Exhibit 10 (v)
LOAN AGREEMENT
Dated as of September 22, 1997
by and among
FLIP/BRE, INC.,
OIP/BRE, L.L.C.,
MBP/BRE, L.L.C.
and
NJA/BRE, L.L.C,
as Borrower
and
NOMURA ASSET CAPITAL CORPORATION
as Lender
TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS...............................................2
Section 1.1. Definitions..............................................2
ARTICLE II GENERAL TERMS...................................................39
Section 2.1. Amount of the Loan; Fees................................39
Section 2.2. Use of Proceeds.........................................39
Section 2.3. Security for the Loan...................................39
Section 2.4. Borrower's Notes........................................40
Section 2.5. Principal and Interest..................................40
Section 2.6. Voluntary Prepayment and Defeasance.....................42
Section 2.7. Mandatory Prepayment and Defeasance.....................42
Section 2.8. Application of Payments.................................43
Section 2.9. Method and Place of Payment.............................44
Section 2.10. Taxes...................................................44
Section 2.11. Release of Collateral...................................44
Section 2.12. Cash Management.........................................46
Section 2.13. Security Agreement......................................59
Section 2.14. Supplemental Mortgage Affidavits........................65
Section 2.15. Securitization..........................................65
ARTICLE III CONDITIONS PRECEDENT...........................................68
Section 3.1. Conditions Precedent to Effectiveness
and Disbursement of the Loan............................68
Section 3.2. Satisfaction of Conditions..............................74
Section 3.3. Form of Loan Documents and Related Matters..............74
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................74
Section 4.1. Borrower Representations................................74
Section 4.2. Survival of Representations.............................87
Section 4.3. Borrower's Knowledge....................................87
ARTICLE V AFFIRMATIVE COVENANTS............................................87
Section 5.1. Borrower Covenants......................................87
ARTICLE VI NEGATIVE COVENANTS.............................................103
Section 6.1. Borrower Negative Covenants............................103
ARTICLE VII................................................................107
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Section 7.1. Event of Default.......................................107
Section 7.2. Remedies...............................................111
Section 7.3. Remedies Cumulative....................................112
ARTICLE VIII MISCELLANEOUS................................................112
Section 8.1. Survival...............................................112
Section 8.2. Lender's Discretion....................................114
Section 8.3. Governing Law..........................................114
Section 8.4. Modification, Waiver in Writing........................115
Section 8.5. Delay Not a Waiver.....................................115
Section 8.6. Notices................................................115
SECTION 8.7. TRIAL BY JURY..........................................116
Section 8.8. Headings...............................................116
Section 8.9. Assignment.............................................117
Section 8.10. Severability...........................................117
Section 8.11. Preferences............................................117
Section 8.12. Waiver of Notice.......................................118
Section 8.13. [INTENTIONALLY OMITTED]................................118
Section 8.14. Exculpation............................................118
Section 8.15. Exhibits Incorporated..................................120
Section 8.16. Offsets, Counterclaims and Defenses....................120
Section 8.17. No Joint Venture or Partnership; Mutual
Representation.........................................121
Section 8.18. Waiver of Marshalling of Assets Defense................121
Section 8.19. Waiver of Counterclaim.................................121
Section 8.20. Conflict; Construction of Documents....................121
Section 8.21. Brokers and Financial Advisors.........................122
Section 8.22. Counterparts...........................................122
Section 8.23. Estoppel Certificates..................................122
Section 8.24. Payment of Expenses....................................122
Section 8.25. Bankruptcy Waiver......................................123
Section 8.26. Indemnification........................................124
Section 8.27. Entire Agreement.......................................125
Section 8.28. Cross Collateralization................................125
Section 8.29. Confidentiality........................................126
Section 8.30. Defeasance.............................................126
Section 8.31. Permitted Restructuring................................129
Section 8.32. Substitution of Individual Properties..................131
Section 8.33. Purchase Option Obligations............................132
ii
Exhibits
A - Allocated Loan Amounts and Debt Service Coverage Ratios
B - Assignment of Agreements (Form)
C - Assignment of Leases and Rents (Form)
D - Engineering Reports
E - Environmental Reports
F - Individual Properties and Owners
G - Manager's Consent and Subordination of Management Agreement (Form)
H - Mortgage, Assignment of Rents, Security Agreement and Fixture
Financing Statement (Form)
I - Promissory Note (Form)
J - Tenant Letter (Form)
K - Collection Account Agreement (Form)
L - Required Debt Service Payment Certificate (Form)
M - Cash Collateral Account Agreement (Form)
N - Non-consolidation Opinion of Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
(Form)
O - Financing Statements
P - Borrower's Estoppel Certificate (Form)
Q - Opinion of Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
R - Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ (New Jersey)
S - Lien Search Reports
T - Officer's Certificate (Form)
U - Second Assignment of Agreements (Form)
V - Second Assignment of Leases and Rents (Form)
W - Second Mortgage, Assignment of Rents, Security Agreement and
Fixture Financing Statement (Form)
X - Tenant Estoppel Certificate (Form)
Y - Non-Disturbance, Subordination and Attornment Agreement (Form)
Z - Certificate of Incorporation for NEW FLIP (Form)
AA - Certificate of Incorporation for NEW MM (Form)
Schedules
1 - Initial Capital Requirements and Capital Reserve Amounts
2 - Exceptions to Representations and Warranties
3 - Certain Leases for which Tenant Estoppel Certificates and
Non-Disturbance, Subordination and Attornment Agreements are
Required
4 - Deferred Maintenance Items
5 - Tenants' Option to Purchase and Rights of First Refusal
iii
6 - Environmental Operation & Maintenance Obligations and Reserve
Requirements
7 - Deliveries Upon Substitution of Property
8 - Rollover Leases
iv
LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of September 22, 1997, is by and among
NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, having an address at 2
World Financial ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Lender") and
FLIP/BRE, INC., a New Jersey corporation ("FLIP"), OIP/BRE, L.L.C., a New Jersey
limited liability company ("OIP"), MBP/BRE, L.L.C., a New Jersey limited
liability company ("MBP"), and NJA/BRE, L.L.C., a New Jersey limited liability
company ("NJA"; FLIP, OIP, MBP and NJA, collectively, "Borrower"), each having
an address c/▇ ▇▇▇▇▇▇▇ Enterprises, Inc., 808 High Mountain Road, ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇.
RECITALS
WHEREAS, Borrower desires to obtain a loan (the "Loan") from Lender
in the amount of $45,000,000 (the "Loan Amount");
WHEREAS, Lender is unwilling to make the Loan unless Borrower joins
in the execution and delivery of this Agreement, the Notes and the other Loan
Documents (all of the foregoing capitalized terms as hereinafter defined) which
shall establish the terms and conditions of the Loan;
WHEREAS, Borrower and Lender contemplate that Lender's interest in
and to the Loan may be assigned by Lender to Trustee for the benefit of
Certificateholders in connection with the Securitization (all of the foregoing
capitalized terms as hereinafter defined); and
WHEREAS, Borrower has agreed to establish certain accounts and to
grant to Lender a security interest therein upon the terms and conditions of the
security agreement set forth in Section 2.13;
NOW, THEREFORE, in consideration of the making of the Loan by Lender
and the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereby covenant, agree, represent and warrant as follows:
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. For all purposes of this Agreement:
(1) the capitalized terms defined in this Article I have the
meanings assigned to them in this Article I, and include the plural as well as
the singular;
(2) all accounting terms have the meanings assigned to them in
accordance with generally accepted accounting principles in effect on the date
hereof;
(3) the words "herein", "hereof", and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the following terms have the following meanings:
"Account Collateral" has the meaning provided in Section 2.13(a).
"Accounts" means, with respect to each Borrower, such Borrower's
rights to payment for goods sold or leased or for services rendered arising from
the operation of such Borrower's Individual Property or Individual Properties,
as the case may be, and not evidenced by an Instrument, including, without
limitation, all accounts and accounts receivable arising from the operation of
such Individual Property or the Individual Properties, as the case may be, now
existing or hereafter coming into existence, and all Proceeds thereof. In
addition to the foregoing, the term "Accounts" shall include the meaning such
term has in the New Jersey Uniform Commercial Code, to the extent of a
Borrower's interest therein.
"Accrued Interest" has the meaning provided in Section 2.5(b).
"Additional Interest Rate" means the difference between the Revised
Interest Rate and interest at 7.71% per annum.
"Affiliate" of any specified Person means any other Person
controlling or controlled by or under common control with
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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 or other beneficial interests, by contract or
otherwise; and the terms "controlling" and "controlled" have the meanings
correlative to the foregoing.
"Affiliate Lease" has the meaning provided in Section 4.1(S)(ix).
"Agreement" means this Loan Agreement, as the same may from time to
time hereafter be modified, supplemented or amended.
"Allocated Loan Amount" means the portion of the Loan Amount
allocated to each Individual Property as set forth in Exhibit A attached hereto,
as such amounts shall be adjusted from time to time as hereinafter set forth.
Upon each adjustment in the amount of Principal Indebtedness due to a regular
monthly payment of principal pursuant to Section 2.5(a), each Allocated Loan
Amount shall be decreased by an amount equal to the product of (i) the amount of
such principal payment and (ii) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the total of all Allocated Loan Amounts prior to the
adjustment to the Principal Indebtedness resulting in the recalculation of the
Allocated Loan Amount. When the Principal Indebtedness is reduced as a result of
Lender's receipt of Net Proceeds or Loss Proceeds with respect to a Taking or
casualty affecting 100% of an Individual Property, the Allocated Loan Amount for
the Individual Property with respect to which the Net Proceeds or Loss Proceeds
were received shall be reduced to zero (such Allocated Loan Amount prior to
being so reduced being referred to as the "Withdrawn Allocated Amount"), and
each other Allocated Loan Amount shall (i) if the Withdrawn Allocated Amount
exceeds the Net Proceeds or Loss Proceeds (such excess being referred to as the
"Proceeds Deficiency"), be increased by an amount equal to the product of (1)
the Proceeds Deficiency and (2) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the aggregate of all of the Allocated Loan Amounts other
than the Withdrawn Allocated Amount or (ii) if the Net Proceeds or Loss Proceeds
are greater than or equal to the Withdrawn Allocated Amount, remain unadjusted.
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"Annual Budget" has the meaning provided in Section 5.1(Q)(vii).
"Approved Annual Budget" has the meaning provided in Section
5.1(Q)(vii).
"Assignment of Agreements" means, with respect to an Individual
Property, a first priority Assignment of Management Agreement and Agreements
Affecting Real Estate, in the form attached hereto as Exhibit B, dated as of the
Closing Date, from the relevant Borrower, as assignor, to Lender, as assignee,
collaterally assigning to Lender (to the extent set forth in the Assignment of
Agreements) such Borrower's interest in and to all contracts between such
Borrower and third parties in connection with the management and operation of
the Individual Property, including, without limitation, the Management
Agreement, any agreements with design professionals, all agreements, allocations
and rights with all utility services affecting the Individual Property and all
development agreements and Permits, as the same may hereafter from time to time
be supplemented, amended, modified or extended by one or more written agreements
supplemental thereto, and "Assignments of Agreements" means all such instruments
collectively.
"Assignment of Leases" means, with respect to an Individual
Property, a first priority Assignment of Leases and Rents, in the form attached
hereto as Exhibit C, dated as of the Closing Date, from the relevant Borrower,
as assignor, to Lender, as assignee, collaterally assigning to Lender such
Borrower's interest in and to the Leases and the Rents with respect to such
Individual Property, as the same may hereafter from time to time be
supplemented, amended, modified or extended by one or more agreements
supplemental thereto, and "Assignments of Leases" means all such instruments
collectively.
"Basic Carrying Costs" means the following costs with respect to the
Mortgaged Property: (i) real property taxes and assessments applicable to the
Individual Properties (excluding taxes which tenants are required by their
Leases to pay directly to the taxing authority, unless Lender or Servicer
determines, in its reasonable discretion, that said tenants will be unable to
make such payments on a timely basis) and (ii) insurance premiums for policies
of insurance required to be maintained by Borrower pursuant to this Agreement or
the other Loan Documents.
"Basic Carrying Costs Monthly Installment" means Lender's good faith
estimate of 1/12th of the annual amount of
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Basic Carrying Costs, calculated so that a sum sufficient to pay any Basic
Carrying Cost shall be in the Basic Carrying Costs Sub-Account at least 30 days
prior to the due date thereof. Should the Basic Carrying Costs for the current
Fiscal Year or payment period not be ascertainable at the time a monthly deposit
is required to be made, the Basic Carrying Costs Monthly Installment shall be
Lender's good faith estimate based on 1/12th of the aggregate Basic Carrying
Costs for the prior Fiscal Year or payment period with reasonable adjustments
which estimate shall not exceed 10% of such prior amount unless based on actual
bills. As soon as the Basic Carrying Costs are fixed for the current Fiscal Year
or period, the next ensuing Basic Carrying Costs Monthly Installment shall be
adjusted to reflect any deficiency or surplus in prior Basic Carrying Costs
Monthly Installments.
"Basic Carrying Costs Sub-Account" means the Sub-Account of the Cash
Collateral Account or the Servicer Account, as the case may be, established and
maintained pursuant to Section 2.12 relating to the payment of Basic Carrying
Costs.
"Borrower" has the meaning provided in the first paragraph of this
Agreement.
"Business Day" means any day other than (i) a Saturday or a Sunday,
and (ii) a day on which federally insured depository institutions in (x) New
York, (y) a state in which Servicer, the Property Collection Account Bank, the
Cash Collateral Account Bank or the Servicer Account Bank is located or (z) the
state in which the Corporate Trust Office is located are authorized or obligated
by law, governmental decree or executive order to be closed.
"Capital Costs" means costs incurred by Borrower in connection with
capital expenditures, tenant improvements and lease commissions with respect to
the Mortgaged Property.
"Capital Reserve Amount" means $120,482 per annum, which is the sum
of the amounts specified for each Individual Property in the Capital Reserve
Amount column on Schedule 1 attached hereto.
"Capital Reserve Monthly Installment" means an amount equal to
1/12th of the Capital Reserve Amount.
"Capital Reserve Sub-Account" means the Sub-Account of the Cash
Collateral Account or the Servicer Account, as the case
6
may be, established and maintained pursuant to Section 2.12 relating to the
payment of Capital Costs and Environmental Operation & Maintenance
Obligations.
"Cash Collateral Account" has the meaning provided in Section
2.12(b).
"Cash Collateral Account Bank" means a bank or any successor bank,
selected by Lender in accordance with the terms hereof and reasonably acceptable
to Borrower, at which the Cash Collateral Account will be maintained.
"CC Account Agreement" has the meaning provided in Section 2.13(c).
"Central Cash Management Period" means any one of the following
periods: (i) on or before the Optional Prepayment Date, a period commencing upon
an Event of Default (the "Trigger Event of Default") and ending on (A) if the
Trigger Event of Default is cured (as determined by Lender in its sole
discretion) within 30 days from the occurrence thereof, the first anniversary of
the date of the occurrence of the Trigger Event of Default or (B) if the Trigger
Event of Default is not cured (as determined by Lender in its sole discretion)
within 30 days from the occurrence thereof, the first anniversary of the date on
which the Trigger Event of Default is cured (as determined by Lender in its
absolute discretion), provided, however, that no other Default or Event of
Default then exists and the Debt Service Coverage Ratio for the Individual
Properties as a whole is at least 1.30, and if both such conditions are not then
satisfied, the period shall end on the first date thereafter on which both such
conditions are satisfied; (ii) on or before the Optional Prepayment Date, the
period commencing upon Lender's receipt of notice of the agreed upon Purchase
Option Purchase Price and ending on the date Borrower satisfies the Purchase
Option Obligations (as determined by Lender in its reasonable discretion); and
(iii) the period commencing on the Optional Prepayment Date and continuing until
the Loan has been paid in full.
"Certificate" means any security issued in connection with the
Securitization.
"Certificateholder" means the Person in whose name a Certificate is
registered.
"Closing Date" means September 24, 1997.
7
"Code" means the Internal Revenue Code of 1986, as amended, and as
it may be further amended from time to time and any successor statutes thereto
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"Collateral" means, collectively, the Land, Improvements, Equipment,
Rents, Accounts, General Intangibles, Instruments, Inventory, Money, Permits (to
the full extent assignable) and all Proceeds, all whether now owned or hereafter
acquired and all other property which is or hereafter may become subject to a
Lien in favor of Lender as security for the Loan.
"Collateral Security Instrument" means any right, document or
instrument, other than a Mortgage or a Second Mortgage, given as security for
the Loan (including, without limitation, the Assignments of Leases, the Second
Assignments of Leases, the Assignments of Agreements, the Second Assignments of
Agreements and the Manager's Subordination), as same may be supplemented,
amended, extended or modified from time to time.
"Collection Account Agreement" has the meaning provided in Section
2.12(b).
"Collection Period" means, with respect to any Payment Date, the
period commencing on and including the eleventh day of the calendar month
preceding the calendar month in which such Payment Date occurs and ending on and
including the tenth day of the calendar month in which such Payment Date occurs.
If the Closing Date shall occur prior to the tenth day of a calendar month, the
first Collection Period shall commence on and include the Closing Date and end
on and include the tenth day of the calendar month in which the Closing Date
occurs. If the Closing Date shall occur after the tenth day of a calendar month,
the first Collection Period shall commence on the Closing Date and end on and
include the tenth day of the calendar month following the month in which the
Closing Date occurs. If the Closing Date shall occur on the tenth day of a
calendar month, the first Collection Period shall consist of a one day period
consisting of the Closing Date. No Collection Period shall extend beyond the
Maturity Date.
"Condemnation Proceeds" has the meaning provided in Section 2.12(h).
"Contingent Obligation" means any obligation of a Borrower
guaranteeing any indebtedness, leases, dividends or
8
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Borrower, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof, except indemnities required
by any title insurance company in connection with the issuance of the Title
Insurance Policies. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (taking into
account the non-recourse or limited recourse nature of such Contingent
Obligation, if applicable) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Borrower is
required to perform thereunder) as determined by Lender in good faith (taking
into account the non-recourse or limited recourse nature of such Contingent
Obligation, if applicable).
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered.
"Debt Service" means, for any period, the principal, if any, and
interest payments that would be due and payable in accordance with the Notes and
this Agreement during such period.
"Debt Service Coverage Ratio" means, on any calculation date, (and
calculated either for an Individual Property or for the Individual Properties as
a whole) the quotient obtained by dividing Net Cash Flow for the 12-month period
ending on the last day of the month preceding such calculation date by the
Imputed Debt Service for such period. All calculations of Debt Service Coverage
Ratios shall be made by Borrower, subject to verification by Lender and an
accounting firm reasonably acceptable to Lender (any "Big Six" accounting firm
being deemed acceptable to Lender). The Debt Service Coverage Ratios for the
Individual Properties as of the Closing Date are set forth on Exhibit A attached
hereto.
9
"Debt Service Payment Sub-Account" means the Sub-Account of the Cash
Collateral Account or the Servicer Account, as the case may be, established and
maintained pursuant to Section 2.12 relating to the payment of Debt Service.
"Default" means the occurrence of any event which, but for the
giving of notice or the passage of time, or both, would be an Event of Default.
"Default Collateral" has the meaning provided in Section 8.14.
"Default Rate" means (a) during the period prior to but not
including the Optional Prepayment Date, the per annum interest rate equal to the
lesser of (i) the Maximum Amount and (ii) the Interest Rate plus 4% and (b)
during the period after and including the Optional Prepayment Date, the per
annum interest rate equal to the lesser of (i) the Maximum Amount and (ii) the
Revised Interest Rate plus 4%.
"Defaulting Tenant" means, as at any date of determination, any
tenant that (i) has filed a bankruptcy petition or has had a bankruptcy petition
filed against it unless such tenant has accepted its Lease, or (ii) is in
default for two or more monthly payments of base rent required to be paid by it
under its Lease.
"Defeasance Date" has the meaning provided in Section 8.30(a)(i).
"Defeasance Deposit" means an amount equal to the total cost
incurred or to be incurred in the purchase by a Borrower of U.S. Obligations
necessary to meet the Scheduled Defeasance Payments.
"Eligible Account" means an account that is: (i) an account
maintained with a federal or state chartered depository institution or trust
company, whose (x) commercial paper, short-term debt obligations or other
short-term deposits are rated as at least A-1 by each Rating Agency, if the
deposits in such account are to be held in such account for 30 days or less or
(y) long-term unsecured debt obligations are rated by each Rating Agency as at
least AA-, if the deposits in such account are to be held in such account for
more than 30 days, (ii) a segregated trust account maintained with the trust
department of a federal or state chartered depository institution or trust
10
company acting in its fiduciary capacity which institution or trust company is
subject to regulations regarding fiduciary funds on deposit substantially
similar to 12 C.F.R. ss. 9.10(b), or (iii) an account otherwise acceptable to
each Rating Agency, as confirmed in writing that such account would not, in and
of itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to any of the Certificates.
"Engineer" means (i) an engineer who prepared an Engineering Report
described on Exhibit D attached hereto or (ii) any reputable Independent
engineer licensed as such in the applicable state.
"Engineering Reports" means the property condition reports with
respect to each Individual Property delivered to Lender in connection with the
Loan, as described on Exhibit D attached hereto, and any amendments or
supplements thereto delivered to Lender.
"Environmental Claim" means any written request for information by a
Governmental Authority, or any written notice, notification, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
written communication by any Person or Governmental Authority alleging or
asserting liability with respect to a Borrower or any Individual Property,
whether for damages, contribution, indemnification, cost recovery, compensation,
injunctive relief, investigatory, response, remedial or cleanup costs, damages
to natural resources, personal injuries, fines or penalties arising out of,
based on or resulting from (i) the presence, Use or Release into the environment
of any Hazardous Substance originating at or from, or otherwise affecting, an
Individual Property, (ii) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law by a Borrower or otherwise affecting an Individual Property or (iii) any
alleged injury or threat of injury to health, safety or the environment by a
Borrower or otherwise affecting an Individual Property.
"Environmental Laws" means any and all applicable federal, state,
local and foreign laws, rules or regulations, any judicial or administrative
orders, decrees or judgments thereunder, and any permits, approvals, licenses,
registrations, filings and authorizations, in each case as in effect as of the
date hereof and as amended from time to time, relating to the protection of
human health or the environment, or the Release or threatened Release of
Hazardous Substances into the indoor or
11
outdoor environment including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata or otherwise relating
to the Use of Hazardous Substances.
"Environmental Operation & Maintenance Obligations" means the
obligations of Borrower described on Schedule 6 attached hereto.
"Environmental Operation & Maintenance Reserve" means $13,687.50,
which is the sum of the amounts specified on Schedule 6 attached hereto
necessary to complete the Environmental Operation & Maintenance Obligations for
the Individual Properties as described on Schedule 6 attached hereto.
"Environmental Reports" means the environmental audit reports with
respect to each Individual Property delivered to Lender in connection with the
Loan, as described on Exhibit E attached hereto, and any amendments or
supplements thereto delivered to Lender.
"Equipment" means, with respect to each Borrower, all fixtures,
appliances, machinery, furniture, furnishings, decorations, tools and supplies
now owned or hereafter acquired by such Borrower and located upon the Land or
the Improvements owned by such Borrower and used in connection with the present
or future operation and occupancy of such Land and Improvements, including, but
not limited to, all carpeting, telephones, cash registers, computers, lamps,
glassware, any building equipment, including, but not limited to, all heating,
lighting, incinerating, waste removal and power equipment, engines, pipes,
tanks, motors, conduits, switchboards, security and alarm systems, plumbing,
lifting, cleaning, fire prevention, fire extinguishing, refrigeration,
ventilating and communications apparatus, air cooling and air conditioning
apparatus, escalators, elevators, ducts and compressors, materials and supplies,
and all other machinery, apparatus, equipment, fixtures and fittings now owned
or hereafter acquired by such Borrower, any portion thereof or any appurtenances
thereto, together with all additions, replacements, parts, fittings, accessions,
attachments, accessories, modifications and alterations of any of the foregoing
to the extent relating to such Borrower's Individual Property, located upon such
Borrower's Land or Improvements and used in connection with the present or
future operation and occupancy of such Land and Improvements, provided, however,
that, with respect to any items which are leased and not owned by such Borrower,
the Equipment
12
shall include the leasehold interest only of such Borrower, together with any
options to purchase any of said items and any additional or greater rights with
respect to such items which such Borrower may hereafter acquire.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated thereunder.
Section references to ERISA are to ERISA, as in effect at the date of this
Agreement and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or business that is
a member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which any Borrower is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which any
Borrower is a member.
"Event of Default" has the meaning provided in Section 7.1.
"Excess Cash Flow" has the meaning provided in Section 2.12(g).
"Fiscal Year" means the 12-month period ending on December 31st of
each year or such other fiscal year of Borrower as Borrower may select from time
to time with the prior consent of Lender (which consent shall not be
unreasonably withheld), provided, however, that each Borrower shall have the
same fiscal year.
"FLIP" has the meaning provided in the first paragraph of this
Agreement.
"FLIP S CORP" means Fair Lawn Industrial Park, Inc., a New York
subchapter "S" corporation, the owner of 100% of the issued and outstanding
stock of FLIP.
"GAAP" means generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
"General Intangibles" means, with respect to each Borrower, all
intangible personal property of such Borrower
13
arising out of or directly relating to such Borrower's Individual Properties
(other than Accounts, Rents, Instruments, Inventory, Money and Permits),
including, without limitation, things in action, settlements, judgments,
contract rights, rights to performance (including, without limitation, rights
under warranties), refunds of real estate taxes and assessments and other rights
to payment of Money, copyrights, trademarks and patents now existing or
hereafter in existence. In addition to the foregoing, the term "General
Intangibles" shall include the meaning such term has in the New Jersey Uniform
Commercial Code, to the extent of a Borrower's rights therein.
"Governmental Authority" means any national or federal government,
any state, regional, local or other political subdivision thereof with
jurisdiction and any Person with jurisdiction exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guaranty" means that certain Guaranty in favor of Lender, dated as
of the date hereof, executed and delivered by each Guarantor, as the same may
hereafter be supplemented, amended, modified or extended by one or more written
agreements supplemental thereto.
"Guarantor" means each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. Revocable Trust,
under Instrument dated April 22, 1996, ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, trustee, and ▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr., W. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Guarantors" means all such individuals and trust collectively.
"Hazardous Substance" means, collectively, (i) any petroleum or
petroleum products or waste oils, explosives, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), lead in
drinking water, and lead-based paint, the presence, generation, use,
transportation, storage or disposal of which (x) is regulated or could lead to
liability under any Environmental Law or (y) is subject to notice or reporting
requirements under any Environmental Law, (ii) any chemicals or other materials
or substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic
14
pollutants," "contaminants," "pollutants" or words of similar import under any
Environmental Law and (iii) any other chemical or any other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.
"Impositions" means all taxes (including, without limitation, all ad
valorem, sales (including those imposed on lease rentals), use, single business,
gross receipts, value added, intangible transaction privilege, privilege,
license or similar taxes), assessments (including, without limitation, to the
extent not discharged prior to the date hereof, all assessments for public
improvements or benefits, whether or not commenced or completed within the term
of the Related Mortgages), ground rents, water, sewer or other rents and
charges, excises, levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees), and all other governmental charges,
in each case whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of every character in respect of an Individual Property, or any
Rents and Accounts related thereto, (including all interest and penalties
thereon), which at any time prior to, during or in respect of the term hereof
may be assessed or imposed on or in respect of or be a lien upon (i) a Borrower
(including, without limitation, all income, franchise, single business or other
taxes imposed on such Borrower for the privilege of doing business in the
jurisdiction in which such Individual Property, or any other collateral
delivered or pledged to Lender in connection with the Loan, is located) or
Lender, (ii) an Individual Property, or any other collateral delivered or
pledged to Lender in connection with the Loan, or any part thereof or any Rents
therefrom or any estate, right, title or interest therein, or (iii) any
occupancy, operation, use or possession of, or sales from, or activity conducted
on, or in connection with such Individual Property or the leasing or use of such
Individual Property or any part thereof, or the acquisition or financing of the
acquisition of such Individual Property by a Borrower. Nothing contained in this
Agreement shall be construed to require a Borrower to pay any tax, assessment,
levy or charge imposed on Lender, Servicer or any Certificateholder in the
nature of a franchise, capital levy, estate, inheritance, succession, income or
net revenue tax.
"Improvements" means, with respect to each Individual Property, all
improvements owned by a Borrower and now or hereafter situated, placed or
constructed upon the Land, including all buildings, structures and improvements
of every
15
nature whatsoever now or hereafter situated, placed or constructed upon the
Land, including, but not limited to, any and all office buildings, hotels,
storage facilities, shopping centers, apartment buildings, houses, power plants,
garages, carports, warehouses, utility sheds, workrooms, swimming pools, tennis
courts, sidewalks, parking areas, drives, retaining walls, fences, gates,
grating, terracing and other improvements and appurtenances thereto, and any and
all additions, alterations and betterments now or hereafter situated, placed or
constructed upon the Land or any part thereof, and to the extent of a Borrower's
interest therein, all gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures,
carpeting and other floor coverings, water heaters, awnings and storm sashes,
and cleaning apparatus which are or shall be attached to the Land or said
buildings, structures or improvements.
"Imputed Debt Service" means for any period (and calculated either
for an Individual Property based on its Allocated Loan Amount or for the
Individual Properties as a whole based on the Principal Indebtedness then
outstanding) the aggregate amount of principal and interest payments (excluding
for purposes of such calculations for the Individual Properties, as a whole, any
Scheduled Defeasance Payments) that would be due and payable during the
applicable period calculated using a debt constant of 9.23% per annum.
"Indebtedness" means the Principal Indebtedness, together with all
accrued and unpaid interest thereon and all other obligations and liabilities
due or to become due to Lender pursuant hereto, under the Notes or in accordance
with any of the other Loan Documents, and all other amounts, sums and expenses
payable to Lender hereunder or pursuant to the Notes or any of the other Loan
Documents.
"Indemnified Parties" has the meaning provided in Section 8.26.
"Independent" means, when used with respect to any Person, a Person
who (i) does not have any direct financial interest or any material indirect
financial interest in a Borrower or in any Affiliate of a Borrower, and (ii) is
not connected with a Borrower or any Affiliate of a Borrower as an officer,
employee, promoter, underwriter, trustee, partner, member, shareholder, director
or person performing similar functions, provided, however, that the same
individual may serve
16
as the Independent director of both MM and FLIP (or NEW MM and NEW FLIP), if he
or she otherwise qualifies as Independent.
"Individual Property" means the Land, the Improvements and the
Equipment (to the extent same shall be deemed to be fixtures) encumbered by the
Related Mortgages. All of the "Individual Properties" collectively comprise the
Mortgaged Property. The Individual Properties are described on Exhibit F
attached hereto.
"Initial Capital Requirement" means $42,125, which is the sum of the
amounts specified in the Engineering Reports as being necessary to complete the
deferred maintenance and items identified therein and on Schedule 4 attached
hereto (as adjusted by Lender), as specified for each Individual Property on
Schedule 1 attached hereto.
"Initial Lease Reserve Deposit" means $150,000.
"Instruments" means, with respect to each Borrower, all instruments,
chattel paper, documents or other writing obtained by such Borrower from or in
connection with the operation of such Borrower's Individual Properties
evidencing a right to the payment of Money, including, without limitation, all
notes, drafts, acceptances, documents of title, and policies and certificates of
insurance, including, but not limited to, liability, hazard, rental and credit
insurance, guarantees and securities, now or hereafter received by such Borrower
or in which such Borrower has or acquires an interest pertaining to the
foregoing. In addition to the foregoing, "Instruments" shall include the meaning
such term has in the New Jersey Uniform Commercial Code, to the extent of a
Borrower's rights therein.
"Insurance Proceeds" has the meaning provided in Section 2.12(h).
"Insurance Requirements" means all material terms of any insurance
policy required pursuant to this Agreement or a Mortgage or Second Mortgage and
all material regulations and then current standards applicable to or affecting
the applicable Individual Property or any part thereof or any use or condition
thereof, which may, at any time, be recommended by the Board of Fire
Underwriters, if any, having jurisdiction over such Individual Property, or such
other body exercising similar functions.
17
"Interim Servicing Agreement" means an Interim Servicing Agreement
entered into by and between Lender and Servicer with respect to the servicing of
the Loan, as the same may be amended from time to time.
"Inventory" means, with respect to each Borrower, all goods now
owned or hereafter acquired by such Borrower intended for sale or lease, or to
be furnished under contracts of service by such Borrower in connection with such
Borrower's Individual Properties, including, without limitation, all inventories
of food, beverages and other comestibles held by such Borrower for sale or use
at or from such Borrower's Individual Properties, and all other such goods,
wares, merchandise and materials and supplies of every nature held by such
Borrower for sale to or for consumption by tenants or guests of such Borrower's
Individual Properties and others, and all such other goods returned to or
repossessed by such Borrower. In addition to the foregoing, the term "Inventory"
shall include the meaning such term has in the New Jersey Uniform Commercial
Code, to the extent of a Borrower's interest therein.
"Land" has the meaning provided in the Mortgages and the Second
Mortgages.
"Lease Reserve Amount" means $163,000 per annum, which is the
aggregate reserve amount specified for the Rollover Leases on Schedule 8
attached hereto, as adjusted from time to time pursuant to Section 2.12(f)(iv).
"Lease Reserve Monthly Installment" means an amount equal to 1/12th
of the Lease Reserve Amount.
"Lease Reserve Sub-Account" means the Sub-Account of the Cash
Collateral Account or the Servicer Account, as the case may be, established and
maintained pursuant to Section 2.12 relating to the payment of Rollover Lease
Costs.
"Leases" means, with respect to each Borrower, all leases and other
agreements or arrangements with or assumed by such Borrower as landlord
affecting the use or occupancy of all or any portion of such Borrower's
Individual Properties now in effect or hereafter entered into (including,
without limitation, lettings, subleases, licenses, concessions, tenancies and
other occupancy agreements with or assumed by such Borrower as landlord covering
or encumbering all or any portion of such Borrower's Individual Properties),
together with any guarantees, supplements, amendments, modifications, extensions
and renewals
18
of the same, and all additional remainders, reversions and other rights and
estates appurtenant thereto.
"Legal Requirements" means all governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting either an applicable Individual Property or
any part thereof or the construction, use, alteration or operation thereof, or
any part thereof, enacted and in force as of the relevant date, and all Permits,
licenses and authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to a Borrower, at any time in force affecting such Individual
Property or any part thereof, including, without limitation, any which may (i)
require repairs, modifications or alterations in or to such Individual Property
or any part thereof, or (ii) in any way limit the use and enjoyment thereof.
"Lender" has the meaning provided in the first paragraph of this
Agreement.
"Lien" means any mortgage, deed of trust, lien (statutory or other),
pledge, hypothecation, assignment, preference, priority, security interest or
any other encumbrance or charge on or affecting an Individual Property or any
portion thereof or a Borrower, or any interest in a Borrower, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement or similar instrument under the
Uniform Commercial Code or comparable law of any other jurisdiction, domestic or
foreign, and mechanic's, materialmen's and other similar liens and encumbrances.
"Loan" has the meaning provided in the Recitals hereto.
"Loan Amount" has the meaning provided in the Recitals hereto.
"Loan Documents" means this Agreement, the Notes, the Mortgages, the
Second Mortgages, the Assignments of Leases, the Second Assignments of Leases,
the Assignments of Agreements, the Second Assignments of Agreements, the
Manager's Subordination, the Guaranty and all other agreements, instruments,
certificates and documents delivered by a Borrower or any Affiliate to evidence
or secure the Loan.
19
"Loss Proceeds" has the meaning provided in Section 2.12(h).
"Losses" has the meaning provided in Section 8.26.
"Management Agreement" means, with respect to an Individual
Property, the Management Agreement entered into between the Manager and a
Borrower, respectively, pertaining to the management of such Individual Property
and in the form attached to the Manager's Subordination or such other form as
may be approved by Lender in Lender's reasonable discretion, and "Management
Agreements" means all such agreements collectively.
"Manager" means ▇▇▇▇▇▇▇ Enterprises, Inc., or any permitted
successor or assignee, as manager of an Individual Property or all of the
Individual Properties, as the case may be.
"Manager's Subordination" means, with respect to each Borrower, the
Manager's Consent and Subordination of Management Agreement in the form attached
hereto as Exhibit G, dated as of the Closing Date, executed by the Manager for
the Individual Properties owned by such Borrower, such Borrower and Lender.
"Material Adverse Effect" means a material adverse effect upon (i)
the business or the financial position or results of operation of a Borrower,
(ii) the ability of a Borrower to perform, or of Lender to enforce, any of the
Loan Documents or (iii) the value of (x) the Collateral taken as a whole or (y)
any Individual Property.
"Material Contract" means any contract relating to an Individual
Property which is not cancelable on 30 days' notice without penalty and which
requires payment of more than $20,000 per month.
"Maturity Date" means October 11, 2022, or such earlier date
resulting from acceleration.
"Maximum Amount" means the maximum rate of interest designated by
applicable Legal Requirements.
"MBP" has the meaning provided in the first paragraph of this
Agreement.
"MEI" means ▇▇▇▇▇▇▇ Enterprises, Inc., a New Jersey corporation.
20
"MM" means REA/SPC, Inc., a New Jersey corporation, the managing
member of each of OIP, MBP and NJA.
"Money" means, with respect to each Borrower, all of such Borrower's
rights, now or hereafter acquired, in moneys, cash, rights to deposit or savings
accounts, credit card receipts or other items of legal tender obtained from or
for use in connection with the operation of such Borrower's Individual
Properties.
"Mortgage" means, with respect to an Individual Property, a first
priority Mortgage, Assignment of Rents, Security Agreement and Fixture Financing
Statement, dated as of the Closing Date, granted by a Borrower to Lender (in
substantially the form attached hereto as Exhibit H) with respect to such
Individual Property as security for such Borrower's Note, as the same may
hereafter from time to time be supplemented, amended, modified or extended by
one or more written agreements supplemental thereto, but shall exclude any such
instrument released by Lender pursuant to Section 2.11, and "Mortgages" means
all such instruments collectively.
"Mortgaged Property" means all the Individual Properties encumbered
by the Mortgages and Second Mortgages then outstanding.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by a Borrower or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"NACC" has the meaning provided in Section 8.9.
"Net Cash Flow" means for any trailing 12 calendar month period (and
calculated either for an Individual Property or for the Individual Properties as
a whole) the excess, if any, of Operating Income for such period over Operating
Expenses for such period, subject to adjustment as follows: (i) addition (to the
extent not already included) shall be made for income derived or to be derived
from signed Leases with credit rated tenants in place as of the date of the
calculation for which such tenants are in occupancy but were not in occupancy
during the entire covered period, such addition to be equal to an annualization
of base rent for all such credit rated tenants less the actual rent paid by such
tenants for the covered period; (ii) deduction shall be made for income derived
from
21
Leases in effect during some or all of the covered period but terminated as of
the date of the calculation (except to the extent any related Lease termination
payment is then in the Rent Payment Sub-Account); (iii) adjustment (as
reasonably determined by Lender, which may include a complete deduction) shall
be made for income derived from temporary or month-to-month tenants; (iv)
deduction shall be made for income derived from a Defaulting Tenant for the
period for which such calculation is being made; (v) the Capital Reserve Amount
shall be deducted (to the extent such amount has not been included in Operating
Expenses); (vi) to the extent such costs have not been included in Operating
Expenses, deduction shall be made for management fees equal to the greater of
(x) actual management fees paid pursuant to the Management Agreements and (y) 4%
of Operating Income; (vii) a normalized allowance for lease rollovers (based on
an examination of the existing rent rolls and current market leasing conditions,
including costs for downtime, tenant improvements and leasing commissions) shall
be included; (viii) a vacancy allowance equal to the greater of (x) the market
vacancy rate if actual vacancy is less than market and (y) 7.5% if actual
vacancy is less than 7.5% shall be included; (ix) deduction shall be made to
▇▇▇▇ any above market leases to market rent; (x) adjustment shall be made for
any rent adjustments or cancellation options contained in the Leases; (xi)
deduction shall be made for non-recurring items of Operating Income; and (xii)
any other items that Lender determines may have an impact on Net Cash Flow. Net
Cash Flow shall be determined in a manner consistent with the method used by
Lender to determine Net Cash Flow for purposes of underwriting and closing the
Loan.
"Net Proceeds" means (i) either (x) the purchase price (at
foreclosure or otherwise) actually received by Lender from a third party
purchaser with respect to one or more Individual Properties as a result of the
exercise by Lender of its rights, powers, privileges and other remedies after
the occurrence of an Event of Default or (y) in the event that Lender is the
purchaser at foreclosure of one or more of such Individual Properties, the fair
market value of such Individual Properties, as determined by Lender in good
faith, or, at Borrower's request and expense, an appraiser, in either case less
(ii) all reasonable costs and expenses, including, without limitation, all
attorneys' fees and disbursements and any closing costs, brokerage fees,
sheriff's or ▇▇▇▇▇▇▇▇'▇ commissions or the like, if applicable, incurred by
Lender in connection with the exercise of such remedies; provided, however, that
such costs and expenses shall not be deducted to the extent such amounts
22
previously have been added to the Indebtedness in accordance with the terms of
the Mortgages and the Second Mortgages or applicable law.
"NEW FLIP" means a newly formed corporation that will be a
Single-Purpose Entity and a qualified subsidiary of the REIT.
"NEW MM" means a newly formed corporation that will be a
Single-Purpose Entity and 100% owned by the REIT.
"NJA" has the meaning provided in the first paragraph of this
Agreement.
"Notes" means and refers to the promissory notes, each in the form
attached hereto as Exhibit I, dated the Closing Date, made by each Borrower to
Lender pursuant to this Agreement, as such notes may be modified, amended,
supplemented, extended or consolidated, and any note(s) issued in exchange
therefor or in replacement thereof.
"Officer's Certificate" means a certificate delivered to Lender by a
Borrower which is signed by an authorized officer of a Borrower or an authorized
officer of the managing member of a Borrower, as the case may be.
"OIP" has the meaning provided in the first paragraph of this
Agreement.
"Operating Expense Sub-Account" means the Sub-Account of the Cash
Collateral Account established and maintained pursuant to Section 2.12 relating
to the payment of Operating Expenses during a Central Cash Management Period.
"Operating Expenses" means, for any period, all expenditures by
Borrower required to be expensed under GAAP during such period in connection
with the ownership, operation, maintenance, repair or leasing of the Individual
Properties (or of an Individual Property), including, without limitation:
(i) expenses in connection with the cleaning, repair and maintenance
of the Individual Properties (or of an Individual Property);
(ii) wages, benefits, payroll taxes, uniforms, insurance costs and
all other related expenses for employees of Borrower or any Affiliate
engaged in the
23
repair, operation and maintenance of the Individual Properties (or of an
Individual Property);
(iii) any management fees and expenses incurred with respect to the
Individual Properties (or of an Individual Property);
(iv) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, utility or similar
item and overtime services;
(v) the cost of cleaning supplies;
(vi) Impositions (other than income taxes);
(vii) business interruption, liability, casualty and fidelity
insurance premiums (which, in the case of any policies covering more than
one Individual Property, shall be allocated among the Individual
Properties pro rata in proportion to the insured value of the Individual
Properties covered by such policies);
(viii) legal, accounting and other professional fees and expenses
incurred in connection with the ownership and operation of the Individual
Properties (or of an Individual Property) including, without limitation,
collection costs and expenses;
(ix) costs and expenses of security and security systems provided to
and/or installed and maintained with respect to the Individual Properties
(or an Individual Property);
(x) trash removal and exterminating costs and expenses;
(xi) advertising and marketing costs;
(xii) costs of environmental audits and monitoring, environmental
remediation work or any other expenses incurred with respect to compliance
with Environmental Laws; and
(xiii) all other ongoing expenses which in accordance with GAAP
should be included in Borrower's annual financial statements as operating
expenses of the Individual Properties (or of an Individual Property).
24
Notwithstanding the foregoing, Operating Expenses described in more than one
category listed above shall only be counted once and Operating Expenses shall
not include (v) any operating expense otherwise includable in Operating Expenses
but paid directly by a Person other than Borrower, (w) any Capital Costs, (x)
depreciation, amortization and other non-cash charges, (y) any extraordinary
items not normally considered an operating expense in accordance with GAAP or
(z) Debt Service and other payments in connection with the Indebtedness.
Operating Expenses shall be calculated on the accrual basis of accounting and in
accordance with GAAP.
"Operating Income" means, for any period, all regular ongoing income
of Borrower during such period from the Permitted Investments or the operation
of the Individual Properties (or of an Individual Property), including, without
limitation:
(i) all amounts payable to Borrower by any Person as Rent relating
to the Individual Properties (or an Individual Property);
(ii) business interruption proceeds; and
(iii) all other amounts which in accordance with GAAP are included
in Borrower's annual financial statements as operating income or expense
reductions of the Individual Properties (or of an Individual Property).
Notwithstanding the foregoing, Operating Income shall not include (v) any
condemnation or insurance proceeds (other than business interruption proceeds or
condemnation proceeds with respect to a temporary taking and, in either such
case, only to the extent allocable to such period or other applicable reporting
period), (w) any proceeds resulting from the sale, exchange, transfer, financing
or refinancing of all or any portion of one or more Individual Properties, (x)
any Rent attributable to a Lease prior to the date on which the actual payment
of Rent is required to be made thereunder or any Lease termination payment,
provided, however, that funds released from the Rent Payment Sub-Account shall
be included in Operating Income when released from the Rent Payment Sub-Account,
(y) any item of income otherwise includable in Operating Income but paid
directly to a Person other than Borrower, the Manager or the Property Collection
Account Bank (unless thereafter deposited in the Property Collection Accounts)
or (z) security deposits received from tenants until forfeited. Operating Income
shall
25
be calculated on the accrual basis of accounting and in accordance with GAAP.
"Operating Partnership" means American Real Estate Investment, L.P.,
a Delaware limited partnership, having the REIT as its sole general partner.
"Optional Prepayment Date" means October 11, 2007.
"Other Borrowings" means, with respect to a Borrower, without
duplication (but not including the Indebtedness or any deferred fees payable in
connection with the Transactions) (i) all indebtedness of such Borrower for
borrowed money or for the deferred purchase price of property or services, (ii)
all indebtedness of such Borrower evidenced by a note, bond, debenture or
similar instrument, (iii) the face amount of all letters of credit issued for
the account of such Borrower and, without duplication, all unreimbursed amounts
drawn thereunder, (iv) all indebtedness of such Borrower secured by a Lien on
any property owned by such Borrower whether or not such indebtedness has been
assumed and (v) all Contingent Obligations of such Borrower.
"Payment Date" means, for each month, the eleventh day of such
month; provided, however, that for the purposes of calculating payments
hereunder, but not for the purposes of calculating Collection Periods, if the
eleventh day of a given month shall not be a Business Day, then the Payment Date
for such month shall be the next Business Day to occur. The first Payment Date
shall be October 11, 1997.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"PCBs" has the meaning provided in the definition of "Hazardous
Substances".
"Permits" means, with respect to an Individual Property, all
licenses, permits, allocations, authorizations, approvals and certificates
obtained by or in the name of, or assigned to, a Borrower and used in connection
with the ownership, operation, use or occupancy of such Individual Property,
including, without limitation, building permits, business licenses, state health
department licenses, food service licenses, liquor licenses, licenses to conduct
business and all such other permits, licenses and rights, obtained by or in the
name of, or assigned to, such Borrower from any
26
Governmental Authority or private Person concerning ownership, operation, use or
occupancy of such Individual Property.
"Permitted Encumbrances" means, with respect to an Individual
Property, collectively, (i) the Lien created by the Related Mortgages or the
other Loan Documents of record, (ii) all Liens and other matters disclosed in
the Title Insurance Policy concerning such Individual Property or any part
thereof, (iii) Liens, if any, for Impositions imposed by any Governmental
Authority not yet due or delinquent or being contested in good faith and by
appropriate proceedings in accordance with Section 2.06(b) of the Mortgages or
Second Mortgages or other Liens being so contested, (iv) any mechanics' and
materialmen's Liens deleted from the exceptions to, or affirmatively insured
against collection with respect to, the Individual Property under the applicable
Title Insurance Policy, any mechanics' and materialmen's Liens relating to work
done by a tenant and any mechanics' and materialmen's Liens being contested in
good faith and by appropriate proceedings in accordance with Section 2.06(b) of
the Mortgages or Second Mortgages, (v) without limiting the foregoing, any and
all governmental, public utility and private restrictions, covenants,
reservations, easements, licenses or other agreements of an immaterial nature
which may hereafter be granted by a Borrower and which do not affect materially
and adversely (x) the marketability of title to such Borrower's Individual
Property, (y) the fair market value thereof or (z) the use or operation thereof
as of the Closing Date, (vi) rights of existing and future tenants, as tenants
only pursuant to Leases and (vii) those certain options and rights set forth on
Schedule 5 hereto.
"Permitted Investments" means any one or more of the following
obligations or securities payable on demand or having a scheduled maturity on or
before the Business Day preceding the date upon which the funds in the Cash
Collateral Account are required to be drawn, and having at all times the
required ratings, if any, provided for in this definition, unless each Rating
Agency shall have confirmed in writing to Lender that a lower rating would not,
in and of itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to any of the Certificates:
(i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full
faith and credit of
27
the United States of America including, without limitation, obligations
of: the U.S. Treasury (all direct or fully guaranteed obligations), the
Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S.
Maritime Administration (guaranteed Title XI financing), the Small
Business Administration (guaranteed participation certificates and
guaranteed pool certificates), the U.S. Department of Housing and Urban
Development (local authority bonds) and the Washington Metropolitan Area
Transit Authority (guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating,
(C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if
any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations),
the Farm Credit System (consolidated systemwide bonds and notes), the
Federal Home Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the Student Loan
Marketing Association (debt obligations), the Financing Corp. (debt
obligations), and the Resolution Funding Corp. (debt obligations);
provided, however, that the investments described in this clause must (A)
have a predetermined fixed dollar amount of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with maturities
of not more than 365 days of any bank, the short term obligations of which
are rated in the
28
highest short term rating category by each Rating Agency (or otherwise
acceptable to each Rating Agency as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any of
the Certificates); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar amount of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not
have an "r" highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a
single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand and
time deposits in, or certificates of deposit of, or bankers' acceptances
issued by, any bank or trust company, savings and loan association or
savings bank, the short term obligations of which are rated in the highest
short term rating category by each Rating Agency (or otherwise acceptable
to each Rating Agency as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal
of the then current ratings assigned to any of the Certificates);
provided, however, that the investments described in this clause must (A)
have a predetermined fixed dollar amount of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365 days and
rated by each Rating Agency (or otherwise acceptable to each Rating Agency
as confirmed in writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current
ratings assigned to any of the Certificates) in its highest long-term
unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar amount
of principal due at maturity that cannot vary or change, (B) if rated by
29
S&P, must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must
move proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
with maturities of not more than 365 days and that is rated by each Rating
Agency (or otherwise acceptable to each Rating Agency as confirmed in
writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings
assigned to any of the Certificates) in its highest short-term unsecured
debt rating; provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar amount of principal due
at maturity that cannot vary or change, (B) if rated by S&P, must not have
an "r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity; and
(viii) the Federated Prime Obligation Money Market Fund (the "Fund")
so long as the Fund is rated "AAAm" or "AAAm-G" by S&P, or the equivalent
by each other Rating Agency (or otherwise acceptable to each Rating Agency
as confirmed in writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current
ratings assigned to any of the Certificates);
(ix) any other demand, money market or time deposit, demand
obligation or any other obligation, security or investment, provided that
each Rating Agency has confirmed in writing to Lender, that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any of
the Certificates; and
30
(x) such other obligations as are acceptable as Permitted
Investments to each Rating Agency, as confirmed in writing to Lender, that
such obligations would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any of
the Certificates;
provided, however, that, in the reasonable judgment of Lender, such instrument
continues to qualify as a "cash flow investment" within the meaning of Code
Section 860G(a)(6) earning a passive return in the nature of interest and
provided further that no instrument or security shall be a Permitted Investment
if (i) such instrument or security evidences a right to receive only interest
payments or (ii) the right to receive principal and interest payments derived
from the underlying investment provides a yield to maturity in excess of 120% of
the yield to maturity at par of such underlying investment.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association or
any other entity, any federal, state, county or municipal government or any
bureau, department or agency thereof and any fiduciary acting in such capacity
on behalf of any of the foregoing.
"Plan" means an employee benefit or other plan established or
maintained by any Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Principal Indebtedness" means the Loan Amount, initially, as
adjusted by each increase or decrease in the principal amount of the Loan
outstanding, whether as a result of prepayment or otherwise.
"Proceeds" means all of a Borrower's rights, now or hereafter
acquired, in all proceeds, Rents, profits, products, Accounts, chattel paper,
deposit accounts, Instruments, Equipment, Inventory, consumer goods, farm
products, documents, General Intangibles and other proceeds whether cash or
non-cash, movable or immovable, tangible or intangible (including Insurance
Proceeds and Condemnation Proceeds) from the Collateral, including, without
limitation, those from the sale, exchange, transfer, collection, loss, damage,
disposition, substitution or replacement of any of the Collateral and all
income, gain, credit, distributions and similar items from or with respect to
the Collateral. In addition to the foregoing,
31
"Proceeds" shall also include the meaning as such term has in the New Jersey
Uniform Commercial Code, to the extent of a Borrower's interest therein.
"Proceeds Deficiency" has the meaning provided in the definition of
"Allocated Loan Amount".
"Property Collection Accounts" has the meaning provided in Section
2.12(a).
"Property Collection Account Bank" means the bank holding the
Property Collection Accounts and any successor bank hereafter selected by
Borrower and approved by Lender (such approval not to be unreasonably withheld,
delayed or conditioned) in accordance with the terms hereof.
"Purchase Option" means that certain purchase option granted to a
tenant of the Individual Property known as ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
as further described in item (1) on Schedule 5 hereto.
"Purchase Option Closing" has the meaning provided in Section 8.33.
"Purchase Option Obligations" has the meaning provided in Section
8.33(d).
"Purchase Option Proceeds" has the meaning provided in Section
8.33(b).
"Purchase Option Property" has the meaning provided in Section 8.33.
"Purchase Option Purchase Price" has the meaning provided in Section
8.33(a).
"Purchase Option Sub-Account" has the meaning provided in Section
8.33(a).
"Rating Agencies" means any one or more of the following rating
agencies engaged by Lender, or its designee, to rate the Certificates: Fitch
Investors Service, L.P., ▇▇▇▇▇'▇ Investors Service, Inc., Duff & ▇▇▇▇▇▇ Credit
Rating Co. and Standard & Poor's Ratings Services or any successor thereto.
"Recourse Distributions" has the meaning provided in Section 8.14.
32
"Reimbursement Agreement" means that certain Reimbursement
Agreement, dated as of the date hereof, among FLIP, OIP, MBP and NJA, as
reasonably approved by Lender, as the same may hereafter be supplemented,
amended, modified or extended by one or more written agreements supplemental
thereto, as reasonably approved by Lender.
"REIT" means American Real Estate Investment Corporation, a Maryland
corporation and a publicly traded qualified real estate investment trust.
"Related Mortgages" means, with respect to a particular Individual
Property, the Mortgage and Second Mortgage encumbering such Individual Property.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Substances through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Release Price" has the meaning provided in Section 2.7(a).
"Remedial Work" has the meaning provided in Section 5.1(D)(i).
"REMIC" means "real estate mortgage investment conduit" for federal
income tax purposes.
"REMIC Trust" means a trust fund created in connection with the
Securitization for which a REMIC election is made under the Code.
"Rent Payment Sub-Account" means the Sub-Account of the Cash
Collateral Account or the Servicer Account, as the case may be, established and
maintained pursuant to Section 2.12 relating to certain payments made with
respect to Leases.
"Rents" means, with respect to each Individual Property, all rents
(whether denoted as base rent, advance rent, minimum rent, percentage rent,
additional rent, reimbursements or otherwise), issues, income, royalties,
profits, revenues, proceeds, bonuses, deposits (whether denoted as security
deposits or otherwise), termination fees, rejection damages,
33
buy-out fees and any other fees made or to be made in lieu of rent to Borrower,
any award made hereafter to a Borrower in any court proceeding involving any
tenant, lessee, licensee or concessionaire under any of the Leases in any
bankruptcy, insolvency or reorganization proceedings in any state or federal
court, and all other payments, rights and benefits of whatever nature from time
to time due to a Borrower under the Leases, including, without limitation, (i)
rights to payment earned under the Leases, (ii) any payments or rights to
payment with respect to facilities (including, but not limited to office,
retail, storage, conference, dining, bar and parking facilities) in any way
contained within or associated with such Individual Property, and (iii) all
other income, consideration, issues, accounts, profits or benefits of any nature
arising from the possession, use and operation of such Individual Property.
"Required Debt Service Payment" has the meaning provided in
Section 2.12(f).
"Revised Interest Rate" means the per annum rate equal to the
greater of (i) 12.71% and (ii) the Treasury Rate on the Optional Prepayment Date
plus 6.5%.
"Rollover Leases" means the Leases identified on Schedule 8 attached
hereto, each of which is scheduled to expire in 2003.
"Rollover Lease Costs" means costs incurred by Borrower in
connection with releasing the space covered by the Rollover Leases, including,
without limitation, lease commissions and tenant improvement costs, provided,
however, that the term of any new Lease or extension of the existing Lease for
such space must extend for at least five years beyond the scheduled expiration
date set forth on Schedule 8.
"RROP" means RROP, L.L.C., a New Jersey limited liability company,
the holder of a 99% interest as a non-managing member of OIP.
"Scheduled Defeasance Payments" means:
(a) with respect to a defeasance of the Loan in whole pursuant to
Section 2.6, payments on or prior to, but as close as possible to, (i)
each scheduled Payment Date, after the Defeasance Date and through and
including the Payment Date immediately preceding the Optional Prepayment
Date, upon which interest and principal payments are
34
required under this Agreement and in amounts equal to the scheduled
payments due on such dates under this Agreement and (ii) the Optional
Prepayment Date, of the Principal Indebtedness and any accrued and unpaid
interest thereon;
(b) with respect to any defeasance of the Loan in part pursuant to
Section 2.6, payments on or prior to, but as close as possible to, (i)
each scheduled Payment Date, after the Defeasance Date through and
including the Payment Date immediately preceding the Optional Prepayment
Date, of a proportionate share (based on the percentage of outstanding
principal prior to the defeasance represented by the amount of principal
defeased) of the monthly installments of principal and interest as
provided in Section 2.5(a) and (ii) the Optional Prepayment Date, of the
unpaid portion of the amount of the principal so defeased and any accrued
and unpaid interest thereon; or
(c) with respect to any defeasance of a portion of the Loan pursuant
to Section 2.7(a) or Section 8.33, payments on or prior to, but as close
as possible to, (i) each scheduled Payment Date, after the Defeasance Date
through and including the Payment Date immediately preceding the Optional
Prepayment Date, of a proportionate share (based on the percentage of
outstanding principal prior to the defeasance represented by the Release
Price) of the monthly installments of principal and interest as provided
in Section 2.5(a) and (ii) the Optional Prepayment Date, of the unpaid
portion of the Release Price and any accrued and unpaid interest thereon.
"Second Assignment of Agreements" means, with respect to an
Individual Property, an Assignment of Management Agreement and Agreements
Affecting Real Estate in the form attached hereto as Exhibit U, dated as of the
Closing Date, from the relevant Borrower, as assignor, to Lender, as assignee,
collaterally assigning to Lender (to the extent set forth in the Second
Assignment of Agreements) such Borrower's interest in and to all contracts made
between such Borrower and third parties in connection with the management and
operation of the Individual Property, including, without limitation, the
Management Agreement, any agreements with design professionals, all agreements,
allocations and rights with all utility services affecting the Individual
Property and all development agreements and Permits, as the same may hereafter
from time to time be supplemented, amended, modified or extended by one or more
35
written agreements supplemental thereto, and "Second Assignments of Agreements"
means all such instruments collectively.
"Second Assignment of Leases" means, with respect to an Individual
Property, an Assignment of Leases and Rents in the form attached hereto as
Exhibit V, dated as of the Closing Date, from the relevant Borrower, as
assignor, to Lender, as assignee, collaterally assigning to Lender such
Borrower's interest in and to Leases and Rents with respect to such Individual
Property, as the same may hereafter from time to time be supplemented, amended,
modified or extended by one or more written agreements supplemental thereto, and
"Second Assignments of Leases" means all such instruments collectively.
"Second Mortgage" means, with respect to an Individual Property, a
Mortgage, Assignment of Rents, Security Agreement and Fixture Financing
Statement, in the form attached hereto as Exhibit W, dated as of the Closing
Date, granted by the relevant Borrower to Lender with respect to such Individual
Property as security for the portion of the Loan evidenced by the other
Borrowers' Notes, as the same may hereafter from time to time be supplemented,
amended, modified or extended by one or more written agreements supplemental
thereto, but shall exclude any such instrument released by Lender pursuant to
Section 2.11 and "Second Mortgages" means all such instruments collectively.
"Securitization" has the meaning provided in Section 2.15.
"Securitization Closing Date" means the date on which the
Securitization is effected.
"Securitization Expense Reserve Amount" means $140,000.
"Securitization Expense Sub-Account" means the Sub-Account of the
Servicer Account established and maintained pursuant to Section 2.12 relating to
the payment of Lender's reasonable third party fees and expenses in connection
with the Securitization.
"Security Agreement" has the meaning provided in Section
8.30(a)(vii)(A).
"Security Deposit Account" has the meaning provided in Section
2.12(a).
36
"Senior McBrides" means, collectively, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Revocable Trust A, under Instrument dated March 10, 1982, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
trustee; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Article Third, Testamentary Trust
"B," under Instrument dated ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇ May 12, 1993), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and W. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustees; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Servicer" means any Person appointed as servicer in connection with
the Securitization or such Person's successor as servicer.
"Servicer Account" has the meaning provided in Section 2.12(f).
"Servicer Account Bank" means a bank, or any successor bank,
selected by Lender or Servicer in accordance with the terms hereof and
reasonably acceptable to Borrower, at which the Servicer Account will be
maintained.
"Single-Purpose Entity" means a Person, other than an individual,
which (i) is formed or organized solely for the purpose of holding, directly or
indirectly, an ownership interest in the Mortgaged Property, (ii) does not
engage in any business unrelated to the Mortgaged Property, (iii) does not have
any assets other than those related to its interest in the Mortgaged Property or
any indebtedness other than as permitted by this Agreement, the Mortgages, the
Second Mortgages or the other Loan Documents, (iv) has its own separate books
and records and, except for the centralized accounts contemplated by Article II,
has its own accounts, in each case which are separate and apart from the books
and records and accounts of any other Person, (v) if a corporation, at all times
from and after the date of this Agreement, has an Independent director
reasonably acceptable to Lender, (vi) except for the centralized accounts
contemplated by Article II, does not commingle its assets with the assets of any
other Person, (vii), except as contemplated in the Loan Documents and the
Reimbursement Agreement, does not guarantee the obligations of any other Person
and (viii) holds itself out as being a Person separate and apart from any other
Person.
"Sub-Account" has the meaning provided in Section 2.12(c).
"Substitute Property" has the meaning provided in Section 8.32.
37
"Substitution Closing Date" has the meaning provided in Section
8.32.
"Substitution Documents" has the meaning provided in Section 8.32.
"Survey" means a certified title survey of an Individual Property
prepared by a registered Independent surveyor reasonably satisfactory to Lender
and the company issuing the Title Insurance Policy for that Individual Property.
"Taking" means a taking or voluntary conveyance during the term
hereof of all or part of an Individual Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting an Individual Property or any portion thereof.
"Tax Fair Market Value" means the fair market value of an Individual
Property, and (x) shall not include the value of any personal property or other
property that is not an "interest in real property" within the meaning of
Treasury Regulation ss.ss.1.860G-2 and 1.856-3(c), and (y) shall be reduced by
the "adjusted issue price" (within the meaning of Code ss. 1272(a)(4)) of any
indebtedness, other than the Loan, secured by a Lien affecting the Individual
Property, which Liens is prior to or on a parity with the Liens created under
the Related Mortgages.
"Tenant Letter" has the meaning provided in Section 2.12(a).
"Tenant Purchaser" has the meaning provided in Section 8.33.
"Title Insurance Policies" means the loan policies of title
insurance issued by ▇▇▇▇▇▇▇ Title Guaranty Company with respect to each
Individual Property and insuring the first priority lien in favor of Lender
created by the Mortgage and insuring the lien in favor of Lender created by the
Second Mortgage, subject only to the Permitted Encumbrances for that Individual
Property and containing such endorsements and affirmative assurances as Lender
shall reasonably require.
"Transaction Costs" means the structuring fee payable to Lender as
described in Section 2.1 and, subject to the limitations set forth in Sections
2.15 and 8.24, all other costs
38
and expenses paid or payable by Borrower relating to the Transactions.
"Transactions" means each of the transactions contemplated by the
Loan Documents.
"Transfer" means any transfer, sale, assignment or conveyance of
an Individual Property.
"Treasury Rate" means the yield calculated by linear interpolation
(rounded to three decimal places) of the yields of United States Treasury
Constant Maturities with terms (one longer and one shorter) most nearly
approximating that of noncallable United States Treasury obligations having
maturities as close as possible to the Maturity Date, as determined by Lender on
the basis of Federal Reserve Statistical Release H.15 -- Selected Interest Rates
under the heading U.S. Governmental Security/ Treasury Constant Maturities, or
other recognized source of financial market information selected by Lender.
"Treasury Regulations" means the U.S. Department of Treasury
regulations issued pursuant to the Code in temporary or final form.
"Trigger Event of Default" has the meaning provided in the
definition of "Central Cash Management Period".
"Trustee" means any Person appointed as trustee in connection with
the Securitization or its successor in interest.
"UCC Searches" has the meaning provided in Section 3.1(F).
"UH" means Urban Holdings, L.L.C., a New Jersey limited liability
company.
"Use" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation to or from
the property of such Person of such Hazardous Substance.
"U.S. Obligations" means non-callable direct obligations of, or
obligations fully guaranteed as to payment of principal and interest by, the
United States of America or any agency or instrumentality thereof provided that
such obligations
39
are backed by the full faith and credit of the United States of America.
"U.S. Obligations Deliveries" has the meaning provided in Section
5.1(P).
"Withdrawn Allocated Amount" has the meaning provided in the
definition of "Allocated Loan Amount".
ARTICLE II
GENERAL TERMS
Section 2.1. Amount of the Loan; Fees. On the Closing Date, subject
to the terms and conditions of this Agreement, Lender shall lend to Borrower the
Loan Amount. After any Principal Indebtedness is repaid, Lender shall have no
obligation to re-advance the amount repaid. Borrower shall pay to Lender on the
Closing Date a nonrefundable structuring fee in an amount equal to $225,000.
Lender acknowledges receipt of other fees and amounts payable prior to the date
hereof by Borrower to Lender.
Section 2.2. Use of Proceeds. Proceeds of the Loan shall be used for
the following purposes: (a) to repay all existing indebtedness on the Mortgaged
Property, and all related costs and expenses of such repayment, (b) to fund the
Capital Reserve Sub-Account of the Servicer Account in the amount of the Initial
Capital Requirement and the Environmental Operation & Maintenance Reserve, to
fund the initial deposit to the Basic Carrying Costs Sub-Account of the Servicer
Account, to fund the Lease Reserve Sub-Account of the Servicer Account in the
amount of the Initial Lease Reserve Deposit and to fund the Securitization
Expense Sub-Account in the amount of the Securitization Expense Reserve Amount
and (c) to pay to the structuring fee to Lender described in Section 2.1 and to
pay or reimburse all other Transaction Costs payable by Borrower. Any proceeds
in excess of the amounts described in clauses (a), (b) and (c) may be used by
Borrower for any lawful purpose.
Section 2.3. Security for the Loan. The Notes and Borrower's
obligations hereunder and under the other Loan Documents shall be secured by (a)
the Mortgages and the Second Mortgages, (b) the Assignments of Leases and the
Second Assignments of Leases, (c) the Assignments of Agreements and the Second
Assignments of Agreements, (d) the Guaranty and (e) the
40
security interests and Liens granted in this Agreement and in the other Loan
Documents.
Section 2.4. Borrower's Notes.
(a) Borrower's obligation to pay the principal of and interest on
the Loan shall be evidenced by the Notes, duly executed and delivered by FLIP,
OIP, MBP and NJA. The Notes shall be payable as to principal and interest as
specified in this Agreement, with a final maturity on the Maturity Date. All
outstanding Indebtedness shall be paid by Borrower on the Maturity Date.
(b) Lender is hereby authorized, at its option, (i) to endorse on a
schedule attached to each Note (or on a continuation of such schedule attached
to each Note and made a part thereof) an appropriate notation evidencing the
date and amount of each payment of principal and interest, and/or (ii) to record
the Allocated Loan Amounts and such payments in its books and records. Such
schedule and/or such books and records, as the case may be, shall, absent
manifest error, constitute prima facie evidence of the accuracy of the
information contained therein.
Section 2.5. Principal and Interest.
(a) On the Payment Date on October 11, 1997 a payment of interest
only on the Notes shall be made for the first Collection Period, calculated at a
rate of 7.71% per annum and computed on the actual number of days elapsed, based
on a 360-day year (i.e., interest for each day during which any part of the Loan
is outstanding shall be computed at said rate divided by 360). Commencing with
the Payment Date on November 11, 1997, and on each and every Payment Date
thereafter, the principal of and interest on the Notes shall be payable in equal
monthly installments of $338,717.07, which payment is based on an interest rate
of 7.71% and a 300-month amortization schedule. For each Collection Period,
interest at a rate of 7.71% per annum shall be computed on the actual number of
days elapsed, based on a 360-day year (i.e., interest for each day during which
any part of the Loan is outstanding shall be computed at said rate divided by
360) and the remaining amount of the monthly installment shall be applied to
principal. Upon a prepayment pursuant to Section 2.7(b) or 2.12(i), the amount
of the monthly installment will be reduced proportionately (based on the
percentage of outstanding principal prior to the prepayment represented by the
amount of principal prepaid).
41
(b) Commencing on the Optional Prepayment Date, in addition to the
interest described in Section 2.5(a), interest shall also accrue on the
Principal Indebtedness at the Additional Interest Rate and on the Accrued
Interest, if any, at the Revised Interest Rate. Commencing on November 11, 2007,
and on each and every Payment Date thereafter, in addition to the payments
described in Section 2.5(a), 100% of the amount of Excess Cash Flow attributable
to the Mortgaged Properties for the calendar month preceding the calendar month
in which such Payment Date occurs shall be applied, first, to the Principal
Indebtedness until reduced to zero, second, to currently accruing interest
described in the prior sentence of this Section 2.5(b), and, third, to the
Accrued Interest, if any. To the extent Excess Cash Flow is insufficient to pay
the interest payments described in the first sentence of this Section 2.5(b) on
any Payment Date, such interest shall be deferred and added to any interest
previously deferred pursuant to this sentence and remaining unpaid (the "Accrued
Interest"). Amounts payable pursuant to this Section 2.5(b) shall not be
included in determinations of Required Debt Service Payments, nor shall failure
to pay interest or Accrued Interest pursuant to this Section 2.5(b) constitute
an Event of Default or give rise to interest at the Default Rate or late payment
premiums.
(c) The entire outstanding principal balance of the Loan (including,
without limitation, any Accrued Interest), together with all accrued but unpaid
interest thereon, shall be due and payable to Lender on the Maturity Date. In
addition, if, prior to the Optional Prepayment Date, the Loan has been
accelerated based on an Event of Default described in Section 7.1(i), (iii),
(iv), or (v) or an Event of Default arising from a Borrower's fraud or willful
misconduct, there shall also be due and payable to Lender on the Maturity Date
an amount equal to the excess, if any, of (i) the amount of a Defeasance Deposit
for the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance
Payments described in clause (a) of the definition of "Scheduled Defeasance
Payments" over (ii) the Principal Indebtedness.
(d) During the continuance of an Event of Default, the entire
outstanding principal balance of the Loan will bear interest at the Default
Rate. In addition, a late payment premium of five percent of any principal or
interest payment not paid on the Payment Date therefor shall be due with any
such late payment.
42
Section 2.6. Voluntary Prepayment and Defeasance. Except in
connection with the Purchase Option as set forth in Section 8.33, the Loan may
not be prepaid or defeased in whole or in part during the period commencing on
the Closing Date through and including the second anniversary of the
Securitization Closing Date. After the second anniversary of the Securitization
Closing Date, and prior to the Optional Prepayment Date, Borrower may
voluntarily defease the Loan in whole as provided in Section 8.30. On or after
July 11, 2007, Borrower may voluntarily prepay the Loan in whole, without
defeasance, premium or penalty, on any Payment Date. On or after the Optional
Prepayment Date, Borrower may voluntarily prepay the Loan in part, without
defeasance, premium or penalty, on any Payment Date. The Loan may also be
prepaid or defeased as described in Section 2.7 and Section 8.33.
Section 2.7. Mandatory Prepayment and Defeasance.
(a) Except as set forth in Sections 8.32 and 8.33, Borrower may
Transfer any Individual Property only at any time after the second anniversary
of the Securitization Closing Date; provided, however, that (i) no Event of
Default shall have occurred and be continuing, (ii) the Debt Service Coverage
Ratio of the remaining Individual Properties (considered as a whole) immediately
after the Transfer would not be less than the greater of (x) the Debt Service
Coverage Ratio of all Individual Properties (including the Individual Property
to be transferred) (considered as a whole) calculated immediately prior to the
Transfer or (y) the Debt Service Coverage Ratio of all Individual Properties
(including the Individual Property to be transferred) (considered as a whole) in
effect on the Closing Date, (iii) Lender shall have received an Officer's
Certificate certifying that the Principal Indebtedness, after deducting the
Release Price, will not, on the related Defeasance Date, exceed 125% of the sum
of the Tax Fair Market Values of the remaining Individual Properties as of the
Securitization Closing Date, (iv) Lender shall have received from Borrower
financial statements, calculations and other backup information with respect to
the matters in clauses (ii) and (iii) above, all in form and substance
reasonably satisfactory to Lender and accompanied by an Officer's Certificate
stating that such statements, calculations and information are true, correct and
complete in all material respects, and (v) upon the date of the consummation of
any such Transfer (which must be the Defeasance Date), Borrower shall defease a
principal portion of the Loan in an amount equal to 125% of the Allocated Loan
Amount for such Individual Property (the "Release Price") pursuant to
43
Section 8.30. If Borrower satisfies all of the conditions set forth above other
than the condition contained in clause (ii), Borrower shall have the right to
satisfy such condition by increasing the Release Price by the amount required
for such condition to be satisfied. On or after the Optional Prepayment Date,
the conditions of this Section 2.7(a) shall apply to a Transfer of any
Individual Property, except that clause (v) will be modified as follows: "(v)
upon the date of the consummation of any such Transfer (which must be a Payment
Date), Borrower shall prepay a principal portion of the Loan in an amount equal
to 125% of the Allocated Loan Amount for such Individual Property (the "Release
Price"), without premium or penalty, and pay an amount equal to the product of
(x) the Accrued Interest and (y) a percentage equal to the Release Price divided
by the Principal Indebtedness."
(b) If Borrower is required by Lender under the provisions of a
Mortgage or a Second Mortgage to prepay the Loan or any portion thereof in the
event of damage, destruction or a Taking of an Individual Property, Lender or
Servicer shall prepay a portion of the Loan by advancing the Loss Proceeds from
the Cash Collateral Account and applying such Loss Proceeds to (i) principal up
to the Release Price for such Individual Property and (ii) either (x) interest
on such principal amount to the immediately succeeding Payment Date or (y)
accrued interest on such principal amount, if such payment is made on a Payment
Date. Any Loss Proceeds remaining after such application shall be released to
Borrower.
(c) Upon prepayment of the Loan in full, Borrower shall pay to
Lender, in addition to the amounts specified in Section 2.6 or this Section 2.7,
as applicable, any other amounts then due and payable to Lender pursuant to the
Loan Documents. All prepayments made pursuant to Section 2.6 or this Section 2.7
shall be applied in accordance with the provisions of Section 2.8.
Section 2.8. Application of Payments. All proceeds (including any
Net Proceeds) of any repayment, including prepayments, of the Loan shall be
applied to pay: first, any reasonable out-of-pocket costs and expenses of Lender
(including the fees and charges of the Cash Collateral Account Bank and/or the
Servicer Account Bank) with respect to such repayment; second, any currently
accruing interest then payable with respect to the Loan or the portion thereof
being repaid (excluding any interest at the Additional Interest Rate or the
Revised Interest Rate); third, the outstanding principal amount
44
of the Loan or the portion thereof being repaid; fourth, currently accruing
interest at the Additional Interest Rate or the Revised Interest Rate then
payable; fifth, Accrued Interest; and sixth, any other amounts due and owing
under the Loan Documents. Such payments shall be applied pro rata to the Notes,
except that if the payment being applied has been made with respect to a
particular Individual Property (such as payment of a Release Price or Loss
Proceeds), such payment shall be applied to the Note secured by the Mortgage on
such Individual Property. Any partial prepayment of principal made pursuant to
Section 2.5(b) shall be applied to principal payments thereafter required in the
inverse order of their maturity and the payments described in Section 2.5(a)
shall not be changed. After and during the continuance of an Event of Default,
proceeds may be applied in any order in the sole discretion of Lender.
Section 2.9. Method and Place of Payment.
(a) Except as otherwise specifically provided herein, all payments
and prepayments under this Agreement and the Notes shall be made to Lender not
later than 12:00 noon, New York City time, on the date when due and shall be
made in lawful money of the United States of America in federal or other
immediately available funds to an account specified to Borrower by Lender in
writing, and any funds received by Lender after such time shall, for all
purposes hereof, be deemed to have been paid on the next succeeding Business
Day.
(b) All payments made by Borrower hereunder, or by Borrower under
the other Loan Documents, shall be made irrespective of, and without any
deduction for, any set-offs or counterclaims.
Section 2.10. Taxes. All payments made by Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (other than taxes imposed on the income of Lender).
Section 2.11. Release of Collateral.
(a) Notwithstanding any other provision of this Agreement or any
other Loan Document, upon a prepayment with
45
respect to any Individual Property as described in Section 2.03(d) of the
Mortgages and the Second Mortgages or Section 2.12(i), a defeasance or
prepayment with respect to any Individual Property as described in Section
2.7(a), a substitution of Individual Properties as described in Section 8.32 or
upon the defeasance or substitution in accordance with Section 8.33 with respect
to the Purchase Option Property, Lender shall, simultaneously with such payment
or Purchase Option Closing, (i) release the Liens of the Related Mortgages and
the related Assignment of Leases, Second Assignment of Leases, Assignment of
Agreements, Second Assignment of Agreements and UCC-1 financing statements and
any other Liens in favor of Lender relating to such Individual Property and (ii)
release to Borrower any portion of the Sub-Accounts relating to such Individual
Property, except that in the event a Central Cash Management Period has been
instituted and not terminated pursuant to Section 8.33, all funds in the
Sub-Accounts relating to the released Purchase Option Property will be
transferred to the Purchase Option Sub-Account. Lender shall cooperate with
Borrower to make release documents available through escrow or other
arrangements reasonably satisfactory to Lender that do not delay release of its
Liens.
(b) If, in connection with a Taking or casualty, Lender receives
Loss Proceeds with respect to any Individual Property in an amount equal to or
exceeding the sum of the Allocated Loan Amount for such Individual Property and
accrued and unpaid interest thereon and applies such Loss Proceeds to reduce the
Indebtedness in accordance with Section 2.7(b), or, if the Loss Proceeds are
less than such sum, but the Loss Proceeds together with a cash payment to Lender
from Borrower equal the sum of the Allocated Loan Amount for such Individual
Property and accrued and unpaid interest thereon, Lender shall simultaneously
with such application release the Liens of the Related Mortgages and related
Assignment of Leases, Second Assignment of Leases, Assignment of Agreements,
Second Assignment of Agreements and UCC-1 financing statements and any other
Liens in favor of Lender relating to such Individual Property and shall release
to Borrower any portion of the Sub-Accounts relating to such Individual
Property.
(c) Upon repayment of the Loan and all other amounts due hereunder
and under the Loan Documents in full in accordance with the terms hereof and
thereof or defeasance of the Loan in whole as described in Section 8.30, Lender
shall release its Liens with respect to all Collateral, provided, however, that
Lender shall have no obligation to release any Lien with respect
46
to Collateral on or prior to the second anniversary of the Securitization
Closing Date except as provided in Section 2.03(d) of the Mortgages and the
Second Mortgages, Section 2.11(b), Section 2.12(i), Section 8.32 or Section
8.33. Lender shall cooperate with Borrower to make release documents available
through escrow or other arrangements reasonably satisfactory to
Lender that do not delay release of its Liens.
Section 2.12. Cash Management.
(a) Property Collection and Security Deposit Accounts. Borrower
hereby acknowledges and agrees that all of the Rents (other than security
deposits from tenants), Money and Proceeds received from Accounts derived from
the Individual Properties shall be utilized to pay Basic Carrying Costs, Debt
Service, Capital Costs, Rollover Lease Costs, Operating Expenses, Purchase
Option Obligations (if any) and for other purposes, including without
limitation, dividends or distributions. Each Borrower shall open and maintain at
the Property Collection Account Bank a demand deposit account (each, a "Property
Collection Account"). Borrower shall open and maintain at the Property
Collection Account an additional demand deposit account that is fully segregated
and distinct from the Property Collection Accounts (the "Security Deposit
Account"). The Security Deposit Account may, at Borrower's option, have
sub-accounts for each of the Individual Properties so as to distinguish the
security deposits for each Individual Property. Each of the Property Collection
Accounts shall be assigned a separate and unique identification number by the
Property Collection Account Bank and shall be opened and maintained,
respectively, in the names: (i) "Nomura Asset Capital Corporation as Mortgagee
of FLIP/BRE, Inc.", (ii) "Nomura Asset Capital Corporation as Mortgagee of
OIP/BRE, L.L.C.", (iii) "Nomura Asset Capital Corporation as Mortgagee of
MBP/BRE, L.L.C.", and (iv) "Nomura Asset Capital Corporation as Mortgagee of
NJA/BRE, L.L.C.". The Security Deposit Account shall be assigned a separate and
unique identification number by the Property Collection Account Bank and shall
be opened and maintained in the name "Nomura Asset Capital Corporation as
Mortgagee of FLIP/BRE, INC., OIP/BRE, L.L.C., MBP/BRE, L.L.C. and NJA/BRE,
L.L.C.". Borrower shall notify all current and future tenants to pay Rent to the
appropriate Property Collection Account by delivering to each tenant a notice
(the "Tenant Letter") in substantially the form attached hereto as Exhibit J.
All payments constituting Rent (other than security deposits from tenants) or
made with respect to Accounts received by Borrower or a Manager shall be
endorsed and deposited within
47
one Business Day after the day received directly into the appropriate Property
Collection Account. All security deposits shall be paid to the Manager who shall
collect all security deposits and shall endorse all checks and deposit all such
funds within one Business Day after the day received directly into the Security
Deposit Account. Borrower shall notify Lender of any security deposits held as
letters of credit and, upon Lender's request, such letters of credit shall be
delivered to Lender or its designee. Borrower may designate a new financial
institution to serve as the Property Collection Account Bank hereunder as
provided in Section 2.13(l). Borrower shall have no right of withdrawal from the
Property Collection Accounts or the Security Deposit Account except that, prior
to the Property Collection Account Bank's receipt of notice of the occurrence of
an Event of Default from Lender or Servicer (given at the request of Lender on
Lender's behalf), Borrower may withdraw funds from the Security Deposit Account
as permitted pursuant to the Collection Account Agreement. If Borrower receives
funds from the Security Deposit Account or from letters of credit or other
instruments held in lieu of cash security deposits, then, except as provided in
the Collection Account Agreement with respect to funds to be refunded to
tenants, such funds shall be deposited in the appropriate Property Collection
Account within one Business Day after receipt.
(b) Cash Collateral Account. Pursuant to the Collection Account
Agreement executed by the Property Collection Account Bank (the "Collection
Account Agreement") in substantially the form attached hereto as Exhibit K, the
Property Collection Account Bank has agreed to transfer on a daily basis all
funds deposited in the Property Collection Accounts to accounts designated by
Borrower in the Collection Account Agreement, unless the Property Collection
Account Bank has received notice from Lender or Servicer of the commencement of
a Central Cash Management Period, after which the Property Collection Account
Bank has agreed to transfer on a daily basis all funds deposited in the Property
Collection Accounts to an account with the Cash Collateral Account Bank, as
designated by Lender or Servicer in such notice (the "Cash Collateral Account"),
until receipt of a notice from Lender or Servicer that the Central Cash
Management Period has ended. Lender may elect to change the financial
institution at which the Cash Collateral Account shall be maintained; provided,
however, that Lender shall give Borrower and the Property Collection Account
Bank not fewer than 30 days' prior notice of each change and the financial
institution to which the Cash Collateral Account may be transferred shall be
subject to Borrower's reasonable
48
approval. The Cash Collateral Account shall at all times be an Eligible Account.
Upon the commencement of a Central Cash Management Period, Borrower shall
cooperate with Lender to establish, and hereby appoints Lender its
attorney-in-fact for the purpose of establishing, the Cash Collateral Account in
the name of Lender, and the Cash Collateral Account shall be under the sole
dominion and control of Lender and Servicer, acting on Lender's behalf. Borrower
shall have no right of withdrawal in respect of the Cash Collateral Account.
(c) Establishment of Sub-Accounts. The Cash Collateral Account and
the Servicer Account shall each contain the Basic Carrying Costs Sub-Account,
the Debt Service Payment Sub-Account, the Capital Reserve Sub-Account, the Lease
Reserve Sub-Account and the Rent Payment Sub-Account. The Servicer Account shall
contain the Securitization Expense Sub-Account, and the Cash Collateral Account
shall contain the Operating Expense Sub-Account and, if and when required
pursuant to Section 8.33, the Purchase Option Sub-Account. Each of the accounts
described in this paragraph (c) (individually, a "Sub-Account" and collectively,
the "Sub-Accounts") shall be either a separate Eligible Account to which certain
funds shall be allocated and from which disbursements shall be made pursuant to
the terms of this Agreement or a ledger entry under the Cash Collateral Account
or the Servicer Account, as the case may be.
(d) Permitted Investments. Upon the request of Borrower which
request may be made one time per month, Lender shall direct the Cash Collateral
Account Bank or the Servicer Account Bank, as applicable, to invest and reinvest
any balance in the Cash Collateral Account or the Servicer Account,
respectively, from time to time in Permitted Investments as instructed by
Borrower; provided, however, that (i) if Borrower fails to so instruct Lender,
or upon the occurrence of an Event of Default, Lender or Servicer, on Lender's
behalf, may direct the Cash Collateral Account Bank or the Servicer Account
Bank, as applicable, to invest and reinvest such balance in Permitted
Investments as Lender or Servicer, on Lender's behalf, shall determine in its
sole discretion, (ii) the maturities of the Permitted Investments on deposit in
the Cash Collateral Account or the Servicer Account shall, to the extent such
dates are ascertainable, be selected and coordinated to become due not later
than the day before any disbursements from the applicable Sub-Accounts must be
made, (iii) all such Permitted Investments shall be held in the name and be
under the sole dominion and control of Lender or its designee, and (iv) no
Permitted Investment shall be made unless Lender or its designee shall
49
retain a perfected first priority Lien in such Permitted Investment securing the
Indebtedness and all filings and other actions necessary to ensure the validity,
perfection, and priority of such Lien have been taken. It is the intention of
the parties hereto that the entire amount deposited in the Cash Collateral
Account and the Servicer Account (or as much thereof as Lender or Servicer, on
Lender's behalf, may reasonably arrange to invest) shall at all times be
invested in Permitted Investments, and that the Cash Collateral Account and the
Servicer Account shall each be a so-called "zero balance" account. All funds in
the Cash Collateral Account or the Servicer Account that are invested in a
Permitted Investment are deemed to be held in the Cash Collateral Account or the
Servicer Account for all purposes of this Agreement and the other Loan
Documents. Except as provided in Section 2.13(g), neither Lender nor any of its
agents, including Servicer, shall have any liability for any loss in investments
of funds in the Cash Collateral Account or the Servicer Account that are
invested in Permitted Investments (unless invested contrary to Borrower's
request prior to an Event of Default) and no such loss shall affect Borrower's
obligation to fund, or liability for funding, the Cash Collateral Account, the
Servicer Account and each Sub-Account, as the case may be. Borrower agrees that
Borrower shall include all such earnings on the Cash Collateral Account and the
Servicer Account as income of Borrower for federal and applicable state tax
purposes.
(e) Interest on Accounts. All interest paid or other earnings on the
Permitted Investments made hereunder shall be for the benefit of Borrower and
shall be deposited into the Cash Collateral Account or the Servicer Account, as
the case may be, and shall be subject to allocation and distribution like any
other monies deposited therein.
(f) The Servicer Account; Payment of Debt Service, Basic Carrying
Costs, Capital Costs and Rollover Lease Costs. On or before each Payment Date
during the term of the Loan, Lender or Servicer shall deliver to Borrower
written notice of the Debt Service, excluding any Scheduled Defeasance Payments
pursuant to Section 8.30 (the "Required Debt Service Payment"), the Basic
Carrying Costs Monthly Installment, the Capital Reserve Monthly Installment and
the Lease Reserve Monthly Installment, payable to Lender on the Payment Date in
the next calendar month. On each Payment Date in the term of the Loan that is
not during a Central Cash Management Period, Borrower shall pay to Lender the
Required Debt Service Payment, the Basic Carrying Costs Monthly Installment, the
Capital Reserve Monthly
50
Installment and the Lease Reserve Monthly Installment by transferring such funds
by wire transfer to an account with the Servicer Account Bank (the "Servicer
Account") as designated by Lender or Servicer in the foregoing written notice,
at or before 11:00 a.m., New York City time, on such Payment Date and failure to
make such payment by such time shall be an Event of Default hereunder. Prior to
the Securitization, the Servicer Account shall be maintained with Lender. Upon
the Securitization and thereafter, Lender may elect to change the financial
institution at which the Servicer Account shall be maintained with reasonable
prior to notice to Borrower. Upon such election, Lender, Servicer, Borrower and
the Servicer Account Bank shall enter into a letter agreement reasonably
satisfactory to all parties, whereby Servicer and the Servicer Account Bank
acknowledge and agree to the terms of this Agreement as it relates to the
Servicer Account and the application of funds maintained therein.
Notwithstanding the foregoing, if Borrower has paid to Lender for deposit in the
Basic Carrying Costs Sub-Account of the Servicer Account an amount equal to
one-fourth of the Basic Carrying Costs for the next twelve month period,
Borrower shall not be required to pay Basic Carrying Costs Monthly Installments,
provided, however, that Lender shall not be obligated to pay Basic Carrying
Costs pursuant to paragraph (i) of this Section 2.12(f) if Borrower is not
making such monthly payments.
(i) Payment of Basic Carrying Costs. At least ten Business Days
prior to the date that payment of any Basic Carrying Cost would become
delinquent or any fine, penalty, interest or cost attaches thereto and not
more frequently than once each month with respect to each such Basic
Carrying Cost, Borrower shall notify Lender and Servicer in writing and
request that Lender or Servicer pay such Basic Carrying Cost on behalf of
Borrower on or prior to such date or inform Lender and Servicer that
Borrower is contesting such Basic Carrying Cost in accordance with Section
2.06(b) of the Related Mortgages. Together with each such notice, Borrower
shall furnish Lender and Servicer with copies of bills and other
documentation as may be reasonably required by Lender or Servicer to
establish that such Basic Carrying Cost is then due or is being properly
contested pursuant to Section 2.06(b) of the Related Mortgages. Unless
such Basic Carrying Cost is being so contested, Lender or Servicer shall
make such payments on behalf of Borrower out of the Basic Carrying Costs
Sub-Account before same shall be delinquent and before any fine, penalty,
interest or cost attaches
51
thereto, to the extent that there are funds available in the Basic
Carrying Costs Sub-Account, and Lender and Servicer have received
appropriate documentation to establish the amount(s) due and the
delinquency, penalty, interest and due date(s). Borrower may pay Basic
Carrying Costs directly and request reimbursement therefor from the Basic
Carrying Costs Sub-Account upon presentation of evidence of payment
reasonably satisfactory to Lender or Servicer. Lender shall have no
obligation to make such payments if the Basic Carrying Costs Sub-Account
is not being funded on a monthly basis with the Basic Carrying Costs
Monthly Installment.
(ii) Payment of Debt Service. At or before 12:00 noon, New York City
time, on each Payment Date during the term of the Loan, Lender shall
transfer from the Debt Service Payment Sub-Account to its account an
amount equal to the Required Debt Service Payment for such Payment Date
or, if Servicer has been appointed, Servicer shall transfer from the Debt
Service Payment Sub-Account an amount equal to the Required Debt Service
Payment for such Payment Date to the account of Servicer established under
the Interim Servicing Agreement or, if after the Securitization Closing
Date, under any pooling and servicing agreement executed in connection
with the Securitization. Borrower shall be deemed to have timely made the
Required Debt Service Payment pursuant to Section 2.9 (and no Default Rate
interest or late payment premium shall be imposed thereon and there shall
be no Event of Default under Section 7.1(i)) regardless of the time
Servicer makes such transfer as long as sufficient funds are then on
deposit in the Debt Service Payment Sub-Account.
(iii) Payment of Capital Costs. Not more frequently than once each
Collection Period and provided that no Event of Default has occurred and
is continuing, upon Borrower's written request Lender or Servicer shall
transfer funds to Borrower then allocated to the Capital Reserve
Sub-Account for payment of Capital Costs and Environmental Operation &
Maintenance Obligations. Together with each such request, Borrower shall
furnish Lender and Servicer with an Officer's Certificate detailing the
work performed, certifying the completion thereof in a good and
workmanlike manner (and with respect to the Environmental Operation &
Maintenance Obligations, in accordance with the related Environmental
Reports) and certifying that the attached invoices relate to the work
performed and have been paid or
52
will be paid from the funds transferred pursuant to such request. In
addition, Borrower will submit such other documentation as may be
reasonably required by Lender or Servicer to establish that such Capital
Costs or Environmental Operation & Maintenance Obligations are then due,
which may include photographs of the completed work, partial lien releases
with respect to the payments last made and contingent lien releases (if
customary in the relevant jurisdiction) with respect to the payments to be
made with the funds to be transferred to Borrower. Upon completion of any
deferred maintenance items covered by the Initial Capital Requirement,
Borrower may request return of the full amount reserved for such items as
set forth on Schedule 4, to the extent not previously released to
Borrower, and upon completion of all deferred maintenance items covered by
the Initial Capital Requirement, Borrower may request return of any
portion of the Initial Capital Requirement not previously released to
Borrower. Any excess amounts not so requested by Borrower shall remain in
the Capital Reserve Sub-Account and be available for the payment of other
Capital Costs. Upon completion of any Environmental Operation &
Maintenance Obligations item covered by the Environmental Operation &
Maintenance Reserve, Borrower may request return of the full amount
reserved for such item as set forth on Schedule 6, to the extent not
previously released to Borrower, and upon completion of all such items
covered by such reserve, Borrower may request return of any portion of the
Environmental Operation & Maintenance Reserve not previously released to
Borrower. Any excess amounts not so requested by Borrower shall remain in
the Capital Reserve Sub-Account and be available for the payment of other
Capital Costs.
(iv) Payment of Rollover Lease Costs. Not more frequently than once
each Collection Period and provided that no Event of Default has occurred
and is continuing, upon Borrower's written request, Lender or Servicer
shall transfer funds to Borrower then allocated to the Lease Reserve
Sub-Account for payment of Rollover Lease Costs. Together with each such
request, Borrower shall furnish Lender and Servicer with an Officer's
Certificate detailing the expenses incurred and, in connection with tenant
improvements, detailing the work performed and certifying the completion
thereof in a good workmanlike manner and certifying that the attached
invoices relate to the payment requested and, if applicable, the work
performed, and that
53
the attached invoices have been paid or will be paid from the funds
transferred pursuant to such request. In addition, Borrower will submit
such other documentation as may be reasonably required by Lender or
Servicer to establish that such Rollover Lease Costs are then due, which
may include photographs of the completed work, partial lien releases with
respect to the payments last made and contingent lien releases (if
customary in the relevant jurisdiction) with respect to payments to be
made with the funds to be transferred to Borrower. Upon releasing the
entire space covered by the applicable Rollover Lease pursuant to
fully-executed Leases, the terms of which have commenced and will extend
at least five years beyond the scheduled expiration date set forth on
Schedule 8 and are otherwise in accordance with the terms of the Loan
Documents, (i) no further deposits to the Lease Reserve Sub-Account shall
be required with respect to such Rollover Lease (and the Lease Reserve
Amount and Lease Reserve Monthly Installment shall be adjusted
accordingly) and (ii) Borrower may request return of the full amount
reserved for such Rollover Lease as set forth on Schedule 8 to the extent
not previously released to Borrower. Upon so releasing the space covered
by all of the Rollover Leases, Borrower may request return of any amounts
then held in the Lease Reserve Sub-Account not previously released to
Borrower.
(g) Monthly Funding of Sub-Accounts During a Central Cash Management
Period. Upon the commencement of a Central Cash Management Period, Lender or
Servicer shall cause all amounts then in the Servicer Account (and any
Sub-Accounts thereof) to be transferred to the Cash Collateral Account (and
respective Sub-Accounts thereof). During each Collection Period (or part
thereof) in a Central Cash Management Period, funds in the Property Collection
Accounts shall be transferred to the Cash Collateral Account pursuant to the
Collection Account Agreement, and Lender or Servicer shall allocate all funds
then on deposit in the Cash Collateral Account among the Sub-Accounts thereof as
follows and in the following priority:
(i) first, to the Basic Carrying Costs Sub-Account, until an amount
equal to the Basic Carrying Costs Monthly Installment for the Collection
Period has been allocated to the Basic Carrying Costs Sub-Account and
amounts required to pay the Basic Carrying Costs due, if any, in the next
succeeding Collection Period are being held in the Basic Carrying Costs
Sub-Account;
54
(ii) second, to the Debt Service Payment Sub-Account, until an
amount equal to the Required Debt Service Payment for the Payment Date
occurring immediately after such Collection Period has been allocated to
the Debt Service Payment Sub-Account;
(iii) third, to the Capital Reserve Sub-Account, until an amount
equal to the Capital Reserve Monthly Installment for the Collection Period
has been allocated to the Capital Reserve Sub-Account; and
(iv) fourth, until all of the space covered by the Rollover Leases
has been released pursuant to fully-executed Leases the terms of which
have commenced and will extend at least five years beyond the scheduled
expiration date set forth on Schedule 8 and otherwise in accordance with
the terms of the Loan Documents, to the Lease Reserve Sub-Account, until
an amount equal to the Lease Reserve Monthly Installment for the
Collection Period has been allocated to the Lease Reserve Sub-Account.
Not later than three Business Days before each Payment Date during a
Central Cash Management Period, Lender or Servicer shall deliver to Borrower a
certificate in the form attached hereto as Exhibit L, setting forth (i) the
Required Debt Service Payment for such Payment Date and (ii) whether sufficient
funds exist in the Cash Collateral Account to fund the Basic Carrying Costs
Sub-Account, the Debt Service Payment Sub-Account, the Capital Reserve
Sub-Account and the Lease Reserve Sub-Account in the required amounts. If any
such certificate states that the funds then allocated to the Sub-Accounts are
less than the amount of funds which are required to be on deposit therein on
such Payment Date, Borrower shall be obligated to deposit funds (in addition to
Rents, Money and Proceeds received from Accounts) into the Cash Collateral
Account in the amount of such deficiency, and failure to make such deposit by
11:00 a.m., New York City time, on such Payment Date shall be an Event of
Default hereunder.
Payments shall be made from the Sub-Accounts of the Cash Collateral
Account as provided in paragraphs (i) - (iv) of Section 2.12(f).
Prior to the Optional Prepayment Date, provided that (i) no Event of
Default has occurred and is continuing, (ii) Lender has received all financial
information described in
55
Section 5.1(Q) for the most recent periods for which the same are due and (iii)
there are no outstanding Purchase Option Obligations, Lender agrees that in each
Collection Period any amounts deposited into or remaining in the Cash Collateral
Account after the minimum amounts set forth in clauses (i), (ii), (iii) and (iv)
above have been allocated with respect to the Collection Period and any periods
prior thereto shall be disbursed by wire transfer to Borrower as set forth in
the CC Account Agreement and that Lender or Servicer will notify the Property
Collection Account Bank to stop the transfer of funds to the Cash Collateral
Account for the remainder of such Collection Period and instead transfer such
funds to Borrower as provided in the Collection Account Agreement. Borrower
shall use any funds distributed to Borrower (or to Manager) from the Cash
Collateral Account or the Property Collection Accounts first to pay all
Operating Expenses and then for any purpose, including, without limitation,
dividends or other distributions. If there are outstanding Purchase Option
Obligations, any amounts deposited into or remaining in the Cash Collateral
Account in each Collection Period after Lender or Servicer has (x) allocated
minimum amounts as hereinabove provided, and (y) allocated to the Operating
Expense Sub-Account amounts required to pay any Operating Expenses approved by
Lender, Servicer or Trustee, shall be allocated to the Purchase Option
Sub-Account to satisfy outstanding Purchase Option Obligations. If an Event of
Default has occurred and as long as it is continuing, if so elected by Lender,
Servicer or Trustee, any amounts deposited into or remaining in the Cash
Collateral Account in each Collection Period after Lender or Servicer has (x)
allocated minimum amounts as hereinabove provided, and (y) allocated to the
Operating Expense Sub-Account amounts required to pay any Operating Expenses
approved by Lender, Servicer or Trustee, shall be for the account of Lender and
may be withdrawn by Lender to be applied to amortize the principal amount of the
Loan or to satisfy any outstanding Purchase Option Obligations, in Lender's sole
discretion.
From and after the Optional Prepayment Date, in each Collection
Period, all funds in the Property Collection Accounts shall be transferred to
the Cash Collateral Account and applied by Lender or Servicer as follows: (x)
first, to the allocation to the Sub-Accounts of the minimum amounts set forth in
clauses (i), (ii), (iii) and (iv), (y) then, amounts required to pay Operating
Expenses and Capital Costs (other than Capital Costs to be paid from funds in
the Capital Reserve Sub-Account) in the Collection Period (as set forth for such
period in the Approved Annual Budget or as otherwise requested by Borrower and
approved
56
by Lender in its sole discretion) shall be allocated to the Operating Expense
Sub-Account and disbursed to Borrower, not more than once each Collection
Period, to be used by Borrower to pay such Operating Expenses and Capital Costs
and (z) then, to the payment of any outstanding Purchase Option Obligations. All
other amounts transferred to the Cash Collateral Account in such Collection
Period shall constitute "Excess Cash Flow" for such month and shall be applied
to the payment of principal and interest as provided in Section 2.5(b) on the
Payment Date in the next Collection Period.
Upon the termination of a Central Cash Management Period, Lender or
Servicer shall cause all amounts then in the Cash Collateral Account (and any
Sub-Accounts thereof) to be transferred to the Servicer Account (and respective
Sub-Accounts thereof).
(h) Loss Proceeds. In the event of a casualty or Taking with respect
to an Individual Property and unless pursuant to the Related Mortgages the
proceeds, net of Borrower's reasonable collection costs reasonably approved by
Lender, received under any insurance policy required to be maintained by
Borrower ("Insurance Proceeds") or the proceeds, net of Borrower's reasonable
collection costs reasonably approved by Lender, in respect of any Taking
("Condemnation Proceeds"), as the case may be, are to be made available to
Borrower for restoration, Lender and Borrower shall cause all such Insurance
Proceeds or Condemnation Proceeds (collectively, "Loss Proceeds") to be paid
directly to the Servicer Account or, if during a Central Cash Management Period,
to the Cash Collateral Account whereupon Lender or Servicer, as the case may be,
shall apply same to reduce the Indebtedness in accordance with Section 2.7(b).
If Lender agrees or is required pursuant to the provisions hereof or of the
Related Mortgages to make Loss Proceeds available for restoration, (i) all
Insurance Proceeds received in respect of business interruption coverage and
(ii) any Condemnation Proceeds received in connection with a temporary Taking
shall be maintained in the Servicer Account or the Cash Collateral Account, as
applicable, to be applied by Lender in the same manner as Rent received from
Manager with respect to the operation of such Individual Property; provided,
further, that in the event that the Insurance Proceeds of any such business
interruption insurance policy or Condemnation Proceeds of such temporary Taking
are paid in a lump sum in advance, Lender shall hold such Insurance Proceeds or
Condemnation Proceeds in a segregated interest-bearing escrow account at the
Cash Collateral Account Bank or the Servicer
57
Account Bank, shall estimate, in Lender's reasonable discretion, the number of
months required for Borrower to restore the damage caused by the casualty to
such Individual Property or that such Individual Property will be affected by
such temporary Taking, as the case may be, shall divide the aggregate business
interruption Insurance Proceeds or Condemnation Proceeds in connection with such
temporary Taking by such number of months, and shall disburse from such escrow
account into the Servicer Account or the Cash Collateral Account, as applicable,
each month during the performance of such restoration or pendency of such
temporary Taking such monthly installment of said Insurance Proceeds or
Condemnation Proceeds. In the event that Insurance Proceeds or Condemnation
Proceeds are to be applied toward restoration, Lender shall hold such funds in a
segregated interest-bearing escrow account at the Cash Collateral Account Bank
or the Servicer Account Bank and shall disburse same in accordance with the
provisions of the Related Mortgages. If any Loss Proceeds are received by
Borrower, such Loss Proceeds shall be received in trust for Lender, shall be
segregated from other funds of Borrower, and shall be forthwith paid to the
Servicer Account or the Cash Collateral Account, as applicable, or paid to
Lender to hold in a segregated interest-bearing escrow account, in each case to
be applied or disbursed in accordance with the foregoing, except as provided to
the contrary in Sections 2.05(e) and 2.12(c) of the Related Mortgages. Any Loss
Proceeds made available to Borrower for restoration in accordance herewith, to
the extent not used by Borrower in connection with, or to the extent they exceed
the cost of such restoration, shall be deposited into the Cash Collateral
Account or the Servicer Account, as applicable, whereupon Lender or Servicer, as
the case may be, shall apply the same to reduce the Indebtedness in accordance
with Section 2.7(b). Notwithstanding anything to the contrary herein or in any
Mortgage or Second Mortgage, Loss Proceeds will not be made available to
Borrower for restoration unless Borrower furnishes Lender with an opinion of
outside counsel reasonably acceptable to Lender that any REMIC formed pursuant
to the Securitization will not fail to maintain its REMIC status for federal
income tax purposes as a result of making the Loss Proceeds available to
Borrower for restoration.
(i) Payment of Basic Carrying Costs. Except to the extent that
Lender is obligated to pay Basic Carrying Costs from the Basic Carrying Costs
Sub-Account pursuant to the terms of Section 2.12(f)(i), Borrower shall pay all
Basic Carrying Costs with respect to Borrower and each Individual Property in
accordance with the provisions of the Related Mortgages,
58
subject, however, to Borrower's rights to contest payment of same in accordance
with the Related Mortgages. Borrower's obligation to pay (or cause Lender to
pay) Basic Carrying Costs pursuant to this Agreement shall include, to the
extent permitted by applicable law, Impositions resulting from the passage of
any state, federal, municipal or other governmental law, order, rule or
regulation subsequent to the date hereof, in any manner changing or modifying
the laws now in force governing the taxation of mortgages, security agreements
or deeds of trust or debts secured thereby or the manner of collecting such
taxes so as to materially adversely affect Lender with respect to any Mortgage
or Second Mortgage. (If, in the reasonable opinion of Lender, any such state,
federal, municipal or other governmental law, order, rule or regulation
prohibits Borrower from making, in any form or method, such payment or would
materially penalize Lender if Borrower makes such payment or if, in the
reasonable opinion of Lender, the making of such payment might result in the
imposition of interest beyond the Maximum Amount, Borrower shall prepay a
portion of the Loan equal to the Allocated Loan Amount with respect to the
affected Individual Property, such prepayment to be applied to the Allocated
Loan Amount for such Individual Property together with (x) interest thereon to
the immediately succeeding Payment Date or (y) accrued interest thereon, if such
prepayment is made on a Payment Date. Such prepayment shall be made on the date
that is 120 days after such change in law, and failure to pay such amounts on
the date due shall be an Event of Default.) All funds deposited in the Servicer
Account or the Cash Collateral Account relating to the Basic Carrying Costs
shall be held by Lender pursuant to the provisions of this Agreement and shall
be applied in payment of the foregoing charges when and as payable, provided
that no Event of Default shall have occurred and be continuing. Should an Event
of Default occur, the proceeds on deposit in the Basic Carrying Costs
Sub-Account of the Servicer Account shall be transferred to the Basic Carrying
Costs Sub-Account of the Cash Collateral Account and may be applied by Lender in
payment of any Basic Carrying Costs for all or any portion of the Mortgaged
Property as Lender in its sole discretion may determine; provided, however, that
after the Securitization Closing Date Lender shall not apply the proceeds of the
Basic Carrying Costs Sub-Account of the Servicer Account or the Cash Collateral
Account to such Basic Carrying Costs in the event of a shortfall unless Lender
receives notice from Servicer or becomes aware that Servicer shall not be
advancing such shortfall pursuant to the terms of its pooling and servicing
agreement; and provided, further, that no such application shall be deemed to
have been
59
made by operation of law or otherwise until actually made by Lender as herein
provided.
(j) Rent Payment Sub Account. All lease termination payments and
Rents prepaid more than 30 days in advance shall be deposited in the Rent
Payment Sub-Account of the Servicer Account or, if during a Central Cash
Management Period, of the Cash Collateral Account, within three Business Days
after receipt thereof. Funds shall be disbursed from the Rent Payment
Sub-Account (i) to the applicable Debt Service Payment Sub- Account for payment
of Debt Service, but not in any month in an amount in excess of the scheduled
monthly payment under the terminated Lease or the Lease with respect to which
Rent was prepaid, as the case may be, or (ii) if such funds are Lease
termination payments, to Borrower for expenses incurred in connection with the
releasing of the space covered by such terminated Lease, including tenant
improvement costs and lease commissions upon Borrower's written request
accompanied by copies of bills and such other documentation as may be reasonably
required by Lender and Servicer to establish that such costs have been incurred
and payment thereof is due. After space covered by a terminated Lease is
released to a third party (as evidenced by delivery of a fully executed copy of
the new Lease with a third party), any unused portion of the Lease termination
payment relating to such space shall be disbursed to Borrower.
(k) The Banks' Reliance. The Cash Collateral Account Bank and the
Servicer Account Bank may rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Cash Collateral Account Bank and the
Servicer Account Bank may rely on notice from Lender or Servicer, on Lender's
behalf, as to the occurrence of an Event of Default.
Section 2.13. Security Agreement. (a) Pledge of Accounts. To secure
the full and punctual payment and performance of all of the Indebtedness,
Borrower hereby sells, assigns, conveys, pledges and transfers to Lender (and
after the Securitization Closing Date to Lender or its assigns on behalf of the
Certificateholders), and grants to Lender (and after the Securitization Closing
Date to Lender or its assigns on behalf of the Certificateholders) a first and
continuing security interest in and to, the following property, whether now
owned or
60
existing or hereafter acquired or arising and regardless of where located
(collectively, the "Account Collateral"):
(i) all of Borrower's right, title and interest in the Property
Collection Accounts and the Servicer Account and all Money, if any, from
time to time deposited or held in the Property Collection Accounts and the
Servicer Account;
(ii) all of Borrower's right, title and interest in the Security
Deposit Account and all Money, if any, from time to time deposited or held
in the Security Deposit Account;
(iii) all of Borrower's right, title and interest in the Cash
Collateral Account and the Servicer Account and all Money and Permitted
Investments, if any, from time to time deposited or held in the Cash
Collateral Account and the Servicer Account;
(iv) all interest, dividends, Money, Instruments and other property
from time to time received, receivable or otherwise payable in respect of,
or in exchange for, any of the foregoing (provided, however, that amounts
transferred to Borrower's account pursuant to Section 2.12(b) or (g) shall
not be subject to any continuing lien or security interest in favor of
Lender); and
(v) to the extent not covered by clause (i), (ii), (iii) or (iv)
above, all proceeds (as defined under the Uniform Commercial Code of the
applicable jurisdiction) of any or all of the foregoing (provided,
however, that amounts transferred to Borrower's account pursuant to
Section 2.12(b) or (g) shall not be subject to any continuing lien or
security interest in favor of Lender).
(b) Representations and Covenants. Borrower represents and covenants
that (i) all Rents, Money and Proceeds received from Accounts (other than tenant
security deposits and other than funds received by Borrower or Manager from the
Property Collection Accounts, the Servicer Account or the Cash Collateral
Account) shall be deposited into the Property Collection Accounts; (ii) there
are no other accounts currently maintained and used by Borrower or any Manager
for the collection of Rents or Money received from Accounts; (iii) as long as
any portion of the Indebtedness is outstanding, Borrower shall not open (nor
permit Manager to open) any other account
61
for the collection of Rents, Money or Proceeds received from Accounts, other
than Borrower's account at the Collection Account Bank, as referenced in Section
2.12(b), and such replacement Property Collection Accounts as may be established
pursuant to Section 2.13(l); (iv) all security deposits posted by tenants shall
be deposited in the Security Deposit Account; (v) there are no other accounts
currently maintained and used by Borrower or any Manager for the collection and
management of such security deposits; and (vi) as long as any portion of the
Indebtedness is outstanding, Borrower shall not open (nor permit Manager to
open) any other account for the collection and management of such security
deposits, other than such replacement Security Deposit Accounts as may be
established pursuant to Section 2.13(l). The Property Collection Accounts and
the Security Deposit Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other banking authority or Governmental Authority, as may now or
hereafter be in effect, and to the rules, regulations and procedures of the
Property Collection Account Bank relating to demand deposit accounts from time
to time in effect.
(c) Instructions and Agreements. Borrower, the Property Collection
Account Bank and Lender have entered into a Collection Account Agreement. Upon
the commencement of a Central Cash Management Period, Borrower, Lender and the
Cash Collateral Account Bank shall execute and deliver that certain Cash
Collateral Account Agreement dated as of the date hereof (the "CC Account
Agreement"), the form of which is attached hereto as Exhibit M. Borrower agrees
that prior to the payment in full of the Indebtedness, the CC Account Agreement
shall be irrevocable by Borrower without the prior written consent of Lender.
The Cash Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other banking authority or Governmental Authority, as may now or
hereafter be in effect and the rules, regulations and procedures of the Cash
Collateral Account Bank relating to demand deposit accounts from time to time in
effect. All statements relating to the Cash Collateral Account shall be issued
by the Cash Collateral Account Bank as provided in the CC Account Agreement.
(d) Financing Statements; Further Assurances. Borrower has executed
and delivered to Lender for filing a financing statement or statements in
connection with the Account Collateral in the form required to properly perfect
Lender's security interest in the Account Collateral to the extent that
62
it may be perfected by such a filing. Borrower agrees that at any time and from
time to time, at the expense of Borrower, Borrower shall promptly execute and
deliver all further instruments, and take all further action, that Lender may
reasonably request, in order to perfect and protect the pledge and security
interest granted or purported to be granted hereby, or to enable Lender to
exercise and enforce Lender's rights and remedies hereunder, with respect to any
Account Collateral.
(e) Transfers and Other Liens. Borrower agrees that it will not sell
or otherwise dispose of any of the Account Collateral other than pursuant to the
terms hereof, or create or permit to exist any Lien upon or with respect to all
or any of the Account Collateral, except for the Lien granted to Lender under
this Agreement.
(f) Servicer's Right to Perform. If Borrower fails to perform any
covenant or obligation contained in this Agreement and such failure shall
continue for a period of five Business Days after Borrower's receipt of written
notice thereof from Servicer (or, if such covenant or obligation cannot be cured
by the payment of money, Borrower has not commenced curing such failure within
such period), Servicer may, but shall have no obligation to, itself perform, or
cause performance of, such covenant or obligation, and the reasonable expenses
of Servicer incurred in connection therewith shall be payable by Borrower to
Servicer upon demand. Notwithstanding the foregoing, Servicer shall have no
obligation to send notice to Borrower of any such failure unless directed to do
so by Lender.
(g) Lender's and Servicer's Reasonable Care. Beyond the exercise of
reasonable care in the custody and preservation thereof, neither Lender nor
Servicer shall have any duty as to any Account Collateral or any income thereon
in its possession or control or in the possession or control of any agents for,
or of Lender or Servicer, or the preservation of rights against any Person or
otherwise with respect thereto. Each of Lender and Servicer shall be deemed to
have exercised reasonable care in the custody and preservation of the Account
Collateral in its possession if the Account Collateral is accorded treatment
substantially equal to that which such Person accords its own property, it being
understood that neither Lender nor Servicer shall be liable or responsible for
(i) any loss or damage to any of the Account Collateral, or for any diminution
in value thereof from a loss of, or delay in Lender's or Servicer's
acknowledging receipt of, any wire transfer from the Property Collection Account
Bank or (ii) any loss, damage or diminution
63
in value by reason of the act or omission of Servicer or Lender, or Servicer's
or Lender's agents, employees or bailees, except to the extent that such loss or
damage or diminution in value results from such Person's gross negligence or
willful misconduct or the gross negligence or willful misconduct of any such
agent, employee or bailee of such Person.
(h) Remedies. The rights and remedies provided in this Section 2.13
are cumulative and may be exercised independently or concurrently, and are not
exclusive of any other right or remedy provided at law or in equity. No failure
to exercise or delay by Servicer or Lender in exercising any right or remedy
hereunder or under the Loan Documents shall impair or prohibit the exercise of
any such rights or remedies in the future or be deemed to constitute a waiver or
limitation of any such right or remedy or acquiescence therein.
(i) No Waiver. Every right and remedy granted to Lender or Servicer
under this Section 2.13 or by law may be exercised by Lender or Servicer at any
time and from time to time, and as often as Lender or Servicer may deem it
expedient. Any and all of Lender's rights with respect to the pledge and
security interest granted hereunder shall continue unimpaired, and Borrower
shall be and remain obligated in accordance with the terms hereof,
notwithstanding (i) any proceeding of Borrower under the United States
Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or statutes
of any state, (ii) the release or substitution of Account Collateral at any
time, or of any rights or interests therein or (iii) any delay, extension of
time, renewal, compromise or other indulgence granted by Lender or Servicer in
the event of any Default with respect to the Account Collateral or otherwise
hereunder. No delay or extension of time by Lender in exercising any power of
sale, option or other right or remedy hereunder, and no notice or demand which
may be given to or made upon Borrower by Lender or Servicer, shall constitute a
waiver thereof, or limit, impair or prejudice Lender's or Servicer's right,
without notice or demand, to take any action against Borrower or to exercise any
other power of sale, option or any other right or remedy.
(j) Lender and Servicer Appointed Attorney-In-Fact. Borrower hereby
irrevocably constitutes and appoints Lender and Servicer as Borrower's true and
lawful attorney-in-fact, with full power of substitution, at any time after the
occurrence and during the continuation of an Event of Default, to execute,
acknowledge and deliver any instruments and to exercise and enforce every right,
power, remedy, option and privilege of
64
Borrower with respect to the Account Collateral, and do in the name, place and
stead of Borrower, all such acts, things and deeds for and on behalf of and in
the name of Borrower with respect to the Account Collateral, which Borrower
could or might do or which Lender may deem necessary or desirable to more fully
vest in Lender and Servicer the rights and remedies provided for herein with
respect to the Account Collateral and to accomplish the purposes of this
Agreement including, but not limited to, the execution and delivery of the CC
Account Agreement and any documents necessary to establish the Cash Collateral
Account. The foregoing powers of attorney are irrevocable for the term of the
Loan and coupled with an interest.
(k) Continuing Security Interest; Termination. This Section 2.13
shall create a continuing pledge of and security interest in the Account
Collateral and shall remain in full force and effect until the Account
Collateral is released in connection with a payment or defeasance in full of the
Indebtedness. Upon payment or defeasance in full of the Indebtedness, Borrower
shall be entitled to the return, upon its request and at its expense, of such of
the Account Collateral as shall not have been sold or otherwise applied pursuant
to the terms hereof. Portions of the Account Collateral may be released from
time to time as provided in Section 2.11(a). Lender shall execute such
instruments and documents as may be reasonably requested by Borrower to evidence
such termination and the release of the pledge and lien hereof, provided,
however, that Borrower shall pay on demand all of Lender's reasonable expenses
in connection therewith.
(l) Replacement of the Property Collection Account Bank. As long as
no Event of Default shall have occurred and be continuing, Borrower shall have
the right at any time to designate a successor Property Collection Account Bank
to hold the Property Collection Accounts or Security Deposit Account upon 30
days' prior written notice to Lender and Servicer, and Lender's or Servicer's
(on Lender's behalf) approval of the successor, which approval shall not be
unreasonably withheld or delayed. In the event that the rating of long-term
unsecured debt obligations of the Property Collection Account Bank issued by a
Rating Agency is withdrawn or reduced to a rating of BBB or lower, Borrower
shall be obligated to promptly select a new Property Collection Account Bank
and, upon approval of such selection by Lender or Servicer (on Lender's behalf),
to establish and maintain the Property Collection Accounts and the Security
Deposit Account previously held at such Property Collection Account Bank at said
successor. No such designation
65
shall become effective until Borrower has delivered to Lender and Servicer a
Collection Account Agreement executed by Borrower and such successor Property
Collection Account Bank and such financing statements as may be necessary or
appropriate have been prepared, executed and delivered to a filing agency.
(m) Reliance. Each of Lender and Servicer may rely and shall be
protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties. Servicer may rely on notice from Lender as to the occurrence of an
Event of Default.
Section 2.14. Supplemental Mortgage Affidavits. The Lien created by
each Mortgage is intended to encumber the Individual Property described therein
to the full extent of all the relevant Borrower's obligations under such
Borrower's Note. The Lien created by each Second Mortgage is intended to
encumber the Individual Property described therein to the full extent of the
excess of the Indebtedness over the amount secured by the relevant Mortgage. As
of the Closing Date, Borrower has paid, or arranged for timely payment of, all
state, county and municipal recording and all other taxes imposed upon the
execution and recordation of the Mortgages and the Second Mortgages in the
applicable states. If at any time Lender determines, based on applicable law,
that Lender is not being afforded the maximum amount of security available from
any Individual Property as a direct, or indirect, result of applicable taxes not
having been paid with respect to the Related Mortgages, Borrower agrees that
Borrower will execute, acknowledge and deliver to Lender, immediately upon
Lender's request, supplemental affidavits increasing the amount of Indebtedness
for which all applicable taxes have been paid to an amount determined by Lender
to be equal to the lesser of (a) the greater of the fair market value of such
Individual Property (i) as of the Closing Date and (ii) as of the date such
supplemental affidavits are to be delivered to Lender, and (b) the amount of the
Indebtedness, and Borrower shall, on demand, pay any such additional taxes.
Section 2.15. Securitization. Borrower hereby acknowledges that
Lender, any of its Affiliates, its successors or assigns, may securitize the
Loan through the issuance of the Certificates, which will be rated by the Rating
Agencies (the "Securitization"). Borrower agrees that it will use its
commercially reasonable efforts to cooperate fully with Lender
66
and the Rating Agencies in connection with the Securitization, including, but
not limited to, by (a) entering into nonmaterial amendments to the Loan
Documents that do not materially adversely affect Borrower's rights or
obligations thereunder, to the extent required by the Rating Agencies or
otherwise in connection with the Securitization; (b) assisting in the
preparation of offering documents describing the Loan and the Securitization in
a manner that satisfies the requirements of applicable federal and state
securities laws, by (i) providing such information with respect to Borrower, its
Affiliates, the Individual Properties (or the management thereof) or the Loan as
may be reasonably requested in connection therewith and (ii) acting reasonably
and promptly in connection with its review and approval of the portions of the
offering documents pertaining to Borrower, its Affiliates, the Individual
Properties (or the management thereof) or the Loan; (c) causing to be rendered
an opinion letter in substantially the form attached hereto as Exhibit N
(subject to changes in law or fact after the date hereof and further subject to
changes requested by the Rating Agencies (to the extent such changes are
consistent with applicable law or facts)) and an opinion letter from ▇▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇ to Borrower stating that the assignment of the Loan and the Loan
Documents to Trustee is enforceable; (d) representing that as of the
Securitization Closing Date (i) the Principal Indebtedness does not exceed 125%
of the Tax Fair Market Value of the Mortgaged Property and (ii) the fair market
value of any personal property or other property that is part of the Mortgaged
Property that is not "qualifying real property" within the meaning of Treasury
Regulation ss.1.593-11(b) does not exceed the excess, if any, of the Tax Fair
Market Value of the Mortgaged Property over the Principal Indebtedness, and
providing Lender with any supporting materials reasonably requested by Lender;
and (e) at reasonable times and upon reasonable notice, showing potential
Certificateholders the Individual Properties. Borrower agrees to reimburse its
pro rata share (based on the percentage of the aggregate loan amount included in
the Securitization represented by the principal amount of the Loan) of
reasonable third party fees and expenses in connection with the Securitization,
including, but not limited to, reasonable legal fees and disbursements,
third-party due diligence expenses, Rating Agency fees and expenses, the costs
of providing appraisals, environmental reports and engineering reports as
required by the Rating Agencies, and any servicing, Trustee or special servicing
fees and expenses, provided, however, that the third party fees and expenses to
be reimbursed by Borrower shall not exceed the Securitization Expense Reserve
Amount. In connection with the
67
Securitization, Lender intends to use the Engineering Reports, the Environmental
Reports and other third party reports, updated as necessary due to the age of
such reports, to the extent permitted by the Rating Agencies. On the Closing
Date, proceeds of the Loan in an amount equal to the Securitization Expense
Reserve Amount shall be deposited into the Securitization Expense Sub-Account.
Within 90 days from the Securitization Closing Date, Lender shall provide
Borrower with an itemized ▇▇▇▇ of the third party fees and expenses for which it
seeks reimbursement from Borrower. Within 10 days from its receipt of such ▇▇▇▇,
Borrower shall have the right to request in writing to Lender an adjustment of
such ▇▇▇▇, which adjustment Lender may grant in its reasonable discretion based
on the nature of this Loan and the costs associated with other loans in the
Securitization. Within 30 days from the delivery of such ▇▇▇▇ (or within 30 days
from the delivery of the adjusted ▇▇▇▇, as the case may be) to Borrower, the
funds in the Securitization Expense Sub-Account shall be applied to reimburse
Lender for such expenses, with any remaining funds in the Securitization Expense
Sub-Account to be returned to Borrower on the next Payment Date. On or prior to
the Securitization Closing Date, Borrower and MEI shall execute and deliver to
Lender an instrument (in form and substance reasonably satisfactory to Lender,
Borrower and MEI) indemnifying and holding Lender and its controlling Persons
and Affiliates harmless against all costs, expenses and damages incurred by
Lender and its controlling Persons and Affiliates (including, without
limitation, all liabilities under all applicable federal and state securities
laws) as a direct result of any untrue statement of a material fact contained in
such offering documents based on information provided in writing by Borrower,
MEI or their counsel which describes Borrower, MEI, their respective Affiliates,
the Individual Properties (and the management thereof) or any aspect of the
Loan, or as a result of any untrue statement of material fact in any of the
financial statements of Borrower, MEI or their respective Affiliates
incorporated into the offering documents or the failure to include in such
financial statements or in such offering documents any material fact relating to
Borrower, MEI, their respective Affiliates, the Individual Properties (and the
management thereof) and any aspect of the Loan necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Borrower shall have had an opportunity
to review and shall have approved in writing the relevant portions of the
offering documents pertaining to Borrower, MEI, their respective Affiliates, the
Individual Properties (or the
68
management thereof) or the Loan; and provided, further, that Borrower shall have
no such obligation with respect to information unrelated to Borrower, MEI, their
respective Affiliates, the Individual Properties (and the management thereof) or
the Loan. Borrower and MEI shall not indemnify Lender for any liability, loss,
cost or expense incurred as a result of the inclusion of any erroneous or
misleading information in the offering documents, or the omission of material
information from the offering documents, pertaining to Borrower, MEI, their
respective Affiliates, the Individual Properties (and the management thereof) or
any aspect of the Loan, unless Borrower, MEI or their counsel shall have
previously approved in writing such portions of the offering documents. Borrower
and MEI shall not indemnify Lender for any liability, loss, cost or expense
incurred as a result of the inclusion of any erroneous or misleading information
in the offering documents, or the omission of material information from the
offering documents, unrelated to Borrower, MEI, their respective Affiliates, the
Individual Properties (and the management thereof) or any aspect of the Loan. On
or prior to the Securitization Closing Date, Lender shall execute and deliver to
Borrower an instrument (in form and substance reasonably satisfactory to Lender
and Borrower) indemnifying and holding Borrower and its Affiliates harmless
against all costs, expenses and damages (other than consequential damages and
costs and expenses specifically agreed by Borrower to be borne by it) incurred
by them (including, without limitation, all liabilities under all applicable
federal and state securities laws) caused by and directly relating to such
offering or the Securitization; provided, however, that such indemnification
shall not apply if any such costs, expenses or damages arise out of or are based
upon an untrue statement of a material fact or an omission to state a material
fact in such offering documents or in Borrower's, MEI's or their Affiliates'
financial statements for which Borrower is providing indemnification as provided
above.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Effectiveness and Disbursement
of the Loan. The following conditions shall have been satisfied (or waived in
accordance with Section 8.4) as of the Closing Date unless Lender requires in
writing that any such conditions be performed after the Closing Date:
(A) Loan Documents.
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(i) Loan Agreement. Borrower shall have executed and delivered this
Agreement to Lender.
(ii) Notes. Each of FLIP, OIP, MBP and NJA shall have executed and
delivered to Lender its Note.
(iii) Mortgages. Each of FLIP, OIP, MBP and NJA shall have executed
and delivered the Mortgages and the Second Mortgages with respect to its
Individual Properties to Lender and the Mortgages and the Second Mortgages
shall have been filed of record in the appropriate filing offices in each
of the jurisdictions in which the Individual Properties are located or
irrevocably delivered to a title agent for such recordation.
(iv) Assignments of Agreements. Each of FLIP, OIP, MBP and NJA shall
have executed and delivered the Assignments of Agreements and the Second
Assignments of Agreements with respect to its Individual Properties to
Lender and such documents shall have been filed of record in the
appropriate filing offices in each of the jurisdictions in which such
Individual Properties are located or irrevocably delivered to a title
agent for such recordation.
(v) Assignments of Leases. Each of FLIP, OIP, MBP and NJA shall have
executed and delivered the Assignments of Leases and the Second
Assignments of Leases with respect to its Individual Properties to Lender
and the Assignments of Leases and the Second Assignments of Leases shall
have been filed of record in the appropriate filing offices in each of the
jurisdictions in which such Individual Properties are located or
irrevocably delivered to a title agent for such recordation.
(vi) [INTENTIONALLY OMITTED]
(vii) Collection Account Agreement. Borrower and the Collection
Account Bank shall have executed the Collection Account Agreement and
delivered to Lender a copy thereof.
(viii) Financing Statements. Each of FLIP, OIP, MBP and NJA shall
have executed and delivered all financing statements specified on Exhibit
O attached hereto to Lender and such financing statements shall have been
filed of record in the appropriate filing offices in each of the
70
jurisdictions in which its Individual Properties are located and all other
appropriate jurisdictions or irrevocably delivered to a title agent for
such filing.
(ix) Manager's Subordinations. The Manager and FLIP, OIP, MBP and
NJA shall have executed and delivered to Lender the Manager's
Subordinations.
(x) Borrower's Estoppel Certificates. Each of FLIP, OIP, MBP and NJA
shall have executed and delivered to Lender an estoppel certificate with
respect to its respective Management Agreements in substantially the form
of Exhibit P attached hereto.
(xi) [INTENTIONALLY OMITTED].
(xii) Tenant Letters. Each Borrower shall have executed and mailed
Tenant Letters to each of its tenants and delivered to Lender a copy
thereof.
(xiii) Reimbursement Agreement; Guaranty. Borrower shall have
executed and delivered the Reimbursement Agreement and shall have caused
each Guarantor to execute and deliver to Lender the Guaranty.
(B) Opinions of Counsel. Lender shall have received from Shaw,
Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, special counsel to Borrower, its legal opinion in
the form attached hereto as Exhibit Q; and from ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, special
New Jersey counsel to Borrower, its legal opinion in the form attached hereto as
Exhibit R. Each of such legal opinions will be addressed to Lender and dated the
Closing Date. Borrower hereby instructs such counsel to deliver to Lender such
opinions addressed to Lender.
(C) Entity Documents. Lender shall have received with respect to (i)
each of OIP, MBP and NJA (x) its certificate of formation, as amended, modified
or supplemented to the Closing Date, certified to be true, correct and complete
by the appropriate Secretary of State as of a date not more than fifteen days
prior to the Closing Date, (y) its operating agreement certified by MM to be
true, correct and complete as of the Closing Date and (z) a good standing
certificate from the Secretary of State for the State of New Jersey, dated a
date not more than fifteen days prior to the Closing Date, (ii) FLIP (x) its
certificate of incorporation, as amended, modified or supplemented to the
Closing Date, certified to be true, correct
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and complete by the appropriate Secretary of State as of a date not more than
fifteen days prior to the Closing Date and (y) a good standing certificate from
the Secretary of State for the State of New Jersey, dated a date not more than
fifteen days prior to the Closing Date, and (iii) MM (x) its certificate of
incorporation, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by the Secretary of State for the
State of New Jersey as of a date not more than fifteen days prior to the Closing
Date and (y) a good standing certificate from the Secretary of State for the
State of New Jersey, dated a date not more than fifteen days prior to the
Closing Date.
(D) Certified Resolutions, Etc. Lender shall have received a
certificate of the secretary or assistant secretary of each of MM and FLIP dated
the Closing Date, certifying (i) the names and true signatures of its incumbent
officers authorized to sign the applicable Loan Documents, (ii) its by-laws as
in effect on the Closing Date, (iii) the resolutions of its board of directors
approving and authorizing the execution, delivery and performance of all Loan
Documents executed by it, and (iv) that there have been no changes in its
certificate of incorporation since the date of the most recent certification
thereof by the appropriate Secretary of State.
(E) Insurance. Lender shall have received certificates of insurance
demonstrating insurance coverage in respect of each of the Individual Properties
of types, in amounts, with insurers and otherwise in compliance with the terms,
provisions and conditions set forth in the Related Mortgages. Such certificates
shall indicate that Lender is named in all liability policies as an additional
insured as its interest may appear and shall contain a loss payee endorsement in
favor of Lender with respect to the property policies required to be maintained
under the Mortgages and the Second Mortgages. All insurance policies required to
be maintained hereunder shall be maintained throughout the term of this
Agreement in the types and amounts required under the Mortgages and the Second
Mortgages.
(F) Lien Search Reports. Lender shall have received satisfactory
(i.e., showing no Liens other than Permitted Encumbrances) reports of UCC
(collectively, the "UCC Searches"), tax lien, judgment and litigation searches
conducted by a search firm acceptable to Lender with respect to the Collateral,
FLIP, OIP, MBP and NJA and the Person(s) identified on Exhibit S
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attached hereto, such searches to be conducted in each of the locations set
forth on Exhibit S attached hereto.
(G) Title Insurance Policies. Lender shall have received commitments
(in form and substance satisfactory to Lender) to issue the Title Insurance
Policies.
(H) Financial Statements; Budgets; Operating Reports. Lender shall
have received (i) the audited consolidated financial statements of the
Individual Properties for the fiscal years ending December 31, 1995 and December
31, 1996, (ii) unaudited consolidated financial statements of the Individual
Properties for the twelve month period ending August 31, 1997, (iii) 1997
operating budgets for the Individual Properties, and (iv) historical operating
reports for the Individual Properties for the three calendar years prior to the
Closing Date (verified by a certified public accounting firm acceptable to
Lender in its reasonable discretion (any "Big Six" accounting firm being deemed
acceptable to Lender)). All audited financial statements must have been prepared
by a certified public accounting firm acceptable to Lender in its reasonable
discretion.
(I) Environmental Matters. Lender shall have received Environmental
Reports, reasonably acceptable to Lender, with respect to each of the Individual
Properties, such Environmental Reports to be conducted by Independent
environmental engineers acceptable to Lender.
(J) Consents, Licenses, Approvals, Etc. Lender shall have received
copies of all consents, licenses and approvals, if any, required in connection
with the execution, delivery and performance by Borrower, and the validity and
enforceability, of the Loan Documents, and such consents, licenses and approvals
shall be in full force and effect.
(K) Additional Matters. Lender shall have received such other
Permits, certificates (including certificates of occupancy for each Individual
Property), opinions, documents and instruments (including zoning endorsements to
the Title Insurance Policies satisfactory to Lender or, if unavailable, letters
from the appropriate Governmental Authorities regarding the zoning of each
Individual Property, evidence that utility services are available for each
Individual Property and that each Individual Property is subject to separate tax
assessment) relating to the Loan as may have been reasonably requested by
Lender, and all corporate and other resolutions or consents, all
73
other documents (including, without limitation, all documents referred to herein
and not appearing as exhibits hereto) and all legal matters in connection with
the Loan shall be reasonably satisfactory in form and substance to Lender.
(L) Representations and Warranties. The representations and
warranties herein and in the other Loan Documents shall be true and correct in
all material respects on the Closing Date both before and after giving effect to
the making of the Loan.
(M) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on the Closing Date either before or after
giving effect to the making of the Loan.
(N) No Injunction. No law or regulation shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been issued,
and no litigation shall be pending or threatened, which in the good faith
judgment of Lender would enjoin, prohibit or restrain, or impose or result in
the imposition of any material adverse condition upon, the making or repayment
of the Loan or the consummation of the Transactions.
(O) Surveys. Lender shall have received a Survey with respect to
each Individual Property.
(P) Engineering Reports. Lender shall have received the Engineering
Reports reasonably acceptable to Lender, with respect to the Individual
Properties, such Engineering Reports to be prepared by Independent Engineers
acceptable to Lender.
(Q) Contracts and Permits. Each of FLIP, OIP, MBP and NJA shall have
delivered to Lender a copy of each Material Contract and Permit affecting its
Individual Properties.
(R) Management Agreements. Lender shall have received the Management
Agreements.
(S) Transaction Costs. Borrower shall have paid (or agreed to pay at
closing from the proceeds of the Loan) all Transaction Costs for which bills
have been submitted.
(T) Leases; Tenant Estoppels; Non-Disturbance Agreements. Borrower
shall have delivered rent rolls with respect to each of the Individual
Properties dated as of
74
September 1, 1997 and certified as true and correct, a copy of any standard form
Lease and copies of all Leases. Borrower shall have also delivered (i) an
original executed tenant estoppel certificate in substantially the form attached
hereto as Exhibit X with respect to each Lease specified on Schedule 3 attached
hereto and 70% of all other Leases, which tenant estoppel certificates shall
disclose no defaults or other conditions not previously disclosed to Lender
which, in Lender's reasonable opinion, have or may have a material adverse
effect on the Net Cash Flow for the affected Individual Property and (ii) an
original executed Non-Disturbance, Attornment and Subordination Agreement in
substantially the form attached hereto as Exhibit Y with respect to each Lease
specified on Schedule 3 attached hereto and 70% of all other Leases.
(U) Appraisals. Lender shall have received MAI appraisals (prepared
in compliance with FIRREA) with respect to the Individual Properties prepared by
Independent firms acceptable to Lender.
Section 3.2. Satisfaction of Conditions. Upon execution and delivery
of this Agreement by Lender, all of the conditions required to be satisfied
under this Article III in connection with the making of the Loan shall be deemed
to have been satisfied or waived in accordance with Section 8.4, unless Lender
requires in writing that any such conditions be performed after the Closing
Date.
Section 3.3. Form of Loan Documents and Related Matters. The Notes
and all of the certificates, agreements, legal opinions and other documents and
papers referred to in this Article III, unless otherwise specified, shall be
delivered to Lender, and shall be satisfactory in form and substance to Lender
in its reasonable discretion (unless the form thereof is prescribed herein).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Borrower Representations. Subject to the
exceptions set forth in Schedule 2 attached hereto, Borrower represents and
warrants as of the Closing Date that:
(A) Organization. Each of OIP, MBP and NJA (i) is a duly formed and
validly existing limited liability company in good standing under the laws of
the State of New Jersey, (ii)
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has the requisite power and authority to own its properties (including, without
limitation, its portion of the Mortgaged Property) and to carry on its business
as now being conducted, and (iii) has the requisite power to execute and
deliver, and perform its obligations under, this Agreement, its respective Note,
the Mortgages, the Second Mortgages and all of the other Loan Documents to which
it is a party. FLIP (i) is a duly organized and validly existing corporation in
good standing under the laws of the State of New Jersey, (ii) has the requisite
corporate power and authority to carry on its business as now being conducted,
and (iii) has the requisite corporate power to execute and deliver this
Agreement, its respective Note, the Mortgages, the Second Mortgages and all of
the other Loan Documents to which FLIP is a party. MM (i) is a duly organized
and validly existing corporation in good standing under the laws of the State of
New Jersey, (ii) has the requisite corporate power and authority to carry on its
business as now being conducted, and (iii) has the requisite corporate power to
execute and deliver on behalf of OIP, MBP and NJA this Agreement, their
respective Notes, the Mortgages, the Second Mortgages and all of the other Loan
Documents to which OIP, MBP or NJA is a party.
(B) Authorization. The execution and delivery by each of FLIP, OIP,
MBP and NJA of this Agreement, its respective Note, the Mortgages, the Second
Mortgages and each of the other Loan Documents, each of FLIP's, OIP's, MBP's and
NJA's performance of its respective obligations hereunder and thereunder and the
creation of the security interests and liens provided for in this Agreement and
the other Loan Documents (i) have been duly authorized by all requisite
corporate or company action, as the case may be, on the part of each of FLIP,
OIP, MBP and NJA, (ii) will not violate any provision of any Legal Requirements,
any order of any court or other Governmental Authority, the respective operating
agreements or certificate of incorporation or by-laws, as the case may be, of or
any indenture or material agreement or other instrument to which any of FLIP,
OIP, MBP and NJA is a party or by which any such entity is bound, and (iii) will
not be in conflict with, result in a breach of, or constitute (with due notice
or lapse of time or both) a default under, or result in the creation or
imposition of any Lien of any nature whatsoever upon any of the property or
assets of any of FLIP, OIP, MBP and NJA pursuant to, any such indenture or
material agreement or instrument. Other than those obtained or filed on or prior
to the Closing Date, none of FLIP, OIP, MBP and NJA is required to obtain any
consent, approval or authorization from, or to file any declaration or statement
76
with, any Governmental Authority or other agency in connection with or as a
condition to the execution, delivery or performance of this Agreement, its
respective Note, the Mortgages, the Second Mortgages or the other Loan
Documents.
(C) Litigation. Except for claims that are fully covered by valid
policies of insurance held by FLIP, OIP, MBP and NJA, there are no actions,
suits or proceedings at law or in equity by or before any Governmental Authority
or other agency now pending and served or, to the knowledge of FLIP, OIP, MBP
and NJA, threatened against FLIP, OIP, MBP or NJA or any of their respective
Individual Properties, which actions, suits or proceedings, if determined
against FLIP, OIP, MBP or NJA or any of their respective Individual Properties,
might result in a Material Adverse Effect.
(D) Agreements. To the best of Borrower's knowledge, none of FLIP,
OIP, MBP and NJA is a party to any agreement or instrument or subject to any
restriction which is reasonably likely to have a Material Adverse Effect. To the
best of Borrower's knowledge, none of FLIP, OIP, MBP and NJA is in default in
any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to
which it is a party or by which it or any of its Individual Property is bound,
except to the extent that such default is not reasonably likely to have a
Material Adverse Effect.
(E) Title to the Mortgaged Property. Each of FLIP, OIP, MBP and NJA
owns good, marketable and insurable fee simple title to its Individual
Properties, free and clear of all Liens, other than the Permitted Encumbrances
applicable to that Individual Property. Except as set forth on Schedule 5, there
are no outstanding options to purchase or rights of first refusal for the
purchase of all or any portion of any Individual Property.
(F) No Bankruptcy Filing. None of FLIP, OIP, MBP and NJA is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
its assets or property, and none of FLIP, OIP, MBP and NJA has knowledge of any
Person contemplating the filing of any such petition against it.
(G) Full and Accurate Disclosure. No statement of fact made by or on
behalf of Borrower in this Agreement or in any of the other Loan Documents
contains any untrue statement of
77
a material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact presently known to
Borrower which has not been disclosed to Lender which materially adversely
affects, nor as far as Borrower can foresee, might materially adversely affect,
any Individual Property or the business, operations or condition (financial or
otherwise) of Borrower.
(H) Location of Chief Executive Offices. The location of Borrower's
principal place of business and chief executive office is 808 High Mountain
Road, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
(I) Compliance. Except for matters set forth in the Engineering
Reports described on Exhibit D attached hereto and in the "Summary" sections of
the Environmental Reports described on Exhibit E attached hereto and except for
matters described in Section 4.1(P) (as to which the provisions of Section
4.1(P) shall apply), to the best of Borrower's knowledge, Borrower, each
Individual Property and Borrower's use thereof and operations thereat comply in
all material respects with all applicable Legal Requirements, including, without
limitation, building and zoning ordinances and codes, and all applicable
Insurance Requirements. To the best of Borrower's knowledge, Borrower is not in
default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority, the violation of which is reasonably likely to have a
Material Adverse Effect.
(J) Use of Proceeds; Margin Regulations. Borrower will use the
proceeds of the Loan for the purposes described in Section 2.2. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose which would be inconsistent
with such Regulation U or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements.
(K) Financial Information. All historical financial data concerning
Borrower or the Individual Properties that has been delivered by Borrower to
Lender is true, complete and correct in all material respects. Since the
delivery of such data, except as otherwise disclosed in writing to Lender, there
has been no material adverse change in the financial position of any of FLIP,
OIP, MBP and NJA or Individual Properties, or in the results of operations of
the Individual Properties.
78
Borrower has not incurred any obligation or liability, contingent or otherwise,
not reflected in such financial data which might adversely affect its business
operations or any Individual Property.
(L) Condemnation. No Taking has been commenced or, to Borrower's
knowledge, is contemplated with respect to all or any portion of any Individual
Property or for the relocation of roadways providing access to any Individual
Property.
(M) Other Debt. Except for the debt to be repaid from the proceeds
of the Loan or as permitted pursuant to Section 6.1(C), Borrower has not
borrowed or received other debt financing whether unsecured or secured by any
Individual Property or any part thereof.
(N) ERISA. Each Plan, and, to the knowledge of Borrower, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, its terms and the
applicable provisions of ERISA, the Code and any other federal or state law, and
no event or condition has occurred and is continuing as to which Borrower would
be under an obligation to furnish a report to Lender under Section 5.1(S)(i).
(O) Utilities and Public Access. Each Individual Property has
adequate rights of access to public ways and is served by adequate water, sewer,
sanitary sewer and storm drain facilities. Except as otherwise disclosed by the
Surveys, and except as set forth on Schedule 2 hereto, to the best of Borrower's
knowledge, all public utilities necessary to the continued use and enjoyment of
each Individual Property as presently used and enjoyed are located in the public
right-of-way abutting the premises, and all such utilities are connected so as
to serve such Individual Property without passing over other property. All roads
necessary for the full utilization of each Individual Property for its current
purpose have been completed and dedicated to public use and accepted by all
Governmental Authorities or are the subject of access easements for the benefit
of the Individual Property.
(P) Environmental Compliance. Except for matters set forth in the
"Summary" sections of the Environmental Reports described on Exhibit E attached
hereto (true, correct and complete copies of which have been provided to Lender
by Borrower):
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(i) To the best of Borrower's knowledge, Borrower is in compliance
with all applicable Environmental Laws, which compliance includes, but is
not limited to, the possession by Borrower of all environmental, health
and safety permits, licenses and other governmental authorizations
required in connection with the ownership and operation of the Individual
Property under all Environmental Laws, except where the failure to comply
with such laws is not reasonably likely to result in a Material Adverse
Effect.
(ii) There is no Environmental Claim pending or, to the best of
Borrower's knowledge, threatened with respect to the Individual Properties
and (x) no penalties arising under Environmental Laws have been assessed
against Borrower, Borrower's immediate predecessor-in-interest to the
Individual Properties or, to Borrower's knowledge, any other Person with
respect to the Individual Properties whose liability for any Environmental
Claim Borrower has or may have retained or assumed either contractually or
by operation of law, and (y) to the best of Borrower's knowledge, no
investigation or review is pending or, to the knowledge of Borrower,
threatened by any Governmental Authority, citizens group, employee or
other Person, in each case, with respect to any alleged failure by
Borrower or the Individual Property to have any environmental, health or
safety permit, license or other authorization required under, or to
otherwise comply with, any Environmental Law or with respect to any
alleged liability of Borrower for any Use or Release of any Hazardous
Substances.
(iii) To the best of Borrower's knowledge, except as set forth in
the Environmental Reports, there have been and are no past or present
Releases of any Hazardous Substance that are reasonably likely to form the
basis of any Environmental Claim against Borrower or against any Person
whose liability for any Environmental Claim Borrower has or may have
retained or assumed either contractually or by operation of law.
(iv) To the best of Borrower's knowledge, except as set forth in the
Environmental and/or Engineering Reports, there is not present at, on, in
or under the Individual Property, PCB-containing equipment, asbestos or
asbestos containing materials, underground storage tanks or surface
impoundments for Hazardous Substances, lead in drinking
80
water (except in concentrations that comply with all Environmental Laws),
or lead-based paint.
(v) To Borrower's knowledge, no Governmental Authority has been
taking or is in the process of taking any action that could subject the
Individual Property to Liens under any Environmental Law.
(vi) There have been no environmental investigations, studies,
audits, reviews or other analyses conducted by or that are in the
possession of Borrower in relation to an Individual Property which have
not been provided to Lender.
(Q) Solvency. None of the transactions contemplated hereby will be
or have been made with an actual intent to hinder, delay or defraud any present
or future creditors of FLIP, OIP, MBP or NJA and, giving effect to the
transactions contemplated hereby, the fair saleable value of a Borrower's assets
exceeds and will, immediately following the making of the Loan, exceed such
Borrower's total liabilities, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. Each Borrower has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. The fair saleable value of a Borrower's assets is and will,
immediately following the making of the Loan, be greater than such Borrower's
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Each Borrower's assets
do not and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. No Borrower intends to, nor believes that it will, incur debts
and liabilities (including, without limitation, Contingent Obligations and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
such Borrower).
(R) Not Foreign Person. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
(S) Single-Purpose Entity. (To the extent provisions of this Section
4.1(S) are agreements with respect to matters from and after the Closing Date,
such provisions shall be covenants for the purposes of the default, remedies and
limitation on recourse provisions of this Agreement.)
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(i) Each of OIP, MBP and NJA at all times since its formation has
been, and will continue to be, a duly formed and existing New Jersey
limited liability company and a Single-Purpose Entity. FLIP at all times
since its formation has been, and will continue to be, a duly formed and
existing New Jersey corporation and a Single-Purpose Entity. MM at all
times since its formation has been and will continue to be, a duly formed
and existing New Jersey corporation and a Single-Purpose Entity.
(ii) Each of OIP, MBP and NJA at all times since its formation has
complied, and will continue to comply, with the provisions of its
operating agreement and the laws of the State of New Jersey relating to
limited liability companies. FLIP at all times since its formation has
complied, and will continue to comply, with the provisions of its
certificate of incorporation and its by-laws and the laws of the State of
New Jersey relating to corporations. MM at all times since its formation
has complied, and will continue to comply, with the provisions of its
certificate of incorporation and its by-laws and the laws of the State of
New Jersey relating to corporations.
(iii) All customary formalities regarding the corporate existence of
each Borrower and MM have been observed at all times since its formation
and will continue to be observed.
(iv) Each Borrower and MM has at all times since its formation
accurately maintained, and will continue to accurately maintain, its
financial statements, accounting records and other corporate documents
separate from those of its shareholders, members, Affiliates of its
shareholders or members and any other Person, provided, however, that
financial statements for a Borrower may be maintained and prepared on a
consolidated basis with the financial statements of the other Borrowers
provided that each Borrower is identified therein as a separate entity.
Except for the centralized accounts described in Article II, neither any
Borrower nor MM has at any time since its formation commingled, and
neither any Borrower nor MM will commingle, its assets with those of its
shareholders, members, any Affiliates of its shareholders or members, or
any other Person. Except for the centralized accounts described in Article
II, each Borrower and MM has at all times since its formation accurately
maintained, and will continue to accurately maintain, its own bank
accounts and separate books of account.
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(v) Each Borrower and MM has at all times since its formation paid,
and will continue to pay, its own liabilities from its own separate
assets.
(vi) Each Borrower and MM has at all times since its formation
identified itself, and will continue to identify itself, in all dealings
with the public, under its own name and as a separate and distinct entity.
Neither any Borrower nor MM has at any time since its formation identified
itself, and neither any Borrower nor MM will identify itself, as being a
division or a part of any other entity. Neither any Borrower nor MM has at
any time since its formation identified, and neither any Borrower nor MM
will identify its shareholders, members or any Affiliates of its
shareholders or members, as being a division or part of it.
(vii) Each Borrower and MM have been at all times since their
formation and will continue to be adequately capitalized in light of the
nature of their then current business.
(viii) Neither any Borrower nor MM has at any time since its
formation assumed or guaranteed, and neither any Borrower nor MM will
assume or guarantee, the liabilities of its shareholders, members, any
Affiliates of its shareholders or members, or any other Persons, except
for liabilities relating to such Borrower's Individual Properties and
except as permitted by or pursuant to this Agreement. Neither any Borrower
nor MM has at any time since its formation acquired, and neither any
Borrower nor MM will acquire, obligations or securities of its
shareholders or members, or any Affiliates of its shareholders or members.
Neither any Borrower nor MM has at any time since its formation made, and
neither any Borrower nor MM will make, loans to its shareholders or
members, or any Affiliates of its shareholders or members.
(ix) Neither any Borrower nor MM has at any time since its formation
entered into and neither any Borrower nor MM has been a party to, and,
neither any Borrower nor MM will enter into or be a party to, any
transaction with its shareholders or members or any Affiliates of its
shareholders or members except (x) for the Management Agreements and the
Lease Agreement between MBP, as landlord, and Mesco, an Affiliate, as
tenant, relating to
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the Individual Property known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
(the "Affiliate Lease"), and (y) in the ordinary course of business of any
Borrower or MM, as the case may be, on terms which are no less favorable
to such Borrower or MM, as the case may be, than would be obtained in a
comparable arm's length transaction with an unrelated third party.
(T) No Joint Assessment; Separate Lots. Each Individual Property is
comprised of one or more parcels, each of which constitutes a separate tax lot
and none of which constitutes a portion of any other tax lot. No Individual
Property is benefitting from a tax abatement.
(U) Assessments. Except as disclosed in the Title Insurance
Policies, there are no pending or, to the knowledge of Borrower, proposed
special or other assessments for public improvements or otherwise affecting any
Individual Property, nor, to the knowledge of Borrower, are there any
contemplated improvements to any Individual Property that may result in such
special or other assessments.
(V) Mortgage and Other Liens. Each Mortgage, when properly recorded,
creates a valid and enforceable first mortgage Lien on the Individual Property
described therein, as security for the repayment of the portion of the
Indebtedness evidenced by the Note made by the owner of such Individual
Property, subject only to the Permitted Encumbrances applicable to such
Individual Property. Each Second Mortgage, when properly recorded, creates a
valid and enforceable second mortgage Lien on the Individual Property described
therein, as security for the repayment of the portion of the Indebtedness
evidenced by the Notes made by each Borrower other than the owner of such
Individual Property, subject only to the Permitted Encumbrances applicable to
such Individual Property. Each Collateral Security Instrument establishes and
creates a valid, subsisting and enforceable Lien on and a security interest in,
or claim to, the rights and property described therein. All property covered by
any Collateral Security Instrument is subject to a Uniform Commercial Code
financing statement filed and/or recorded, as appropriate, (or irrevocably
delivered to a title agent for such recordation or filing) in all places
necessary to perfect a valid first priority lien with respect to the rights and
property that are the subject of such Collateral Security Instrument to the
extent governed by the Uniform Commercial Code. All continuations and any
assignments of any
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such financing statements will be timely filed or refiled, as appropriate, in
the appropriate recording offices.
(W) Enforceability. The Notes, each Mortgage, each Second Mortgage
and each other Loan Document executed by a Borrower in connection herewith,
including, without limitation, any Collateral Security Instrument, are the
legal, valid and binding obligations of Borrower, or each Borrower,
respectively, as the case may be, enforceable against Borrower or each Borrower,
respectively, as the case may be, in accordance with their terms, subject to
bankruptcy, insolvency and other limitations on creditors' rights generally and
to equitable principles and the other matters described in the opinions
delivered pursuant to Section 3.1(B). The Notes, each such Mortgage, each such
Second Mortgage and the other Loan Documents executed by any Borrower are, as of
the date hereof, not subject to any right of rescission, set-off, counterclaim
or defense by Borrower, including the defense of usury, nor will the operation
of any of the terms of the Notes, each such Mortgage, each such Second Mortgage
and other Loan Documents executed by Borrower, or the exercise of any right
thereunder, render the Mortgages or the Second Mortgages unenforceable against
any Borrower, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense by any Borrower, including the defense of
usury, and Borrower has asserted any right of rescission, set-off, counterclaim
or defense with respect thereto.
(X) Permitted Encumbrances. Except for the items set forth on
Schedule 5 hereto, to the best of Borrower's knowledge, the Permitted
Encumbrances (other than those described in clauses (i) and (ii) of the
definition of Permitted Encumbrances) do not cause a Material Adverse Effect.
(Y) No Prior Assignment. As of the date hereof, (i) Lender is the
assignee of Borrower's interest under the Leases and (ii) there are no prior
assignments of the Leases or any portion of the Rent due and payable or to
become due and payable which are presently outstanding.
(Z) No Defaults. No Event of Default or, to the best of Borrower's
knowledge, Default exists under or with respect to any Loan Document.
(AA) Labor Matters. Borrower does not have any employees. Borrower
is not a party to any collective bargaining agreements.
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(BB) Use of Facilities. Each Individual Property is used exclusively
for general office and/or industrial purposes and uses ancillary thereto
(including parking).
(CC) Permits; Certificate of Occupancy. Each Borrower has obtained
(directly or by assignment from its respective predecessor-in-interest) all
Permits necessary to use and operate its Individual Properties for the use
described in Section 4.1(BB). The use being made of each Individual Property is
in conformity in all material respects with the certificate of occupancy and/or
Permits for such Individual Property and any other restrictions, covenants or
conditions affecting such Individual Property.
(DD) Flood Zone. Except as shown on the Surveys, none of the
Individual Properties is located in a flood hazard area as defined by the
Federal Insurance Administration.
(EE) Physical Condition. To the best of Borrower's knowledge, each
Individual Property is free of structural defects and all building systems
contained therein are in good working order in all material respects subject to
ordinary wear and tear, except as disclosed in the Engineering Reports described
on Exhibit D.
(FF) Structure. MM is the managing member of each of OIP, MBP and
NJA. Each of OIP, MBP and NJA has only one other member. FLIP S CORP owns 100%
of FLIP. UH owns 96% and the Senior McBrides own 4%of MM. The Guarantors,
collectively, own 100% of UH. The Guarantors, collectively, own, directly or
indirectly, 100% of the other member of each of MBP and NJA. The Guarantors,
collectively, own 100% of FLIP S CORP. The Guarantors and the Senior McBrides,
collectively, own, directly or indirectly, 100% of RROP.
(GG) Security Deposits. All security deposits with respect to the
Individual Properties on the date hereof shall be transferred to the Security
Deposit Accounts within 5 Business Days from the date hereof, and each Borrower
is in compliance with all Legal Requirements relating to such security deposits.
(HH) Intellectual Property. All material trademarks, tradenames and
servicemarks that a Borrower owns or has pending, or under which it is licensed,
are in good standing and uncontested. There is no right under any trademark,
tradename or servicemark necessary to the business of a Borrower as presently
conducted or
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as a Borrower contemplates conducting its business. To the best of each
Borrower's knowledge, such Borrower has not infringed, is not infringing, and
has not received notice of infringement with respect to asserted trademarks,
tradenames and servicemarks of others. To each Borrower's knowledge, there is no
infringement by others of material trademarks, tradenames and servicemarks of
Borrower.
(II) Investment Company Act; Public Utility Holding Company Act. No
Borrower is (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.
(JJ) Tax Fair Market Value. As of the Closing Date, (i) the Tax Fair
Market Value of each Individual Property is equal to or greater than the
Allocated Loan Amount for such Individual Property and (ii) the Tax Fair Market
Value of the Mortgaged Property is equal to or exceeds the Principal
Indebtedness.
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Section 4.2. Survival of Representations. Borrower agrees that all
of the representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents are made as of the
Closing Date (except as expressly otherwise provided) and shall survive the
delivery of the Notes and making of the Loan and continue for as long as any
amount remains owing to Lender under this Agreement, the Notes or any of the
other Loan Documents; provided, however, that the representations and warranties
set forth in Section 4.1(P) shall survive for a period of two years following
the repayment in full of the Loan and all other sums owing under this Agreement
and the other Loan Documents, provided, however, that if, at any time during the
term of the Loan (including upon maturity), an Event of Default occurred
(whether or not cured) or Lender exercised any of its rights or remedies with
respect the operation, control, management, physical condition, maintenance or
inspection of the Individual Properties or similar matters, the representations
and warranties set forth in Section 4.1(P) shall survive in perpetuity. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
Section 4.3. Borrower's Knowledge. Any representation or warranty in
this Agreement or in the other Loan Documents made "to the best of Borrower's
knowledge" or "to the knowledge of Borrower" is made after due inquiry by any of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ and
includes the actual knowledge of any of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. Borrower Covenants. Borrower covenants and agrees that,
from the date hereof and until payment in full of the Indebtedness (or, with
respect to a particular Individual Property, the earlier release of its Related
Mortgages):
(A) Existence; Compliance with Legal Requirements; Insurance. Each
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its existence as a limited liability company
or a corporation, as the case may be, rights, licenses, Permits and
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franchises necessary for the conduct of its business and comply in all material
respects with all Legal Requirements and Insurance Requirements applicable to it
and each Individual Property owned by it. Each Borrower shall at all times
maintain, preserve and protect all franchises and tradenames and preserve all
the remainder of its property necessary for the continued conduct of its
business and keep each Individual Property owned by it in good repair, working
order and condition, except for reasonable wear and use, and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Mortgages and the Second Mortgages. Borrower shall keep each Individual
Property insured at all times, by financially sound and reputable insurers, to
such extent and against such risks, and maintain liability and such other
insurance, as is more fully provided in the Mortgages and the Second Mortgages.
Notwithstanding anything contained in the Mortgages and the Second Mortgages, in
each case, however, if no providers of such insurance are rated as required in
the Mortgages and the Second Mortgages, the requirement for such rating shall be
that rating by the Rating Agencies, as confirmed by the Rating Agencies in
writing, which will not result in a downgrade, qualification or withdrawal of
the then current ratings of any class of the Certificates. Upon Borrower's
receipt of notice designating Servicer, Borrower shall cause all certificates of
liability insurance to be revised to include Servicer as an additional insured
as its interest may appear.
(B) Impositions and Other Claims. Borrower shall pay and discharge
or cause to be paid and discharged all Impositions, as well as all lawful claims
for labor, materials and supplies or otherwise, which could become a Lien, all
as more fully provided in, and subject to any rights to contest contained in,
the Mortgages and the Second Mortgages.
(C) Litigation. Each Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened (in
writing) against such Borrower or the Mortgaged Property which is reasonably
likely to have a Material Adverse Effect.
(D) Environmental Remediation.
(i) If any investigation, delineation, site monitoring, cleanup,
removal, restoration or other remedial work of any kind or nature is
required pursuant to an order
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or directive of any Governmental Authority or, except to the extent set
forth in the last sentence of this clause (i), under any applicable
Environmental Law (collectively, the "Remedial Work"), because of or in
connection with the current or future presence, suspected presence,
Release or threatened Release of a Hazardous Substance relating to an
Individual Property or any portion thereof, Borrower shall promptly
commence and diligently prosecute to completion all such Remedial Work. In
all events, such Remedial Work shall be commenced within 30 days after any
demand therefor by Lender or such shorter period as may be required under
any applicable Environmental Law or by any Governmental Authority;
provided, however, that Borrower shall not be required to commence such
Remedial Work within the above specified time periods: (x) if prevented
from doing so by any Governmental Authority, (y) if commencing such
Remedial Work within such time periods would result in Borrower or such
Remedial Work violating any Environmental Law or (z) if Borrower, at its
expense and after prior notice to Lender, is contesting by appropriate
legal, administrative or other proceedings conducted in good faith and
with due diligence the need to perform Remedial Work, as long as (1)
Borrower is permitted by the applicable Environmental Laws to delay
performance of the Remedial Work pending such proceedings, (2) neither the
Individual Property nor any part thereof or interest therein will be sold,
forfeited or lost if Borrower performs the Remedial Work being contested,
and Borrower would have the opportunity to do so, in the event of
Borrower's failure to prevail in the contest, (3) Lender would not, by
virtue of such permitted contest, be exposed to any material risk of any
civil liability for which Borrower has not furnished additional security
as provided in clause (4) below, or to any risk of criminal liability, and
neither the Individual Property nor any interest therein would be subject
to the imposition of any lien for which Borrower has not furnished
additional security as provided in clause (4) below, as a result of the
failure to perform such Remedial Work and (4) Borrower shall have
furnished to Lender additional security in respect of the Remedial Work
being contested and the loss or damage that may result from Borrower's
failure to prevail in such contest in such amount as may be reasonably
requested by Lender. Notwithstanding the foregoing, with respect only to
those certain issues disclosed in the Environmental Reports received by
Lender on or before the date of this Agreement for the Individual
Properties located in Fair Lawn, New Jersey, which issues relate to
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the nearby property on the E.P.A.'s National Priority List, Borrower's
obligation to perform Remedial Work under this clause (i) shall arise only
if any such Remedial Work is required to be performed or paid for by
Borrower pursuant to an order or directive of any Governmental Authority,
and only to the extent and within the time periods set forth in such order
or directive or subsequent orders or directives, provided, however, that
Borrower shall at all times provide Lender with any notices or information
relating to such Individual Properties as required hereunder, whether from
or prepared by a Governmental Authority or other Person.
(ii) If requested by Lender, all Remedial Work under clause (i)
above shall be performed by contractors, and under the supervision of a
consulting Engineer, each approved in advance by Lender which approval
will not be unreasonably withheld or delayed. All costs and expenses
reasonably incurred in connection with such Remedial Work shall be paid by
Borrower. If Borrower does not timely commence and diligently prosecute to
completion the Remedial Work, unless Borrower is contesting the need to
perform such Remedial Work in accordance with clause (i) above, Lender may
(but shall not be obligated to), upon 30 days prior written notice to
Borrower of its intention to do so, cause such Remedial Work to be
performed. In such event, Borrower shall pay or reimburse Lender on demand
for all expenses (including reasonable consultants' and attorneys' fees
and disbursements, but excluding internal overhead, administrative and
similar costs of Lender) reasonably relating to or incurred by Lender in
connection with monitoring, reviewing or performing any Remedial Work in
accordance herewith, together with interest thereon at the Default Rate
from the date of demand by Lender.
(iii) Borrower shall not commence any Remedial Work under clause (i)
above, nor enter into any settlement agreement, consent decree or other
compromise relating to any Hazardous Substances or Environmental Laws
which is reasonably likely to have a Material Adverse Effect without the
prior written consent of Lender, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, if the
presence, Release or threatened Release of Hazardous Substances relating
to any Individual Property poses an immediate threat to the health, safety
or welfare of any Person or the environment, or is of such a nature that
an immediate response is necessary, or if Remedial Work is required by the
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applicable Governmental Authority to be commenced immediately, or if
Borrower could incur penalties or fines if it failed to commence and
complete Remedial Work immediately, Borrower may commence and complete all
necessary Remedial Work. In such events, Borrower shall notify Lender as
soon as practicable and, in any event, within three Business Days, of any
action taken.
(E) Environmental Matters; Inspection.
(i) Borrower shall not authorize a Hazardous Substance to be present
on or under or to emanate from an Individual Property, or migrate from
adjoining property controlled by Borrower onto or into an Individual
Property, except under conditions permitted by applicable Environmental
Laws and conditions not reasonably likely to give rise to Remedial Work,
and in the event that such Hazardous Substances are present on, under or
emanate from an Individual Property, or migrate onto or into an Individual
Property, if required pursuant to Section 5.1(D), Borrower shall cause the
removal or remediation of such Hazardous Substances, in accordance with
Section 5.1(D) of this Agreement and Environmental Laws. Subject to
Section 5.1(D) hereof, Borrower shall use commercially reasonable efforts
to prevent other Persons, and to seek the remediation by other Persons of,
any migration of Hazardous Substances (of which Borrower has knowledge)
onto or into any Individual Property from any adjoining property.
(ii) Upon reasonable prior written notice and subject to the rights
of tenants under Leases, Lender or Lender's agents shall have the right at
all reasonable times to enter upon and inspect all or any portion of any
Individual Property, provided that such inspections shall not unreasonably
interfere with the operation or the tenants, occupants or guests of such
Individual Property. If Lender suspects that Remedial Work may be
required, Lender may select a consulting Engineer to conduct and prepare
reports of such inspections. Borrower shall be given a reasonable
opportunity to review any reports, data and other documents or materials
reviewed or prepared by the Engineer, and to submit comments and suggested
revisions or rebuttals to same. The inspection rights granted to Lender in
this Section 5.1(E) shall be in addition to, and not in limitation of, any
other inspection rights granted to Lender in this Agreement, and shall
expressly include the
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right (if Lender suspects that Remedial Work may be required) to conduct
soil borings, establish ground water monitoring ▇▇▇▇▇ and conduct other
customary environmental tests, samplings, assessments and audits.
(iii) Borrower agrees to bear and shall pay or reimburse Lender on
demand for all sums advanced and expenses incurred (including reasonable
consultants' and attorneys' fees and disbursements, but excluding internal
overhead, administrative and similar costs of Lender) reasonably relating
to, or incurred by Lender in connection with, the inspections and reports
described in this Section 5.1(E) (to the extent such inspections and
reports relate to any Individual Property) in the following situations:
(x) If Lender has reasonable grounds to believe, at the time
any such inspection is ordered, that there exists an occurrence or
condition that could lead to an Environmental Claim;
(y) If any such inspection reveals an occurrence or condition
that could lead to an Environmental Claim; or
(z) If an Event of Default with respect to any Individual
Property exists at the time any such inspection is ordered, and such
Event of Default relates to any representation, covenant or other
obligation pertaining to Hazardous Substances, Environmental Laws or
any other environmental matter.
(F) Environmental Notices. Borrower shall promptly provide notice to
Lender of:
(i) any Environmental Claim asserted by any Governmental Authority
with respect to any Hazardous Substance relating to any Individual
Property, which could reasonably be expected to impair the value of
Lender's security interests hereunder or have a Material Adverse Effect;
(ii) any proceeding, investigation or inquiry commenced or
threatened in writing by any Governmental Authority, against Borrower,
with respect to the presence, suspected presence, Release or threatened
Release of Hazardous Substances relating to any property not owned by
Borrower, including, without limitation, proceedings under
93
the Comprehensive Environmental Response, Compensation, and Liability Act,
as amended, 42 U.S.C. ss. 9601, et seq., which could reasonably be
expected to impair materially the value of Lender's security interests
hereunder or have a Material Adverse Effect;
(iii) all Environmental Claims asserted or threatened against
Borrower, against any other party occupying any Individual Property or any
portion thereof which become known to Borrower or against such Individual
Property, which could reasonably be expected to impair the value of
Lender's security interests hereunder or have a Material Adverse Effect;
(iv) the discovery by Borrower of any occurrence or condition on any
Individual Property or on any real property adjoining or in the vicinity
of such Individual Property which could reasonably be expected to lead to
an Environmental Claim against Borrower or Lender which such Environmental
Claim is reasonably likely to have a Material Adverse Effect; and
(v) the commencement or completion of any Remedial Work.
(G) Copies of Notices. Borrower shall transmit to Lender copies of
any citations, orders, notices or other written communications received from any
Person and any notices, reports or other written communications submitted to any
Governmental Authority with respect to the matters described in Section 5.1(F).
(H) Environmental Claims. Lender and/or, to the extent authorized by
Lender, Trustee and/or Servicer, may join and participate in, as a party if
Lender so determines, any legal or administrative proceeding or action
concerning a Individual Property or any portion thereof under any Environmental
Law, if, in Lender's reasonable judgment, the interests of Lender, Trustee or
Servicer will not be adequately protected by Borrower. Borrower agrees to bear
and shall pay or reimburse Lender, Trustee and/or Servicer, on demand for all
reasonable sums advanced and expenses (including reasonable consultants' and
attorneys' fees and disbursements, but excluding internal overhead,
administrative and similar costs of Lender, Trustee and Servicer) incurred by
Lender, Trustee and/or Servicer, in connection with any such action or
proceeding.
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(I) Environmental Indemnification. Borrower agrees to indemnify,
reimburse, defend, and hold harmless Lender, Trustee and Servicer for, from, and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties, reasonable attorneys' fees, disbursements and expenses, and
reasonable consultants' fees, disbursements and expenses (but excluding internal
overhead, administrative and similar costs of Lender, Trustee and Servicer),
asserted against, resulting to, imposed on, or incurred by Lender, Trustee and
Servicer, directly or indirectly, in connection with any of the following,
except to the extent same are directly caused by (x) Lender's, Trustee's or
Servicer's gross negligence, bad faith or willful misconduct or a breach by
Lender, Trustee or Servicer of any of its or their obligations under the Loan
Documents or (y) actions taken or omitted to be taken by Lender, Trustee or
Servicer after any such party becomes a mortgagee in possession or otherwise
takes possession or control of the affected Individual Property following an
Event of Default or acquires title to the affected Individual Property through
foreclosure, deed in lieu of foreclosure or otherwise (it being Borrower's
burden to prove such causation):
(i) events, circumstances, or conditions which are alleged to, or
do, form the basis for an Environmental Claim;
(ii) any Environmental Claim against any Person whose liability for
such Environmental Claim Borrower has or may have assumed or retained
either contractually or by operation of law; or
(iii) the breach of any representation, warranty or covenant set
forth in Section 4.1(P) and Sections 5.1(D) through 5.1(I), inclusive.
The indemnity provided in this Section 5.1(I) shall not be included
in any exculpation of Borrower from recourse liability provided in this
Agreement or in any of the other Loan Documents. Nothing in this Section 5.1(I)
shall be deemed to deprive Lender of any rights or remedies provided to it
elsewhere in this Agreement or the other Loan Documents or otherwise available
to it under law.
(J) Access to Individual Properties. Borrower shall permit agents,
representatives and employees of Lender to inspect each Individual Property or
any part thereof at such
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reasonable times as may be requested by Lender upon reasonable advance notice,
subject, however, to the rights of the tenants, occupants and guests of the
Individual Property.
(K) Notice of Default. Borrower shall promptly advise Lender of any
material adverse change in Borrower's condition, financial or otherwise, or of
the occurrence of any Event of Default, or of the occurrence of any Default of
which Borrower has knowledge.
(L) Cooperate in Legal Proceedings. Except with respect to any claim
by Borrower against Lender, Borrower shall cooperate fully with Lender with
respect to any proceedings before any Governmental Authority which may in any
way affect the rights of Lender hereunder or any rights obtained by Lender under
any of the Loan Documents and, in connection therewith, not prohibit Lender, at
its election, from participating in any such proceedings.
(M) Perform Loan Documents. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions required to be
observed, performed or satisfied by it, and shall pay when due all costs, fees
and expenses required to be paid by it, under the Loan Documents executed and
delivered by Borrower.
(N) Insurance Benefits. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable to Lender in connection with each Individual Property, and
Lender shall be reimbursed for any expenses reasonably incurred in connection
therewith (including attorneys' fees and disbursements and the payment by
Borrower of the expense of an appraisal on behalf of Lender in case of a fire or
other casualty affecting such Individual Property or any part thereof, but
excluding internal overhead, administrative and similar costs of Lender) out of
such Insurance Proceeds, all as more specifically provided in the Mortgages and
the Second Mortgages.
(O) Further Assurances. Borrower shall, at Borrower's sole cost and
expense:
(i) upon Lender's request therefor given in connection with the
Securitization or from time to time, pay for (a) reports of UCC, tax lien,
judgment and litigation searches with respect to Borrower and (b) searches
of title to each Individual Property, each
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such search to be conducted by search firms designated by Lender in each
of the locations designated by Lender;
(ii) furnish to Lender all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and
every other document, certificate, agreement and instrument required to be
furnished pursuant to the terms of the Loan Documents;
(iii) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts
necessary, to evidence, preserve and/or protect the Collateral at any time
securing or intended to secure the Notes, as Lender may reasonably
require; and
(iv) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out
of the intents and purposes of this Agreement and the other Loan
Documents, as Lender shall reasonably require from time to time but
without materially adversely affecting Borrower's rights or obligations
hereunder or thereunder.
(P) Management of Mortgaged Property. Each of the Individual
Properties will be managed at all times by a Manager pursuant to a Management
Agreement until terminated as herein provided. Pursuant to the Manager's
Subordinations, the Manager has agreed that each Management Agreement is subject
and subordinate in all respects to the Lien of the Related Mortgages. Each
Management Agreement may be terminated by Lender upon 30 days' prior written
notice to the relevant Borrower and Manager (i) upon the occurrence and during
the continuance of an Event of Default, or (ii) if the Debt Service Coverage
Ratio for the Individual Properties as a whole shall fall below 1.15 as of the
last day of a calendar quarter, and, upon such termination, Lender may appoint a
replacement manager or managers. Notwithstanding the foregoing, (A) during the
period prior to and including the second anniversary of the Securitization
Closing Date, Borrower shall have the right, within five Business Days after
notice from Lender of its intention to terminate one or more of the Management
Agreements pursuant to clause (ii), to deposit with Lender or Servicer the
following items (for the purposes of this paragraph, the "U.S. Obligations
Deliveries"): (1) U.S. Obligations the payments from which will increase the
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Debt Service Coverage Ratio to 1.15 when recalculated with an adjustment to
Operating Income to include as income the payments to be made from the U.S.
Obligations for the next succeeding 12 month period, (2) a security agreement,
in form and substance reasonably satisfactory to Lender, creating a first
priority lien on the U.S. Obligations, and (3) an opinion of counsel for
Borrower in form satisfactory to Lender stating, among other things, that Lender
has a first priority perfected security interest in the U.S. Obligations; (B)
during the period after but not including the second anniversary of the
Securitization Closing Date and before but not including the Optional Prepayment
Date, Borrower shall have the right, within five Business Days after notice from
Lender of its intention to terminate one or more of the Management Agreements
pursuant to clause (ii), to notify Lender in writing of Borrower's election to
defease a portion of the Loan in accordance with Section 8.30 in an amount
sufficient to increase the Debt Service Coverage Ratio to 1.15; and (C) on and
after the Optional Prepayment Date, Borrower shall have the right, within five
Business Days after notice from Lender of its intention to terminate one or more
of the Management Agreements pursuant to clause (ii), to notify Lender of
Borrower's intention to prepay the Loan in accordance with Section 2.6 on the
next Payment Date in an amount sufficient to increase the Debt Service Coverage
Ratio to 1.15, and Lender shall not so terminate the Management Agreement(s) if
Borrower so delivers the U.S. Obligations Deliveries or so defeases or prepays a
portion of the Loan. Income produced from the U.S. Obligations delivered
pursuant to clause (A) shall be deposited into the Cash Collateral Account or
the Servicer Account, as the case may be, to be applied and disbursed in
accordance with Section 2.12. Borrower may from time to time appoint one or more
successor managers to manage the Individual Properties or any of the Individual
Properties with Lender's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. If Lender does not respond to a
request for such consent within ten Business Days after such request is deemed
given pursuant to Section 8.6, Borrower may send a second request for such
consent which shall be marked "SECOND REQUEST". If Lender does not respond to
such second request within three Business Days after it is deemed given pursuant
to Section 8.6, Lender shall be deemed to have approved such request, if the
successor manager satisfies the requirements set forth in clauses (i) through
(iv) below and its experience has been managing at least 500,000 square feet of
the specified property types in New York, New Jersey and/or Pennsylvania.
Notwithstanding the foregoing, any successor property manager selected hereunder
by Lender or Borrower to
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serve as a Manager (including upon the consummation of the transactions
described in Section 8.31) shall (i) if the transactions described in Section
8.31 have occurred, manage the Individual Properties subject to such guidelines
as may be necessary to maintain the status of the REIT as a qualified real
estate investment trust, (ii) be a reputable management company having (or its
primary personnel having) at least seven years' experience in the management of
general office and/or industrial properties, as the case may be, and be
obligated to manage the Individual Property in accordance with standards at
least equal to those then in effect with respect to the Manager being replaced,
and, in any event, in accordance with then existing standards of service,
operation and conduct exhibited by other comparable property managers in the
general vicinity of the Individual Property, (iii) enter into a Management
Agreement, including terms that are standard in the applicable market and
providing for management fees that do not exceed then market rates, and a
Manager's Subordination and (iv) if after the Securitization Closing Date, (x)
have qualifications such that the then current ratings of no class of the
Certificates would be downgraded or withdrawn by the Rating Agencies upon such
an appointment and (y) be reasonably acceptable to Servicer. Provided the
preceding conditions are met, Lender hereby consents to the appointment of the
Operating Partnership, or an Affiliate thereof, as successor manager in
connection with the transactions described in Section 8.31. Borrower further
covenants and agrees that each Manager (including any successor property manager
serving as Manager) shall at all times during the term of the Loan maintain
worker's compensation insurance as required by Governmental Authorities.
Notwithstanding anything contained herein to the contrary, without Lender's
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, Borrower shall not agree to a renewal of any Management
Agreement with a Manager otherwise acceptable hereunder if such renewal period
would extend beyond the Optional Prepayment Date.
(Q) Financial Reporting.
(i) Borrower shall keep and maintain or shall cause to be kept and
maintained on a Fiscal Year basis, in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender) consistently applied,
books, records and accounts reflecting in reasonable detail all of the
financial affairs of Borrower and all items of income and expense in
connection with the operation of each Individual Property and in
connection with any services,
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equipment or furnishings provided in connection with the operation of each
Individual Property. Lender shall have the right from time to time at all
times during normal business hours upon reasonable prior written notice to
Borrower to examine such books, records and accounts at the office of
Borrower or other Person maintaining such books, records and accounts and
to make such copies or extracts thereof as Lender shall desire. After the
occurrence of an Event of Default with respect to Borrower or any
Individual Property, Borrower shall pay any reasonable costs and expenses
incurred by Lender to examine Borrower's accounting records with respect
to such Individual Property, as Lender shall reasonably determine to be
necessary or appropriate in the protection of Lender's interest.
(ii) Borrower shall furnish to Lender annually, within 90 days
following the end of each Fiscal Year, a complete copy of Borrower's
operating and financial statements audited by a certified public
accounting firm reasonably acceptable to Lender (any "Big Six" accounting
firm being deemed acceptable to Lender) in accordance with GAAP
consistently applied, covering Borrower's financial position and results
of operations, including consolidated and consolidating balance sheets for
each Individual Property, for such Fiscal Year and containing a statement
of revenues and expenses, a statement of assets and liabilities, a
statement of Borrower's equity, a calculation of Net Cash Flow and an
exhibit detailing capitalized expenses for such Fiscal Year. 30 days
before each delivery required by this clause (ii), Borrower shall deliver
unaudited copies of the same to Lender. Audited statements for the
Individual Properties may be prepared on a combined basis provided such
statements are accompanied by a procedures report acceptable to Lender
demonstrating that the unaudited property level statements on the
Individual properties tie to the combined audited statements.
Together with Borrower's annual financial statements, Borrower shall
furnish to Lender an Officer's Certificate certifying as of the date
thereof (x) whether there exists an Event of Default or, to Borrower's
knowledge, Default, and if such Event of Default or Default exists, the
nature thereof, the period of time it has existed and the action then
being taken to remedy same and (y) with the unaudited annual financial
statements only, that the annual financial
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statements present fairly in all material respects the results of
operations and financial condition of Borrower.
(iii) [INTENTIONALLY OMITTED].
(iv) Borrower shall furnish to Lender, within 30 days following the
end of each month (starting with said report for the month of October
1997), (x) property operating statements (prepared on an accrual basis and
including a schedule showing actual cash receipts and expenditures and a
calculation of Net Cash Flow) for each Individual Property, (y) certified
updated occupancy reports and rent rolls in forms reasonably acceptable to
Lender and (z) an Officer's Certificate in substantially the form attached
hereto as Exhibit T.
(v) Borrower shall furnish to Lender, within 15 Business Days after
request, such further information with respect to the operation of any
Individual Property and the financial affairs of Borrower as may be
reasonably requested by Lender, including all business plans prepared for
Borrower in the ordinary course.
(vi) Borrower shall furnish to Lender, within 15 Business Days after
request, such further information regarding any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA as
may be reasonably requested by Lender.
(vii) If the Loan is not repaid on the Optional Prepayment Date, for
the period from November 1, 2007 through December 31, 2007 and for each
Fiscal Year thereafter, Borrower shall submit to Lender for Lender's
written approval an annual budget (an "Annual Budget") for each of the
Individual Properties not later than (x) November 1, 2007 with respect to
the first such Annual Budget and (y) 30 days prior to the commencement of
each Fiscal Year thereafter, in form and substance satisfactory to Lender
setting forth in reasonable detail budgeted monthly amounts for Operating
Income, Operating Expenses, Capital Costs and Excess Cash Flow for such
Individual Properties. Each Annual Budget shall contain, among other
things, limitations on management fees, third party service fees, and
other expenses as Borrower may reasonably determine. If Lender objects to
the proposed Annual Budget submitted by Borrower, Lender shall advise
Borrower of such objections within 15 Business Days after receipt thereof
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(and deliver to Borrower a reasonably detailed description of such
objection) and Borrower shall promptly revise such Annual Budget and
resubmit the same to Lender. Lender shall advise Borrower of any
objections to such revised Annual Budget within ten Business Days after
receipt thereof (and deliver to Borrower a reasonably detailed description
of such objection) and Borrower shall promptly revise the same in
accordance with the process described in this sentence until Lender
approves an Annual Budget. Each such Annual Budget approved by Lender in
accordance with the terms hereof shall be referred to herein as an
"Approved Annual Budget". Until such time that Lender approves a proposed
Annual Budget, the most recent Approved Annual Budget, if any, shall apply
or, in the case of the period beginning on November 1, 2007, Operating
Expenses and Capital Costs shall not exceed the amounts actually spent in
the same month of the prior Fiscal Year, provided, however, that such
Approved Annual Budget shall be adjusted to reflect actual increases in
Basic Carrying Costs.
(viii) After the Securitization Closing Date, Borrower shall also
furnish to the Rating Agencies a copy of each report, statement and other
information provided to Lender under this Section 5.1(Q).
(R) Conduct of Business. Borrower shall cause the operation of each
Individual Property to be conducted at all times in a manner consistent with at
least the level of operation of such Individual Property as of the date hereof,
including, without limitation, the following:
(i) to maintain or cause to be maintained the standard of operations
at each Individual Property at all times at a level necessary to insure a
level of quality for the Individual Properties consistent with similar
properties in the same competitive market;
(ii) to operate or cause to be operated each Individual Property in
a prudent manner in compliance in all material respects with applicable
Legal Requirements and Insurance Requirements relating thereto and cause
all licenses, Permits and any other agreements necessary for the continued
use and operation of each Individual Property to remain in effect; and
(iii) to maintain or cause to be maintained sufficient Inventory and
Equipment of types and quantities at each
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Individual Property to enable Borrower or Manager to operate such
Individual Property.
(S) ERISA. Borrower shall deliver to Lender as soon as possible, and
in any event within ten days after Borrower knows or has reason to believe that
any of the events or conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement signed by a senior
financial officer of Borrower setting forth details respecting such event or
condition and the action, if any, that Borrower or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice required to be
filed with or given to PBGC by Borrower or an ERISA Affiliate with respect to
such event or condition):
(i) any reportable event, as defined in Section 4043(c) of ERISA and
the regulations issued thereunder, with respect to a Plan, as to which
PBGC has not by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of Section
412 of the Code or Section 302 of ERISA, including, without limitation,
the failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code); and any request for a waiver under
Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by Borrower or an ERISA
Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by Borrower or any ERISA Affiliate of
a notice from a Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by
Borrower or any ERISA Affiliate that results in liability under Section
4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt by Borrower
or any ERISA Affiliate of notice from a Multiemployer Plan
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that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part if
Borrower or an ERISA Affiliate fails to timely provide security to the
Plan in accordance with the provisions of said Sections; and
(vii) the imposition of a lien or a security interest in connection
with a Plan.
(T) Deferred Maintenance. On or before the first anniversary of the
date hereof, Borrower shall use good faith efforts and due diligence to complete
the repairs listed on Schedule 4 attached hereto in accordance with the
Engineering Reports, being the deferred maintenance items for which the Initial
Capital Requirement was established.
(U) Environmental Operation & Maintenance Obligations. Borrower
shall satisfy the Environmental Operation & Maintenance Obligations in
accordance with the Environmental Reports and within the times specified on
Schedule 6 attached hereto, being the Environmental Operation & Maintenance
Obligations for which the Environmental Operation & Maintenance
Reserve was established.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. Borrower Negative Covenants. Borrower covenants and
agrees that, until payment in full of the Indebtedness (or, with respect to any
particular Individual Property, the earlier release of the Related Mortgages),
it will not do or permit, directly or indirectly, any of the following unless
Lender consents thereto in writing:
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(A) Liens on the Mortgaged Property. Incur, create, assume, become
or be liable in any manner with respect to, or permit to exist, any Lien with
respect to any Individual Property, except: (i) Liens in favor of Lender and
(ii) the Permitted Encumbrances.
(B) Transfer; Pledge. Except as expressly permitted by or pursuant
to this Agreement or the Related Mortgages including, without limitation,
Section 8.31, allow any Transfer to occur, terminate the Management Agreements,
or enter into a management contract with respect to any Individual Property.
Membership interests or stock in a Borrower may be transferred, subject to the
provisions of Section 6.1(N) relating to the admission of members, with the
consent of Lender, which consent will not be unreasonably withheld, provided,
however, that any transfer of a managing member's interest in a Borrower or 50%
or more of the membership interests in a Borrower shall require (i) delivery of
an opinion by Borrower's counsel satisfactory to Lender and its counsel that
such transfer will not affect the tax status of the REMIC Trust, and (ii) if
such transfer occurs after the Securitization Closing Date, confirmation in
writing from each Rating Agency that such Transfer will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any class of the Certificates. In addition, all of the Mortgaged Property may be
transferred to a Single-Purpose Entity and the Loan may be assumed by such
transferee, if (i) such transferee assumes the Loan and all of Borrower's
obligations under the Loan Documents pursuant to documentation acceptable to the
Rating Agencies and Lender, (ii) transferee's counsel (who must be satisfactory
to Lender and the Rating Agencies) delivers an opinion satisfactory to Lender
and the Rating Agencies that such transfer will not affect the status of the
REMIC Trust and covering such other matters, such as formation, authorization
and enforceability, relating to the assumption of the Loan as Lender and the
Rating Agencies may request, (iii) each Rating Agency confirms in writing that
the transfer and assumption will not result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any class of Certificates,
and (iv) all expenses incurred by Lender, the Rating Agencies and Servicer in
connection with such transfer are paid by Borrower or transferee, such payment
not to exceed .5% of the Principal Indebtedness. No member in OIP, MBP or NJA
and no shareholder in FLIP shall pledge or otherwise encumber its membership
interest in OIP, MBP or NJA or its stock in FLIP, respectively, to secure any
financing or indebtedness.
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(C) Other Borrowings. Incur, create, assume, become or be liable in
any manner with respect to Other Borrowings, except (i) as set forth in the
Reimbursement Agreement, provided all payments to be made thereunder are subject
and subordinate, in all respects, to the payments and obligations required to be
made by Borrower hereunder and in any other Loan Document, and (ii) that a
Borrower may incur unsecured indebtedness for Capital Costs with respect to an
Individual Property, provided, however, that the aggregate amount of
indebtedness for Capital Costs shall not at any time exceed 10% of the initial
Allocated Loan Amount for such Individual Property.
(D) Dissolution. Except as permitted pursuant to Section 8.31,
dissolve, terminate, liquidate, merge with or consolidate into another Person.
(E) Change In Business. Cease to be a Single-Purpose Entity, or make
any material change in the scope or nature of its business objectives, purposes
or operations, or undertake or participate in activities other than the
continuance of its present business.
(F) Debt Cancellation. Cancel or otherwise forgive or release any
material claim or debt owed to a Borrower by any Person, except for adequate
consideration or in the ordinary course of such Borrower's business.
(G) Affiliate Transactions. Enter into, or be a party to, any
transaction with an Affiliate of a Borrower, except (x) for the Management
Agreements, the Affiliate Lease and the Reimbursement Agreement and (y) in the
ordinary course of business and on terms which are no less favorable to such
Borrower or such Affiliate than would be obtained in a comparable arm's length
transaction with an unrelated third party, and, if the amount to be paid to the
Affiliate pursuant to the transaction or series of related transactions is
greater than $50,000, are fully disclosed to Lender in advance.
(H) Creation of Easements. Create, or permit any Individual Property
or any part thereof to become subject to, any easement, license or restrictive
covenant, other than a Permitted Encumbrance. Lender agrees that it will join in
and subordinate the Liens of the Mortgages and Second Mortgages to any easement,
license or restrictive covenant (i) which arises after the date hereof and (ii)
that Lender, in Lender's reasonable discretion, deems to constitute a Permitted
Encumbrance.
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(I) Misapplication of Funds. Distribute any Rents, Money or Proceeds
received from Accounts in violation of the provisions of Section 2.12, fail to
deliver any security deposit to Manager for deposit into the Security Deposit
Accounts, fail to deposit in the Property Collection Accounts any Rents, Money
or Proceeds received by a Borrower or Manager from any source other than the
Property Collection Accounts or the Cash Collateral Account or misappropriate
any security deposit or portion thereof.
(J) Certain Restrictions. Enter into any agreement which expressly
restricts the ability of any Borrower to enter into amendments, modifications or
waivers of any of the Loan Documents.
(K) Assignment of Licenses and Permits. Assign or transfer any of
its interest in any Permits pertaining to any Individual Property, or assign,
transfer or remove or permit any other Person to assign, transfer or remove any
records pertaining to any Individual Property (except for removal of records (i)
in the ordinary course of business or (ii) pursuant to court order or Legal
Requirements) without Lender's prior written consent, which consent may be
granted or refused in Lender's sole discretion.
(L) Place of Business. Change its chief executive office or its
principal place of business without giving Lender at least 30 days' prior
written notice thereof and promptly providing Lender such information as Lender
may reasonably request in connection therewith.
(M) Leases. (i) Enter into, amend or cancel Leases, except as
permitted by or pursuant to the Mortgages and the Assignments of Leases; and
(ii) notwithstanding the foregoing clause (i) or anything contained to the
contrary in the Mortgages or the Assignments of Leases and except in connection
with a tenant default, without the prior written consent of Lender, terminate,
reduce rents under or shorten the term of any Lease unless such action (taking
into account the planned alternative use of the affected space) does not
materially adversely affect the value of any Individual Property.
(N) Admission of Members. Except as permitted pursuant to Section
8.31, admit any Person as a member of OIP, MBP or NJA, unless (i) if such Person
is admitted as a managing member (w) such Person is a Single-Purpose Entity, (x)
such Person confirms to Lender in writing the representations and covenants
contained in Section 4.1(S) with respect to itself,
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(y) prior to such Person's admission as a managing member, a non-consolidation
opinion in form and substance acceptable to the Rating Agencies is delivered to
Lender and the Rating Agencies, and (z) if such admission occurs after the
Securitization Closing Date, each Rating Agency confirms in writing that such
Person's admission as a managing member will not result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any class of
Certificates and (ii) if such Person is admitted as a non-managing member of
Borrower owning in the aggregate 49% or more of the membership interests in
Borrower, (x) prior to such Person's admission as a non-managing member, a
non-consolidation opinion in form and substance acceptable to the Rating
Agencies is delivered to Lender and the Rating Agencies and (y) if such
admission occurs after the Securitization Closing Date, each Rating Agency
confirms in writing that such Person's admission as a non-managing member will
not result in a downgrade, qualification or withdrawal of the then current
ratings assigned to any class of Certificates.
(O) Joint Assessments; Separate Lots. Suffer, permit or initiate the
joint assessment of any Individual Property (i) with any other real property
constituting a separate tax lot, and (ii) with any portion of the Individual
Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Individual
Property as a single lien.
ARTICLE VII
DEFAULTS
Section 7.1. Event of Default. The occurrence of one or more of
the following events shall be an "Event of Default" hereunder:
(i) if on any Payment Date (x) the Required Debt Service Payment is
not made by Borrower or (y) during a Central Cash Management Period the
funds in the Debt Service Payment Sub-Account of the Cash Collateral
Account are insufficient to pay the Required Debt Service Payment due on
such Payment Date;
(ii) if Borrower fails to pay the outstanding Indebtedness on the
Maturity Date;
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(iii) if on the date that is ten Business Days prior to the date any
payment of a Basic Carrying Cost would become delinquent or on which any
interest, penalties or fines would be imposed, (x) such Basic Carrying
Cost is not paid by Borrower or (y) the funds in the Basic Carrying Costs
Sub-Account of either the Cash Collateral Account or the Servicer Account,
together with any funds in the Cash Collateral Account not allocated to
another Sub-Account of the Cash Collateral Account, are insufficient to
make such payment;
(iv) the occurrence of the event identified in Section 2.12(f),
2.12(g) or 2.12(i) as constituting an "Event of Default";
(v) if Borrower fails to pay any other amount payable pursuant to
this Agreement or any other Loan Document when due and payable in
accordance with the provisions hereof or thereof, as the case may be, and
such failure continues for 15 days after Lender delivers written notice
thereof to Borrower;
(vi) if any representation or warranty made by Borrower, MM, Manager
or MEI herein or in any other Loan Document, or in any report,
certificate, financial statement or other Instrument, agreement or
document furnished by Borrower in connection with this Agreement, the
Notes or any other Loan Document executed and delivered by a Borrower,
shall be false in any material respect as of the date such representation
or warranty was made;
(vii) if a Borrower or MM makes an assignment for the benefit of
creditors;
(viii) if a receiver, liquidator or trustee shall be appointed for a
Borrower or MM or if a Borrower or MM shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or
state law, shall be filed by or against, consented to, or acquiesced in
by, a Borrower or MM or if any proceeding for the dissolution or
liquidation of a Borrower or MM shall be instituted; provided, however,
that if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by a Borrower or MM, as the case may be,
upon the same not being discharged, stayed or dismissed
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within 60 days, or if a Borrower or MM shall generally not be paying its
debts as they become due;
(ix) if (x) a Borrower attempts to delegate its obligations or
assign its rights under this Agreement, any of the other Loan Documents or
any interest herein or therein, or (y) if any provision of Section 6.1(B)
or Section 6.1(C) is violated;
(x) (i) if any provision of (A) a Borrower's operating agreement or
certificate of incorporation and by-laws, as the case may be, or (B) the
certificate of incorporation or the by-laws of MM, affecting the purpose
for which such entity is formed is amended or modified in any material
respect which may adversely affect Lender or Servicer, or (ii) if a
Borrower or MM or any of their members or stockholders, respectively, (A)
fails to perform or enforce the provisions of Sections 3.1, 4.2, 7.3.C,
7.9.D, 11.1.D, 12.1, 13.1, 13.2.E, 14.1.C or Article 16 of a Borrower's
operating agreement or the 3rd, 6th, 7th, 8th, 9th, 10th or 11th articles
of a Borrower's certificate of incorporation, as the case may be, or the
3rd, 6th, 7th, 8th, 9th, 10th or 11th articles of MM's certificate of
incorporation or amends or modifies any such provisions without Lender's
consent or (B) fails to perform or enforce any other provisions of such
organizational documents such that Lender or Servicer may be materially
adversely affected or (C) attempts to dissolve a Borrower or MM, or (iii)
if a Borrower or MM breaches any of its representations, warranties or
covenants set forth in Section 4.1(S) or 6.1(E);
(xi) if an Event of Default as defined or described in the Notes,
the Mortgages, the Second Mortgages or any other Loan Document occurs,
whether as to a Borrower or any of its Individual Property or all or any
portion of the Mortgaged Property;
(xii) if a Borrower shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement, its respective
Note, the Mortgages, the Second Mortgages or the other Loan Documents, for
15 days after notice to such Borrower from Lender or its successors or
assigns, in the case of any Default which can be cured by the payment of a
sum of money (other than Events of Default pursuant to clauses (i), (ii),
(iii) and (iv) above as to which no grace period is applicable), or for 30
days
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after notice from Lender or its successors or assigns, in the case of any
other Default (unless otherwise provided herein or in such other Loan
Document); provided, however, that if such non-monetary Default is
susceptible of cure but cannot reasonably be cured within such 30 day
period and provided further that Borrower shall have commenced to cure
such Default within such 30 day period and thereafter diligently and
expeditiously proceeds to cure the same, such 30 day period shall be
extended for such time as is reasonably necessary for a Borrower in the
exercise of due diligence to cure such Default, but in no event shall such
period exceed 120 days after the original notice from Lender;
(xiii) if an event or condition specified in Section 5.1(S) shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, a Borrower or any ERISA Affiliate shall incur or in the
opinion of Lender shall be reasonably likely to incur a liability to a
Plan, a Multiemployer Plan or PBGC (or any combination of the foregoing)
which would constitute, in the determination of Lender, a Material Adverse
Effect; or
(xiv) if the representation made in connection with the
Securitization that the Principal Indebtedness does not exceed 125% of the
Tax Fair Market Value of the Mortgaged Property shall be false as of the
Securitization Closing Date, unless (x) REMIC status of any REMIC formed
in connection with the Securitization is maintained or regained due to
corrective actions taken by Borrower within any applicable cure period
under the Code or otherwise, and (y) Borrower furnishes Lender with an
opinion of outside counsel reasonably acceptable to Lender stating that
each REMIC Trust is a valid REMIC for federal income tax purposes;
then, upon the occurrence of any such Event of Default and at any time
thereafter, Lender or its successors or assigns, may, in addition to any other
rights or remedies available to it pursuant to this Agreement, the Notes, the
Mortgages, the Second Mortgages and the other Loan Documents, or at law or in
equity, take such action, without notice or demand, as Lender or its successors
or assigns, deems advisable to protect and enforce its rights against Borrower
and in and to all or any portion of the Mortgaged Property, including, without
limitation, declaring
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the entire Indebtedness to be immediately due and payable by written notice to
Borrower and may enforce or avail itself of any or all rights or remedies
provided in the Loan Documents against Borrower and/or the Mortgaged Property,
including, without limitation, all rights or remedies available at law or in
equity.
Section 7.2. Remedies. (a) Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers and other remedies
available to Lender against Borrower under this Agreement, the Notes, the
Mortgages, the Second Mortgages or any of the other Loan Documents executed by
or with respect to Borrower, or at law or in equity may be exercised by Lender
at any time and from time to time, whether or not all or any portion of the
Indebtedness shall be declared due and payable, and whether or not Lender shall
have commenced any foreclosure proceeding or other action for the enforcement of
its rights and remedies under any of the Loan Documents with respect to any
Individual Property or all or any portion of the Mortgaged Property. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents.
(b) In the event of the foreclosure or other action by Lender to
enforce its remedies in connection with one or more of the Individual Properties
or all or any portion of the Mortgaged Property, whether such foreclosure sale
(or other remedy) yields Net Proceeds in an amount less than, equal to or more
than the Allocated Loan Amount of such Individual Property or Mortgaged
Property, Lender shall apply all Net Proceeds received to repay the Indebtedness
in accordance with Section 2.8, Allocated Loan Amounts shall be adjusted (or not
adjusted) in accordance with the definition of "Allocated Loan Amount", the
Indebtedness shall be reduced to the extent of such Net Proceeds and the
remaining portion of the Indebtedness shall remain outstanding and secured by
the Mortgages, the Second Mortgages and the other Loan Documents, it being
understood and agreed by Borrower that, subject to Section 8.14, Borrower is
liable for the repayment of all the Indebtedness and that any "excess"
foreclosure proceeds are part of the cross-collateralized and cross-defaulted
security granted to Lender pursuant to the Mortgages and the Second Mortgages,
provided,
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however, that any Note shall be deemed to have been accelerated only to the
extent of the Net Proceeds actually received by Lender with respect to any
Individual Property and applied in reduction of the Indebtedness evidenced by
such Note in accordance with the provisions of the Note, after payment by
Borrower of all transaction costs and expenses and costs of enforcement.
Section 7.3. Remedies Cumulative. The rights, powers and remedies of
Lender under this Agreement shall be cumulative and not exclusive of any other
right, power or remedy which Lender may have against Borrower pursuant to this
Agreement or the other Loan Documents executed by or with respect to Borrower,
or existing at law or in equity or otherwise. Lender's rights, powers and
remedies may be pursued singly, concurrently or otherwise, at such time and in
such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of any Default or
Event of Default shall not be construed to be a waiver of any subsequent Default
or Event of Default or to impair any remedy, right or power consequent thereon.
Notwithstanding any other provision of this Agreement, Lender reserves the right
to seek a deficiency judgment or preserve a deficiency claim, in connection with
the foreclosure of a Mortgage or Second Mortgage on an Individual Property,
solely to the extent necessary to foreclose on other parts of the Mortgaged
Property.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the execution and delivery of this Agreement, the
making by Lender of the Loan and the execution and delivery by each Borrower to
Lender of the Notes, and shall continue in full force and effect as long as any
portion of the Indebtedness is outstanding and unpaid; provided, however, that
upon a prepayment with respect to a particular Individual Property as described
in Section 2.7(a) and upon satisfaction of the other conditions set forth in
Section 2.11, Borrower shall be released of all liability under this Agreement
(other than any liability
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with respect to environmental matters arising under Section 4.1(P) or 5.1(D) -
(I), inclusive, hereof), the Related Mortgages, the applicable Assignments of
Lease, and the other Loan Documents insofar as they concern such Individual
Property. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All covenants, promises and agreements in this Agreement contained, by or
on behalf of Borrower, shall inure to the benefit of the respective successors
and assigns of Lender. Nothing in this Agreement or in any other Loan Document,
express or implied, shall give to any Person other than the parties and the
holder(s) of the Notes, the Mortgages, the Second Mortgages and the other Loan
Documents, and their legal representatives, successors and assigns, any benefit
or any legal or equitable right, remedy or claim hereunder.
Section 8.2. Lender's Discretion. Whenever pursuant to this
Agreement, Lender exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive.
Section 8.3. Governing Law. (a) This Agreement was negotiated in New
York, and made by Lender and accepted by Borrower in the State of New York, and
the proceeds of the Notes were disbursed from New York, which State the parties
agree has a substantial relationship to the parties and to the underlying
transaction embodied hereby, and in all respects, including, without limitation,
matters of construction, validity and performance, this Agreement and the
obligations arising hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts made and
performed in such State and any applicable law of the United States of America.
To the fullest extent permitted by law, Borrower hereby unconditionally and
irrevocably waives any claim to assert that the law of any other jurisdiction
governs this Agreement and the Notes, and this Agreement and the Notes shall be
governed by and construed in accordance with the laws of the State of New York
pursuant to ss. 5-1401 of the New York General Obligations Law.
(b) Any legal suit, action or proceeding against Lender or Borrower
arising out of or relating to this Agreement
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shall be instituted in any federal or state court in New York, New York,
pursuant to ss. 5-1402 of the New York General Obligations Law, or in any
federal or state court in the jurisdiction in which any Individual Property is
located, and Borrower waives any objection which it may now or hereafter have to
the laying of venue of any such suit, action or proceeding, and Borrower hereby
irrevocably submits to the jurisdiction of any such court in any suit, action or
proceeding. Borrower does hereby designate and appoint CT Corporation System,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent to accept and
acknowledge on its behalf service of any and all process which may be served in
any such suit, action or proceeding in any such federal or state court, and
agrees that service of process upon said agent at said address (or at such other
office as may be designated by Borrower from time to time in accordance with the
terms hereof) with a copy to Borrower at c/▇ ▇▇▇▇▇▇▇ Enterprises, Inc., 808 High
Mountain Road, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, and written notice of said service of Borrower mailed or delivered
to Borrower in the manner provided in Section 8.6 shall be deemed in every
respect effective service of process upon Borrower, in any such suit, action or
proceeding. Borrower (i) shall give prompt notice to Lender of any changed
address of its authorized agent hereunder, (ii) may at any time and from time to
time designate a substitute authorized agent (whose office shall be designated
as the address for service of process), and (iii) shall promptly designate such
a substitute if its authorized agent is dissolved without leaving a successor.
Section 8.4. Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, the Notes or any other Loan Document, or consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
a writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.
Section 8.5. Delay Not a Waiver. Neither any failure nor any delay
on the part of Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under the Notes, or of any other Loan Document, or any
other
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instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Notes or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Notes
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.
Section 8.6. Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified United States mail, postage prepaid, or (b) expedited prepaid
delivery service, either commercial or United States Postal Service, with proof
of attempted delivery, addressed if to Lender at its address set forth on the
first page hereof, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, if to Servicer at such address
designated for Servicer upon its appointment, and if to Borrower c/▇ ▇▇▇▇▇▇▇
Enterprises, Inc. at Borrower's address set forth on the first page hereof,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or at such other address and Person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Section 8.6. A copy of all notices, consents, approvals and requests directed to
Lender shall be delivered to Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and copies
of all notices, consents, approvals and requests directed to Borrower (other
than statements setting forth the monthly amount payable under the Notes) shall
be delivered to each of: Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., and ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq. A notice shall be deemed to have been given: in the case of hand
delivery, at the time of delivery; in the case of certified mail, when delivered
or the first attempted delivery on a Business Day; or in the case of expedited
prepaid delivery and telecopy, upon the first attempted delivery on a Business
Day. A party receiving a notice which does not comply with the technical
requirements for notice under this Section 8.6 may elect to waive any
deficiencies and treat the notice as having been properly given.
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SECTION 8.7. TRIAL BY JURY. LENDER AND EACH BORROWER, TO THE FULLEST
EXTENT THAT THEY MAY LAWFULLY DO SO, WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY
HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS.
LENDER AND EACH BORROWER AGREE THAT THE OTHER PARTIES HERETO MAY FILE A COPY OF
THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF EACH OF THEIR KNOWING,
VOLUNTARY AND BARGAINED AGREEMENT IRREVOCABLY TO WAIVE THEIR RIGHT TO TRIAL BY
JURY, AND THAT, TO THE FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, ANY DISPUTE
OR CONTROVERSY WHATSOEVER BETWEEN A BORROWER AND LENDER SHALL INSTEAD BE TRIED
IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
Section 8.8. Headings. The Article and Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.9. Assignment. Lender shall have the right to sell,
transfer, assign or securitize this Agreement and/or any of the other Loan
Documents and the obligations hereunder or thereunder to any Person. The parties
hereto acknowledge that Lender expects to sell, transfer and assign this
Agreement, the Notes, the Mortgages, the Second Mortgages and the other Loan
Documents to Trustee in connection with a Securitization. All references to
"Lender" hereunder shall be deemed to include the assigns of Lender, and the
parties hereto acknowledge that actions taken by Lender hereunder may be taken
(x) by Servicer on Lender's behalf (to the extent provided in the Interim
Servicing Agreement) or (y) after the Securitization Closing Date, by Servicer,
on behalf of Trustee, pursuant to any pooling and servicing agreement executed
in connection with the Securitization. Following the assignment of this
Agreement, the Notes, the Mortgages, the Second Mortgages and the other Loan
Documents by Nomura Asset Capital Corporation ("NACC") in connection with the
Securitization, in addition to providing notices to Lender's assignee in
accordance with instruments received from such assignee, Borrower shall continue
to send copies of all notices and other communications (including, without
limitation, reports under Section 5.1(Q)) to NACC at the address set forth in
Section 8.6 or to such other address as may be designated by NACC pursuant to
Section 8.6. Borrower shall not be entitled to assign its rights hereunder,
except as provided in Section 8.31.
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Section 8.10. Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
Section 8.11. Preferences. Lender shall have no obligation to
marshal any assets in favor of any Borrower or any other party or against or in
payment of any or all of the obligations of Borrower pursuant to this Agreement,
the Notes or any other Loan Document. Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by Borrower
to any portion of the obligations of Borrower hereunder. To the extent Borrower
makes a payment or payments to Lender for Borrower's benefit, which payment or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
received, the obligations hereunder or part thereof intended to be satisfied
shall be revived and continue in full force and effect, as if such payment or
proceeds had not been received by Lender.
Section 8.12. Waiver of Notice. Borrower shall not be entitled to
any notices of any nature whatsoever from Lender except with respect to matters
for which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents does not specifically and expressly
provide for the giving of notice by Lender to Borrower.
Section 8.13. [INTENTIONALLY OMITTED]
Section 8.14. Exculpation. Notwithstanding anything herein or in any
other Loan Document to the contrary, except as otherwise set forth in this
Section 8.14 to the contrary, Lender shall not enforce the liability and
obligation of any Borrower (or of a Borrower's members or shareholders, if and
to the
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extent such liability or obligation exists or arises) to perform and observe the
obligations contained in this Agreement, the Notes, the Mortgages, the Second
Mortgages or any of the other Loan Documents executed and delivered by a
Borrower by any action or proceeding wherein a money judgment shall be sought
against a Borrower or its members or shareholders, except that Lender may bring
a foreclosure action, action for specific performance or other appropriate
action or proceeding (including, without limitation, to obtain a deficiency
judgment) against a Borrower solely for the purpose of enabling Lender to
realize upon (i) a Borrower's interest in the Mortgaged Property, (ii) the Rents
and Accounts arising from the Individual Properties to the extent received by a
Borrower or a Manager after the occurrence of an Event of Default and not
deposited in the applicable Property Collection Account pursuant to Section
2.12(a) (all such Rents and Accounts, the "Recourse Distributions") and (iii)
any other collateral given to Lender under the Loan Documents ((i), (ii) and
(iii), collectively, the "Default Collateral"); provided, however, that any
judgment in any such action or proceeding shall be enforceable against Borrower
only to the extent of any such Default Collateral. The provisions of this
Section 8.14 shall not, however, (a) impair the validity of the Indebtedness
evidenced by the Notes or in any way affect or impair the Liens of the
Mortgages, the Second Mortgages or any of the other Loan Documents or the right
of Lender to foreclose the Mortgages or the Second Mortgages following an Event
of Default; (b) impair the right of Lender to name a Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under any of
the Mortgages or the Second Mortgages; (c) affect the validity or enforceability
of the Notes, the Mortgages, the Second Mortgages or the other Loan Documents
subject to the limitations of this Section 8.14; (d) impair the right of Lender
to obtain the appointment of a receiver; (e) impair the enforcement of the
Assignments of Leases, the Second Assignments to Leases, the Assignments of
Agreements, the Second Assignments of Agreements or the Manager's Subordinations
(subject to the nonrecourse provisions thereof); (f) impair the right of Lender
to bring suit for actual (but not consequential) damages, losses and costs
resulting from (i) fraud, (ii) intentional misrepresentation, (iii) physical
waste or removal of the Mortgaged Properties or any portion thereof other than
as permitted pursuant to the Loan Documents or (iv) disposal of the Mortgaged
Properties or any portion thereof other than as permitted pursuant to the Loan
Documents, in each case by a Borrower, MM, Manager, MEI or any of their
respective Affiliates in connection with this Agreement, the Notes, the
Mortgages, the Second Mortgages or the
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other Loan Documents; (g) impair the right of Lender to obtain the Recourse
Distributions received by a Borrower, including, without limitation, the right
to proceed against a Borrower's members or shareholders to the extent any
Recourse Distributions have actually theretofore been distributed to a
Borrower's members or shareholders; (h) impair the right of Lender to bring suit
with respect to a Borrower's misappropriation of security deposits or Rents
collected more than one month in advance; (i) impair the right of Lender to
obtain Insurance Proceeds or Condemnation Proceeds due to Lender pursuant to the
Mortgages or the Second Mortgages; (j) impair the right of Lender to enforce the
provisions of Section 4.1(P) or 5.1(D)-(I) even after repayment in full of the
Indebtedness; (k) prevent or in any way hinder Lender from exercising, or
constitute a defense, or counterclaim, or other basis for relief in respect of
the exercise of, any other remedy against any or all of the Collateral as
provided in the Loan Documents; (l) impair the right of Lender to bring suit
with respect to any misapplication of any funds; (m) impair the right of Lender
to ▇▇▇ for, seek or demand a deficiency judgment against a Borrower (but not a
Borrower's members or shareholders) solely for the purpose of foreclosing the
Mortgaged Property or any part thereof, or realizing upon the Default
Collateral; provided, however, that any such deficiency judgment referred to in
this clause (m) shall be enforceable against a Borrower only to the extent of
any of the Default Collateral; or (n) impair the right of Lender to enforce the
Guaranty. The provisions of this Section 8.14 shall be inapplicable to a
Borrower if any petition for bankruptcy, reorganization or arrangement pursuant
to federal or state law shall be filed by, consented to or acquiesced in by or
with respect to such Borrower, or if a Borrower shall institute any proceeding
for the dissolution or liquidation of itself, or if a Borrower shall make an
assignment for the benefit of creditors, in which event Lender shall have
recourse against all of the assets of such Borrower and the interests in such
Borrower owned by, and the Recourse Distributions received by, such Borrower's
members or shareholders (but excluding all other assets of such Borrower's
members or shareholders). Notwithstanding the foregoing, in the event an
Individual Property is released from the lien created by the Related Mortgages,
Borrower shall be released in all respects from any further liability with
respect to the Loan other than any further liability for certain kinds of
environmental matters arising under Section 4.1(P) or 5.1(D) - (I) as the same
applies to such Individual Property.
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Section 8.15. Exhibits Incorporated. The information set forth on
the cover, heading and recitals hereof, and the Exhibits attached hereto, are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.
Section 8.16. Offsets, Counterclaims and Defenses. Any assignee of
Lender's interest in and to this Agreement, the Notes, the Mortgages, the Second
Mortgages and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to this Agreement, the
Notes, the Mortgages, the Second Mortgages and the other Loan Documents which
Borrower may otherwise have against any assignor of this Agreement, the Notes,
the Mortgages, the Second Mortgages and the other Loan Documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower in
any action or proceeding brought by any such assignee upon this Agreement, the
Notes, the Mortgages, the Second Mortgages and other Loan Documents and any such
right to interpose or assert any such unrelated offset, counterclaim or defense
in any such action or proceeding is hereby expressly waived by Borrower.
Section 8.17. No Joint Venture or Partnership; Mutual
Representation. Borrower and Lender intend that the relationship created
hereunder be solely that of borrower and lender. Nothing herein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in the
Mortgaged Property other than that of mortgagee or lender. Lender and Borrower
hereby represent to the other that the transaction contemplated hereby is not
being entered into as part of an agreed upon arrangement to subsequently
collateralize the Loan with non real estate collateral (i.e., in lieu of the
Individual Properties which are being encumbered by the Related Mortgages).
Section 8.18. Waiver of Marshalling of Assets Defense. To the
fullest extent Borrower may legally do so, Borrower waives all rights to a
marshalling of the assets of Borrower and Persons with interests in Borrower,
and of the Mortgaged Property, or to a sale in inverse order of alienation in
the event of foreclosure of the interests hereby created, and agrees not to
assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the
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right of Lender under the Loan Documents to a sale of the Individual Property
for the collection of the Indebtedness without any prior or different resort for
collection, or the right of Lender to the payment of the Indebtedness out of the
Net Proceeds of the Individual Property in preference to every other claimant
whatsoever.
Section 8.19. Waiver of Counterclaim. Borrower hereby waives the
right to assert a counterclaim, other than compulsory counterclaim, in any
action or proceeding brought against it by Lender or its agents, including,
without limitation, Servicer.
Section 8.20. Conflict; Construction of Documents. In the event of
any conflict between the provisions of this Agreement and the provisions of the
Notes, the Mortgages, the Second Mortgages or any of the other Loan Documents,
the provisions of this Agreement shall prevail. The parties hereto acknowledge
that they were represented by counsel in connection with the negotiation and
drafting of the Loan Documents and that the Loan Documents shall not be subject
to the principle of construing their meaning against the party which drafted
same.
Section 8.21. Brokers and Financial Advisors. Borrower and Lender
hereby represent that they have dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower and Lender hereby agree to
indemnify and hold each other and Servicer harmless from and against any and all
claims, liabilities, costs and expenses of any kind in any way relating to or
arising from a claim by any Person that such Person acted on behalf of the
indemnifying party in connection with the transactions contemplated herein. The
provisions of this Section 8.21 shall survive the expiration and termination of
this Agreement and the repayment of the Indebtedness.
Section 8.22. Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument.
Section 8.23. Estoppel Certificates. Borrower and Lender each hereby
agree at any time and from time to time upon not less than 15 days prior written
notice by Borrower or Lender to execute, acknowledge and deliver to the party
specified in such notice, a statement, in writing, certifying that this
Agreement is unmodified and in full force and effect (or if
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there have been modifications, that the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
knowledge of such certifying party, any Default or Event of Default has occurred
and is then continuing, and, if so, specifying each such Default or Event of
Default; provided, however, that it shall be a condition precedent to Lender's
obligation to deliver the statement pursuant to this Section 8.23, that Lender
shall have received, together with Borrower's request for such statement, an
Officer's Certificate stating that no Event of Default or, to Borrower's
knowledge, Default exists as of the date of such certificate (or specifying such
Default or Event of Default).
Section 8.24. Payment of Expenses. Borrower shall, whether or not
the Transactions are consummated, pay all of the following Transaction Costs on
demand: (a) reasonable out-of-pocket costs and expenses of Lender in connection
with (i) the negotiation, preparation, execution and delivery of the Loan
Documents and the documents and instruments referred to therein, (ii) the
creation, perfection or protection of Lender's Liens in the Collateral
(including, without limitation, fees and expenses for title and lien searches
and filing and recording fees, third party due diligence expenses, accounting
firm fees, costs of the Environmental Reports (and an environmental consultant),
the Engineering Reports and the appraisals), (iii) the negotiation, preparation,
execution and delivery of any amendment, waiver or consent relating to any of
the Loan Documents, and (iv) the preservation of rights under and enforcement of
the Loan Documents and the documents and instruments referred to therein,
including any restructuring or rescheduling of the Indebtedness, (b) the
reasonable fees, expenses and disbursements of counsel to Lender in connection
with all of the foregoing, and (c) in connection with the Securitization only,
reasonable fees, expenses and disbursements of counsel to Servicer and to
Trustee in connection with their review of the Loan Documents and any de minimis
expenses of Servicer and Trustee. Transaction Costs (inclusive of the foregoing)
relating to the Securitization are subject to the limitation set forth in
Section 2.15.
Section 8.25. Bankruptcy Waiver. Borrower hereby agrees that, in
consideration of the recitals and mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, in the event Borrower shall (i) file with any bankruptcy
court of competent jurisdiction or be the subject of any petition under Title 11
of the U.S. Code, as amended, (ii) be the subject of any order for relief issued
under Title 11 of the U.S. Code, as
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amended, (iii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future law relating to bankruptcy,
insolvency or other relief of debtors, (iv) have sought or consented to or
acquiesced in the appointment of any trustee, receiver, conservator or
liquidator or (v) be the subject of any order, judgment or decree entered by any
court of competent jurisdiction approving a petition filed against such party
for any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency or other relief for debtors, the
automatic stay provided by the Federal Bankruptcy Code shall be modified and
annulled as to Lender, so as to permit Lender to exercise any and all of its
remedies, upon request of Lender made on notice to Borrower and any other party
in interest but without the need of further proof or hearing. Neither Borrower
nor any Affiliate of Borrower shall contest the enforceability of this Section
8.25.
Section 8.26. Indemnification. MEI and Borrower shall indemnify,
defend and hold harmless Lender, and each of its Affiliates, directors,
officers, employees, attorneys, agents (including, without limitation,
Servicer), successors and assigns (the "Indemnified Parties"), from and against
all damages (excluding consequential damages), liabilities, claims, actions,
penalties and fines (collectively and severally, "Losses") which may be imposed
upon, asserted against or incurred or paid by any of them resulting from the
claims of any third party relating to or arising out of (i) the Mortgaged
Property or any of the Loan Documents, (ii) any act performed or omitted to be
performed by any Indemnified Party under any of the Loan Documents or (iii) any
transaction arising out of or in any way connected with the Mortgaged Property
or any of the Loan Documents, except for Losses caused by (x) the gross
negligence, bad faith or willful misconduct of any Indemnified Party or a breach
by any Indemnified Party of its obligations under the Loan Documents (as
established by a final, non-appealable judicial determination) or (y) actions
taken or omitted to be taken by any Indemnified Party after such Indemnified
Party becomes a mortgagee in possession or otherwise takes possession or control
of an Individual Property following an Event of Default or acquires title to an
Individual Property through foreclosure, deed in lieu of foreclosure or
otherwise, and periodically reimburse each Indemnified Party on demand for any
expenses (including the reasonable attorneys' fees and disbursements) reasonably
incurred in connection with the
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investigation of, preparation for or defense of any actual or threatened claim,
action or proceeding arising therefrom (including any such costs of responding
to discovery requests or subpoenas), regardless of whether Lender or such other
Indemnified Party is a party thereto. It shall be MEI's and Borrower's burden to
prove that any Loss is caused by the gross negligence, bad faith or willful
misconduct or actions or failure to act of an Indemnified Party or a breach by
any Indemnified Party of its obligations under the Loan Documents. The
indemnification provided by Borrower and MEI in this Section 8.26 is not
intended to cover the matters covered by Borrower's indemnifications described
in Section 2.15 or Section 5.1(I) and shall not in any way alter, increase or
decrease the Borrower's indemnification obligations pursuant to Section 2.15 or
Section 5.1(I). With reference to the provisions set forth above in this Section
8.26 for payment by Borrower and MEI of reasonable attorneys' fees incurred by
the Indemnified Parties in any action or claim brought by a third party,
Borrower and MEI shall diligently defend such Indemnified Party and diligently
conduct such defense, and, provided MEI and Borrower demonstrates to the
reasonable satisfaction of the applicable Indemnified Party its ability to pay
for any settlement amount agreed to by MEI or Borrower, MEI or Borrower may
settle any such action or claim or consent to an entry of any judgment related
thereto without the prior written consent of any Indemnified Party to the extent
such judgment or claim is for the payment of money. If the Indemnified Party
desires to engage separate counsel, it may do so at its own expense; provided,
however, that such limitation on the obligation of MEI and Borrower to pay the
fees of separate counsel for such Indemnified Party shall not apply if such
Indemnified Party has retained such separate counsel because of a reasonable
belief (based upon reasonable inquiry) that MEI and Borrower are not diligently
defending it and/or not diligently conducting the defense and so notifies MEI
and Borrower. The Loan shall not be considered to have been paid in full unless
all obligations of MEI and Borrower under this Section 8.26 shall have been
fully performed (except for contingent indemnification obligations for which no
claim has actually been made pursuant to this Agreement). This Section 8.26
shall survive repayment in full of the Loan.
Section 8.27. Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto and the other Loan Documents, constitutes the
entire agreement among the parties hereto with respect to the subject matter
contained in
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this Agreement, the Exhibits and Schedules hereto and the other Loan Documents.
Section 8.28. Cross Collateralization. Without limitation of any
other right or remedy provided to Lender in this Agreement or any of the other
Loan Documents, each Borrower covenants and agrees that upon the occurrence of
an Event of Default, (i) Lender shall have the right to pursue all of its rights
and remedies in one proceeding, or separately and independently in separate
proceedings which it, as Lender, in its sole and absolute discretion, shall
determine from time to time, (ii) Lender is not required to either ▇▇▇▇▇▇▇▇
assets, sell Collateral in any inverse order of alienation, or be subjected to
any "one action" or "election of remedies" law or rule, (iii) the exercise by
Lender of any remedies against any Collateral will not impede Lender from
subsequently or simultaneously exercising remedies against any other Collateral,
(iv) all Liens and other rights, remedies and privileges provided to Lender in
this Agreement and in the other Loan Documents or otherwise shall remain in full
force and effect until Lender has exhausted all of its remedies against the
Collateral and all Collateral has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Loan and (v) its Individual Properties
shall be security for the performance of all obligations hereunder and under the
other Loan Documents.
Section 8.29. Confidentiality. Borrower shall keep, and shall cause
its Affiliates, partners, members, shareholders, employees, legal counsel and
other advisors to keep, the terms of this Agreement, the Loan and the other Loan
Documents strictly confidential and will not, directly or indirectly, disclose
such terms without Lender's prior written consent, unless required to make such
disclosure by law or in connection with the REIT's public reporting requirements
or as so advised by counsel or auditors or recommended by the REIT's board of
directors, if such material would customarily be disclosed in connection with
such public reporting. Borrower shall endeavor to deliver all press releases
relating to the terms of this Agreement, the Loan, the other Loan Documents and
the Manager's Subordinations to Lender for its review at least 24 hours prior to
releasing such items. Lender shall have the right to issue press releases,
advertisements and other promotional materials describing Lender's origination
of the Loan or a Securitization.
Section 8.30. Defeasance. (a) In the event a Borrower exercises its
option to defease the Loan pursuant to Section 2.6 or is obligated to make a
mandatory defeasance pursuant to
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Section 2.7(a) or Section 8.33, such Borrower shall defease the Loan in
compliance with the following conditions precedent:
(i) the delivery by such Borrower of not less than 30 days' prior
written notice to Lender specifying a regularly scheduled Payment Date
(the "Defeasance Date") on which the Defeasance Deposit is to be made and
the principal amount to be defeased;
(ii) the payment to Lender of all scheduled interest and principal
payments due and unpaid on the Defeasance Date;
(iii) with respect to defeasance of the Loan in whole pursuant to
Section 2.6 only, the payment to Lender of all other sums due under the
applicable Note, the Mortgages, the Second Mortgages and the other Loan
Documents;
(iv) with respect to defeasance of the Loan pursuant to Section
2.7(a) or Section 8.33 only, payment of all other amounts due under the
Related Mortgages;
(v) the payment to Lender of the Defeasance Deposit on the
Defeasance Date;
(vi) with respect to defeasance of the Loan in whole pursuant to
Section 2.6 after a Securitization, the defeasance shall be in connection
with a Transfer of all of the Individual Properties or any other customary
commercial transaction, and not as part of an arrangement to collateralize
the REMIC Trust with obligations that are not real estate mortgages;
(vii) the delivery to Lender of:
(A) a security agreement, in form and substance reasonably
satisfactory to Lender, creating a first priority lien on the
Defeasance Deposit and the U.S. Obligations purchased on behalf of
Borrower with the Defeasance Deposit in accordance with this
provision of this Section 8.30 (the "Security Agreement");
(B) with respect to defeasance of the Loan in whole pursuant
to Section 2.6 only, releases for each of the Individual Properties
from the Liens of the Related Mortgages, the Assignments of Leases,
the Second Assignment of Leases, the Assignments of
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Agreements, the Second Assignment of Agreements and UCC-1 financing
statements (for execution by Lender) in forms appropriate for the
jurisdiction in which each Individual Property is located;
(C) with respect to defeasance of the Loan pursuant to Section
2.7(a) or Section 8.33(b) only, the releases described in Section
2.11(a) (for execution by Lender) in forms appropriate for the
jurisdiction in which the applicable Individual Property is located;
(D) an Officer's Certificate certifying that the requirements
set forth in this Section 8.30 have been satisfied;
(E) an opinion of counsel for Borrower in form reasonably
satisfactory to Lender stating, among other things, that Lender has
a perfected security interest in the Defeasance Deposit and a first
priority perfected security interest in the U.S. Obligations
purchased by Lender on behalf of Borrower;
(F) a certificate from an accounting firm reasonably
acceptable to Lender (any "Big Six" accounting firm being deemed
acceptable to Lender) certifying that the U.S. Obligations
constituting the Defeasance Deposit meet the criteria set forth in
the definition of "U.S. Obligations" in Article I hereof, and that
the Defeasance Deposit is in an amount sufficient to purchase the
U.S. Obligations and to make the Scheduled Defeasance Payments in a
timely manner; and
(G) such other certificates, documents or instruments as
Lender may reasonably request, including, without limitation, an
opinion of counsel for Borrower in form reasonably satisfactory to
Lender stating that such defeasance shall not affect the REMIC
status of the REMIC Trust, and any other certificates, documents or
instruments reasonably required in connection with a Securitization;
and
(viii) Lender shall have received confirmation in writing from the
applicable Rating Agencies that such defeasance will not result in a
qualification, withdrawal or downgrading of the ratings in effect
immediately prior
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to such defeasance for any of the Certificates which are then outstanding.
In connection with the conditions set forth above, Borrower hereby
appoints Lender as its agent and attorney-in-fact for the purpose of using
the Defeasance Deposit to purchase U.S. Obligations which provide
Scheduled Defeasance Payments, and Lender shall upon receipt of the
Defeasance Deposit purchase such U.S. Obligations on behalf of Borrower.
Borrower, pursuant to the Security Agreement or other appropriate
document, shall authorize and direct that the payments received from the
U.S. Obligations shall be made directly to Lender and applied to satisfy
the obligations of Borrower under the Notes.
(b) With respect to defeasance of the Loan in whole pursuant to
Section 2.6 or Section 8.33(b), upon compliance with the requirements of
Section 8.30(a), (i) the Mortgaged Property shall be released from the
liens of the Related Mortgages, the Assignments of Leases, the Second
Assignment of Leases, the Assignments of Agreements, the Second Assignment
of Agreements and the UCC-1 financing statements and (ii) the pledged U.S.
Obligations shall be the sole source of collateral securing the Notes.
With respect to a defeasance to prepay the Loan pursuant to Section 2.7(a)
or Section 8.33(b), upon compliance with the requirements of Section
8.30(a) the applicable Individual Property or Properties shall be released
pursuant to Section 2.11(a).
(c) Any portion of the Defeasance Deposit in excess of the amount
necessary to purchase the U.S. Obligation required by Section 8.30(a) or
to satisfy the other requirements of Section 8.30(a) shall be remitted to
Borrower.
(d) Borrower shall have the right to assign to a Single-Purpose
Entity acceptable to Lender, and such assignee shall have the obligation
to assume, the obligations under the Loan Documents relating to the
principal amount so defeased.
Section 8.31. Permitted Restructuring. Notwithstanding the
provisions of Sections 6.1(B) and 6.1(N), the following restructuring relating
to Borrower shall not constitute a Default or Event of Default under this
Agreement:
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(a) the merger of FLIP S CORP into the REIT, and in connection
therewith, the merger of FLIP into NEW FLIP;
(b) the transfer by MM of all of its 1% interests as managing member
in each of OIP, MBP and NJA to NEW MM; and
(c) the transfer by the non-managing member of each of NJA, MBP and
OIP of its respective 99% membership interest in NJA, MBP and OIP to the
Operating Partnership,
provided, however, that the following conditions are satisfied:
(i) the transfers and mergers described in this Section 8.31 occur
substantially simultaneously;
(ii) Lender shall have received a copy of the certificate of
incorporation for NEW FLIP substantially in the form attached hereto as Exhibit
Z, certified by the Secretary of State for the State of New Jersey;
(iii) Lender shall have received a copy of the certificate of
incorporation for NEW MM substantially in the form attached hereto as Exhibit
AA, certified by the Secretary of State for the State of New Jersey;
(iv) Lender shall have received certificates of good standing for
each of NEW FLIP and NEW MM from the Secretary of State for the State of New
Jersey;
(v) NEW FLIP shall have executed and delivered to Lender, and, to
the extent reasonably required by Lender, recorded or filed in the appropriate
jurisdictions, all agreements and instruments reasonably required by Lender to
reflect NEW FLIP's assumption of the due and punctual performance and observance
of each covenant and condition of this Agreement, the Note made by FLIP and all
other Loan Documents to which FLIP is a party;
(vi) Lender shall have received an opinion of counsel reasonably
acceptable to Lender to the effect that all such agreements or instruments by
NEW FLIP effecting such assumptions are enforceable in accordance with their
terms;
(vii) Lender shall have received such endorsements to, or
replacements of, its Title Insurance Policies, as Lender shall reasonably
determine to be necessary;
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(viii) Lender shall have received amendments to the certificates of
formation (certified by the Secretary of State of New Jersey) and the operating
agreements of OIP, MBP and NJA, reflecting the change in ownership of the 1%
managing member therein from MM to NEW MM and the change in ownership of the 99%
interest of the respective non-managing member to the Operating Partnership;
(ix) Lender shall have received from Borrower's counsel reasonably
acceptable to Lender a non-consolidation opinion substantially in the form
attached hereto as Exhibit N (subject to (a) changes in law or fact after the
date hereof, (b) changes requested by the Rating Agencies (to the extent such
changes are consistent with applicable law or facts) and (c) customary due
diligence), after giving effect to the transfers and mergers contemplated by
this Section 8.31, in form and substance reasonably acceptable to Lender; and
(x) Borrower shall pay all reasonable expenses incurred by Lender in
connection with such transaction, provided, however, that such payment shall not
exceed .5% of the Principal Indebtedness.
Section 8.32. Substitution of Individual Properties. Borrower shall
have the right, at any time and from time to time, to obtain the release of one
or more Individual Properties from the Liens relating to this Loan upon the
substitution therefor of real estate of similar quality (a "Substitute
Property"), upon satisfaction of the following conditions:
(i) no Event of Default shall have occurred and be continuing;
(ii) the Allocated Loan Amounts of the Individual Properties so
released may not exceed, in the aggregate, $11,250,000;
(iii) the representations and warranties set forth in this
Agreement, the Loan Documents and any documents executed in connection with the
release and substitution (the "Substitution Documents") shall be true and
correct in all material respects as to the Substitute Property on the date such
release and substitution takes place (the "Substitution Closing Date");
(iv) the Debt Service Coverage Ratio of the remaining Individual
Properties (considered as a whole) after such release
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and substitution (including the Substitute Property) would not be less than the
greater of (x) the Debt Service Coverage Ratio for all Individual Properties
(including the Individual Property to be released) (considered as a whole)
calculated immediately prior to the release and substitution or (y) the Debt
Service Coverage Ratio of all Individual Properties (including the Individual
Property to be released) (considered as a whole) in effect on the Closing Date;
(v) Borrower shall deliver to Lender and the Rating Agencies (at the
addresses provided by Lender at Borrower's request) a written request for such
release and substitution at least 30 days prior to the proposed Substitution
Closing Date and shall submit with such request (1) the items described in Part
A of Schedule 7 attached hereto and (2) such other information, including,
without limitation, financial information, as the Rating Agencies may request;
(vi) the Rating Agencies shall have confirmed in writing, which
confirmation may be granted or withheld in the Rating Agencies' sole and
absolute discretion, that such release and substitution will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any class of the Certificates;
(vii) the Rating Agencies shall have received opinions satisfactory
to each of them that such release and substitution will not affect the status of
the REMIC Trust and covering such other matters, such as authorization and
enforceability, relating to the release and substitution as the Rating Agencies
may request;
(viii) on or before the Substitution Closing Date, Borrower shall
have executed and delivered to Lender documents and certificates set forth in
Part B of Schedule 7 attached hereto;
(ix) all reasonable expenses incurred by Lender, the Rating Agencies
and the Servicer in connection with such release and substitution are paid by
Borrower; and
(x) Borrower shall represent and warrant to Lender in writing that
as of the Substitution Closing Date, (i) the Tax Fair Market Value of each
Individual Property, including the Substitute Property and excluding the
Individual Property to be released), is equal to or greater than the Allocated
Loan Amount for such Individual Property and (ii) the Tax Fair Market Value
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of the Mortgaged Property, after giving effect to the substitution, is equal to
or exceeds the Principal Indebtedness.
Within 30 days after satisfaction of the conditions set forth in
clause (v) above, subject to the satisfaction of the other conditions contained
in this Section 8.32, Lender and Borrower shall cooperate with each other and
use reasonable efforts to close such transaction.
Section 8.33. Purchase Option Obligations. Notwithstanding anything
to the contrary contained herein or in the other Loan Documents, subject to the
satisfaction by Borrower of the terms and conditions contained in (i) paragraph
(a) of this Section 8.33 and (ii) either paragraph (b), (c) or (d) of this
Section 8.33, Borrower shall be permitted to transfer all, and not less than
all, of the Individual Property affected by the Purchase Option noted in item
(1) of Schedule 5 (the "Purchase Option Property") to the tenant (the "Tenant
Purchaser") upon exercise by such tenant of the Purchase Option. The Transfer of
the Purchase Option Property (the "Purchase Option Closing") shall be made in
accordance with the terms of the Purchase Option and the terms hereof.
(a) Notices; Reserves; Central Cash Management. Within ten Business Days
of Borrower's receipt of notice of the Tenant Purchaser's election to exercise
the Purchase Option, Borrower shall notify Lender of such election. Borrower
shall notify Lender again within ten Business Days after Borrower and the Tenant
Purchaser have agreed, pursuant to the related lease, upon the purchase price to
be paid for the Purchase Option Property (the "Purchase Option Purchase Price"),
which notice shall state the Purchase Option Purchase Price. Upon Lender's
receipt of such notice of the Purchase Option Purchase Price, if the Purchase
Option Purchase Price is less than 105% of the Defeasance Deposit required to
defease a portion of the Loan equal to the Release Price of the Purchase Option
Property (as reasonably determined by Lender), a Central Cash Management Period
shall commence. During such Central Cash Management Period, any funds remaining
in the Cash Collateral Account after allocation of the minimum amounts pursuant
to clauses (i), (ii), (iii) and (iv) of Section 2.12(g) and after allocation to
the Operating Expense Sub-Account as required under Section 2.12(g), shall be
funded into a reserve sub-account (the "Purchase Option Sub-Account"). Any costs
of Lender in connection with the Purchase Option Closing not covered by funds as
set forth in paragraphs (b), (c), and (d) below, shall be paid by Borrower upon
demand.
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(b) Defeasance. On the date of the Purchase Option Closing (which must be
the Defeasance Date), Borrower may elect to defease a principal portion of the
Loan in an amount equal to the Release Price for the Purchase Option Property
pursuant to Section 8.30. Upon such defeasance, Lender shall release the Liens
of the Related Mortgages and other Loan Documents with respect to the Purchase
Option Property as set forth in Section 2.11 and the Central Cash Management
Period, if triggered by the agreement of the Tenant Purchaser and Borrower upon
the Purchase Option Purchase Price, shall be terminated. Upon such defeasance,
any funds in the Purchase Option Sub-Account and funds in other Sub-Accounts
relating to the Purchase Option Property shall (i) first, be released to Lender
and applied to Lender's costs in connection with the Purchase Option, to the
extent not previously paid by Borrower and (ii) second, released to Borrower.
(c) Substitute Property. Borrower may elect to substitute property for the
Purchase Option Property. If Borrower so elects, Borrower shall:
(i) at least 30 days prior to the Purchase Option Closing, identify a
Substitute Property and deliver to Lender all requests, documents and other
items specified in Section 8.32(v); and
(ii) on the date of the Purchase Option Closing, satisfy all other terms
and conditions of Section 8.32 and cause a Substitute Property to be substituted
for the Purchase Option Property.
Upon such substitution, Lender shall release the Liens of the Related Mortgages
and other Loan Documents with respect to the Purchase Option Property as set
forth in Section 2.11 and the Central Cash Management Period, if triggered by
the agreement of the Tenant Purchaser and Borrower upon the Purchase Option
Purchase Price, shall be terminated. Upon such substitution, any funds in the
Purchase Option Sub-Account and funds in other Sub-Accounts relating to the
Purchase Option Property shall (i) first, be released to Lender and applied to
Lender's costs in connection with the Purchase Option, to the extent not
previously paid by Borrower, and (ii) second, released to Borrower.
(d) Purchase Option Sub-Account; Defeasance. If Borrower fails to defease
the Loan pursuant to paragraph (b) of this
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Section 8.33 or to substitute the Purchase Option Property with a Substitute
Property in accordance with paragraph (c) of this Section 8.33, such failure
shall not constitute a Default or Event of Default hereunder, provided, however,
that (i) the price paid by Tenant Purchaser to acquire the Purchase Option
Property shall be deposited into the Purchase Option Sub-Account; (ii)
simultaneously with the deposit described in clause (i), (x) Lender shall
release the Liens of the Related Mortgages and other Loan Documents with respect
to the Purchase Option Property as set forth in Section 2.11 and (y) all amounts
in Sub-Accounts relating to the Purchase Option Property shall be transferred to
the Purchase Option Sub-Account; and (iii) the Central Cash Management Period
triggered by the agreement of the Tenant Purchaser and Borrower upon the
Purchase Option Purchase Price shall continue, or, if not so triggered, a
Central Cash Management Period shall immediately commence and continue, until
the amount of the funds deposited in the Purchase Option Sub-Account (after
payment of Lender's costs) is sufficient to defease a portion of the Loan equal
to the Release Price of the Purchase Option Property, at which time Lender shall
use such funds to defease such portion of the Loan pursuant to Section 8.30.
"Purchase Option Obligations" shall mean any one of the following: (1)
Borrower's defeasance obligation under paragraph (b) of this Section 8.33; (2)
Borrower's substitution obligation under paragraph (c) of this Section 8.33, and
(3) defeasance of the Loan as provided in paragraph (d) of this Section 8.33.
Any election made by Borrower under paragraphs (b) or (c) of this Section 8.33
shall be made in writing at least 30 days prior to the Purchase Option closing.
Upon Lender's receipt of written confirmation from Borrower and the Tenant
Purchaser that the parties have agreed not to consummate the Purchase Option
Closing, the Central Cash Management Period triggered by the agreement of the
Tenant Purchaser and Borrower upon the Purchase Option Purchase Price, if any,
shall terminate. The provisions of this Section 8.33 will apply to any
subsequent exercise by Tenant Purchaser of the Purchase Option.
135
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.
LENDER:
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BORROWER:
FLIP/BRE, INC.,
a New Jersey corporation
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
OIP/BRE, L.L.C., a New Jersey limited
liability company
By: REA/SPC, INC., a New Jersey
corporation, its Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
MBP/BRE, L.L.C., a New Jersey limited
liability company
By: REA/SPC, INC., a New Jersey
corporation, its Managing Member
136
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
[signatures continued on next page]
137
NJA/BRE, L.L.C., a New Jersey limited
liability company
By: REA/SPC, INC., a New Jersey
corporation, its Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
To confirm its agreement with the provisions of
Sections 2.15 and 8.26, MEI joins in the execution
of this Agreement:
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
a New Jersey corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Exhibit A
ALLOCATED LOAN AMOUNTS AND DEBT SERVICE COVERAGE RATIOS
Allocated Debt Service
Individual Property Loan Amount Coverage Ratios
------------------- ----------- ---------------
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 7,947,000 68%
2. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 15,304,000 68%
3. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 6,302,000 68%
4. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 994,000 68%
5. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 5,042,000 68%
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 2,608,000 68%
7. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 577,000 68%
8. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 890,000 68%
9. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 3,972,000 68%
10. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 1,364,000 68%
===============
TOTAL: $ 45,000,000
The Debt Service Coverage Ratio for the Individual Properties
(considered as a whole) as of the Closing Date is 1.30.
Exhibit D
ENGINEERING REPORTS
Individual Property Engineering Report
------------------- ------------------
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 21, 1997
2. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Wayne, New Jersey dated August 21, 1997
3. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 21, 1997
4. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 20, 1997
5. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 20, 1997
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Report prepared byEMG,
Fair Lawn, New Jersey dated August 21, 1997
7. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 21, 1997
8. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 21, 1997
9. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997
10. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997
Exhibit E
ENVIRONMENTAL REPORTS
Individual Property Environmental Report
------------------- --------------------
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 21, 1997
2. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Wayne, New Jersey dated August 21, 1997
3. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 20, 1997
4. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997
5. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997
7. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 19, 1997
8. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Report prepared by EMG,
Oakland, New Jersey dated August 20, 1997
9. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997 and
revised September 10, 1997
10. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ Report prepared by EMG,
Fair Lawn, New Jersey dated August 21, 1997 and
revised September 10, 1997
Exhibit F
INDIVIDUAL PROPERTIES AND OWNERS
Individual
Property Owner
-------- -----
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
3. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
4. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
5. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ FLIP
Fair Lawn, New Jersey
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ FLIP
Fair Lawn, New Jersey
7. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ FLIP
Fair Lawn, New Jersey
8. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ FLIP
Fair Lawn, New Jersey
9. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
10. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
Exhibit L
REQUIRED DEBT SERVICE PAYMENT CERTIFICATE
FLIP/BRE, INC., OIP/BRE, L.L.C.,
MBP/BRE, L.L.C. and NJA/BRE, L.L.C.
c/▇ ▇▇▇▇▇▇▇ Enterprises, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: Loan Agreement (the "Loan Agreement"), dated as of
September 22, 1997, among FLIP/BRE, INC., OIP/BRE, L.L.C.,
MBP/BRE, L.L.C. and NJA/BRE, L.L.C, collectively, as
borrower, and Nomura Asset Capital Corporation ("Lender")
Ladies and Gentlemen:
This certificate is delivered in accordance with Section 2.12(g) of
the Loan Agreement. All capitalized terms not defined herein shall have the
meanings ascribed to them in the Loan Agreement.
Lender hereby certifies that the Required Debt Service Payment due
on ____________, 19__ is _________________________ Dollars ($__________), and to
date, the funds deposited into the Cash Collateral Account which have been
allocated to the Debt Service Payment Sub-Account [are] [are not] sufficient to
make such payment. In addition, the funds deposited into the Cash Collateral
Account which have been allocated to (x) the Basic Carrying Costs Sub-Account
[are][are not] sufficient to constitute the Basic Carrying Costs Monthly
Installment for the month, (y) the Capital Reserve Sub-Account [are][are not]
sufficient to constitute the Capital Reserve Monthly Installment for the month
and (z) the Lease Reserve Sub-Account [are] [are not] sufficient to constitute
the Lease Reserve Monthly Installment for the month. [The amount of the
deficiency or deficiencies is, in total, _________________________ Dollars
($_____________) and such amount should be deposited into the Cash Collateral
Account by 12:00 noon on (the applicable Payment Date)].
NOMURA ASSET CAPITAL CORPORATION(1)
----------
(1) or insert signature block for Servicer
2
By:_____________________________
Name:
Title:
EXHIBIT O
FINANCING STATEMENTS
I. Property Financing Statements
(relevant Borrower as debtor and Lender as secured party on all)
For each Individual Property file first and second priority financing
statements with:
1. New Jersey Secretary of State
2. County where Individual Property located
3. Secretary of State/County of Borrower's Principal Place of Business
(if differs from 1 and 2)
II. Accounts Financing Statements
(relevant Borrower as debtor and Lender as secured party on both)
1. Secretary of State/County of Borrower's Principal Place of Business
2. Secretary of State/County where Accounts located (if differs from 1)
EXHIBIT S
LIEN SEARCH REPORTS
Each Borrower and each Borrower's predecessor-in-interest to the Individual
Properties:
I. Uniform Commercial Code Searches
A. State Level:
1. New Jersey Secretary of State
2. Secretary of State of Principal Place of Business
3. Secretary of State of State of Formation
B. County Level:
1. Each County where Individual Properties are located
2. County of Principal Place of Business
II. Tax Searches
A. State Level:
1. New Jersey Secretary of State
B. Federal
III. Suit/Judgment Searches
A. U.S. District Court:
1. New Jersey
2. State of Principal Place of Business
3. State of Formation
B. County Level:
1. Each County where Individual Properties are located
2. County of Principal Place of Business
Exhibit T
OFFICER'S CERTIFICATE
Nomura Asset Capital Corporation
2 World Financial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
RE: Loan Agreement dated as of September 22, 1997 (together with
amendments, if any, the "Loan Agreement") among Nomura Asset Capital
Corporation, as Lender, and FLIP/BRE, INC., OIP/BRE, L.L.C.,
MBP/BRE, L.L.C. and NJA/BRE, L.L.C., collectively, as Borrower
(collectively, "Borrower")
The undersigned officer of REA/SPC, INC., the managing member of each of
OIP/BRE, L.L.C., MBP/BRE, L.L.C. and NJA/BRE, L.L.C., and the undersigned
officer of FLIP/BRE, INC., do hereby certify on behalf of Borrower that for the
quarterly financial period ending _____________________:
1. No Event of Default or, to the best knowledge of Borrower, Default has
occurred or exists except ____________________.
2. The monthly financial information, occupancy reports and rent rolls
delivered herewith are true, correct and complete.
3. All Operating Expenses and other expenses that had accrued as of the last
day of the period have been fully paid or otherwise reserved or provided
for.
4. Capitalized terms not defined herein shall have the meanings given to such
terms in the Loan Agreement.
Very truly yours,
-------------------------------
Name:
Title:
-------------------------------
Name:
Title:
2
Dated this ____ day of ___________, ____.
Schedule 1
INITIAL CAPITAL REQUIREMENTS AND CAPITAL RESERVE AMOUNTS
Initial Capital Capital Reserve
Individual Property Requirement(2) Amount
------------------- --------------- ---------------
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ $ 0 $ 9,149
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 0 $ 23,355
3. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 0 $ 22,781
4. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 0 $ 2,840
5. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 0 $ 11,589
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 0 $ 15,805
7. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 2,625 $ 1,019
8. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 0 $ 3,067
9. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 14,500 $ 22,755
10. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ $ 25,000 $ 8,121
==========
TOTALS: $ 42,125 $ 120,482
----------
(2) See Schedule 4 for the intended use of these amounts.
Schedule 2
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
All section and exhibit references used in this Schedule 2 are to sections and
exhibits in the Loan Agreement unless otherwise specified.
1. Section 4.1(O). Four properties are serviced by a septic system: (a) ▇▇
▇▇▇▇▇ ▇▇▇▇▇; (b) 99 ▇▇▇▇▇ Drive; (c) ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇; and (d) ▇▇ ▇▇▇▇▇▇
▇▇▇▇. The latter two have a Cycle-Let system in conjunction with the
septic system. In addition, by way of easement, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, storm
water drainage and a sanitary sewer cross over adjacent properties to
regional detention basins and sanitary sewer systems owned and operated by
the municipality.
2. Section 4.1(X). Except as provided in Schedule 5.
Schedule 3
CERTAIN LEASES FOR WHICH TENANT ESTOPPEL CERTIFICATES
AND NON-DISTURBANCE, SUBORDINATION AND ATTORNMENT AGREEMENTS
ARE REQUIRED
1. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Symtron Systems, Inc., tenant
under lease agreement dated as of July, 1, 1994, as amended and assigned;
2. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: MDA Services, Inc., tenant
under lease agreement dated as of July 1, 1994, as amended and assigned;
3. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Aramis, Inc., tenant under lease
agreement dated as of July, 18, 1973 as amended and assigned and lease
agreement dated as of July, 1, 1977, as amended and assigned;
4. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: TCI of Northern New Jersey, Inc.,
tenant under lease agreement dated as of April 3, 1990, as amended and
assigned;
5. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: New Jersey ▇▇▇▇ Telephone
Company, tenant under lease agreement dated as of December 10, 1970, as
amended and assigned;
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Paid Prescriptions, Inc.,
tenant under lease agreement dated as of January 31, 1996, as amended and
assigned;
7. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Greentree Learning Centers, Inc.,
tenant under lease agreement dated as of March 28, 1991, as amended and
assigned;
8. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Road-Con Systems, Inc., tenant
under lease agreement dated as of June 14, 1989, as amended and assigned;
9. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Reckitt & ▇▇▇▇▇▇, Inc., tenant under
lease agreement dated as of May 5, 1987, as amended and assigned;
10. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Publishers (successor
in interest to ▇▇▇▇▇, Foresman and Company), tenant under lease agreement
dated as of October 11, 1965, as amended and assigned; and
3
11. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Travel, Inc., tenant under
lease agreement dated as of October 11, 1965, as amended and assigned.
Schedule 4
DEFERRED MAINTENANCE ITEMS
Property Item Amount
-------- ---- ------
1. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ADA Compliance as per EMG $25,000.00
Fair Lawn, New Jersey Report
2. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ADA Compliance as per EMG $ 8,250.00
Fair Lawn, New Jersey Report
Foundation Work as per EMG $ 6,250.00
Report
3. 95 ▇▇▇▇▇ Drive ADA Compliance as per EMG $ 1,000.00
Oakland, New Jersey Report
Entrance work as per EMG $ 1,250.00
Report
Plumbing work as per EMG $ 375.00
Report
Total $42,125.00
Schedule 5
TENANTS' OPTIONS TO PURCHASE AND
RIGHTS OF FIRST REFUSAL
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Purchase Option granted to TCI of
Northern New Jersey, Inc., as tenant, pursuant to Sections 47 & 48 of
lease agreement dated April 3, 1990, as amended or assigned, providing
tenant with an option to purchase the premises during the 10th year
(around or about April 2002) or 20th year (around or about April 2012) of
the initial term, at fair market value pursuant to certain closing terms
and conditions contained in the lease.
2. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇: Rights of First Refusal granted to
Aramis Inc., as tenant, pursuant to Section 29 of Agreement of Lease dated
July 18, 1973, as amended or assigned, and Section 29 of Agreement of
Lease dated July 1, 1977, as amended or assigned.
SCHEDULE 6
ENVIRONMENTAL OPERATION & MAINTENANCE
OBLIGATIONS AND RESERVE REQUIREMENTS
Reserve
Property Item Obligation Amount
-------- ---- ---------- ------
1. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Above Ground Tanks Construct Secondary Containment (2) $1,875.00
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Former Lab Space/RCRIS De-List Individual Property $0
Wayne, New Jersey
3. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ Asbestos as per EMG Report Establish O&M Plan (1) $562.50
Fair Lawn, New Jersey
4. ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Asbestos, Lead paint Establish O&M Plan (1) $562.50
Fair Lawn, New Jersey Battery Storage Tenant to properly store $0
5. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Asbestos as per EMG Report Establish O&M Plan (1) $562.50
Oakland, New Jersey
6. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asbestos as per EMG Report Establish O&M Plan (1) $562.50
Fair Lawn, New Jersey
7. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asbestos as per EMG Report Establish O&M Plan (1) $562.50
Fair Lawn, New Jersey
8. ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, New Post Excavation Sampling Sample as per EMG Report (3) $6,250.00
Jersey Asbestos as per EMG Report Establish O&M Plan (1) $375.00
Former Tenant RCRIS De-List Individual Property $0
9. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Former spill site Obtain N.F.A. Letter (4) $0
Oakland, New Jersey Asbestos, Lead paint Establish O&M Plan. (1) $562.50
Lead in water Re-Test (3) $1,250.00
10. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Former spill site Obtain N.F.A. Letter (4) $0
Oakland, New Jersey Asbestos, Lead paint Establish O&M Plan (1) $562.50
Total $13,687.50
Note 1 O&M Plans are to be established within 3 months of the Closing Date.
Note 2 Construction of secondary containment is to be completed within 6 months
of the Closing Date.
Note 3 Sampling and testing is to be completed within one month from the
Closing Date. If levels are found to be higher than regulatory standard
minimums, remediation
2
must be initiated within one week of receiving results in accordance
with this Agreement.
Note 4 Items that require inquiries to the regulatory agency must be diligently
pursued and completed within 10 months following the Closing Date.
Schedule 7
DELIVERIES UPON SUBSTITUTION OF PROPERTY
All capitalized terms used in this Schedule 7 shall have the meanings ascribed
to such term in the Loan Agreement to which this Schedule 7 is attached and all
section references are to sections in the Loan Agreement unless otherwise
specified.
Part A
1. Lien Search Reports. Lender shall have received satisfactory (i.e.,
showing no Liens other than Permitted Encumbrances (excluding clause (ii)
thereof)) reports of UCC (collectively, the "UCC Searches"), tax lien,
judgment and litigation searches with respect to the Substitute Property
conducted by a reputable search firm with respect to the Collateral, each
Borrower and the predecessor in interest for the Substitute Property, such
searches to be conducted in each of the locations set forth on Exhibit S
attached to the Loan Agreement.
2. Title Insurance Policy. Lender shall have received a commitment to issue a
loan policy of insurance issued by a nationally recognized reputable title
company, capable of retaining a primary liability of $30,000,000, with
respect to the Substitute Property and insuring the first priority lien in
favor of Lender created by the Mortgage and insuring the second priority
lien of Lender created by the Second Mortgage, subject only to the
Permitted Encumbrances (excluding clause (ii) thereof) and meeting the
requirements attached hereto as Schedule 7-A (the "Substitute Title
Insurance Policy").
3. Financial Statements; Budgets; Operating Reports. Lender shall have
received (i) audited financial statements of the Substitute Property for
the two fiscal years prior to the Substitution Closing Date, (ii)
unaudited financial statements of the Substitute Property for the twelve
month period ending on the last day of the month prior to the Substitution
Closing Date, (iii) an operating budget for the Substitute Property for
the year in which the Substitution Closing Date takes place, and (iv)
historical operating
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reports for the Substitute Property for the three calendar years prior to
the substitution verified by a "Big Six" accounting firm. All audited
financial statements must have been prepared by a "Big Six" accounting
firm.
4. Environmental Matters. Lender shall have received a Phase I environmental
report issued by a recognized environmental consultant at Borrower's
expense, and, if recommended under the Phase I environmental report, a
Phase II environmental report, which concludes that the Substitute
Property does not contain any Hazardous Substance except for nominal
amounts of such Hazardous Substance commonly incorporated in or used in
the operation of properties similar to the Substitute Property (in either
case in compliance with all Environmental Laws) and is not subject to any
risk of contamination from any off-site Hazardous Substance. If any such
report discloses the presence of any Hazardous Substance or the material
risk of contamination from any off-site Hazardous Substance, such report
shall include an estimate of the cost of any related remediation and
Borrower shall deposit with Lender an amount equal to one hundred-ten
percent (110%) of such estimated cost, which deposit shall constitute
additional security for the Loan and shall be released to Borrower upon
the delivery to Lender of (A) an update to such report indicating that
there is no longer any Hazardous Substance on the Substitute Property
except for nominal amounts of such Hazardous Substances commonly
incorporated in or used in the operation of properties similar to the
Substitute Property (in either case in compliance with all Environmental
Laws) or any material risk of contamination from any off-site Hazardous
Substance that has not been fully remediated and (B) paid receipts
indicating that the costs of all such remediation work have been paid.
5. Additional Matters. Lender shall have received such other Permits,
certificates (including certificates of occupancy for the Substitute
Property), opinions, documents and instruments (including zoning
endorsements to the Title Insurance Policies or, if unavailable, an
opinion of counsel or letters from the appropriate Governmental
Authorities regarding the zoning of the Substitute Property and evidence
that utility services are available for the Substitute Property, and that
the Substitute Property is subject to separate tax assessment) relating to
the Loan as may have been required by Lender in connection with the
advance of the Loan Amount, and all corporate and other resolutions or
consents, all other documents (including, without limitation,
3
all documents referred to herein and not appearing as exhibits hereto) and
all legal matters as may have been required by Lender in connection with
advance of the Loan Amount.
6. Surveys. Lender shall have received a Survey with respect to the
Substitute Property which meets the requirements attached hereto as
Schedule 7-B.
7. Engineering Reports. Lender shall have received the Engineering Report
with respect to the Substitute Property, such Engineering Report to be
prepared by an Independent Engineer. The Engineering Report must state
that the Substitute Property and its use comply in all material respects
with all applicable Legal Requirements (including, without limitation,
zoning, subdivision and building laws) and that the Substitute Property is
in good condition and repair and free of material damage or waste. If
compliance with any Legal Requirements is not addressed by the Engineering
Report, such compliance shall be confirmed by delivery to Lender of a
certificate of an architect licensed in the state in which the Substitute
Property is located, a letter from the municipality in which such
Substitute Property is located, a certificate of a surveyor that is
licensed in the state in which the Substitute Property is located (with
respect to zoning and subdivision laws), an ALTA 3.1 zoning endorsement to
the Substitute Title Insurance Policy delivered pursuant to clause (2)
above (with respect to zoning laws) or a subdivision endorsement to the
Substitute Title Insurance Policy delivered pursuant to clause (2) above
(with respect to subdivision laws). If the Engineering Report recommends
that any repairs be made with respect to the Substitute Property, such
Engineering Report shall include an estimate of the cost of such
recommended repairs and Borrower shall deposit with Lender an amount equal
to one hundred ten percent (110%) of such estimated cost, which deposit
shall constitute additional security for the Loan, shall be deposited in
the Capital Reserve Sub-Account and shall be treated as an Initial Capital
Requirement and shall be released to Borrower in accordance with Section
2.12(f)(iii).
8. Contracts and Permits. The Lender shall have received a copy of each
Material Contract and Permit affecting the Substitute Property.
4
9. Management Agreement. Lender shall have received the Management Agreement
with respect to the Substitute Property.
10. Leases; Tenant Estoppels; Non-Disturbance Agreements. Borrower shall have
delivered a rent roll with respect to the Substitute Property dated as of
the first day of the month in which the documents are delivered to Lender
pursuant to Section 8.32(v) and certified as true and correct, a copy of
any standard form Lease and copies of all Leases. Borrower shall have also
delivered with respect to each Lease (i) an original executed tenant
estoppel certificate in substantially the form attached to the Loan
Agreement as Exhibit Y, which tenant estoppel certificates shall disclose
no defaults or other conditions which have or may have a material adverse
effect on the Net Cash Flow for the Substitute Property and (ii) an
original executed Non-Disturbance, Attornment and Subordination Agreement
in substantially the form attached to the Loan Agreement as Exhibit Z.
11. Appraisals. Lender shall have received a MAI appraisal (prepared in
compliance with FIRREA) with respect to the Substitute Property prepared
by a reputable Independent firm.
12. Conveying Deed. Lender shall have received a certified copy of a deed
conveying to the relevant Borrower all right, title and interest in and to
the Substitute Property and a letter from a title insurance company
acknowledging receipt of such deed and agreeing to record such deed in the
real estate records for the county in which the Substitute Property is
located.
13. Release. Lender shall have received a release of Lien (and related Loan
Documents) for the Individual Property to be released for execution by
Lender. Such release shall be in a form appropriate for the jurisdiction
in which the Individual Property being released is located.
Part B
1. Mortgages. The relevant Borrower shall have executed and delivered the
Mortgage and the Second Mortgage with respect to the Substitute Property
to Lender and such Mortgage and such Second Mortgage shall have been filed
of record in the appropriate filing office(s) in the jurisdiction in which
the
5
Substitute Property is located or irrevocably delivered to a title agent
for such recordation.
2. Assignment of Agreements. The relevant Borrower shall have executed and
delivered the Assignment of Agreements and the Second Assignment of
Agreements with respect to the Substitute Property to Lender and such
documents shall have been filed of record in the appropriate filing
office(s) in the jurisdiction in which the Substitute Property is located
or irrevocably delivered to a title agent for such recordation.
3. Assignment of Leases. The relevant Borrower shall have executed and
delivered the Assignment of Leases and the Second Assignment of Leases
with respect to the Substitute Property to Lender and the Assignment of
Leases and the Second Assignment of Leases shall have been filed of record
in the appropriate filing office(s) in the jurisdiction in which the
Substitute Property is located or irrevocably delivered to a title agent
for such recordation.
4. Financing Statements. The relevant Borrower shall have executed and
delivered all financing statements specified in Section I of Exhibit O
attached to the Loan Agreement to Lender and such financing statements
shall have been filed of record in the appropriate filing office(s) in the
jurisdiction in which the Substitute Property is located and all other
appropriate jurisdictions or irrevocably delivered to a title agent for
such filing.
5. Amendment to the Loan Documents. The Borrower shall have executed and
delivered amendments to any Loan Documents necessary to reflect the
release and substitution and to effect the cross-default and
cross-collateralization of all Loan Documents.
6. Manager's Subordination. The Manager and the relevant Borrower shall have
executed and delivered to Lender the Manager's Subordination.
7. Borrower's Estoppel Certificates. The relevant Borrower shall have
executed and delivered to Lender an estoppel certificate with respect to
its respective Management Agreement in substantially the form of Exhibit P
attached to the Loan Agreement.
6
8. Tenant Letters. The relevant Borrower shall have executed and mailed
Tenant Letters to each of its tenants with respect to the Substitute
Property and delivered to Lender a copy thereof.
9. Entity Documents. Lender shall have received with respect to (i) the
relevant Borrower, if such Borrower is an limited liability company (x)
its certificate of formation, as amended, modified or supplemented to the
Substitution Closing Date, certified to be true, correct and complete by
the Secretary of State of the State of New Jersey as of a date not more
than fifteen (15) days prior to the Substitution Closing Date, (y) its
operating agreement certified by MM to be true, correct and complete as of
the Substitution Closing Date and (z) a good standing certificate from the
Secretary of State for the State of New Jersey, dated a date not more than
fifteen (15) days prior to the Substitution Closing Date, (ii) the
relevant Borrower, if such Borrower is a corporation (x) its certificate
of incorporation, as amended, modified or supplemented to the Substitution
Closing Date, certified to be true, correct and complete by the Secretary
of State for the State of New Jersey as of a date not more than fifteen
(15) days prior to the Substitution Closing Date and (y) a good standing
certificate from the Secretary of State for the State of New Jersey, dated
a date not more than fifteen (15) days prior to the Substitution Closing
Date, and (iii) MM (x) its certificate of incorporation, as amended,
modified or supplemented to the Substitution Closing Date, certified to be
true, correct and complete by the Secretary of State for the State of New
Jersey as of a date not more than fifteen (15) days prior to the
Substitution Closing Date and (y) a good standing certificate from the
Secretary of State for the State of New Jersey, each to be dated a date
not more than fifteen (15) days prior to the Substitution Closing Date. If
the Substitute Property is located in a State other than New Jersey, the
relevant Borrower and MM shall each deliver a certificate of good standing
and authorization to transact business from such State, dated a date not
more than fifteen (15) days prior to the Substitution Closing Date.
10. Certified Resolutions, Etc. Lender shall have received a certificate of
the secretary or assistant secretary of each of MM and the relevant
Borrower which owns the Substitute Property, if such Borrower is a
corporation, dated the Closing Date, certifying (i) the names and true
signatures of its incumbent officers authorized to
7
sign the applicable Substitution Documents, (ii) its by-laws as in effect
on the Substitution Closing Date and (iii) the resolutions of its board of
directors approving and authorizing the execution, delivery and
performance of all Substitution Documents executed by it.
11. Insurance. Lender shall have received certificates of insurance
demonstrating insurance coverage in respect of the Substitute Property of
types, in amounts, with insurers and otherwise in compliance with the
terms, provisions and conditions set forth in the Related Mortgages. Such
certificates shall indicate that Lender and Servicer are named in all
liability policies as additional insureds as their interests may appear
and shall contain a loss payee endorsement in favor of Lender with respect
to the property policies required to be maintained under the Mortgage and
the Second Mortgage. All insurance policies required to be maintained
hereunder shall be maintained throughout the term of this Agreement in the
types and amounts required under the Mortgage and the Second Mortgage.
12. Consents, Licenses, Approvals, Etc. Lender shall have received copies of
all consents, licenses and approvals, if any, required in connection with
the execution, delivery and performance by Borrower, and the validity and
enforceability, of the Substitution Documents, and such consents, licenses
and approvals shall be in full force and effect.
SCHEDULE 7-A
Title Requirements
1. Form of Policies.
The policies should be in American Land Title Association, extended
coverage, Lender's Fee Policy Form 1970 (Rev. 10-17-84).
2. Insured.
["____________, a _____________________ as trustee, and its successors
and/or assigns"]
3. Endorsements.
The policies should contain the following endorsements, if available:
(a) Comprehensive (See Exhibit 1)
(b) Access CLTA Form 103.7 (See
Exhibit 2)
(c) Zoning 3.1 ALTA Form 3.1 (See
Exhibit 3)
(d) Subdivision (See Exhibit 4)
(e) Tax Parcel (See Exhibit 5)
(f) Contiguity CLTA Form 116.4
(if applicable)
(g) Address CLTA Form 116 (See
Exhibit 7)
(h) Survey CLTA Form 116.1 (See
Exhibit 8)
(i) Source of Title (See Exhibit 9)
(j) Doing Business (See Exhibit 10)
(k) Variable Rate (See Exhibit 11)
(l) Tax Deed (See Exhibit 12)
(if applicable)
(m) Usury (See Exhibit 13)
(n) Tie-In (See Exhibit 14)
(o) First Loss (See Exhibit 15)
4. Pre-printed Exceptions.
All pre-printed exceptions must be omitted.
5. Real Estate Taxes.
Any tax exception in Schedule B should be as follows: "Real property
taxes for the current tax year and subsequent years, not yet due and
payable."
6. Tenancies.
Any exceptions for leases or tenancies should be as follows: "Rights
of ____________, as tenant only, pursuant to a recorded (Memorandum
of) Lease dated ___________ between ______________, as Landlord and
______________, as Tenant, dated ___________, recorded on
_______________ in Book __________, Page _____."
7. Flood Zone.
We require proof that each property is not in a flood zone as
established by the Federal Emergency Management Agency. This
information can be provided to us by flood zone certifications.
8. Reinsurance.
At closing, the title company may be required to provide ALTA form
9/24/94 Reinsurance Agreements or commitment letters to issue same
from companies with limits of liability as may have been required by
Lender in connection with advance of the Loan Amount.
EXHIBIT 1
COMPREHENSIVE ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company insures the owner of the indebtedness secured by the insured
mortgage against loss or damage sustained by reason of:
1. Any incorrectness in the assurance that, at Date of Policy:
(a) There are no covenants, conditions or restrictions under which the lien
of the mortgage referred to in Schedule A can be divested, subordinated or
extinguished, or its validity, priority or enforceability impaired.
(b) Unless expressly excepted in Schedule B:
(1) There are no present violations on the land of any enforceable
covenants, conditions or restrictions, nor do any existing
improvements on the land violate any building setback lines shown on a
plat of subdivision recorded or filed in the public records.
(2) Any instrument referred to in Schedule B as containing covenants,
conditions or restrictions on the land does not, in addition, (i)
establish an easement on the land; (ii) provide a lien for liquidated
damages; (iii) provide for a private charge or assessment; (iv)
provide for an option to purchase, a right of first refusal or the
prior approval of a future purchaser or occupant.
(3) There is no encroachment of existing improvements located on the
land onto adjoining land, nor any encroachment onto the land of
existing improvements located on adjoining land.
(4) There is no encroachment of existing improvements located on the
land onto that portion of the land subject to any easement excepted in
Schedule B.
(5) There are no notices of violation of covenants, conditions and
restrictions relating to environmental protection recorded or filed in
the public records.
2
2. Any future violation on the land of any existing covenants, conditions or
restrictions occurring prior to the acquisition of title to the estate or
interest in the land by the Insured, provided the violation results in:
(a) Invalidity, loss of priority, or unenforceability of the lien of the
insured mortgage; or
(b) loss of title to the estate or interest in the land if the Insured
shall acquire title in satisfaction of the indebtedness secured by the
insured mortgage.
3. Damage to existing improvements, including lawns, shrubbery or trees:
(a) which are located on or encroach upon that portion of the land subject
to any easement excepted in Schedule B, which damage results from the
exercise of the right to maintain the easement for the purpose for which it
was granted or reserved;
(b) resulting from the future exercise of any right to use the surface of
the land for the extraction or development of minerals excepted from the
description of the land or excepted in Schedule B.
4. Any final court order or judgment requiring the removal from any land
adjoining the land of any encroachment excepted in Schedule B.
5. Any final court order or judgment denying the right to maintain any existing
improvements on the land because of any violation of covenants, conditions or
restrictions or building setback lines shown on a plat of subdivision recorded
or filed in the public records.
CLTA Form 100.2 (Rev. 3/27/92)
ALTA Form 9 (Restrictions, Encroachments, Minerals)
EXHIBIT 2
ACCESS ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company hereby assures the Insured that said land abuts upon a
physically open street known as ____________________ which has been completed,
dedicated and accepted by the City of ____________________ for use as an open
public street and the owner of the land has vehicular and pedestrian access
thereto.
EXHIBIT 3
ZONING ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
1. The Company insures the Insured against loss or damage sustained by reason
of any incorrectness in the assurance that, at Date of Policy:
(a) According to applicable zoning ordinances and amendments thereto,
the land is classified Zone ___.
(b) The following use or uses are allowed under that classification
subject to compliance with any conditions, restrictions, or
requirements contained in the zoning ordinances and amendments
thereto, including but not limited to the securing of necessary
consents or authorizations as a prerequisite to the use or uses:
-------------------
2. The Company further insures against loss or damage arising from a final
decree of a court of competent jurisdiction
(a) prohibiting the use of the land, with any structure presently
located thereon, as specified in paragraph 1(b); or
(b) requiring the removal or alteration of any structure
on the basis that, at Date of Policy, the ordinances and amendments
thereto have been violated with respect to any of the following matters:
(i) Area, width or depth of the land as a building site for the
structures:
(ii) Floor space area of the structures;
(iii) Setback of the structures from the property lines of the land;
(iv) Height of the structure; or
2
(v) Number of Parking Spaces.
There shall be no liability under this endorsement based on the invalidity of
the ordinances and amendments thereto until after a final decree of a court of
competent jurisdiction adjudicating the invalidity, the effect of which is to
prohibit the use or uses.
Loss or damage as to the matters insured against by this endorsement shall not
include loss or damage sustained or incurred by reason of the refusal of any
person to purchase, lease or lend money on the estate or interest covered by
this policy.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
CLTA Form 123.2 (Rev. 3-13-87)
(ALTA Endorsement - Form 3.1 (6-1-87))
Zoning -- completed structure
EXHIBIT 4
SUBDIVISION ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
Notwithstanding any of the provisions, terms, conditions, limitations,
stipulations, exceptions and exclusions contained in or arising under the Policy
or any endorsement thereto, the Company hereby insures the Insured against loss
or damage resulting from any violation of any Subdivision Requirement (as
defined below), including, without limitation, any violation of the Subdivision
Requirements caused by the present owner's or its predecessors' acquisition of
the land, the size and configuration of the land, or the present uses of the
land. "Subdivision Requirements" refers to any laws, ordinances, resolutions,
regulations or rules relating to or governing (i) subdivisions, (ii) separation
of ownership of any parcel or parcels of which the land is or was a part or
(iii) any change in the area or dimensions of any parcel or parcels of which the
land is or was a part.
EXHIBIT 5
TAX PARCEL ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company hereby insures the Insured against loss or damage by reason of
any inaccuracy in the following assurance:
the land referred to as Parcel _______ in Schedule A herein is
completely covered by tax identification No. ________; Parcel
_________ is completely covered by tax identification No. __________
and said tax identification numbers do not include any other land.
EXHIBIT 6
CONTIGUITY ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company assures the Insured that the land described in Schedule A
herein as Parcel ____ and Parcel ____ are contiguous to each other along the
_________________ boundary of Parcel ____ and the ______________________
boundary of Parcel ____ and, when taken together, constitute one parcel of land
with no intervening strips, gaps or gores.
The Company hereby insures the Insured against loss which said Insured
shall sustain in the event that the assurance herein shall prove to be
incorrect.
EXHIBIT 7
ADDRESS ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company assures the Insured that at the date of this policy
there is located on said land a ___________________________________________
known as __________________________________________________________ (street
address) and that the survey described in said policy shows the correct location
and dimensions of said land according to those records which under the recording
laws impart constructive notice as to said land.
The Company hereby insures the Insured against loss which said
Insured shall sustain in the event that the assurance herein shall prove to be
incorrect.
The total liability of the Company under said policy and any
endorsements therein shall not exceed, in the aggregate, the face amount of said
policy and costs which the Company is obligated under the conditions and
stipulations thereof to pay.
This endorsement is made a part of said policy and is subject to the
schedules, conditions and stipulations therein, except as modified by the
provisions hereof.
CLTA Form 116 (Revised 2-20-61)
ALTA - Lender
EXHIBIT 8
SURVEY ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company assures the Insured that the land which is described on
Schedule A attached hereto and made a part hereof is the same as that delineated
on the plat of a survey made by __________________________ on _________________,
19__, last revised _________________, 19__, designated Job No. ___________.
The Company hereby insures said Assured against loss which said
Assured shall sustain in the event that the assurance herein shall prove to be
incorrect.
The total liability of the Company under said policy and any
endorsements therein shall not exceed, in the aggregate, the face amount of said
policy and costs which the Company is obligated under the conditions and
stipulations thereof to pay.
This endorsement is made a part of said policy and is subject to the
schedules, conditions and stipulations therein except as modified by the
provisions hereof.
CLTA Form 116.1 (Revised 2-20-61)
EXHIBIT 9
SOURCE DEED ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company hereby insures the Insured that the land conveyed to
_____________________ by that certain deed from _______________ dated
________________ recorded on _____________ in Liber/Book/Volume ______, page
_____ is the same land described in Schedule A hereto.
EXHIBIT 10
DOING BUSINESS ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company hereby insures the Insured against loss or damage which the Insured
shall sustain by reason of the entry of any court order or judgment which
constitutes a final determination holding that the mortgage referred to in
Schedule A is unenforceable as a result of the Insured's failure to "qualify to
do business" within the State of ___________ as that phrase is defined with
respect to the laws of the State of ___________ applicable to the regulation of
foreign entities.
The total liability of the Company under said policy, commitment or binder and
under this and any prior endorsements thereto shall not exceed, in the
aggregate, the amount of liability stated on the face of said policy, commitment
or binder, as the same may be specifically amended in dollar amount by this or
any prior endorsements, and the costs which the Company is obligated to pay
under the Conditions and Stipulations of the policy.
This endorsement is made a part of said policy, commitment or binder and is
subject to all the terms, and provisions thereof, except as modified by the
provisions hereof.
Nothing herein contained shall be construed as extending or changing the
effective date of the aforesaid policy, commitment or binder unless otherwise
expressly stated.
IN WITNESS WHEREOF, the Company has caused this Endorsement to be signed and
sealed as of the day of , 19 , to be valid when countersigned by an authorized
officer or agent of the Company, all in accordance with its By-Laws.
EXHIBIT 11
VARIABLE RATE ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company hereby insures against loss or damage by reason of:
1. The invalidity or unenforceability of the lien of the insured mortgage
resulting from the provisions contained in the Credit/Loan Agreement which
provide for changes in the rate of interest.
2. Loss of priority of the lien of the insured mortgage as security for the
unpaid principal balance of the loan, together with the interest as
changed in accordance with provisions contained in the Credit/Loan
Agreement, which loss of priority is caused by said changes in the rate of
interest.
"Changes in the rate of interest", as used in this endorsement, shall mean only
those changes in the rate of interest calculated pursuant to the formula
contained in the Credit/Loan Agreement at Date of Policy. "Credit/Loan
Agreement", as used in this endorsement, means that certain Credit/Loan
Agreement which is secured by the insured mortgage.
This endorsement does not insure against loss or damage based upon (a) usury, or
(b) any consumer credit protection or truth in lending law.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto, except that the
insurance afforded by this endorsement is not subject to paragraph 3(d) of the
Exclusions From Coverage. Except to the extent expressly stated, it neither
modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it increase the face amount thereof.
EXHIBIT 12
TAX DEED WIPING OUT EASEMENT ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company insures the Insured against loss or damage which the
Insured may sustain due to the entry of any final judgment extinguishing the
easement described in Schedule A as parcel ________________, or denying or
limiting the use thereof by reason of the issuance of a tax deed for nonpayment
of any general tax or special assessment levied against the land.
EXHIBIT 13
USURY ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The Company hereby insures the Insured against loss or damage not exceeding the
Amount of Insurance stated in Schedule A which the Insured shall sustain by
reason of the entry of any court order or judgment which constitutes a final
determination and adjudges that the lien of the mortgage referred to in Schedule
A is invalid or unenforceable as to the principal and/or interest due on the
note or notes secured thereby, said interest being computed in accordance with
provisions of the Credit/Loan Agreement, on the ground that the loan evidenced
by the note or notes secured thereby is usurious. As used in this endorsement,
the "Credit/Loan Agreement" means that certain Credit/Loan Agreement which is
secured by the insured mortgage.
The insurance against usury risks afforded by this endorsement and its effect on
the title insurance under the policy to which it is attached shall survive the
satisfaction of the mortgage or trust deed, the lien of which is thus insured.
EXHIBIT 14
TIE-IN ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
The following policies are issued in conjunction with one another:
[List all policies here.]
Notwithstanding the provision of Section 7(a)(i) of the Conditions and
Stipulations of this policy, the amount of insurance available to cover the
Company's liability for loss or damage under this policy at the time of payment
of loss hereunder shall be the aggregate of the amount of insurance under this
policy and the other policies identified above. At no time shall the amount of
insurance under this policy and the other policies identified above exceed in
the aggregate $______________. All payments made by the Company under this
policy or any of the other policies identified above, except those payments
which would not reduce the amount of insurance under the Conditions and
Stipulations of the policies, shall reduce the aggregate amount of insurance pro
tanto.
This endorsement is made a part of the policy and is subject to all of the
terms and provisions thereof and of any prior endorsements thereto. Except to
the extent expressly stated, it neither modifies any of the terms and provisions
of the policy and any prior endorsements, nor does it extend the effective date
of the policy and any prior endorsements, nor does it increase the face amount
thereof.
[Witness clause optional]
__________________ Title Insurance Company
EXHIBIT 15
FIRST LOSS ENDORSEMENT
Attached to Policy No. ______
Issued By
______ TITLE INSURANCE COMPANY
In the event a defect, lien or encumbrance or other matter insured against
by this policy creates a loss as determined by this policy, the amount for which
the Company shall be liable shall be determined without requiring maturity of
the indebtedness by acceleration or otherwise and without requiring the Insured
to pursue its remedies against any other collateral securing the indebtedness
which is also secured by the insured mortgage.
SCHEDULE 7-B
Survey Requirements
Each survey shall (i) be a current "as-built" metes and bounds survey of the
land covered by the title policy, including easements which benefit such land,
(ii) be made in accordance with the "Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys" jointly established and adopted by ALTA and ACSM
in 1992 and meet the accuracy requirements of an "Urban" survey as defined
therein, (iii) be prepared by a surveyor, and be in form, scope and substance,
as may have been required by Lender in connection with advance of the Loan
Amount, (iv) contain Optional Survey Requirements 1, 2, 3, 6, 7(a), 7(b), 7(c),
8, 9, 10, 11 and 13 as specified on Table A to Exhibit 16 hereto, and (v)
contain a certification substantially in the form attached hereto as Exhibit 17.
In addition, the surveyor should list all Schedule B exceptions and plot all
easements cited in the title commitment, or note that they are not applicable to
the subject property, or are not plottable.
EXHIBIT 16
ALTA/ACSM REQUIREMENTS
(See attached)
EXHIBIT 17
SURVEY CERTIFICATION
The undersigned hereby certifies to Nomura Asset Capital Corporation, and
its successors and/or assigns, ▇▇▇▇▇▇▇ Title Insurance Company, and
_________________________________, that (s)he is a duly registered land surveyor
of the State of __________, that the survey reflected by this plat was actually
made upon the ground on _______________, 19__, that the attached plat of survey
is made at least in accordance with the minimum standards established by the
State of __________ for surveyors and with the "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys" jointly established and adopted
by ALTA and ACSM in 1992 and meets the accuracy requirements of an "Urban"
survey as defined therein and includes Items 1, 2, 3, and shows the size and
location of Items 6, 7(a), 7(b), 7(c), 8, 9, 10, 11 and 13 (appearing from a
careful physical inspection of the Premises, as hereinafter defined) of Table A
thereof; that said survey correctly shows the location of all buildings,
structures and other improvements situated on the ______ acre tract known as
_________________________________________________(street address) (the
"Premises") shown thereon; that the Premises is a separate tax lot; and that
said Premises is a separately subdivided tract; that all utilities for the
operation of the Premises are available at the lot lines, enter said tract
through adjoining public streets and do not run through or under any buildings
or improvements; that there are no violations of zoning ordinances, restrictions
or other rules or regulations with reference to the location of all buildings,
structures and improvements situated on the Premises and the number and
configuration of parking spaces; and that, except as shown, there are no visible
or recorded easements or rights of way across said Premises; that there are no
other easement or rights of way of which the undersigned has been advised; no
encroachments onto adjoining premises, streets or alleys by any buildings,
structures or other improvements, except as shown, and no encroachments onto
said Premises by buildings, structures or other improvements situated on
adjoining premises; that said Premises do not lie within any flood hazard areas;
and that all roads, streets and highways shown therein are completed and
dedicated public streets and have been accepted for public maintenance; that the
Premises has access to a dedicated public street or streets known as
2
______________________________________.
Schedule 8
ROLLOVER LEASES
================================================================================
Individual Scheduled
Property Lease Expiration
--------------------------------------------------------------------------------
1. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, May 5, 1987/ May 5, 2003
Wayne, New Jersey Reckitt & ▇▇▇▇▇▇, Inc. (tenant has right to
renew for two (2)
additional five (5) year
terms)
--------------------------------------------------------------------------------
2. 5 ▇▇▇▇▇▇▇▇ Road, July 18, 1973 April 30, 2003
Oakland, New Jersey and July 1, 1977/ (tenant has right to
Aramis, Inc. renew for two (2)
additional five (5) year
terms)
================================================================================
The following apply to the Leases described in items (1) and (2) above, in the
aggregate:
Initial Lease Reserve Deposit: $ 150,000
Annual Lease Reserve Amount: $ 163,000
=========
Total at End of 5 Years: $ 965,000