Loan No.: ▇▇-▇▇▇▇▇▇▇
Servicing No.: 50514
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PATRICIAN FINANCIAL COMPANY LIMITED PARTNERSHIP,
as Lender
LOAN AGREEMENT
dated as of February 13,1998
TOWNFAIR CENTER ASSOCIATES,
as Borrower
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS................................................................................................... 1
Section 1.1 Definitions..................................................................................... 1
Section 1.2 Other Definitional Provisions................................................................... 10
Section 1.3 Incorporation by Reference of Commitment ....................................................... 11
ARTICLE II - THE LOAN..................................................................................................... 11
Section 2.1 Loan Terms...................................................................................... 11
Section 2.2 Interest ...................................................................................... 11
Section 2.3 Term............................................................................................ 11
Section 2.4 Payments........................................................................................ 11
ARTICLE III - CONDITIONS PRECEDENT TO LOAN................................................................................ 12
Section 3.1 Loan Documents.................................................................................. 12
Section 3.2 Brokerage Commissions........................................................................... 12
Section 3.3 Title Evidence.................................................................................. 12
Section 3.4 Survey.......................................................................................... 12
Section 3.5 Insurance....................................................................................... 12
Section 3.6 Authority Documents............................................................................. 12
Section 3.7 Financial Statements and Operating Statements .................................................. 13
Section 3.8 Opinion......................................................................................... 13
Section 3.9 Compliance with Laws............................................................................ 13
Section 3.10 Agreements...................................................................................... 13
Section 3.11 Taxes........................................................................................... 13
Section 3.12 Utilities....................................................................................... 13
Section 3.13 Reserve Accounts................................................................................ 13
Section 3.14 Engineer's Report............................................................................... 13
Section 3.15 Certificate of Occupancy and Other Permits ..................................................... 14
Section 3.16 Environmental Assessment and O&M Program........................................................ 14
Section 3.17 Appraisal....................................................................................... 14
Section 3.18 Equity ......................................................................................... 14
Section 3.19 Management Agreement............................................................................ 14
Section 3.20 Special Purpose Entity.......................................................................... 14
Section 3.21 Miscellaneous................................................................................... 14
ARTICLE IV - REPRESENTATIONS AND WARRANTIES............................................................................... 14
Section 4.1 Existence; Compliance with Law.................................................................. 14
Section 4.2 Equity Interests................................................................................ 15
Section 4.3 Power, Authorization; Enforceable Obligations .................................................. 15
Section 4.4 No Legal Bar.................................................................................... 15
Section 4.5 No Material Litigation ......................................................................... 15
Section 4.6 No Default...................................................................................... 15
Section 4.7 Solvency; Fraudulent Conveyance................................................................. 16
Section 4.8 Special Purpose Entity.......................................................................... 16
Section 4.9 Taxes........................................................................................... 16
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Section 4.10 No Burdensome Restrictions ..................................................................... 16
Section 4.11 Investment Company Act; Other Regulations ...................................................... 16
Section 4.12 Subsidiaries.................................................................................... 16
Section 4.13 Title to Premises............................................................................... 17
Section 4.14 Ownership of Personalty......................................................................... 17
Section 4.15 Financial Statements............................................................................ 17
Section 4.16 No Change ...................................................................................... 17
Section 4.17 Accuracy of Information......................................................................... 17
Section 4.18 Principal Place of Business ................................................................... 18
Section 4.19 Taxpayer Identification Number.................................................................. 18
Section 4.20 Insurance....................................................................................... 18
Section 4.21 Mechanic's Liens, etc........................................................................... 18
Section 4.22 Litigation...................................................................................... 18
Section 4.23 No Violation.................................................................................... 18
Section 4.24 ERISA........................................................................................... 18
Section 4.25 O&M Program..................................................................................... 19
ARTICLE V - COVENANTS AND AGREEMENTS ..................................................................................... 19
Section 5.1 Affirmative Covenants of the Borrower........................................................... 19
Section 5.2 Negative Covenants of the Borrower.............................................................. 23
Section 5.3 Environmental Covenants......................................................................... 24
Section 5.4 Recourse Covenants.............................................................................. 26
Section 5.5 Insurance....................................................................................... 26
ARTICLE VI - RESERVE ACCOUNTS............................................................................................. 27
Section 6.1 Establishment of Reserve Accounts............................................................... 27
Section 6.2 Initial Reserve Deposits........................................................................ 27
Section 6.3 Monthly Reserve Deposits........................................................................ 28
Section 6.4 Adjustments to Monthly Reserve Deposit to the Replacement Reserve Account....................... 28
Section 6.5 Permitted Investments, Earnings, Charges and Annual Accounting.................................. 28
Section 6.6 Assignment to the Lender of Reserve Accounts and Rights and Claims.............................. 29
Section 6.7 Application of Reserve Accounts Upon an Event of Default........................................ 29
Section 6.8 Disbursements from Tax and Insurance Reserve Account............................................ 30
Section 6.9 Disbursements from Repair Escrow Account and Replacement Reserve Account........................ 30
Section 6.10 Indemnification................................................................................. 32
ARTICLE VII - EVENTS OF DEFAULT; REMEDIES................................................................................. 32
Section 7.1 Events of Default............................................................................... 32
Section 7.2 Remedies........................................................................................ 33
ARTICLE VIII - CASUALTY LOSSES; EMINENT DOMAIN............................................................................ 34
Section 8.1 Repairs and Casualty Losses..................................................................... 34
Section 8.2 Eminent Domain.................................................................................. 34
Section 8.3 Application of Insurance Proceeds and Condemnation Awards....................................... 35
ARTICLE IX - GENERAL PROVISIONS........................................................................................... 36
Section 9.1 Remedies Cumulative; Waivers.................................................................... 36
Section 9.2 Benefit......................................................................................... 36
Section 9.3 Assignment and Assumption....................................................................... 37
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Section 9.4 Information..................................................................................... 38
Section 9.5 Nonrecourse Loan; Exceptions.................................................................... 38
Section 9.6 Amendments...................................................................................... 38
Section 9.7 Governing Law and Jurisdiction.................................................................. 38
Section 9.8 Savings Clause.................................................................................. 38
Section 9.9 Execution in Counterparts ...................................................................... 38
Section 9.10 Notices ........................................................................................ 38
Section 9.11 Right of Set-Off ............................................................................... 39
Section 9.12 Written Agreement............................................................................... 39
Section 9.13 Waiver of Jury Trial ........................................................................... 39
EXHIBITS
EXHIBIT A Equity Interests
EXHIBIT B Immediate Repairs, Replacements and Reserve Amounts
EXHIBIT C Addresses for Notice
EXHIBIT D Program Rider
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LOAN AGREEMENT
LOAN AGREEMENT, dated as of February 13, 1998 (together with all
exhibits, schedules, riders and addenda hereto, which are hereby incorporated
herein, the "Loan Agreement" or "Agreement"), by and between TOWNFAIR CENTER
ASSOCIATES, a Pennsylvania general partnership (the "Borrower"), with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇;
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(the "Borrower Principals", whether one or more); and PATRICIAN FINANCIAL
COMPANY LIMITED PARTNERSHIP, a Massachusetts limited partnership, with its
principal offices in Bethesda, Maryland (together with its successors and
assigns, the "Lender").
RECITALS:
The Borrower has applied to the Lender for a loan in the original
principal amount of $10,700,000.00 (the "Loan") to be made by the Lender
pursuant to the terms hereof.
The Loan will be secured by, among other things, a first priority lien
on the Land, Improvements, Personalty and Rents and Profits.
The Lender is willing to make the Loan based on the terms and
conditions set forth in this Loan Agreement and subject to the execution and
delivery of each of the Loan Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Borrower
Principals and the Lender hereby agree as follows:
ARTICLE I - DEFINITIONS
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Section 1.1 Definitions.
As used in this Agreement, the other Loan Documents, or any certificate
or other document made or delivered pursuant hereto, the capitalized terms used
herein shall, unless otherwise defined herein or therein, have the following
meanings:
Additional Repair(s) or Replacement(s). Any repairs, replacements or
improvements (other than Immediate Repairs or Replacements) (i) which are
advisable to keep the Premises in good order and repair and in good marketable
condition, or to prevent deterioration of the Premises, or (ii) for an Immediate
Repair or Replacement to the extent such Immediate Repair or Replacement exceeds
125% of the estimated cost of such Immediate Repair or Replacement as set forth
in Exhibit B hereto.
Affiliate(s). As to any specified Person, any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
Appraisal. An appraisal of the Premises prepared (unless otherwise
specified) at the Borrower's expense by a qualified appraiser designated by and
satisfactory to the Lender, in accordance with written instructions from the
Lender, dated as of a date acceptable to the Lender and otherwise satisfactory
in form and substance to the Lender.
Approved Insurer. An insurer previously approved by the Lender with an
A.M. Best Company, Inc. rating of A-or better, and which is authorized to issue
insurance in the State.
Assignment of Management Agreement. The Assignment and Subordination of
Management Agreement, dated as of even date herewith, executed by the Borrower,
the Lender and the property manager for the Premises.
Bankruptcy Event. As to any Person, the occurrence of any of the
following with respect to such Person: (i) a court or governmental agency having
jurisdiction over the Premises shall enter a decree or order for relief in
respect of such Person in an involuntary case under any applicable bankruptcy,
insolvency, reorganization, moratorium, sequestration, liquidation,
consolidation or other similar law now or hereafter in effect, or appoint a
receiver, liquidator, assignee, custodian, conservator, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its property
or order the winding up or liquidation of its affairs; (ii) an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect is commenced against a Person and such petition remains
unstayed and in effect for a period of sixty (60) consecutive days; (iii) such
Person shall commence a voluntary case under any applicable bankruptcy,
insolvency or similar law or make any general assignment for the benefit of
creditors; (iv) such Person shall admit in writing its inability to pay its
debts generally as they become due (otherwise than on a purely temporary basis),
or (v) such Person shall take any action in furtherance of any of the aforesaid
purposes.
Business Day. Any day other than a Saturday, a Sunday, a legal holiday
in Charlotte, North Carolina, or a day on which banking institutions located in
Charlotte, North Carolina are authorized by law or other governmental action to
close.
Certification. As to any specified report, Financial Statement,
Operating Statement, Rent Roll or other document, a written certification by a
Responsible Officer of the Person providing such report, Financial Statement,
Operating Statement, Rent Roll or other document that such report, Financial
Statement, Operating Statement, Rent Roll or other document, as at the date
thereof, (i) contains all of the information and statements required to be set
forth therein, (ii) that such information and statements are true and correct in
all material respects, (iii) that there is no untrue statement of a material
fact required to be stated therein, (iv) that there is no failure to state
therein any information or fact that is necessary to make the information or
statements contained therein, in light of the circumstances under which they are
made, not misleading, and (v) that there is no fact known to such Responsible
Officer that materially adversely affects any of the information or statements
set forth therein.
Closing Date. The date set forth in the first paragraph of this Loan
Agreement.
Commitment. The Lender's commitment letter with respect to the Loan as
accepted by the Borrower and the Borrower Principals in accordance with the
terms thereof.
Default Condition. The occurrence or existence of an event or condition
which, upon the giving of notice or the passage of time, or both, would
constitute an Event of Default.
Eligible Account. An account that is either (i) maintained with a
depository institution whose commercial or finance paper or other similar
obligations are rated A-1 or better by Standard & Poor's or P-1 or better by
▇▇▇▇▇'▇, (ii) an account or accounts maintained with a depository institution
with a minimum long-term unsecured debt rating of BBB- or better by Standard &
Poor's or Baa3 or better by ▇▇▇▇▇'▇, provided that the deposits in such account
or accounts are fully insured by the Federal Deposit Insurance Corporation,
(iii) a segregated trust account maintained with the corporate trust department
of an institution with capital and surplus of not less than $50,000,000 and with
a minimum long-term unsecured debt rating of BBB- or better by Standard & Poor's
or Baa3 or better by ▇▇▇▇▇'▇, or (iv) an account otherwise acceptable to the
Lender.
Environmental Assessment. A report (including all drafts thereof) of an
environmental assessment of the Premises of such scope (including but not
limited to the taking of soil borings and air and groundwater samples and other
above and below ground testing) as the Lender may request, by a consulting firm
acceptable to the Lender, which shall, among other things, be dated as of a date
acceptable to the Lender and conform to (i) the current minimum standards for
the American Society of Testing and Materials, and (ii) the Lender's then
current requirements.
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Environmental Covenant(s). Each of the covenants, agreements and/or
indemnities set forth in Section 5.3 of this Loan Agreement.
Equity Interests. Any and all shares, interests, participations and
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person not a corporation (including,
without limitation, general and limited partnership interests in a limited
partnership), and any and all warrants and options to purchase any of the
foregoing.
ERISA. The Employee Retirement Income Security Act of 1974.
Event of Default. The occurrence of any event or condition specified in
Section 7.1 of this Loan Agreement.
Financial Statement. As to any indicated Person, for any specified
period, financial statements of such Person, including, at a minimum, a current
balance sheet, a current income and expense statement, a statement showing
contingent liabilities and any other supporting schedules or documentation that
the Lender may from time to time reasonably require, and, in the case of the
Borrower, a detailed cash flow statement for each property and/or entity in
which the Borrower has an interest, prepared in accordance with GAAP (as defined
herein). The cash flow statements provided shall include, as applicable, the
property and entity name, location, size (including the number of rooms with
respect to hotels and the number of licensed beds with respect to healthcare
facilities), and the percentage of ownership therein, its leasing and occupancy
status, its Operating Income (including the sources of Operating Income), its
Operating Expenses, its Net Operating Income, any loan balance currently
outstanding, the amount and beneficiary of any cash distributions, the amount
invested in and/or received from such property or entity; and detailed cash flow
projections for the next twelve (12) month period therefor. Each Financial
Statement shall include a Certification thereto.
Financing Statements. The UCC financing statements filed in order to
perfect the Lender's lien on certain personal property and fixtures as more
particularly described therein. The Financing Statements shall be on forms
approved for filing in the State and local filing offices of the State in which
any filings are necessary or, in the Lender's opinion desirable, to be made to
perfect the interests of the Lender granted under the Loan Documents, together
with the search results for such filing offices, including copies of all
reported financing statements.
GAAP. Generally accepted accounting principles, as from time-to-time in
effect in the United States of America, or such alternative accounting standard
as may be acceptable to the Lender, consistently applied.
Governmental Action. The issuance or probable or threatened issuance of
any claim, citation, notice of any pending or threatened suit, proceeding, order
or governmental inquiry or opinion involving the Premises that alleges the
violation of any Requirement of Law or Hazardous Materials Law.
Governmental Authorities. Any governmental (including health and
environmental) agency, office, officer or official whose consent or approval is
required as a prerequisite to the commencement of the construction, renovation
or expansion of the Improvements or to the operation and occupancy of the
Improvements or the Premises or to the performance of any act or obligation or
the observance of any agreement, provision or condition of whatsoever nature
herein contained.
Ground Lease. Each ground lease, if any, pursuant to which the Borrower
acquires an interest as ground lessee of any portion of the Premises.
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Hazardous Materials. Includes petroleum and petroleum products,
flammable explosives, radioactive materials (excluding radioactive materials in
smoke detectors), polychlorinated biphenyls, lead, asbestos or asbestos
containing materials in any form that is or could become friable, hazardous
waste, toxic or hazardous substances or other related materials whether in the
form of a chemical, element, compound, solution, mixture or otherwise including,
but not limited to, those materials defined as "hazardous substances,"
"extremely hazardous substances," "hazardous chemicals," "hazardous materials,"
"toxic substances," "solid waste," "toxic chemicals," "air pollutants" "toxic
pollutants," "hazardous wastes," "extremely hazardous waste," or "restricted
hazardous waste" by Hazardous Materials Law or regulated by Hazardous Materials
Law in any manner whatsoever, and all other "Hazardous Materials", if any,
identified in the Program Rider.
Hazardous Materials Law. All federal, state, and local laws, ordinances
and regulations and standards, rules, policies and other governmental
requirements and any court judgments applicable to the Borrower or to the
Premises relating to industrial hygiene or to environmental or unsafe conditions
or to human health including, but not limited to, those relating to the
generation, manufacture, storage, handling, transportation, disposal, release,
emission or discharge of Hazardous Materials, those in connection with the
construction, fuel supply, power generation and transmission, waste disposal or
any other operations or processes relating to the Premises, and those relating
to the atmosphere, soil, surface and ground water, wetlands, stream sediments
and vegetation on, under, in or about the Premises. "Hazardous Materials Law"
also shall include, but not be limited to, the following laws, as amended as set
forth herein and as subsequently amended: (1) the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986,42 USCA 9601 et seq.; (2) the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 USCA
6901 et seq.; (3) the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977,33 USCA 1251 et seq.; (4) the Toxic Substances Control
Act, 15 USCA 2601 et seq.; (5) the Emergency Planning and Community
Right-to-Know Act of 1986,42 ▇▇▇▇ ▇▇▇▇▇ et seq.; (6) the Clean Air Act, as
amended by the Clean Air Act Amendments, 42 USCA 7401 et seq.; (7) the National
Environmental Policy Act of 1969,42 USCA 4321 et seq.; (8) the River and Harbor
Act of 1899,33 USCA 401 et seq.; (9) the Endangered Species Act of 1973, 16
USCA 1531 et seq.; (10) the Occupational Safety and Health Act of 1970, 29 USCA
651 et seq.; (11) the Safe Drinking Water Act, 42 USCA 300(f) et seq.; and (12)
the Hazardous Materials Transportation Act, 49 USCA 1801 et seq., and all
regulations from time to time adopted in respect to the foregoing laws.
Immediate Repair(s). Those repairs, replacements and improvements
listed as "Immediate Repairs" on Exhibit B hereto.
Improvements. As defined in the Security Instrument.
Initial Reserve Deposit(s). Any amount required to be deposited into
any Reserve Account on or before the Closing Date in accordance with the terms
of this Loan Agreement, including without limitation, any initial deposit to any
Reserve Account identified on Exhibit B hereto or in the Program Rider.
Insurance. All of the following insurance coverages:
(i) Property Insurance. Insurance with respect to the Improvements
against any peril included within the classification "All Risks of
Physical Loss" with extended coverage in amounts at all times
sufficient to prevent it from becoming a co-insurer within the terms of
the applicable policies, but in any event such insurance shall be
maintained in an amount equal to the full insurable value of the
Premises and with deductibles acceptable to the Lender. The term "full
insurable value" as used herein shall mean the actual replacement cost
of the Premises (without taking into account any depreciation, and
exclusive of excavations, footings and foundations, landscaping and
paving). The policy must include an agreed value clause, which must be
updated annually.
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(ii) Liability Insurance. Comprehensive general liability
insurance, including bodily injury, death and property damage
liability, dram shop coverage and umbrella liability insurance against
any and all claims, including all legal liability to the extent
insurable imposed upon the Lender and all court costs and attorneys'
fees and expenses, arising out of or connected with the possession,
use, leasing, operation, maintenance or condition of the Premises in
such amounts as the Lender may reasonably require but in no event for a
combined single limit of less than a $1,000,000.00 minimum (or a
$3,000,000.00 minimum if the Premises contains one or more elevators)
with a $2,000,000.00 minimum (or a $6,000,000.00 minimum if the
Premises contains one or more elevators) general aggregate limit. In
the event that any payment of proceeds is made under any umbrella
liability insurance policy, the Borrower shall immediately purchase
additional liability insurance coverage so that at all times there
shall be no less than a $1,000,000.00 minimum (or a $3,000,000.00
minimum if the Premises contains one or more elevators) of liability
insurance coverage per occurrence with a $2,000,000.00 minimum (or a
$6,000,000.00 minimum if the Premises contains one or more elevators)
general aggregate limit.
(iii) Workers' Compensation Insurance. Statutory workers'
compensation insurance (to the extent the risks to be covered thereby
are not already covered by other policies of insurance maintained by
it), with respect to any work on, about or regarding the Premises.
(iv) Business Interruption. Business interruption insurance and/or
insurance for loss of rental value (as determined by the Lender) in an
amount sufficient to avoid any co-insurance penalty and to provide
proceeds which will cover a period acceptable to the Lender in its
reasonable discretion.
(v) Boiler and Machinery Insurance. Broad form boiler and
machinery insurance covering all boilers and other pressure vessels,
machinery and equipment located in, on or about the Premises and
insurance against loss of occupancy or use arising from any such
breakdown in an amount equal to 100% of the actual replacement cost of
such machinery (without taking into account any depreciation) and
containing such deductibles as are reasonably acceptable to the Lender.
(vi) Flood Insurance. If all or any portion of the Premises is
located within a federally designated flood hazard zone, flood
insurance as is generally available and in such amounts and with such
deductibles as the Lender may reasonably require.
(vii) Other Insurance. Such other insurance (including, without
limitation, earthquake insurance, sinkhole insurance and malpractice
insurance) with respect to the Premises against loss or damage of the
kinds from time to time reasonably required by the Lender in connection
with loans secured by properties comparable to the Premises.
Intangible Personalty. As defined in the Security Instrument.
Land. As defined in the Security Instrument.
Lien. Any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing).
Loan Amount. The original principal amount of the Note.
Loan Document(s). This Loan Agreement, the Commitment, the Note, the
Security Instrument, the Financing Statements, the Assignment of Management
Agreement, and all other documents evidencing, securing or relating to the Loan.
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Local Tenant Lease(s). Any lease representing (i) an interest in 20% or
less of the aggregate net rental square footage of the Premises or (ii) any
lease representing 5,000 sq. ft. or less; provided however, as to one or more
tenants that are Affiliates, all leases of such affiliated tenant shall be
aggregated and treated as one lease for purposes of determining whether such
leases are individually Local Tenant Leases, and if such leases, as aggregated,
exceed either limitation set forth above, then each lease shall be deemed not to
be a Local Tenant Lease.
Management Agreement. The written management agreement for the
Premises, in form and substance satisfactory to the Lender, by and between the
Borrower, as owner, and a management company acceptable to the Lender, as
manager.
Material Adverse Change. As to the specified Person, a material adverse
change in the business, operations, property, condition (financial or otherwise)
or prospects of such Person and, in addition, as to the Borrower, any material
adverse change in (i) the ability of the Borrower to perform its obligations
under this Loan Agreement or any of the other Loan Documents or (ii) the
validity or enforceability of this Loan Agreement or any of the other Loan
Documents or the rights or remedies of the Lender hereunder or thereunder.
Monthly Reserve Deposits. Any other monthly payment or deposit required
in connection with any Reserve Account, including without limitation, any
monthly payments or deposits to any Reserve Account identified in Exhibit B
hereto or in the Program Rider.
Net Operating Income. With respect to any specified period, (i)
Operating Income, minus (ii) Operating Expenses, each as calculated for such
period.
Note. The promissory note or notes of the Borrower in connection with
the Loan in favor of the Lender, as acknowledged and agreed to by the Borrower
Principals, together with all prior notes amended, modified, renewed, extended,
restated, supplemented, replaced or substituted thereby.
Note Payment Amount. For any Payment Date, the total amount due and
owing under the Note on such Payment Date.
O&M Program. An operations and maintenance program (in form and
substance reasonably satisfactory to the Lender) relating to the use, handling
and/or abatement of one or more Hazardous Materials and which is accepted in
writing by the Borrower.
Obligations. As to any stated Person, the unpaid principal of and
interest on any promissory note or other indebtedness of such Person (including,
without limitation, interest accruing after the maturity of any such promissory
note or indebtedness and interest accruing thereon after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to such Person, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) and all other
obligations and liabilities of such Person, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and disbursements of
counsel) or otherwise.
Operating Expenses. Any expense paid or to be paid by the Borrower (or
any of its agents or by the Lender on account or on behalf of the Borrower) at
any time in connection with the operation of the Premises, determined on a cash
basis, in accordance with GAAP, including, without limitation, (i) fees, costs
and expenses related to tenant improvements required to be paid or reimbursed
under any lease or other agreement, (ii) all payments required to be made
pursuant to any management, franchise or other agreement, (iii) undistributed
expenses, including without limitation, general and administrative, marketing,
utilities, operations and maintenance and other expenses, as appropriate, (iv)
legal, accounting, appraisal and other professional fees, costs and
disbursements, including annual fees and other amounts (including indemnity
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payments) payable annually or otherwise, (v) taxes, insurance premiums and
impositions of any type, (vi) replacement reserves, (vii) fees, costs and
expenses of the Lender (if any) paid by the Borrower, (viii) any amount paid in
connection with any interest rate contract or similar hedge, cap, collar, floor
or currency swap, and (ix) all items, if any, defined as an Operating Expense in
the Program Rider. Notwithstanding the foregoing. Operating Expenses will not
include (A) depreciation or amortization, (B) any expenses that in accordance
with GAAP should be capitalized (other than current charges for any such
expenses included in the preceding sentence), (C) the principal of and interest
on the Note and (D) any item of expense that would otherwise be considered
within Operating Expenses pursuant to the provisions above but which is actually
paid directly by any tenant or other Person as required by such tenant's or
Person's lease and/or other agreement.
Operating Income. All rents (net of concessions), charges, expense
recovery, revenues and other income (including interest income) paid or to be
paid (other than security deposits from tenants or other Persons under valid
leases or other agreements and insurance, eminent domain or similar proceeds and
rewards paid directly to the Lender pursuant to the provisions of the Loan
Agreement) at any time to the Borrower (or to any of its agents for the account
of the Borrower) by any Person in connection with the operation of the Premises,
determined on a cash basis, in accordance with GAAP, and all items, if any,
defined as Operating Income in the Program Rider.
Operating Statement. As to the Premises, for any period indicated, a
statement of the Borrower, as reflecting, truly and accurately, the items set
forth therein as at the date thereof, showing the Operating Income and Operating
Expenses for the indicated period and including a statement as to the amounts
and sources of rent or other income collected and any other information
reasonably required by the Lender. Each Operating Statement shall include a
Certification.
Payment Date. Each date any payment of principal or interest on the
Note is due and payable thereunder.
Permitted Encumbrances. As defined in the Security Instrument, together
with any Liens which have been bonded over (i) within thirty (30) days after the
date of filing thereof, (ii) with a bonding company satisfactory to the Lender,
(iii) in an amount satisfactory to the Lender, and (iv) otherwise in form and
substance satisfactory to the Lender, in each case, in the Lender's reasonable
discretion.
Permitted Investments. Any (i) direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by, the
full faith and credit of the United States of America (including obligations
issued or held in book-entry form on the books of the Department of the Treasury
of the United States of America); (ii) commercial or finance paper or other
similar obligations rated at the time of purchase A-1 or better by Standard &
Poor's or P-1 or better by Moody's; (iii) interest-bearing demand or time
deposits (including certificates of deposit) in any issuing bank or trust
company secured at all times, in the manner and to the extent provided by law,
by collateral security (described in clause (i) of this definition) of a market
value (valued at least quarterly) of no less than the amount of money so
invested; (iv) negotiable or non-negotiable certificates of deposit, time
deposits or other similar banking arrangements issued by any bank or trust
company with combined equity and surplus of no less than S100,000,000, having a
rating in either of the two highest rating categories by either Moody's or
Standard & Poor's or fully insured by the Federal Deposit Insurance Corporation;
(v) Eligible Account; and (vi) account or fund that is invested only in any of
the above; provided that such Permitted Investments shall mature on the Business
Day after the date of acquisition.
Person. An individual, a general or limited partnership, a limited
liability company, a limited liability partnership, a corporation, a business
trust, a joint stock company, a trust, an unincorporated association, a joint
venture, a Governmental Authority or other entity of whatever nature.
Personalty. The Tangible Personalty and the Intangible Personalty.
Premises. The collective reference to the Land, the Improvements and
the Tangible Personalty.
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Program Rider. The Program Rider attached as Exhibit D to this Loan
Agreement.
Prohibited Activities or Conditions. Causing or permitting, whether
directly or indirectly, (i) the presence, use, generation, manufacture,
production, processing, installation, release, discharge, storage (including
storage in above ground and underground storage tanks for petroleum or petroleum
products), treatment, handling, or disposal of any Hazardous Materials
(excluding the safe and lawful use and storage of quantities of Hazardous
Materials or petroleum products, customarily used in the ordinary operations of,
or stored or sold as inventory by, the Borrower, or customarily used in the
ordinary operations of any tenant previously approved by the Lender) on or under
the Premises, or in any way affecting the Premises or its value or which may
form the basis for any present or future claim, demand or action seeking cleanup
of the Premises, (ii) the transportation of any Hazardous Materials to or from
the Premises (excluding the safe and lawful use and storage of quantities of
Hazardous Materials or petroleum products, customarily used in the ordinary
operations of, or stored or sold as inventory by, the Borrower, or customarily
used in the ordinary operations of any tenant previously approved by the
Lender), or (iii) any occurrence or condition on the Premises (or exacerbation
of the same) that is or may be in violation of Hazardous Materials Law.
Recourse Covenant(s). Each of those covenants and/or agreements set
forth in Section 5.4 of this Loan Agreement.
Rent Roll. As to the Premises, a rent schedule in a form acceptable to
the Lender, certified by a Responsible Officer of the Borrower, showing the
legal and trade name of each tenant, and for each tenant, the gross and net
square feet occupied, the lease expiration date, the rent payable (both base
rent and additional rent), right of first refusal, options, rights to move
tenants, security deposits and any other information reasonably requested by the
Lender and, as to any annual Rent Roll, copies of paid tax receipts for the
related fiscal year. Each Rent Roll shall include a Certification.
Rents and Profits. As defined in the Security Instrument.
Repair Escrow Account. An Eligible Account established and maintained
pursuant to the terms of this Loan Agreement.
Replacement Reserve Account. An Eligible Account established and
maintained pursuant to the terms of this Loan Agreement.
Replacements. Those repairs, replacements or improvements listed as
"Replacements" on Exhibit B hereto.
Requirement(s) of Law. As to any Person, the organizational or
governing documents of such Person, and any statute, law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority (including, without limitation, all requirements relating to zoning,
parking, ingress and egress, building setbacks, or use of the Premises, all
Hazardous Materials Laws, the Architectural Barriers Act of 1968, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, erosion
control ordinances, storm drainage control laws and doing business and/or
licensing laws), in each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its property is subject.
Reserve Account(s). The Repair Escrow Account, the Tax and Insurance
Reserve Account, the Replacement Reserve Account, and all other reserve and/or
escrow accounts established or required pursuant to the provisions of the Loan
Documents, including, without limitation, pursuant to the Program Rider.
Responsible Officer. As to any Person, the general partner (if the
general partner is not an individual, then the chief executive officer, the
chief financial officer or the president or similar individual of the general
partner), the chief executive officer, the chief financial officer or the
president or similar individual of such Person.
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Security Instrument. The deed of trust, mortgage, deed to secure debt
or other instrument, dated as of even date herewith, executed by the Borrower
granting to the Lender a first priority lien or title priority on the Premises,
the Intangible Personalty and the Rents and Profits to secure the obligations of
the Borrower under the Loan Documents, together with all prior instruments
amended, modified, renewed, extended, restated, supplemented, replaced or
substituted thereby.
Significant Ownership Interest. Any of the following:
(i) if the entity is a general partnership or a joint venture, (A)
any partnership interest in the general partnership, or (B) any
interest of a joint venturer in the joint venture;
(ii) if the entity is a limited partnership, (A) any limited
partnership interest in the entity which, together with all other
limited partnership interests in the entity sold, assigned,
transferred, pledged, encumbered or otherwise disposed of since the
Closing Date exceeds 49% of all of the limited partnership interests in
the entity, or (B) any general partnership interest in the entity;
(iii) if the entity is a limited liability company or limited
liability partnership, any membership interest which, together with all
other membership interests in the limited liability company or limited
liability partnership sold, assigned, transferred, pledged, encumbered
or otherwise disposed of since the Closing Date exceeds 49% of all of
the membership interests in the limited liability company or limited
liability partnership;
(iv) if the entity is a corporation, any voting stock in the
corporation which, together with all other voting stock of the
corporation sold, assigned, transferred, pledged, encumbered or
otherwise disposed of since the Closing Date exceeds 49% of all of the
voting stock of the corporation; and/or
(v) if the entity is a trust, any beneficial interest in such
trust which, together with all other beneficial interests in the trust
sold, assigned, transferred, pledged, encumbered or otherwise disposed
of since the Closing Date exceeds 49% of all of the beneficial
interests in the trust.
Special Purpose Entity. An entity whose structure and organizational
and governing documents are in form and substance acceptable to the Lender and
which satisfies all of the following requirements:
(i) it conducts its business solely in its own name through its
duly authorized officers or agents so as not to mislead others as to
the identity of the entity with which those others are concerned, and
particularly uses its best efforts to avoid the appearance of
conducting business on behalf of any Affiliate or that its assets are
available to pay the creditors of any Affiliate. Without limiting the
generality of the foregoing, all oral and written communications,
including, without limitation, letters, invoices, purchase orders,
contracts, statements and loan applications, are made solely in its
name;
(ii) it maintains its records and books of account separate from
those of its Affiliates;
(iii) it obtains proper authorization required by any Requirement
of Law of all action requiring such authorization;
(iv) it obtains proper authorization from its shareholders,
partners or members, as the case may be, of all action requiring such
approval;
(v) it pays its Operating Expenses and liabilities from its own
funds;
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(vi) its Financial Statements disclose the effects of its
transactions in accordance with GAAP, and disclose that its assets are
not available to pay creditors of any Affiliate;
(vii) its resolutions, agreements and other instruments
authorizing and underlying the transactions described in this Agreement
and in the other Loan Documents are maintained by it as its official
records, separately identified and held apart from the records of any
Affiliate;
(viii) it maintains an arm's-length relationship with its
Affiliates and does not hold itself out as being liable for the debts
of any Affiliate;
(ix) it keeps its assets and its liabilities wholly separate from
those of all other entities, including, but not limited to its
Affiliates except, in each case, as contemplated by the Loan Documents;
and
(x) its sole assets are the Premises, the Intangible Personalty
and the Rents and Profits.
State. The state in which the Premises is located.
Subordination Agreement. A subordination, non-disturbance and
attornment agreement in form and substance acceptable to the Lender.
Survey. A survey of the Land and Improvements (as-built) made by a
civil engineer or surveyor, duly licensed or registered in the State, dated as
of a date acceptable to the Lender, containing a surveyor's certification
acceptable to the Lender for the benefit of the Borrower and the Lender (which
certification shall, among other things, indicate whether or not any of the Land
or Improvements are located within an area identified as having "special flood
hazards" as such term is used in the Flood Disaster Protection Act of 1973),
together with its successors and assigns, as their interests may appear, and
otherwise in form and substance acceptable to the Lender.
Tangible Personalty. As defined in the Security Instrument.
Tax and Insurance Reserve Account. An Eligible Account established and
maintained pursuant to the terms of this Loan Agreement.
Tenant Estoppel Certificate. A tenant estoppel certificate in form and
substance reasonably acceptable to the Lender.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof,"" "herein" and "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. The word "including" when used in this Agreement is intended
to be illustrative and not exclusive. Section, subsection, paragraph,
clause, exhibit, schedule, addendum and rider references contained in
this Agreement are references to sections, subsections, paragraphs,
clauses, exhibits, schedules, addenda and riders in or to this
Agreement unless otherwise specified. The captions herein are inserted
only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Loan Agreement nor the intent of
any provision hereof. The terms set forth herein are applicable to the
singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms.
(b) All references in this Loan Agreement or any other Loan
Document to any Loan Document, agreement, contract, license, document
or instrument shall mean such Loan Document, agreement, contract,
license, document or instrument as amended, modified, renewed,
extended, restated, supplemented, reissued, and/or substituted from
time to time.
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(c) All references or citations in this Loan Agreement or any
other Loan Document to any statute, law, treaty, rule, regulation or
other Requirement of Law shall mean such statute, law, treaty, rule,
regulation or other Requirement of Law as amended, modified,
supplemented, replaced or substituted from time to time.
Section 1.3 Incorporation by Reference of Commitment.
All of the terms and conditions of the Commitment are hereby
incorporated herein by reference, as if such terms and conditions were set forth
herein in their entirety, but in the event of any conflict or discrepancy
between the terms and/or conditions of this Loan Agreement and those of the
Commitment, the terms and conditions of this Loan Agreement shall control.
ARTICLE II - THE LOAN
--------------------
Section 2.1 Loan Terms.
Subject to the terms and conditions of this Loan Agreement and the
other Loan Documents, the Lender agrees to make the Loan to the Borrower in the
principal sum of the Loan Amount, such borrowing to be evidenced by the Note and
the other Loan Documents.
Section 2.2 Interest.
The outstanding principal balance of the Loan shall bear interest, and
principal and interest shall be repayable, in accordance with the terms of the
Note.
Section 2.3 Term.
The Loan shall be due and payable in full, unless accelerated sooner
pursuant to the terms of this Loan Agreement, on the maturity date set forth in
the Note.
Section 2.4 Payments.
All payments by the Borrower under the Loan shall be made in accordance
with the terms of the Note.
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ARTICLE III - CONDITIONS PRECEDENT TO LOAN
------------------------------------------
The obligation of the Lender to make the Loan is subject to the
Lender's satisfaction, by proper evidence, execution and/or delivery to the
Lender of each of the following items, each in form and substance satisfactory
to the Lender and the Lender's counsel:
Section 3.1 Loan Documents.
Each of the Loan Documents.
Section 3.2 Brokerage Commissions.
All brokerage commissions, finder's fees or similar compensation in
connection with the purchase of the Premises (if all or any portion of the
Premises is being purchased with Loan proceeds), the making of the Loan, or the
transactions contemplated by the Loan Documents have been paid in full.
Section 3.3 Title Evidence.
An original signed title commitment in form and substance satisfactory
to the Lender, for a standard ALTA mortgagee policy as to the Premises from a
company or from companies approved by the Lender (including any reinsurance
agreements and endorsements required by the Lender), providing coverage for the
full principal amount of the Loan, containing such coverages and endorsements as
may be required by the Lender, together with copies of all recorded documents
creating exceptions to such policy.
Section 3.4 Survey.
Two (2) originals of the Survey.
Section 3.5 Insurance.
Each policy of insurance required by this Loan Agreement is in full
force and effect on the Closing Date.
Section 3.6 Authority Documents.
(a) Organizational Documents. As applicable, a certified copy of
each limited partnership agreement, limited partnership certificate,
partnership agreement, articles of incorporation, bylaws, shareholder
agreements, articles of organization and operating agreement of the
Borrower and each Borrower Principal (when not an individual), and each
general partner, member or shareholder of the Borrower and each
Borrower Principal (when not an individual), with all amendments,
modifications, supplements and restatements thereto.
(b) Assumed Name Certificate. A certified copy of each assumed
name certificate, if any, of the Borrower and each Borrower Principal
(when not an individual).
(c) Good Standing Certificates. Good standing certificates, or
their equivalent, issued by the Secretary of State and all other
appropriate offices of the state organization of the Borrower and each
Borrower Principal (when not an individual) and evidence satisfactory
to the Lender of the Borrower's and each such Borrower Principal's
authorization to do business in the State if the state of the
Borrower's and each such Borrower Principal's organization is other
than the State.
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(d) Resolutions and Consents. Certified resolutions and/or
consents authorizing the Borrower and each Borrower Principal (when not
an individual) to enter into the Loan Documents.
Section 3.7 Financial Statements and Operating Statements.
Financial Statements of the Borrower and each Borrower Principal as of
the end of the most recent fiscal year, together with Operating Statements for
the period from the beginning of the current fiscal year and ending on a date
not more than thirty (30) days prior to the Closing Date.
Section 3.8 Opinion.
An opinion of independent counsel to the Borrower in form and substance
acceptable to the Lender, dated as of the Closing Date.
Section 3.9 Compliance with Laws.
The Premises and the Intangible Personalty, and the intended uses
thereof, are in compliance with all Requirements of Law.
Section 3.10 Agreements.
Certified copies of all operating agreements, franchise agreements,
service contracts, purchase contracts, management agreements, labor contracts,
license agreements and equipment leases, if any, relating to the Borrower's
ownership and operation of the Premises.
Section 3.11 Taxes.
The Land and the Improvements are separately assessed for tax purposes,
together with tax parcel identification numbers, tax rates, estimated tax values
and the identities of the taxing authorities.
Section 3.12 Utilities.
The availability and suitability of the water, storm water, electric,
oil, natural gas, sewer and telephone utilities needed to properly service the
Premises in its intended use.
Section 3.13 Reserve Accounts.
The establishment of each Reserve Account with balances equal to any
Initial Reserve Deposit thereto required by this Loan Agreement (including the
Program Rider) or any of the other Loan Documents.
Section 3.14 Engineer's Report.
An engineer's report from an engineer approved by the Lender and dated
as of a date acceptable to the Lender, which report shall, among other things,
(a) conform to all requirements of the Lender and (b) certify that the Premises
is in compliance with all applicable requirements of the Americans with
Disabilities Act of 1990.
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Section 3.15 Certificate of Occupancy and Other Permits.
Such certificates of occupancy, permits and licenses as the Lender may
require to evidence that the Premises is suitable for occupancy and use.
Section 3.16 Environmental Assessment and O&M Program.
An Environmental Assessment of the Premises. The Borrower shall furnish
and adopt an O&M Program with respect to all Hazardous Materials, if any,
identified in such Environmental Assessment or as otherwise required by the
Lender.
Section 3.17 Appraisal.
An Appraisal.
Section 3.18 Equity.
The Borrower's equity as of the Closing Date is acceptable to the
Lender.
Section 3.19 Management Agreement.
A certified copy of the Management Agreement for the Premises in form
and substance satisfactory to the Lender. The Management Agreement and all
management fees thereunder shall be subordinate to the Loan.
Section 3.20 Special Purpose Entity.
The Borrower is a Special Purpose Entity.
Section 3.21 Miscellaneous.
All other documents or items set forth in the Commitment (including all
supplemental and special conditions included in the Commitment) or otherwise
required by the Lender.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
-------------------------------------------
To induce the Lender to enter into this Agreement and to make the Loan,
the Borrower and, where specifically indicated, each Borrower Principal hereby
represents and warrants to the Lender (for itself, but not otherwise) on the
Closing Date as follows:
Section 4.1 Existence: Compliance with Law.
The Borrower and each Borrower Principal (when not an individual) (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessor and to conduct the business in which it is currently engaged, (c) is duly
qualified to do business in and is 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 (d) to its knowledge is in
compliance with all Requirements of Law.
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Section 4.2 Equity Interests.
The owners (beneficial and otherwise) of all of the Equity Interests in
the Borrower and each Borrower Principal (when not an individual) are as set
forth in Exhibit A and have been duly authorized, are validly issued and
outstanding, fully paid and non-assessable. There are no outstanding options or
other rights pertaining to the Equity Interests in the Borrower and each
Borrower Principal (when not an individual), and no voting trust or similar
agreement affecting either ownership of or the right to vote such Equity
Interests (except for those items detailed in the Borrower's or such Borrower
Principal's partnership or operating agreement or certificate of incorporation).
Section 4.3 Power; Authorization1; Enforceable Obligations.
The Borrower and each Borrower Principal (when not an individual) has
all requisite legal power and authority, and the legal right, to make, deliver
and perform each Loan Document to which it is, or is to be, a party and, in the
case of the Borrower, to borrow hereunder, and has taken all necessary
corporate, partnership or company action (as the case may be) to authorize the
execution, delivery and performance of each Loan Document to which it is, or is
to be, a party and to authorize the borrowings on the terms and conditions of
this Agreement and the Note. No consent or authorization of, filing with, notice
to or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of any Loan
Document, except to the extent specified in any such Loan Document. Each Loan
Document has been (or will be) duly executed by, and delivered on behalf of the
Borrower and the Borrower Principals, as the case may be. Each Loan Document
constitutes (or when executed and delivered will constitute) the legal, valid
and binding obligation, enforceable against the Borrower and the Borrower
Principals, as the case may be, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, sequestration, liquidation, consolidation or similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
Section 4.4 No Legal Bar.
To the Borrower's knowledge, the execution, delivery and performance of
the Loan Documents will not violate any Requirement of Law applicable to the
Borrower and the Borrower Principals or any contractual obligation, security,
agreement, instrument, license or other undertaking by which the Borrower or any
Borrower Principal is bound and will not result in, or require, the creation or
imposition of any Lien on any of their properties or revenues pursuant to any
such Requirement of Law or contractual obligation, security, agreement,
instrument, license or other undertaking.
Section 4.5 No Material Litigation.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower and
the Borrower Principals, threatened against any of them or any of their
properties or revenues or with respect to any Loan Document or any of the
transactions contemplated thereby, or which could reasonably be expected to have
a Material Adverse Change.
Section 4.6 No Default.
Neither the Borrower nor any Borrower Principal is in default, under or
with respect to any contractual obligation, security, agreement, instrument,
license or other undertaking by which the Borrower or such Borrower Principal is
bound which is in excess of $50,000. No Default Condition or Event of Default
has occurred and is continuing.
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Section 4.7 Solvency: Fraudulent Conveyance.
The Borrower and each Borrower Principal is solvent and will not be
rendered insolvent by the transactions contemplated hereby and, after giving
effect to such transactions, will not be left with an unreasonably small amount
of capital with which to engage in its business. Neither the Borrower nor any
Borrower Principal intends to incur, or believes that it has incurred, debts
beyond its ability to pay such debts as they mature. Neither the Borrower nor
any Borrower Principal has commenced or filed nor contemplates the commencement
or filing of any bankruptcy, insolvency, reorganization, moratorium,
sequestration, liquidation, consolidation or similar proceedings or the
appointment of a receiver, liquidator, assignee, conservator, trustee,
sequestrator or similar official in respect of it or any of its assets. The
amount of the Loan constitutes reasonably equivalent value and fair
consideration for the transfer to the Lender of the interest in the Premises
represented by the Security Instrument. Neither the Borrower nor any Borrower
Principal is transferring any interest in the Premises with any intent to
hinder, delay or defraud any of its creditors.
Section 4.8 Special Purpose Entity.
The Borrower is a Special Purpose Entity.
Section 4.9 Taxes.
The Borrower and each Borrower Principal, respectively, has filed or
caused to be filed all tax returns which are required to be filed and has paid
all taxes shown to be due and payable on said returns and on any assessments
made against it and any of its property and, to its knowledge, all other taxes,
fees and other charges imposed on it and any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on its
books). No tax Lien has been filed, and, to its knowledge, no claim is being
asserted, with respect to any such tax, fee or other charge which, in either
case, could reasonably be expected to have a Material Adverse Change.
Section 4.10 No Burdensome Restrictions.
Neither the Borrower nor any Borrower Principal is a party to or
subject to any contractual obligation, security, agreement, instrument, license
or other undertaking by which the Borrower or such Borrower Principal is bound
(other than the Loan Documents) which reasonably could be expected to have a
Material Adverse Change on the business, properties, assets, operations or
condition, financial or otherwise, of it, or on the ability of it to carry out
its obligations hereunder or under the other Loan Documents.
Section 4.11 Investment Company Act: Other Regulations.
Neither the Borrower nor any Borrower Principal is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended. Neither the Borrower
nor any Borrower Principal is subject to regulation under any Requirement of
Law which limits its ability to incur Obligations, other than as set forth
herein or in the other Loan Documents.
Section 4.12 Subsidiaries.
The Borrower has no Subsidiaries.
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Section 4.13 Title to Premises.
The Borrower is seized of the Land and Improvements (and any fixtures)
in fee, or is the owner of a leasehold interest in the Land and Improvements
(and any fixtures) pursuant to a Ground Lease, and has marketable title to any
appurtenant easements and has the right to convey the same, that title to such
property is free and clear of all encumbrances except for the Permitted
Encumbrances, and that it will warrant and defend the title to such property
(except for the Permitted Encumbrances) against the claims of all Persons. As to
the balance of the Premises, the Rents and Profits and the Intangible
Personalty, the Borrower represents and warrants that it has marketable title to
such property, that it has the right to convey such property and that it will
warrant and defend such property against the claims of all persons or parties.
Section 4.14 Ownership of Personalty.
The Borrower owns, subject to no Lien other than the Lien of the
Security Instrument and the other Loan Documents, as appropriate, all of the
Personalty.
Section 4.15 Financial Statements.
As of the date of the most recent Financial Statement furnished to the
Lender, neither the Borrower nor any Borrower Principal had any material (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services, as evidenced by bonds, notes or other similar instruments or
agreements, (b) obligations as a lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases, (c) obligations
under direct or indirect guaranties in respect of, or any obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or any obligations of
another of the kind referred to in clause (a) or (b) above, (d) contingent
liability or liability for taxes, or (e) long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is not, to the extent
required by GAAP, reflected in the foregoing statements or in the notes thereto.
No sale, transfer or other disposition by the Borrower or any Borrower Principal
of any material part of its business or property has occurred since the date of
such party's most recent Financial Statement furnished to the Lender.
Section 4.16 No Change.
There has been no development or event which has had or could
reasonably be expected to have a Material Adverse Change (a) with respect to the
Borrower or any Borrower Principal since the date of such party's most recent
Financial Statement furnished to the Lender, or (b) with respect to the Premises
or any portion of the Intangible Personalty since the date of the most recent
Operating Statements furnished to the Lender.
Section 4.17 Accuracy of Information.
Each exhibit, Financial Statement, Operating Statement, Rent Roll,
document, book, record, report and other item of written information furnished
by the Borrower or the Borrower Principals, as the case may be, to the Lender in
connection with the Loan Documents is accurate in all material respects as of
its date and as of the date so furnished and (b) all financial projections
contained therein are based on reasonable and stated assumptions, and no such
document contains any material misstatement of fact or omits to state a material
fact.
Section 4.18 Principal Place of Business.
The Borrower's principal place of business and chief executive office
is at the location set forth in the first paragraph of this Loan Agreement and
it has not operated under any name other than its own name at any time from the
date of its formation.
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Section 4.19 Taxpayer Identification Number.
The Borrower's taxpayer identification number is as set forth in the
Note.
Section 4.20 Insurance.
The Borrower does not know of and has not received any written notice
of any violation of any insurance policy term that remains uncured and, to its
best knowledge, it and the Premises and the use thereof materially comply with
all insurance policy terms.
Section 4.21 Mechanic's Liens, etc.
Except as have been paid for in full by the Borrower on or before the
Closing Date or as shall be paid prior to delinquency in the ordinary course of
the Borrower's business, no improvements or repairs have been made to the
Premises during the one hundred twenty (120) days preceding the date hereof;
there are no contracts not fully performed, and no outstanding bills incurred,
for labor or materials used in making improvements or repairs on the Premises,
or for services of architects, surveyors or engineers incurred in connection
therewith. The Borrower has made no contract or arrangement of any kind
whatsoever, the performance of which by the other party thereto could give rise
to a Lien on the Premises superior to that of the Security Instrument.
Section 4.22 Litigation.
There are no pending or threatened actions, proceedings, suits,
judgments, bankruptcies or executions that in any way involve the Borrower, the
Loan Documents or any Borrower Principal, and the Borrower is not a surety on
any bond through which a Lien might be created superior to any conveyance
executed by the Borrower.
Section 4.23 No Violation.
To the Borrower's knowledge, the Borrower is not in violation of any
Requirement of Law or any Hazardous Materials Law and has not received notice of
and has no knowledge of any Governmental Action.
Section 4.24 ERISA.
The Borrower is not an "employee benefit plan" as defined in Section
3(3) of ERISA, which is subject to Title I of ERISA, (b) the assets of the
Borrower do not constitute "plan assets" of one or more such plans within the
meaning of 29 C.F.R. ss.2510.3-101, (c) neither the Borrower nor any of its
general partners, members or shareholders, as the case may be, have any trust or
custodial relationship with the Lender or any affiliate of the Lender with
respect to any ERISA plan, and (d) neither the Borrower nor any general partner,
member or shareholder of the Borrower is a participant in any governmental plan
that has a trust or custodial relationship with the Lender or any affiliate of
the Lender. The Borrower (i) is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (ii) transactions by or with the Borrower are not
subject to Requirements of Law regulating investments of and fiduciary
obligations with respect to government plans.
Section 4.25 O&M Program.
The Borrower has adopted an O&M Program with respect to all Hazardous
Materials, if any, identified in the Environmental Assessment furnished to the
Lender prior to the Closing Date or as otherwise required by the Lender.
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ARTICLE V - COVENANTS AND AGREEMENTS
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Section 5.1 Affirmative Covenants of the Borrower.
During any period in which the Loan is outstanding, the Borrower agrees
that it will:
(a) Use of Loan Funds. Cause all Loan proceeds to be used for the
purposes set forth in a loan closing statement approved by the Lender and use
all excess Loan proceeds disbursed to the Borrower only for lawful business
purposes permitted under the Borrower's organizational documents. No part of the
proceeds of the Loan will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board of Governors. If requested by the
Lender, the Borrower will furnish to the Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No part of the proceeds of the Loan has been used in any manner
that could result in a violation of Regulations G, T, V or X of the Board of
Governors of the Federal Reserve System.
(b) Payment. Pay when due all sums owing to the Lender and others in
accordance with the terms of the Loan Documents.
(c) Fees, Costs and Expenses. Pay when due all fees, costs and expenses
required to be paid by the Borrower pursuant to the terms of the Commitment or
any of the other Loan Documents, including without limitation, reasonable
attorneys fees and other fees, costs and expenses of the Lender in connection
with the enforcement of the Lender's rights under the Loan Documents. Any such
amounts paid by the Lender shall be due and payable upon demand.
(d) Condition of Premises. Keep and maintain the Premises in good
order, condition and repair and shall make, as and when the same shall become
necessary, all repairs and maintenance necessary or appropriate in order to keep
the Premises from deteriorating.
(e) Compliance. Comply with all (i) building, zoning, fire, health,
environmental, disability and use laws (including, but not limited, to all state
and local handicapped access laws, the Architectural Barriers Act of 1968, the
Fair Housing Amendments Act of 1988, the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990 and similar laws and ordinances), codes,
ordinances, rules and regulations, (ii) covenants and restrictions of record and
(iii) easements which are in any way applicable to the Premises or any part
thereof and the use or enjoyment thereof.
(f) Inspection. Subject to the rights of any tenants of the Premises
under their leases, permit the Lender and/or its authorized agents to enter upon
the Premises during normal working hours and as often as the Lender desires, for
the purpose of inspecting the Improvements specifically and the condition and
operation of the Premises generally. In connection therewith, the Borrower shall
permit the Lender and the Lender's representatives (including an independent
Person such as an engineer, architect, or inspector) or third parties making
Immediate Repairs, Replacements or Additional Repairs or Replacements to enter
onto the Premises during normal business hours (subject to the rights of any
tenants of the Premises under their leases) to inspect the progress of any
Immediate Repairs, Replacements or Additional Repairs or Replacements and all
materials being used in connection therewith, to examine all plans,
specifications and shop drawings relating to such Immediate Repairs,
Replacements or Additional Repairs or Replacements which are or may be kept at
the Premises, and, if an Event of Default has occurred and is continuing, to
complete any Immediate Repairs, Replacements or Additional Repairs or
Replacements. The Borrower agrees to cause all contractors, subcontractors,
agents, architects and inspectors reasonably to cooperate with the Lender and
the Lender's representatives or such other Persons described above in connection
with inspections or the completion of Immediate Repairs, Replacements or
Additional Repairs or Replacements. At the Borrower's request, a representative
of the Borrower may be present during any such inspection.
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(g) Reimbursement. The Borrower agrees that if it shall fail to pay
when due any tax, assessment or charge levied or assessed against the Premises
or any utility charge, whether public or private, or any insurance premium or if
it shall fail to procure the Insurance required hereunder and cause the delivery
of the insurance certificates as required herein, or if it shall fail to pay any
other charge or fee described herein, then the Lender, at its option, may pay,
procure or cause the delivery of the same. The Borrower will reimburse the
Lender upon demand for any sums of money paid by the Lender pursuant to this
Section, together with interest on each such payment at the default rate set
forth in the Note and all such sums and interest thereon shall be secured hereby
(h) Environmental Assessment. Provide to the Lender from time-to-time,
at the Borrower's sole fee, cost and expense, if the Lender shall ever have
reason to believe that any Hazardous Material affects the Premises, or if any
Governmental Action is made or threatened, or if an Event of Default shall have
occurred, an Environmental Assessment, which Environmental Assessment shall have
been ordered by the Borrower within ten (10) days after the Lender's request and
which shall be delivered to the Lender promptly after the date of the Lender's
request. At all other times, the Lender may request an Environmental Assessment
to be provided by the Borrower at the Lender's expense. The Borrower will
cooperate with each consulting firm making any Environmental Assessment and will
promptly supply to the consulting firm, from time to time upon request, all
information available to the Borrower to facilitate the completion of the
Environmental Assessment. If the Borrower fails to order such Environmental
Assessment within ten (10) days after the Lender's request, the Lender may cause
any such Environmental Assessment to be made at the Borrower's fee, cost,
expense and risk. The Lender may disclose to interested parties any information
the Lender ever has about the environmental condition or compliance of the
Premises, but shall be under no duty to disclose any such information except as
may be required by law. The Lender shall be under no duty to make any
Environmental Assessment of the Premises, and in no event shall any such
Environmental Assessment by the Lender be or give rise to a representation that
any Hazardous Material is or is not present on the Premises, or that there has
been or shall be compliance with any Hazardous Materials Law, nor shall the
Borrower or any other Person be entitled to rely on any Environmental Assessment
made by the Lender or at the Lender's request The Lender owes no duty of care to
protect the Borrower or any other Person against, or to inform them of, any
Hazardous Material or other adverse condition affecting the Premises.
(i) Appraisal. At all times during the term of the Loan, cooperate with
the Lender and use its best efforts to assist the Lender in obtaining an
Appraisal of the Premises, and will promptly supply to the Lender, from time to
time upon request, all information available to the Borrower to facilitate the
completion of such Appraisal. If any Event of Default occurs, or if a casualty
loss or governmental taking occurs and results in insurance or eminent domain
proceeds in excess of $150,000.00, the Lender may, in its reasonable discretion,
choose the appraiser, but the Borrower shall be responsible for any fees payable
to said appraiser in connection with an Appraisal of the Premises. Under all
other circumstances, the appraiser performing any such Appraisal shall be
engaged by the Lender, and the Lender shall be responsible for any fees payable
to said appraiser in connection with an Appraisal of the Premises.
(j) Surveys. Following any change in the exterior configuration of the
Premises or any rezoning affecting the Premises, provide the Lender with such
additional Surveys as reasonably requested by the Lender.
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(k) Other Tests. Promptly submit to the Lender copies of reports of all
physical tests at any time made on the Land, the Improvements or the materials
to be incorporated into the Improvements and shall, at the Borrower's expense,
cause to be made such additional tests from time to time as the Lender may
reasonably require after any change in the Premises or receipt by the Lender of
any such report.
(1) Taxes and Fees. Except as otherwise provided herein, pay as they
become due all taxes, general and special assessments, permit fees, inspection
fees, license fees, water and sewer charges, franchise fees and equipment rents
against it or the Premises, and the Borrower, upon request of the Lender, will
submit to the Lender receipts evidencing said payments.
(m) Financial Statements and Operating Statements. Furnish, or cause to
be furnished to the Lender, annual Financial Statements for itself. Monthly
Operating Statements shall be submitted to the Lender when requested by the
Lender and for any period during which any Event of Default is continuing.
Operating Statements shall be delivered to the Lender within forty-five (45)
days of the end of each of the Borrower's fiscal quarters, and an annual
Financial Statements shall be submitted to the Lender within one hundred twenty
(120) days of the Borrower's fiscal year end in lieu of an Operating Statement
for the Borrower's fourth fiscal quarter. Without limiting any other rights
available to the Lender under this Loan Agreement or any of the other Loan
Documents, in the event the Borrower shall fail to timely furnish the Lender any
Financial Statement in accordance with this subsection, the Borrower shall
promptly pay to the Lender a penalty in the amount of $1,000.00 for each such
failure.
(n) Books and Records. Keep and maintain at all times at the Premises,
at the Borrower's address set forth herein, or at such other place as the Lender
may approve in writing, complete and accurate books of accounts and records
adequate to reflect correctly the results of the operation of the Premises and
copies of all written contracts, leases and other instruments which affect the
Premises (including, but not limited to, all bills, invoices and contracts for
utilities, waste management service, telephone service and management services,
rent registrations and all materials filed with any Governmental Authority where
applicable). Such books, records, contracts, leases and other instruments shall
be subject to examination and inspection at any time during normal working hours
by the Lender upon reasonable prior notice.
(o) Further Assurances. The Borrower shall furnish or cause to be
furnished such further documentation or information (including without
limitation, amendments, replacements, corrections, deletions or additions to the
Loan Documents or any other materials furnished to the Lender in connection with
the Loan) which is (i) reasonably required to enable the Lender to sell the
Loan, or (ii) deemed necessary or appropriate by the Lender in the exercise of
its rights under any of the Loan Documents or to perfect, protect, maintain,
preserve, continue and/or extend any Lien granted to the Lender under the
Security Instrument or any other Loan Document, provided, however, that the
Borrower shall not be required to do anything that (A) has the effect of (I)
changing any essential economic or other material terms of the Loan set forth in
the Loan Documents or (II) imposing greater liability on the Borrower under the
Loan Documents, or (B) results in any substantial fee, cost or expense to the
Borrower. In addition, the Borrower shall furnish or cause to be furnished such
further documentation and information (including without limitation, amendments,
replacements, corrections, deletions and additions to the Loan Documents and
other materials furnished to the Lender in connection with the Loan) deemed
necessary or appropriate by the Lender to correct patent mistakes in the Loan
Documents, materials relating to title insurance policies and other insurance
required hereunder, and the funding of the Loan, provided that any such further
documentation or information shall be at the sole fee, cost and expense of the
Lender.
(p) Payment of Operating Expenses. Pay all Operating Expenses, except
to the extent that the Lender is obligated to pay any Operating Expense on
behalf of the Borrower from the Tax and Insurance Reserve Account.
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(q) Payment of Recurring Capital Expenditures. Pay all expenditures
with respect to the Premises related to capital repairs, replacements and
improvements (other than Replacements) performed from time to time.
(r) ERISA. Deliver to the Lender such certifications or other evidence
from time to time throughout the term of the Loan, as requested by the Lender in
its reasonable discretion, that (i) the Borrower is not an "employee benefit
plan," a "governmental plan" and/or subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(ii) one or more of the following circumstances is true:
(A) Less than twenty-five percent (25%) of all Equity Interests in
the Borrower are held by "benefit plan investors" within the meaning of
29 C.F.R. ss.2510.3-101(f)(2); and/or
(B) The Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R. ss.2510.3-101
(c) or (e)
(s) Actions and Proceedings. Promptly notify the Lender in writing of
any action or proceeding relating to any condemnation or other taking, whether
direct or indirect, of the Premises or any portion thereof, or purporting to
affect the Premises, any Loan Document or any right of the Lender hereunder or
thereunder. In each such action or proceeding, the Borrower shall, unless
otherwise directed by the Lender in writing, appear in and prosecute or defend
any such action or proceeding. The Borrower hereby further authorizes the
Lender, in the Lender's reasonable discretion following notice to the Borrower,
as attorney-in-fact for the Borrower, to commence, appear in and prosecute, in
the Lender's or the Borrower's name, any action or proceeding relating to any
condemnation or other taking of the Premises, whether direct or indirect, and to
settle or compromise any claim in connection with such condemnation or other
taking. The Lender shall not exercise the authority granted in the preceding
sentence during any time that the Borrower is prosecuting or defending any such
action in good faith with counsel acceptable to the Lender.
(t) Completion of Immediate Repairs, Replacements and Additional
Repairs or Replacement.
(i) The Borrower shall commence the Immediate Repairs immediately
following the execution of this Agreement (or as soon thereafter as weather
reasonably shall permit) and shall at all times thereafter diligently pursue the
completion of all Immediate Repairs. The Borrower shall complete all Immediate
Repairs no later than twelve (12) months after the date of this Agreement. The
Borrower covenants and agrees that each of the Immediate Repairs, Replacements
and Additional Repairs or Replacements and all materials, equipment, fixtures,
and any other item comprising a part of any Immediate Repair, Replacement or
Additional Repair or Replacement shall be constructed, installed or completed,
as applicable, free and clear of all mechanic's, materialman's or other liens
(except for those liens existing on the date of this Agreement which have been
approved in writing by the Lender).
(ii) If the Lender determines, in its reasonable discretion after
consulting with the Borrower, that Additional Repairs or Replacements are
advisable in order to keep the Premises in good order and repair, the Lender may
send the Borrower written notice of the need for making such Additional Repairs
or Replacements. The Borrower shall promptly commence making such Additional
Repairs or Replacements. If the Borrower fails to commence such Additional
Repairs or Replacements within thirty (30) days after such notice and diligently
pursue completion of such Additional Repairs or Replacements, such failure shall
be an Event of Default under this Loan Agreement, and, in addition to all other
rights the Lender may have under the Loan Documents upon an Event of Default,
the Lender may contract with third parties to make such Additional Repairs or
Replacements and may in its sole discretion (A) apply the funds in the Repair
Escrow Account and/or Replacement Reserve Account toward the labor and materials
necessary to complete such Additional Repairs or Replacements, and/or (B) demand
payment for such Additional Repairs or Replacements from the Borrower.
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(iii) In the event the Lender determines in its reasonable discretion
that any Immediate Repair, Replacement or Additional Repair or Replacement has
not been completed in a workmanlike and timely manner, the Lender shall have the
option to withhold disbursement for such unsatisfactory Immediate Repair,
Replacement or Additional Repair or Replacement and to proceed under existing
contracts or to contract with third parties to complete such Immediate Repair,
Replacement or Additional Repair or Replacement and to apply the Repair Escrow
Account or the Replacement Reserve Account toward the labor and materials
necessary to complete such Immediate Repair, Replacement or Additional Repair or
Replacement to the reasonable satisfaction of the Lender, without providing any
prior notice to the Borrower.
(iv) In order to facilitate the Lender's completion or making of the
Immediate Repairs, Replacements or Additional Repairs or Replacements, the
Lender is granted the irrevocable right to enter onto the Premises and perform
any and all work and labor necessary to complete or make the Immediate Repairs,
Replacements or Additional Repairs or Replacements and employ watchmen to
protect the Premises from damage, loss and/or theft. All sums so expended by the
Lender shall be deemed to have been advanced to the Borrower and secured by the
Security Instrument and the other Loan Documents.
(v) All Immediate Repairs, Replacements and Additional Repairs or
Replacements shall comply with all Requirements of Law and applicable insurance
requirements including, without limitation, applicable building codes, special
use permits, environmental regulations, and requirements of insurance
underwriters.
(u) Program Rider. Comply with all covenants and agreements set forth
in the Program Rider.
Section 5.2 Negative Covenants of the Borrower.
During any period in which the Loan is outstanding, the Borrower agrees
that it will not:
(a) Sale or Encumbrance of Personalty. Sell, encumber or otherwise
dispose of any of the Personalty except (i) to incorporate Tangible Personalty
into the Improvements or replace Tangible Personalty with goods of quality and
value at least equal to that replaced, or (ii) for the sale, disposal or use of
inventory or equipment, if any, in the ordinary course of the Borrower's
business at the Premises; provided, however, in the event the Borrower sells or
otherwise disposes of any of the Personalty, the Lender's security interest in
the proceeds of the Personalty shall continue pursuant to the Security
Instrument and the other Loan Documents, as appropriate
(b) Construction. Except for construction arising out of expansion
rights set forth in (i) the lease between the Borrower and Lowe's Home Centers,
Inc., dated January 6, 1995 (the "Lowe's Lease"), and (ii) the Lease between the
Borrower and Supervalue, Inc., dated June 26, 1996, as amended (the "Supervalue
Lease"), construct or permit the construction of any improvements on the
Premises other than Immediate Repairs or Replacements or as otherwise required
hereunder or previously consented to in writing by the Lender, which consent
shall not be unreasonably withheld, conditioned or delayed.
(c) Change in Ownership: Identify of the Borrower. Permit any sale,
transfer, assignment or other disposition of, or grant or create any Lien on, a
Significant Ownership Interest in the Borrower, except by inheritance, devise,
bequest or by operation of law upon the death of a natural person. The Borrower
hereby acknowledges to the Lender that (i) the identity of the Borrower and the
expertise available to the Borrower were and continue to be material
circumstances upon which the Lender has relied in connection with, and which
constitute valuable consideration to the Lender for, the extending to the
Borrower of the indebtedness evidenced by the Note and (ii) any change in such
identity or expertise could materially impair or jeopardize the security for the
payment of the Note granted to the Lender by the Security Instrument and the
other Loan Documents, as appropriate.
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(d) Prepayment of Rent. Accept any prepayment of rent or installments
of rent for more than two (2) months in advance without the prior written
consent of the Lender
(e) No Other Name. Change its name or operate under any name other than
its name as set forth herein
(f) No Restricted Payments. Make any payment or take any other action
constituting (i) any direct or indirect purchase or other acquisition by the
Borrower of Equity Interests of any other Person, or any direct or indirect
loan, advance (other than advances to employees for moving and travel expenses,
drawing accounts and expenditures in the ordinary course of business) or capital
contribution by the Borrower to any other Person, including all debt and any
Obligation of any sort, and/or (ii) a payment or prepayment on account of, or
the setting apart of assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of
subordinated debt, either directly or indirectly, whether in cash or in property
or in obligations of any Person.
(g) No Waste or Abandonment. Suffer, permit or commit waste, permit
impairment or deterioration of, or abandon, the Premises or any portion thereof.
The Borrower will not itself, or permit any tenant or other Person to, remove,
demolish or alter any improvement now existing or hereafter erected on the
Premises or any fixture, equipment or machinery in or on the Premises except in
connection with any Repair or Replacement, except as may be permitted under any
leases between the Borrower and tenants.
(h) Use of Premises. Except as required by applicable law, or as
otherwise permitted in writing by the Lender, allow any change in the business
use of all or any portion of Premises from the use thereof as of the Closing
Date.
Section 5.3 Environmental Covenants.
(a) Not cause, permit or exacerbate any Prohibited Activities or
Conditions. The Borrower represents and warrants that it has not at any time
caused or permitted any Prohibited Activities or Conditions except as set forth
in the Environmental Assessment and that no Prohibited Activities or Conditions
exist or have existed on or under the Premises. The Borrower shall take all
appropriate steps to prevent its employees, agents, and contractors, and any
tenants from causing, permitting, or exacerbating any Prohibited Activities or
Conditions. The Borrower shall not lease or allow the sublease or use of all or
any portion of the Premises to any tenant, subtenant or user that, in the
ordinary course of its business, would cause, permit, or exacerbate any
Prohibited Activities or Conditions, and all leases, subleases and use
agreements relating to the Premises shall contain provisions sufficient to
ensure that tenants, subtenants and users shall not cause, permit or exacerbate
any Prohibited Activities or Conditions.
(b) Comply in a timely manner with, and cause all employees, agents,
and contractors of the Borrower and any other persons present on the Premises to
so comply with, (i) any O&M Program now or hereafter in effect during the term
of the Loan, and (ii) Hazardous Materials Law, so as to minimize any economic
loss to the Premises and the Loan. The Borrower shall adopt an O&M Program with
respect to any Hazardous Materials identified in any Environmental Assessment or
any Governmental Action relating to the Premises, or as otherwise required by
the Lender with respect to the Premises. Any O&M Program shall be performed by
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qualified contractors under the supervision of a consulting engineer hired by
the Borrower with the prior written approval of the Lender which approval shall
not be unreasonably withheld, conditioned or delayed. All costs and expenses of
any O&M Program shall be paid by the Borrower, including without limitation the
charges of such contractors and consulting engineer and the Lender's fees, costs
and expenses incurred in connection with the monitoring and review of the O&M
Program and the Borrower's performance thereunder.
(c) Promptly notify the Lender in writing of: (i) any Governmental
Action it becomes aware of (ii) any claim made or threatened by any third party
against the Borrower, the Lender, or the Premises relating to loss or injury
resulting from any occurrence or condition on the Premises or any other real
property that could require the removal from the Premises of any Hazardous
Materials or cause any restrictions on the ownership, occupancy, transferability
or use of the Premises under Hazardous Materials Law or (iii) the occurrence of
any Prohibited Activities or Conditions of which it becomes aware. The Borrower
shall cooperate with any governmental inquiry, and shall comply with any
governmental or judicial order, request or directive which arises from any
alleged Prohibited Activities or Conditions; provided that with respect to
governmental requests or directives only, the Borrower may contest or object to
a good faith dispute regarding said request or directive if the Borrower
notifies the Lender in advance of said contest or objection and as long as said
contest or objection does not result in a violation of law or fines assessed
against the Premises.
(d) Pay promptly all costs and expenses incurred by the Lender in
connection with any Governmental Action, including but not limited to costs of
any environmental audits, studies, investigations or remedial activities
including but not limited to the removal of any Hazardous Materials from the
Premises. The Borrower also shall pay promptly the costs of any environmental
audits, studies, investigations or the removal of any Hazardous Materials from
the Premises required by the Lender as a condition of its consent to any sale or
transfer of all or any part of the Premises or any interest therein or required
by the Lender following a reasonable determination by the Lender that there may
be Prohibited Activities or Conditions on or under the Premises; provided,
however, that the Lender shall not impose on the Borrower any obligation with
respect to Prohibited Activities or Conditions greater than imposed by
applicable law. Any such costs or expenses incurred by the Lender (including but
not limited to reasonable fees and expenses of attorneys and consultants,
whether incurred in connection with any judicial or administrative process or
otherwise) which the Borrower fails to pay promptly shall become additional
indebtedness secured by the Security Instrument.
(e) HOLD HARMLESS, DEFEND AND INDEMNIFY THE LENDER AND ITS OFFICERS,
DIRECTORS, TRUSTEES, EMPLOYEES, AGENTS, AFFILIATES (INCLUDING ANY PARENT
CORPORATION), SUCCESSORS AND ASSIGNS, FROM AND AGAINST ALL PROCEEDINGS, CLAIMS,
DAMAGES, PENALTIES. FEES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION
REASONABLE FEES AND EXPENSES OF ATTORNEYS AND EXPERT WITNESSES, INVESTIGATORY
FEES, AND CLEANUP AND REMEDIATION EXPENSES, WHETHER INCURRED IN CONNECTION WITH
ANY JUDICIAL OR ADMINISTRATIVE PROCESS OR OTHERWISE), ARISING DIRECTLY OR
INDIRECTLY FROM (i) ANY BREACH OF ANY REPRESENTATION, WARRANTY, OR OBLIGATION OF
THE BORROWER CONTAINED IN THIS SECTION 5.3 OR (ii) THE PRESENCE OF HAZARDOUS
MATERIALS ON OR UNDER THE PREMISES OR ANY PROPERTY PROXIMATE TO THE PREMISES OR
ANY GOVERNMENTAL ACTION ALLEGING ANY SUCH PRESENCE, EXCEPT TO THE EXTENT THAT
THE BORROWER CAN PROVE BOTH THAT SUCH PRESENCE OR GOVERNMENTAL ACTION ALLEGING
SUCH PRESENCE WAS CAUSED SOLELY BY ACTIONS, CONDITIONS, OR EVENTS THAT OCCURRED
AFTER THE DATE THAT THE LENDER (OR ANY PURCHASER AT A FORECLOSURE SALE) ACTUALLY
ACQUIRED TITLE TO THE PREMISES AND THAT SUCH PRESENCE OR GOVERNMENTAL ACTION
ALLEGING SUCH PRESENCE WAS NOT CAUSED BY THE DIRECT OR INDIRECT ACTIONS OF THE
BORROWER OR ANY BORROWER PRINCIPAL, OR ANY PARTNER, MEMBER, PRINCIPAL, OFFICER,
DIRECTOR, TRUSTEE OR MANAGER OF THE BORROWER OR ANY EMPLOYEE, AGENT, CONTRACTOR
OR AFFILIATE OF THE BORROWER OR ANY BORROWER PRINCIPAL. THE OBLIGATIONS AND
LIABILITIES OF THE BORROWER UNDER THIS SECTION 5.3(e) SHALL SURVIVE ANY
TERMINATION, SATISFACTION, ASSIGNMENT, ENTRY OF A JUDGMENT OF FORECLOSURE OR
DELIVERY OF A DEED IN LIEU OF FORECLOSURE OF THE SECURITY INSTRUMENT.
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Section 5.4 Recourse Covenants.
Except as otherwise expressly permitted by the Loan Documents, during
any period in which the Loan is outstanding, the Borrower agrees that it will
not without the prior written consent of the Lender:
(a) Sale Transfer Conveyance or Disposal. Permit any sale, transfer,
conveyance or other disposal of the Premises, the Rents and Profits or the
Intangible Personalty, other than as permitted under the Security Instrument.
(b) Subordinate Financing and Liens. Engage in any subordinate
financing with respect to the Premises, the Rents and Profits or the Intangible
Personalty or grant any consensual Liens against the Premises, the Rents and
Profits or the Intangible Personalty.
(c) Special Purpose Entity. Fail to be a Special Purpose Entity.
Section 5.5 Insurance.
(a) Maintenance of Insurance. The Borrower shall, at its sole cost and
expense, keep in full force and effect all Insurance. If the Borrower fails to
maintain any Insurance required by this Agreement, the Lender may, at its
option, procure such Insurance, and the Borrower shall reimburse the Lender for
the amount of all premiums paid by the Lender thereon promptly upon demand by
the Lender, with interest thereon at the rate then provided by the Note from the
date paid by the Lender to the date of repayment, and such sum shall be a part
of the indebtedness secured by the Security Instrument. The Lender shall not by
the fact of approving, disapproving, accepting, preventing, obtaining or failing
to obtain any Insurance, incur any liability for or with respect to the amount
of Insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and the
Borrower, for itself, hereby expressly assumes full responsibility therefor and
all liability, if any, with respect thereto.
(b) Insurance with Respect to Immediate Repairs, Replacements and
Additional Repairs or Replacements. In addition to and to the extent not covered
by any Insurance required under the Loan Documents, the Borrower shall provide
or cause to be provided worker's compensation insurance, builder's risk, and
public liability insurance and other insurance to the extent required under
applicable law in connection with a particular Immediate Repair, Replacement or
Additional Repair or Replacement reasonably required by the Lender.
(c) Approved Insurers. Each of the Borrower's insurers shall be an
Approved Insurer. If any of the Borrower's insurers shall at any time cease to
be an Approved Insurer, then within thirty (30) days after notice from the
Lender to the Borrower, the Borrower will obtain replacement Insurance or
additional Insurance issued by one or more other Approved Insurers.
(d) Form of Insurance Policies: Endorsements. All policies for
Insurance shall be in such form and with such endorsements as are comparable to
the forms of and endorsements to the Borrower's insurance policies in effect on
the date hereof or otherwise in accordance with commercially reasonable
standards applied by prudent owners of similar businesses in the general
vicinity of the Premises and generally acceptable to institutional lenders for
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comparable properties and risks. All such policies shall name the Lender, and
its successors and assigns, as additional insureds, mortgagees and/or loss
payees, as deemed appropriate by the Lender, and shall provide that all proceeds
are payable to the Lender and shall contain: (i) a standard "non-contributory
mortgagee" endorsement or its equivalent relating, inter alia, to recovery by
the Lender notwithstanding the negligent or willful acts or omissions of the
named Borrower; (ii) to the extent available at commercially reasonable rates, a
waiver of subrogation endorsement as to the Lender; (iii) an endorsement
providing that no policy shall be impaired or invalidated by virtue of any act,
failure to act, negligence of, or violation of declarations, warranties or
conditions contained in such policy by the Borrower, the Lender or any other
named insured, additional insured, mortgagee or loss payee, except for the
willful misconduct of the Lender knowingly in violation of the conditions of
such policy; (iv) an endorsement providing for a deductible per loss of an
amount not more than that which is customarily maintained by prudent owners of
similar businesses in the general vicinity of the Premises; (v) a provision that
such policies shall not be canceled or amended, including, without limitation,
any amendment reducing the scope or limits of coverage, without at least thirty
(30) days prior written notice to the Lender in each instance, and (vi)
effective waivers by the insurer of all claims for insurance premiums against
any loss payees, additional insureds, mortgagees and named insureds (other than
the Borrower). Any insurance coverage relating to the Premises that is carried
by the Borrower in excess of the Insurance required hereunder shall name the
Lender, and its successors and assigns, as additional insureds, mortgagees
and/or loss payees, as appropriate, as provided herein. A certificate executed
by the Borrower's insurance consultant and other evidence of Insurance
reasonably required by the Lender shall be delivered to the Lender not less than
ten (10) days prior to the expiration date of any of the policies for Insurance
required to be maintained hereunder which certificate and other evidence shall
certify payment of applicable premiums for renewal and replacement policies. The
Borrower may effect any Insurance required hereunder through blanket insurance
policies. The Borrower shall deliver to the Lender certified copies of all
policies for Insurance which shall be taken out upon the Premises while any part
of the Loan shall remain unpaid.
(e) Compliance with Insurance Policy Terms. The Borrower shall comply
with all terms of policies for Insurance and shall not bring or keep or permit
to be brought or kept any article upon the Premises or cause or permit any
condition to exist thereon which would be prohibited by or could invalidate any
Insurance required hereunder.
ARTICLE VI - RESERVE ACCOUNTS
-----------------------------
Section 6.1 Establishment of Reserve Accounts.
On or before the Closing Date, the Lender shall establish each Reserve
Account. Each Reserve Account shall be under the sole dominion and control of
the Lender.
Section 6.2 Initial Reserve Deposits.
On the Closing Date, the Borrower shall pay to the Lender for deposit
into each Reserve Account any Initial Reserve Deposit applicable to such Reserve
Account.
Section 6.3 Monthly Reserve Deposits.
On each Payment Date, the Borrower shall pay to the Lender for deposit
into each Reserve Account any Monthly Reserve Deposit applicable to such Reserve
Account. The Lender may, upon written request from the Borrower, waive any
requirement for the payment of a Monthly Reserve Deposit, provided however, that
any such waiver by the Lender of a requirement that the Borrower pay such
Monthly Reserve Deposit may be revoked by the Lender, in the Lender's sole
discretion, at any time upon notice in writing to the Borrower.
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Section 6.4 Adjustments to Monthly Reserve Deposit to the Replacement
Reserve Account.
The Lender may, in the Lender's reasonable discretion, adjust the
Monthly Reserve Deposit to the Replacement Reserve Account from time to time to
an amount sufficient, in the Lender's reasonable judgment, to maintain adequate
balances necessary for Replacements, including, without limitation. Additional
Repairs or Replacements made pursuant to the terms of the Loan Agreement.
Notwithstanding the foregoing, in the event the Lender shall at any time
increase the Monthly Reserve Deposit to the Replacement Reserve Account over the
Monthly Reserve Deposit to the Replacement Reserve Account then required
pursuant to Exhibit B hereto, the Borrower, may at its election, request that
the Lender obtain, at the sole cost, fee and expense of the Borrower, an
engineering report from an engineer to be selected by the Lender in its
reasonable discretion, in which case the Monthly Reserve Deposit to the
Replacement Reserve Account shall be adjusted by the Lender based on such
engineering report, provided that in no event shall the Monthly Reserve Deposit
to the Replacement Reserve Account be decreased below the applicable amount set
forth on Exhibit B hereto.
Section 6.5 Permitted Investments, Earnings, Charges and Annual
Accounting.
(a) Permitted Investments. The Lender shall invest and reinvest,
or cause to be invested or reinvested, all or any portion of any funds
on deposit in any Reserve Account in Permitted Investments. The
maturities of the Permitted Investments on deposit in any Reserve
Account shall be selected and coordinated to become due not later than
the day before any disbursements from any Reserve Account must be made.
All such Permitted Investments shall be held in the name and be under
the sole dominion and control of the Lender, to the extent permitted by
applicable laws, and no Permitted Investment shall be made unless the
Lender shall perfect its first priority Lien in such Permitted
Investment and, to the extent permitted by applicable laws, the Lender
shall have sole possession and control over each such Permitted
Investment and the income thereon, and any certificate or other
instrument or document evidencing any such investment shall be
delivered directly to the Lender, together with any document of
transfer necessary to transfer title to such investment to the Lender.
The Lender shall not have any liability (other than for the Lender's
gross negligence or willful misconduct) for any loss in investments of
funds in any Reserve Account that are invested in Permitted Investments
and no such loss shall affect the Borrower's obligation to (i) make any
payment hereunder, under the Security Instrument, the Note or any other
Loan Document, or (ii) fund, or have liability for funding, any Reserve
Account. The Borrower agrees that it shall include all interest,
earnings or profits on Permitted Investments of funds on deposit in any
Reserve Account as its income (and, if the Borrower is a partnership or
other pass-through entity, the partners, members or beneficiaries of
the Borrower, as the case may be), and shall be the owner of such
accounts for federal and applicable state and local tax purposes,
except to the extent the Lender retains such interest, earnings or
profits for its own account in accordance with the provisions of
Section 6.5(b) of this Loan Agreement. The Borrower shall have no right
whatsoever to direct the investment of the proceeds in any Reserve
Account.
(b) Earnings. All interest, earnings or profits on the Permitted
Investments of funds in any of the Reserve Accounts shall be deposited
into the applicable Reserve Account, provided that the Lender may, at
its election, and subject to applicable law, retain for its own account
any such interest, earnings or profits (i) on the Tax and Insurance
Reserve Account, and (ii) on any or all of the Reserve Accounts during
the occurrence and continuance of an Event of Default.
(c) Charges. Except as prohibited by applicable laws, the Lender
may charge the Borrower for holding, maintaining and applying funds in
any of the Reserve Accounts to the extent funds on deposit in such
Reserve Account are invested or reinvested in Permitted Investments and
the Lender does not retain for its own account any interest, earnings
or profits on such Reserve Account in accordance with the provisions of
Section 6.5(b) of this Loan Agreement.
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(d) Annual Accounting. The Lender shall furnish or cause to be
furnished to the Borrower, without charge, an annual accounting of each
Reserve Account in the normal format of the Lender or its agent,
showing credits and debits to such Reserve Account and the purpose for
which each debit to such Reserve Account was made.
Section 6.6 Assignment to the Lender of Reserve Accounts and Rights and
Claims.
(a) The Borrower hereby assigns to the Lender the Reserve Accounts as
additional security for all of the Borrower's Obligations to the Lender, under
the Note and under the other Loan Documents; provided, however, the Lender shall
make disbursements from the Reserve Accounts in accordance with the terms of
this Agreement, including without limitation, the Program Rider.
(b) As security for the Borrower's obligations to the Lender, the
Borrower assigns to the Lender all rights and claims the Borrower may have
against (i) all persons or entities claiming amounts due for taxes, utilities,
rent or insurance, or (ii) all persons or entities supplying labor or materials
in connection with the Immediate Repairs, Replacements or Additional Repairs or
Replacements; provided, however, that the Lender may not pursue any such right
or claim unless an Event of Default exists under this Agreement or the Loan
Documents.
Section 6.7 Application of Reserve Accounts Upon an Event of Default.
If any Event of Default occurs, then the Borrower shall immediately
lose all of its rights to receive disbursements from the Reserve Accounts unless
and until the earlier to occur of or concurrently with (a) the date on which
such Event of Default is fully cured, and (b) the date on which all amounts
secured by the Security Instrument and the other Loan Documents have been paid
in full and the lien of the Security Instrument and the other Loan Documents, as
appropriate, have been released by the Lender. Upon any Event of Default, the
Lender may in its sole discretion, use the Reserve Accounts (or any portion
thereof) for the following purposes: (i) repayment of any indebtedness secured
by the Security Instrument and the other Loan Documents, including but not
limited to principal prepayments and the prepayment premium applicable to such
full or partial prepayment (as applicable); provided, however, that such
application of funds shall not cure or be deemed to cure any Event of Default,
(ii) reimbursement of the Lender for all losses, fees, costs and expenses
(including, without limitation, reasonable legal fees) suffered or incurred by
the Lender as a result of such Event of Default, (iii) payment of any amount
expended in exercising all rights and remedies available to the Lender at law or
in equity or under this Agreement or under any of the other Loan Documents, or
(iv) to the payment of any item for which payment is required or permitted from
any of the Reserve Accounts pursuant to the terms of this Loan Agreement.
Nothing in this Loan Agreement shall obligate the Lender to apply all or any
portion of the Reserve Accounts on account of any Event of Default by the
Borrower or to pay the indebtedness secured by the Security Instrument or any of
the other Loan Documents or in any specific order of priority.
Section 6.8 Disbursements from Tax and Insurance Reserve Account.
(a) The Lender shall disburse, to the extent of amounts on deposit in
the Tax and Insurance Reserve Account, directly to each Person owed any portion
of the water and sewer assessments and frontage charges, taxes, assessments and
insurance premiums, the total sum owed to such Person. Such disbursements shall
be made by the Lender (i) so as to coincide in frequency with the regular
billing cycle of such Person, and (ii) on or before the date that each such
payment is due.
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(b) The Lender may require the Borrower to pay to the Lender in
advance, additional amounts for taxes, charges, premiums, assessments, and
impositions in connection with the Borrower or the Premises which the Lender
shall reasonably deem necessary. Unless otherwise provided by applicable law,
the Lender may require payments for such other amounts to be paid by the
Borrower in a lump sum or periodic installments, at the Lender's option.
(c) If the amount held in the Tax and Insurance Reserve Account at the
time of the annual accounting thereof shall exceed the amount deemed necessary
by the Lender to provide for the payment of water and sewer assessments and
frontage charges, taxes, assessments, impositions and insurance premiums, as
they fall due, such excess shall be credited against future Monthly Reserve
Deposits to the Tax and Insurance Reserve Account. If at any time the amount
held in the Tax and Insurance Reserve Account shall be less than the amount
deemed necessary by the Lender to pay water and sewer assessments and frontage
charges, taxes, assessments, impositions and insurance premiums, the Borrower
shall pay to the Lender any amount necessary to make up the deficiency within
thirty (30) days after notice from the Lender to the Borrower requesting payment
thereof.
(d) Upon payment in full of all amounts owed by the Borrower under or
otherwise secured by any of the Loan Documents, all remaining amounts on
deposit, if any, in the Tax and Insurance Reserve Account shall be distributed
to the Borrower.
Section 6.9 Disbursements from Repair Escrow Account and Replacement
Reserve Account.
(a) Upon written request from the Borrower and satisfaction of the
requirements set forth in this Loan Agreement, the Lender shall disburse to the
Borrower amounts from the Repair Escrow Account necessary to reimburse the
Borrower for the actual costs of Immediate Repairs and shall disburse amounts
from the Replacement Reserve Account necessary to reimburse the Borrower for the
actual costs of Replacements (but, as to any Immediate Repair or Replacement,
such amount shall not exceed 125% of the original estimated cost of such
Immediate Repair and/or Replacement set forth on Exhibit B to this Loan
Agreement, unless the Lender agrees to such reimbursement).
(b) Upon written request from the Borrower, the Lender shall disburse
amounts from the Repair Escrow Account and/or Replacement Reserve Account to
reimburse the Borrower for the actual cost of labor and materials associated
with an Additional Repair or Replacement of each of the following conditions are
satisfied: (i) each such request from the Borrower shall include a statement
regarding why such disbursement should be made; and (ii) if the Lender
determines that (A) such Additional Repair or Replacement is of the type
intended to be covered by this Agreement, (B) the costs for such Additional
Repair or Replacement are reasonable, (C) the amount of funds in the Repair
Escrow Account and/or the Replacement Reserve Account, as applicable, is
sufficient to pay the Additional Repair or Replacement and 125% of the then
current estimated cost of completing all remaining Immediate Repairs and
Replacements, as applicable, and (D) all other conditions for disbursement under
this Loan Agreement have been met, then the Lender shall disburse funds from the
Repair Escrow Account and/or the Replacement Reserve Account, as applicable, for
such Additional Repair or Replacement in accordance with the requirements of
this Loan Agreement for Immediate Repairs and/or Replacements.
(c) Each request for disbursement from the Repair Escrow Account or
Replacement Reserve Account shall be in a form specified or approved by the
Lender and shall set forth (i) the specific Immediate Repairs, Replacements or
Additional Repair or Replacement, as the case may be, for which the disbursement
is requested, (ii) the quantity and price of each item purchased, if the
Immediate Repair, Replacement or Additional Repair or Replacement, as the case
may be, includes the purchase or replacement of specific items, (iii) the price
of all materials (grouped by type or category) used in any Immediate Repair,
Replacement or Additional Repair or Replacement, as the case may be, other than
the purchase or replacement of specific items, and (iv) the cost of all
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contracted labor or other services applicable to each Immediate Repair,
Replacement or Additional Repair or Replacement, as the case may be, for which
such request for disbursement is made. With each request the Borrower shall
certify that all Immediate Repairs, Replacements or Additional Repairs or
Replacements, as the case may be, have been made in accordance with the
requirements of this Loan Agreement and all Requirements of Laws. Each request
for disbursement shall include (A) copies of invoices for all items or materials
purchased and all contracted labor or services provided, and (B) such
acknowledgments of payment, lien waivers and/or releases with respect to the
Immediate Repairs, Replacements and Additional Repairs or Replacements for which
disbursement is requested as the Lender may reasonably require. In connection
with each disbursement from the Repair Escrow Account or the Replacement Reserve
Account, as the case may be, the Lender may require the Borrower to provide the
Lender with an endorsement to the Lender's title insurance policy showing that
no Liens have been placed against the Premises since the date of recordation of
the Security Instrument (other than Permitted Encumbrances and any other Liens
previously approved in writing by the Lender, if any)
(d) Except as provided in the following sentence, each request for
disbursement from the Repair Escrow Account or the Replacement Reserve Account
shall be made only after completion (as reasonably determined by the Lender) of
the Immediate Repair, Replacement or Additional Repair or Replacement for which
disbursement is requested. If (i) the cost of the Immediate Repair, Replacement
or Additional Repair or Replacement exceeds the lesser of (A) 1% of the original
Loan Amount, or (B) $50,000.00, (ii) the written contract with respect to such
Immediate Repair, Replacement or Additional Repair or Replacement requires
periodic payment for such work pursuant to the terms thereof, and (iii) the
Lender has approved in writing in advance such periodic payments, then a request
for reimbursement from the Repair Escrow Account and/or Replacement Reserve
Account may be made after completion of a portion of the work under such
contract, provided (1) the materials for which the request is made are on site
at the Premises and are properly secured or have been installed in the Premises,
(2) all other conditions in this Loan Agreement for disbursement have been
satisfied, and (3) funds remaining in the Repair Escrow Account or the
Replacement Reserve Account, as the case may be, are, in the Lender's reasonable
judgment, sufficient to complete such Immediate Repair, Replacement or
Additional Repair or Replacement and all the other Immediate Repairs and/or
Replacements when required. The Lender, at its option, may issue joint checks,
payable to the Borrower and the supplier, materialman, mechanic, contractor,
subcontractor or other party to whom payment is due in connection with any such
periodic payment for an Immediate Repair, Replacement or Additional Repair or
Replacement to be paid from the Repair Escrow Account or Replacement Reserve
Account, as the case may be.
(e) The Lender shall have no obligation to make any disbursement from
the Repair Escrow Account or the Replacement Reserve Account more frequently
than once in any month and (except in connection with the final disbursement) in
any amount less than the lesser of (i) 1% of the original Loan Amount, or (ii)
$5,000.00.
(f) Prior to any disbursement from the Repair Escrow Account or the
Replacement Reserve Account, the Lender may, at the Borrower's expense, require
an inspection by an appropriate independent qualified professional reasonably
selected by the Lender and a copy of a certificate of completion by an
independent qualified professional reasonably acceptable to the Lender prior to
the disbursement of any amounts from the Repair Escrow Account or the
Replacement Reserve Account exceeding $25,000.00. The Borrower shall pay the
Lender a reasonable inspection fee not exceeding $1,000.00 for each such
inspection
(g) The Lender shall not be obligated to make disbursements from the
Repair Escrow Account or the Replacement Reserve Account to reimburse the
Borrower for the costs of routine maintenance to the Premises, tenant
improvements or leasing commissions
(h) Upon the earlier to occur of (i) the timely completion of all
Immediate Repairs in accordance with the requirements of this Loan Agreement, as
verified by the Lender in its reasonable discretion, or (ii) the payment in full
of all amounts owed by the Borrower under or otherwise secured by any of the
Loan Documents, all amounts remaining on deposit, if any, in the Escrow Repair
Account shall be distributed to the Borrower
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(i) Upon payment in full of all amounts owed by the Borrower under or
otherwise secured by any of the Loan Documents, all amounts remaining on
deposit, if any, in the Replacement Reserve Account shall be distributed to the
Borrower
Section 6.10 Indemnification.
The Borrower agrees to indemnify the Lender and to hold the Lender
harmless from and against any and all actions, suits, claims, demands,
counterclaims, cross-claims, liabilities, losses, damages, obligations, fees and
costs and expenses (including litigation costs, reasonable attorneys' fees and
expenses) arising from or in any way connected with (a) the performance of the
Immediate Repairs, Replacements or Additional Repairs or Replacements, (b)
unpaid taxes, utility bills, rent or insurance premiums owed by the Borrower,
and/or (c) the holding or investment of the Reserve Accounts, except to the
extent any of the foregoing is the direct result of the gross negligence or
willful misconduct of the Lender.
ARTICLE VII - EVENTS OF DEFAULT; REMEDIES
-----------------------------------------
Section 7.1 Events of Default.
An Event of Default shall occur if any of the following has occurred
and is continuing:
(a) Payments. The Borrower fails to make any payment hereunder, under
the Note or under any other Loan Document, when due and payable, and such
payment is not to be received prior to the 10th day after the same is due (or
such greater period, if any, required by applicable law) following the date such
payment becomes due and payable.
(b) Bankruptcy, etc. The occurrence of any Bankruptcy Event with
respect to the Borrower or any general partner or member thereof.
(c) Judgments. One or more judgments or decrees in excess of $25,000.00
shall be entered against the Borrower (not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage), and any such judgments or
decrees shall not have been vacated, discharged, stayed or bonded (through
appeal or otherwise) within thirty (30) calendar days from the entry thereof.
(d) Recourse Covenants. The Borrower violates any of the Recourse
Covenants.
(e) Compliance with Sections 5.1 (o) and (p) The Borrower fails to
comply with any or all of the provisions of either Section 5.1 (o) or 5.1 (p)
and such failure continues for a period of thirty (30) calendar days following
(i) in the case of Section 5.1 (o), the date demand by the Lender is made upon
the Borrower for the execution of any agreement or document in accordance with
the provisions of Section 5.1 (o) or (ii) in the case of Section 5.1(p), the
date on which any Operating Expense becomes due and payable in accordance with
the terms thereof; provided that if any Operating Expense is the subject of a
bona fide dispute and is less than 1% of the outstanding balance of the Loan as
of the date on which the particular Operating Expense in dispute became due and
payable, then the Borrower shall have ninety (90) days from the date the same
becomes due and payable to pay such Operating Expense or to furnish the Lender a
bond or other collateral acceptable to the Lender in the Lender's reasonable
discretion.
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(f) Representations and Warranties. Any representation, warranty,
acknowledgment or statement made by the Borrower or any Borrower Principal
herein, in any other Loan Document or in any written statement or certificate
delivered or required to be delivered pursuant hereto shall prove untrue in any
material respect on the date as of which it was deemed to have been made or any
representation, warranty acknowledgment or statement submitted to the Lender
concerning the financial condition or credit standing of the Borrower, any
general partner or member thereof or any Borrower Principal proves to be false
or misleading.
(g) Compliance with Covenants and Agreements. The Borrower shall fail
to comply with, observe or perform any covenant or agreement made by it herein
or in any other Loan Document, which failure continues for thirty (30) days
following written notice thereof to the Borrower, provided that if such failure
is of a type which can not reasonably be cured within such thirty (30) day
period and the Borrower is diligently and in good faith pursuing such cure, then
the Borrower shall have a reasonable period of time (but in no event more than
ninety (90) days following such written notice) to cure such failure without the
same becoming an Event of Default hereunder. Nothing in this Section 7.1(g)
shall be deemed or construed to entitle the Borrower to any notice and
opportunity to cure with respect to any failure to comply with, observe or
perform any covenant or agreement which constitutes an Event of Default under
any other subsection of this Section 7.1 or to extend any notice and/or
opportunity to cure otherwise provided for in any other subsection of this
Section 7.1.
(h) Material Adverse Change. In the Lender's reasonable opinion, any
event occurs that could be expected to have a Material Adverse Change upon the
Borrower.
(i) Events of Default under the Program Rider or other Loan Documents.
The occurrence of any Event of Default or similar event under any of the Program
Rider or the other Loan Documents, after giving effect to any period of time
provided for the cure of any such event or occurrence in the Program Rider or
any such Loan Document.
Section 7.2 Remedies.
Upon the occurrence of an Event of Default, the Lender may, at its
option:
(a) Acceleration. Accelerate the entire unpaid principal balance of the
Loan and all accrued interest thereon with advance written notice to the
Borrower, the same becoming immediately due and payable. In addition, upon
acceleration, any and all other Obligations of the Borrower to the Lender shall
be immediately due and payable.
(b) Replacement of Property Manager. Upon written notice to the
Borrower, require the replacement of any property manager or managing agent for
the Premises with a property manager or managing agent acceptable to the Lender.
(c) Other Remedies. Invoke any other remedies set forth herein or in
any of the other Loan Documents, including without limitation, foreclosure of
the Lien granted in the Security Instrument and enforcement of the assignment to
the Lender of the Rents and Profits in accordance with the terms of the Security
Instrument.
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ARTICLE VIII - CASUALTY LOSSES: EMINENT DOMAIN
----------------------------------------------
Section 8.1 Repairs and Casualty Losses.
(a) Restoration of Premises. Except as otherwise provided in this
Section 8.1, the Borrower shall, at its expense, promptly repair, restore,
replace or rebuild any part of the Premises which is damaged or destroyed by any
casualty or as the result of any taking under the power of eminent domain,
provided the Lender has made available insurance proceeds or eminent domain
proceeds or awards available to the Borrower for such repair, restoration,
replacement or rebuilding. The Borrower shall cause all repairs, rebuilding,
replacements or restorations to be (in the reasonable opinion of the Lender) of
substantially equivalent quality to the Premises as of the date hereof, ordinary
wear and tear excepted.
(b) Proof of Loss; Claims Settlement. In the event of loss, the
Borrower shall give prompt written notice thereof to the insurance carrier and
the Lender, and the Lender may make proof of loss if not made promptly by the
Borrower. During the existence of any Event of Default, the Lender is hereby
authorized, in its reasonable discretion, to adjust, compromise and collect the
proceeds of any insurance claims.
(c) Application of Insurance Proceeds. The Borrower hereby assigns the
proceeds of any such insurance policies to the Lender and hereby directs and
authorizes each insurance company to make payment for such loss directly to the
Lender. Except as set forth in the Lowe's Lease and the Supervalue Lease, the
proceeds of any insurance or any part thereof shall be applied by the Lender in
accordance with the provisions of Section 8.3 of this Loan Agreement.
Section 8.2 Eminent Domain.
(a) Participation in Proceedings. The Borrower shall promptly notify
the Lender of any actual or threatened initiation of any eminent domain
proceeding or other taking for public use as to the whole or any part of the
Premises and/or any rights incident or appurtenant thereto and shall deliver to
the Lender copies of any and all papers served or received in connection with
such proceedings, and the Lender shall have the right, at its option, to
participate in such proceedings at the expense of the Borrower (including,
without limitation, the Lender's reasonable attorney's fees) and the Borrower
will execute such documents and take such other steps as required to permit such
participation.
(b) Right to Settle Claims. During the existence of any Event of
Default, the Lender is hereby authorized to adjust, compromise and collect the
proceeds of any eminent domain or similar award or settle a claim for damages
and to apply the same (or any part thereof) to the then outstanding balance of
the Loan.
(c) Use of Proceeds. The Borrower assigns to the Lender any proceeds or
awards which may become due by reason of any condemnation or other taking for
public use of the whole or any part of the Premises and any rights incident or
appurtenant thereto. The proceeds of any such condemnation award or proceeds of
any part thereof shall be applied by the Lender in accordance with the
provisions of Section 8.3 of this Loan Agreement.
(d) Further Assignments: Acceleration. The Borrower agrees to execute
such further assignments and agreements as may be reasonably required by the
Lender to assure the effectiveness of this Section 8.2. In the event any
governmental agency or authority shall require or commence any proceedings for
the seizing or demolishing of any part of the Premises, or shall commence any
proceedings to condemn or otherwise take pursuant to the power of eminent domain
(or other power) a material portion of the Premises, the Lender may, at its
option, declare the Loan to be immediately due and payable in full and apply all
or any portion of the eminent domain (or similar) awards or proceeds to the then
outstanding balance of the Loan.
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Section 8.3 Application of Insurance Proceeds and Condemnation Awards.
(a) All proceeds of insurance assigned to the Lender pursuant to
Section 8.1 of this Loan Agreement, and all proceeds or awards which may become
due by reason of any condemnation or other taking for public use of the whole or
any part of the Premises or any rights incident or appurtenant thereto and that
have been assigned to the Lender pursuant to Section 8.2 of this Loan Agreement
shall be eligible to be applied by the Lender in its sole discretion to the
repayment of the Loan; provided, however, that subject to the provisions of this
Section 8.3, such proceeds shall be held in an Eligible Account and applied to
the repair or restoration of the Premises if all of the following conditions are
met:
(i) there exists no Default Condition or Event of Default;
(ii) the Borrower presents sufficient evidence to the Lender that (A)
with respect to any casualty loss, there are sufficient funds from the insurance
proceeds and from equity funds, if needed, to completely restore or repair the
damaged Premises, or (B) with respect to any condemnation award, there are
sufficient funds from the condemnation award or proceeds and from equity funds,
if needed, to completely restore the Premises to an architectural whole and to
pay Operating Expenses, and (C) the insurance proceeds or condemnation award is
less than 20% of the original Loan Amount;
(iii) as applicable, all affected non-Local Tenants and 75% of all
affected Local Tenants (as determined by square footage) agree in a manner
reasonably satisfactory to the Lender that they will continue or extend their
interests and arrangements for the contract terms then in effect following the
repair, restoration, replacement or rebuilding;
(iv) all parties having material operating, management and/or franchise
interests in, and arrangements concerning, the Premises agree that they will
continue their interests and arrangements for the contract terms then in effect
following the repair, restoration, replacement or rebuilding;
(v) the Borrower presents sufficient evidence to the Lender that the
Premises will be repaired or restored to an architectural whole one (1) year
prior to the maturity date of the Loan;
(vi) the Lender will not incur any liability to any other Person as a
result of such use or release of proceeds; and
(vii) (A) as to any casualty loss, the insurance proceeds shall be held
by the Lender and disbursed as repair, restoration, replacement or rebuilding
progresses substantially in accordance with the procedures set forth in this
Loan Agreement for disbursement from the Replacement Reserve Account; provided,
however that insurance proceeds of $50,000.00 or less will be disbursed directly
to the Borrower for repair, restoration, replacement or rebuilding and (B) as to
any condemnation award, the condemnation award or proceeds shall be held by the
Lender and disbursed as repair, restoration, replacement or rebuilding
progresses substantially in accordance with the procedures set forth in this
Loan Agreement for disbursement from the Replacement Reserve Account.
(b) If the above-stated conditions are not satisfied within one hundred
twenty (120) days of loss, then the Lender may, at its option, apply any
proceeds in repayment of the amount then outstanding under the Note.
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(c) Upon the completion of any repair, restoration, replacement or
rebuilding any remaining proceeds shall be paid to the Lender in repayment of
the amount then outstanding under the Note in accordance with the provisions of
the Note.
ARTICLE IX - GENERAL PROVISIONS
-------------------------------
Section 9.1 Remedies Cumulative; Waivers.
All remedies of the Lender provided for herein and/or in the other Loan
Documents are cumulative and shall be in addition to any and all other rights
and remedies provided for or available under the other Loan Documents, at law
and/or in equity. The exercise of any right or remedy by the Lender hereunder
shall not in any way constitute a cure or waiver of any Default Condition or
Event of Default hereunder or under any other Loan Document, or invalidate any
act done pursuant to any notice of the occurrence of any Default Condition or
Event of Default, or prejudice the Lender in the exercise of any of its rights
hereunder or under or any other Loan Document, unless, in the exercise of said
rights, the Lender realizes all amounts owed to it under the Loan Documents. No
waiver of any Default Condition or Event of Default hereunder shall be implied
from any delay or omission by the Lender to take action on account of such
Default Condition or Event of Default, and no express waiver shall affect any
Default Condition or Event of Default other than the Default Condition or Event
of Default specified in the waiver and it shall be operative only for the time
and to the extenttherein stated. Waivers of any covenants, terms or conditions
contained herein must be in writing and shall not be construed as a waiver of
any subsequent failure to observe or comply with the same covenant, term or
condition. The consent or approval by the Lender to or of any act by the
Borrower requiring further consent or approval shall not be deemed to waive or
render unnecessary the consent or approval to or of any subsequent or similar
act.
Section 9.2 Benefit.
This Loan Agreement is made and entered into for the sole protection
and benefit of the Lender and the Borrower, the Borrower Principals and their
successors and permitted assigns, and no other Person or Persons shall have any
right to action hereon or rights to the Loan proceeds at any time, nor shall the
Lender owe any duty whatsoever to any claimant for labor performed or material
furnished in connection with the construction of the Improvements, or to apply
any undisbursed portion of the Loan to the payment of any such claim, or to
exercise any right or power of the Lender hereunder or arising from any Default
Condition or Event of Default by the Borrower.
Section 9.3 Assignment and Assumption.
(a) The terms hereof shall be binding upon and inure to the
benefit of the heirs, successors, assigns, and personal representatives
of the parties hereto.
(b) The Borrower shall not assign or permit any assumption of this
Loan Agreement, any of the other Loan Documents or any of its rights,
interests, duties or obligations hereunder or thereunder or any Loan
proceeds or other sums to be advanced hereunder in whole or in part
without the prior written consent of the Lender (which consent shall
not be unreasonably withheld or delayed) and the payment to the Lender
of all reasonable and customary expenses incurred by the Lender in
connection with any such assignment and/or assumption and of a
processing fee (i) with respect to any assignment and/or assumption
during the first twelve (12) months of the term of the Loan, in an
amount equal to 1% of the then outstanding principal amount of the Loan
as of the date the Borrower requests the Lender to consent to such
assignment or assumption, and (ii) with respect to any such assignment
and/or assumption thereafter, in an amount equal to $10,000.00; any
assignment or assumption (whether voluntary or by operation of law)
without said consent shall be void. Without in any way limiting the
foregoing, in no event shall the Lender consent to any assignment or
assumption during the first twelve (12) months following the date of
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this Loan Agreement if the consideration paid or to be paid by the
assignee or purchaser of the Premises in connection therewith, as
determined by the Lender in its reasonable judgment, is less than the
appraised value of the Premises used by the Lender in underwriting the
Loan. The Borrower shall furnish the Lender at the Borrower's sole cost
and expense such information as the Lender shall request in connection
with any assignment or assumption, including without limitation, an
Appraisal or other evidence satisfactory to the Lender in its
reasonable discretion of the value of the Premises as of the date of
the assignment and/or assumption. In addition, the assignee or
purchaser of the Premises shall be required to assume the Borrower's
duties and obligations under this Loan Agreement and shall be required
to execute and deliver to the Lender such documents, opinions,
certificates and information as the Lender reasonably requires to
effectuate such assumption of duties and obligations. No sale,
assignment or assumption shall relieve the Borrower of its Obligations
under this Loan Agreement or any of the other Loan Documents, unless
the Borrower has obtained the prior written consent of the Lender,
which consent shall not be unreasonably withheld or delayed.
(c) It is expressly recognized and agreed that the Lender may, in its
sole discretion, sell, assign, transfer, participate or otherwise convey this
Loan Agreement, the Note, the Security Instrument and any other Loan Documents,
in whole or in part, to any other Person provided that all of the provisions
hereof shall continue in full force and effect and, in the event of such
assignment, the Lender shall thereafter be relieved of all liability hereunder
and any Loan disbursements made by any assignee shall be deemed made in
pursuance and not in modification hereof and shall be evidenced by the Note and
secured by the Security Instrument and any other Loan Documents. It is further
expressly recognized that the Lender intends to sell, transfer, deliver and
assign the Loan in the secondary mortgage market. By its execution of this Loan
Agreement and the other Loan Documents, the Borrower and each Borrower Principal
understands and agrees that any Financial Statement, Operating Statement, Rent
Roll and other information delivered to the Lender may be delivered to any
secondary mortgage market participant in connection with the sale or assignment
of the Loan or any security backed by the Loan. In the event of such assignment,
the Lender shall thereafter be relieved of all liability hereunder and any Loan
disbursements made by any assignee shall be deemed made in pursuance and not in
modification hereof and shall be evidenced by the Note and secured by the
Security Instrument and the other Loan Documents.
Section 9.4 Information.
It is expressly recognized and agreed that the Lender may share any
information pertaining to the Loan Documents, the transactions contemplated
thereby and the records maintained by the Lender in connection therewith
NationsBank Corporation, including its bank subsidiaries and NationsBanc Capital
Markets, Inc. and any of the other Affiliates of the foregoing and any other
Persons which require such information in connection with the sale in the
secondary mortgage market of the Loan.
Section 9.5 Nonrecourse Loan: Exceptions.
The Note provides that the Loan is nonrecourse to the Borrower and each
Borrower Principal, except for (a) the lien of the Security Instrument and the
other Loan Documents and (b) the exceptions provided for in the Note.
Section 9.6 Amendments.
This Loan Agreement shall not be amended except by a written instrument
signed by all parties hereto.
-37-
Section 9.7 Governing Law and Jurisdiction.
This Loan Agreement and the other Loan Documents and all matters
relating thereto shall be governed by and construed and interpreted in
accordance with the laws of the State. The Borrower and all of its general
partners/members and each Borrower Principal hereby submit to the jurisdiction
of the state and federal courts located in the State and agree that the Lender
may, at its option, enforce its rights under the Loan Documents in such courts.
Section 9.8 Savings Clause.
Invalidation of any one or more of the provisions of this Loan
Agreement shall in no way affect any of the other provisions hereof, which shall
remain in lull force and effect.
Section 9.9 Execution in Counterparts.
This Loan Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument, and in making proof of this Loan
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
Section 9.10 Notices.
All notices and other communications shall have been duly given and
shall be effective (a) when delivered, (b) when transmitted via telecopy (or
other facsimile device) to the number set forth in Exhibit C hereto, (c) the day
following the day on which the same has been delivered prepaid to a reputable
national overnight air courier service, or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case to the respective party at the address set forth in
Exhibit C hereto, or at such other address as such party may specify by written
notice to the other party hereto. No notice of change of address shall be
effective except upon actual receipt. This Section 9.10 shall not be construed
in any way to affect or impair any waiver of notice or demand provided in any
Loan Document or to require giving of notice or demand to or upon any Person in
any situation or for any reason. In addition to the foregoing, the Lender may,
from time to time, specify to the Borrower additional notice parties by
providing to the Borrower written notice of the name, address, telephone number
and telecopy number of any such additional notice party. Each such additional
notice party shall be entitled to receive and/or give any notice required or
permitted to be given under this Loan Agreement or any other Loan Document
Section 9.11 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, the Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held by or owing to the Lender (including, without
limitation branches, agencies or Affiliates of the Lender wherever located) to
or for the credit or the account of the Borrower against the obligations and
liabilities of the Borrower to the Lender hereunder, under the Note or
otherwise, irrespective of whether the Lender shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of the Lender subsequent thereto.
The Lender agrees to notify the Borrower promptly following to any such set-off
or application.
-38-
Section 9.12 Written Agreement.
(a) THE RIGHTS AND OBLIGATIONS OF THE BORROWER, EACH BORROWER PRINCIPAL
AND THE LENDER, AS APPROPRIATE, SHALL BE DETERMINED SOLELY FROM THIS WRITTEN
LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND ANY PRIOR OR CONTEMPORANEOUS
ORAL OR WRITTEN AGREEMENTS BETWEEN THE LENDER, THE BORROWER AND EACH BORROWER
PRINCIPAL CONCERNING THE SUBJECT MATTER HEREOF AND OF THE OTHER LOAN DOCUMENTS
ARE SUPERSEDED BY AND MERGED INTO THIS LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(b) THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY NOT BE VARIED
BY ANY ORAL AGREEMENTS OR DISCUSSIONS THAT OCCUR BEFORE, CONTEMPORANEOUSLY WITH,
OR SUBSEQUENT TO THE EXECUTION OF THIS LOAN AGREEMENT OR THE OTHER LOAN
DOCUMENTS.
(c ) THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.13 Waiver of Jury Trial.
THE LENDER, THE BORROWER AND EACH BORROWER PRINCIPAL HEREBY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
LOAN AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY
THE LENDER, THE BORROWER AND EACH BORROWER PRINCIPAL, AND THE LENDER, THE
BORROWER AND EACH BORROWER PRINCIPAL ACKNOWLEDGE THAT NO PERSON ACTING ON BEHALF
OF ANOTHER PARTY TO THIS LOAN AGREEMENT HAS MADE ANY REPRESENTATIONS OF FACT TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. THE LENDER, THE BORROWER AND EACH BORROWER PRINCIPAL FURTHER ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED)
IN THE SIGNING OF THIS LOAN AGREEMENT AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE
HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
-39-
IN WITNESS WHEREOF, the Borrower, each Borrower Principal and the
Lender have executed this Loan Agreement as of the above-written date.
BORROWER:
TOWNFAIR CENTER ASSOCIATES, a Pennsylvania
general partnership
By: ▇. ▇. ▇▇▇▇ Incorporated, a Pennsylvania
corporation, a General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Executive Vice President
---------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited Partnership #2, a
Pennsylvania limited partnership, a General
Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Development Corporation, a
Pennsylvania corporation, its General
Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: VIP
--------------------------------------
[Signatures Continued on Following Page]
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[PAGE INTENTIONALLY LEFT BLANK]
-41-
[Signatures Continued From Preceding Page]
BORROWER PRINCIPAL(S):
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.(SEAL)
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
LENDER:
PATRICIAN FINANCIAL COMPANY LIMITED
PARTNERSHIP, a Massachusetts limited
partnership
By: BRF Corporation, a Massachusetts corporation,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Patrician Operations
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EXHIBIT A
---------
EQUITY INTERESTS
Borrower:
▇. ▇. ▇▇▇▇ Incorporated 50%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited Partnership #2 50%
Total: 100%
Each Borrower Principal which is not an Individual:
Not Applicable
EXHIBIT B
---------
IMMEDIATE REPAIRS, REPLACEMENTS, INITIAL RESERVE DEPOSITS
AND MONTHLY RESERVE DEPOSITS
Immediate Repairs Estimated Cost
There are no immediate repairs
Replacements Estimated Cost
See Exhibit ▇-▇ hereto.
Initial Reserve Deposits
Initial Reserve Deposit to the Repair Escrow Account (125% of the
aggregate estimated cost of Immediate Repairs shown above): $ 0
Initial Reserve Deposit to the Replacement Reserve Account: $ 0
Initial Reserve Deposit to the Tax and Insurance Reserve Account: $32,483.00
Monthly Reserve Deposits
Monthly Reserve Deposits to the Replacement Reserve Account shall be in
an amount equal to $682.76 per month, as such amount may be adjusted from time
to time in accordance with the terms of this Loan Agreement, including without
limitation, the Program Rider.
Monthly Reserve Deposits to the Tax and Insurance Reserve Account shall
be in an amount equal to (a) the sum of (i) the aggregate anticipated annual
premiums for all insurance policies required to be maintained pursuant to this
Loan Agreement due in the coming year, (ii) the sum of the anticipated annual
real property taxes, personal property taxes, intangibles taxes and assessment
for the Premises due in the coming year, (iii) the sum of anticipated annual
water and sewer assessments and frontage charges for the Premises due in the
coming year, and (iv) the sum of all other anticipated assessments and charges
against the Premises due in the coming year, divided bv (b) twelve (12).
[o]
*Construction year: 1996
Total Square Feet: 163,863
Inflation Rate: 4.0%
Interest Rate on Reserve Account: 3.0%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Annual Reserves for Square Feet: $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15
Avg. Annual Reserves for Square Feet: $0.15
Year 10 Year 11 Year 12
Annual Reserves for Square Feet: $0.15 $0.15 $0.15
Avg. Annual Reserves for Square Feet
Underwritten Annual Reserves P&F Year 1
(If Different from Actuals): $0.15
ITEM Immediate
Repairs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Pavement
Parking Space Striping $12,000 $12,000
Site Lighting
Building Mounted Lighting
Landscaping
Drainage
Irrigation System
Concrete Block
Windows
Doors
Built-up Roof
Metal Roof
Paint - Exterior
Clean Up / Miscellaneous
IMMEDIATE REPAIRS $0
Cash Requirements $0 $0 $12,000 $0 $0 $0 $12,000 $0 $0
Inflation Factor @ 4.0% 100.00% 104.00% 108.16% 112.49% 116.99% 121.67% 126.53% 131.59% 136.86%
CASH REQUIREMENTS * Inflation $0 $0 $12,979 $0 $0 $0 $15,184 $0 $0
ANNUAL RSVE COLLECTIONS $24,579 $24,579 $24,579 $24,579 $24,579 $24,579 $24,579 $24,579 $24,579
Annual Surplus /(Shortfall) $24,579 $24,579 $11,600 $24,579 $24,579 $24,579 $9,396 $24,579 $24,579
Interest Earned @ 3.0% $737 $1,497 $1,890 $2,684 $3,502 $4,344 $4,756 $5,636 $6,343
CUM. RSVE BALANCE/(SHORTFALL) $25,317 $51,393 $64,883 $92,147 $120,228 $149,151 $163,303 $193,519 $224,642
ITEM
Year 10 Year 11 Year 12 Total
Pavement $0
Parking Space Striping $12,000 $36,000
Site Lighting $0
Building Mounted Lighting $0
Landscaping $0
Drainage $0
Irrigation System $0
Concrete Block $0
Windows $0
Doors $0
Built-up Roof $0
Metal Roof $0
Paint - Exterior $0
Clean Up / Miscellaneous $0
$0
$0
$0
$0
IMMEDIATE REPAIRS $0
Cash Requirements $0 $12,000 $0 $36,000
Inflation Factor @ 142.33% 148.02% 153.95%
CASH REQUIREMENTS * Inflation $0 $17,763 $0 $45,926
ANNUAL RSVE COLLECTIONS $24,579 $24,579 $24,579 $294,953
Annual Surplus /(Shortfall) $24,579 $6,817 $24,579 --
Interest Earned @ $7,477 $57,905 $8,880 --
CUM. RSVE BALANCE/(SHORTFALL) $256,698 $271,420 $304,879 --
EXHIBIT C
---------
ADDRESSES FOR NOTICE
if to the Borrower: Townfair Center Associates
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Development Corporation
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
and
▇▇▇▇▇ & McConomy LLP
Twentieth Floor
Four Gateway Center
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
if to the Lender: Patrician Financial Company Limited Partnership
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
EXHIBIT D
---------
PROGRAM RIDER
(Retail/Industrial/Office)
1. Conditions Precedent. The obligation of the Lender to make the Loan
provided for in this Loan Agreement is subject to the satisfaction, by
proper evidence, execution and/or delivery to the Lender of each of the
following items, each in form and substance satisfactory to the Lender and
the Lender's counsel:
(a) Rent Roll. A Rent Roll dated as of the end of the month ended
immediately prior to the Closing Date.
(b) Leases. Certified copies of all leases, assignments of lease,
subleases and any lease amendments and other agreements (hereinafter
"leases") affecting any part of the Premises, together with the
standard form of lease currently in use and to be used in future
leasing. The leases and forms must be satisfactory to the Lender and
the leases shall be subordinate to the Security Instrument.
(c) Tenant Estoppel Certificates. Tenant Estoppel Certificates for all
tenants and other users (hereinafter "tenants") of any portion of
the Premises.
(d) Subordination Agreements. Subordination Agreements for all tenants
of any portion of the Premises designated by the Lender.
2. Representations and Warranties of the Borrower. To induce the Lender to
enter into this Loan Agreement and to make the Loan, the Borrower hereby
represents and warrants to the Lender on the Closing Date as follows:
(a) Rent Roll. The Rent Roll provided to the Lender pursuant to Section
1 of this Program Rider is complete and correct as at the date
thereof.
(b) Tenant Estoppel Certificates and Subordination Agreements. The
Borrower has delivered to the Lender an original executed Tenant
Estoppel Certificate for each tenant of any portion of the Premises
and a Subordination Agreement for each tenant of any portion of the
Premises designated by the Lender.
3. Affirmative Covenants of the Borrower. During any period in which the
Loan is outstanding, the Borrower agrees that it will:
(a) Lessee Information. Submit to the Lender when requested by the
Lender, all information on all tenant leases otherwise required to
be included in a Rent Roll, which information shall include a
Certification thereof.
(b) Appraisal. In addition to the items required to be furnished by the
Borrower pursuant to Section 5.1 (i) of the Loan Agreement, provide
to the Lender or the Lender's appraiser a current Rent Roll for the
Premises, in form and substance satisfactory to the Lender, in
connection with an Appraisal of the Premises.
(c) Rent Rolls. Furnish, or cause to be furnished Rent Rolls to the
Lender within forty-five (45) days of the end of each of the
Borrower's fiscal quarters. In addition, the Borrower shall furnish
or cause to be furnished to the Lender a Rent Roll at any time there
is any change in or vacancy resulting from the failure of a tenant
other than a tenant under a Local Tenant Lease to renew a lease,
which Rent Roll shall be dated the date of such change or vacancy
and shall reflect such change or vacancy, or at such other times as
the Lender may request.
4. Tenant Improvements. Notwithstanding the provisions of Section S.2(b) and
Section 5.2(g) of the Loan Agreement, the Borrower may make or permit to
be made standard non-structural tenant improvements to existing
structures without the prior written consent of the Lender and without
any violation of the provisions of such Sections of the Loan Agreement.
5. Leases and Other Agreements.
(a) During any period in which the Loan is outstanding, the Borrower
shall not allow any default under, breach, withdrawal, cancellation,
rescission, termination, alteration, or modification of any lease
(except Local Tenant Leases), rental agreement, sales contract,
management contract, franchise agreement, construction contract,
technical service agreement or other contract or agreement affecting
the Premises.
(b) During any period in which the Loan is outstanding, the Borrower
shall not enter into (except as provided in subsection (c) below),
default under, breach, withdraw, cancel, rescind, terminate, alter
or modify any lease of, or other agreement regarding, any part of
the Premises without the Lender's prior written approval, which
approval shall not be unreasonably withheld, conditioned or delayed.
The Borrower shall submit complete and final drafts each such lease
to the Lender for the Lender's approval. Failure by the Lender to
approve or disapprove any such lease properly submitted to it by the
Borrower within ten (10) Business Days after receipt shall be deemed
consent.
(c) Notwithstanding subsection (b) above and without the Lender's prior
written approval, the Borrower may enter into Local Tenant Leases on
the standard form of lease approved by the Lender so long as (i)
each such lease provides for terms in conformity with local
conditions and (ii) each such lease and the tenant's proposed use of
the space leased conform with all applicable laws and the covenants
and agreements set forth in the Loan Documents, including but not
limited to those relating to Hazardous Materials and specifically
references such covenants relating to Hazardous Materials.
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