its capacity as Senior Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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