Exhibit 10.31
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LOAN AGREEMENT
Dated as of December 9, 1999
Between
Borrower (as defined herein)
And
UBS PRINCIPAL FINANCE LLC,
as Lender
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TABLE OF CONTENTS
Page
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I DEFINITIONS: PRINCIPLES OF CONSTRUCTION...................................1
1.1 Specific Definitions.............................................1
1.2 Index of Other Definitions......................................20
1.3 Principles of Construction......................................22
II THE LOAN.................................................................23
2.1 The Loan........................................................23
2.1.1 Commitment...............................................23
2.1.2 Note.....................................................23
2.1.3 Use of Loan Proceeds.....................................23
2.2 Conditions Precedent to Closing.................................23
2.2.1 Representations and Warranties; Compliance
with Conditions..........................................23
2.2.2 First Mortgage and Loan Documents........................23
2.2.3 Title Insurance..........................................23
2.2.4 Environmental Audit......................................24
2.2.5 Insurance................................................24
2.2.6 Financial Statements.....................................24
2.2.7 Searches.................................................24
2.2.8 Survey...................................................25
2.2.9 Management...............................................25
2.2.10 Leases and Material Contracts............................25
2.2.11 Intentionally Deleted....................................25
2.2.12 Tenant Estoppels.........................................25
2.2.13 Property Condition Report................................25
2.2.14 Appraisal................................................25
2.2.15 Zoning Compliance, Etc...................................25
2.2.16 Recording Taxes..........................................26
2.2.17 Perfection of Security Interests.........................26
2.2.18 Opinions of Borrower's Counsel...........................26
2.2.19 Ground Lease.............................................26
2.2.20 REA......................................................26
2.2.21 Reserves and Escrows.....................................26
2.2.22 Rent Roll................................................26
2.2.23 Further Documents........................................26
2.2.24 Completion of Proceedings................................26
2.2.25 Delivery of Organizational Documents.....................27
2.2.26 Expenses.................................................27
2.2.27 Tax Lot..................................................27
2.2.28 Encumbrances.............................................27
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2.3 Substitution of Collateral Properties...........................27
2.4 Defeasance......................................................32
2.4.1 Total Defeasance.........................................32
2.4.2 Partial Defeasance.......................................34
2.4.3 Defeasance Collateral Account. ..........................36
2.4.4 Successor Borrower. .....................................36
III INTEREST; PAYMENTS.......................................................37
3.1 Interest; Monthly Loan Payments.................................37
3.1.1 Interest Generally.......................................37
3.1.2 Payment Before Anticipated Repayment Date................37
3.1.3 Payment After Anticipated Repayment Date.................37
3.1.4 Payment on Maturity Date.................................37
3.1.5 Property Cash Flow Allocation............................37
3.1.6 Payments after Default; Default Rate.....................38
3.2 Loan Repayment; Voluntary Prepayment; Prepayment
After Default...................................................38
3.2.1 Repayment................................................38
3.2.2 Mandatory Prepayments....................................39
3.3 Release of Property.............................................39
3.3.1 Release of Collateral Properties.........................39
3.3.2 Release on Payment in Full...............................40
3.3.3 Release Documents........................................40
3.3.4 Release of Funds.........................................40
3.4 Payments and Computations.......................................40
3.4.1 Making of Payments.......................................40
3.4.2 Interest Calculation.....................................40
3.4.3 Late Payment Charge......................................41
3.5 Taxes...........................................................41
IV CASH MANAGEMENT; ESCROWS AND RESERVES....................................42
4.1 Cash Management Arrangements....................................42
4.1.1 Lockbox Account..........................................42
4.1.2 Deposits into Lockbox Account............................42
4.1.3 The Accounts.............................................42
4.2 Intentionally Deleted...........................................43
4.3 Tax and Insurance Escrow Fund...................................43
4.4 Replacements and Replacement Reserves...........................44
4.4.1 Replacement Reserve Fund.................................44
4.4.2 Payment of Replacement Expenses..........................44
4.5 Rollover Reserves...............................................44
4.5.1 Rollover Reserve Fund....................................44
4.5.2 Payment of Leasing Expenses..............................45
4.6 Ground Rent Escrow..............................................46
4.6.1 Ground Rent Escrow Fund..................................46
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4.7 Operating Expense Reserves......................................46
4.7.1 Operating Expense Reserve Fund...........................46
4.7.2 Payment of Approved Operating Expenses...................46
4.8 Casualty/Condemnation Fund......................................47
4.9 Security Deposits...............................................47
4.10 Funds, Generally................................................47
4.10.1 Grant of Security Interest; Application of Funds.........48
4.10.2 Investments of Funds.....................................48
4.11 Cash Collateral Fund............................................48
4.12 Intentionally Deleted...........................................49
V REPRESENTATIONS AND WARRANTIES...........................................49
5.1 Borrower Representations........................................49
5.1.1 Organization; Special Purpose............................49
5.1.2 Proceedings; Enforceability..............................49
5.1.3 No Conflicts.............................................50
5.1.4 Litigation...............................................50
5.1.5 Agreements...............................................50
5.1.6 Title....................................................50
5.1.7 Survey...................................................51
5.1.8 No Bankruptcy Filing.....................................51
5.1.9 Full and Accurate Disclosure.............................51
5.1.10 No Plan Assets...........................................51
5.1.11 Compliance...............................................51
5.1.12 Contracts................................................51
5.1.13 Financial Information....................................52
5.1.14 Condemnation.............................................52
5.1.15 Federal Reserve Regulations..............................52
5.1.16 Utilities and Public Access..............................52
5.1.17 Not a Foreign Person.....................................52
5.1.18 Separate Lots............................................53
5.1.19 Assessments..............................................53
5.1.20 Enforceability...........................................53
5.1.21 Insurance................................................53
5.1.22 Use of Property; Licenses................................53
5.1.23 Flood Zone...............................................53
5.1.24 Physical Condition.......................................53
5.1.25 Boundaries and Encroachments.............................54
5.1.26 Leases and Rent Roll.....................................54
5.1.27 Filing and Recording Taxes...............................54
5.1.28 Investment Company Act...................................55
5.1.29 Fraudulent Transfer......................................55
5.1.30 Ownership of Borrower....................................55
5.1.31 Management Agreement.....................................56
5.1.32 Hazardous Substances.....................................56
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5.1.33 Name; Principal of Business...............................56
5.1.34 Subordinated Debt.........................................57
5.1.35 Ground Lease..............................................57
5.1.36 REA.......................................................59
5.1.37 Tenant Estoppels..........................................59
5.1.38 No Prior Assignment.......................................59
5.1.39 Special Purpose Entity/Separateness.......................60
5.1.40 Illegal Activity..........................................60
5.2 Survival of Representations and Covenants........................60
VI AFFIRMATIVE COVENANTS.....................................................60
6.1 Existence........................................................60
6.2 Taxes and Other Charges..........................................61
6.3 Repairs; Maintenance and Compliance; Alterations;
Required Repairs.................................................61
6.3.1 Repairs and Maintenance...................................61
6.3.2 Legal Compliance..........................................61
6.3.3 Alterations...............................................62
6.3.4 Required Repairs..........................................63
6.4 Litigation.......................................................63
6.5 Performance of Other Agreements..................................63
6.6 Notices..........................................................63
6.7 Cooperate in Legal Proceedings...................................63
6.8 Further Assurances...............................................63
6.9 Financial Reporting..............................................64
6.9.1 Bookkeeping...............................................64
6.9.2 Annual Reports............................................64
6.9.3 Monthly and Quarterly Reports.............................64
6.9.4 Other Reports.............................................65
6.9.5 Annual Budget.............................................65
6.9.6 Delivery of Financial Information.........................65
6.10 Environmental Matters............................................66
6.10.1 Hazardous Substances......................................66
6.10.2 Environmental Monitoring..................................66
6.10.3 Title to the Property.....................................68
6.10.4 Easements; Dedications. Without the consent
of Lender, Borrower shall have the right from time to
time to release property, grant easements, or dedicate
property in connection with lot line adjustments,
utility or road requirements or other similar items,
provided that any such release, easement or dedication
will not have a material adverse effect on the value
or utility of the applicable Collateral Property and
such Collateral Property will remain in compliance
with all Requirements of Law..............................68
6.11 Leases...........................................................68
6.11.1 Form of Lease.............................................68
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6.11.2 New and Renewal Leases....................................69
6.11.3 Leasing Covenants.........................................69
6.11.4 Non-disturbance Agreements................................69
6.11.5 Reciprocal Easement Agreements............................69
6.11.6 Notice to Tenants.........................................70
6.12 Estoppel Statement...............................................70
6.13 Property Management..............................................70
6.13.1 Management Agreement......................................70
6.13.2 Termination of Manager....................................70
6.13.3 Manager's Subordination...................................71
6.14 Special Purpose Entity...........................................71
6.15 Expenses.........................................................71
6.16 Indemnity........................................................72
6.17 Third Party Reports..............................................73
6.18 Year 2000 Compliance.............................................73
6.19 [Intentionally Deleted.].........................................73
6.20 Performance by Borrower..........................................73
6.21 Secondary Market Transaction Master Estoppel.....................73
6.22 Exercise of Option to Purchase...................................74
VII NEGATIVE COVENANTS........................................................74
7.1 Management Agreement.............................................74
7.2 Liens............................................................75
7.3 Dissolution......................................................75
7.4 Change In Business or Operation of Property......................75
7.5 Debt Cancellation................................................75
7.6 Assets...........................................................75
7.7 Transfers........................................................75
7.8 Debt.............................................................78
7.9 Assignment of Rights.............................................78
7.10 Principal Place of Business......................................78
7.11 Corporate Organization...........................................78
7.12 ERISA............................................................78
7.13 No Joint Assessment..............................................79
7.14 Affiliate Transactions...........................................79
VIII INSURANCE...............................................................79
8.1.1 Coverage..................................................79
8.1.2 Policies..................................................80
8.2 Casualty.........................................................81
8.2.1 Notice; Restoration.......................................81
8.2.2 Settlement of Proceeds....................................81
8.3 Condemnation.....................................................81
8.3.1 Notice; Restoration.......................................81
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8.3.2 Collection of Award.......................................81
8.4 Application of Proceeds or Award.................................82
8.4.1 Application to Restoration................................82
8.4.2 Application to Debt.......................................82
8.4.3 Procedure for Application to Restoration..................83
8.4.4 Ground Lease; Anchor Lease; REA...........................83
IX DEFAULTS..................................................................83
9.1 Events of Default................................................83
9.2 Remedies.........................................................86
9.2.1 Acceleration..............................................86
9.2.2 Remedies Cumulative.......................................86
9.2.3 Severance.................................................86
9.2.4 Delay.....................................................87
9.2.5 Lender's Right to Perform.................................87
X SPECIAL PROVISIONS........................................................87
10.1 Sale of Note and Secondary Market Transaction....................87
10.1.1 Cooperation...............................................87
10.1.2 Use of Information........................................89
10.1.3 Borrower's Obligations Regarding Disclosure Documents.....89
10.1.4 Borrowers Indemnity Regarding Filings.....................90
10.1.5 Indemnification Procedure.................................90
10.1.6 Contribution..............................................91
XI MISCELLANEOUS.............................................................91
11.1 Exculpation......................................................91
11.2 Notices..........................................................93
11.2.1 Borrower's Representative.................................93
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11.3 Brokers and Financial Advisors...................................94
11.4 Retention of Servicer............................................94
11.5 Survival.........................................................94
11.6 Lender's Discretion..............................................95
11.7 Governing Law; Venue.............................................95
11.8 Modification; Waiver in Writing..................................95
11.9 Delay Not a Waiver...............................................96
11.10 TRIAL BY JURY....................................................96
11.11 Heading..........................................................96
11.12 Severability.....................................................96
11.13 Preferences......................................................96
11.14 Waiver of Notice.................................................97
11.15 Remedies of Borrower.............................................97
11.16 Prior Agreements.................................................97
11.17 Offsets, Counterclaims and Defenses..............................97
11.18 Publicity........................................................97
11.19 No Usury.........................................................97
11.20 Conflict; Construction of Documents..............................98
11.21 No Joint Venture or Partnership; No Third Party Beneficiaries....98
11.22 Yield Maintenance Premium........................................98
11.23 Assignment.......................................................99
11.24 Cross-Default; Waiver of Marshalling of Assets...................99
11.25 Joint and Several Liability.....................................100
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LOAN AGREEMENT
LOAN AGREEMENT dated as of December 9, 1999 between the Borrower (as
hereinafter defined) and UBS PRINCIPAL FINANCE LLC, a Delaware limited
liability company (together with its successors and assigns, "Lender").
I DEFINITIONS: PRINCIPLES OF CONSTRUCTION
1.1 Specific Definitions. The following terms have the meanings set
forth below:
"Acceptable Appraisal": an appraisal of a Collateral Property (or
proposed Substitute Property) or the Collateral Pool (i) dated not more
than 180 days prior to the Closing Date or the date of the proposed
Substitution, as applicable, (ii) signed by a qualified MAI/FIRREA
appraiser with no interest, direct or indirect, in the Loan, any
Collateral Property or the proposed Substitute Property, and whose
compensation is not affected by the Appraised Value (and Lender agrees
that as of the date hereof ▇▇▇▇▇▇▇▇ Associates, Inc. satisfies the
foregoing criteria), (iii) addressed to Lender and its successors and
assigns, (iv) made in compliance with the Uniform Standards of Appraisal
Practice, and (v) otherwise reasonably satisfactory to Lender in all
respects.
"ADA": shall mean The Americans with Disabilities Act of 1990.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control
with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
"Agent": shall mean LaSalle National Bank.
"Agreement": this Loan Agreement.
"Allocated Loan Amount": shall mean the portion of the Loan amount
allocated to each Collateral Property by the Lender, as such Allocated
Loan Amounts are set forth on Schedule 1 attached hereto and incorporated
herein by reference.
"Anchor Tenant": shall mean any Tenant from time to time leasing
more than 75,000 square feet of gross leasable area in any particular
Collateral Property.
"Anticipated Repayment Date": shall mean December 11, 2009.
"Applicable Interest Rate": shall mean (a) from the date hereof
through but not including the Anticipated Repayment Date, the Regular
Interest Rate and (b) from and after the Anticipated Repayment Date
through and including the date the Loan is paid in full, the Matured
Performing Rate.
"Applicable Rating Agencies": means the Rating Agencies that have
rated any Securities issued in connection with a Secondary Market
Transaction.
"Appraised Value": the fair market value of a Collateral Property or
the Collateral Pool reflected in an Acceptable Appraisal.
"Approved Leasing Expenses": expenses incurred by a Borrower in
leasing space at the Collateral Property pursuant to Leases entered into
in accordance with the Loan Documents, including brokerage commissions,
tenant improvements and other inducements, which expenses (i) are (A)
specifically approved by Lender in connection with approving the
applicable Lease, (B) incurred in the ordinary course of business and on
market terms and conditions in connection with Leases which do not require
Lender's approval under the Loan Documents, or (C) otherwise approved by
Lender, which approval shall not be unreasonably withheld or delayed, and
(ii) are substantiated by executed Lease documents and brokerage
agreements.
"Approved Manager": Westfield Management Company, a Delaware general
partnership, or Westfield Management Acquisition, Inc., a Delaware
corporation, or any other wholly owned subsidiary of Westfield Holdings
Limited, or any successor or assignee of any of the foregoing, provided
that each successor or assignee shall be (i) approved by Lender in
Lender's reasonable discretion (unless such successor or assign is wholly
owned, directly or indirectly, by Westfield Holdings Limited and evidence
thereof reasonably satisfactory to Lender has been delivered to Lender
prior to the change in Manager, in which case Lender's approval shall not
be required) and (ii) after any Secondary Market Transaction, approved by
each Rating Agency (provided that such Rating Agency approval shall not be
necessary as to any Manager wholly owned, directly or indirectly, by
Westfield Holdings Limited if each Rating Agency has received a
nonconsolidation opinion as to such Manager from Debevoise & ▇▇▇▇▇▇▇▇ or
another law firm acceptable to the Rating Agencies in form and substance
satisfactory to the Rating Agencies).
"Approved Operating Expenses": Operating Expenses incurred by a
Borrower following the occurrence of a Cash Management Event or the
Anticipated Repayment Date which (i) are included in the Operating Budget
for the Current Month for the Collateral Property owned by such Borrower,
(ii) are for electric, gas, oil, water, sewer or other utility service to,
or Management Fees for, the Collateral Property, or (iii) have been
approved by Lender, which approval shall not be unreasonably withheld or
delayed.
"Approved Replacement Expenses": Replacement Expenses incurred by
the Borrower which (i) are included in the approved Replacement Budget for
the Current Month for the Collateral Property or (ii) have been approved
by Lender, which approval shall not be unreasonably withheld or delayed.
"Assignment of Leases": shall mean, with respect to each Collateral
Property, that certain first priority Assignment of Leases and Rents,
dated as of the date hereof, from the applicable Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of the Borrower's interest in
and to the Leases and Rents of such Collateral Property as security for
the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"Borrower": collectively, Downtown Plaza LLC, a Delaware limited
liability company, Eastland Shopping Center LLC, a Delaware limited
liability company, and Westland South
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Shore Mall L.P., a California limited partnership, together with their
respective permitted successors and assigns.
"Business Day": means any day other than (i) a Saturday or a Sunday,
and (ii) a day on which federally insured depository institutions in New
York, New York or San Francisco, California are authorized or obligated by
law, regulation, governmental decree or executive order to be closed.
"Cash Management Agreement": shall mean that certain Cash Management
Agreement dated as of the date hereof by and between the Borrower, Lender,
Manager and Agent.
"Cash Management Event": either (A) an Event of Default occurs or
(B) the Debt Service Coverage Ratio at any time is less than 1.25, subject
to a One Time Cash Management Event Cure by the Borrower.
"Cash Management Fee": the fees charged from time to time by the
Agent in accordance with the Cash Management Agreement.
"Cash Management Termination": the giving by Lender to the Agent of
notice that the sweeping of funds into the Rollover Reserve Account,
Replacement Reserve Account, Operating Expense Account and the Cash
Collateral Account may cease (a "Cash Management Termination Notice"),
which notice Lender shall only be required to give if (x) no other Cash
Management Event has subsequently occurred, and (y) and the Debt Service
Coverage Ratio has been 1.25x or higher for two consecutive fiscal
quarters (such Debt Service Coverage Ratio being tested on a quarterly
basis) since the occurrence of the Cash Management Event.
"Closing Date": shall mean the date of the funding of the Loan or,
in the case of a Substitution, the Substitution Date.
"Code": the Internal Revenue Code of 1986, as amended, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations
issued pursuant thereto in temporary or final form.
"Collateral Pool": collectively, each and every Collateral Property
which is subject to the terms of this Agreement, including any Substitute
Property.
"Collateral Property": shall mean each parcel of real property, the
Improvements thereon, the Equipment and all personal property owned by the
applicable Borrower and encumbered by a Mortgage, together with all rights
pertaining to such property and Improvements, as more particularly
described in the granting clauses of each Mortgage.
"Control": with respect to any Person, either (i) ownership directly
or through other entities of more than fifty percent (50%) of all
beneficial equity interest in such Person, or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, through the ownership of
voting securities, by contract or otherwise.
"Current Month": as of any date of determination following the
occurrence of a Cash Management Event or the Anticipated Repayment Date,
the then current calendar month.
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"Debt": the unpaid principal, all interest accrued and unpaid
thereon, any Yield Maintenance Premium and all other sums due to Lender in
respect of the Loan under the Note, this Agreement, the Mortgages, or
under any Loan Document.
"Debt Service": with respect to any particular period of time, the
scheduled amount of Principal and interest payments due under the Note in
such period.
"Debt Service Coverage Ratio": as of any date, the ratio calculated
by Lender of (i) the Net Operating Income for the twelve (12) month period
ending with the most recently completed calendar quarter to (ii) the Debt
Service for the same period.
"Default": the occurrence of any event under any Loan Document
which, but for the giving of notice or passage of time, or both, would be
an Event of Default.
"Default Rate": prior to the Stated Maturity Date: a rate per annum
equal to the lesser of (i) the Maximum Rate and (ii) three percent (3%)
above the Applicable Interest Rate, compounded monthly.
"Defeasance Collateral": shall mean obligations or securities not
subject to prepayment, call or early redemption which are direct
obligations of, or obligations fully guaranteed as to timely payment by,
the United States of America or any agency or instrumentality of the
United States of America, or the obligations of which are backed by the
full faith and credit of the United States of America, the ownership of
which will not cause Lender to be an "investment company" under the
Investment Company Act of 1940, as amended, as evidenced by an opinion of
counsel reasonably acceptable to Lender, and which qualify under ss.
1.860G-2(a)(8) of the Treasury regulations. All such obligations or
securities shall mature or be redeemable, or provide for payments of
interest thereon, on or prior to the Business Day preceding the date such
amounts are required to be applied under this Agreement and shall provide
payments (i) on or prior to, but as close as possible to, all Payment
Dates and other scheduled payment dates if any, under the Note after the
Defeasance Date and up to and including the Anticipated Repayment Date,
and (ii) in amounts equal to or greater than the Schedule Defeasance
Payments.
"Eligible Account": shall mean a separate and identifiable account
from all other funds held by the holding institution that is either (a) an
account or accounts maintained with a federal or state-chartered
depository institution or trust company which complies with the definition
of Eligible Institution or (b) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity which, in the case of a
state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. ss.9.10(b), having in
either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit,
passbook or other instrument.
"Eligible Institution" shall mean a federal or state chartered
depository institution or trust company, the long-term unsecured debt
obligations of which are rated at least (A) "A+" by S&P and (B) "A+" by
Fitch IBCA, Inc. ("Fitch") or, if not rated by Fitch, at least "A" or its
equivalent by another nationally recognized statistical rating agency
(other than S&P) if the
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deposits are to be held in such account 30 days or more or the short-term
debt obligations of which have a short-term rating of not less than "A-1"
from S&P and "F-1+" from Fitch or if not rated by Fitch, at least "F-1+"
or its equivalent by another nationally recognized statistical rating
agency (other than S&P) if the deposits are to be held in such account for
less than thirty (30) days, or such other account or accounts with respect
to which the Applicable Rating Agencies shall have confirmed in writing
that the then current ratings assigned in any Secondary Market Transaction
will not be qualified, downgraded or withdrawn by reason thereof.
"Environmental Event": means, with respect to any Collateral
Property, (a) a violation of any Environmental Law with respect to such
Collateral Property of which Borrower has received written notice from a
governmental authority, or (b) the presence of any Hazardous Substance on,
about, or under such Collateral Property that, under or pursuant to any
Environmental Law, would require remediation, if in the case of either (a)
or (b), such event or circumstance could result in a material adverse
effect on the value or operations of such Collateral Property.
"ERISA": the Employment Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"ERISA Affiliate": all members of a controlled group of corporations
and all trades and business (whether or not incorporated) under common
control and all other entities which, together with Borrower, are treated
as a single employer under any or all of Section 414(b), (c), (m) or (o)
of the Code.
"FASIT": Financial Asset Securitization Investment Trust within the
meaning of Section 860L(a)(1) of the Code.
"Fiscal Year": each twelve month period commencing on January 1 and
ending on December 31 during each year of the Term.
"GAAP": generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
"Governmental Authority": any court, board, agency, commission,
office or authority of any nature whatsoever for any governmental ▇▇▇▇
(▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or otherwise) now or
hereafter in existence.
"Ground Lease": any lease defined as a "Ground Lease" in any
Mortgage.
"Ground Lessor": a lessor under a Qualified Ground Lease.
"Ground Rent": with respect to any Ground Lease, all ground rents,
square footage rents, percentage rents or any other payments or rents
owing by a Borrower under such Ground Lease.
"Improvements": shall have the meaning set forth in the granting
clause of the related Mortgage with respect to each Collateral Property.
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"Independent Director": shall mean a director or manager of the SPE
Member who is not at the time of initial appointment, or at any time while
serving as a director of the SPE Member, and has not been at any time
during the preceding five (5) years: (a) a stockbroker, director (with the
exception of serving as the Independent Director of the SPE Member),
officer, employee, partner, attorney or counsel of the SPE Member, the
Borrower or any Affiliate of either of them; (b) a customer, supplier or
other person who derives any of its purchases or revenues from its
activities with the SPE Member, the Borrower or any Affiliate of either of
them; (c) a Person controlling or under common control with any such
stockholder, partner, customer, supplier or other Person; or (d) a member
of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other person. As used in this
definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of management,
policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise. An individual that otherwise
satisfies the foregoing shall not be disqualified from serving as an
Independent Director of the SPE Member if such individual is at the time
of initial appointment, or at any time while serving as an Independent
Director of the SPE Member, an Independent Director of a Special Purpose
Entity Affiliated with the Borrower or the SPE Member.
"Insolvency Opinion": shall mean one or more substantive
non-consolidation opinion letters, dated the date hereof, delivered by
Debevoise & ▇▇▇▇▇▇▇▇ on behalf of each Borrower in connection with the
Loan.
"Interest Period": (i) the period from the Closing Date through the
first day thereafter that is an Interest Period Termination Date and (ii)
each period thereafter from an Interest Period Commencement Date through
an Interest Period Termination Date; except that the Interest Period, if
any, that would otherwise commence before and end after the Maturity Date
shall end on the Maturity Date.
"Interest Period Commencement Date": the eleventh (11th) day of each
calendar month; provided, however, that if the Payment Date is changed by
Lender pursuant to the definition thereof, Lender may adjust this
definition accordingly.
"Interest Period Termination Date": the tenth (10th) day of each
calendar month (notwithstanding that the succeeding Payment Date may not
be an Interest Period Commencement Date because the day after such
Interest Period Termination Date is not a Business Day); provided,
however, that if the Payment Date is changed by Lender pursuant to the
definition thereof, Lender may adjust this definition accordingly.
"Lease Rollover Number": as to any calendar year, the aggregate
number of square feet of gross leasable area in the Improvements in the
Collateral Pool that are covered by Leases the expiration dates of which
(after taking into account all renewals and extensions that have been
unconditionally exercised as of the date in question) are scheduled to
occur in such calendar year.
"Lease Rollover Percentage": as to any calendar year, a fraction,
expressed as a percentage, the numerator of which is the Lease Rollover
Number for such calendar year and the
-6-
denominator of which is the aggregate number of square feet of gross
leasable area of all Improvements in the Collateral Pool.
"Leasehold Estate": the leasehold interest and estate of any
Borrower created pursuant to a Ground Lease.
"Leases": all leases and other agreements existing on the date
hereof or hereafter entered into affecting the use, or occupancy of, or
the conduct of any activity upon or in, any Collateral Property or any
Improvements thereon, including any extensions, renewals, modifications or
amendments thereof, but excluding (i) reciprocal easement and operating
agreements and (ii) subleases where the sublessee is not in privity with a
Borrower.
"Legal Requirements": statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of, or agreements with,
Governmental Authorities affecting all or part of any Collateral Property,
any Ground Lease or the construction, use, alteration or operation
thereof, whether now or hereafter enacted and in force, and all permits,
licenses and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instrument, either of record or known to any Borrower, at any time in
force affecting all or part of any Collateral Property, including any that
may (i) require repairs, modifications or alterations in or to all or part
of any Collateral Property, or (ii) in any way limit the use and enjoyment
thereof.
"Letter of Credit": shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit in favor of Lender and
entitling Lender to draw thereon in New York, New York, issued by a
domestic Eligible Institution or the U.S. agency or branch of a foreign
Eligible Institution, or if there are no domestic banks or financial
institutions which qualify as an Eligible Institution or U.S. agencies or
branches of a foreign bank or financial institution which qualifies as an
Eligible Institution then issuing letters of credit, then such letter of
credit may be issued by any domestic bank with a long term unsecured debt
rating that is the highest such rating then given by each Rating Agency to
a domestic commercial bank.
"Lien": any mortgage, deed of trust, indemnity deed of trust, lien,
pledge, hypothecation, assignment, security interest or any other
encumbrance, charge or transfer of, on or affecting all or part of any
Collateral Property or any interest therein, or in any Borrower or in any
Borrower Representative, including any conditional sale or other title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, the filing of any financing
statement, and mechanic's, materialmen's and other similar liens and
encumbrances.
"Loan": shall mean the loan made by Lender to Borrower pursuant to
this Agreement.
"Loan Documents": this Agreement and all other documents, agreements
and instruments evidencing, securing or delivered to Lender in connection
with the Loan, whether now existing or hereafter executed, including the
following: (i) the Note, (ii) the mortgage on each Collateral Property
(individually a "Mortgage" and collectively, the "Mortgages"), (iii) the
Assignments of Leases with respect to each Collateral Property, (iv) the
Assignments of Agreements with respect to each Collateral Property, (v)
the Manager's Consent and
-7-
Subordination of Management Agreement with respect to each Collateral
Property, (vi) the Contribution Agreement, (vii) the Cash Management
Agreement, and (x) the Environmental Indemnity, and all other documents
executed and/or delivered in connection with the Loan, as each of the
foregoing may be (and each of the foregoing defined terms shall refer to
such documents as they may be) amended, restated, replaced, supplemented
or otherwise modified from time to time.
"Maintenance and Repairs": items of maintenance and repair to the
Improvements or Equipment similar to the items of work (but not limited to
such specific items) described in the physical inspection reports
delivered to Lender in connection with the closing of the Loan.
"Management Agreement": as to each Collateral Property, the
management agreement in effect on the date hereof between the applicable
Borrower and an Approved Manager for such Collateral Property, pursuant to
which such Approved Manager is to manage such Property, as same may be
amended, restated, replaced, supplemented or otherwise modified from time
to time with the prior approval of Lender (which consent shall not be
reasonably withheld or delayed), and after any Secondary Market
Transaction, the approval of each Rating Agency (provided, however, that
any modification which does not modify the term or economics of the
Management Agreement or otherwise materially modify the Management
Agreement, shall require prior notice to, but not the consent of, Lender,
and shall not require the consent of any Rating Agency).
"Management Fee(s)": as to any Management Agreement, all fees in the
nature of management fees payable to Manager under such Management
Agreement.
"Manager": as to each Collateral Property, the Approved Manager
under the Management Agreement for such Collateral Property.
"Material Alteration": as to the Collateral Properties known as
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, any alteration affecting structural
elements of such Collateral Property the cost of which exceeds five
percent (5%) of such Collateral Property's original Allocated Loan Amount
per calendar year; provided, however, that in no event shall tenant
improvement work, or alterations performed as part of a Restoration,
constitute a Material Alteration.
"Material Lease": as to any Collateral Property, any Lease (i) which
demises more than five percent (5%) of such Collateral Property's gross
leasable area or (ii) the fixed annual rent under which exceeds five
percent (5%) of the aggregate fixed annual rent payable under all Leases
of such Collateral Property.
"Matured Performing Rate": shall mean a rate per annum equal to the
Regular Interest Rate plus four hundred (400) basis points.
"Maturity Date": the date on which the final payment of Principal of
the Note becomes due and payable as therein or herein provided, whether at
the Stated Maturity Date, by declaration of acceleration, or otherwise.
"Maximum Rate": the maximum interest rate allowed by applicable law
in effect with respect to the Loan on the date for which a determination
of interest accrued hereunder is made,
-8-
after taking into account all fees, payments and other charges that are,
under applicable law, characterized as interest.
"Monthly Debt Service Payment Amount": shall mean a constant monthly
payment of $1,610,022.66.
"Monthly Replacement Deposit": for any Collateral Property, the
amount reasonably determined by Lender, based on the property condition
report for such Collateral Property reviewed by Lender, in connection with
Lender's making of the Loan. On each anniversary of the date of this
Agreement (or, if any such anniversary is not a Payment Date, on the first
Payment Date following such anniversary) the Monthly Replacement Deposit
shall automatically increase by 2.5% of the then current Monthly
Replacement Deposit amount. The initial Monthly Replacement Deposit for
each of the Collateral Properties owned by the Borrower is set forth in
Schedule 2 hereto.
"Monthly Rollover Deposit": for any Collateral Property, an amount
equal to one-twelfth (1/12th) of the average annual cost (as determined by
Lender) to the applicable Borrower for tenant improvements and leasing
commissions in respect of such Collateral Property during the sixty (60)
month period prior to the Closing Date, as set forth on Schedule 3 hereto.
"Net Operating Income": for any period, the excess, if any, of
Operating Income for such period over Operating Expenses for such period.
"Net Operating Income After Debt Service": for any period shall mean
the amount obtained by subtracting Debt Service for such period from Net
Operating Income for such period.
"Obligations": all obligations, liabilities and Debt of Borrower to
Lender, whether now existing or hereafter arising, under this Agreement or
any of the other Loan Documents.
"Officer's Certificate": as to any Borrower, a certificate delivered
to Lender by such Borrower which is signed by a senior executive officer
of such Borrower's Borrower Representative.
"One Time Cash Management Event Cure": In the event that a Cash
Management Event is due to the Debt Service Coverage Ratio being below
1.25, the Borrower shall have the opportunity one (1) time during the Loan
term to deposit cash or a Letter of Credit with the Lender in an amount
sufficient to raise the Debt Service Coverage Ratio to 1.30; provided,
however, that the Debt Service Coverage Ratio must be 1.25 or greater at
the end of the immediately following quarter.
"Operating Expenses": shall mean the total of all expenditures,
computed in accordance with GAAP, of whatever kind relating to the
operation, maintenance and management of the Collateral Property that are
incurred on a regular monthly or other periodic basis, including without
limitation, utilities, ordinary repairs and maintenance, insurance,
license fees, property taxes and assessments, advertising expenses,
management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments, and other similar costs,
but excluding depreciation, Debt Service, Replacement Expenses, non-cash
items
-9-
such as depreciation and amortization or any extraordinary one time
expenditures not considered operating expenses under GAAP.
"Operating Income": as to any Collateral Property or proposed
Substitute Property, for any period, all regular on-going revenues
actually received by Borrower from the operation of such Collateral
Property or proposed Substitute Property during such period, including (i)
Rents, (ii) amounts withdrawn from any Funds pursuant to this Agreement,
and (iii) all other amounts actually received which in accordance with
GAAP are required to be or are included in the applicable Borrower's
annual financial statements as operating income of such Collateral
Property or proposed Substitute Property; provided, that Operating Income
will not include (1) income from non-recurring income sources; (2) advance
Rents or other payments; (3) deposits or escrows other than the Funds,
without duplication; (4) any income otherwise includable in Operating
Income but paid to a Person other than the applicable Borrower; (5)
proceeds of Casualty insurance or Condemnation Awards; or (6) income from
a sale, financing or other capital transaction.
"Other Charges": with respect to any Collateral Property, all Ground
Rents, maintenance charges, impositions other than Taxes, and any other
charges, including vault charges and license fees for the use of vaults,
chutes and similar areas adjoining such Collateral Property, now or
hereafter levied or assessed or imposed against such Collateral Property
or any part thereof, including all interest and penalties on any of the
foregoing.
"Partial Defeasance Collateral": shall mean Defeasance Collateral
which provides payments (i) on or prior to, but as close as possible to,
all Payments Dates and other scheduled payment dates, if any, under the
Defeased Note after the Partial Defeasance Date and up to and including
the Anticipated Repayment Date, and (ii) in amounts equal to or greater
than the Scheduled Defeasance Payments.
"Payment Date": the eleventh (11th) day of each calendar month (or
such other day of a calendar month selected by Lender to collect debt
service payments under loans which it makes and securitizes) or, if such
day is not a Business Day, the first Business Day thereafter.
"Permitted Encumbrances": as to any Collateral Property: (a) the
Liens created by the Loan Documents, (b) all Liens and other matters
disclosed in the Title Insurance Policies insuring the Mortgage on such
Collateral Property, (c) Liens, if any, for Taxes or Other Charges not yet
payable or delinquent, (d) easements for utilities and rights of way which
do not have a material adverse affect on the use, operation or value of
such Collateral Property and (e) such other title and survey exceptions as
Lender approves in writing in Lender's reasonable discretion.
"Permitted Investments": shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, including those issued by Servicer, the trustee under any Secondary
Market Transaction or any of their respective Affiliates, payable on
demand or having a maturity date not later than the Business Day
immediately prior to the first Payment Date following the date of
acquiring such investment and meeting one of the appropriate standards set
forth below:
-10-
(1) obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full faith
and credit of the United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),
the Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;
(2) Federal Housing Administration debentures;
(3) 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 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;
(4) federal funds, unsecured certificates of deposit, time
deposits, the short term obligations of which at all times are rated in the
highest short term rating category by each Applicable Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); 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;
(5) fully Federal Deposit Insurance Corporation-insured demand
and time deposits in, or certificates of deposit of any bank or trust company,
savings and loan association or savings bank, the short term obligations of
which at all times are rated in the highest short term rating category by each
Rating Agency (or, if not rated by all Rating
-11-
Agencies, rated by at least one Rating Agency in the highest short term rating
category and otherwise acceptable to each other Rating Agency, as confirmed in
writing that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); 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;
(6) debt obligations with maturities of not more than 365 days
and at all times rated by each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities) in its
highest long-term unsecured rating category; 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;
(7) 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 at all times is rated by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) in its highest short-term unsecured
debt rating; provided, however, that the investments described in this clause
must (A) have a predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an "r" highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and (D)
such investments must not be subject to liquidation prior to their maturity;
(8) units of taxable money market funds or mutual funds, which
funds are regulated investment companies, seek to maintain a constant net asset
value per share and invest solely in obligations backed by the full faith and
credit of the United States, which funds have the highest rating available from
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result in
a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) for money market funds or mutual
funds; and
(9) any other security, obligation or investment which has
been approved as a Permitted Investment in writing by (a) Lender and (b) each
Rating Agency, as
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evidenced by a written confirmation that the designation of such security,
obligation or investment as a Permitted Investment will not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities by such Rating Agency;
provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.
"Person": any individual, corporation, partnership, joint venture, estate,
trust, unincorporated association, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary acting
in such capacity on behalf of any of the foregoing.
"Plan": (i) an employee benefit or other plan established or maintained by
Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate
makes or is obligated to make contributions and (ii) which is covered by Title
IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
"Pooling and Servicing Agreement": the Servicing Agreement entered into
with the Servicer in connection with any Secondary Market Transaction, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
"Prepayment Lockout Expiration Date": shall mean the date that is the
later of (a) three (3) years from the Closing Date or (b) two (2) years from the
"startup day" within the meaning of Section 860G(a)(9) of the Code of the REMIC
Trust.
"Qualified Ground Lease": a ground lease of a Collateral Property under
which a Borrower is the lessee, all of the terms and conditions of which are
acceptable to Lender in its sole and absolute discretion (or, in the case of a
ground lease which covers only portions of a Collateral Property not material to
the use, operation or legal compliance of such Collateral Property, in Lender's
reasonable discretion) and as to which the Ground Lessor has executed and
delivered to Lender an estoppel certificate in form, scope and substance
satisfactory to Lender in its sole and absolute discretion.
"Qualified REA": an REA all of the terms and conditions of which are
acceptable to Lender in its sole and absolute discretion and as to which each of
the parties to the REA (other than the applicable Borrower) has executed and
delivered to Lender an estoppel certificate in form, scope and substance
satisfactory to Lender in its sole and absolute discretion.
"Rating Agency": any of Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc. ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc., Duff & ▇▇▇▇▇▇ Credit
Rating Co., Fitch IBCA, Inc. or any other nationally-recognized statistical
rating agency which has issued a rating of any Securities.
-13-
"Rating Comfort Letter": a letter issued by each of the Applicable Rating
Agencies which confirms that the taking of the action referenced to therein will
not result in any qualification, withdrawal or downgrading of any existing
ratings of Securities created in a Secondary Market Transaction.
"REA": any "construction, operation and reciprocal easement agreement" or
similar agreement (including any "separate agreement" or other agreement between
a Borrower and one or more other parties to an REA with respect to an REA)
affecting any Collateral Property or portion thereof.
"Real Property": as to any Collateral Property, the portions thereof
constituting land, Improvements thereon and all rights pertaining to such land
and Improvements.
"Regular Interest Rate": shall mean (8.177%) per annum.
"REMIC": a "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code that holds the Note.
"Rents": with respect to any Collateral Property, all rents, rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, all oil and gas or other mineral royalties and bonuses),
income, fees, receivables, receipts, revenues, deposits (including security,
utility and other deposits), accounts, cash, issues, profits, charges for
services rendered, and other payment and consideration of whatever form or
nature received by or paid to or for the account of or benefit of a Borrower,
Manager (in its capacity as manager of such Collateral Property, and excluding
sums payable by Borrower to Manager pursuant to the Management Agreement) or any
of their agents or employees from any and all sources arising from or
attributable to such Collateral Property and the Improvements therein, including
all receivables, customer obligations, installment payment obligations and other
obligations now existing or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of the use and
occupancy of such Collateral Property or rendering of services by the applicable
Borrower or Manager (in its capacity as manager of such Collateral Property, and
excluding sums payable by a Borrower to a Manager pursuant to Management
Agreement), and proceeds, if any, from business interruption or other loss of
income insurance.
"Replacement Expenses": expenses incurred to pay for replacements,
improvements and/or Maintenance and Repairs of the Improvements or Equipment or
portions of either.
"Required Record": any financial statement, certificate, report or
information required to be delivered under Section 6.9.
"Routine Hazardous Substances": Hazardous Substances typically used in the
ordinary course of business at retail properties, which are generated, used,
stored and disposed of in compliance with all applicable Environmental Laws.
"Scheduled Defeasance Payments": shall mean scheduled payments of interest
and principal under the Note in the case of a Total Defeasance and under the
Defeased Note in the case of a Partial Defeasance for all Payment Dates
occurring after the Defeasance Date or Partial Defeasance Date, as applicable,
and up to and including the Anticipated Repayment Date
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(including, in the case of a Total Defeasance, the outstanding Principal balance
on the Note as of the Anticipated Repayment Date and, in the case of a Partial
Defeasance, the outstanding Principal balance on the Defeased Note as of the
Anticipated Repayment Date), and all payments required after the Defeasance Date
or Partial Defeasance Date, as applicable, if any, under the Loan Documents for
servicing fees, fees to Agent and other similar charges.
"Security Agreement": shall mean a security agreement in form and
substance satisfactory to Lender pursuant to which Borrower grants Lender a
perfected, first priority security interest in the Defeasance Collateral Account
and the Total Defeasance Collateral or Partial Defeasance Collateral, as
applicable.
"Servicer": Bank of New York, or its successor in interest, or if any
successor servicer is appointed pursuant to the Pooling and Servicing Agreement,
such successor servicer.
"SPE Member": shall have the meaning set forth in subparagraph (5) of the
definition of "Special Purpose Entity" contained in this Section 1.1.
"Special Purpose Entity": shall mean a corporation, limited partnership or
limited liability company which at all times on and after the date hereof:
(1) is organized solely for the purpose of (A) acquiring,
developing, owning, holding, selling, leasing, transferring, exchanging,
managing and operating a Collateral Property, entering into this Agreement with
the Lender, refinancing a Collateral Property in connection with a permitted
repayment of the Loan, and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing; (B) acting as a general
partner of the limited partnership that owns a Collateral Property or member of
the limited liability company that owns a Collateral Property; (C) acting as a
Borrower under this Agreement; (D) guaranteeing the obligations under this
Agreement and securing its obligations under such guarantee with a Collateral
Property and/or; (E) acting as the sole managing member or sole managing partner
of a Borrower or any entity which owns a partnership interest or a membership
interest in (i) a Borrower or (ii) any parent of a Borrower.
(2) is not engaged and will not engage in any business
unrelated to the purposes described in paragraph (1) above;
(3) does not have and will not have any assets other than
those related to a Collateral Property and other than for the purposes described
in paragraph (1) above;
(4) has not engaged, sought or consented to and will not
engage in, seek or consent to any dissolution, winding up, liquidation,
consolidation, merger, sale of all or substantially all of its assets, transfer
of partnership or membership interests (if such entity is a general partner in a
limited partnership or a member in a limited liability company) or amendment of
its limited partnership agreement, articles of incorporation, articles of
organization, certificate of formation or operating agreement (as applicable)
with respect to the matters set forth in this definition;
(5) if such entity is a limited partnership, has, as its only
general partners, Special Purpose Entities that are corporations, limited
partnerships or limited liability
-15-
companies (with more than one member) (together with the members required
pursuant to subparagraph (7) below (if applicable), the "SPE Member");
(6) if such entity is a corporation, has at least two (2)
Independent Directors, and has not caused or allowed and will not cause or allow
the board of directors or managers of such entity to take any action requiring
the unanimous affirmative vote of 100% of the members of its board of directors
or managers unless all Independent Directors shall have participated in such
vote;
(7) (a) if such entity is a limited liability company, has at
least one member that is a Special Purpose Entity that has at least two (2)
Independent Directors and that owns at least one percent (1%) of the equity of
the limited liability company or (b) is wholly-owned by ▇▇▇▇;
(8) if such entity is (a) a limited liability company, has
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, (b) a limited partnership, has a limited partnership
agreement, or (c) a corporation, has a certificate of incorporation or articles
that, in each case, provide that such entity will not: (1) dissolve, merge,
liquidate, consolidate; (2) sell all or substantially all of its assets or the
assets of the Borrower (as applicable); (3) engage in any other business
activity, or amend its organizational documents with respect to the matters set
forth in this definition without the consent of the Lender; or (4) without the
affirmative vote of all Independent Directors and of all other directors or
managers of the corporation or entity (that is such entity or the general
partner or managing or co-managing member of such entity), file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings with respect
to itself or to any other entity in which it has a direct or indirect legal or
beneficial ownership interest;
(9) if such entity is a limited partnership or a limited
liability company that is the general partner of a limited partnership or the
member of a limited liability company that is the Borrower, has an entity that
owns at least one percent (1%) of the equity of such entity as its general
partner or managing member, as applicable, that is a Special Purpose Entity;
(10) is and will remain solvent and pay its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
from its assets as the same shall become due, and is maintaining and will
maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business
operations;
(11) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity; (12) maintains
and will maintain its accounts, books and records separate from any other Person
and will file its own tax returns, except to the extent that it is required to
file consolidated tax returns by law;
(13) maintains and will maintain its own records, books,
resolutions and agreements;
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(14) other than as provided in the Cash Management Agreement,
(a) does not and will not commingle its funds or assets with those of any other
Person and (b) does not participate and will not participate in any cash
management system with any other Person;
(15) has held and will hold its assets in its own name;
(16) has conducted and will conduct its business in its name
or in a name franchised or licensed to it by an entity, except for services
rendered under a business management services agreement with an Affiliate that
complies with the terms contained in Section 7.14 of this Agreement, so long as
the manager, or equivalent thereof, under such business management services
agreement holds itself out as an agent of the Borrower; (17) maintains and will
maintain its financial statements, accounting records and other entity documents
separate from any other Person and has not permitted and will not permit its
assets to be listed as assets on the financial statement of any other entity
except as required by GAAP;
(18) pays and will pay its own liabilities and expenses,
including the salaries of its own employees, out of its own funds and assets,
and has maintained and will maintain a sufficient number of employees in light
of its contemplated business operations;
(19) has observed and will observe all partnership, corporate
or limited liability company formalities, as applicable;
(20) will not create, incur or assume any indebtedness other
than (i) the Debt, (ii) Taxes, Insurance Premiums, Approved Replacement Expenses
and Approved Leasing Expenses and (iii) other trade debt incurred in the
ordinary course of business relating to the ownership and operation of its
Collateral Property which other trade debt does not exceed, at any time, a
maximum aggregate amount of $1,000,000.00 for each Collateral Property being
operated as a retail shopping center or a mixed use retail/office project and
$500,000.00 for each Collateral Property being operated as a power center, and
such trade debt is paid within sixty (60) days of the date incurred (other than
amounts being disputed in good faith);
(21) does not and will not assume or guarantee or become
obligated for the debts of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person except as permitted
pursuant to this Agreement;
(22) does not and will not acquire obligations or securities
of its partners, members or shareholders or any other Affiliate except as
permitted pursuant to this Agreement;
(23) allocates and will allocate fairly and reasonably any
overhead expenses that are shared with any Affiliate, including, but not limited
to, paying for shared office space and services performed by any employee of an
affiliate;
(24) the stationary, invoices, and checks utilized by the
Special Purpose Entity or utilized to collect its funds or pay its expenses
shall bear its own name and shall not
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bear the name of any other entity unless such entity is clearly designated as
being the Special Purpose Entity's Manager.
(25) will not pledge its assets for the benefit of any other
Person except as permitted in this Agreement;
(26) will hold itself out and identify itself as a separate
and distinct entity under its own name or in a name franchised or licensed to it
by an entity and not as a division or part of any other Person, except for
services rendered under a business management services agreement with an
Affiliate that complies with the terms contained in Section 7.14 herein, so long
as the manager, or equivalent thereof, under such business management services
agreement holds itself out as an agent of the Borrower;
(27) will maintain its assets in such a manner that it will
not be costly or difficult to segregate, ascertain or identify its individual
assets from those of any other Person;
(28) will not make loans to any Person or hold evidence of
indebtedness issued by any other person or entity (other than cash and
investment-grade securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity) except as permitted pursuant to
this Agreement;
(29) will not identify its partners, members or shareholders,
or any Affiliate of any of them, as a division or part of it, and has not
identified itself and shall not identify itself as a division of any other
Person;
(30) has not entered into or been a party to, and will not
enter into or be a party to, any transaction with its partners, members,
shareholders or Affiliates except (A) those referred to in Section 7.14 of this
Agreement, (B) in the ordinary course of its business and on terms which are
intrinsically fair, commercially reasonable and are no less favorable to it than
would be obtained in a comparable arm's-length transaction with an unrelated
third party and (C) in connection with this Agreement;
(31) will not have any obligation to, and will not, indemnify
its partners, officers, directors or members, as the case may be, or has such an
obligation that is fully subordinated to the Debt and will not constitute a
claim against it in the event that cash flow in excess of the amount required to
pay the Debt is insufficient to pay such obligation;
(32) if such entity is a corporation, it shall consider the
interests of its creditors in connection with all corporate actions referred to
in clause 8(c)(4) of this definition;
(33) will not have any of its obligations guaranteed by any
Affiliate other than those obligations guaranteed in connection with the Loan
except as otherwise permitted pursuant to this Agreement or in connection with
obligations relating to alterations or additions to any Collateral Property;
(34) has complied and will comply with all of the terms and
provisions contained in its organizational documents.
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"State": as to any Collateral Property, the state or commonwealth in which
such Collateral Property or any part thereof is located.
"Stated Maturity Date": December 11, 2029.
"Survey": a current as-built survey of a Collateral Property prepared by a
surveyor licensed by the State in which such Collateral Property is located and
certified to Lender and the Title Company and prepared in accordance with the
Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys meeting
the Accuracy Standards of an Urban Survey, with accuracy and precision
requirements modified to meet current angular and linear tolerance requirements
of such State, showing the legal description and street address of the
Collateral Property; all visible or recorded easements, building lines, curb
cuts, and party walls; all parking, sewage, water, electricity, gas and other
utility facilities, together with recording information concerning the documents
creating any such easements and building lines; stating the net, after deduction
of land dedicated or used or subject to easements for roads, highways, fire
lanes, utilities, storm drains or any other public purpose, and gross area of
the land; and including the following Table A items: 1, 2, 3, 4, 6, 7(a),
7(b)(1), 8, 10, 11 and 13.
"Taxes": as to any Collateral Property, all real estate and personal
property taxes, assessments, water rates or sewer rents, now or hereafter levied
or assessed or imposed against all or any part of such Collateral Property.
"Tenant": shall mean any Person leasing, subleasing or otherwise occupying
any portion of any Collateral Property under a Lease or other occupancy
agreement with Borrower.
"Term": the entire term of this Agreement, which shall expire upon
repayment in full of the Debt and full performance of each and every obligation
to be performed by Borrower pursuant to the Loan Documents.
"Title Company": collectively, Chicago Title Insurance Company and First
American Title Insurance Company of New York together with any other title
company providing re-insurance in connection with Lender's Title Insurance
Policy, and their respective successors.
"Title Insurance Policy": as to any Collateral Property, a policy of title
insurance, in form and amount acceptable to Lender, issued by the Title Company
for the benefit of Lender, its successors and assigns, insuring the Lien of the
Mortgage on such Collateral Property subject to no Liens other than Liens
acceptable to Lender, and containing such endorsements and affirmative coverages
(including affirmative coverage as to "creditors' rights" and "tie-in" or
"aggregation" coverage) as Lender may require.
"Total Defeasance Collateral": shall mean Defeasance Collateral which
provides payments (i) on or prior to, but as close as possible to, all Payment
Dates and other scheduled payment dates, if any, under the Note after the
Defeasance Date and up to and including the Anticipated Repayment Date, and (ii)
in amounts equal to or greater than the Scheduled Defeasance Payments.
"Transfer": any sale, conveyance, transfer, lease (including any
amendment, extension, modification, waiver or renewal thereof), assignment,
mortgage, pledge, grant of a security
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interest or hypothecation, whether by law or otherwise, of or in (i) all or part
of any Collateral Property (including any legal or beneficial direct or indirect
interest therein), (ii) any direct or indirect interest in any Borrower, or
(iii) any direct or indirect interest in the Borrower Representative of any
Borrower.
"UCC": as to any Collateral Property, the Uniform Commercial Code as in
effect in the State in which such Collateral Property is located.
"Yield Maintenance Premium": shall mean an amount equal to the present
value as of the Prepayment Date of the Calculated Payments from the Prepayment
Date through the Anticipated Repayment Date determined by discounting such
payments at the Discount Rate. As used in this definition, the term "Prepayment
Date" shall mean the date on which a prepayment is made. As used in this
definition, the term "Calculated Payments" shall mean the monthly payments of
interest only which would be due based on the principal amount of the Loan being
prepaid on the Prepayment Date and assuming an interest rate per annum equal to
the difference (if such difference is greater than zero) between (y) the Regular
Interest Rate and (z) the Yield Maintenance Treasury Rate. As used in this
definition, the term "Discount Rate" shall mean the rate which, when compounded
monthly is equivalent to the Yield Maintenance Treasury Rate, when compounded
semi-annually. As used in this definition, the term "Yield Maintenance Treasury
Rate" shall mean the yield calculated by the linear interpolation of the yields,
as reported in the Federal Reserve Statistical Release H.15-Selected Interest
Rates under the heading U.S. Government Securities/Treasury Constant Maturities
for the week ending prior to the Prepayment Date, of U.S. Treasury Constant
Maturities with maturity dates (one longer or one shorter) most nearly
approximating the Anticipated Repayment Maturity Date. In the event Release H.15
is no longer published, Lender shall select a comparable publication to
determine the Yield Maintenance Treasury Rate. In no event, however, shall
Lender be required to reinvest any prepayment proceeds in U.S. Treasury
obligations or otherwise.
1.2 Index of Other Definitions. The following terms are defined in the
sections or Loan Documents indicated below:
"Account(s)" - 4.1.3
"Accrued Interest" - 3.1.3
"Additional Insolvency Opinion" - 5.1.39
"Air Rights Lease" - 6.22
"Annual Budget" - 6.9.5
"Applicable Taxes" - 3.5
"Approved Insurer" - 8.1.2
"Award" - 8.3.2
"Bankruptcy Proceeding" - 5.1.8
"Borrower Representative" - 5.1.30
"Cash Collateral Account" - 4.1.3
"Cash Collateral Fund" - 4.11
"Cash Management Account" - 4.1.2
"Cash Management Accounts" - 4.10.1
"Casualty" - 8.2.1
"Casualty/Condemnation Prepayment" - 3.2.2
"Casualty/Condemnation Fund" - 4.8
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"Closing Estoppels" - 6.21
"Condemnation" - 8.3.1
"Debt Service Reserve Account" - 4.1.3
"Defeasance Collateral Account" - 2.4.3
"Defeasance Date"-2.4.1
"Defeased Note" - 2.4.2
"Disclosure Document" - 10.1.2
"Environmental Laws" - 5.1.32
"Equipment" - Mortgage
"Event of Default" - 9.1
"Exchange Act" - 10. 1.2
"Funds" - 4.10.1
"Ground Lease" - Mortgage
"Ground Rent Account" - 4.1.3
"Ground Rent Escrow Fund" - 4.6
"Hazardous Substances" - 5.1.32
"Improvements" - Mortgage
"Indemnified Liabilities" - 6.16
"Indemnified Party" - 6.16
"Insurance Premiums" - 8.1.2
"Insured Casualty" - 8.2.2
"Issuer" - 10.1.3
"Late Payment Charge" - 3.4.3
"Lease Termination Payments" - 4.5.1
"Lender's Consultant" - 6.10.2
"Liabilities" - 10.1.3
"Licenses" - 5.1.22
"Lockbox Account" - 4.1.1
"LTV Ratio" - 2.3
"Management Consultant" - 6.13.2
"Manager Consent and Subordination Agreement" - 6.13.3
"Master Estoppel" - 6.21
"Monthly Ground Rent" - 4.6.1
"Monthly Operating Expense Deposit" - 4.7.1
"Monthly Replacement Deposit" - 4.4.1
"Monthly Rollover Deposit" - 4.5.1
"Monthly Insurance Amount" - 4.3
"Monthly Tax Amount" - 4.3
"Mortgage" - Definition of "Loan Documents"
"Note" - 2.1.2
"Operating Budget" - 6.9.5
"Operating Expense Account" - 4.1.3
"Operating Expense Reserve Fund" - 4.7.1
"Other Taxes" - 3.5
"Partial Defeasance"-2.4.2
"Partial Defeasance Date"-2.4.2
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"Policies" - 8.1.2
"Principal" - 2.1.1
"Proceeds" - 8.2.2
"Provided Information" - 10.1.1
"Registration Statement" - 10.1.3
"Release Property" - 2.4.2
"Remedial Work" - 6.10.2
"Rent Roll" - 5.1.26
"Replacement Budget" - 6.9.5
"Replacement Reserve Account" - 4.1.3
"Replacement Reserve Fund" - 4.4.1
"Responsible Officer" - 11.2.1
"Restoration" - 8.4.1
"Rollover Reserve Account" - 4.1.3
"Rollover Reserve Fund" - 4.5.1
"Securities" - 10.1.1
"Securities Act" - 10.1.2
"Secondary Market Transaction" - 10.1.1
"Substitute Borrower" - 2.3
"Substitute Mortgage" - 2.3
"Substitute Property" - 2.3
"Substitution" - 2.3
"Substitution Date" - 2.3
"Successor Borrower" - 2.4.4
"Tax and Insurance Escrow Fund": - 4.3
"Tax and Insurance Account" - 4.1.3
"Total Defeasance"-2.4.1
"Transfer" - 7.7
"UBS Group" - 10.1.3
"Undefeased Note" - 2.4.2
"Underwriter Group" - 10.1.3
"Underwriters" - 10.1.3
"Voluntary Prepayment" - 3.2.1
"▇▇▇▇" - 7.7
"WEA" - 7.7
"Westfield" - 7.7
"Year 2000" - 6.18
1.3 Principles of Construction. Unless otherwise specified, (i) all
references to sections and schedules are to those in this Agreement, (ii) the
words "hereof," "herein" and "hereunder" and words of similar import refer to
this Agreement as a whole and not to any particular provision, (iii) all
definitions are equally applicable to the singular and plural forms of the terms
defined, (iv) the word "including" means "including but not limited to," and (v)
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
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II THE LOAN
2.1 The Loan.
2.1.1 Commitment. Subject to and upon the terms and conditions of
this Agreement, Lender agrees to make a loan to the Borrower on the Closing Date
in an aggregate maximum principal sum of $215,780,000.00 (the "Principal").
Borrower may request and receive only one borrowing hereunder in respect of the
Loan. The Loan shall mature on the Stated Maturity Date. No amount borrowed and
repaid hereunder in respect of the Loan may be reborrowed.
2.1.2 Note. The Loan shall be evidenced by a promissory note in the
maximum principal sum of $215,780,000.00 (the "Note") executed by each Borrower
and secured by the Mortgages, the Assignments of Leases and the other Loan
Documents.
2.1.3 Use of Loan Proceeds. The proceeds of the Loan shall be used
by the Borrower to (i) repay and discharge existing loans relating to such
Borrower's Collateral Property; (ii) fund certain of the Funds required to be
funded by Borrower; (iii) pay approved costs and expenses in connection with the
foregoing and the Loan; and (iv) make distributions to the members or partners
of such Borrower to the extent any Loan proceeds remain upon payment of the
aforementioned items.
2.2 Conditions Precedent to Closing. The obligation of Lender to make the
Loan hereunder is subject to the fulfillment by Borrower of the following
conditions precedent no later than the Closing Date.
2.2.1 Representations and Warranties; Compliance with Conditions.
The representations and warranties of each Borrower, individual and
collectively, contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as if made on and as of such date, and no Default or an Event of
Default shall have occurred and be continuing; and Borrower shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Loan Document on its part to be observed or
performed.
2.2.2 First Mortgage and Loan Documents. A Mortgage which shall
constitute a valid first mortgage lien on the fee simple title to (or on
Borrower's Leasehold Estate interest in a valid and subsisting Qualified Ground
Lease of) each Collateral Property, which shall secure the Debt, subject only to
such Liens as are acceptable to Lender, and such Borrower shall have delivered
UCC-1 financing statements covering fixtures owned or to be owned by such
Borrower and affixed to, or used in connection with, such Collateral Property,
in each case appropriately completed and duly executed and delivered to Lender,
or at Lender's discretion, the Title Company, for filing in the appropriate
county and state offices. Lender shall have also received from Borrower fully
executed and duly delivered counterparts of this Agreement, the Note and each of
the other Loan Documents.
2.2.3 Title Insurance. Lender shall have received a Title Insurance
Policy for each Collateral Property and the Borrower shall have paid to the
Title Company (and shall have delivered to Lender evidence of such payment) all
premiums, and expenses of the Title Company
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in connection with the issuance of such Title Insurance Policy and an amount
equal to the recording and the applicable stamp taxes (including mortgage
recording taxes), if any, payable in connection with recording the insured
Mortgages in the appropriate county land offices. Such Title Insurance Policies
shall (i) provide coverage in amounts satisfactory to Lender, (ii) insure Lender
that the relevant Mortgage creates a valid first priority lien on the Collateral
Property, or the Borrower's Leasehold Estate therein, as applicable, encumbered
thereby, free and clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from coverage (as modified
by the terms of any endorsements), (iii) contain such endorsements and
affirmative coverages as Lender may request, and (iv) name Lender and its
successors and assigns as the insured. The Title Insurance Policies shall be
assignable.
2.2.4 Environmental Audit. Lender shall be satisfied that (A) there
are no pending or threatened claims, suits, actions or proceedings arising out
of or relating to the existence of any Hazardous Substances at, in, on or under
the Collateral Property, (B) the Collateral Property is in compliance in all
material respects with all applicable Environmental Laws, and (C) no Hazardous
Substances exist at, in, on or under the Collateral Property except in
compliance in all material respects with applicable Environmental Laws. Lender
shall have received, without limitation, (1) a comprehensive environmental audit
of each Collateral Property (which shall include a visual survey, a record
review, an area reconnaissance and a Phase I environmental study and, if the
Phase I study shall so require, a Phase II environmental study), reasonably
satisfactory in form and substance to Lender, conducted and certified by a
qualified, independent environmental consultant within six (6) months of the
Closing Date, (2) evidence that all required approvals have been obtained from
all governmental and quasi-governmental authorities having jurisdiction with
respect to the Collateral Property, and (3) such other environmental reports,
inspections and investigations pertaining to the Collateral Property as Lender
shall require, prepared, in each instance, by engineers or other consultants
reasonably satisfactory to Lender.
2.2.5 Insurance. Lender shall have received evidence of the
existence of all insurance required to be maintained by each Borrower pursuant
to the Loan Documents and the designation of Lender as the mortgagee and loss
payee or additional insured, as applicable, thereunder to the extent required by
the Loan Documents, in form and substance specified in the Loan Documents, and
evidence of the payment of all premiums payable for the existing policy period.
2.2.6 Financial Statements. Lender shall have received, with respect
to each Collateral Property, (i) an unaudited operating statement for the
trailing twelve (12) month period, certified by the Chief Financial Officer or
Treasurer of Borrower and a statement of current operations certified by the
applicable Borrower Representative and (ii) audited combined financial
statements for all Borrowers for calendar year 1998. If Lender determines, in
its sole discretion, that there have been significant changes at any Collateral
Property since the most recent audited financial statement delivered to Lender,
Borrower shall deliver to Lender a letter from an accounting firm acceptable to
Lender in its sole discretion verifying current expenses and revenue of the
applicable Collateral Property.
2.2.7 Searches. Lender shall have received copies of UCC filing
searches, tax lien searches, judgment searches and real estate tax searches and
municipal department searches
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setting forth any and all building violations (if available) in each county
where any Collateral Property is located (and in the case of UCC filing
searches, in the office of the Secretary of State or other applicable state
office of the State where any Collateral Property is located), demonstrating as
of a recent date the existence of no other financing statements, tax liens,
judgments, building violations or delinquent real estate taxes, together with
evidence that all fees payable in connection with any such searches have been
paid.
2.2.8 Survey. Lender shall have received a Survey of each Collateral
Property that is satisfactory to Lender and certified to Lender and its
successors and assigns, the Title Company and any other parties requested by
Lender as of a certification date satisfactory to the Title Company and
reasonably satisfactory to Lender.
2.2.9 Management. The Manager of each Collateral Property shall have
executed and delivered a manager consent and subordination in accordance with
Section 6.13.3.
2.2.10 Leases and Material Contracts. Lender shall have received
certified copies of all Leases, reciprocal easement agreements and material
contracts relating to each Collateral Property, including all amendments and
modifications thereto, and such Leases, reciprocal easement agreements and
contracts shall be in form and substance reasonably satisfactory to Lender.
2.2.11 Intentionally Deleted.
2.2.12 Tenant Estoppels. Lender shall have received an executed
tenant estoppel letter, which shall be in form and substance satisfactory to
Lender, from (a) each Anchor Tenant, (b) each Tenant paying base rent in an
amount equal to or exceeding five percent (5%) of the Operating Income from the
applicable Collateral Property occupied by such Tenant and (c) disregarding the
area leased by those described in clauses (a) and (b), lessees of not less than
seventy-five percent (75%) of the remaining gross leasable area of each
Collateral Property.
2.2.13 Property Condition Report. Lender shall have received reports
covering the physical and structural condition of each Collateral Property in
form and substance, and prepared by a qualified independent engineer, reasonably
satisfactory to Lender and dated no more than six (6) months prior to the
Closing Date, which shall (i) identify code and ADA compliance, (ii) include a
schedule of deferred maintenance and the cost thereof, (iii) include a schedule
of all capital expenditures projected to be required in the twelve (12) year
period following the Closing Date, and (iv) for any Collateral Property in
States in which Lender reasonably determines that there has been a history of
earthquakes, assess the probable maximum loss in the event of the occurrence of
an earthquake.
2.2.14 Appraisal. Lender shall have received an Acceptable Appraisal
of each Collateral Property.
2.2.15 Zoning Compliance, Etc. Lender shall have received, with
respect to each Collateral Property, evidence, in the form of (i) letters or
other evidence from the appropriate municipal authorities, (ii) an ALTA 3.1
zoning endorsement (including parking coverage) for the applicable Title
Insurance Policy, or (iii) a zoning opinion, in each case in substance
reasonably satisfactory to Lender, that all improvements constituting part of
the
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Collateral Property have been constructed and are being used and operated in
compliance in all material respects with (A) all applicable zoning, subdivision,
environmental and other laws, orders, rules, regulations and requirements of all
governmental or quasi-governmental authorities having jurisdiction with respect
to each Collateral Property, (B) all building permits issued in respect of each
Collateral Property and (C) the certificates of occupancy for each Collateral
Property (copies of which certificates of occupancy shall have been delivered to
Lender).
2.2.16 Recording Taxes. Borrower shall have paid all mortgage
recording taxes payable (if any) in each jurisdiction in which the Collateral
Property is located in connection with the recordation of any Mortgage required
under this Agreement.
2.2.17 Perfection of Security Interests. Lender shall have received
evidence that all actions necessary or, in the opinion of Lender, desirable to
perfect and protect the Liens and security interests created by the Loan
Documents have been or will be taken, including evidence that each Mortgage on
the Collateral Property has been or will be duly filed and recorded in the
appropriate governmental offices and that the related UCC financing statements
have been or will be duly filed in the appropriate governmental offices.
2.2.18 Opinions of Borrower's Counsel. Lender shall have received an
opinion of counsel as to the applicable Borrower and an opinion of local counsel
to Lender in the State in which the proposed Collateral Property is located, in
each case with respect to such matters as Lender may request (including as to
enforceability of the Loan Documents against such Borrower) and an Insolvency
Opinion with respect to such Borrower, its partners, the Manager of the
Collateral Property and such other persons as Lender shall designate, which
Insolvency Opinion must be in form and substance reasonably satisfactory to
Lender.
2.2.19 Ground Lease. If any Collateral Property is subject to a
Ground Lease, such Ground Lease is a Qualified Ground Lease.
2.2.20 REA. If any Collateral Property is subject to an REA, such
REA is a Qualified REA.
2.2.21 Reserves and Escrows. Each Borrower shall have made such
initial deposits into the Funds as Lender may require in accordance with this
Agreement and the other Loan Documents.
2.2.22 Rent Roll. A Rent Roll (in spread sheet format, containing
such information as Lender may reasonably require) for each Collateral Property,
certified by the Borrower Representative on behalf of the Borrower, shall have
been delivered to Lender.
2.2.23 Further Documents. Each Borrower shall have executed and
delivered to Lender such documents, opinions and agreements and taken such
action including executing such amendments or supplements to, and assumptions
of, the Loan Documents, which Lender may reasonably require.
2.2.24 Completion of Proceedings. All corporate and other
proceedings taken or to be taken by each Borrower in connection with the
transactions contemplated by this Agreement and other Loan Documents and all
documents incidental thereto shall be satisfactory
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in form and substance to Lender, and Lender shall have received all such
counterpart originals or certified copies of such documents as Lender may
reasonably request.
2.2.25 Delivery of Organizational Documents. Each Borrower shall
have delivered or caused to be delivered to Lender copies certified by the
Borrower of all organizational documentation related to that Borrower and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Lender may request, including, without limitation, good standing
certificates, qualifications to do business in the appropriate jurisdictions,
resolutions authorizing the entering into of the Loan and incumbency
certificates as may be reasonably requested by Lender.
2.2.26 Expenses. Borrower shall have paid all amounts required to be
paid by Borrower under Section 6.15.
2.2.27 Tax Lot. Lender shall have received evidence that each
Collateral Property constitutes one (1) or more separate tax lots, which
evidence shall be reasonably satisfactory in form and substance to Lender.
2.2.28 Encumbrances. Each Borrower shall have taken or caused to be
taken such actions in such a manner so that Lender has a valid and perfected
first Lien as of the Closing Date with respect to each Mortgage on the
applicable Collateral Property, or the Borrower's Leasehold Estate therein, as
applicable, subject only to applicable Permitted Encumbrances and such other
Liens as are permitted pursuant to the Loan Documents, and Lender shall have
received satisfactory evidence thereof.
2.3 Substitution of Collateral Properties.
(a) Subject to the terms and conditions set forth in this Section
2.3, Borrower may, at any time and from time to time during the period from the
date hereof until thirty (30) days prior to the Anticipated Repayment Date
obtain a release of Lender's Lien against one or more Collateral Properties by
substituting (a "Substitution") one or more other comparable real estate assets
(a "Substitute Property") for the Collateral Property or Collateral Properties
so released. From and after the Substitution of a Substitute Property in
accordance herewith, such Substitute Property shall thereafter be deemed a
Collateral Property under this Agreement and the Allocated Loan Amount of such
Substitute Property shall be the same as the Allocated Loan Amount of the
Collateral Property it is replacing. In the event of a Substitution, the Note
shall remain in full force and effect, and a new Mortgage encumbering the
Substitute Property (the "Substitute Mortgage") shall be executed and delivered
by Borrower to Lender to encumber the Substitute Property, which Substitute
Mortgage shall secure the Borrower's Obligations under the Note and the other
Loan Documents and which shall be cross-defaulted with the other Mortgages.
Concurrently with the completion of all steps necessary to substitute a
Substitute Property as provided herein, Lender shall execute or cause to be
executed all such documents requested by Borrower as are necessary or
appropriate (i) to release all Liens granted to Lender and affecting the
replaced Property (or to assign the Security Instrument relating thereto).
Borrower shall prepare at its expense all such documents. The Note shall be
executed by the entity owning the Substitute Property (the "Substitute
Borrower") and the Substitute Borrower shall execute and become party to the
Contribution Agreement and each of the other Loan
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Documents. The Borrower that owns the Property being replaced in the
Substitution shall be released automatically from all of its obligations under
the Loan Documents.
(b) To qualify as a Substitute Property, the property must at the
time of substitution:
(i) be a property as to which the applicable Borrower will
hold indefeasible fee or ground leasehold title free and clear of any Lien
or other encumbrance except for Permitted Encumbrances and easements,
restrictive covenants and other title exceptions and Leases which do not
have a material adverse effect on the utility or value of such property
for its current use;
(ii) be the subject of an environmental report issued and
certified by a recognized environmental consultant at Borrower's expense
and in form and substance acceptable to the Applicable Rating Agencies,
which shall demonstrate that the Substitute Property materially complies
with all Environmental Laws and that an assessment of the Substitute
Property does not contain any material amounts of Hazardous Substances
(except for Routine Hazardous Substances) and there is no further action
required with regard to such Substitute Property, unless the Borrower has
agreed to deposit with the Lender such sums reasonably required to
remediate any environmental problems set forth in the applicable
environmental report;
(iii) be the subject of an engineering report which shall
demonstrate that the property is in good repair and condition, provided
that Borrower shall deposit into the Required Repair Fund an amount equal
to one hundred twenty-five percent (125%) of the deferred maintenance
costs as estimated by Lender based on third-party engineering reports; and
(iv) be in compliance, in all material respects, with Legal
Requirements, as shall be certified in an Officer's Certificate in form
and substance reasonably acceptable to Lender.
(c) In addition to the conditions in Section 2.3(b) above,
Substitution of any Collateral Property pursuant to this Section 2.3 shall be
subject to the satisfaction of the following, all of which shall be prepared or
obtained at Borrower's expense:
(i) Borrower shall have delivered to Lender a legal
opinion from counsel to Borrower opining that any REMIC Trust formed
pursuant to a Secondary Market Transaction will not fail to maintain its
status as a "real estate mortgage investment conduit" within the meaning
of Internal Revenue Code Section 860D, as amended from time to time, or
any successor statute, as a result of the Substitution; provided, however,
that in connection with the consents required pursuant to subsection (xii)
below only, the Borrower shall have delivered to Lender a legal opinion
from counsel to Borrower opining that any REMIC Trust formed pursuant to a
Secondary Market Transaction should not fail to maintain its status as a
"real estate mortgage investment conduit" within the meaning of Internal
Revenue Code Section 860D, as amended from time to time, or any successor
statute, as a result of the Substitution;
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(ii) Borrower shall have delivered to Lender a Rating Comfort
Letter;
(iii) Receipt by Lender and the Applicable Rating Agencies of
written notice thereof from Borrower at least thirty (30) days before the
date of the proposed Substitution (the "Substitution Date"), together with
(1) written evidence that the property proposed to be a Substitute
Property complies with Sections 2.3(a) and (b) above and (2) such other
information, including financial information, as Lender or the Applicable
Rating Agencies may reasonably request;
(iv) Lender shall have received any due diligence materials
requested by Lender with respect to each Substitute Property at least
sixty (60) days before the Substitution Date (other than items such as
title reports and estoppels which are typically not delivered sixty (60)
days before a closing, provided such items are delivered within a
reasonable period of time before the Substitution Date); provided that the
Borrower shall only be required to provide to Lender the due diligence
required pursuant to Section 2.2 of this Agreement and as otherwise
required by the Rating Agencies in connection with the Substitute Property
and the Substitution;
(v) The value of the Substitute Property shall be equal to at
least 125% of the Allocated Loan Amount of the Collateral Property being
released as such value is determined by the Lender based on a current
Acceptable Appraisal for the Substitute Property;
(vi) After giving effect to such Substitution, the Debt
Service Coverage Ratio of the Collateral Pool shall be equal to or greater
than each of (x) the Debt Service Coverage Ratio of the Collateral Pool as
of the Closing Date and (y) the Debt Service Coverage Ratio of the
Collateral Pool immediately before such Substitution;
(vii) The Net Operating Income of the proposed Substitute
Property shall be equal to or greater than the Net Operating Income of the
Collateral Property it is replacing (calculated on the trailing twelve
(12) month period);
(viii)After giving effect to such Substitution, the ratio of
unpaid Principal to the Appraised Value of the Collateral Pool (the "LTV
Ratio") shall not exceed either of (x) the LTV Ratio as of the day after
the Closing Date, or (y) the LTV Ratio immediately prior to such
Substitution;
(ix) After giving effect to such Substitution, the Lease
Rollover Percentage will not exceed twenty percent (20%) for any calendar
year all or any portion of which occurs prior to the Anticipated Repayment
Date;
(x) Either (i) the Lease Rollover Percentage as of immediately
after the Substitution will not, for any calendar year all or any portion
of which occurs prior to the Anticipated Repayment Date, be more than two
percent (2%) in excess of the Lease Rollover Percentage for such calendar
year (or portion thereof) as of immediately prior to the Substitution or
(ii) the Borrower shall deposit into the Rollover Reserve Fund for such
Substitute Property an amount equal to (1) $1.00 multiplied by (2) the
increase in
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the Lease Rollover Number which resulted in the condition set forth in the
foregoing clause (i) not being satisfied;
(xi) Borrower shall have demonstrated that there is no
Environmental Event affecting any Collateral Property that has a material
adverse effect on the value of the Collateral Pool as a whole;
(xii) On any date of a Substitution, no more than twenty-five
percent (25%) in the aggregate of the Collateral Properties (calculated by
share of Net Operating Income) may be released from the Liens of the Loan
Documents pursuant to Section 2.3(a); provided, however, that such
twenty-five percent (25%) limitation shall not apply (i) in the event all
or a portion of the Loan is included in a Secondary Market Transaction, if
unanimous consent is obtained of all the holders of the most junior class
(or classes, if aggregated pursuant to the pooling and servicing agreement
or similar document), which, as of the time of the requested Substitution,
is designated as the "controlling" or "directing" class or similar class
having authority to appoint a special servicer and/or to consent or
approve proposed actions of the special servicer; and (ii) if the Loan is
participated or severed into one or more note(s) or component(s) such that
one note or component is junior to another note or component, then,
regardless of whether any note or component is included in a Secondary
Market Transaction, the unanimous consent is obtained of all the holders
of such junior note or component.
(xiii) With respect to each Substitute Property, Borrower
shall have complied with all of the conditions precedent set forth in
Section 2.2, except that all references in Section 2.2 to Closing Date
shall be deemed to refer to the Substitution Date;
(xiv) No Event of Default shall be continuing;
(xv) Borrower shall have executed and/or delivered such other
consents, enforceability and tax opinions, certificates, documents,
agreements or instruments as Lender may reasonably request (including any
modifications to this Agreement or the other Loan Documents amending,
e.g., the schedules hereto);
(xvi) Borrower shall have paid all amounts required to be paid
by Borrower under Section 6.15;
(xvii) Borrower shall have delivered to Lender an Officer's
Certificate certifying that all information delivered to Lender by or on
behalf of Borrower in connection with the Substitution is true, accurate
and complete in all material respects and that all of the requirements of
this Section 2.3 have been satisfied;
(xviii) Borrower shall have paid to, or deposited with, Lender
all amounts required under Article IV in connection with the Substitute
Property;
(xix) Each Substitute Property shall be located in the United
States and its territories;
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(xx) Borrower shall have delivered to Lender, in form and
substance satisfactory to Lender, originals of the following:
(A) a Substitute Mortgage duly executed and
acknowledged by the applicable Borrower; a
substitute Assignment of Leases or an amendment to
the Assignment of Leases; and an amendment to the
Deposit Agreement with respect to the Substitute
Property; each duly executed and acknowledged by
the applicable Borrower, assigning and
transferring to Lender a first priority security
interest in all Rents, revenues, issues, profits
and proceeds arising under the Leases relating to
the Substitute Property, subject to the Permitted
Encumbrances;
(B) Uniform Commercial Code financing statements (Form
UCC-1) (or other forms required in any
jurisdiction), duly executed by the applicable
Borrower, covering all fixtures, equipment and
other personal property collateral and all
proceeds thereof, naming the applicable Borrower
as debtor and Lender as secured party;
(C) insurance certificates issued by an Approved
Insurer evidencing the insurance coverage required
under Section 8.1.1 hereof; and
(D) payment of all costs and expenses anticipated to
be incurred in connection with such Substitution
(including, without limitation, reimbursement of
Lender's reasonable costs, title premiums,
mortgage recording taxes, transfer taxes,
recording fees, appraisal fees and reasonable
attorneys' fees and disbursements actually
incurred).
(xxi) Borrower shall have provided Lender with a Title
Insurance Policy reasonably acceptable to Lender insuring the Lien of the
Substitute Mortgage and Borrower shall have paid all title insurance
premiums associated with the issuance of such Title Insurance Policy;
(xxii) Borrower shall have represented to Lender the
representation in Section 5.1.32 of this Agreement with respect to the
Substitute Property; and
(xxiii) Borrower shall have represented to Lender the
representation in Section 5.1.24 of this Agreement with respect to the
Substitute Property.
(d) For purposes of calculating Net Operating Income and Debt
Service Coverage Ratio under Section 2.3(c), if any Collateral Property being
substituted for has suffered a Casualty or Condemnation or an Environmental
Event, then, at Lender's option, the Net Operating Income of such Collateral
Property shall be calculated as of the end of the last full calendar month
preceding such Casualty, Condemnation or Environmental Event, as the case may
be.
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(e) For purposes of determining whether any of the conditions set
forth in this Section 2.3 have been satisfied, Borrower will not be required to
pay for the cost of any reports or updates of reports by third parties (e.g.,
engineers or environmental consultants) with respect to any Collateral Property
(as distinguished from a proposed Substitute Property) unless the Net Operating
Income of such Collateral Property has declined by ten percent (10%) or more
since the date of this Agreement.
(f) Upon completion of a Substitution and Borrower's fulfillment of
the requirements of Section 2.3, the applicable Collateral Property shall be
released from the Lien of its Mortgage and the Substitution Property, pledged to
the Lender pursuant to a Substitute Mortgage, shall become part of the
collateral securing the Note. In connection with the release of the applicable
Lien, Borrower shall submit to Lender, not less than thirty (30) days prior to
the Substitution Date, a release of Lien (and related Loan Documents) for
execution by Lender. Such release shall be in a form appropriate in the
jurisdiction in which the respective Collateral Property is located and
satisfactory to Lender in its reasonable discretion. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such releases. Borrower shall pay all costs, taxes
and expenses associated with the releases of the Lien of the Mortgage on the
Collateral Property which has been replaced pursuant to a Substitution,
including Lender's reasonable attorneys' fees. Except as set forth in Section
2.3 or otherwise in this Agreement, no repayment, prepayment, substitution or
defeasance of all or any portion of the Note shall cause, give rise to a right
to require, or otherwise result in, the release of the Lien of any Mortgage on
the Collateral Properties. Upon the completion of the Substitution, the Borrower
shall have no liability to Lender relating to such released Collateral Property
for any actions (or inaction) occurring thereon, or pertaining thereto, after
the date of the Substitution.
2.4 Defeasance.
2.4.1 Total Defeasance.
(a) Provided no Event of Default shall have occurred and remain
uncured, Borrower shall have the right at any time after the Prepayment Lockout
Expiration Date and prior to the Anticipated Repayment Date to obtain a release
of the Liens of the Mortgages encumbering all of the Collateral Properties (a
"Total Defeasance") upon satisfaction of the following conditions:
(i) Borrower shall provide Lender thirty (30) days prior
written notice specifying a Payment Date (the "Defeasance Date") on which
Borrower shall have satisfied the conditions in this Section 2.4.1 and on
which it shall effect the defeasance;
(ii) Borrower shall pay to Lender (A) all accrued and unpaid
interest on the Principal balance of the Note to and including the
Defeasance Date and (B) all other sums, then due under the Note, this
Agreement, the Mortgages and the other Loan Documents;
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(iii) Borrower shall deposit the Total Defeasance Collateral
into the Defeasance Collateral Account and otherwise comply with the
provisions of Sections 2.4.3 and 2.4.4 hereof;
(iv) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the Total
Defeasance Collateral;
(v) Borrower shall deliver to Lender (1) an opinion of counsel
for Borrower satisfactory to a prudent lender opining, among other things,
that (A) Lender has a legal and valid perfected first priority security
interest in the Defeasance Collateral Account and the Total Defeasance
Collateral, (B) if a Secondary Market Transaction has occurred, the REMIC
Trust formed pursuant to such Secondary Market Transaction will not fail
to maintain its status as a "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code as a result of the
defeasance pursuant to this Section 2.4.1, and (C) delivery of the
Defeasance Collateral and the grant of a security interest therein to
Lender shall not constitute an avoidable preference under Section 547 of
the U.S. Bankruptcy Code or applicable state law, and (2) an Insolvency
Opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender a Rating Comfort Letter
with respect to the defeasance;
(vii) Borrower shall deliver an Officer's Certificate
certifying that the requirements set forth in this Section 2.4.1(a) have
been satisfied;
(viii) Borrower shall deliver a certificate of Borrower's
independent certified public accountant certifying that the Total
Defeasance Collateral will generate monthly amounts equal to or greater
than the Scheduled Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions,
documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all reasonable costs and expenses of
Lender incurred in connection with the defeasance, including Lender's
reasonable attorneys' fees and expenses and Rating Agency fees and
expenses.
(b) If Borrower has elected to defease the entire Note and the
requirements of this Section 2.4.1 have been satisfied, the Collateral
Properties shall be released from the Liens of the Mortgages and the Total
Defeasance Collateral, pledged pursuant to the Security Agreement, shall be the
sole source of collateral securing the Note. In connection with the release of
the Liens, Borrower shall submit to Lender, not less than thirty (30) days prior
to the Defeasance Date, releases of Liens (and related Loan Documents) for
execution by Lender. Such releases shall be in a form appropriate in the
jurisdiction in which the respective Collateral Properties are located and
satisfactory to Lender in its reasonable discretion. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such releases, together with an Officer's
Certificate certifying that such documentation (i) is in compliance with all
Legal Requirements, and (ii) will effect such
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releases in accordance with the terms of this Agreement. Borrower shall pay all
costs, taxes and expenses associated with the releases of the Liens of the
Mortgages, including Lender's reasonable attorneys' fees. Except as set forth in
this Section 2.4.1, in Section 2.4.2 or otherwise in this Agreement, no
repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the releases of
the Liens of the Mortgages on the Collateral Properties.
2.4.2 Partial Defeasance.
(a) Provided no Event of Default shall have occurred and remain
uncured, Borrower shall have the right at any time after the Prepayment Lockout
Expiration Date and prior to the Anticipated Repayment Date to obtain a release
of the Lien of a Mortgage or Mortgages encumbering one or more Collateral
Properties (a "Partial Defeasance") upon satisfaction of the following
conditions:
(i) Borrower shall provide Lender thirty (30) days prior
written notice specifying (A) a Payment Date (the "Partial Defeasance
Date") on which Borrower shall have satisfied the conditions in this
Section 2.4.2 and on which it shall effect the defeasance, and (B) the
Collateral Property proposed to be released from the Lien of its Mortgage
(the "Release Property");
(ii) Borrower shall pay to Lender (A) all accrued and unpaid
interest on the Principal balance of the Note to and including the Partial
Defeasance Date and (B) all other sums, then due under the Note, this
Agreement, the Mortgages and the other Loan Documents;
(iii) Borrower shall deposit the Partial Defeasance Collateral
into the Defeasance Collateral Account and otherwise comply with the
provisions of Sections 2.4.3 and 2.4.4 hereof;
(iv) Borrower shall prepare all necessary documents to modify
this Agreement and to amend and restate the Note and issue two substitute
notes, one note having a principal balance equal to 125% of the Allocated
Loan Amount for the Release Property (the "Defeased Note"), and the other
note having a principal balance equal to the excess of (A) the original
Principal amount of the Loan, over (B) the amount of Defeased Note (the
"Undefeased Note"). The Defeased Note and Undefeased Note shall have
identical terms as the Note except for the Principal balance. The Defeased
Note and the Undefeased Note shall be cross defaulted and cross
collateralized. A Defeased Note may not be the subject of any further
defeasance;
(v) After giving effect to the release of the Lien of the
Mortgage encumbering the Release Property proposed by Borrower to be
released, the Debt Service Coverage Ratio for the trailing twelve (12)
month period with respect to the remaining Collateral Properties is not
less than the greater of (A) the Debt Service Coverage Ratio of all
Collateral Properties encumbered by the Mortgages immediately prior to the
release and (B) the Debt Service Coverage Ratio of all of the Collateral
Properties as of the date hereof.
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(vi) Borrower shall have delivered to Lender and the
Applicable Rating Agencies shall have received from Borrower with respect
to the matters referred to in clause (v), (A) statements of the Net
Operating Income and Debt Service (both on a consolidated basis and
separately for the applicable Collateral Property to be released) for the
applicable measuring period and (B) based on the foregoing statements of
Net Operating Income and Debt Service, calculations of the Debt Service
Coverage Ratio both with and without giving effect to the proposed
release, and (C) calculations of the ratios referred to in such clause
(v), accompanied by an Officer's Certificate stating that such statements,
calculations and information are true, correct and complete in all
material respects;
(vii) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the Partial
Defeasance Collateral;
(viii) Borrower shall deliver to Lender an opinion of counsel
for Borrower satisfactory to a reasonably prudent lender opining, among
other things, that (A) Lender has a legal and valid perfected first
priority security interest in the Defeasance Collateral Account and the
Partial Defeasance Collateral, (B) if a Secondary Market Transaction has
occurred, the REMIC Trust formed pursuant to such Secondary Market
Transaction will not fail to maintain its status as a "real estate
mortgage investment conduit" within the meaning of Section 860D of the
Code as a result of the defeasance pursuant to this Section 2.4.2, (C)
delivery of the Defeasance Collateral and the grant of a security interest
therein to Lender shall not constitute an avoidable preference under
Section 547 of the U.S. Bankruptcy Code or applicable state law and (D) an
Insolvency Opinion with respect to the Successor Borrower;
(ix) Borrower shall deliver to Lender a Rating Comfort Letter
with respect to the defeasance;
(x) Borrower shall deliver an Officer's Certificate certifying
that the requirements set forth in this Section 2.4.2(a) have been
satisfied;
(xi) Borrower shall deliver a certificate of Borrower's
independent certified public accountant certifying that the Partial
Defeasance Collateral will generate monthly amounts equal to or greater
than the Scheduled Defeasance Payments;
(xii) Borrower shall deliver such other certificates,
opinions, documents and instruments as Lender may reasonably request; and
(xiii) Borrower shall pay all reasonable costs and expenses of
Lender incurred in connection with the defeasance, including Lender's
reasonable attorneys' fees and expenses and Rating Agency fees and
expenses.
(b) If Borrower has elected to partially defease the Note and the
requirements of this Section 2.4.2 have been satisfied, the Release Property
shall be released from the Lien of its Mortgage. In connection with the release
of the Lien, Borrower shall submit to Lender, not less than thirty (30) days
prior to the Partial Defeasance Date, a release of Lien (and related Loan
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Documents) for execution by Lender. Such release shall be in a form appropriate
in the jurisdiction in which the Release Property is located and satisfactory to
Lender in its reasonable discretion. In addition, Borrower shall provide all
other documentation Lender reasonably requires to be delivered by Borrower in
connection with such release, together with an Officer's Certificate certifying
that such documentation (i) is in compliance with all Legal Requirements, and
(ii) will effect such release in accordance with the terms of this Agreement.
Borrower shall pay all costs, taxes and expenses associated with the release of
the Lien of the Mortgage, including Lender's reasonable attorneys' fees.
Borrower shall cause title to the Collateral Property so released from the Lien
of its Mortgage to be transferred to and held by a Person other than Borrower.
Except as set forth in this Section 2.4.2, in Section 2.4.1 or otherwise in this
Agreement, no repayment, prepayment or defeasance of all or any portion of the
Note shall cause, give rise to a right to require, or otherwise result in, the
release of any Lien of any Mortgage on any of the Collateral Properties.
2.4.3 Defeasance Collateral Account. On or before the date on which
Borrower delivers the Total Defeasance Collateral or Partial Defeasance
Collateral, Borrower shall open at any Eligible Institution the defeasance
collateral account (the "Defeasance Collateral Account") which shall at all
times be an Eligible Account. The Defeasance Collateral Account shall contain
only (i) the Total Defeasance Collateral or Partial Defeasance Collateral, and
(ii) cash from interest and principal paid on the Total Defeasance Collateral or
Partial Defeasance Collateral. All cash from interest and principal payments
paid on the Total Defeasance Collateral or Partial Defeasance Collateral shall
be paid over to Lender on each Payment Date and applied first to accrued and
unpaid interest and then to principal. Any cash from interest and principal paid
on the Total Defeasance Collateral or Partial Defeasance Collateral not needed
to pay accrued and unpaid interest or Principal shall be retained in the
Defeasance Collateral Account as additional collateral for the Loan. Borrower
shall cause the Eligible Institution at which the Total Defeasance Collateral or
Partial Defeasance Collateral are deposited to enter an agreement with Borrower
and Lender, satisfactory to Lender in its reasonable discretion, pursuant to
which such Eligible Institution shall agree to hold and distribute the Total
Defeasance Collateral and Partial Defeasance Collateral in accordance with this
Agreement. Successor Borrower shall be the owner of the Defeasance Collateral
Account and shall report all income accrued on the Total Defeasance Collateral
and Partial Defeasance Collateral for federal, state and local income tax
purposes in its income tax return. Borrower shall prepay all costs and expenses
associated with opening and maintaining the Defeasance Collateral Account.
Lender shall not in any way be liable by reason of any insufficiency in the
Defeasance Collateral Account.
2.4.4 Successor Borrower. In connection with a Total Defeasance or
Partial Defeasance under this Section 2.4, Borrower shall establish or designate
a successor entity unaffiliated with the Borrower (the "Successor Borrower")
which shall be a Special Purpose Entity approved by Lender. Lender hereby
specifically reserves the right to require that the Successor Borrower be an
Affiliate of Lender or Servicer. Borrower shall transfer and assign all
obligations, rights and duties under and to the Note or the Defeased Note, as
applicable, together with the Total Defeasance Collateral or Partial Defeasance
Collateral, as applicable, to such Successor Borrower. Such Successor Borrower
shall assume the obligations under the Note or the Defeased Note, as applicable,
and the Security Agreement and Borrower shall be relieved of its obligations
under such documents. Borrower shall pay $1,000 to any such Successor
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Borrower as consideration for assuming the obligations under the Note or the
Defeased Note, as applicable, and the Security Agreement. Borrower shall pay all
costs and expenses incurred by Lender, including Lender's attorney's fees and
expenses, incurred in connection therewith.
III INTEREST; PAYMENTS
3.1 Interest; Monthly Loan Payments.
3.1.1 Interest Generally. Interest on the outstanding Principal
balance of the Loan shall accrue from the Closing Date to but excluding the
Maturity Date at the Applicable Interest Rate.
3.1.2 Payment Before Anticipated Repayment Date. Borrower shall pay
to Lender (a) on the first Payment Date following the Closing Date, an amount
equal to interest only on the outstanding principal balance of the Loan from the
Closing Date up to but not including such Payment Date and (b) on each Payment
Date thereafter up to but not including the Anticipated Repayment Date, an
amount equal to the Monthly Debt Service Payment Amount, which payments shall be
applied first to accrued and unpaid interest and the balance to principal.
3.1.3 Payment After Anticipated Repayment Date. Borrower shall pay
to Lender on each Payment Date on and after the Anticipated Repayment Date (a)
an amount equal to the Monthly Debt Service Payment Amount, such payment to be
applied to interest in an amount equal to interest that would have accrued on
the outstanding principal balance of the Loan (without adjustment for Accrued
Interest) at the Regular Interest Rate and the balance applied to principal and
(b) an amount equal to the Net Operating Income After Debt Service for the
preceding month, such payment to be applied to principal. Interest accrued at
the Matured Performing Rate and not paid pursuant to the preceding sentence
("Accrued Interest"), shall be added to the outstanding principal balance and
shall earn interest at the Applicable Interest Rate, to the extent permitted by
law.
3.1.4 Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance, all accrued and unpaid interest
(including without limitation the Accrued Interest) and all other amounts due
hereunder and under the Note, the Mortgages and other the Loan Documents.
3.1.5 Property Cash Flow Allocation.
(a) Commencing on the January, 2000 Payment Date and continuing on
each Payment Date occurring prior to the Maturity Date, except following the
acceleration of all or any part of the Debt, all Rents with respect to the
Collateral Property shall be applied as follows in the following order of
priority: (i) First, to make the monthly required payments of Ground Rent, if
any, pertaining to any Borrower's Collateral Property (including, the payment to
Lender of any sums required to be deposited into the Ground Rent Escrow Fund);
(ii) Second, to make payments to the Tax and Insurance Escrow Fund required to
be made by Borrower, (iii) Third, to pay the monthly portion of the Cash
Management Fee due and payable by Borrower; (iv) Fourth, to Lender to pay the
interest payment and principal payment required under Section 3.1.2 or 3.1.3, as
applicable, (plus, if applicable, interest at the Default Rate and any
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other charges then due to Lender under the Loan Documents); (v) Fifth, during
the continuance of a Cash Management Event, to make payments to the Rollover
Reserve Fund required to be made by Borrower; (vi) Sixth, and only during the
continuance of a Cash Management Event or the Anticipated Repayment Date, to
make payments for Approved Operating Expenses pertaining to the Collateral
Property; (vii) Seventh, during the continuance of a Cash Management Event, to
make payments to the Replacement Reserve Fund required to be made by Borrower;
(viii) Lastly, payments to Borrower of any excess amounts unless the Debt
Service Coverage Ratio falls below 1.25 (subject to a One Time Cash Management
Event Cure) (the Debt Service Coverage Ratio shall be tested on a quarterly
basis at the end of each calendar quarter (or portion thereof, if applicable)
from and after the Closing Date), in which case all Rents remaining after
application thereof pursuant to subsection (vii) hereof shall be applied by
Lender in accordance with Section 4.11 until such time as a Cash Management
Termination occurs.
(b) Subject to the provisions of the Cash Management Agreement and
as otherwise set forth herein in Section 4.11, the failure of any Borrower to
make all of the payments required under clauses (i) through (vii) of Section
3.1.5(a) in full on each Payment Date shall constitute an Event of Default under
this Agreement.
(c) At any time after the Maturity Date or after the acceleration of
all or any portion of the Debt, Lender may, in its sole discretion, permit the
application of Rents in any order, and to any portion or portions of the Debt,
as Lender shall determine.
3.1.6 Payments after Default; Default Rate. After the occurrence and
during the continuance of an Event of Default, the entire unpaid Debt shall bear
interest at the Default Rate, and shall be payable upon demand from time to time
to the extent permitted by applicable law. Payment or acceptance of interest at
the Default Rate is not a permitted alternative to timely payment and shall not
constitute a waiver of any Default or Event of Default or an amendment to this
Agreement or any other Loan Document and shall not otherwise prejudice or limit
any rights or remedies of Lender.
3.2 Loan Repayment; Voluntary Prepayment; Prepayment After Default.
3.2.1 Repayment. Subject to the provisions of Section 8.4 of this
Agreement, Borrower shall repay the Loan in full on the Maturity Date, together
with interest thereon to (but excluding) the date of repayment and any other
amounts due and owing under the Note, this Agreement and the other Loan
Documents. Borrower shall not have the right to prepay all or any portion of the
Principal before the Stated Maturity Date; provided, however, if no Default or
Event of Default shall then exist, and Borrower provides not less than thirty
(30) days prior written notice to Lender, (x) Borrower may prepay the Loan in
full (but not in part) without penalty or premium at any time within three (3)
months of the Anticipated Repayment Date and (y) Borrower may prepay the Loan in
full (but not in part) on any Payment Date occurring on or after the Prepayment
Lockout Expiration Date provided that such prepayment is accompanied by the
Yield Maintenance Premium applicable thereto and any other sums including all
accrued and unpaid interest on the Principal due under the Note, this Agreement
and the other Loan Documents (such repayments in (x) and (y) above being
referred to as a "Voluntary Prepayment"). In the event any such Voluntary
Prepayment is not made on a Payment Date,
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Borrower shall also pay interest that would have accrued on such prepaid
Principal to but not including the next Payment Date. Except during the
continuance of an Event of Default, all proceeds of a Voluntary Prepayment of
the Loan shall be applied by Lender as follows in the following order of
priority: (i) First, to accrued and unpaid interest on the Loan at the
Applicable Interest Rate; (ii) Second, to Principal of the Loan; and (iii)
Third, to any other amounts then due and owing under the Loan Documents. If at
any time prior to the Anticipated Repayment Date the Debt is accelerated by
reason of an Event of Default, any principal payment received by Lender (whether
as a result of a foreclosure of any Mortgage, the exercise of any of Lender's
other rights or remedies under the Loan Documents or otherwise), then Lender
shall be entitled to receive, in addition to all other sums due under the Loan
Documents, an amount equal to the Yield Maintenance Premium applicable to such
prepayment. During the continuance of an Event of Default, all proceeds of
repayment, including any payment or recovery on any Collateral Property (whether
as a result of foreclosure, of any Mortgage, the exercise of any of Lender's
other rights or remedies or otherwise) shall, unless otherwise provided in the
Loan Documents, be applied in such order and in such manner as Lender shall
elect in Lender's discretion.
3.2.2 Mandatory Prepayments. Each Loan is subject to mandatory
prepayment, without premium or penalty, in certain instances of Insured Casualty
or Condemnation (each a "Casualty/Condemnation Prepayment"), in the manner and
to the extent set forth in Section 8.4.2. Each Casualty/Condemnation Prepayment
shall be made on a Payment Date and shall be applied as follows in the following
order of priority: (i) First, to costs and expenses of Lender (if any),
including reasonable attorney's fees and disbursements, in connection with such
prepayment or reasonably expended by Lender to protect the collateral value of
the Collateral Property; (ii) Second, accrued and unpaid interest at the
Applicable Interest Rate; (iii) Third, to Principal (with each
Casualty/Condemnation Prepayment being applied first to reduce the Allocated
Loan Amount of the Borrower whose Collateral Property was the subject of the
Casualty/Condemnation); and (iv) Fourth, to any other amounts then due and owing
under the Loan Documents. If such Casualty/Condemnation Prepayment is not paid
on a Payment Date, the payment amount will include interest that would have
accrued on the Principal prepaid to but not including the next Payment Date.
3.3 Release of Property. Except as set forth in this Section 3.3 and
otherwise set forth in this Agreement, no repayment or prepayment shall cause,
give rise to a right to require, or otherwise result in, the release of the Lien
of any Mortgage.
3.3.1 Release of Collateral Properties. A Borrower on one or more
occasions may obtain (i) the release of the Collateral Property owned by it from
the Lien of the Mortgage thereon (and related Loan Documents) and (ii) the
release of such Borrower's obligations under the Loan Documents with respect to
such Collateral Property (other than those expressly stated to survive), upon
satisfaction of each of the following conditions:
(a) Either (i) the conditions for Voluntary Prepayment of the entire
Loan pursuant to Section 3.2.1 hereof are satisfied, (ii) Lender is required to
release such Collateral Property pursuant to Section 2.3 in connection with a
Substitution (it being understood that a release pursuant to Section 2.3 need
not satisfy any Release Conditions not expressly set forth in Section 2.3); or
(iii) Lender is required to release such Collateral Property pursuant to
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Section 2.4 in connection with a Defeasance (it being understood that a release
pursuant to Section 2.4 need not satisfy any Release Conditions not expressly
set forth in Section 2.4)
(b) Such Borrower shall submit to Lender, the Release Documents set
forth in Section 3.3.3 below, together with all other documentation Lender
reasonably requires to be delivered by such Borrower in connection with such
release, together with an Officer's Certificate of such Borrower.
3.3.2 Release on Payment in Full. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of the Debt in
accordance herewith, release the Liens of the Mortgages if not theretofore
released.
3.3.3 Release Documents. When the terms of Section 3.3 are satisfied
with respect to a Collateral Property or when Lender has consented to a
Substitution pursuant to Section 2.3, Lender shall execute and deliver to the
Borrower such documents as may be necessary or appropriate to release such
Borrower from its obligations under the Loan Documents and to release all liens
held by Lender on such Collateral Property. All such documents shall be prepared
by Borrower's counsel, shall be in a form appropriate in the jurisdiction in
which such Collateral Property is located, shall be reasonably acceptable to
Lender in form and substance and shall be delivered to Lender at least thirty
(30) days before the proposed release date.
3.3.4 Release of Funds. Upon the completion of the release of a
Collateral Property pursuant to Section 3.3.1 or the completion of a
Substitution pursuant to Section 2.3, the Lender shall refund to the Borrower
all amounts on deposit in the Funds with respect to the released Collateral
Property or if such release is pursuant to a Substitution, at Lender's option,
Lender shall offset such amounts against the sums required to be deposited into
the Funds for the Substitute Collateral Property.
3.4 Payments and Computations.
3.4.1 Making of Payments. Each payment by a Borrower hereunder or
under the Note shall be made in funds settled through the New York Clearing
House Interbank Payments System or other funds immediately available to Lender
by 1:00 p.m., New York City time, on the date such payment is due, to Lender by
deposit to such account as Lender may designate by written notice to Borrower.
Whenever any payment hereunder or under the Note shall be stated to be due on a
day that is not a Business Day, such payment shall be made on the first Business
Day preceding such scheduled Payment Date. All payments made by any Borrower
hereunder or under the other Loan Documents, shall be without any deduction,
set-off or counterclaim, whatsoever and are payable without relief from
valuation and appraisement laws and with all costs and charges incurred in the
collection or enforcement thereof, including attorneys' fees and court costs.
Payments to Lender made from the Accounts shall be deemed to have been made
before 1:00 p.m., New York City time, on the date such payment is made.
3.4.2 Interest Calculation. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for
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which the calculation is being made by (b) a daily rate based on a three hundred
sixty (360) day year by (c) the outstanding Principal balance.
3.4.3 Late Payment Charge. If any Principal, interest or other sum
due under any Loan Document is not paid on the date on which it is due, Borrower
shall pay to Lender upon demand an amount equal to the lesser of five percent
(5%) of such unpaid sum or the maximum amount permitted by applicable law (the
"Late Payment Charge"), in order to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the
loss of the use of such delinquent payment; provided that if no such late
payment has occurred within the prior twelve (12) month period, Borrower shall
only be required to pay the late payment charge provided for in this Section
3.4.3 if such failure to pay continues for two (2) Business Days after notice
from Lender. Such amount shall be secured by the Loan Documents. Any action by
Lender regarding the collection of a Late Payment Charge will be without
prejudice to any other rights, nor act as a waiver of any other rights, that
Lender may have as provided herein, at law or in equity. No Late Payment Charge
shall be due in connection with any payment to be made from the Accounts,
provided that on the date such payment is due there are sufficient funds in such
Accounts to make the payment in question.
3.5 Taxes. Any and all payments by Borrower hereunder and under the other
Loan Documents shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on Lender's income, and franchise taxes imposed on Lender by the law or
regulation of any Governmental Authority (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to in this Section 3.5 as "Applicable Taxes"). If Borrower shall be
required by law to deduct any Applicable Taxes from or in respect of any sum
payable hereunder to Lender, the following shall apply provided the Applicable
Taxes do not result because the Lender (due to permitted succession or
assignment) is not a United States person as defined at section 7701(a)(30) of
the Code or the Lender has failed to provide information necessary to avoid
back-up withholding pursuant to section 3406 of the Code: (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.5), Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions and (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
Borrower also agrees to pay any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or recordation of, or
otherwise with respect to, this Agreement or any other Loan Document ("Other
Taxes"). Borrower shall indemnify Lender for the full amount of Applicable Taxes
or Other Taxes (including any Applicable Taxes or Other Taxes imposed by any
jurisdiction on amounts paid or payable under this Section 3.5) paid by Lender
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Applicable Taxes or Other Taxes
were correctly or legally asserted. Payments pursuant to this Section 3.5 shall
be made within fifteen (15) days after the date Lender makes written demand
therefor. Borrower shall have the right to contest such Applicable Taxes and
Other Taxes referred to in this Section 3.5 in accordance with the terms of
Section 6.2 of this Agreement.
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IV CASH MANAGEMENT; ESCROWS AND RESERVES
4.1 Cash Management Arrangements.
4.1.1 Lockbox Account. On or before the Closing Date, Borrower shall
open an account for each Collateral Property (the "Lockbox Account") with Agent
which shall be the depository account for the applicable Borrower into which all
sums due to such Borrower will be deposited. The Lockbox Account shall be in
Lender's name, or at Lender's option, in the Servicer's name. The Lockbox
Account shall be under the sole dominion and control of Lender. The Lockbox
Account will be opened and maintained as an Eligible Account.
4.1.2 Deposits into Lockbox Account. Borrower shall cause all
Tenants at each Collateral Property to pay Rent directly into the Lockbox
Account on or before the date such Rent is due under the terms of the applicable
Lease. When bills to Tenants are delivered pursuant to Section 6.11.6 of this
Agreement, Borrower shall send a notice, substantially in the form of Exhibit A
attached hereto, to all Tenants at each Collateral Property directing them to
pay all Rent into the Lockbox Account. In the event that Borrower, it Affiliates
or the Manager receives any Rents directly, Borrower agrees to deposit, or cause
to be deposited, all such Rents into the Lockbox Account within one (1) Business
Day. All sums deposited into the Lockbox Account shall be swept daily into one
cash management account established by Borrower with Agent on or before the
Closing Date (the "Cash Management Account") (the Cash Management Account shall
be held and administered in accordance with the Cash Management Agreement). The
Cash Management Account shall be in Lender's name, or at Lender's option, in the
Servicer's name. The Cash Management Account shall be under the sole dominion
and control of Lender. The Cash Management Account will be opened and maintained
as an Eligible Account. Neither the Lockbox Account, the Cash Management Account
nor the Cash Management Agreement shall alter or diminish in any way Borrower's
obligation to make timely payment and deposits to all sums required to be paid
or deposited under any Loan Document.
4.1.3 The Accounts. On or before the Closing Date, Borrower shall
open with Agent separate accounts for each of the following Funds (hereinafter
defined): Tax and Insurance Escrow Fund (the "Tax and Insurance Account"),
Replacement Reserve Fund (the "Replacement Reserve Account"), Rollover Reserve
Fund (the "Rollover Reserve Account"), Ground Rent Escrow Fund (the "Ground Rent
Account"), Operating Expense Reserve Fund (the "Operating Expense Account"), the
Cash Collateral Fund (the "Cash Collateral Account") and the Debt Service
Reserve Fund (the "Debt Service Reserve Account")]. Tax and Insurance Escrow
Funds shall be held in the Tax and Insurance Account. Replacement Reserve Funds
shall be held in the Replacement Reserve Account. Rollover Reserve Funds shall
be held in the Rollover Reserve Account. Ground Rent Escrow Funds shall be held
in the Ground Rent Account. Operating Expense Reserve Funds shall be held in the
Operating Expense Account. The Debt Service Reserve Fund shall be held in the
Debt Service Reserve Account All Funds remaining in the Accounts after
application pursuant to Sections 3.1.5 and 4.11 shall be held in the Cash
Collateral Account. The accounts defined in this Section may be hereinafter
referred to from to time as an "Account" or collectively as the "Accounts." At
Lender's option, each of the Accounts shall be opened in Lender's name or in
Servicer's name. Each of the Accounts shall be under the sole dominion and
control of Lender. Each of the Accounts shall be opened and maintained as an
Eligible Account.
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4.2 Intentionally Deleted.
4.3 Tax and Insurance Escrow Fund. Borrower shall pay to Lender on each
Payment Date (i) one-twelfth (1/12th) of the Taxes for the Collateral Property
that Lender estimates will be payable during the next twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Taxes at least
thirty (30) days prior to their respective due dates ("Monthly Tax Amount"), and
(ii) one-twelfth (1/12th) of the Insurance Premiums that Lender estimates will
be payable for the renewal of the coverage afforded by the Policies relating to
the Collateral Property upon the expiration thereof in order to accumulate with
Lender sufficient funds to pay all such Insurance Premiums at least thirty (30)
days prior to the expiration of such Policies ("Monthly Insurance Amount") (the
amounts paid under the foregoing clauses (i) and (ii) with respect to the
Collateral Property, less disbursements thereof pursuant hereto, being called
the "Tax and Insurance Escrow Fund"). Lender will (a) apply the Tax and
Insurance Escrow Fund to payments of Taxes and Insurance Premiums required to be
made by the respective Borrower pursuant to Sections 6.2 and 8.1 prior to the
date upon which interest or penalties would be imposed, provided that the
Borrower has promptly supplied Lender with notices of all Taxes and Insurance
Premiums due for each Collateral Property, or (b) reimburse the applicable
Borrower for such amounts upon presentation of evidence of payment and an
Officer's Certificate in form and substance satisfactory to Lender; subject,
however, to the Borrower's right to contest Taxes in accordance with Section
6.2. Following the payment by Lender of any Taxes pursuant to this Section 4.3,
Lender shall send a "paid" receipt to the Borrower. Provided the Borrower has
deposited funds into the Tax and Insurance Escrow Fund as required under this
Section and given Lender timely notice of the amount and due date of such taxes,
Borrower shall not be liable for interest or penalties resulting from late
payment of such Taxes by Lender, and, so long as no portion of the Debt has been
accelerated, Lender or Servicer shall be responsible for such interest and
penalties. In making any payment relating to the Tax and Insurance Escrow Fund,
Lender may do so according to any ▇▇▇▇, statement or estimate procured from the
appropriate public office (with respect to Taxes) or insurer or agent (with
respect to Insurance Premiums), without inquiry into the accuracy of such ▇▇▇▇,
statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If the amount of the Tax and
Insurance Escrow Fund shall exceed the amounts next coming due for Taxes and
Insurance Premiums pursuant to Sections 6.2 and 8.1, Lender shall, in its sole
discretion, return any excess to the applicable Borrower or credit such excess
against future payments to be made to the Tax and Insurance Escrow Fund. If at
any time Lender determines that the Tax and Insurance Escrow Fund is not or will
not be sufficient to pay the Taxes or Insurance Premiums next coming due, Lender
shall notify the Borrower of such determination and the Borrower shall increase
the monthly payments to Lender by the amount that Lender estimates is sufficient
to make up the deficiency at least thirty (30) days prior to delinquency of the
Taxes and/or expiration of the Policies, as the case may be. Lender acknowledges
that Borrower currently causes its Premiums to be paid by Afco Acceptance Corp.
("Afco") through an agreement with Westfield America, Inc., and Lender agrees
that amounts for the Borrower's Premiums held in the Tax and Insurance Escrow
Fund shall be released to reimburse the Borrower for payments made by it to
reimburse Westfield America, Inc. for the amounts paid to Afco with respect to
the Borrower's Premiums (subject to compliance by Borrower with clause (b) of
this Section 4.3 or any other similar arrangements reasonably acceptable to
Lender.
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4.4 Replacements and Replacement Reserves.
4.4.1 Replacement Reserve Fund. Upon the occurrence of a Cash
Management Event, Borrower shall pay to Lender on each Payment Date thereafter
(in addition to other payments required hereunder) an amount equal to the
Monthly Replacement Deposit for each Collateral Property (such payments with
respect to the entire Collateral Pool, less disbursements thereof pursuant
hereto, being called the "Replacement Reserve Fund"). If the amount of the
Replacement Reserve Fund shall exceed the amounts due for Approved Replacement
Expenses pursuant to the terms hereof, Lender shall, in its discretion, return
any excess to the Borrower or, if future Replacement Reserve Fund payments are
then required, credit such excess against such future payments.
4.4.2 Payment of Replacement Expenses. From time to time (but not
more often than monthly), Lender shall disburse funds held in the Replacement
Reserve Fund to the applicable Borrower, within thirty (30) days after the
delivery by the applicable Borrower to Lender of a request therefor, in
increments of at least $5,000; provided, that (i) on the day of the request and
on the day of payment no Event of Default shall have occurred and be continuing;
(ii) such disbursement is for a Replacement Expense that has been incurred by
such Borrower (provided that, during the continuance of a Cash Management Event,
such Replacement Expense must be an Approved Replacement Expense); (iii) Lender
shall have (if it desires) verified (by an inspection conducted at the
Borrower's expense) performance of the work associated with such Approved
Replacement Expense (or Replacement Expense, as the case may be); and (iv) the
request for disbursement is accompanied by (A) an Officer's Certificate
certifying (v) the amount of funds to be disbursed, (w) that such funds will be
used to pay or reimburse the applicable Borrower for Approved Replacement
Expenses (or Replacement Expenses, as the case may be) and a description
thereof, (x) that all outstanding trade payables (other than those to be paid
from the requested disbursement or those otherwise permitted to be outstanding
under Section 7.8) have been paid in full, (y) that the same has not been the
subject of a previous disbursement, and (z) that all previous disbursements have
been used to pay the previously identified Approved Replacement Expenses (or
Replacement Expenses, as the case may be), and (B) reasonably detailed
documentation as to the amount, necessity and purpose therefor.
4.5 Rollover Reserves.
4.5.1 Rollover Reserve Fund. Upon the occurrence of a Cash
Management Event, Borrower shall pay to Lender on each Payment Date thereafter
monthly deposits for the payment of Approved Leasing Expenses (the "Monthly
Rollover Deposit") for each Collateral Property (in addition to other payments
required hereunder) (such payments with respect to the entire Collateral Pool,
less disbursements thereof pursuant hereto, being called the "Rollover Reserve
Fund") or, at Borrower's option, shall post a Letter of Credit in such amount
determined by Lender based on $.75 a square foot of gross leasable area
excluding Anchor Tenant space for each Collateral Property. Lender will apply
such payments to payment of Approved Leasing Expenses pursuant to the terms
hereof. Borrower shall also deposit into the Rollover Reserve Fund all payments
("Lease Termination Payments") received from Tenants in connection with the
termination or cancellation of any Lease more than one year prior to its
expiration date, including fees, penalties and commissions (provided that, upon
the releasing of all or any portion of the space demised under such cancelled or
terminated Lease, Lender shall,
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upon the applicable Borrower's request and provided no Event of Default then
exists, release to such Borrower the portion, if any, of the Lease Termination
Payment which exceeds the actual Leasing Expenses incurred or to be incurred in
connection with such releasing). If the amount of the Rollover Reserve Fund
shall exceed the amounts due for Approved Leasing Expenses pursuant to the terms
hereof, Lender shall retain excess Rollover Reserve Funds in accordance with
Section 4.11 of this Agreement. If Lender determines in its reasonable judgment
that the amount of the Rollover Reserve Fund will be insufficient to pay the
amounts due or to become due for Approved Leasing Expenses (after taking into
account any Lease Termination Payments theretofore deposited into the Rollover
Reserve), Lender may adjust the monthly amounts required to be deposited into
the Rollover Reserve Fund upon thirty (30) days' notice to Borrower.
Alternatively, Lender may in its discretion determine that the amount of the
Rollover Reserve Fund will exceed the amounts due or to become due for Approved
Leasing Expenses, in which case Lender may reduce the monthly amounts to be
deposited therein. Lender shall release funds on deposit in the Rollover Reserve
Fund to the Borrower for each Collateral Property, in an amount calculated based
on the amounts per square foot leased as set forth on Schedule 6 attached
hereto, upon Lender's receipt from Borrower of evidence that (i) a new Lease has
been executed, (ii) the Tenant under such new Lease has taken possession of the
premises leased thereunder and has provided the Borrower and Lender with an
estoppel letter stating that the Tenant has commenced paying rent pursuant to
the terms of its Lease, (iii) all tenant improvement costs or other Approved
Leasing Expenses have been paid pursuant to the terms of the new Lease, and (iv)
any leasing commissions have been paid and there are no outstanding monetary
obligations of the Borrower to the Tenant or any third party due under such new
Lease.
4.5.2 Payment of Leasing Expenses. From time to time (but not more
than once per month) Lender shall disburse funds held in the Rollover Reserve
Fund to the applicable Borrower(s), within fifteen (15) days after the delivery
by the applicable Borrower(s) to Lender of a request therefor, in increments of
at least $5,000; provided, (i) on the day of the request and on the day of
payment no Event of Default shall have occurred and be continuing; (ii) such
disbursement is for an Approved Leasing Expense; (iii) Lender shall have (if it
desires) verified (by an inspection conducted at Borrower's expense) performance
of any construction work associated with such Approved Leasing Expense; and (iv)
the request for disbursement is accompanied by (A) an Officer's Certificate
certifying (v) the amount of funds to be disbursed, (w) that such funds will be
used only to pay (or reimburse the applicable Borrower(s) for) Approved Leasing
Expenses and a description thereof, (x) that all outstanding trade payables
(other than those to be paid from the requested disbursement or those otherwise
permitted to be outstanding under Section 7.8) have been paid in full, (y) that
the same has not been the subject of a previous disbursement, and (z) that all
previous disbursements have been used only to pay (or reimburse the applicable
Borrower(s) for) the previously identified Approved Leasing Expenses, and (B)
reasonably detailed supporting documentation as to the amount, necessity and
purpose therefor. During the continuance of a Cash Management Event, any such
disbursement to pay (rather than reimburse) Approved Leasing Expenses may, at
Lender's option, be made by joint check payable to the applicable Borrower(s)
and the payee of such Approved Leasing Expenses.
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4.6 Ground Rent Escrow.
4.6.1 Ground Rent Escrow Fund. Each Borrower whose Collateral
Property is subject to a Ground Lease that requires payment of net annual rent
on other than a monthly basis, shall pay to Lender on each Payment Date
one-twelfth (1/12th) of the annual net rent that Lender estimates will be
payable under such Ground Lease during the next twelve (12) months in order to
accumulate with Lender sufficient funds to pay the then next installment of
annual net rent due under such Ground Lease at least thirty (30) days prior to
the due date thereof (the "Monthly Ground Rent") (such payments with respect to
all Ground Leases, less disbursements thereof pursuant hereto, the "Ground Rent
Escrow Fund"). Lender will apply the Ground Rent Escrow Fund to payments of
annual net rent required to be made by the applicable Borrower under its Ground
Lease, or to reimburse such Borrower for such amounts upon presentation of
evidence of payment and an Officer's Certificate of such Borrower in form and
substance satisfactory to Lender. In making any payment relating to the Ground
Rent Escrow Fund, Lender may do so according to any ▇▇▇▇, statement or estimate
procured from the landlord under the applicable Ground Lease, without inquiry
into the accuracy of such ▇▇▇▇, statement or estimate or into the validity of
any claim by such landlord. If at any time Lender determines that the portion of
the Ground Rent Escrow Fund allocable to any Ground Lease is not or will not be
sufficient to pay the annual net Rent pursuant to such Ground Lease next coming
due, Lender shall notify the applicable Borrower(s) of such determination and
the applicable Borrower(s) shall increase its (their) monthly payments to Lender
by the amount that Lender reasonably estimates is sufficient to make up the
deficiency at least thirty (30) days prior to delinquency of the annual net rent
under the applicable Ground Lease(s).
4.7 Operating Expense Reserves.
4.7.1 Operating Expense Reserve Fund. After the occurrence of a Cash
Management Event or the Anticipated Repayment Date, Borrower shall pay to Lender
an amount equal to the Approved Operating Expenses for each Collateral Property
for the next Current Month (the "Monthly Operating Expense Deposit") (such
payments with respect to the entire Collateral Pool, less disbursements thereof
pursuant hereto, being called the "Operating Expense Reserve Fund"). If the
amount of the Operating Expense Reserve Fund shall exceed the amounts due for
Approved Operating Expenses pursuant to the terms hereof, Lender shall retain
excess Operating Expense Reserve Funds in accordance with Section 4.11 of this
Agreement.
4.7.2 Payment of Approved Operating Expenses. From time to time (but
not more than once per month) following the occurrence of a Cash Management
Event or the Anticipated Repayment Date, Lender shall disburse funds held in the
Operating Expense Reserve Fund to Borrower, provided (i) on the day of the
request and on the date of payment no portion of the Debt shall have been
accelerated; (ii) such disbursement is for an Approved Operating Expense; and
(iii) such disbursement is requested by Borrower in writing, accompanied by (A)
an Officer's Certificate certifying (v) the amount of funds to be disbursed, (w)
that such funds will be used to pay Approved Operating Expenses and a
description thereof, (x) that all outstanding trade payables (other than those
to be paid from the requested disbursement or those otherwise permitted to be
outstanding under Section 7.8) have been paid in full, (y) that the same has not
been the subject of a previous disbursement, and (z) that all previous
disbursements have
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been or will be used to pay the previously identified Approved Operating
Expenses, and (B) reasonably detailed documentation as to the amount, necessity
and purpose therefor. Subject to satisfaction of the preceding conditions, if
Lender receives from a Borrower a valid request for a disbursement for payment
of Approved Operating Expenses for the then Current Month at least five (5)
Business Days prior to the Payment Date occurring in such Current Month, then
the disbursement in respect of such Approved Operating Expenses shall be made to
such Borrower on such Payment Date. Notwithstanding anything to the contrary in
the foregoing, during the continuance of an Event of Default Lender shall have
the right, in lieu of disbursing to Borrower funds from the Operating Expense
Reserve Fund, to pay such funds directly to the obligees or to pay such funds to
the applicable Borrower and the obligee in question jointly.
4.8 Casualty/Condemnation Fund. The Borrower shall pay, or cause to be
paid, to Lender all Proceeds or Awards due to any Casualty or Condemnation (such
amounts, less disbursements thereof pursuant hereto, the "Casualty/Condemnation
Fund"), in accordance with the provisions of Sections 8.2.2 and 8.3.2. All
amounts in the Casualty/Condemnation Fund shall be disbursed in accordance with
the provisions of Article VIII.
4.9 Security Deposits.
(a) Security deposits under Leases shall not be commingled with any
other funds of any Borrower (unless permitted by applicable Legal Requirements)
and all security deposits paid in cash under Leases, shall, unless permitted to
be commingled with any Borrower's funds under applicable Legal Requirements, be
deposited by the applicable Borrower into an account with the Agent. After the
occurrence of a Cash Management Event, each Borrower shall, upon Lender's
request, if permitted by applicable Legal Requirements, turn over to Lender the
security deposits (and any interest theretofore earned thereon) under Leases, to
be held by Lender subject to the terms of the Leases. If applicable Legal
Requirements prohibit any Borrower from turning over to Lender security deposits
under Leases, such Borrower shall keep such security deposits at a separately
designated account at the Agent so that the security deposits shall not be
commingled with any other funds of such Borrower. Security deposits held by the
Lender will be released by Lender upon notice from the Borrower together with
such evidence as Lender may reasonably request that such security deposit is
required to be returned to a Tenant pursuant to the terms of a Lease or may be
applied as Rent pursuant to the rights of such Borrower under the applicable
Lease.
(b) Any letter of credit or other instrument that a Borrower
receives in lieu of a cash security deposit shall (i) be maintained in full
force and effect in the full amount unless replaced by a cash deposit as
hereinabove described, (ii) if pertaining to a Material Lease, be issued by an
institution reasonably satisfactory to Lender, (iii) if permitted pursuant to
any Legal Requirements, name Lender as payee or mortgagee thereunder (or be
fully assignable to Lender) and (iv) in all respects, comply with any applicable
Legal Requirements and, if pertaining to a Material Lease, otherwise be
reasonably satisfactory to Lender. Each Borrower shall, upon request, provide
Lender with evidence reasonably satisfactory to Lender of such Borrower's
compliance with the foregoing.
4.10 Funds, Generally.
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4.10.1 Grant of Security Interest; Application of Funds. As
additional security for Borrower's payment of the Debt and the performance by
Borrower of all other terms, conditions and provisions of the Loan Documents,
each Borrower hereby pledges and assigns to Lender, and grants to Lender a
security interest in, all right, title and interest of such Borrower in and to
all Rents and in and to all payments to or monies held in the Lockbox Account,
the Cash Management Account, the Accounts (collectively, the "Cash Management
Accounts") and in the Casualty/Condemnation Fund (all amounts held in the
Accounts, the Casualty/Condemnation Fund, together with all other funds
designated as or deemed to be "Funds" under this Agreement, are referred to
herein as the "Funds"). Each Borrower for itself and on behalf of each of its
Affiliates and the Manager hereby grants to Lender a continuing security
interest in, and agrees to hold in trust for the benefit of Lender, all Rents in
its possession prior to the (i) payment of such Rents to Lender or (ii) deposit
of such Rents into the Lockbox Account in accordance with this Agreement and the
Cash Management Agreement. No Borrower shall, without obtaining the prior
written consent of Lender, further pledge, assign or grant any security interest
in any Cash Management Account or Fund, or permit any Lien to attach thereto, or
any levy to be made thereon, or any UCC-1 Financing Statements, except those
naming Lender as the secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to be a security
agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums in the Cash
Management Accounts as provided under Section 3.1.5(c).
4.10.2 Investments of Funds. Lender shall direct the Agent to invest
any balances in the Accounts in Permitted Investments as instructed by Borrower,
provided that (i) if Borrower fails to so instruct Lender, or upon the
occurrence and continuation of a Cash Management Event, Lender may direct the
Agent to invest and reinvest such balances of the Funds in Permitted Investments
as Lender shall determine in its sole discretion, (ii) the maturities of the
Permitted Investments on deposit in the Accounts shall be selected and
coordinated to become due not later than one day before any disbursements from
the Accounts must be made, (iii) all such Permitted Investments shall be held in
the name of and be under the sole dominion and control of Lender and subject at
all times to the terms hereof, and (iv) no Permitted Investment shall be made
unless Lender shall have and continue to have a perfected first priority Lien in
such Permitted Investment securing the obligations of Borrower hereunder and
under the other Loan Documents and all filings and other actions necessary to
ensure the validity, perfection, and first priority of such Lien shall have been
taken. Lender shall have no liability for any loss investments of Funds in the
Accounts that are invested in Permitted Investments and no such loss shall
affect Borrower's obligations to make the deposits into the Funds pursuant to
this Agreement. Borrower shall report on its federal, state and local income tax
reports at interest or income accrued on Funds in the Accounts.
4.11 Cash Collateral Fund.
(a) After the occurrence of a Cash Management Event, all Rents
remaining in the Accounts after application thereof pursuant to items (i)
through (vii) of Section 3.1.5(a), shall be transferred to the Cash Collateral
Account (all funds at any time in the Cash Collateral Account being called the
"Cash Collateral Fund").
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(b) Funds in the Cash Collateral Account which originally
constituted a part of the Replacement Reserve Fund or the Rollover Reserve Fund
shall be held in the Cash Collateral Account for future disbursement by Lender,
provided no Event of Default then exists, for Approved Replacement Expenses and
Approved Leasing Expenses, respectively, to the extent, but only to the extent,
that Borrower's required Monthly Reserve Deposits and/or required Monthly
Rollover Deposits, respectively, are insufficient to pay for same. Funds in the
Cash Collateral Account which originally constituted a part of some other Fund
shall be held in the Cash Collateral Account for future application, provided no
Event of Default then exists, to such Funds, in such order and manner as Lender
may elect in its sole and absolute discretion.
(c) Any funds deposited with the Lender in connection with a One
Time Cash Management Event Cure shall be secured by the Mortgages and be
otherwise applied in accordance with the terms of this Section 4.11 if the One
Time Cash Management Event Cure does not prevent a Cash Management Event from
occurring at the end of the following quarter upon the Lender's test of the Debt
Service Coverage Ratio. If there is no Cash Management Event upon such
subsequent test of the Debt Service Coverage Ratio, or a Cash Management
Termination has occurred, the funds deposited with the Lender in connection with
a One Time Cash Management Event Cure shall be returned to the Borrower pursuant
to subsection (d) below.
(d) Upon a Cash Management Termination, Lender shall deliver to
Borrower, on the next Business Day, all Funds then on deposit in the Cash
Collateral Account.
4.12 Intentionally Deleted.
V REPRESENTATIONS AND WARRANTIES
5.1 Borrower Representations. Each Borrower represents and warrants as to
itself, as of the date hereof that, except to the extent (if any) disclosed on
Schedule 4 with reference to a specific subsection of this Section 5.1:
5.1.1 Organization; Special Purpose. Each Borrower has been duly
organized and is validly existing and in good standing under the laws of the
State of formation, with requisite power and authority, and all rights,
licenses, permits and authorizations, governmental or otherwise, necessary to
own its properties and to transact the business in which it is now engaged. Each
Borrower is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
properties, business and operations. Each Borrower is a Special Purpose Entity,
and the sole business of each Borrower is the ownership, management and
operation of the Collateral Property owned by it.
5.1.2 Proceedings; Enforceability. Each Borrower has taken all
necessary action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party. The Loan Documents to which any Borrower
is a party have been duly executed and delivered by such Borrower and constitute
legal, valid and binding obligations of such Borrower enforceable against such
Borrower in accordance with their respective terms, subject to applicable
bankruptcy, insolvency and similar laws affecting rights of creditors generally,
and
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general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
5.1.3 No Conflicts. The execution, delivery and performance by each
Borrower of the Loan Documents to which it is a party will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien (other than pursuant
to the Loan Documents) upon any of the property of such Borrower pursuant to the
terms of, any agreement or instrument to which such Borrower is a party or by
which its property is subject (including any Ground Lease), nor will such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any Governmental Authority having jurisdiction over such Borrower
or any of its properties. Each Borrower's rights under the Licenses and the
Management Agreement pertaining to the Collateral Property owned by such
Borrower will not be adversely affected by the execution and delivery of the
Loan Documents, such Borrower's performance thereunder, the recordation of any
Mortgage executed by such Borrower, or the exercise of any remedies by Lender.
Any consent, approval, authorization, order, registration or qualification of or
with any Governmental Authority required for the execution and delivery by any
Borrower of the Loan Documents has been obtained and is in full force and
effect.
5.1.4 Litigation. There are no actions, suits or other proceedings
at law or in equity by or before any Governmental Authority now pending or
threatened against or affecting any Borrower, any Borrower Representative, the
Manager or any Collateral Property, which, if adversely determined, might
materially adversely affect the condition (financial or otherwise) or business
of any Borrower, any Borrower Representative, Manager or the condition or
ownership of any Collateral Property.
5.1.5 Agreements. No Borrower is a party to any agreement or
instrument or subject to any restriction which might adversely affect such
Borrower or its Collateral Property, or such Borrower's business, properties,
operations or condition, financial or otherwise. No Borrower is in default in
any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Permitted Encumbrance or
any other agreement or instrument to which it is a party or by which it or any
Collateral Property is bound.
5.1.6 Title. Each Borrower has good fee title (or, if the Mortgages
granted by such Borrower are leasehold mortgages, leasehold title) to the
portion of its Collateral Property constituting Real Property, and good title to
the balance of the Collateral Property, free and clear of all Liens except the
Permitted Encumbrances. The Mortgage executed by each Borrower, when properly
recorded in the appropriate records, together with any UCC financing statements
required to be filed in connection therewith, will create (i) valid, perfected
first and second priority lien on the fee interest in the Collateral Property
(or, if the Mortgage granted by such Borrower are leasehold mortgages, the
Leasehold Estate), and (ii) perfected security interests in and to, and
perfected collateral assignments of, all personalty purported to be covered by
such Mortgages (including the Leases affecting such Collateral Property), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances. The Permitted Encumbrances do not materially adversely
affect the value or use of any Collateral Property, or the ability of Borrower
to repay the Loan. There are no claims for payment for
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work, labor or materials affecting any Collateral Property which are or may
become a Lien prior to, or of equal priority with, any Liens created by the Loan
Documents.
5.1.7 Survey. To the best of each Borrower's knowledge, the survey
for each Collateral Property delivered to Lender does not fail to reflect any
material matter affecting such Collateral Property or the title thereto which is
required to be reflected thereon in accordance with the standards for a Survey
described in the definition thereof.
5.1.8 No Bankruptcy Filing. None of the Borrowers is contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency law or the liquidation of all or a major portion of its property (a
"Bankruptcy Proceeding"), and none of the Borrowers has any knowledge of any
Person contemplating the filing of any such petition against any Borrower. In
addition, no Borrower or Borrower Representative or any principal or Affiliate
of any Borrower or Borrower Representative has been a party to, or the subject,
of a Bankruptcy Proceeding for the past ten (10) years.
5.1.9 Full and Accurate Disclosure. No statement of fact made by
Borrower in any Loan Document contains any untrue statement of a material fact
or omits to state any material fact necessary to make statements contained
therein not misleading. There is no material fact presently known to any
Borrower that has not been disclosed to Lender which adversely affects, or, as
far as any Borrower can foresee, might adversely affect, the Collateral Property
or the business, operations or condition (financial or otherwise) of any
Borrower.
5.1.10 No Plan Assets. Borrower is not an "employee benefit plan,"
as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of
the assets of Borrower constitutes or will constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition,
(a) Borrower is not a "governmental plan" within the meaning of Section 3(32) of
ERISA and (b) transactions by or with Borrower are not subject to state statutes
regulating investment of, and fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Loan Agreement.
5.1.11 Compliance. Each Borrower and its Collateral Property and the
use thereof comply in all material respects with all applicable Legal
Requirements. No Borrower is in default or violation of any order, writ,
injunction, decree or demand of any Governmental Authority, the violation of
which might materially adversely affect the condition (financial or otherwise)
or business of such Borrower. There has not been and shall never be committed by
any Borrower or any other Person in occupancy of or involved with the operation
or use of any Collateral Property any act or omission affording any Governmental
Authority the right of forfeiture as against any Collateral Property or any part
thereof or any monies paid in performance of any Borrower's obligations under
any Loan Document.
5.1.12 Contracts. As of the date hereof, there are no material
service, maintenance or repair contracts affecting any Collateral Property other
than those identified on Schedule 5. All information set forth in Schedule 5 is
true, accurate and complete in all material respects as of the date hereof.
Except as disclosed on Schedule 5, there are no material service,
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maintenance or repair contracts that are not terminable on one month's notice or
less without cause and without penalty or premium. All service, maintenance or
repair contracts affecting any Collateral Property have been entered into at
arms-length in the ordinary course of a Borrower's business and provide for the
payment of fees in amounts and upon terms comparable to existing market rates.
5.1.13 Financial Information. All financial data, including the
information required pursuant to Section 2.2.6 hereof and any statements of cash
flow and income and operating expense, that have been delivered to Lender in
respect of any Collateral Property (i) are true, complete and correct in all
material respects, (ii) accurately represent the financial condition of such
Collateral Property as of the date of such reports, and (iii) to the extent
prepared by an independent certified public accounting firm, have been prepared
in accordance with GAAP consistently applied throughout the periods covered,
except as disclosed therein. No Borrower has any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that would have a material
adverse affect on the financial condition of such Borrower or on any Collateral
Property or the operation thereof as retail shopping centers, except as referred
to or reflected in said financial statements. Since the date of such financial
statements, there has been no materially adverse change in the financial
condition, operations or business of any Borrower from that set forth in said
financial statements.
5.1.14 Condemnation. No Condemnation or other proceeding has been
commenced or, to any Borrower's best knowledge, is contemplated with respect to
all or part of any Collateral Property or for the relocation of roadways
providing access to any Collateral Property.
5.1.15 Federal Reserve Regulations. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose that would be inconsistent with such
Regulation U or any other regulation of such Board of Governors, or for any
purpose prohibited by Legal Requirements or any Loan Document.
5.1.16 Utilities and Public Access. Each Collateral Property has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service such Collateral Property for its
respective intended uses. All public utilities necessary or convenient to the
full use and enjoyment of each Collateral Property are located either in the
public right-of-way abutting such Collateral Property (which are connected so as
to serve such Collateral Property without passing over other property) or in
recorded easements serving such Collateral Property and such easements are set
forth in and insured by the Title Insurance Policies. All roads necessary for
the use of each Collateral Property for their current respective purposes have
been completed and dedicated to public use and accepted by all Governmental
Authorities.
5.1.17 Not a Foreign Person. No Borrower is a "foreign person"
within the meaning of ss. 1445(f)(3) of the Code.
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5.1.18 Separate Lots. Each Collateral Property is comprised of one
(1) or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Collateral
Property.
5.1.19 Assessments. There are no pending or proposed material
special or other assessments for public improvements or otherwise affecting any
Collateral Property, or any contemplated improvements to any Collateral Property
that may result in such special or other assessments.
5.1.20 Enforceability. The Loan Documents are not subject to, and no
Borrower has asserted, any right of rescission, set-off, counterclaim or
defense, including the defense of usury. No exercise of any of the terms of the
Loan Documents, or any right thereunder, will render any Loan Document
unenforceable.
5.1.21 Insurance. Borrower has obtained and has delivered to Lender
certified copies of all insurance policies reflecting the insurance coverages,
amounts and other requirements set forth in this Agreement. No Person, including
Borrower, has done, by act or omission, anything which would impair the coverage
of any such policy.
5.1.22 Use of Property; Licenses. Each Collateral Property is used
exclusively for retail and other appurtenant and related uses. Except as
heretofore discussed in writing to Lender, all material certifications, permits,
licenses and approvals, including certificates of completion and occupancy
permits required for the legal use, occupancy and operation of the Collateral
Property (collectively, the "Licenses"), have been obtained and are in full
force and effect. Borrower shall keep and maintain all licenses necessary for
the operation of each Collateral Property as a retail shopping center. The uses
being made of each Collateral Property are in conformity in all material
respects with, and are permitted under, the certificate of occupancy issued for
such Collateral Property.
5.1.23 Flood Zone. Except as disclosed on a Survey delivered to
Lender, none of the Improvements on any Collateral Property is located in an
area as identified by the Federal Emergency Management Agency as an area having
special flood hazards.
5.1.24 Physical Condition. Except as otherwise disclosed in the
written physical inspection reports heretofore delivered to Lender, each
Collateral Property, including, without limitation, all buildings, improvements,
parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,
HVAC systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects;
there exists no structural or other material defects or damages in any
Collateral Property, whether latent or otherwise, and Borrower has not received
notice from any insurance company or bonding company of any defects or
inadequacies in any Collateral Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
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5.1.25 Boundaries and Encroachments. All of the Improvements on any
Collateral Property included in determining the appraised value of such
Collateral Property lie wholly within the boundaries and building restriction
lines of such Collateral Property, and no improvement on an adjoining property
encroaches upon such Collateral Property, and no easement or other encumbrance
upon such Collateral Property encroaches upon any of the Improvements, so as to
affect the value or marketability of such Collateral Property, except those
insured against by the Title Insurance Policy.
5.1.26 Leases and Rent Roll. Borrowers have delivered to Lender a
true, correct and complete rent roll for each Collateral Property (each a, "Rent
Roll"), which includes all Leases affecting each Collateral Property (including
schedules for all executed Leases for Tenants not yet in occupancy or under
which the rent commencement date has not occurred). Except as set forth in the
Rent Rolls and estoppel certificates delivered to Lender on or prior to the
Closing Date for the applicable Collateral Property: (i) to the best of each
Borrower's knowledge, each Lease is in full force and effect; (ii) the Tenants
under the Leases have accepted possession of and are in occupancy of all of
their respective demised premises, have commenced the payment of rent under the
Leases, and, to the best of each Borrower's knowledge, there are no offsets,
claims or defenses to the enforcement thereof; (iii) to the best of each
Borrower's knowledge, all rents due and payable under the Leases have been paid
and no portion thereof has been paid for any period more than thirty (30) days
in advance; (iv) the rent payable under each Lease is the amount of fixed rent
set forth in the Rent Roll, and, to the best of each Borrower's knowledge, there
is no claim or basis for a claim by the Tenant thereunder for an adjustment to
the rent; (v) to the best of each Borrower's knowledge, no Tenant has made any
written claim of a material default against the landlord under any Lease which
remains outstanding nor, to the best of each Borrower's knowledge, has Borrower
or Manager received, by telephonic, in-person, e-mail or other communication,
received any notice of a material default under any Lease; (vi) to the best of
each Borrower's knowledge, there is no present material default by the Tenant
under any Lease; (vii) no Borrower holds any security deposits under the Leases;
(viii) a Borrower is the sole owner of the entire lessor's or sublessor's
interest in each Lease; (ix) to the best of each Borrower's knowledge, each
Lease is the valid, binding and enforceable obligation of a Borrower and the
applicable Tenant thereunder; (x) to the best of each Borrower's knowledge, no
Person has any possessory interest in, or right to occupy, any Collateral
Property except under the terms of a Lease; and (xi) Borrower has not received
any written notice of default on the part of Landlord under any Lease.
Notwithstanding the foregoing, the breach of any of the representations
contained in the preceding sentence shall not constitute an Event of Default
provided that (i) the relevant Lease is not a Material Lease and (ii) the facts
resulting in such breach do not, after taking into account all other facts
resulting in other breaches of the representations contained in the preceding
sentence, do not have a material adverse affect on the value, Net Operating
Income, use or operation of any Collateral Property. None of the Leases contains
any option to purchase or right of first refusal to purchase any Collateral
Property or any part thereof. Neither the Leases nor the Rents have been
assigned or pledged except to Lender, and no other Person has any interest
therein except the Tenants thereunder.
5.1.27 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of any Collateral Property to any Borrower have
been paid. All mortgage, mortgage recording, stamp,
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intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Mortgages, have been paid, and, under current Legal Requirements, each of the
Mortgages is enforceable in accordance with their respective terms by Lender (or
any subsequent holder thereof).
5.1.28 Investment 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.
5.1.29 Fraudulent Transfer. No Borrower has entered into the Loan or
any Loan Document with the actual intent to hinder, delay, or defraud any
creditor, and each Borrower has received reasonably equivalent value in exchange
for its obligations under the Loan Documents. Giving effect to the transactions
contemplated by the Loan Documents, the fair saleable value of each Borrower's
assets exceeds and will, immediately following the execution and delivery of the
Loan Documents, exceed Borrower's total liabilities, including subordinated,
unliquidated, disputed or contingent liabilities. The fair saleable value of
each Borrower's assets is and will, immediately following the execution and
delivery of the Loan Documents, be greater than such Borrower's probable
liabilities, including the maximum amount of its contingent liabilities or its
debts as such debts become absolute and matured. Each Borrower's assets do not
and, immediately following the execution and delivery of the Loan Documents will
not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. No Borrower intends to, or believes
that it will, incur debts and liabilities (including contingent liabilities and
other commitments) beyond its ability to pay such debts as they mature (taking
into account the timing and amounts to be payable on or in respect of
obligations of such Borrower).
5.1.30 Ownership of Borrower. As to each Borrower that is a limited
partnership, the sole managing member of the sole general partner of such
Borrower is its Borrower Representative. As to each Borrower that is a limited
liability company, the sole managing member of such Borrower is its Borrower
Representative. Westfield America Limited Partnership is the owner of all of the
issued and outstanding capital stock of, in the case of Downtown Plaza LLC,
Borrower, and in the case of each of the other Borrowers, the Borrower
Representative, all of which capital stock has been validly issued and fully
paid and is nonassessable. The only limited partners or other members of each
Borrower are identified on Schedule 6 hereto. The stock of, in the case of the
Downtown Plaza LLC, Borrower, and in the case of each of the other Borrowers,
the Borrower Representative, and all limited partnership or membership interests
in each Borrower are owned free and clear of all Liens, warrants, options and
rights to purchase. No Borrower has an obligation to any Person to purchase,
repurchase or issue any ownership interest in it. Attached hereto as Schedule 6
is an organizational chart for each Borrower indicating the ownership interests
in each Borrower and its Borrower Representative.
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5.1.31 Management Agreement. The Management Agreement for each
Collateral Property is in full force and effect. There is no default, breach or
violation existing thereunder, and no event has occurred (other than payments
due but not yet delinquent) that, with the passage of time or the giving of
notice, or both, would constitute a default, breach or violation thereunder, by
either party thereto. The Management Fee and the terms and provisions of the
Management Agreement are subordinate to the Loan Documents in accordance with
the term set forth in the applicable Manager Consent and Subordination of
Management Agreement, Lender approves the terms of the Management Agreements
heretofore delivered to Lender.
5.1.32 Hazardous Substances. To the best of each Borrower's
knowledge after due inquiry, except as disclosed in the written environmental
reports delivered to Lender prior to the date hereof: (i) no Collateral Property
is in violation of any Legal Requirement pertaining to or imposing liability or
standards of conduct concerning environmental regulation, contamination or
clean-up, including the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Emergency
Planning and Community Right-to-Know Act of 1986, the Hazardous Substances
Transportation Act, the Solid Waste Disposal Act, the Clean Water Act, the Clean
Air Act, the Toxic Substance Control Act, the Safe Drinking Water Act, the
Occupational Safety and Health Act, any state super-lien and environmental
clean-up statutes, any local law requiring related permits and licenses and all
amendments to and regulations in respect of the foregoing laws (collectively,
"Environmental Laws"); (ii) no Collateral Property is subject to any private or
governmental Lien or judicial or administrative notice or action or inquiry,
investigation or claim relating to hazardous, toxic, dangerous and/or regulated
substances, wastes, materials, raw materials which include hazardous
constituents, pollutants or contaminants, including asbestos, asbestos
containing materials, petroleum, tremolite, anthlophylite, actinolite,
polychlorinated biphenyls and any other substances or materials which are
included under or regulated by Environmental Laws or which are considered by
scientific opinion to be otherwise dangerous in terms of the health, safety and
welfare of humans (collectively, "Hazardous Substances"); (iii) no Hazardous
Substances are or have been (including the period prior to the acquisition of
any Collateral Property by the Borrower that owns it), discharged, generated,
treated, stored on, incorporated in, or removed from any Collateral Property
other than in compliance with all Environmental Laws; (iv) except for Routine
Hazardous Substances, no Hazardous Substances are or have been (including the
period prior to the acquisition of any Collateral Property by the Borrower that
owns it), disposed of or transported from any Collateral Property other than in
compliance with all Environmental Laws; (v) no Hazardous Substances are present
in, on or under any nearby real property which could migrate to or otherwise
affect any Collateral Property; and (vi) no underground storage tanks exist on
any Collateral Property. There have been no environmental investigations,
studies, audits, reviews or other analyses conducted by or on behalf of any
Borrower which have not been provided to Lender.
5.1.33 Name; Principal of Business. No Borrower uses or will use any
trade name and has done or will do business under any name other than its actual
name set forth herein or the name of its Collateral Property. The principal
place of business of each Borrower is its primary address for notices as set
forth in Section 11.2, and no Borrower has any other place of business (other
than its Collateral Property).
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5.1.34 Subordinated Debt. No Borrower has any indebtedness with
respect to its Collateral Property or any excess cash flow or any residual
interest therein, whether secured or unsecured, other than Permitted
Encumbrances and the permitted indebtedness described in Section 7.8.
5.1.35 Ground Lease. (A) Borrower hereby represents and warrants to
Lender the following with respect to Lease and Option to Purchase between the
Redevelopment Agency of the City of Sacramento and Tishman Sacramento, Inc.,
dated as of August 11, 1967, as amended and assigned:
(1) Recording; Modification. The Ground Lease (or a
memorandum thereof) has been duly recorded. The Ground Lease
permits the interest of Borrower to be encumbered by a
mortgage or the ground lessor has approved and consented to
the encumbrance of the applicable Collateral Property by the
respective Mortgage. There have not been amendments or
modifications to the terms of the Ground Lease since its
recordation, with the exception of written instruments which
have been recorded. Borrower will not cancel, terminate,
surrender or amend the Ground Lease without the prior written
consent of Lender.
(2) No Liens. Except for the Permitted Encumbrances,
Borrower's interest in the Ground Lease is not subject to any
Liens or encumbrances superior to, or of equal priority with,
the related Mortgage other than the ground lessor's related
fee interest.
(3) Ground Lease Assignable. Borrower's interest in the
Ground Lease is assignable to Lender upon notice to, but
without the consent of, the ground lessor (or, if any such
consent is required, it has been obtained prior to the Closing
Date). The Ground Lease is further assignable by Lender, its
successors and assigns without the consent of the ground
lessor.
(4) Default. As of the date hereof, the Ground Lease is
in full force and effect and no default has occurred under the
Ground Lease and there is no existing condition which, but for
the passage of time or the giving of notice, could result in a
default under the terms of the Ground Lease.
(5) Notice. The Ground Lease requires the ground lessor
to give notice of any default by Borrower to Lender. The
Ground Lease, or estoppel letters received by Lender from the
ground lessor, further provides that notice of termination
given under the Ground Lease is not effective against Lender
unless a copy of the notice has been delivered to Lender in
the manner described in the Ground Lease.
(6) Cure. Lender is permitted the opportunity
(including, where necessary, sufficient time to gain
possession of the interest of
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Borrower under the Ground Lease) to cure any default under the
Ground Lease, which is curable after the receipt of notice of
any of the default before the ground lessor thereunder may
terminate the Ground Lease.
(7) Term. The Ground Lease has a term (including all
available renewals) which extends through July 31, 2027.
(8) New Lease. The Ground Lease requires the ground
lessor to enter into a new lease upon termination of the
Ground Lease if the Ground Lease was terminated and Lender was
not given an opportunity to cure the default prior to
termination.
(9) Insurance Proceeds. Under the terms of the Ground
Lease and the respective Mortgage, taken together, any related
insurance and condemnation proceeds will be applied either to
the repair or restoration of all or part of the applicable
Collateral Property, with Lender having the right to hold and
disburse the proceeds in excess of $1,000,000 as the repair or
restoration progresses, or to the payment of the outstanding
principal balance of the Loan together with any accrued
interest thereon.
(10) Subleasing. The Ground Lease does not impose any
restrictions on subleasing other than obtaining Landlord's
prior consent.
(B) Borrower hereby represents and warrants to Lender the
following with respect to the Amended and Restated Sublease by and between
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Stores, Inc. and DPA, L.P., dated as of March 1, 1993 as
assigned from DPA, L.P. to Downtown Plaza LLC pursuant to that certain
Assignment of Ground Sublease, dated October 29, 1998:
(1) Recording; Modification. A memorandum of the Ground
Lease has been duly recorded. The Ground Lease permits the
interest of Borrower to be encumbered by a mortgage or the
ground lessor has approved and consented to the encumbrance of
the applicable Collateral Property by the respective Mortgage
in an amount not to exceed One Million Eight Hundred Nineteen
Thousand Eight Hundred Sixty Eight and NO/100 Dollars
($1,819,868.00). There have not been amendments or
modifications to the terms of the Ground Lease since its
recordation, with the exception of written instruments which
have been recorded. Borrower will not cancel, terminate,
surrender or amend the Ground Lease without the prior written
consent of Lender.
(2) No Liens. Except for the Permitted Encumbrances,
Borrower's interest in the Ground Lease is not subject to any
Liens or encumbrances superior to, or of equal priority with,
the related Mortgage other than the ground lessor's related
fee interest.
(3) Ground Lease Assignable. Borrower's interest in the
Ground Lease is assignable to Lender at a foreclosure sale
upon notice to,
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but without the consent of, the ground lessor (or, if any such
consent is required, it has been obtained prior to the Closing
Date).
(4) Default. As of the date hereof, the Ground Lease is
in full force and effect and no default has occurred under the
Ground Lease and there is no existing condition which, but for
the passage of time or the giving of notice, could result in a
default under the terms of the Ground Lease.
(5) Notice. The Ground Lease requires the ground lessor
to give notice of any default by Borrower to Lender. The
Ground Lease, or estoppel letters received by Lender from the
ground lessor, further provides that notice of termination
given under the Ground Lease is not effective against Lender
unless a copy of the notice has been delivered to Lender in
the manner described in the Ground Lease.
(6) Cure. Lender is permitted the opportunity
(including, where necessary, sufficient time to gain
possession of the interest of Borrower under the Ground Lease)
to cure any default under the Ground Lease, which is curable
after the receipt of notice of any of the default before the
ground lessor thereunder may terminate the Ground Lease.
(7) Term. The Ground Lease has a term (including all
available renewals) which extends through October 31, 2039.
(8) Subleasing. The Ground Lease does not impose any
restrictions on subleasing.
5.1.36 REA. With respect to each REA: (i) the applicable Borrower
has delivered to Lender a true and correct copy of such REA,
together with all amendments and modifications thereto. Such
REA is in full force and effect and has not otherwise been
modified or amended; (ii) except as disclosed in estoppels
delivered to Lender prior to the Closing Date, Borrower has
received no written claim of a default (other than a
technical, non-material default which would not entitle a
party to terminate or exercise any remedies with respect to an
REA) under such REA; (iii) all sums due and payable under such
REA have been paid in full; (iv) no party thereto has
commenced any action or given or received any notice for the
purpose of terminating such REA; and (v) the applicable
Borrower's interest in such REA may be encumbered by the
Mortgage granted in connection with the Loan and is assignable
without the consent of any other party to the REA.
5.1.37 Tenant Estoppels. No modifications have been made to any of
the terms and conditions of any of the Leases that would cause any of the
statements made by each of the Tenants in the Tenant estoppel certificates
delivered to Lender prior to the date hereof to be false or misleading in any
material respect.
5.1.38 No Prior Assignment. There are no prior assignments of the
Leases or any portion of the Rents due and payable or to become due and payable
which are presently outstanding.
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5.1.39 Special Purpose Entity/Separateness
(a) Until the Debt has been paid in full, each Borrower hereby
represents, warrants and covenants that each Borrower is, shall be and shall
continue to be a Special Purpose Entity.
(b) The representations, warranties and covenants set forth in
Section 5.1.39(a) shall survive for so long as any portion of the Debt remains
payable to Lender under this Agreement, the Note or any other Loan Document.
(c) All of the assumptions made in the Insolvency Opinion,
including, but not limited to, any exhibits attached thereto, are true and
correct in all respects and any assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Loan Documents or a
Substitution or Transfer of any Collateral Property (an "Additional Insolvency
Opinion"), including, but not limited to, any exhibits attached thereto, will
have been and shall at all times be true and correct in all respects. Each
Borrower has complied and will comply with all of the assumptions made with
respect to it in the Insolvency Opinion. Each Borrower will have complied and
will comply with all of the assumptions made with respect to it in any
Additional Insolvency Opinion. Each entity other than a Borrower with respect to
which an assumption shall be made in any Additional Insolvency Opinion will have
complied and will comply with all of the assumptions made with respect to it in
any Additional Insolvency Opinion.
5.1.40 Illegal Activity. No portion of any Collateral Property has
been or will be purchased with proceeds of any illegal activity.
5.2 Survival of Representations and Covenants. All of the representations
and warranties in Section 5.1 and elsewhere in the Loan Documents (i) shall
survive for so long as any portion of the Debt remains owing to Lender and (ii)
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf. The
representations, warranties and covenants set forth in Section 5.1.39 and 6.10
shall not be subject to the exculpation provisions of Section 11.1.
VI AFFIRMATIVE COVENANTS
From the date hereof and until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Liens of all Mortgages encumbering the Collateral Properties (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
6.1 Existence. Each Borrower shall (i) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence,
rights, and franchises, (ii) continue to engage in the business presently
conducted by it, (iii) obtain and maintain all Licenses applicable to it or its
Collateral Property, and (iv) qualify to do business and remain in good standing
under the laws of each jurisdiction, in each case as and to the extent required
for the ownership, maintenance, management and operation of the Collateral
Property owned by it.
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6.2 Taxes and Other Charges. Each Borrower shall pay all Taxes and Other
Charges applicable to such Borrower and the Collateral Property owned by it as
the same become due and payable, and deliver to Lender receipts for payment or
other evidence satisfactory to Lender that such Taxes and Other Charges have
been so paid no later than thirty (30) days before they would be delinquent if
not paid (provided, however, that a Borrower need not furnish such receipts for
payment of Taxes paid by Lender pursuant to Section 4.3). No Borrower shall
suffer and shall promptly cause to be paid and discharged any Lien against its
Collateral Property other than Permitted Encumbrances, and shall promptly pay
for all utility services provided to such Collateral Property. After prior
notice to Lender, a Borrower, at its own expense, may contest by appropriate
legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application of any Taxes or Other Charges,
provided that (i) no Event of Default has occurred and remains uncured, (ii)
such proceeding shall suspend the collection of such Taxes or Other Charges or
the Taxes shall have been paid, (iii) such proceeding shall be permitted under
and be conducted in accordance with the provisions of any other instrument to
which such Borrower is subject and shall not constitute a default thereunder,
(iv) no part of or interest in any Collateral Property will be in danger of
being sold, forfeited, terminated, canceled or lost, (v) such Borrower shall
have furnished such security as may be required in the proceeding, or as may be
requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon, which shall not be less than
125% of the unpaid Taxes and Other Charges being contested (and in the case of
any Taxes being contested, any sums in the Tax and Insurance Escrow fund
dedicated to payment of such contested Taxes shall count toward such 125%), and
(vi) such Borrower shall promptly upon final determination thereof pay the
amount of such Taxes or Other Charges, together with all costs, interest and
penalties. Lender may pay over any such security or part thereof held by Lender
to the claimant entitled thereto at any time when, in the judgment of Lender,
the entitlement of such claimant is established.
6.3 Repairs; Maintenance and Compliance; Alterations; Required Repairs.
6.3.1 Repairs and Maintenance. Each Borrower shall at all times
maintain, preserve and protect all franchises and trade names, and each Borrower
shall cause its Collateral Property (including any Substitute Property) to be
maintained in a good and safe condition and repair and shall not, without
Lender's prior written consent, remove or demolish the Improvements or Equipment
(except for removal of Equipment being replaced with Equipment of the same or
greater value and utility, and demolition necessary to perform alterations
permitted under Section 6.3.3).
6.3.2 Legal Compliance. Each Borrower shall promptly comply in all
material respects with all Legal Requirements applicable to itself or its
Collateral Property and cure properly any violation of a Legal Requirement
within thirty (30) days after such Borrower receives notice of such violation.
Each Borrower shall promptly repair, replace or rebuild any part of its
Collateral Property that becomes damaged, worn or dilapidated and shall complete
and pay for any Improvements constituting part of its Collateral Property at any
time in the process of construction or repair. Notwithstanding the foregoing, a
Borrower may defer compliance with a Legal Requirement pending such Borrower's
contest thereof; provided that (1) such Borrower is permitted by the applicable
Legal Requirement to delay compliance therewith pending such proceedings, (2)
neither the affected Collateral Property nor any part thereof or interest
therein
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will be sold, forfeited or lost if such Borrower fails to promptly comply with
the Legal Requirement being contested, and if Borrower fails to prevail in
contest, such Borrower would thereafter have the opportunity to comply with such
Legal Requirement, (3) Lender would not, by virtue of such permitted contest, be
exposed to any risk of any civil liability for which such Borrower has not
furnished additional security as provided in clause (4) below, or to any risk of
criminal liability, and neither the Collateral Property nor any interest therein
would be subject to the imposition of any Lien for which such Borrower has not
furnished additional security as provided in clause (4) below, as a result of
the failure to comply with such Legal Requirement and (4) if requested by Lender
at any time, such Borrower shall have furnished to Lender additional security in
respect of the Legal Requirement being contested and the loss or damage that may
result from such Borrower's failure to prevail in such contest in such amount as
may be reasonably requested by Lender but in no event less than one hundred
twenty-five percent (125%) of the cost of complying such Legal Requirement and
any loss or damage that may result from such Borrower's failure to prevail in
such contest.
6.3.3 Alterations. Borrower may, without Lender's consent, perform
alterations to the Improvements and Equipment at a Collateral Property which do
not constitute a Material Alteration and which do not adversely affect such
Borrower's financial condition or the value or net operating income of such
Collateral Property. No Borrower shall perform any Material Alteration the cost
of which is reasonably estimated to exceed five percent (5%) of the Allocated
Loan Amount per calendar year for the applicable Collateral Property or which is
likely to result in a decrease of Net Operating Income of the applicable
Collateral Property by 2.5% or more for a period of thirty (30) days or longer,
without Lender's prior written consent, which consent shall not be unreasonably
withheld or delayed. Lender may, as a condition to giving its consent to a
Material Alteration, require that the Borrower deliver to Lender as security for
payment of the cost of such Material Alteration and as additional security for
Borrower's payment of the Debt any of the following: (1) cash, (2) U.S. Treasury
securities, (3) other securities having a rating acceptable to Lender, (4) a
Rating Comfort Letter, or (5) an irrevocable Letter of Credit (payable on sight
draft only) issued by an Eligible Institution. Such security shall be in an
amount equal to the cost of the Material Alteration as reasonably estimated by
Lender. Upon the occurrence of an Event of Default, Lender may apply such
security to payment of the Debt. If the security posted is other than cash, upon
substantial completion of the Material Alteration and submission to Lender of
evidence satisfactory to Lender that (i) the Material Alteration was constructed
in accordance with applicable Legal Requirements and substantially in accordance
with plans and specifications approved by Lender (which approval shall not be
unreasonably withheld or delayed), (ii) all contractors, subcontractors,
materialmen and professionals who provided work, materials or services in
connection with the Material Alteration have been paid in full and have
delivered unconditional releases of lien and (iii) all material Licenses
necessary for the use, operation and occupancy of the Material Alteration (other
than those which depend on the performance of tenant improvement work) have been
issued, Lender shall, provided no Event of Default then exists, return the
security (or the unapplied portion thereof) to the Borrower. At the Borrower's
request, Lender shall, provided no Event of Default then exists, return one-half
of the security to Borrower when Lender has determined, in its sole discretion,
that seventy-five percent (75%) of the Material Alteration has been completed
and paid for and that the remaining security is sufficient to ensure payment in
full for all work, services and materials necessary to complete the Material
Alteration as contemplated in clauses (i), (ii) and (iii) of the preceding
sentence. If the security posted is cash,
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Lender shall disburse such cash in accordance with the same procedures as are
applicable to disbursement of Proceeds or an Award under Section 8.4.3. The
Borrower shall reimburse Lender upon demand for all out-of-pocket costs and
expenses (including the reasonable fees of all professionals) incurred by Lender
in reviewing plans and specifications or in making any determinations necessary
to implement the provisions of this Section 6.3.3.
6.3.4 Required Repairs. In the event that a Substitute Property
becomes subject to the terms of this Loan Agreement pursuant to Section 2.3
hereof, the Borrower hereby agrees that all repairs recommended in the
engineering report for the Substitute Property which was obtained in connection
with the Substitution and reasonably required by Lender shall be performed in
accordance with the schedule set forth in the reports and otherwise in material
compliance with such engineering report. All required repairs shall be done in a
good and workmanlike manner, shall be completed free of liens, shall comply in
all material respects with all applicable Legal Requirements and shall otherwise
be reasonably approved by the Lender.
6.4 Litigation. Each Borrower shall give prompt written notice to Lender
of any litigation, governmental proceedings or claims or investigations
regarding an alleged actual violation of a Legal Requirement pending or
threatened against such Borrower which would, if adversely determined,
materially adversely affect such Borrower's condition (financial or otherwise)
or business or its Collateral Property.
6.5 Performance of Other Agreements. Each Borrower shall observe and
perform in all material respects each and every term to be observed or performed
by it pursuant to the terms of any agreement or instrument affecting or
pertaining to its Collateral Property, including any Ground Lease affecting such
Collateral Property.
6.6 Notices. Each Borrower shall promptly advise Lender of any material
adverse change in such Borrower's condition, financial or otherwise, or of the
occurrence of any Default or Event of Default of which such Borrower has
knowledge, including any notice sent by any Ground Lessor concerning any Ground
Lease under which such Borrower is the lessee. Each Borrower shall cause to be
delivered to Lender any Securities and Exchange Commission or other public
filings, if any, of such Borrower, its Borrower Representative, Manager, or any
Affiliate of any of the foregoing within ten (10) Business Days of such filing.
6.7 Cooperate in Legal Proceedings. Each Borrower shall cooperate fully
with Lender with respect to, and permit Lender, at its option, to participate
in, any proceedings before any Governmental Authority which may in any way
affect the rights of Lender under any Loan Document.
6.8 Further Assurances. Each Borrower shall, at Borrower's sole cost and
expense, (i) furnish to Lender all then existing instruments, documents,
boundary surveys, footing or foundation surveys, certificates, plans and
specifications, appraisals, title and other insurance reports and agreements,
reasonably requested by Lender; (ii) execute and deliver to Lender such
documents, instruments, certificates, assignments and other writings, and do
such other acts necessary or desirable, to evidence, preserve and/or protect the
collateral at any time securing or intended to secure the Debt, as Lender may
reasonably require from time to time; (iii) do and execute all and such further
lawful and reasonable acts, conveyances and assurances for the
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better and more effective carrying out of the intents and purposes of the Loan
Documents, as Lender shall reasonably require from time to time and (iv) upon
Lender's request therefor given from time to time after the occurrence of any
Default or Event of Default pay for (a) reports of UCC, federal tax lien, state
tax lien judgment and pending litigation searches with respect to such Borrower
and (b) searches of title to any Collateral Property, each such search to be
conducted by search firms reasonably designated by Lender in each of the
locations reasonably designated by Lender.
6.9 Financial Reporting.
6.9.1 Bookkeeping. Each Borrower shall keep on a Fiscal Year basis,
in accordance with GAAP, proper and accurate books, records and accounts
reflecting all of the financial affairs of such Borrower and all items of income
and expense and any services, Equipment or furnishings provided in connection
with the operation of such Borrower's Collateral Property, whether such income
or expense is realized by such Borrower, Manager or any Affiliate of such
Borrower or Manager. Lender shall have the right from time to time during normal
business hours upon reasonable notice to examine such books, records and
accounts at the office of such Borrower or other Person maintaining them, and to
make such copies or extracts thereof as Lender shall desire. After an Event of
Default, Borrower shall pay any costs incurred by Lender to examine such books,
records and accounts, as Lender shall determine to be necessary or appropriate
in the protection of Lender's interest.
6.9.2 Annual Reports. Each Borrower shall furnish to Lender
annually, (i) within forty (40) days after each Fiscal Year, unaudited financial
statements of such Borrower, and (ii) within one-hundred twenty (120) days after
each Fiscal Year, a complete copy of such Borrower's annual financial statements
audited by a "Big Five" accounting firm or another independent certified public
accountant (accompanied by an unqualified opinion from such accounting firm or
other independent certified public accountant) reasonably acceptable to Lender,
each in accordance with GAAP and containing balance sheets and statements of
profit and loss for such Borrower and its Collateral Property in such detail as
Lender may request. Each such statement (x) shall set forth the financial
condition and the income and expenses for its Collateral Property for the
immediately preceding calendar year, including statements of annual Net
Operating Income, and (y) shall be accompanied by an Officer's Certificate
certifying (1) that such statement presents fairly the financial condition of
such Collateral Property and has been prepared in accordance with GAAP, (2)
whether there exists a Default or Event of Default, and if so, the nature
thereof, the period of time it has existed and the action then being taken to
remedy it, (3) a list of Tenants, if any, occupying more than twenty percent
(20%) of the rentable space of such Collateral Property, and (4) a breakdown
showing (a) the year in which each Lease then in effect expires, (b) the
percentage of rentable space covered by such Lease, (c) the percentage of base
rent with respect to which Leases shall expire in each such year, expressed both
on a per year and a cumulative basis. At Borrower's option, Borrower may submit
a combined annual statement with individual Collateral Property schedules
setting forth all information required under this Section 6.9.2.
6.9.3 Monthly and Quarterly Reports. Each Borrower shall furnish to
Lender (x) within thirty (30) days after the end of each calendar month the
following items: (i) monthly and year-to-date operating statements, noting Net
Operating Income and other information
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necessary and sufficient under GAAP to fairly represent the financial position
and results of operation of its Collateral Property during such calendar month,
all in form reasonably satisfactory to Lender; (ii) a statement that such
Borrower has not incurred any indebtedness other than indebtedness permitted
hereunder; and (iii) occupancy rates, rent rolls (identifying the leased
premises, names of all Tenants, units leased, monthly rental and all other
charges payable under each Lease, date to which paid, term of Lease, date of
occupancy, date of expiration, material special provisions, concessions or
inducements granted to Tenants, and a year-by-year schedule showing by
percentage the rentable area of the Improvements and the total base rent
attributable to Leases expiring each year) and a delinquency report for such
Collateral Property; and (y) within forty (40) days after the end of each
calendar quarter the following items: (i) a balance sheet for such calendar
month; (ii) a comparison of the budgeted income and expenses and the actual
income and expenses for each month and year-to-date for such Collateral
Property, together with a detailed explanation of any variances of ten percent
(10%) or more between budgeted and actual amounts for such period and
year-to-date; (iii) a statement of the actual Replacement Expenses made by such
Borrower during each calendar quarter as of the last day of such calendar
quarter; and (iv) an aged receivables report. Each such statement shall be
accompanied by an Officer's Certificate certifying (1) that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of such Borrower and its Collateral Property in
accordance with GAAP (subject to normal year-end adjustments) and (2) whether
there exists a Default or Event of Default, and if so, the nature thereof, the
period of time it has existed and the action then being taken to remedy it.
6.9.4 Other Reports. Each Borrower shall furnish to Lender, within
ten (10) Business Days after request, such further detailed information with
respect to the operation of its Collateral Property and the financial affairs of
such Borrower or Manager as may be reasonably requested by Lender or any
Applicable Rating Agency, all such information to conform to any related
requirements of the Securities and Exchange Commission.
6.9.5 Annual Budget. Upon the occurrence of a Cash Management Event
or the Anticipated Repayment Date, each Borrower shall prepare and submit (or
shall cause its Manager to prepare and submit) to Lender within thirty (30) days
after a Cash Management Event and by November 15 of each year during the Term
until the occurrence of a Cash Management Termination, for approval by Lender,
which approval shall not be unreasonably withheld or delayed, a proposed pro
forma budget for its Collateral Property for the succeeding Fiscal Year (an
"Annual Budget"), and, promptly after preparation thereof, any revisions to such
Annual Budget. Lender's failure to approve or disapprove any Annual Budget or
revision within thirty (30) days after Lender's receipt thereof shall be deemed
to constitute Lender's approval thereof. The Annual Budget shall consist of (i)
an operating expense budget (the "Operating Budget") showing, on a
month-by-month basis, in reasonable detail, each line item of such Borrower's
anticipated Operating Income and Operating Expenses (on a cash and accrual
basis), including amounts required to establish, maintain and/or increase the
Funds, and (ii) a Replacement Expense budget (the "Replacement Budget") showing,
on a month-by-month basis, in reasonable detail, each line item of anticipated
Replacement Expenses.
6.9.6 Delivery of Financial Information. After notice to any
Borrower of a Secondary Market Transaction, such Borrower shall, concurrently
with any delivery to Lender,
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deliver copies of all financial information provided in this Article VI to the
Applicable Rating Agencies, the Servicer, any trustee or any other party
reasonably requested by Lender.
6.10 Environmental Matters.
6.10.1 Hazardous Substances. So long as any Borrower owns or is in
possession of any Collateral Property, such Borrower (i) shall keep such
Collateral Property free from Hazardous Substances (other than Routine Hazardous
Substances) and in compliance with all Environmental Laws, (ii) shall promptly
notify Lender if such Borrower shall become aware that (A) any Hazardous
Substance (other than Routine Hazardous Substances) is on or immediately
adjacent to such Collateral Property, (B) such Collateral Property is in direct
or indirect violation of any Environmental Laws or (C) any condition on or near
such Collateral Property shall pose a threat to the health, safety or welfare of
humans, (iii) shall remove such Hazardous Substances and/or cure such violations
and/or remove such threats, as applicable, as required by law, promptly after
such Borrower becomes aware of same and is required to do so by a Governmental
Authority, at such Borrower's sole expense and (iv) shall take all actions
described in the environmental report delivered to Lender in connection with the
Loan as being necessary to comply with all applicable laws. Nothing herein shall
prevent any Borrower from recovering such expenses from any other party that may
be liable for such removal or cure.
6.10.2 Environmental Monitoring. (a) Each Borrower shall give prompt
written notice to Lender of (i) any proceeding or inquiry by any party
(including any Governmental Authority) with respect to the presence of any
Hazardous Substance on, under, from or about its Collateral Property, (ii) all
claims made or threatened in writing by any third party (including any
Governmental Authority) against such Borrower or its Collateral Property or any
party occupying such Collateral Property relating to any loss or injury
resulting from any Hazardous Substance, and (iii) such Borrower's discovery of
any occurrence or condition on any real property adjoining or in the vicinity of
its Collateral Property that could cause such Collateral Property to be subject
to any investigation or cleanup pursuant to any Environmental Law. Each Borrower
shall permit Lender to join and participate in, as a party if it so elects, any
legal proceedings or other actions initiated with respect to its Collateral
Property in connection with any Environmental Law or Hazardous Substance, and
such Borrower shall pay all reasonable attorneys' fees and disbursements
incurred by Lender in connection therewith.
(b) Upon Lender's request, at any time and from time to time, each
Borrower shall provide an inspection or audit of its Collateral Property
prepared by a licensed hydrogeologist, licensed environmental engineer or
qualified environmental consulting firm approved by Lender assessing the
presence or absence of Hazardous Substances on, in or near such Collateral
Property. The cost and expense of such audit or inspection shall be paid by a
Borrower with respect to its Collateral Property if Lender, in its good faith
judgment, determines that reasonable cause exists for the performance of an
environmental inspection or audit of such Collateral Property, in which case
such inspections or audits shall be at the Borrower's sole expense. If a
Borrower fails to order any such inspection or audit within thirty (30) days
after such request, Lender may order same, and such Borrower hereby grants to
Lender and its employees and agents access to its Collateral Property and a
license to undertake such inspection or audit. The cost of such inspection or
audit shall, to the extent required to be paid by a
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Borrower pursuant to this paragraph, be paid by such Borrower upon demand and if
not paid, shall be added to the Debt and shall bear interest thereafter at the
Default Rate until paid.
(c) If any environmental site assessment report prepared in
connection with such inspection or audit recommends that an operations and
maintenance plan be implemented for any Hazardous Substance, whether such
Hazardous Substance existed prior to the ownership by a Borrower of its
Collateral Property, or presently exists or is reasonably suspected of existing,
the applicable Borrower shall cause such operations and maintenance plan to be
prepared and implemented at its expense upon request of Lender. If a licensed
hydrogeologist, licensed environmental engineer or other qualified environmental
consulting firm engaged by Lender ("Lender's Consultant") determines that any
investigation, site monitoring, containment, cleanup, removal, restoration or
other work of any kind is required to cure a violation of an applicable
Environmental Law or to comply with an order or directive of any court or
governmental agency ("Remedial Work"), the applicable Borrower shall commence
and thereafter diligently prosecute to completion all such Remedial Work within
thirty (30) days after written demand by Lender for performance thereof (or such
shorter period of time as may be required under applicable law). All Remedial
Work shall be performed by contractors reasonably approved in advance by Lender,
and under the supervision of a consulting engineer reasonably approved by
Lender. All costs of such Remedial Work shall be paid by the applicable
Borrower, including Lender's reasonable attorneys' fees and disbursements
incurred in connection with the monitoring or review of such Remedial Work. If
the applicable Borrower does not timely commence and diligently prosecute to
completion the Remedial Work, Lender may (but shall not be obligated to) cause
such Remedial Work to be performed. All costs and expenses (including reasonable
attorneys' fees and disbursements) relating to or incurred by Lender in
connection with monitoring, reviewing or performing any Remedial Work in
accordance herewith shall be paid by the applicable Borrower upon demand from
Lender and if not, shall be added to the Debt and shall bear interest thereafter
at the Default Rate until paid. Notwithstanding the foregoing, no Borrower shall
be required to commence such Remedial Work within the above specified time
period: (x) if prevented from doing so by any Governmental Authority, (y) if
commencing such Remedial Work within such time period would result in such
Borrower or such Remedial Work violating any Environmental Law, or (z) if such
Borrower, at its expense and after prior written 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. Each Borrower
shall have the right to contest the need to perform such Remedial Work; provided
that (1) such Borrower is permitted by the applicable Environmental Laws to
delay performance of the Remedial Work pending such proceedings, (2) neither the
affected Collateral Property nor any part thereof or interest therein will be
sold, forfeited or lost if such Borrower fails to promptly perform the Remedial
Work being contested, and if Borrower fails to prevail in contest, such Borrower
would thereafter have the opportunity to perform such Remedial Work, (3) Lender
would not, by virtue of such permitted contest, be exposed to any risk of any
civil liability for which such Borrower has not furnished additional security as
provided in clause (4) below, or to any risk of criminal liability, and neither
the Collateral Property nor any interest therein would be subject to the
imposition of any Lien for which such 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) if requested by Lender at any time, such 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 such Borrower's
failure to
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prevail in such contest in such amount as may be reasonably requested by Lender
but in no event less than one hundred twenty-five percent (125%) of the cost of
such Remedial Work and any loss or damage that may result from such Borrower's
failure to prevail in such contest.
(d) No Borrower shall install or permit to be installed on its
Collateral Property any underground storage tank without Lender's prior written
consent; provided, however, that (i) a Borrower may permit the Tenant under any
"anchor," "big box" or TBA (tires, batteries and accessories) Lease to install
an underground storage tank provided that (x) such Tenant has the right to do so
under its Lease and (y) such installation and the maintenance and repair of such
tank is performed in accordance with all applicable Legal Requirements and (ii)
Borrower may install an underground storage tank if it reasonably determines
that an above ground storage tank is not reasonably feasible, provided that such
Borrower complies with all of the provisions of the preceding clause (y) in
connection with such underground storage tank.
(e) Borrower's obligations to Lender to remediate an environmental
condition existing at any Collateral Property shall terminate if Lender's Lien
on such Collateral Property is released in connection with a Substitution of
Collateral Property pursuant to Section 2.3; provided, however, that Borrower's
indemnification obligations under Section 6.16 with respect to such
environmental condition shall not terminate upon such Substitution.
6.10.3 Title to the Property. Borrower will warrant and defend (a)
the title to each Collateral Property and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances) and (b) the
validity and priority of the Liens of the Mortgage and the Assignment of Leases
on each Collateral Property, subject only to Liens permitted hereunder
(including Permitted Encumbrances), in each case against the claims of all
Persons whomsoever. Borrower shall reimburse Lender for any losses, costs,
damages or expenses (including reasonable attorneys' fees and court costs)
incurred by Lender if an interest in any Collateral Property, other than as
permitted hereunder, is claimed by another Person.
6.10.4 Easements; Dedications. Without the consent of Lender,
Borrower shall have the right from time to time to release property, grant
easements, or dedicate property in connection with lot line adjustments, utility
or road requirements or other similar items, provided that any such release,
easement or dedication will not have a material adverse effect on the value, use
or operation of the applicable Collateral Property and such Collateral Property
will remain in compliance with all Requirements of Law.
6.11 Leases.
6.11.1 Form of Lease. All Leases other than Material Leases shall be
written on the standard forms of lease which have been approved by Lender. In
negotiating Leases, changes may be made to the standard form of lease provided
that (i) such changes are commercially reasonable, and (ii) no changes may be
made to the following provisions in Borrowers' standard form of lease without
the prior written consent of Lender: provisions relating to subordination,
attornment, estoppels, mortgagee's right to notice and opportunity to cure
landlord's defaults, and mortgagee's rights with respect to lease amendments and
prepayment of rents. In addition, all renewals of Leases and all proposed leases
shall provide for
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rental rates comparable to existing local market rates and shall be arms length
transactions. All Leases entered into after the date hereof shall provide for
(x) subordination to the Mortgages and, at Lender's election, attornment to
Lender or any purchaser at a sale by foreclosure or power of sale, and (y) the
Lender's unilateral right to subordinate the Mortgages to the Leases. No Lease
entered into after the date hereof will contain any option to purchase, any
right of first refusal to purchase, any right to terminate (except in the event
of the destruction of substantially all of the applicable Collateral Property),
any non-disturbance or similar agreement or any requirement that a Borrower
rebuild any Collateral Property (except as provided in the forms of Lease that
have been approved by Lender); provided, however, that "small shop" leases
entered into after the date hereof and covering not more than fifteen percent
(15%) of the gross leasable area of any Collateral Property may contain so
called "kick-out" clauses permitting either landlord or the Tenant to terminate
the Lease if the specified sales revenue is not attained. Upon request, each
Borrower shall furnish Lender with executed copies of all Leases affecting its
Collateral Property then in effect.
6.11.2 New and Renewal Leases. All Leases executed after the date
hereof, and all amendments, modifications, terminations or surrenders of
existing Leases, shall (a) be undertaken in a manner consistent with the
standing leasing practices of Borrower and the Manager, (b) be the product of an
arms-length transaction, and (c) not result in a material adverse effect on the
Collateral Property taken as a whole. Upon the occurrence of a Cash Management
Event and during the continuance thereof, any Leases written thereafter for more
than 7,500 square feet, and any amendments, modifications, terminations or
surrenders of existing Leases for more than 7,500 square feet, shall be approved
by Lender, which approval shall not be unreasonably withheld, conditioned or
delayed.
6.11.3 Leasing Covenants. Each Borrower (i) shall observe and
perform the material obligations imposed upon the lessor under the Leases; (ii)
shall enforce in a commercially reasonable manner the terms, covenants and
conditions contained in the Leases upon the part of the lessee thereunder to be
observed or performed; (iii) shall not collect any of the rents more than one
(1) month in advance (other than security deposits) except as approved by Lender
or as provided in Leases in existence as of the date hereof; (iv) shall not
execute any other assignment of lessor's interest in the Leases or the Rents
(except as contemplated by the Loan Documents); (v) shall not alter, modify or
change the terms of the Leases in a manner inconsistent within the provisions of
the Loan Documents; (vi) shall promptly send copies to Lender of all notices of
default such Borrowers shall give or receive with respect to any Lease demising
20,000 or more square feet of gross leasable area; and (vii) shall execute and
deliver at the request of lender all such further assurances, confirmations and
assignments in connection with the Leases as Lender shall from time to time
reasonably require.
6.11.4 Non-disturbance Agreements. At a Borrower's request, Lender
shall enter into a subordination, non-disturbance and attornment agreement as to
any Lease permitted under the Loan Documents. Such agreement shall be in the
form attached hereto as Exhibit B, with such changes thereto as may be
reasonably acceptable to Lender.
6.11.5 Reciprocal Easement Agreements. No Borrower shall enter into,
terminate or modify any REA without Lender's consent, which consent shall not be
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unreasonably withheld or delayed. Lender shall subordinate the lien of the
applicable Mortgages to any REA Amendment consented to by Lender.
6.11.6 Notice to Tenants. Promptly after the date hereof (but in no
event later than the date on which such Borrower sends out bills for Rents due
in January, 1999), each Borrower shall deliver a notice in the form of Exhibit A
attached hereto to each existing Tenant at such Borrower's Collateral Property
directing them to remit their rent checks directly to the Agent and shall also
deliver such a notice to each future tenant at such Collateral Property.
6.12 Estoppel Statement. After request by Lender, each Borrower shall
within ten (10) days furnish Lender with a statement, duly acknowledged and
certified, setting forth (i) the unpaid Principal, (ii) the Interest Rate, (iii)
the date installments of interest and/or Principal were last paid, (iv) any
offsets or defenses to the payment of the Debt, (v) that the Loan Documents are
valid, legal and binding obligations and have not been modified or if modified,
giving particulars of such modification and (vi) such other information
concerning the Loan as Lender may request. After request by Lender (but no more
frequently than once in any twelve (12) month period), each Borrower shall,
within thirty (30) days, request Tenant estoppel certificates from each Tenant
at such Borrower's Collateral Property in form and substance reasonably
satisfactory to Lender, and thereafter use commercially reasonable efforts to
obtain such estoppel certificates and deliver them to Lender. From time to time
upon the reasonable request of Lender, each Borrower whose Collateral Property
is subject to a Ground Lease will endeavor to obtain from Ground Lessor an
estoppel certificate in form and substance reasonably satisfactory to Lender.
6.13 Property Management.
6.13.1 Management Agreement. Each Borrower shall (i) cause its
Collateral Property to be managed pursuant to the Management Agreement; (ii)
promptly perform and observe all of the covenants required to be performed and
observed by it under the Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder, (iii) promptly
notify Lender of any default under the Management Agreement of which it is
aware; (iv) promptly deliver to Lender a copy of any notice of default or other
material notice received by such Borrower under the Management Agreement; and
(v) promptly enforce the performance and observance of all of the covenants
required to be performed and observed by Manager under the Management Agreement.
6.13.2 Termination of Manager. If a Cash Management Event shall
exist, each Borrower shall, at the request of Lender, hire a property management
firm designated by Lender to thereafter serve as a property management
consultant (the "Management Consultant") for each such Borrower and its
Collateral Property. Any Borrower's failure to retain such property management
firm within thirty (30) days after Lender designates such firm shall constitute
an immediate Event of Default. Each Borrower shall continue to retain its
Management Consultant until a Cash Management Termination occurs. The Management
Consultant at each Collateral Property shall oversee and approve and fully
participate in all actions and decisions of the Manager at such Collateral
Property, including the incurring of any expenses, the retention of any broker,
the negotiation and execution of any leases or lease "term sheets", decisions as
to tenants and "tenant mix" and repairs, alterations and improvements. Each
Borrower shall cause
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its Manager to cooperate with the applicable Management Consultant to enable the
Management Consultant to perform its responsibilities as described above and in
the applicable agreement between such Borrower and its Management Consultant.
All fees payable to the Management Consultant shall be an Approved Operating
Expense.
6.13.3 Manager's Subordination. Each Borrower shall cause its
Manager to enter into a Manager Consent and Subordination of Management
Agreement (the "Manager Consent and Subordination Agreement") in the form of
Exhibit C-1 hereto; provided, however, that if such Manager is wholly owned,
directly or indirectly by Westfield Holdings Limited, such Manager may enter
into a Manager Consent and Subordination of Management Agreement in the form of
Exhibit C-2 hereto.
6.14 Special Purpose Entity. Each Borrower is and shall continue to be a
Special Purpose Entity.
6.15 Expenses. Each Borrower shall reimburse Lender upon receipt of notice
for all reasonable out-of-pocket costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by Lender in connection with the
Loan, including (i) the preparation, negotiation, execution and delivery of the
Loan Documents and the consummation of the transactions contemplated thereby and
all the costs of furnishing all opinions by counsel for Borrowers; (ii) all
costs, fees and expenses (including the fees of any Rating Agencies, trustee or
Servicer) incurred in connection with any Substitution of a Collateral Property,
any release of a Collateral Property (but excluding the fees payable to the
Rating Agencies in connection with the initial issuance of Securities) or any
Transfer of any Collateral Property; (iii) each Borrower's and Lender's ongoing
performance under and compliance with the Loan Documents, including confirming
compliance with environmental and insurance requirements; (iv) the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications of or under any Loan Document and any other
documents or matters requested by Lender, (v) filing and recording of any Loan
Documents; (vi) title insurance, surveys, inspections and appraisals; (vii) the
creation, perfection or protection of Lender's Liens in the Collateral
Properties, the Cash Management Accounts and the Funds (including fees and
expenses for title and lien searches, intangibles taxes, personal property
taxes, mortgage recording taxes, due diligence expenses, travel expenses,
accounting firm fees, costs of appraisals, environmental reports and Lender's
Consultant, surveys and engineering reports); (viii) enforcing or preserving any
rights in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against under or
affecting any Borrower, the Loan Documents, any Collateral Property, or any
other security given for the Loan; and (ix) enforcing any obligations of or
collecting any payments due from any Borrower under any Loan Document or with
respect to any Collateral Property or in connection with any refinancing or
restructuring of the Loan in the nature of a "work-out", or any insolvency or
bankruptcy proceedings. Any costs and expenses due and payable to Lender
hereunder which are not paid by any Borrower within ten (10) days after demand
may be paid from any amounts in the Cash Management Accounts, with notice
thereof to Borrowers. The obligations and liabilities of each Borrower under
this Section 6.15 shall survive the Term and the exercise by Lender of any of
its rights or remedies under the Loan Documents, including the acquisition of
any Collateral Property by foreclosure or a conveyance in lieu of foreclosure.
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6.16 Indemnity. Each Borrower shall indemnify and hold harmless Lender and
each of its Affiliates and their respective successors and assigns (including
their respective directors, officers, participants, employees, professionals and
agents and each other Person, if any, who Controls Lender, its Affiliates or any
of the foregoing) (each, an "Indemnified Party") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for an Indemnified
Party in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not Lender shall be designated a
party thereto), that may be imposed on, incurred by, or asserted against any
Indemnified Party (collectively, the "Indemnified Liabilities") in any manner,
relating to or arising out of or by reason of the Loan, including: (i) any
breach by a Borrower of its obligations under, or any misrepresentation by a
Borrower contained in, any Loan Document; (ii) the use or intended use of the
proceeds of the Loan; (iii) any information provided by or on behalf of a
Borrower, or contained in any documentation approved by a Borrower; (iv)
ownership of any Mortgage, any Collateral Property or any interest therein, or
receipt of any Rents; (v) any accident, injury to or death of persons or loss of
or damage to property occurring in, on or about any Collateral Property or on
the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (vi) any use, non-use or condition in, on or about any
Collateral Property or on adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (vii) performance of any labor or
services or the furnishing of any materials or other property in respect of any
Collateral Property; (viii) the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release, or threatened release of any Hazardous
Substance on, from or affecting any Collateral Property; (ix) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Substance; (x) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Substance; (xi) any violation of the Environmental Laws which is based upon or
in any way related to such Hazardous Substance, including, without limitation,
the costs and expenses of any Remedial Work, attorney and consultant fees and
disbursements, investigation and laboratory fees, court costs, and litigation
expenses; (xii) any failure of any Collateral Property to comply with any Legal
Requirement; (xiii) any claim by brokers, finders or similar persons claiming to
be entitled to a commission in connection with any Lease or other transaction
involving any Collateral Property or any part thereof, or any liability asserted
against Lender with respect thereto; and (xiv) the claims of any lessee of any
portion of any Collateral Property or any person acting through or under any
lessee or otherwise arising under or as a consequence of any Lease; no Borrower
shall have any obligation to any Indemnified Party hereunder to the extent that
it is finally judicially determined that such Indemnified Liabilities arise from
the gross negligence, illegal acts, fraud or willful misconduct of such
Indemnified Party. If any Indemnified Party becomes involved in any action,
proceeding or investigation in connection with any transaction or matter
referred to or contemplated in this Agreement, Borrowers shall periodically
reimburse any Indemnified Party upon demand therefor in an amount equal to its
reasonable legal and other expenses (including the costs of any investigation
and preparation) incurred in connection therewith. To the extent that the
undertaking to indemnify and hold harmless set forth in the preceding sentence
may be unenforceable because it violates any law or public policy, Borrowers
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by any Indemnified Party. Any amounts payable to any
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Indemnified Party by reason of the application of this paragraph shall become
immediately due and payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by any Indemnified Party until paid. The
obligations and liabilities of Borrower under this Section 6.16 shall survive
the Term and the exercise by Lender of any of its rights or remedies under the
Loan Documents, including the acquisition of any Collateral Property by
foreclosure or a conveyance in lieu of foreclosure. As used in this Section
6.16, the term "Collateral Property" includes any property that was at any time
subject to the Lien of a Mortgage.
6.17 Third Party Reports. Within thirty (30) days after any request by
Lender, each Borrower shall deliver to Lender and pay for (or reimburse Lender
for cost of) any reports of third parties (e.g., engineers or environmental
consultants) requested by Lender as to any Collateral Property the Net Operating
Income for which has declined by ten percent (10%) or more since the date on
which it first became a Collateral Property.
6.18 Year 2000 Compliance. Borrower acknowledges awareness of the
potential effect of the problem generally known as "Year 2000 computer-related
dysfunction" ("Year 2000"). Borrower represents that to the best of Borrower's
knowledge, all computers and computer-dependant systems of Borrower, are, or
will be, on or before December 20, 1999, able to function notwithstanding Year
2000. Borrower will promptly notify Lender in the event Borrower discovers or
determines that any of the above-referenced computers will not be Year 2000
compliant prior to December 20, 1999. Borrower hereby covenants and agrees that
it will promptly commence and diligently prosecute the remediation of any such
Year 2000 dysfunction.
6.19 Intentionally Deleted.
6.20 Performance by Borrower. Borrower shall in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each Loan
Document executed and delivered by, or applicable to, Borrower, and shall not
enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower without the prior written consent of Lender.
6.21 Secondary Market Transaction Master Estoppel. (A) Prior to the
contemplated Secondary Market Transaction, Borrower and ▇▇▇▇ shall provide to
Lender a master estoppel letter ("Master Estoppel") in form and substance
satisfactory to Lender stating, without limitation, that as of the date of the
Master Estoppel, the information contained in each of the Tenant estoppel
letters delivered to Lender on or prior to the date of the closing of the Loan
("Closing Estoppels") is true and accurate in all material respects, and to the
extent any information in the Closing Estoppels is not accurate as of the date
of the Master Estoppel, then such Master Estoppel shall include a schedule of
exceptions to the accuracy of the Closing Estoppels, and (B) Borrower covenants
that commencing immediately, Borrower shall use commercially reasonable efforts
to provide to Lender an executed tenant estoppel letter, which shall be in form
and substance satisfactory to Lender, from (a) each Anchor Tenant, (b) each
Tenant paying base rent in an amount equal to or exceeding five percent (5%) of
the Operating Income from the applicable Collateral Property occupied by such
Tenant and (c) disregarding the area leased by those Tenants described in
clauses (a) and (b), Tenants of not less than seventy-
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five percent (75%) of the remaining gross leasable area of each Collateral
Property. In the event that Borrower and ▇▇▇▇ are required to provide the Lender
a Master Estoppel pursuant to subsection (A) of this Section 6.21, ▇▇▇▇ agrees
to execute simultaneously with the execution of the Master Estoppel a limited
recourse guaranty for the benefit of Lender guaranteeing that, in the event that
any of the information provided in the Master Estoppel is materially false or
misleading at the time the Master Estoppel is provided to Lender, ▇▇▇▇ shall
indemnify and hold Lender harmless from any and all losses incurred by Lender in
connection with such misrepresentations made by ▇▇▇▇. To the extent tenant
estoppel letters are subsequently delivered to Lender in connection with a
Secondary Market Transaction as set forth in subsection (B) hereof, ▇▇▇▇ and
Borrower shall be released from the Master Estoppel limited recourse guaranty.
6.22 Exercise of Option to Purchase. Borrower agrees to (a) exercise all
of the renewal options granted to the tenant in the that certain Lease and
Option to Purchase, a copy of which was recorded on August 31, 1967 in Book
67-08-31 at Page 1196 in the Official Records of Sacramento County (the "Air
Rights Lease") in accordance with the terms of the Air Rights Lease and (b) so
long as the Loan remains outstanding, the Borrower must, in the event that the
Air Rights Lease cannot be extended beyond the renewals currently granted
therein, exercise its option to purchase the Leased Property (as defined in the
Air Rights Lease) no later than one (1) year prior to the date that the last
renewal term of the Air Rights Lease expires, or, in the event that the Air
Rights Lease has been amended or otherwise modified to grant Borrower additional
renewal term options, then the Borrower may extend the term of the Air Rights
Lease through the Scheduled Maturity Date of the Loan (if such extensions are
available to Borrower).
VII NEGATIVE COVENANTS
From the date hereof until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Liens of all Mortgages encumbering the Collateral Properties in accordance with
the terms of this Agreement and the other Loan Documents, each Borrower
covenants and agrees with Lender that it will not do, directly or indirectly,
any of the following:
7.1 Management Agreement. Without Lender's prior consent: (i) surrender,
terminate, cancel, extend or renew the Management Agreement (other than an
extension or renewal on the same terms as the expiring Management Agreement,
with only such modifications as do not require consent of Lender or any
Applicable Rating Agency hereunder) or otherwise replace the Manager or enter
into any other management agreement (except pursuant to Section 6.13.2); (ii)
reduce or consent to the reduction of the term of the Management Agreement;
(iii) increase or consent to the increase of the amount of any charges under the
Management Agreement; (iv) otherwise modify, change, supplement, alter or amend
in any material respect, or waive or release in any material respect any of its
rights and remedies under, the Management Agreement; or (v) suffer or permit the
occurrence and continuance of a default beyond any applicable cure period under
the Management Agreement (or any successor management agreement) if such default
permits the Manager to terminate the Management Agreement (or such successor
management agreement);
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7.2 Liens. Without Lender's prior consent, create, incur, assume, permit
or suffer to exist any mechanic's, materialmen's or other Lien (other than an
inchoate mechanic's lien the amount of which is not yet due and payable) on any
portion of its Collateral Property or legal or beneficial ownership interest in
such Borrower, except Permitted Encumbrances, unless such Lien is bonded or
discharged within thirty (30) days after such Borrower first receives notice of
such Lien; provided, however, that the existence of liens resulting from
mechanics or materialmen hired by a Tenant shall not constitute a Default or
Event of Default hereunder so long as the applicable Borrower is diligently
taking all commercially reasonable action to enforce the obligation of such
Tenant to cause such lien to be removed;
7.3 Dissolution. Dissolve, terminate, liquidate, merge with or consolidate
into another Person;
7.4 Change In Business or Operation of Property. Enter into any line of
business other than the ownership and operation of its Collateral Property, or
make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business or otherwise cease to operate its Collateral
Property as a retail property or terminate such business for any reason
whatsoever (other than temporary cessation in connection with renovations to its
Collateral Property);
7.5 Debt Cancellation. Cancel or otherwise forgive or release any claim or
debt owed to such Borrower by any Person, except in the ordinary course of such
Borrower's business in its reasonable judgment and in a manner consistent with
the operation of first class retail properties;
7.6 Assets. Purchase or own any property other than its Collateral
Property and other property intended to be subject to the lien of a Mortgage;
7.7 Transfers. Without the prior written consent of Lender which will not
be unreasonably withheld or delayed, neither Borrower nor any other Person
having an ownership or beneficial interest, direct or indirect, in Borrower or
the general partner or managing member of Borrower shall (a) directly or
indirectly sell, transfer, convey, mortgage, pledge, or assign any Collateral
Property, any part thereof or any interest therein (including any ownership
interest in Borrower or such general partner or managing member (a "Transfer"),
(b) further encumber, alienate, ▇▇▇▇▇ ▇ ▇▇▇▇ or ▇▇▇▇▇ any other interest in any
Collateral Property or any part thereof (including any ownership interest in
Borrower and such general partner or managing member), whether voluntarily or
involuntarily or (c) enter into any easement or other agreement granting rights
in or restricting the use or development of any Collateral Property which may
have a material adverse effect on the Collateral Property.
(a) Notwithstanding the foregoing prohibition on Transfers, the
Lender shall grant a consent to the Transfer by any or all Borrower(s) of its
interests in any or all of the Collateral Properties that such Borrower owns and
the assumption of the Loan by the transferee upon reasonable satisfaction of the
following conditions:
(i) No Default or Event of Default shall have occurred or be
continuing;
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(ii) Borrower shall deliver to Lender any documents reasonably
required by Lender to evidence the assumption of this Agreement, the Note,
the Mortgages and the other Loan Documents by the proposed transferee,
subject to the provisions of Section 11.1 of this Agreement;
(iii) Borrower shall pay all of Lender's reasonable costs and
expenses incurred in connection with the Lender's consent and approval of
the Transfer in accordance with Section 6.15;
(iv) Borrower shall deliver to Lender a Rating Comfort Letter;
(v) Borrower shall deliver an non-consolidation opinion with regard
to the proposed transferee and its partners or members, as the case may
be, in form and substance reasonably satisfactory to Lender;
(vi) The proposed transferee must be a Special Purpose Entity and
comply with the representations and covenants contained in Sections 5.1.1
and 5.1.39 of this Agreement; and
(vii) Such other conditions as Lender shall determine in its
reasonable discretion to be in the interest of Lender, including, without
limitation, Lender's approval of the creditworthiness, reputation and
qualifications of the proposed transferee with respect to the Loan and the
Collateral Property.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt
immediately due and payable upon Borrower's Transfer of any Collateral Property
or any part thereof (including any individual Collateral Property) without
Lender's consent. This provision shall apply to every Transfer of any Collateral
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer of any Collateral Property.
(b) Provided no Default or Event of Default has occurred and is
continuing under this Agreement or the other Loan Documents, the prior written
consent of the Lender and the approval of the Applicable Rating Agencies shall
not be required for the following Transfers provided that any reasonable costs
and expenses incurred by the Lender in reviewing any such proposed Transfer
shall be paid by Borrower, regardless of whether such consent or approval is
given by Lender:
(i) Any Transfer of any interest in any Borrower between and among
that Borrower's partners or members to Affiliates of such Borrower and
Borrower's partners or members;
(ii) Any Transfer of interests in any of any Borrower's partners or
members (between and among the partners and members);
(iii) Any Transfer by devise or descent or by operation of law upon
the death of a partner of any Borrower; or
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(iv) Any Transfers of limited partnership or membership interests in
any Borrower up to an aggregate of fifty percent (50%) of such interests;
provided, however that
(A) Lender must receive at least sixty (60) days prior
written notice of any proposed Transfer pursuant to this
subsection;
(B) Westfield America Limited Partnership or an approved
general partner (collectively, "Westfield") must retain
at least fifty percent (50%) ownership interest in the
applicable Borrower and Westfield must, following any
such Transfer, retain control of the applicable Borrower
and the day to day operations of the applicable
Collateral Property;
(C) Lender shall have received evidence satisfactory to it
that the Borrower and its partners or members, as the
case may be, following such transfer, remain Special
Purpose Entities in accordance with the standards of the
Applicable Rating Agencies; and
(D) If requested by Lender, Lender shall have received a
non-consolidation opinion with regard to the proposed
transferee and its partners or members, as the case may
be, in form and substance satisfactory to Lender.
(c) Notwithstanding the foregoing restrictions on Transfers, nothing
contained in this Agreement or the other Loan Documents shall in any way
restrict or prohibit, nor shall any notice to Lender or consent of Lender be
required in connection with, (i) the transfer or issuance of any securities or
interests in Westfield America, Inc. ("WEA"), (ii) the merger or consolidation
of WEA (iii) the transfer or issuance of any securities or interests in
Westfield America Limited Partnership ("▇▇▇▇") or (iv) the merger or
consolidation of ▇▇▇▇. With respect to the events set forth in subsections (iii)
and (iv) hereof, to the extent that such transfers, issuance of securities or
interests, merger or consolidation of ▇▇▇▇ result in a change of ownership or
control in ▇▇▇▇, the Borrower must be owned and controlled by an entity that
provides the same expertise as ▇▇▇▇ in conducting business of the nature
currently conducted by ▇▇▇▇. Prior to completing any action with respect to ▇▇▇▇
pursuant to subsections (iii) and (iv) hereof that will result in a change in
control of ▇▇▇▇, the Borrower must deliver to Lender a Rating Comfort Letter and
a non-consolidation opinion with regard to the proposed transferee and its
partners or members, as the case may be, in form and substance satisfactory to
Lender, provided that no Rating Comfort Letter or non-consolidation opinion
shall be required in connection with subsection (i) or (ii) hereof.
(d) In accordance with the provisions of the entity documents of
each Borrower, in no event shall the provisions of this Section 7.7 be amended
or modified in any manner until such time as the Borrower has obtained a Rating
Comfort Letter.
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7.8 Debt. Create, incur or assume any indebtedness other than (i) the
Debt, (ii) Taxes, Insurance Premiums, Approved Replacement Expenses and Approved
Leasing Expenses and (iii) other trade debt incurred in the ordinary course of
business relating to the ownership and operation of its Collateral Property
which other trade debt does not exceed, at any time, a maximum aggregate amount
of $1,000,000.00 for each Collateral Property being operated as a retail
shopping center or a mixed use retail/office project and $500,000.00 for each
Collateral Property being operated as a power center, and such trade debt is
paid within sixty (60) days of the date incurred (other than amounts being
disputed in good faith);
7.9 Assignment of Rights. Without Lender's prior consent, attempt to (i)
assign such Borrower's rights or interest under any Loan Document in
contravention of any Loan Document or (ii) if such Borrower's Collateral
Property is affected by a Ground Lease, surrender, terminate, cancel, modify or
amend such Ground Lease;
7.10 Principal Place of Business. Change its principal place of business
without first giving Lender thirty (30) days' prior written notice;
7.11 Corporate Organization. Make any change, amendment or modification to
the organizational documents of such Borrower, or take any other action, if such
change, amendment, modification or action could result in (x) such Borrower not
being a Special Purpose Bankruptcy Remote Entity or (y) the term of any Borrower
or Borrower Representative being shortened; or
7.12 ERISA.
(a) Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
(b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is not
and does not maintain an "employee benefit plan" as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(3) of ERISA; (B) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (C) one or more of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. ss.2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R.ss.2510.3-101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R.ss.2510.3-101(c)
or (e).
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7.13 No Joint Assessment. No Borrower shall suffer, permit or initiate the
joint assessment of any Collateral Property with (a) any other real property
constituting a tax lot separate from such Collateral Property, or (b) any
portion of such Collateral 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
such Collateral Property.
7.14 Affiliate Transactions. No Borrower shall enter into, or be a party
to, any transaction with an Affiliate of any Borrower or any of the partners of
any Borrower except in the ordinary course of business and on terms which are
fully disclosed to Lender in advance and are no less favorable to such Borrower
or such Affiliate than would be obtained in a comparable arm's-length
transaction with an unrelated third party. Lender hereby acknowledges that it
has reviewed and approved the Master Development Framework Agreement by and
between Westfield America, Inc. (formerly known as CenterMark Properties, Inc.),
a Missouri corporation and Westfield Corporation, Inc., a Delaware corporation,
dated as of July 1, 1996 and amended on May 21, 1997 and the Management
Agreement.
VIII INSURANCE.
8.1.1 Coverage. Each Borrower, at its sole cost, for the mutual
benefit of such Borrower and Lender, shall obtain and maintain during the Term
the following policies of insurance with respect to the Collateral Property
owned by such Borrower:
(a) Property insurance insuring against loss or damage by standard,
"all-risk" perils, which shall (i) be in an amount equal to the greatest of (A)
the then full replacement cost of the Collateral Property without deduction for
physical depreciation, (B) the unpaid Principal, and (C) such amount as is
necessary so that the insurer would not deem such Borrower a co-insurer under
such policies, (ii) have deductibles or self insured retentions no greater than
$25,000 (or, in the case of earthquake insurance, five percent (5%) of the total
insured values at risk), (iii) be paid annually in advance and (iv) contain an
"agreed amounts" and a "Replacement Cost Endorsement" with a waiver of
depreciation.
(b) Flood insurance if any part of the Collateral Property is
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards in an amount to be determined by Lender.
(c) Commercial general public liability insurance, including broad
form property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages and containing minimum limits per occurrence of
$1,000,000 and $2,000,000 in the aggregate per location for any policy year;
together with at least $50,000,000 excess and/or umbrella liability insurance
for any and all claims, including all legal liability imposed upon Borrower and
all court costs and attorneys' fees incurred in connection with the ownership,
operation and maintenance of the Collateral Property.
(d) Rental loss and/or business interruption insurance in an amount
equal the estimated Rents for the next succeeding 18-month period. The amount of
such insurance shall be increased from time to time during the Term as and when
the estimated or actual Rents increase.
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(e) Insurance against loss or damage from (i) leakage of sprinkler
systems and (ii) explosion of steam boilers, air conditioning equipment, high
pressure piping, machinery and Equipment, pressure vessels or similar apparatus
now or hereafter installed in any of the Improvements (without exclusion for
explosions), in an amount at least equal to $2,000,000.
(f) Worker's compensation insurance with respect to any employees of
such Borrower, as required by any Legal Requirement.
(g) During any period of repair or restoration, builder's "all-risk"
insurance in an amount equal to not less than the full insurable value of the
Collateral Property, against such risks (including fire and extended coverage
and collapse of the Improvements to agreed limits) as Lender may request, in
form and substance acceptable to Lender.
(h) Ordinance or Law Coverage to compensate for the diminished value
of the subject Collateral Property, the cost of demolition and the increased
cost of construction in an amount satisfactory to Lender.
(i) Such other insurance (including earthquake insurance and
windstorm insurance) as may from time to time be reasonably required by Lender
in order to protect its interests and as is otherwise commercially reasonable.
8.1.2 Policies.
(a) All policies of insurance (the "Policies") required pursuant to
Section 8.1.1 (other than earthquake insurance) shall (i) be issued by companies
approved by Lender and licensed to do business in the State, with a claims
paying ability rating of "AA" or better by S&P and a rating of A:VII or better
in the current Best's Insurance Reports ("Approved Insurer"); (ii) name Lender
and its successors and/or assigns as their interest may appear as the mortgagee
(in the case of property insurance) or an additional insured (in the case of
liability insurance); (iii) contain (in the case of property insurance) a
Non-Contributory Standard Lender Clause and a Lender's Loss Payable Endorsement,
or their equivalents, naming Lender as the person to which all payments made by
such insurance company shall be paid; (iv) contain a waiver of subrogation
against Lender, (v) be delivered to Lender (provided that copies may be
delivered in lieu of originals) together with an insurance certificate; (vi)
contain such provisions as Lender deems reasonably necessary or desirable to
protect its interest, including endorsements providing that neither the
applicable Borrower, Lender nor any other party shall be a co-insurer under the
Policies and that Lender shall receive at least 30 days' prior written notice of
any modification, reduction or cancellation of any of the Policies; and (vii) be
satisfactory in form and substance to Lender and approved by Lender as to
amounts, form, risk coverage, deductibles, loss payees and insureds. Each
Borrower shall pay the premiums for the Policies required to be maintained by it
hereunder (the "Insurance Premiums") as the same become due and payable and
furnish to Lender evidence of the renewal of each of the Policies together with
(unless such Insurance Premiums have been paid by Lender pursuant to Section
4.3) receipts for or other evidence of the payment of the Insurance Premiums
reasonably satisfactory to Lender. If a Borrower does not furnish such evidence
and receipts at least thirty (30) days prior to the expiration of any expiring
Policy, then Lender may, but shall not be obligated to, procure such insurance
and pay the Insurance Premiums therefor, and such
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Borrower shall reimburse Lender for the cost of such Insurance Premiums promptly
on demand, with interest accruing at the Default Rate. Each Borrower shall
deliver to Lender a copy of each Policy (and an insurance certificate pertaining
thereto) required to be maintained by it hereunder within ninety (90) days after
its effective date. Within ninety (90) days after request by Lender, each
Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices, and such coverage as is commercially available.
8.2 Casualty.
8.2.1 Notice; Restoration. If any Collateral Property is damaged or
destroyed, in whole or in part, by fire or other casualty (a "Casualty"),
Borrower shall give prompt notice thereof to Lender. Following the occurrence of
a Casualty, the Borrower that owns such Collateral Property, regardless of
whether insurance proceeds are available, shall promptly proceed to restore,
repair, replace or rebuild such Collateral Property in accordance with Legal
Requirements to be of at least equal value and of substantially the same
character as prior to such damage or destruction.
8.2.2 Settlement of Proceeds. In the event of a Casualty covered by
any of the Policies (an "Insured Casualty") where the loss does not exceed
$1,000,000, the applicable Borrower may settle and adjust any claim without the
consent of Lender; provided such adjustment is carried out in a competent and
timely manner; and such Borrower is hereby authorized to collect and receipt for
the insurance proceeds (the "Proceeds"). In the event of an Insured Casualty
where the loss equals or exceeds $1,000,000, Lender may settle and adjust any
claim without the consent of any Borrower and agree with the insurer(s) on the
amount to be paid on the loss, and the Proceeds shall be due and payable solely
to Lender and held by Lender in the Casualty/Condemnation Fund and disbursed in
accordance herewith. The expenses incurred by Lender in the adjustment and
collection of the Proceeds shall become part of the Debt and shall be reimbursed
by the applicable Borrower to Lender upon demand.
8.3 Condemnation.
8.3.1 Notice; Restoration. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding affecting any Collateral Property (a "Condemnation") and shall
deliver to Lender copies of any and all papers served in connection with such
Condemnation. Following the occurrence of a Condemnation, the applicable
Borrower, regardless of whether an Award is available, shall promptly proceed to
restore, repair, replace or rebuild such Collateral Property in accordance with
all Legal Requirements to the extent practicable to be of at least equal value
and of substantially the same character as prior to such Condemnation.
8.3.2 Collection of Award. Lender is hereby irrevocably appointed as
each Borrower's attorney-in-fact, coupled with an interest, with exclusive power
to collect, receive and retain any award or payment in respect of a Condemnation
(an "Award") in excess of $1,000,000 and to make any compromise or settlement in
connection with such Condemnation. Notwithstanding any Condemnation (or any
transfer made in lieu of or in anticipation of such
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Condemnation), Borrower shall continue to pay the Debt at the time and in the
manner provided for in the Loan Documents, and the Debt shall not be reduced
unless and until any Award shall have been actually received and applied by
Lender to expenses of collecting the Award and to discharge of the Debt. Lender
shall not be limited to the interest paid on the Award by the condemning
authority but shall be entitled to receive out of the Award interest at the
Applicable Interest Rate. If a Collateral Property that is the subject of a
Condemnation is sold, through foreclosure or otherwise, prior to the receipt by
Lender of such Award, Lender shall have the right, whether or not a deficiency
judgment on the Note shall be recoverable or shall have been sought, recovered
or denied, to receive all or a portion of the Award sufficient to pay the Debt.
Each Borrower shall cause any Award that is payable to such Borrower to be paid
directly to Lender. Lender shall hold such Award in the Casualty/Condemnation
Fund and disburse such Award in accordance with the terms hereof.
8.4 Application of Proceeds or Award.
8.4.1 Application to Restoration. In the event of an Insured
Casualty or Condemnation with respect to any Collateral Property where (i) the
loss is in an aggregate amount less than 25% of the Allocated Loan Amount with
respect to such Collateral Property, (ii) in the reasonable judgment of Lender,
such Collateral Property can be restored within six (6) months, and prior to the
Anticipated Repayment Date and the expiration of the business interruption
insurance with respect thereto, to an economic unit not less valuable and not
less useful than the same was prior to the Insured Casualty or Condemnation, and
after such restoration will, together with the other Collateral Properties,
adequately secure the unpaid Principal, and (iii) no Event of Default shall have
occurred and be then continuing, then the Proceeds or the Award, as the case may
be (after reimbursement of any expenses incurred by Lender), shall be applied to
reimburse the applicable Borrower for the cost of restoring, repairing,
replacing or rebuilding such Collateral Property (the "Restoration"), in the
manner set forth herein. The applicable Borrower shall commence and diligently
prosecute such Restoration; provided that (x) such Borrower shall pay (and if
required by Lender, such Borrower shall deposit with Lender in advance) all
costs of such Restoration in excess of the net amount of the Proceeds or the
Award made available pursuant to the terms hereof; and (y) Lender shall have
received evidence reasonably satisfactory to it that during the period of the
Restoration, the Rents (including all Proceeds from the business interruption
insurance required pursuant to Section 8.1.1)from such Collateral Property,
together with the Rents from the other Collateral Properties, will be sufficient
to satisfy all of Borrower's Obligations.
8.4.2 Application to Debt. Except as provided in Section 8.4.1, the
Proceeds and any Award in excess of 1,000,000 may, at the option of Lender in
its sole discretion, be applied to the payment of the Debt as set forth in
Section 3.2.2, or applied to reimburse the applicable Borrower for the cost of
any Restoration, in the manner set forth in Section 8.4.3. Any such application
to the prepayment of the Loan shall be without any prepayment consideration or
penalty, unless the Debt or any portion thereof is accelerated prior to, or
within one year after, the date the Proceeds are received from the insurance
company or the Award is received from the condemning authority, as the case may
be, in which event the Borrower shall pay to Lender an additional amount equal
to the Yield Maintenance Premium, if any, that may be required with respect to
the amount of the Proceeds or Award applied to the Debt.
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8.4.3 Procedure for Application to Restoration. If a Borrower is
entitled to reimbursement out of the Proceeds or an Award held by Lender, such
Proceeds or Award shall be disbursed from time to time from the
Casualty/Condemnation Fund upon Lender being furnished with (i) evidence
satisfactory to it of the estimated cost of completion of the Restoration, (ii)
funds or, at Lender's option, assurances satisfactory to Lender that such funds
are available sufficient, in addition to the Proceeds or Award, to complete the
proposed Restoration, (iii) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, bonds, plats of
survey and such other evidences of cost, payment and performance as Lender may
reasonably require and approve, and (iv) all plans and specifications for such
Restoration, such plans and specifications to be approved by Lender prior to
commencement of any work. No payment made prior to the final completion of the
Restoration shall exceed ninety percent (90%) of the value of the work performed
from time to time; funds other than the Proceeds or Award shall be disbursed
prior to disbursement of such Proceeds or Award; and at all times, the
undisbursed balance of such Proceeds or Award remaining in the hands of Lender,
together with funds deposited for that purpose or irrevocably committed to the
satisfaction of Lender by or on behalf of the applicable Borrower for that
purpose, shall be at least sufficient in the reasonable judgment of Lender to
pay for the cost of completion of the Restoration, free and clear of all Liens
or claims for Lien. Any surplus that remains out of the Proceeds held by Lender
after payment of such costs of Restoration shall be paid to the applicable
Borrower. Any surplus that remains out of the Award received by Lender after
payment of such costs of Restoration shall, in the sole and absolute discretion
of Lender, be retained by Lender and applied to payment of the Debt or returned
to the applicable Borrower.
8.4.4 Ground Lease; Anchor Lease; REA. If Lender shall have the
right or option hereunder to apply Proceeds or an Award to payment of the Debt,
but under any controlling provision in any Ground Lease, "anchor" Lease or REA
such Proceeds or Awards are required to be applied to Restoration of a
Collateral Property, then, notwithstanding anything to the contrary in this
Article 8, such Proceeds or Award shall be applied to Restoration in accordance
with such Ground Lease, "anchor" Lease or REA, subject to such conditions and
procedures as Lender may impose which are not inconsistent with the terms of
such Ground Lease, "anchor" Lease or REA.
IX DEFAULTS.
9.1 Events of Default. An "Event of Default" shall exist with respect to
the Loan upon the occurrence of any of the following events:
(a) any portion of the Debt is not paid when due;
(b) Borrower shall fail to pay when due any deposit into any Fund;
(c) any of the Taxes applicable to any Collateral Property are not
paid when due (other than Taxes for which funds have been deposited with Lender
pursuant to Section 4.3), subject to Borrower's right to contest Taxes
applicable to its Collateral Property in accordance with Section 6.2;
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(d) the Policies with respect to any Collateral Property are not
delivered to Lender within ninety (90) days after their respective applicable
effective dates or within ten days after written demand from Lender, whichever
is later, or such Policies are not kept in full force and effect;
(e) a Transfer other than a Transfer permitted pursuant to Section
7.7 occurs with respect to any Collateral Property, any interest in any Borrower
or an interest in any Borrower Representative of any Borrower;
(f) any representation or warranty made by any Borrower or in any
Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished by any Borrower in connection with
any Loan Document, shall be false or misleading in any material respect as of
the date the representation or warranty was made;
(g) any Borrower or any Borrower's Borrower Representative shall
make an assignment for the benefit of creditors, or shall generally not be
paying its debts as they become due;
(h) a receiver, liquidator or trustee shall be appointed for any
Borrower or such Borrower's Borrower Representative, or any Borrower or such
Borrower's Borrower Representative shall be adjudicated a bankrupt or insolvent;
or 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, any Borrower or such Borrower's
Borrower Representative, as the case may be; or any proceeding for the
dissolution or liquidation of any Borrower or such Borrower's Borrower
Representative shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
such Borrower or such Borrower's Borrower Representative, as the case may be,
only upon the same not being discharged, stayed or dismissed within sixty (60)
days;
(i) any Borrower breaches any negative covenant contained in
Sections 7.3, 7.4, 7.6, 7.7, 7.8, 7.10 or 7.11 or any affirmative covenant
contained in Section 6.14;
(j) any Borrower shall be in default under any other mortgage or
security agreement covering any part of the Collateral Property owned by such
Borrower whether it be superior or junior in Lien to a Mortgage, and such
default shall continue after the expiration of any applicable notice and grace
period provided therein;
(k) except as permitted hereunder, any Borrower shall commence any
alteration, improvement, demolition or removal of any of the Improvements
constituting part of such Borrower's Collateral Property without the prior
consent of Lender;
(l) an Event of Default as defined or described in any other Loan
Document occurs; or any other event shall occur or condition shall exist, if the
effect of such event or condition is to accelerate or to permit Lender to
accelerate the maturity of the Debt;
(m) any Borrower shall be in default under any term, covenant or
provision set forth herein or in any other Loan Document which specifically
contains a notice requirement or grace period and such notice has been given and
such grace period has expired;
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(n) any of the assumptions contained in the Insolvency Opinion or an
Additional Insolvency Opinion were not true and correct as of the date of such
opinion or thereafter became untrue or incorrect and such Borrower fails to
deliver to Lender, within twenty (20) days after such Borrower first become
aware that any such assumption is not true or is incorrect, a new substantive
non-consolidation opinion from the same counsel (or other counsel acceptable to
Lender and the Applicable Rating Agencies) which omits all such untrue or
incorrect assumptions and is otherwise in the same form as the Insolvency
Opinion or the Additional Insolvency Opinion, as applicable (other than for
changes approved by Lender and the Applicable Rating Agencies);
(o) Intentionally Deleted;
(p) any Borrower shall fail to pay when due any rent, additional
rent or other charge payable under any Ground Lease (which term, for purposes of
this paragraph (p) shall mean any Ground Lease affecting such Borrower's
Collateral Property or any portion thereof); or any Borrower shall default in
the observance or performance of any other term, covenant or condition of any
Ground Lease and such default is not cured within twenty (20) days prior to the
expiration of any applicable grace period provided therein; or any event shall
occur that would cause any Ground Lease to terminate without notice or action by
the landlord thereunder or would entitle such landlord to terminate any Ground
Lease and the term thereof by giving notice to such Borrower; or any Ground
Lease shall be surrendered, terminated or canceled for any reason or under any
circumstance whatsoever; or any term of any Ground Lease shall be modified or
supplemented without Lender's consent; or any Borrower shall fail, within ten
(10) Business Days after demand by Lender, to exercise its option to renew or
extend the term of any Ground Lease or shall fail or neglect to pursue
diligently all actions necessary to exercise such renewal rights pursuant to
such Ground Lease;
(q) any Borrower shall permit any event to occur that would cause
any REA to terminate without notice or action by any party thereto or would
entitle any party to terminate any REA and the term thereof by giving notice to
such Borrower; or any REA shall be surrendered, terminated or canceled for any
reason or under any circumstance whatsoever; or any term of any REA shall be
modified or supplemented without Lender's consent; or any Borrower shall fail,
within ten (10) Business Days after demand by Lender, to exercise its option to
renew or extend the term of any REA or shall fail or neglect to pursue
diligently all actions necessary to exercise such renewal rights pursuant to
such REA; or
(r) any Borrower shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement or any other Loan
Document not specified in this Section 9.1, for ten (10) days after notice to
such Borrower from Lender, in the case of any Default which can be cured by the
payment of a sum of money, or for thirty (30) days after notice from Lender in
the case of any other Default; provided, however, that if such non-monetary
Default is susceptible of cure but cannot reasonably be cured within such 30-day
period, and such 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 an additional period of time as
is reasonably necessary for such Borrower in the exercise of due diligence to
cure such Default, such additional period not to exceed 90 days.
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9.2 Remedies.
9.2.1 Acceleration. Upon the occurrence of an Event of Default with
respect to the Loan (other than an Event of Default described in paragraph (g)
or (h) of Section 9.1) and at any time and from time to time thereafter, in
addition to any other rights or remedies available to it pursuant to the Loan
Documents or at law or in equity, Lender may take such action, without notice or
demand, that Lender deems advisable to protect and enforce its rights against
Borrower and in and to any and all Collateral Properties and any and all Ground
Leases to which any Borrower is a party, and upon any Event of Default described
in paragraph (g) or (h) of Section 9.1, the Debt (including unpaid interest,
Default Rate interest, Late Payment Charges, Yield Maintenance Premium and any
other amounts owing by Borrower) shall immediately and automatically become due
and payable, without notice or demand, and Borrower hereby expressly waives any
such notice or demand, anything contained in any Loan Document to the contrary
notwithstanding.
9.2.2 Remedies Cumulative. Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under the Loan Documents or at law
or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents. Any such actions taken by Lender shall be cumulative and concurrent
and may be pursued independently, singly, successively, together or otherwise,
at such time and in such order as Lender may determine in its 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 in the Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing, (i) to the
extent permitted by applicable law, Lender is not subject to any "one action" or
"election of remedies" law or rule, and (ii) all Liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect
until Lender has exhausted all of its remedies against the Collateral
Properties, each Mortgage has been foreclosed, the Collateral Properties have
been sold and/or otherwise realized upon in satisfaction of the Debt or the Debt
has been paid in full. To the extent permitted by applicable law, nothing
contained in any Loan Document shall be construed as requiring Lender to resort
to any portion of the Collateral Pool for the satisfaction of any of the Debt in
preference or priority to any other portion, and Lender may seek satisfaction
out of the entire Collateral Pool or any part thereof, in its absolute
discretion.
9.2.3 Severance. Lender shall have the right from time to time to
sever the Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents in such denominations as Lender shall
determine in its sole discretion for purposes of evidencing and enforcing its
rights and remedies. Borrower shall execute and deliver to Lender from time to
time, promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance described in
the preceding sentence, all in form and substance reasonably satisfactory to
Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect such severance, Borrower
ratifying all that such attorney shall do by virtue thereof.
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9.2.4 Delay. No delay or omission to exercise any remedy, right,
power accruing upon an Event of Default, or the granting of any indulgence or
compromise by Lender shall impair any such remedy, right or power hereunder or
be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
one Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon. Notwithstanding any other provision of this Agreement, to
the extent permitted by applicable law, Lender reserves the right to seek a
deficiency judgment or preserve a deficiency claim, in connection with the
foreclosure of any Mortgage, to the extent necessary to foreclose on any other
Collateral Property or part thereof, the Rents, the Funds or any other
collateral that constitutes security for the same obligation.
9.2.5 Lender's Right to Perform. If Borrower fails to perform any
covenant or obligation contained herein and such failure shall continue for a
period of (5) five Business Days after Borrower's receipt of written notice
thereof from Lender, without in any way limiting Lender's right to exercise any
of its rights as provided hereunder or under any of the other Loan Documents,
Lender may, but shall have no obligation to, perform, or cause performance of,
such covenant or obligation, and the expenses of Lender incurred in connection
therewith shall be payable by such Borrower to Lender upon demand and if not
paid shall be added to the Debt and shall bear interest thereafter at the
Default Rate. Notwithstanding the foregoing, Lender shall have no obligation to
send notice to such Borrower of any other Borrower of any such failure.
X SPECIAL PROVISIONS
10.1 Sale of Note and Secondary Market Transaction.
10.1.1 Cooperation. At Lender's request (to the extent not already
required to be provided by Borrowers under this Agreement), Borrower and ▇▇▇▇
shall cooperate with Lender to enable Lender to satisfy the market standards to
which Lender customarily adheres or which may be reasonably required in the
marketplace or by the Applicable Rating Agencies in connection with one or more
sales or assignments of the Note or participations therein or securitizations
(including any FASIT) of rated single or multi-class securities (the
"Securities") secured by or evidencing ownership interests in the Note and the
Mortgage (each such sale, assignment, participation and/or securitization, a
"Secondary Market Transaction"). No Borrower shall be required to incur any
out-of-pocket expense to comply with the provisions of this Section 10.1.1
(unless Lender agrees to reimburse such Borrower therefor). In furtherance of
the foregoing, each Borrower and ▇▇▇▇ shall, at the request of Lender in
connection with any Secondary Market Transaction, and so long as the Loan is
still outstanding:
(a) (i) provide updates of financial and other information with
respect to its Collateral Property, such Borrower and its Affiliates, Manager
and any Tenants of its Collateral Property, (ii) provide updated business plans
and budgets relating to its Collateral Property and (iii) perform or permit or
cause to be performed or permitted such site inspection, appraisals, surveys,
market studies, environmental reviews and reports (Phase I's and, if
appropriate, Phase II's), engineering reports and other due diligence
investigations of its Collateral Property, as may be reasonably requested from
time to time by Lender or the Applicable Rating Agencies or as may be necessary
or appropriate in connection with a Secondary Market Transaction or
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Exchange Act requirements (the items provided to Lender pursuant to this
paragraph (a) being called the "Provided Information"), together, if customary,
with appropriate verification of and/or consents to the Provided Information
through letters of auditors or opinions of counsel of independent attorneys
acceptable to Lender and the Applicable Rating Agencies;
(b) use reasonable efforts to cause counsel to render opinions as to
non-consolidation, fraudulent conveyance, true sale and true contribution and
any other opinion customary in securitization transactions with respect to its
Collateral Property, each Borrower and its respective Affiliates, which counsel
and opinions shall be reasonably satisfactory to Lender and the Applicable
Rating Agencies;
(c) provide current certificates of good standing and qualification
with respect to such Borrower and ▇▇▇▇ from appropriate Governmental
Authorities; and
(d) execute such amendments to the Loan Documents and each
Borrower's organizational documents as may be requested by Lender or the
Applicable Rating Agencies or otherwise to effect a Secondary Market
Transaction, provided that nothing contained in this subsection (d) shall result
in an economic change in the transaction or impose any material legal
obligations on any Borrower or restrict Borrower in any material way;
(e) assist Lender in the event Lender requires the severance of the
Note or any other Loan Document in order to adjust its security interest in the
Collateral Properties to enhance its position in the context of a Secondary
Market Transaction, provided that such severance of the Note or other applicable
adjustment in the security of the Loan pursuant to a Secondary Market
Transaction shall be completed at the sole cost of the Lender;
(f) deliver to Lender and/or any Applicable Rating Agency, (a) one
or more Officer's Certificates certifying as to the accuracy of all
representations made by Borrower in the Loan Documents as of the date of the
Loan Closing in all relevant jurisdictions or, if such representations are no
longer accurate, certifying as to what modifications to the representations
would be required to make such representations accurate, and (b) certificates of
the relevant Governmental Authorities in all relevant jurisdictions indicating
the good standing and qualification of Borrower and it's Borrower Representative
as of the date of the Secondary Market Transaction;
(g) make such other representations and warranties as of the closing
date of the Secondary Market Transaction with respect to the Collateral
Properties, Borrower, ▇▇▇▇, and the Loan Documents as are customarily provided
in securitization transactions and as may be reasonably requested by the holder
of the Note or the Rating Agencies and consistent with the facts covered by such
representations and warranties as they exist on the date thereof, including the
representations and warranties made in the Loan Documents;
(h) participate in any meeting reasonably requested by the Lender,
such meeting to be attended by senior management of Borrower and/or ▇▇▇▇; and
(i) obtain ratings of the Securities from two (2) or more Rating
Agencies.
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10.1.2 Use of Information. Each Borrower understands that certain of
the Provided Information and the Required Records may be included in disclosure
documents in connection with a Secondary Market Transaction, including a
prospectus or private placement memorandum (each, a "Disclosure Document") and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers or other parties relating
to the Secondary Market Transaction. In the event that the Disclosure Document
is required to be revised, each Borrower shall cooperate with Lender in updating
the Provided Information or Required Records for inclusion or summary in the
Disclosure Document or for other use reasonably required in connection with a
Secondary Market Transaction by providing all current information pertaining to
such Borrower, and its Collateral Property necessary to keep the Disclosure
Document accurate and complete in all material respects with respect to such
matters. Such disclosure may include the opinion or judgment of Lender or
Servicer concerning the Provided Information or other matters disclosed.
10.1.3 Borrower's Obligations Regarding Disclosure Documents. In
connection with a Disclosure Document, each Borrower shall:
(a) if requested by Lender, certify in writing that such Borrower
has carefully examined those portions of such Disclosure Document, pertaining to
such Borrower, its Collateral Property, the Manager and the Loan, including
applicable portions of the sections entitled "Special Considerations",
"Description of the Mortgages", "Description of the Mortgage Loans and Mortgaged
Property", "The Manager," "The Borrower" and "Certain Legal Aspects of the
Mortgage Loan," and such portions (and portions of any other sections reasonably
requested and pertaining to such Borrower, its Collateral Property, the Manager
or the Loan) do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading;
(b) indemnify (i) any underwriter, syndicate member or placement
agent (collectively, the "Underwriters") retained by Lender or its issuing
company affiliate (the "Issuer") in connection with a Secondary Market
Transaction, (ii) Lender and (iii) the Issuer that is named in the Disclosure
Document or registration statement relating to a Secondary Market Transaction
(the "Registration Statement"), and each of the Issuer's directors, each of its
officers who have signed the Registration Statement and each person or entity
who controls the Issuer or the Lender within the meaning of Section 15 of the
Securities Act or Section 30 of the Exchange Act (collectively within (iii), the
"UBS Group"), and each of its directors and each person who controls each of the
Underwriters, within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act (collectively, the "Underwriter Group") for any losses,
claims, damages or liabilities (the "Liabilities") to which Lender, the UBS
Group or the Underwriter Group may become subject (including reimbursing all of
them for any legal or other expenses actually incurred in connection with
investigating or defending the Liabilities) insofar as the Liabilities arise out
of or are based upon any untrue statement of any material fact contained in any
of the Required Records or in any of the applicable portions of such sections of
the Disclosure Document applicable to Borrower, Manager, any Collateral Property
or the Loan,
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or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated in the applicable portions of such
sections or necessary in order to make the statements in the applicable portions
of such sections in light of the circumstances under which they were made, not
misleading, provided, however, that no Borrower shall be required to indemnify
Lender for any Liabilities relating to untrue statements or omissions or
inadequacies of disclosure which (i) such Borrower identified to Lender in
writing at the time of such Borrower's examination of such Disclosure Document
or (ii) are set forth in a report prepared by a third party not Affiliated with
such Borrower; and
(c) reimburse any member of the UBS Group for any legal or other
expenses reasonably incurred by such member in connection with investigating or
defending the Liabilities.
Borrowers' Liability under clause (a) or (b) above shall be limited to
Liabilities arising out of or based upon any such untrue statement or omission
made therein in reliance upon and in conformity with information furnished to
Lender by or on behalf of a Borrower in connection with the preparation of those
portions of the Disclosure Document pertaining to Borrower, Manager, the
Collateral Properties or the Loan or in connection with the underwriting of the
debt including financial statements of each Borrower, operating statements, rent
rolls and other Required Records, environmental site assessment reports and
property condition reports with respect to the Collateral Properties. The
foregoing indemnity will be in addition to any liability which Borrowers may
otherwise have. Lender shall give Borrower a copy of any Disclosure Document
that is to be subject to the foregoing indemnification obligations a reasonable
amount of time prior to its delivery to potential investors pursuant to an
offering.
10.1.4 Borrowers Indemnity Regarding Filings. In connection with
filings under the Exchange Act, Borrower shall (i) indemnify Lender, the UBS
Group and the Underwriter Group for any Liabilities to which Lender, the UBS
Group or the Underwriter Group may become subject insofar as the Liabilities
arise out of or are based upon the omission or alleged omission to state in the
Provided Information or Required Records a material fact required to be stated
in the Provided Information or Required Records in order to make the statements
in the Provided Information or Required Records, in light of the circumstances
under which they were made not misleading and (ii) reimburse Lender, the UBS
Group or the Underwriter Group for any legal or other expenses reasonably
incurred by Lender, UBS Group or the Underwriter Group in connection with
defending or investigating the Liabilities.
10.1.5 Indemnification Procedure. Promptly after receipt by an
indemnified party under Section 10.1.3 or 10.1.4 of notice of the commencement
of any action for which a claim for indemnification is to be made against
Borrower, such indemnified party shall notify Borrower in writing of such
commencement, but the omission to so notify the Borrower will not relieve
Borrower from any liability that it may have to any indemnified party hereunder
except to the extent that failure to notify causes prejudice to Borrower. In the
event that any action is brought against any indemnified party, and it notifies
Borrower of the commencement thereof, Borrower will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice of commencement, to assume the
defense thereof with counsel satisfactory to such indemnified party in its sole
discretion. After notice from
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Borrower to such indemnified party under this Section 10.1.5, Borrower shall not
be responsible for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both any Borrower and an indemnified party, and any indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to Borrower, then the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Borrower shall not be liable for the expenses of
more than one separate counsel unless there are legal defenses available to it
that are different from or additional to those available to another indemnified
party.
10.1.6 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 10.1.3 or 10.1.4 is for any reason held to be unenforceable by an
indemnified party in respect of any Liabilities (or action in respect thereof)
referred to therein which would otherwise be indemnifiable under Section 10.1.3
or 10.1.4, Borrower shall contribute to the amount paid or payable by the
indemnified party as a result of such Liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, the following factors shall be considered: (i)
the UBS Group's and Borrower's relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances. Lender and each
Borrower hereby agree that it may not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
XI MISCELLANEOUS
11.1 Exculpation.
(a) Subject to the qualifications below, Lender shall not enforce
the liability and obligation of any Borrower to perform and observe the
obligations contained in the Loan Documents by any action or proceeding wherein
a money judgment shall be sought against such Borrower, except that Lender may
bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest and rights under the Loan Documents, or in the Collateral
Properties, the Rents or any other collateral given to Lender pursuant to the
Loan Documents; provided, however, that, except as specifically provided herein,
any judgment in any such action or proceeding shall be enforceable against a
Borrower only to the extent of Borrower's interest in its Collateral Property,
in the Rents and in any other collateral given to Lender, and Lender shall not
▇▇▇ for, seek or demand any deficiency judgment against any Borrower in any such
action or proceeding under or by reason of or under or in connection with any
Loan Document. The provisions of this section shall not, however, (i) constitute
a waiver, release or impairment of any obligation evidenced or secured by any
Loan Document; (ii) impair the right of Lender to name any Borrowers as a party
defendant in any action or suit for foreclosure and sale under any Mortgage;
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(iii) affect the validity or enforceability of any of the Loan Documents or any
guaranty made in connection with the Loan or any of the rights and remedies of
Lender thereunder, (iv) impair the right of Lender to obtain the appointment of
a receiver, (v) impair the enforcement of any Assignment of Leases; (vi)
constitute a prohibition against Lender to commence any other appropriate action
or proceeding in order for Lender to fully realize the security granted by the
Mortgages or to exercise its remedies against the Collateral Properties; or
(vii) constitute a waiver of the right of Lender to enforce the liability and
obligation of any Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys' fees and costs reasonably incurred) arising out of
or in connection with the following: (a) fraud or intentional misrepresentation
by such Borrower or any guarantor in connection with the Loan; (b) the gross
negligence or willful misconduct of such Borrower; (c) the breach of any
representation, warranty, covenant or indemnification in any Loan Document
concerning Environmental Laws or Hazardous Substances, including Sections 5.1.32
and 6.10, and clauses (viii) through (xi) of Section 6.16; (d) physical waste or
after an Event of Default, the removal or disposal of any portion of any
Collateral Property; (e) the misapplication or conversion by such Borrower of
(x) any Proceeds paid by reason of any Insured Casualty, (y) any Award received
in connection with a Condemnation, or (z) any Rents, refunds of Taxes or Other
Charges or Funds (i.e., use of Rents or refunds of Taxes or Other Charges or
Funds to make distributions or payments to members/partners/shareholders of such
Borrower during the continuance of an Event of Default); (f) failure to pay
charges for labor or materials or other charges that can create Liens on any
portion of any Collateral Property unless such charges are the subject of a bona
fide dispute in which the applicable Borrower is contesting the amount or
validity thereof, (g) any security deposits collected with respect to any
Collateral Property which are not delivered to Lender upon a foreclosure of any
Mortgage encumbering such Collateral Property or action in lieu thereof, except
to the extent any such security deposits were applied in accordance with the
terms and conditions of any of the Leases prior to the occurrence of the Event
of Default that gave rise to such foreclosure or action in lieu thereof; and (h)
such Borrower's indemnifications of Lender set forth in Sections 10.1.3 and
10.1.4.
(b) Notwithstanding anything to the contrary in this Agreement or
any of the Loan Documents, (A) Lender shall not be deemed to have waived any
right which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Debt or to require that all collateral shall continue to secure all of the
Debt in accordance with the Loan Documents, and (B) the Debt shall be fully
recourse to Borrowers in the event that (1) any Borrower or any Person owning an
interest (directly or indirectly) in any Borrower commences any action, suit,
claim, arbitration, governmental investigation or other proceeding (x) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors seeking to have an
order for relief entered with respect to any Borrower, or seeking to adjudicate
any Borrower a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to any Borrower or any Borrower's debts, or (y) seeking appointment
of a receiver (other than a Borrowers seeking the appointment of a receiver
during the pendency of a foreclosure action against such Borrower commenced by
Lender), trustee, custodian or other similar official for any Borrower or for
all or substantially all of any Borrower's assets or (2) any Borrower ever
ceases to be a Special Purpose Entity.
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11.2 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document (a "notice") shall be given
in writing and shall be effective for all purposes if hand delivered or sent (i)
by (a) certified or registered United States mail, postage prepaid, or (ii) by
(A) expedited prepaid delivery service, either commercial or United States
Postal Service, with proof of attempted delivery, and (B) by telecopier (with
answer back acknowledged), in any case addressed as follows (or to such other
address or Person as a party shall designate 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):
If to Lender: UBS Principal Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: c/o Westfield Corporation, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or 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.
11.2.1 Borrower's Representative.
(a) Each Borrower's Representative shall notify Lender of the names
of its officers and employees authorized to request and take other actions on
behalf of its Borrower (each a "Responsible Officer") and shall provide Lender
with a specimen signature of each such officer or employee. Lender shall be
entitled to rely conclusively on a Responsible Officer's authority to give and
receive notices and take other all other actions of any kind on behalf of
Borrower or any of them until Lender receives written notice to the contrary.
Lender shall have no duty to verify the authenticity of the signature appearing
on any notice.
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(b) EACH BORROWER DOES HEREBY DESIGNATE AND APPOINT CT CORPORATION
SYSTEM AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, AS ITS AUTHORIZED AGENT
TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY
BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT
IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT
SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE OF SUCH BORROWER MAILED OR
DELIVERED TO SUCH BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH BORROWER (1) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE
DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY
DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN
NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
11.3 Brokers and Financial Advisors. Each Borrower hereby represents that
it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the Loan. Borrowers and Lender
shall indemnify and hold the other 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 11.3 shall survive the expiration and termination of this Agreement
and the repayment of the Debt.
11.4 Retention of Servicer. Lender reserves the right to retain the
Servicer to act as its agent hereunder with such powers as are specifically
delegated to the Servicer by Lender, whether pursuant to the terms of this
Agreement, any Pooling and Servicing Agreement or similar agreement entered into
as a result of a Secondary Market Transaction, the Cash Management Agreement or
otherwise, together with such other powers as are reasonably incidental thereto.
Borrowers shall pay any reasonable fees and expenses of the Servicer in
connection with a release or substitution of any Collateral Properties,
assumption or modification of the Loan, enforcement of the Loan Documents or any
other action taken by Servicer hereunder on behalf of Lender.
11.5 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as any of the Debt is unpaid unless a longer period is expressly set
forth herein or in the other Loan Documents. Each Borrower's covenants and
agreements in this Agreement shall inure to the benefit of the respective legal
representatives, successors and assigns of Lender.
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11.6 Lender's Discretion. Whenever pursuant to this Agreement or any other
Loan Document, Lender exercises any right given to it to approve or disapprove,
or 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.
11.7 Governing Law; Venue.
(a) THIS AGREEMENT WAS MADE BY LENDER AND ACCEPTED BY BORROWERS IN
THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO
WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, TIES AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY
APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, AND PROCEDURES RELATING TO ENFORCEMENT
OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE COLLATERAL PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE DEBT. TO THE FULLEST EXTENT
PERMITTED BY LAW, EACH BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO ss.
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR ANY
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY 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, AND EACH BORROWER WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
11.8 Modification; Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement
or of any other Loan Document, nor consent to any departure by any Borrower
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is
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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 any Borrower shall entitle such
Borrower or any other Borrower to any other or future notice or demand in the
same, similar or other circumstances.
11.9 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 any other Loan Document, shall operate as or constitute a waiver thereof,
nor shall a single or partial exercise thereof preclude any other future
exercise, or the exercise of any other right, power, remedy or privilege. In
particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under any Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under the Loan Documents, or to declare an Event of Default for
failure to effect prompt payment of any such other amount.
11.10 TRIAL BY JURY. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL
BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER.
11.11 Heading. The Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
11.12 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.
11.13 Preferences. To the extent any Borrower makes a payment to Lender,
or Lender receives proceeds of any collateral, which is in whole or part
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Debt or part thereof
intended to be satisfied shall be revived and continue in full force and effect,
as if such payment or proceeds had not been received by Lender. This provision
shall survive the expiration or termination of this Agreement and the repayment
of the Debt.
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11.14 Waiver of Notice. No Borrower shall be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or any other Loan Document specifically and expressly provides for the
giving of notice by Lender to such Borrower and except with respect to matters
for which such Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Each Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
no Loan Document specifically and expressly provides for the giving of notice by
Lender to such Borrower.
11.15 Remedies of Borrower. In the event that a claim or adjudication is
made that Lender or its agent, including Servicer, has acted unreasonably or
unreasonably delayed acting in any case where by law or under any Loan Document,
Lender or such agent, as the case may be, has an obligation to act reasonably or
promptly, each Borrower agrees that neither Lender nor its agents, including
Servicer, shall be liable for any monetary damages, and such Borrower's sole
remedy shall be to commence an action seeking injunctive relief or declaratory
judgment. Any action or proceeding to determines whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment. Each
Borrower specifically waives any claim against Lender and its agents, including
Servicer, with respect to actions taken by Lender or its agents on any
Borrower's behalf pursuant to Section 9.2.5.
11.16 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents.
11.17 Offsets, Counterclaims and Defenses.
Each Borrower hereby waives the right to assert a counterclaim, other than
a compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents, including Servicer. Any assignee of Lender's interest in
and to the Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses that are unrelated to the Loan Documents which any
Borrower may otherwise have against any assignor of such documents, and no such
unrelated offset, counterclaim or defense shall be interposed or asserted by any
Borrower in any action or proceeding brought by any such assignee upon such
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 each Borrower.
11.18 Publicity. All news releases, publicity or advertising by any
Borrower or its Affiliates through any media intended to mach the general
public, which refers to the Loan Documents, the Loan, Lender, any member of the
UBS Group, a Loan purchaser, the Servicer or the trustee in a Secondary Market
Transaction, shall be subject to the prior written approval of Lender.
11.19 No Usury. Borrowers and Lender intend at all times to comply with
applicable state law or applicable United States federal law (to the extent that
it permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under state law) and that this Section 11.19 shall
control every other agreement in the Loan Documents. If the applicable
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law (state or federal) is ever judicially interpreted so as to render usurious
any amount called for under the Note or any other Loan Document, or contracted
for, charged, taken, reserved or received with respect to the Debt, or if
Lender's exercise of the option to accelerate the maturity of the Loan or any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Borrower's and Lender's express
intent that all excess amounts theretofore collected by Lender shall be credited
against the unpaid Principal and all other Debt (or, if the Debt has been or
would thereby be paid in full, refunded to the Borrower, and the provisions of
the Loan Documents immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for thereunder. All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of the Loan
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Debt does not
exceed the maximum lawful rate from time to time in effect and applicable to the
Debt for so long as the Debt is outstanding. Notwithstanding anything to the
contrary contained in any Loan Document, it is not the intention of Lender to
accelerate the maturity of any interest that has not accrued at the time of such
acceleration or to collect unearned interest at the time of such acceleration.
11.20 Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and any of the other Loan Documents,
the provisions of this Agreement shall control. The parties hereto acknowledge
that each is represented by separate counsel in connection with the negotiation
and drafting of the Loan Documents and that the Loan Documents shall not be
subject to the principle of construing their meaning against the party that
drafted them.
11.21 No Joint Venture or Partnership; No Third Party Beneficiaries. (a)
Borrower and Lender intend that the relationships created hereunder and under
the other Loan Documents be solely that of borrower and lender. Nothing herein
or therein 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 Properties other than that of mortgagee,
beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
11.22 Yield Maintenance Premium. Each Borrower acknowledges that Lender
intends to enter into a Secondary Market Transaction which may result in various
classes of
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Securities with different coupon rates. Each Borrower also acknowledges that (i)
the proceeds of any partial prepayment of Principal may be utilized to retire
Securities bearing a coupon rate lower than the Interest Rate, (ii) that
following such prepayment the remaining outstanding Securities may bear a
weighted average coupon rate in excess of the Interest Rate and (iii) that,
absent the Yield Maintenance Premium payable hereunder in connection with such
prepayment, Lender will not receive the benefits intended to be conferred by the
Loan Documents. For these reasons, and to induce Lender to make the Loan,
Borrower expressly waives any right or privilege to prepay the Loan except as
may be specifically permitted herein and agrees that, except as expressly
provided for herein, any prepayments, whether voluntary or involuntary, will be
accompanied by the Yield Maintenance Premium. Such Yield Maintenance Premium
shall be required whether payment is made by Borrower, by a Person on behalf of
Borrower, or by the purchaser at any foreclosure sale, and may be included in
any bid by Lender at such sale. Each Borrower further acknowledges that (A) it
is a knowledgeable real estate developer and/or investor; (B) it fully
understands the effect of the provisions of this Section 11.22, as well the
other provisions of the Loan Documents; (C) the making of the Loan by Lender at
the Applicable Interest Rate and other terms set forth in the Loan Documents are
sufficient consideration for such Borrower's obligation to pay a Yield
Maintenance Premium (if required); and (D) Lender would not make the Loan on the
terms set forth herein without the inclusion of such provisions. Borrower also
acknowledges that the provisions of this Agreement limiting the right of
prepayment and providing for the payment of the Yield Maintenance Premium and
other charges specified herein were independently negotiated and bargained for,
and constitute a specific material part of the consideration given by Borrower
to Lender for the making of the Loan.
11.23 Assignment. The Loan, the Note, the Loan Documents and all Lender's
rights, title, obligations and interests therein may be assigned by Lender at
any time in its sole discretion whether by operation of law (pursuant to a
merger or other successor in interest) or otherwise. Upon such assignment, all
references to Lender in this Loan Agreement and in any Loan Document shall be
deemed to refer to such assignee or successor in interest and such assignee or
successor in interest shall thereafter stand in the place of Lender; provided,
however that the original named Lender herein shall not be released of its
obligations in respect of Advances which Lender is thereafter required to make
hereunder. No Borrower may assign its rights, interests or obligations under
this Loan Agreement or under any of the Loan Documents except as expressly
permitted hereunder.
11.24 Cross-Default; Waiver of Marshalling of Assets.
(a) Borrower acknowledges that Lender has made the Loan to Borrower
upon the security of its collective interest in the Collateral Pool and in
reliance upon Lender's determination that the aggregate of the Collateral Pool
taken together being of greater value as collateral security than the sum of
each Collateral Property taken separately. Borrower agrees that the Mortgages
are and will be cross-defaulted with each other so that (i) an Event of Default
under any of the Mortgages shall constitute an Event of Default under each of
the other Mortgages which secure the Note; (ii) an Event of Default under the
Note or this Loan Agreement shall constitute an Event of Default under each
Mortgage; and (iii) each Mortgage shall constitute security for the Note as if a
single blanket lien were placed on all of the Collateral Properties as security
for the Note.
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(b) To the fullest extent permitted by law, each Borrower, for
itself and its successors and assigns, waives all rights to a marshalling of the
assets of each Borrower, each Borrower's partners and others with interests in
any Borrower, and of the Collateral Properties, or to a sale in inverse order of
alienation in the event of foreclosure of all or any of the Mortgages, and
agrees not to assert any right under any laws pertaining to the marshalling of
assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the Collateral Properties for the collection of the Debt without any prior or
different resort for collection or of the right of Lender to the payment of the
Debt out of the net proceeds of the Collateral Properties in preference to every
other claimant whatsoever. In addition, Borrower, for itself and its successors
and assigns, waives in the event of foreclosure of any or all of the Mortgages,
any equitable right otherwise available to Borrower which would require the
separate sale of the Collateral Properties or require Lender to exhaust its
remedies against any Collateral Property or any combination of the Collateral
Properties before proceeding against any other Collateral Property or
combination of Collateral Properties; and further in the event of such
foreclosure Borrower does hereby expressly consent to and authorize, at the
option of Lender, the foreclosure and sale either separately or together of any
combination of the Collateral Properties.
11.25 Joint and Several Liability. Each Borrower shall be jointly and
severally liable with each other Borrower for payment of all amounts including
those that are not specific to any particular Collateral Property or Borrower
that become due under this Agreement, the Note or the other Loan Documents, such
as payment of all fees and expenses pursuant to Section 6.15.
[SIGNATURE PAGES IMMEDIATELY FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
BORROWER:
DOWNTOWN PLAZA LLC,
a Delaware limited liability company
By: Westfield America Limited Partnership,
a Delaware limited partnership,
its sole member
By: Westfield America, Inc.
a Missouri corporation,
its general partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: SECRETARY
EASTLAND SHOPPING CENTER LLC,
a Delaware limited liability company
By: Eastland Manager LLC,
a Delaware limited liability company,
its managing member
By: Westfield America Limited Partnership,
a Delaware limited partnership,
its sole member
By: Westfield America, Inc.,
a Missouri corporation,
its general partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: SECRETARY
[Signatures Continue on Next Page]
WESTLAND SOUTH SHORE MALL L.P.,
a California limited partnership
By: South Shore Mall LLC,
a Delaware limited liability company,
its general partner
By: South Shore Manager LLC,
a Delaware limited liability company,
its managing member
By: Westfield America Limited
Partnership, a Delaware limited
partnership, its sole member
By: Westfield America, Inc.,
a Missouri corporation,
its general partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: SECRETARY
LENDER:
UBS PRINCIPAL FINANCE LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Director
Exhibit A
Form of Notice To Tenants
[BORROWER'S NAME AND ADDRESS]
_____________, 2000
[Name and Address of Tenant]
Re: Lease of Store at
(the "Center")
Ladies and Gentlemen:
The undersigned is the Owner of the Center and the landlord under
your lease of a store at the Center (your "Lease").
By this letter, you are hereby directed (1) to make all checks, in
payment of rent and other sums due to the landlord under your Lease, payable to
the order of [applicable Agent], and (2) to deliver such checks or otherwise
make such payments to the following address:
[Name and Address of Agent]
The foregoing direction is irrevocable, except with the written
consent of our mortgagee, UBS Principal Finance LLC (or its successors or
assigns), notwithstanding any future contrary request or direction from the
undersigned or any other person (other than UBS Principal Finance LLC (or its
successors or assigns)). Thank you for your cooperation.
Very truly yours,
[BORROWER]
By: ________________________________________
Name: _______________________________
Title: ______________________________
A - 1
Exhibit B
Form of Subordination, Nondisturbance and Attornment Agreement
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This Non-Disturbance and Attornment Agreement (this Agreement), made as of
___________, 199_, by and between , a limited
liability company organized under the laws of Delaware and having an address at
(the Lender) and _________________, a
_________________, having an address at _______________________ (the Tenant);
WITNESSETH:
WHEREAS, by the lease (as the same may be amended from time to time, the
Lease) dated _________, 19__, between _______________ (the Landlord), as
landlord, and Tenant, as tenant, the Landlord leased to Tenant a certain portion
of the building known as and located at __________________, being more fully
described in said Lease (the Premises);
WHEREAS, the Landlord has executed and delivered to the Lender a mortgage
note in the original principal amount of ____________ ($____________) Dollars,
which note is secured by, among other things, a mortgage or deed of trust (which
mortgage or deed of trust, and all amendments, renewals, increases,
modifications, replacements, substitutions, extensions, spreaders, restatements
and consolidations thereof and all re-advances thereunder and additions thereto
is referred to as the Mortgage) encumbering certain land being more particularly
described in Schedule A attached hereto (the Land), together with the buildings
and other improvements located or to be located thereon (such buildings and
other improvements and the Land, collectively, the Mortgaged Property)
including, without limitation, the Premises.
NOW, THEREFORE, the parties hereto, in consideration of the covenants
contained herein, have agreed and hereby agree as follows:
1. The Lease, as the same may hereafter be modified, amended or
extended, is and shall be subject and subordinate in each and every respect to
the Mortgage, to all renewals,
B - 1
modifications, replacements and extensions thereof, to all terms, conditions and
provisions thereof and to each and every advance hertofore made or hereafter
made under the Mortgage.
2. The Lender agrees that if any action or proceeding is commenced
by the Lender for the foreclosure of the Mortgage or the sale of the Mortgaged
Property, the Tenant shall not be named as a party therein (unless required by
law), and the sale of the Mortgaged Property in any such action or proceeding
and the exercise by the Lender of any of its other rights under the Mortgage, or
under the note secured by the Mortgage, shall be made subject to all rights of
the Tenant under the Lease, provided that at the time of the commencement of any
such action or proceeding and at the time of any such sale or exercise of any
such other rights, the Tenant shall not be in default under any of the terms,
covenants or conditions of the Lease or of this Agreement on the Tenant's part
to be observed or performed.
3. The Tenant shall concurrently give the Lender copies of all
notices and other communications given by the Tenant to the Landlord relating to
(i) defaults or alleged defaults on the part of the Landlord or the Tenant under
the Lease, (ii) any violations of any ordinances, statues, laws, rules, codes
regulations or requirements of any governmental agency, and (iii) any assignment
or subletting of all or any portion of the Premises.
4. In the event of any act or omission by the Landlord which would
give the Tenant the right, either immediately or after the lapse of a period of
time, to terminate the Lease, or to claim a partial or total eviction, the
Tenant will not exercise any such right (i) until it has sent written notice of
such act or omission to the Lender as provided herein, and (ii) unless the
Lender shall have failed within sixty (60) days after receipt of such notice to
cure such default or, if such default is not reasonably susceptible of cure
within such sixty (60) days, the Lender shall not have commenced the cure of
such default within sixty (60) days of receipt of such notice and thereafter
diligently pursued such action.
5. In the event that the interest of the Landlord is transferred by
reason of, or assigned in lieu of foreclosure or other proceedings for
enforcement of the Mortgage, then, subject to the provisions of this Agreement,
the Lease shall nevertheless continue in full force and effect and, upon the
written request of the Lender, the Tenant shall attorn to the Lender and shall
recognize the Lender as its landlord. Although the foregoing provision shall be
self-operative, in order to confirm such attornment, upon the request of the
Lender, the Tenant shall execute and deliver to the Lender (i) an agreement of
attornment in form and content reasonably satisfactory to the Lender, at the
Tenant's sole cost and expense, confirming the foregoing attornment and agreeing
to perform all the terms, covenants and conditions of the Lease on the Tenant's
part to be performed for the benefit of such Lender with the same force and
effect as if such Lender were the Landlord originally named in this Lease or
(ii) a new lease with the
B - 2
Lender, as landlord, for the remaining term of the Lease and otherwise on the
same terms and conditions and with the same options, if any, then remaining.
Nothing herein contained shall be construed however, to obligate the Lender to
cure any default by the Landlord under the Lease occurring prior to any date on
which the Lender shall succeed to the rights of the Landlord, it being expressly
agreed that under no circumstances shall the Lender be obligated to remedy any
such default.
6. If the Lender shall succeed to the interest of the Landlord, the
Lender shall have no personal liability as successor to the Landlord, and the
Tenant shall look only to the estate and property of the Lender in the Mortgaged
Property or the proceeds thereof for the satisfaction of the Tenant's remedies
for the collection of a judgement (or other judicial process) requiring the
payment or money in the event of any default by the Lender as landlord under the
Lease. In addition, the Lender as holder of the Mortgage or as landlord under
the Lease if it succeeds to that position, shall in no event (i) be liable to
the Tenant for any act or omission of any prior landlord, (ii) be subject to any
offset or defense which the Tenant might have against any prior landlord, (iii)
be liable to the Tenant for any liability or obligation of any prior landlord
occurring prior to the date that the Lender or any subsequent owner acquires
title to the Premises, or (iv) be liable to the Tenant for any security or other
deposits given to secure the performance of the Tenant's obligations under the
Lease, except to the extent that the Lender shall have acknowledged actual
receipt of such security or other deposits in writing. No other property or
assets of the Lender shall be subject to levy, execution or other enforcement
procedure for the satisfaction of the Tenant's remedies under or with respect to
the Lease, the relationship of the landlord and the tenant thereunder or the
Tenant's use or occupancy of the Premises.
7. All notices and other communications hereunder shall be sent by
certified or registered mail (postage prepaid, return receipt requested) to the
Lender at the address set forth above, Attention: _________, or to the Tenant at
the address set forth in the Lease, or to such other address or person as may be
specified in a notice sent in accordance with the provisions of this Section 7,
and shall be deemed given when received at the addresses specified above.
8. No prepayment of rent or additional rent due under the Lease of
more than one month in advance shall be binding upon the Lender, as holder of
the Mortgage or as landlord under the Lease if the Lender succeeds to that
position, unless consented to by the Lender, and from and after the date hereof,
no amendment, modification, surrender or cancellation of the Lease shall be
binding upon the Lender, as holder of the Mortgage or as landlord under the
Lease if the Lender succeeds to that position, unless such amendment,
modification, surrender or cancellation is done in compliance with the terms of
the Mortgage.
B - 3
9. This Agreement shall apply to, bind and inure to the benefit of
the parties hereto and their respective successors and assigns. As used herein,
the term Tenant shall mean and include the present tenant under the Lease, any
permitted subtenant under the Lease, any permitted assignee of the Lease and any
successor of any of them. The term Lender as used herein shall include the
holder of the Mortgage, the successors and assigns of the Lender, and any
person, party or entity which shall become the owner of the Mortgaged Property
by reason of a foreclosure of the Mortgage or the acceptance of a deed or
assignment in lieu of foreclosure or other proceedings for enforcement of the
Mortgage or otherwise. The term Landlord as used herein shall mean and include
the present landlord under the Lease and such landlord's predecessors and
successors in interest under the Lease.
10. This Agreement may not be modified in any manner or terminated
except by an instrument in writing executed by the parties hereto.
[11. This Agreement satisfies the condition to the subordination of
the Lease to the Mortgage set forth in Section _____ of the Lease with respect
to the execution and delivery of ____.]
12. This Agreement shall be governed by and construed in accordance
with the laws of the State of ____________.
13. Both the Tenant and the Lender hereby irrevocably waive all
right to trial by jury in any action, proceeding or counterclaim arising out of
or relating to the Lease or this Agreement.
B - 4
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
By:
--------------------------------
Name:
Title:
[TENANT]
By:
--------------------------------
Name:
Title:
B - 5
EXHIBIT C-1
Form of Manager Consent and Subordination
(Manager other than Westfield)
CONSENT AND SUBORDINATION OF MANAGER
----------
UBS Principal Finance
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to (i) that certain Management Agreement (the
"Management Agreement"), dated as of _______________, between
______________________ (the "Borrower") and the undersigned (the "Manager") with
respect to the property known as __________________ and located in the City of
_____________ County, _________ (the "Property"), and (ii) that certain Loan
Agreement (the "Loan Agreement") dated as of ______________, 199_, between the
Borrower and (together with its successors and assigns, the
"Lender"). Any capitalized terms used herein but not defined herein shall have
the same meanings as are ascribed to them in the Loan Agreement.
The Manager acknowledges and understands that delivery of this letter to
you is a condition to the Lender making a certain loan to the Borrower pursuant
to the Loan Agreement in the original principal amount of up to $___________
(the "Loan").
The Borrower and the Manager hereby agree as follows:
1. The Management Agreement is and shall be subject and subordinate in all
respects to (i) the Mortgage (and to the lien of the Mortgage), (ii) the Loan
Documents, and (iii) any and all modifications, amendments, renewals and/or
substitutions of the Mortgage and/or any of the other Loan Documents. This
paragraph 1 shall be self-operative and no further instrument of
C-1-1
subordination shall be required. If requested, however, the Borrower and/or the
Manager shall execute and deliver such further instruments as the Lender may
deem reasonably necessary to effectuate this subordination.
2. If there shall have occurred and be continuing an Event of Default and
the Lender shall have obtained (i) title to the Property (or any portion
thereof) whether by foreclosure, deed-in-lieu of foreclosure, bankruptcy sale or
otherwise and/or (ii) possession of the Property (or any portion thereof)
whether personally or through an agent, a receiver or a trustee, the Manager
shall, if and to the extent requested in writing by the Lender, continue
performance under the Management Agreement in accordance with the terms thereof
so long as the Manager is paid compensation thereafter accruing under the
Management Agreement. The Borrower and the Manager understand, however, that
nothing contained herein, in the Mortgage or in any of the other Loan Documents
shall be construed to obligate the Lender to perform or discharge any of the
Borrower's obligations, duties or liabilities under the Management Agreement.
3. Upon the occurrence of any default by the Borrower under the terms of
the Management Agreement, the Manager shall, promptly upon becoming aware
thereof, provide the Lender with notice in writing thereof, and after receipt of
said notice, the Lender shall have the same time period within which to cure
said default as the Borrower has under the Management Agreement although the
Borrower and the Manager understand that the Lender shall not have any
obligation to do so. Notwithstanding the foregoing, the failure by the Manager
to notify the Lender of a default under the Management Agreement shall not be
deemed to constitute a waiver by the Manager of such default. Furthermore, the
Borrower and the Manager agree that the Lender may terminate the Management
Agreement (i) in accordance with Section of the Loan Agreement or in the event
of the Manager's gross negligence, malfeasance or willful misconduct(1), or (ii)
by giving five days' notice to the Manager upon the Lender (or a successor
owner, as the case may be) obtaining (A) title to the Property (or any portion
thereof) whether by foreclosure, deed-in-lieu of foreclosure, bankruptcy sale or
otherwise, and/or (B) possession of the Property (or any portion thereof)
whether personally or through an agent, a receiver or a trustee. If the Lender
elects to terminate the Management Agreement in accordance with this Paragraph
3, the Borrower and the Manager understand and agree that the Manager shall look
solely to the Borrower for any and all fees, charges or other sums payable to
the Manager under the Management Agreement. If the Management Agreement shall be
so terminated by the Lender, the Manager agrees to cooperate with the Lender to
ensure a smooth transition to the new property manager.
----------
(1) The Management Agreement must permit the Borrower to terminate the
Management Agreement in the event of the Manager's gross negligence,
malfeasance or willful misconduct.
C-1-2
4. The Manager hereby confirms that (i) the term of the Management
Agreement shall expire on or before the Anticipated Prepayment Date, and (ii) if
the Debt has not been repaid in full on or before the Anticipated Prepayment
Date, the term of the Management Agreement may only be renewed or extended
beyond the Anticipated Prepayment Date with the prior written approval of the
Servicer.(2)
5. This letter shall inure to the benefit of the Lender and its successors
and assigns, including the trustee in a Secondary Market Transaction. In the
event of any inconsistency or conflict with the provisions of this letter and
the provisions of the Management Agreement, the provisions of this letter shall
control.
6. The Manager agrees that it shall not change, amend, modify or terminate
the Management Agreement without the Lender's prior written approval in each
instance, which approval may be given or denied by the Lender in its sole
discretion. If the Manager does so amend, modify or terminate the Management
Agreement without the Lender's prior written approval, such amendment,
modification or termination shall be void ab initio.
7. This letter shall be governed by, and construed in accordance with the
law of the State of New York.
8. Without limiting the generality of any other provisions contained
herein or in the other Loan Documents, no failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder or under any of the
other Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right preclude any other or further exercise thereof or
the exercise of any other right. The rights and remedies of the Lender provided
herein and in the other Loan Documents are cumulative and are in addition to,
and are not exclusive of, any rights or remedies provided by law or in equity.
9. The Manager represents and warrants to the Lender that as of the date
hereof (i) the Management Agreement is in full force and effect and has not been
amended, modified, assigned, terminated or supplemented, (ii) the Manager is not
in default under the provisions of the Management Agreement and there is no
condition which, with the giving of notice and/or the lapse of time, would
constitute such a default, and (iii) to the best of Manager's knowledge, the
Borrower is not in default under the provisions of the Management Agreement and
there is no condition which, with the giving of notice and/or the lapse of time,
would constitute such a default.
----------
(2) The Management Agreement must expire on or before the Anticipated
Prepayment Date and may not be renewed or extended without the prior
written approval of the Servicer.
C-1-3
10. This letter may not be amended, modified, terminated or supplemented
without the written approval of each of the Manager, the Borrower and the
Lender.
Very truly yours,
[MANAGER]
By: ________________________________
Name:
Title:
AGREED AND CONSENTED
TO AS OF _______________, 199_
[BORROWER]
By: ______________________, its _____________
By: ___________________________
Name:
Title:
C-1-4
Exhibit C-2
MANAGER'S CONSENT AND SUBORDINATION
OF MANAGEMENT AGREEMENT
THIS MANAGER'S CONSENT AND SUBORDINATION OF MANAGEMENT AGREEMENT
(this "Agreement"), dated as of , is executed by the undersigned,
WESTFIELD MANAGEMENT COMPANY, a Delaware general partnership ("Manager"), as an
inducement to UBS Principal Finance LLC, a Delaware limited liability company
(together with its successors and assigns, the "Lender"), to make a loan to
, a Delaware limited liability company ("Borrower") in a
principal amount not to exceed $16,840,000.00 (the "Loan") pursuant to that
certain Loan Agreement dated as of the date hereof (the "Loan Agreement"), in
connection with various properties, including the property owned by
(the "Property").
1. Definitions. All capitalized terms not defined herein shall have
the meanings ascribed thereto in the Loan Agreement.
2. Manager's Representations. Manager warrants and represents to
Lender, as of the date hereof, that the following are true and correct:
(a) That Manager has agreed to act as manager of the Property
pursuant to that certain management agreement, between Borrower and Manager,
which agreement is described on Exhibit A attached hereto and made a part
hereof, and has not been amended, modified or supplemented except as set forth
on said Exhibit A (the "Management Agreement").
(b) That the entire agreement between Manager and Borrower for the
management of the Property is evidenced by the Management Agreement.
(c) That the Management Agreement constitutes the valid and binding
agreement of Manager, is enforceable in accordance with its terms, and Manager
has full authority under all state or local laws and regulations, to perform all
of its obligations under said Management Agreement.
(d) That neither Borrower nor Manager is in default in the
performance of any of its obligations under the Management Agreement.
(e) That Manager has received and reviewed a copy of the Loan
Agreement and the Cash Management Agreement.
3. Manager's Agreements. Manager hereby consents to and agrees to
each and every one of the following covenants and agreements for the benefit of
Lender and as a condition to Lender's making the Loan:
(a) No Termination of Management Agreement. Manager shall not
terminate the Management Agreement without first obtaining Lender's written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed.
C-2-1
Notwithstanding the foregoing, Manager shall have the right to terminate the
Management Agreement upon default by Borrower with respect to non-payment of the
management fee due thereunder by giving Lender thirty (30) days' prior written
notice of such termination. In the event Lender shall cure such non-payment
default in the aforesaid thirty (30)-day period, then any such termination
notice shall be of no further force or effect.
(b) Subordination of Management Agreement to Lien of Mortgages. Any
and all liens, rights and interests (whether ▇▇▇▇▇▇ or inchoate and including,
without limitation, all mechanics' and materialmen's liens under applicable law)
owned, claimed or held, or to be owned, claimed or held, by Manager in and to
the Property, other than rights of Manager to receive payment of the basic
management fee and all other amounts payable under the Management Agreement for
periods prior to the termination thereof, are and shall be, and are hereby made,
in all respects subordinate and inferior to the liens and security interests
created or to be created for the benefit of Lender, its successors and assigns,
and securing the repayment of the Debt and including, without limitation, those
created under and by virtue of the Mortgage.
(c) Lender's Right to Terminate. Upon the occurrence of a Cash
Management Event, Manager shall, at the request of Lender, continue performance,
subject to Paragraph 3(d) hereof, on behalf of Lender, of all of Manager's
obligations under the terms of the Management Agreement with respect to the
Property, provided that Lender gives Manager the notice provided for in
Paragraph 3(j) hereof and Lender (or Borrower) performs or causes to be
performed the obligations of Borrower to Manager under the Management Agreement
accruing or arising from and after, and with respect to the period commencing
upon, the effective date of such notice. Notwithstanding anything contained in
the Management Agreement to the contrary, Lender, or Borrower at Lender's
direction pursuant to the Loan Documents, shall have the right to terminate the
Management Agreement upon, or at any time after, Lender or any third party
acquires the Property, whether by foreclosure, deed-in-lieu of foreclosure or
otherwise, by giving Manager thirty (30) days' prior written notice of such
termination, in which event Manager shall resign as manager of the Property
effective upon the end of such thirty (30)-day period. Manager agrees not to
look to Lender for payment of any accrued but unpaid fees relating to the
Property accruing from and after the effective date of such termination.
(d) Cooperation with Management Consultant. If, pursuant to the Loan
Agreement, Borrower retains a Management Consultant, Manager shall cooperate
with the Management Consultant to enable the Management Consultant to perform
its responsibilities as described in the Loan Agreement.
(e) No Amendments to Management Agreement. Manager will not amend or
modify the Management Agreement in any manner which would (i) materially and
adversely affect the management, operation or value of the Property, or (ii)
increase the base management fee payable thereunder, without the prior written
consent of Lender which consent shall not be unreasonably withheld, delayed or
conditioned. In the event Manager fails to secure such approval, the Management
Agreement shall, for the
C-2-2
purposes of Manager's obligations to Lender pursuant to this Agreement,
including Manager's obligation aforesaid to continue performance thereunder for
Lender's benefit pursuant to the terms of this Agreement, be deemed not to have
been modified by such amendment.
(f) Delivery of Rent Roll and Service Contracts. Within twenty (20)
Business Days after Lender's request therefor, but not more than once in any
calendar quarter, and only to the extent not furnished by Borrower. Manager
shall furnish to Lender a current rent roll of all Tenants of the Property,
including a list of which Tenants are in default under their respective leases,
and a schedule of all other entities with whom Manager has entered into leases,
contracts or other agreements relating to the Property, together with copies of
all such leases, contracts or agreements.
(g) Further Assurances. Manager further agrees, without cost to
Manager, to (i) execute such affidavits and certificates as Lender shall
reasonably require to further evidence the agreements herein contained, (ii) on
request from Lender, and only to the extent not furnished by Borrower, furnish
Lender with copies of such information as Borrower is entitled to receive under
the Manager Agreement, and (iii) at reasonable times, and upon reasonable
advance notice, cooperate with Lender's representative or agent in any
inspection of the Property.
(h) Assignment of Rents and Leases. Manager acknowledges that, in
connection with the Loan, Borrower has executed and delivered to Lender an
Assignment of Leases and Rents, dated as of the date hereof, assigning to
Lender, among other things, all of Borrower's right, title and interest in and
to all of the Leases, including any of Borrower's rights in the security
deposits thereunder (to the extent permitted by applicable law). Manager hereby
agrees that as of the date hereof, Manager shall henceforth deliver to the
Lockbox Account, and cause all Tenants under Leases to deliver to the Lockbox
Account, for application in accordance with the terms and conditions of
the Loan Agreement, the Cash Management Agreement and the other Loan Documents,
all Rents and other proceeds received after the date hereof from any and all
Tenants or other parties occupying or using any portion of the Property.
(i) No Joint Venture. Lender has no obligation to Manager with
respect to the Debt and Manager shall not be a third party beneficiary with
respect to any of Lender's obligations to Borrower set forth in the Loan
Documents. The relationship of Lender to Borrower is one of a creditor to a
debtor, and Lender is not a joint venturer or partner of Borrower.
(j) Lender Not Obligated Under Management Agreement. Manager further
agrees that, except as hereinafter set forth, nothing herein shall impose upon
Lender any obligation for payment or performance in favor of Manager. In the
event that Lender notifies Manager in writing of the occurrence of a Cash
Management Event and that Lender has elected to assert the rights of Borrower
under the Management Agreement, Lender shall pay Manager the sums due Manager
under the terms of the Management Agreement (subject to and in accordance with
the terms of the Management Agreement and this Agreement) for the period
commencing on the effective date of
C-2-3
Lender's notice to Manager and ending on the expiration date or earlier
termination of the Management Agreement.
(k) Lender's Reliance on Representations. Manager has executed this
Agreement for the purpose of inducing the Lender to make the Loan in accordance
with the Loan Agreement and with full knowledge that Lender shall rely upon the
representations, warranties and agreements herein contained when making the
Loan, and that but for this instrument and the representations, warranties and
agreements herein contained, the Lender would not take such actions.
(l) Governed by Loan Documents. Manager agrees that until such time
as the Debt has been repaid in full, the terms and provisions of this Agreement
and the Note, the Loan Agreement and the other Loan Documents shall be superior
to the terms and provisions of the Management Agreement with respect to the
payment of any management fees thereunder (other than with respect to payment of
management fees; and other amounts payable under the Management Agreement for
any periods prior to the termination thereof) and termination of the Management
Agreement, and to the extent there are any inconsistencies between the
Management Agreement and this Agreement and the Loan Documents with respect to
such terms and provisions, the terms, provisions and conditions in this
Agreement and the Loan Documents shall govern in all respects.
4. Borrower Consent. Borrower has joined herein to evidence its
consent to all the agreements of Manager contained in this Agreement.
5. 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.
6. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
collectively constitute but one and the same instrument.
7. Assignment. Lender shall have the right to transfer, sell and
assign its interest in this Agreement to any Person. All references to "Lender"
hereunder shall be deemed to include the successors and assigns of Lender.
8. Notices. Any notice, election, request, communication or demand
which is required or permitted to be given or served hereunder shall be in
writing and shall be given or served by hand delivery against receipt, by any
nationally recognized overnight courier service providing evidence of the date
of delivery or by certified mail return receipt requested, postage prepaid,
addressed to
C-2-4
If to Lender: UBS Principal Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief
Financial Officer
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or demand given hereunder shall be effective upon delivery or
three (3) days after mailing aforesaid. All notices, elections, requests,
communications and demands required or permitted hereunder shall be in the
English language.
9. Non-Recourse. Anything contained in this Agreement to the
contrary notwithstanding (except as provided below), Lender's recourse with
respect to any claims arising under or in connection with this Agreement shall
be limited solely to the interest of Manager in the Management Agreement, and
none of (i) Manager or any of its Affiliates, (ii) any Persons who presently or
in the future own any direct ownership interest in Manager or any successor of
Manager (each, a "Direct Beneficial Owner") or any affiliate thereof, (iii) any
Person owning, directly or indirectly, any legal or beneficial interest in
Manager or any Direct Beneficial Owner of any Affiliate thereof, or (iv) any
partner, principal, officer, controlling person, beneficiary, trustee, advisor,
shareholder, employee, agent, nominee, Affiliate or director of any Person
described in clauses (i) through (iii) above shall be personally liable for the
performance of any obligation thereunder or the payment of any amount due
hereunder; provided, however, that the foregoing limitation on the personal
liability of the Persons described in clauses (i) through (iv) above shall not
impair the validity of this Agreement or the right of Lender to enforce any of
its rights or remedies hereunder or under any of the other Loan Documents upon
the occurrence of a Cash Management Event as provided in this Agreement. Nothing
contained herein shall release, impair or otherwise affect any right, remedy or
recourse Lender may have against Manager or Borrower with respect to (a) any
fraud or bad faith or any material and intentional misrepresentation by Manager
or its Affiliates made in connection with the transactions contemplated hereby,
(b) bad
C-2-5
faith waste by Manager, (c) any misapplication of Rents following and during the
continuance of a Cash Management Event, or (d) any misapplication of proceeds of
any insurance policies required to be maintained by Borrower or Manager.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
C-2-6
Schedule 1
Allocated Loan Amounts
DOWNTOWN PLAZA: $85,861,500.00
EASTLAND PLAZA: $41,486,500.00
SOUTH SHORE MALL: $88,432,000.00
Schedule 1 - 1
Schedule 2
Monthly Rollover Deposit
MONTHLY ROLLOVER DEPOSIT
SHALL BE AS SET FORTH IN
SECTION 4.5.1 OF THE
LOAN AGREEMENT
Schedule 2 - 1
Schedule 3
Exceptions To Borrower Representations
NONE
Schedule 3 - 1
Schedule 4
Contracts
EXHIBIT BEGINS ON NEXT PAGE
Schedule 4 - 1
Downtown Plaza
Contracts
SERVICE: PROVIDER: MONTHLY COST: TERM. DATE:
HVAC Linford AirCon $ 3,268 Montly*
Elev. /Escal. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ $ 22,000 Sept. 2000
Fire System Simplex $ 620 Dec. 2000
Janitorial ABM $ 62,000 Monthly**
Security P.S.C. $ 77,181 Jan. 2001
Landscaping Environmental Care $ 6,266 Dec. 2000
Fountains Clear Advantage $ 150 Jan. 2000
Chiller American Chiller $ 1,263 Mar. 2000
Pest Control Cal-X $ 695 Dec. 2000
Trash Removal Waste Management $ 6,400 Monthly ***
* AirCon has a new contract. We are awaiting their signed copies.
** A new, supplies included, contract has been signed by ABM and has
been sent to our r
*** New contract is in progress
Westfield
[ILLEGIBLE]
SERVICE CONTRACT LOG
Center Name: EASTLAND SHOPPING CENTER
1999
====================================================================================================================================
Contract # Contractor Type of Contract Commencement Termination Contract
Date Date Amount
===================================================================================================================================
98-01 Professional Security Consultants Sercurity Services (2nd year) 01/08/1999 03/07/2000 $ 103,524.24
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
99-01 Reliable Lighting Serives Pkg Lot Canopy Lighting Min. 04/01/1999 03/31/2000 $ 2,400.00
------------------------------------------------------------------------------------------------------------------------------------
99-02 SC Property Services Inc. Parking Lot Sweeping 07/01/1999 6/30/2000 $ 40,980.00
------------------------------------------------------------------------------------------------------------------------------------
SC Property Services Inc. Parking Lot Sweeping (2nd yr) 07/01/2000 06/30/2001 $ 41,799.00
------------------------------------------------------------------------------------------------------------------------------------
99-03 Centerscapes, Inc. Landscaping 07/01/1999 6/30/2000 $ 48,200.00
------------------------------------------------------------------------------------------------------------------------------------
Centerscapes, Inc. Landscaping (2nd yr) 07/01/2000 6/30/2001 $ 48,600.00
------------------------------------------------------------------------------------------------------------------------------------
▇▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ & Sidewalk Repair 06/25/1999 07/26/1999 $ 2,000.00
------------------------------------------------------------------------------------------------------------------------------------
99-05 Pacific Powers Asphalt Repair 07/01/1999 07/30/1999 $ 30,000.00
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99-06 Reliable Lighting Coke Machines Electrical 06/10/1999 08/30/1999 $ 4,675.00
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▇▇-▇▇ ▇▇▇▇▇ ▇▇▇. Lot Service Stripping 08/10/1999 08/30/1999 $ 5,000.00
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99-08 Osce Landscape Tree Pruning 09/07/1999 09/30/99 $ 3,500.00
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99-09 Reliable Lighting Underground Electrical Work 10/13/1999 11/31/1999 $ 6,200.00
------------------------------------------------------------------------------------------------------------------------------------
99-10 Reliable Lighting Tower Lights 10/13/1999 01/06/2000 $ 3,700.00
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE]
SERVICE CONTRACT LOG
WESTFILED SHOPPING TOWN
SOUTH SHORE
11/23/1999
------------------------------------------------------------------------------------------------------------------------
Commencement Term
Contract # Contractor Type of Contract Date Date
------------------------------------------------------------------------------------------------------------------------
99-01 Cleaning Systems Management Corp. Cleaning Maintenance 11/23/1998 11/20/2001
------------------------------------------------------------------------------------------------------------------------
99-02 Cleaning Systems Management Corp. Mechanical Maintenance 11/23/1999 11/20/2001
------------------------------------------------------------------------------------------------------------------------
99-11 Team Construction Snow Removal 11/15/1999 04/15/2000
------------------------------------------------------------------------------------------------------------------------
99-12 Team Construction Parking Lot Sweeping 12/01/1999 11/30/2000
------------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Elite Protection [ILLEGIBLE] Corp. Services Security Services 3/31/1997 Month to Month
------------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Chem-Aqua Condenser Water treat 08/07/1999 05/01/2000
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Annual
Contract # Contractor Amount Comments
------------------------------------------------------------------------------------------------------------------------------
99-01 Cleaning Systems Management Corp. $521,754.00
------------------------------------------------------------------------------------------------------------------------------
99-02 Cleaning Systems Management Corp. $131,208.00 Cost + 3% $ based on budget
------------------------------------------------------------------------------------------------------------------------------
99-11 Team Construction $50,000.00 Actual cost based on snowfall, $ based on budget
------------------------------------------------------------------------------------------------------------------------------
99-12 Team Construction $33,000.00
------------------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Elite Protection [ILLEGIBLE] Corp. Services $400,000.00 New contract signed commencing 2/1/99
------------------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Chem-Aqua $ 2,250.00
------------------------------------------------------------------------------------------------------------------------------
Schedule 5
Ownership for Borrower
EXHIBIT BEGINS ON FOLLOWING PAGE
Schedule 5 - 1
SCHEDULE 5 continued
Simplified WEA UPREIT Structure at ▇/▇/▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza
---------------------
WEA
---------------------
| |
1% | | 96.61% LP(1)
GP | |
| | ~~~~~~~~~
| | Investors
| | ~~~~~~~~~
| | |
| | 2.39% |
| | -------------------
| | |
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Limited Partnership
("OP")
========================
|
|
|
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
========================
|
|
~~~~~~~~~~~~~~~~~~~~~~~~
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Legend:
-------------
Corporations:
-------------
=============
Partnership
or LLC
=============
~~~~~~~~~~~~~
Property:
~~~~~~~~~~~~~
(1) Owned by WEA and certain of its wholly owned subsidiaries.
SCHEDULE 5
Simplified WEA UPREIT Structure
Westfield Shoppingtown Eastland
---------------------
WEA
---------------------
| | |
----------------- | |
Westfield America | 1% | 96.68% LP(1)
G.P., Inc. | GP |
----------------- | | ~~~~~~~~~
| | | Investors
| | | ~~~~~~~~~
| | | |
------ | | 2.32% |
| | | -------------------
| | | |
1% | ==============================
GP | Westfield America
| Limited Partnership
| (The OP)
| ==============================
| 99% | | |
| ----------- | |
| | | 100% |
================== | |
Westfield America ================ |
Investor ▇.▇. ▇▇▇▇▇▇▇▇ Manager |
================== LLC |
| ================ |
1% | | |
| | 1% |
| | Managing |
----------------- | Member | 98%
| | |
| | |
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ LLC
============================
|
| 100%
|
~~~~~~~~~~~~~~~~~~~~~~~~
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
~~~~~~~~~~~~~~~~~~~~~~~~
Legend:
-------------
Corporations:
-------------
=============
Partnership
or LLC
=============
~~~~~~~~~~~~~
Property:
~~~~~~~~~~~~~
(1) Owned by WEA and/or certain of its wholly owned subsidiaries.
SCHEDULE 5 Continued
Simplified WEA UPREIT Structure
Westfield Shoppingtown South Shore
---------------------
WEA
---------------------
| | |
----------------- | |
Westfield America | 1% | 96.88% LP(1)
G.P., Inc. | GP |
----------------- | | ~~~~~~~~~
| | | Investors
| | | ~~~~~~~~~
| | | |
------ | | 2.32% |
| | | -------------------
| | | |
1% | ==================================
GP | Westfield America
| Limited Partnership
| (The OP)
| ==================================
| 99% | | | |
| ----------- | | |
| | | 100% | |
================== | | |
Westfield America ================ | |
Investor L.P. South Shore | |
================== Manager LLC | |
| ================ | |
1% | | | |
| | 1% | |
| | Managing | |
----------------- | Member | 98% | 0.1% LP
| | | |
| | | |
============================ |
South Shore Mall |
LLC |
============================ |
| |
| 98.9% LP |
| 1% GP |
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ LP
============================
|
| 100%
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Legend:
-------------
Corporations:
-------------
=============
Partnership
or LLC
=============
~~~~~~~~~~~~~
Property:
~~~~~~~~~~~~~
(1) Owned by WEA and/or certain of its wholly owned subsidiaries.
Schedule 6
Rollover Release Amount Schedule
Schedule 6 - 1
SCHEDULE 6
Collateral Gross Mall Reserve Yearly Total Average PSF release
Property Square footage Rollover amount
Per Year
Eastland 514,000 $0.75 385,500.00 50,382 $7.65
South Shore 285,851 $0.75 214,388.25 24,076 $8.90
Downtown 687,847 $0.75 515,885.25 54,115 $9.53