EXHIBIT 10.11
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JUNE 27, 2003
NORTH TOWER, LLC
(Borrower)
and
COMMONWEALTH LAND TITLE COMPANY
(Trustee)
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
(Lender)
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
Dated: As of June 26, 2003
Location: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇: Los Angeles
State: California
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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TABLE OF CONTENTS
Page
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PART I
GENERAL PROVISIONS
1. Payment of Debt and Incorporation of Covenants, Conditions and Agreements............................... 4
2. Warranty of Title....................................................................................... 4
3. Insurance............................................................................................... 5
4. Casualty................................................................................................ 10
5. Payment of Taxes, Etc................................................................................... 16
6. Tax and Insurance Impound Fund; Deferred Maintenance Escrow Fund;
Outstanding Tenant Allowance Escrow Fund; ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund;
Minimum Occupancy Escrow Fund; Replacement/Leasing Escrow Fund.......................................... 16
7. Alterations............................................................................................. 28
8. Leases and Rents........................................................................................ 29
9. Maintenance and Use of Trust Property................................................................... 31
10. Transfer or Encumbrance of the Trust Property........................................................... 32
11. Representations and Covenants Concerning the Borrower and Trust Property................................ 39
12. Single Purpose Entity/Separateness...................................................................... 46
13. Estoppel Certificates and No Default Affidavits......................................................... 52
14. Controlling Agreement................................................................................... 52
15. Changes in Laws Regarding Taxation...................................................................... 53
16. No Credits on Account of the Debt....................................................................... 53
17. Documentary Stamps...................................................................................... 53
18. Books and Records....................................................................................... 53
19. Performance of Other Agreements......................................................................... 55
20. Further Acts, Etc....................................................................................... 55
21. Recording of Deed of Trust, Etc......................................................................... 55
22. Reporting Requirements.................................................................................. 56
23. Events of Default....................................................................................... 56
24. Late Payment Charge..................................................................................... 58
25. Right To Cure Defaults.................................................................................. 58
26. Additional Remedies..................................................................................... 58
27. Right of Entry.......................................................................................... 61
28. Security Agreement...................................................................................... 62
29. Actions and Proceedings................................................................................. 63
30. Waiver of Setoff and Counterclaim....................................................................... 63
31. Contest of Certain Claims............................................................................... 63
32. Recovery of Sums Required to be Paid.................................................................... 64
33. Marshalling and Other Matters........................................................................... 64
34. Hazardous Substances.................................................................................... 64
35. Asbestos................................................................................................ 65
36. Environmental Monitoring................................................................................ 66
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37. Handicapped Access...................................................................................... 67
38. Indemnification......................................................................................... 67
39. Notices................................................................................................. 68
40. Authority............................................................................................... 69
41. Waiver of Notice........................................................................................ 70
42. Remedies of Borrower.................................................................................... 70
43. Sole Discretion of Lender............................................................................... 70
44. Non-Waiver.............................................................................................. 70
45. No Oral Change.......................................................................................... 71
46. Liability............................................................................................... 71
47. Inapplicable Provisions................................................................................. 71
48. Headings, Etc........................................................................................... 71
49. Duplicate Originals..................................................................................... 71
50. Definitions............................................................................................. 71
51. Homestead............................................................................................... 71
52. Assignments............................................................................................. 71
53. Waiver of Jury Trial.................................................................................... 72
54. Governing Law........................................................................................... 72
55. Trustee's Fees; Substitute Trustee...................................................................... 73
56. Power of Sale........................................................................................... 74
57. Recourse Provisions..................................................................................... 75
58. Cash Management Agreement............................................................................... 77
59. Management of the Trust Property........................................................................ 77
60. Servicer................................................................................................ 78
61. Component Notes......................................................................................... 78
62. Miscellaneous........................................................................................... 79
PART II
STATE SPECIFIC PROVISIONS
63. Principles of Construction.............................................................................. 81
64. Additional Remedies Provisions.......................................................................... 81
65. Deed of Trust Not to Secure Environmental Covenants, Obligations, and
Indemnities or Guaranty Obligations..................................................................... 84
66. Additional Waivers...................................................................................... 84
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INDEX OF DEFINED TERMS
Access Laws .............................................................................................. 66
Additional Monthly Leasing Escrow Deposit ................................................................ 20
Affiliate ................................................................................................ 50
Affiliated Manager ....................................................................................... 32
Asbestos ................................................................................................. 64
Assignment of Leases and Rents ........................................................................... 44
Award.......... .......................................................................................... 10
Best ..................................................................................................... 8
BH Guaranty .............................................................................................. 49
Blanket Insurance Premium Financing Arrangement........................................................... 9
Borrower ................................................................................................. 1
Borrower Parties ......................................................................................... 74
Bottom Dollar Guaranty ................................................................................... 49
Cash Management Agreement ................................................................................ 76
Casualty ................................................................................................. 9
Casualty Consultant ...................................................................................... 13
Casualty Restoration ..................................................................................... 10
Casualty Retainage ....................................................................................... 14
CERCLA ................................................................................................... 63
Code ..................................................................................................... 69
Collateral ............................................................................................... 61
Condemnation ............................................................................................. 10
Condemnation Proceeds .................................................................................... 11
Condemnation Restoration ................................................................................. 10
Control .................................................................................................. 36
Controlled ............................................................................................... 36
Debt ..................................................................................................... 1
Debt Service Coverage Ratio .............................................................................. 54
Deed of Trust ............................................................................................ 1
Deferred Maintenance Fund ................................................................................ 17
Delinquency Date ......................................................................................... 15
Eligible Institution ..................................................................................... 24
Environmental Laws ....................................................................................... 63
Equipment ................................................................................................ 2
ERISA .................................................................................................... 41
Event of Default ......................................................................................... 55
Factory Mutual ........................................................................................... 9
Financing Installment .................................................................................... 9
Funds .................................................................................................... 25
GAAP ..................................................................................................... 22
▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund .................................................................................. 18
▇▇▇▇▇▇ ▇▇▇▇ Reserve Amount ............................................................................... 18
▇▇▇▇▇▇ ▇▇▇▇ Space ........................................................................................ 18
▇▇▇▇▇▇ ▇▇▇▇ TI/LC Obligations ............................................................................ 18
Gross Income from Operations ............................................................................. 22
Guarantor ................................................................................................ 32
Hazardous Substances ..................................................................................... 64
Improvements ............................................................................................. 1
Indebtedness ............................................................................................. 50
Independent Director ..................................................................................... 50
Independent Manager ...................................................................................... 50
Initial Management Agreement ............................................................................. 45
Initial Manager .......................................................................................... 45
Insolvency Opinion ....................................................................................... 51
Insurance Premiums ....................................................................................... 8
Insurance Proceeds ....................................................................................... 11
Insured Casualty ......................................................................................... 10
Intangibles .............................................................................................. 3
Leases ................................................................................................... 3
Leases In Place .......................................................................................... 22
Leasing Deposits ......................................................................................... 20
Leasing Escrow Fund Catch-Up Deposit ..................................................................... 21
Lender ................................................................................................... 1
Lender's Consultant ...................................................................................... 64
Letter of Credit ......................................................................................... 24
Loan Documents ........................................................................................... 4
Loans .................................................................................................... 1
Major Lease .............................................................................................. 30
Management Agreement ..................................................................................... 45
Manager .................................................................................................. 45
Minimum Occupancy Escrow Fund ............................................................................ 19
Minimum Occupancy Space .................................................................................. 19
Minimum Occupancy TI/LC Obligations ...................................................................... 19
Monthly Leasing Escrow Deposit ........................................................................... 20
Monthly Minimum Occupancy Reserve Amount ................................................................. 19
Monthly Replacement Escrow Amount ........................................................................ 20
▇▇▇▇▇'▇ .................................................................................................. 8
Net Operating Income ..................................................................................... 21
Net Proceeds ............................................................................................. 11
Net Proceeds Deficiency .................................................................................. 14
NOI Trigger Event ........................................................................................ 21
Note ..................................................................................................... 1
Note A ................................................................................................... 1
Note B ................................................................................................... 1
Notices .................................................................................................. 67
OP ....................................................................................................... 6
OP Management Agreement .................................................................................. 45
Operating Expenses ....................................................................................... 22
Other Charges ............................................................................................ 15
Outstanding Tenant Allowance Amount ...................................................................... 17
Outstanding Tenant Allowance Escrow Fund ................................................................. 17
Outstanding Tenant Allowance Obligations ................................................................. 17
Permitted Exceptions ..................................................................................... 4
Permitted Institutional Transferee ....................................................................... 36
Permitted Investments .................................................................................... 25,27
Person ................................................................................................... 51
Phase I Report ........................................................................................... 63
Policies ................................................................................................. 8
Policy ................................................................................................... 8
Premises ................................................................................................. 1
Rating Agencies .......................................................................................... 29
RCRA ..................................................................................................... 63
REIT ..................................................................................................... 32
Remedial Work ............................................................................................ 66
Rent Roll ................................................................................................ 44
Rentable Space Percentage ................................................................................ 12
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Rents...................................................................................................... 3
Replacement Deposits....................................................................................... 20
Replacement/Leasing Escrow Fund............................................................................ 20
Required Leases............................................................................................ 12
Restoration................................................................................................ 10
Restricted Party........................................................................................... 32
RFM Guaranty............................................................................................... 49
S&P........................................................................................................ 8
Sale or Pledge............................................................................................. 32
Securitization............................................................................................. 29
Servicer................................................................................................... 77
Servicing Agreement........................................................................................ 77
Significant Casualty....................................................................................... 10
Special Purpose Bankruptcy Remote Entity................................................................... 46
Subordination of Management Agreement...................................................................... 76
Survey..................................................................................................... 45
Taking..................................................................................................... 10
Tax and Insurance Impound Fund............................................................................. 16
Taxes...................................................................................................... 15
Tenant Estoppels........................................................................................... 44
Terrorism Acts............................................................................................. 7
Threshold Amount........................................................................................... 28
Transfer................................................................................................... 32
Trust Property............................................................................................. 1
Trustee.................................................................................................... 1
Uniform Commercial Code.................................................................................... 2
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EXHIBITS
Exhibit A LEGAL DESCRIPTION
Exhibit B RESERVED
Exhibit C REQUIRED REPAIRS
Exhibit D OUTSTANDING TENANT ALLOWANCE OBLIGATIONS
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DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this "DEED OF TRUST"), made as of June 26, 2003,
by NORTH TOWER, LLC, a Delaware limited liability company, having its principal
place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("BORROWER"), to COMMONWEALTH LAND TITLE COMPANY, a California
corporation, the trustee hereunder, having its mailing address at ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("TRUSTEE") for the benefit of
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation ("LENDER"),
having its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H :
To secure the payment of indebtedness (a) in the original
principal sum of Two Hundred Fifty Million and No/100 Dollars ($250,000,000)
lawful money of the United States of America, or so much thereof as may be
advanced pursuant to Note A (as hereinafter defined) and Note B (as hereinafter
defined) to be paid with interest according to (i) a certain Deed of Trust Note
A of even date herewith made by Borrower to Lender in the original principal
amount of up to One Hundred Eighty-Four Million Six Hundred Eighty-Eight
Thousand and No/100 Dollars ($184,688,000) ("NOTE A)" and (ii) a certain Deed of
Trust Note B of even date herewith made by Borrower to Lender in the original
principal amount of Sixty-Five Million Three Hundred Twelve Thousand and No/100
Dollars ($65,312,000) ("NOTE B)"; Note A and Note B, together with all
extensions, renewals or modifications thereof, being hereinafter collectively
called the "NOTE" and the loans evidenced by the Note hereinafter being referred
to as the "LOANS") and all other sums due hereunder, under the other Loan
Documents (hereinafter defined) and under the Note (said indebtedness and
interest due under the Note and all other sums due hereunder under the Note and
the other Loan Documents being hereinafter collectively referred to as the
"DEBT"), Borrower has deeded, mortgaged, given, granted, bargained, transferred,
sold, alienated, enfeoffed, conveyed, confirmed, warranted, pledged, assigned,
and hypothecated and by these presents does hereby deed, mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge, assign and
hypothecate unto Trustee (in trust), with power of sale for the benefit and
security of Lender, the real property described in Exhibit A attached hereto
(the "PREMISES") and the buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter located thereon (the "IMPROVEMENTS"); TOGETHER WITH: all right,
title, interest and estate of Borrower now owned, or hereafter acquired, in and
to the following property, rights, interests and estates (the Premises, the
Improvements, and such property, rights, interests and estates hereinafter
described are collectively referred to herein as the "TRUST PROPERTY"):
GRANTING CLAUSE ONE
All easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses, water
rights and powers, air rights and development rights, all rights to oil, gas,
minerals, coal and other substances of any kind or character, and all estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Premises and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the bed of any
street, road, highway, alley or avenue, opened, vacated or proposed, in front of
or adjoining the Premises, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtsey and rights of
curtsey, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Premises and the Improvements and every
part and parcel thereof, with the appurtenances thereto;
GRANTING CLAUSE TWO
All machinery, furniture, furnishings, equipment, computer
software and hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Premises and the Improvements and all building
equipment, materials and supplies of any nature whatsoever owned by Borrower, or
in which Borrower has or shall have an interest, now or hereafter located upon
the Premises and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation, enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively referred to as the
"EQUIPMENT"), including any leases of any of the foregoing, any deposits
existing at any time in connection with any of the foregoing, and the proceeds
of any sale or transfer of the foregoing, and the right, title and interest of
Borrower in and to any of the Equipment that may be subject to any "security
interests" as defined in the Uniform Commercial Code, as adopted and enacted by
the State or States where any of the Trust Property is located (the "UNIFORM
COMMERCIAL CODE"), superior in lien to the lien of this Deed of Trust;
GRANTING CLAUSE THREE
Awards or payments, including interest thereon, that may
heretofore and hereafter be made with respect to the Premises and the
Improvements, whether from the exercise of the right of eminent domain or
condemnation (including, without limitation, any transfer made in lieu of or in
anticipation of the exercise of said rights), or for a change of grade, or for
any other injury to or decrease in the value of the Premises and Improvements;
GRANTING CLAUSE FOUR
All leases, subleases and other agreements or arrangements
heretofore or hereafter entered into affecting the use, enjoyment or occupancy
of, or the conduct of any activity upon or
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in, the Premises and the Improvements, including any extensions, renewals,
modifications or amendments thereof (the "LEASES") and all rents, rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents
(including, but not limited to, fees from parking passes), royalties (including,
without limitation, all oil and gas or other mineral royalties and bonuses),
income, receivables, receipts, revenues, deposits (including, without
limitation, security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, and other consideration of whatever form
or nature received by or paid to or for the account of or benefit of Borrower or
its agents or employees from any and all sources arising from or attributable to
the Premises and the Improvements (the "RENTS"), together with all proceeds from
the sale or other disposition of the Leases and the right to receive and apply
the Rents to the payment of the Debt;
GRANTING CLAUSE FIVE
All proceeds of and any unearned premiums on any insurance
policies covering the Trust Property, including, without limitation, the right
to receive and apply the proceeds of any insurance, judgments, or settlements
made in lieu thereof, for damage to the Trust Property;
GRANTING CLAUSE SIX
The right, in the name and on behalf of Borrower, to appear in
and defend any action or proceeding brought with respect to the Trust Property
and to commence any action or proceeding to protect the interest of Lender in
the Trust Property;
GRANTING CLAUSE SEVEN
All accounts (together with all deposits or wire transfers
made to accounts and all cash, checks, drafts, certificates, securities,
investment property, financial assets, instruments and other property held
therein from time to time and all proceeds, products, distributions or dividends
or substitutions thereon and thereof), escrows, documents, instruments, chattel
paper, claims, deposits and general intangibles, as the foregoing terms are
defined in the Uniform Commercial Code, and all franchises, trade names,
trademarks, symbols, service marks, books, records, plans, specifications,
designs, drawings, permits, consents, licenses, management agreements, contract
rights (including, without limitation, any contract with any architect or
engineer or with any other provider of goods or services for or in connection
with any construction, repair, or other work upon the Trust Property),
approvals, actions, refunds of real estate taxes and assessments (and any other
governmental impositions related to the Trust Property), and causes of action
that now or hereafter relate to, are derived from or are used in connection with
the Trust Property, or the use, operation, maintenance, occupancy or enjoyment
thereof or the conduct of any business or activities thereon (hereinafter
collectively referred to as the "INTANGIBLES"); and
GRANTING CLAUSE EIGHT
All proceeds, products, offspring, rents and profits from any
of the foregoing, including, without limitation, those from sale, exchange,
transfer, collection, loss, damage, disposition, substitution or replacement of
any of the foregoing.
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TO HAVE AND TO HOLD the above granted and described Trust
Property unto and to the use and benefit of Lender;
IN TRUST WITH POWER OF SALE, to secure the payment to Lender
of the Debt at the time and in the manner provided for in the Note and in this
Deed of Trust;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Borrower shall well and truly pay to Lender the Debt at the
time and in the manner provided in the Note and this Deed of Trust and shall
well and truly abide by and comply with each and every covenant and condition
set forth herein, in the Note and in the other Loan Documents (hereinafter
defined) in a timely manner, these presents and the estate hereby granted shall
cease, terminate and be void;
AND Borrower represents and warrants to and covenants and
agrees with Lender as follows:
PART I
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS,
CONDITIONS AND AGREEMENTS. Borrower shall pay the Debt at the time and in the
manner provided in the Note and in this Deed of Trust. All the covenants,
conditions and agreements contained in (a) the Note and (b) all and any of the
documents including the Note and this Deed of Trust now or hereafter executed by
Borrower and/or others and by or in favor of Lender, which evidences, secures or
guarantees all or any portion of the payments due under the Note or otherwise is
executed and/or delivered in connection with the Note and this Deed of Trust
(the "LOAN DOCUMENTS") are hereby made a part of this Deed of Trust to the same
extent and with the same force as if fully set forth herein.
2. WARRANTY OF TITLE. Borrower warrants that Borrower
has good, marketable and insurable title to the Trust Property and has the full
power, authority and right to execute, deliver and perform its obligations under
this Deed of Trust and to deed, encumber, mortgage, give, grant, bargain, sell,
alienate, enfeoff, convey, confirm, pledge, assign and hypothecate the same and
that Borrower possesses an unencumbered fee estate in the Premises and the
Improvements and that it owns the Trust Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Deed of Trust (the "PERMITTED
EXCEPTIONS"), or that may otherwise be expressly permitted by the Loan
Documents, and that this Deed of Trust is and will remain a valid and
enforceable first lien on and security interest in the Trust Property, subject
only to said exceptions. Borrower shall forever warrant, defend and preserve
such title and the validity and priority of the lien of this Deed of Trust and
shall forever warrant and defend the same to Lender against the claims of all
persons whomsoever.
3. INSURANCE.
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(a) Borrower shall maintain insurance for Borrower and
the Property providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements
and the Equipment, including contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to the greater of (x)
one hundred percent (100%) of the "Full Replacement Cost," which for
purposes of this Deed of Trust shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities
and footings) with a waiver of depreciation and (y) the original
principal amount of the Loans; (B) containing an agreed amount
endorsement with respect to the Improvements and Equipment waiving all
co-insurance provisions; (C) providing for no deductible in excess of
$50,000; and (D) containing an "Ordinance or Law Coverage" or
"Enforcement" endorsement if any of the Improvements or the use of the
Trust Property shall at any time constitute legal non-conforming
structures or uses. In addition, Borrower shall obtain: (x) Flood
Insurance in an amount of not less than $25,000,000 each occurrence;
(y) earthquake insurance in an amount at least equal to one multiplied
by a Probable Maximum Loss of 11% of total replacement value and a
deductible of 5% of the Total Insured Value (which includes annual
rental value) at the Trust Property, and otherwise in form and
substance reasonably satisfactory to Lender; and (z) coastal windstorm
insurance in amounts and in form and substance satisfactory to Lender
in the event the Trust Property is located in any coastal region,
provided that the insurance pursuant to clauses (x), (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i) and rental interruption
insurance under subsection (iii);
(ii) commercial general liability insurance against claims
for personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, such insurance (A) to be on the
so-called "occurrence" form with a combined limit of not less than Two
Million and No/100 Dollars ($2,000,000) in the aggregate and One
Million and No/100 Dollars ($1,000,000) per occurrence; (B) to continue
at not less than the aforesaid limit until required to be changed by
Lender in writing by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and completed
operations on an "if any" basis; (3) independent contractors; (4)
blanket contractual liability for all legal contracts; and (5)
liability that may arise from acts of terrorism;
(iii) rental interruption insurance (A) with loss payable
to Lender (allowing reimbursement to Borrower for reasonable operating
costs during the interruption); (B) covering all risks required to be
covered by the insurance provided for in subsection (i) above; (C)
containing an unlimited period of restoration and extended period of
indemnity endorsement which provides that after the physical loss to
the Improvements and Equipment has been repaired, the continued loss of
rental income will be insured until such rental income either returns
to the same level it was at prior to the loss, or the expiration of
twelve (12) months from the date that the Trust Property is repaired or
replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such
period, provided that the unlimited period of restoration endorsement
may be limited to the length of time
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required with the exercise of due diligence and dispatch to rebuild,
repair or replace the damaged or destroyed property; and (D) in an
amount equal to one hundred percent (100%) of the projected gross
income from the Trust Property for a period of twelve (12) months from
the date that the Property is repaired or replaced and operations are
resumed. The amount of such rental interruption insurance shall be
determined prior to the date hereof and at least once each year
thereafter based on Borrower's reasonable estimate of the gross income
from the Trust Property for the succeeding twelve (12) month period.
Subject to the rights of Lender and subject to the provisions of
paragraph 4(e)(x) below, all proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the
obligations secured by the Loan Documents from time to time due and
payable hereunder and under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations
to pay the obligations secured by the Loan Documents on the respective
dates of payment provided for in the Note and the other Loan Documents
except to the extent such amounts are actually paid out of the proceeds
of such rental interruption insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements,
and only if the property coverage form does not otherwise apply, (A)
owner's contingent or protective liability insurance covering claims
not covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the insurance
provided for in subsection (i) above written in a so-called builder's
risk completed value form (1) on a non-reporting basis, (2) against all
risks insured against pursuant to subsection (i) and (iii) above, (3)
including permission to occupy the Trust Property, and (4) with an
agreed amount endorsement waiving co-insurance provisions;
(v) Worker's Compensation insurance, as required by any
governmental authority or any applicable legal requirements and
Employer's Liability Insurance of not less than One Million and No/100
Dollars ($1,000,000) for each occurrence;
(vi) comprehensive boiler and machinery insurance in an
amount of not less than Fifty Million and No/100 Dollars ($50,000,000)
each occurrence on terms consistent with the commercial property
insurance policy required under subsection (i) and (iii) above;
(vii) umbrella liability insurance in an amount not less
than One Hundred Million and No/100 Dollars ($100,000,000) per
occurrence, on terms consistent with the commercial general liability
insurance policy required under subsection (ii) above, on a portfolio
basis naming the Trust Property and all other properties owned by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and/or his Affiliates as of the date hereof or,
following the transfer of indirect interests in the Borrower to ▇▇▇▇▇▇▇
Properties, L.P., a Maryland limited partnership (the "OP"), then all
other properties owned by the OP and/or its Affiliates; provided, that
such insurance may be provided under a blanket insurance Policy so long
as the coverage required pursuant to this clause is not reduced below
the per occurrence limit set forth in this clause;
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(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence, including umbrella coverage, of Five
Million and No/100 Dollars ($5,000,000);
(ix) if the Property is or becomes a legal
"non-conforming" use, ordinance or law coverage and insurance coverage
to compensate for the cost of demolition or rebuilding of the undamaged
portion of the Trust Property along with any reduced value and the
increased cost of construction in amounts as requested by Lender;
(x) if "certified acts of terrorism", as declared by the
United States Government, are now or hereafter excluded from Borrower's
comprehensive all risk insurance policy or business income coverage,
Borrower shall obtain an endorsement to such policies, or separate
policies, insuring against all such "certified acts of terrorism" (such
acts or events so excluded, "TERRORISM ACTS"), at Borrower's option,
either (A) in an amount not less than Three Hundred Million and No/100
Dollars ($300,000,000) on an aggregate basis covering the Trust
Property and all other properties owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and/or his
Affiliates as of the date hereof or, following the transfer of indirect
interests in the Borrower to the OP, then all other properties owned by
the OP and/or its Affiliates and providing for a deductible not
exceeding $1,000,000.00 or (B) in a total amount not less than Three
Hundred and Fifty Million and No/100 Dollars ($350,000,000) on an
aggregate basis covering the Trust Property and all other properties
owned by the OP and/or its Affiliates as of the date hereof and
providing for a deductible of not in excess of 5% of the full
replacement value of the Trust Property; in either case, the
endorsement or policy shall be (x) in form and substance reasonably
satisfactory to Lender; and (y) non-cancelable (to the extent such
non-cancelable insurance is available in the marketplace) (insurance
meeting such requirements being referred to herein as "FULL COVERAGE");
provided the Borrower shall not be required to spend in excess of Three
Million and No/100 Dollars ($3,000,000.00) per annum for such coverage
and, in the event that Full Coverage is not available at a cost of
$3,000,000 per annum, then Borrower shall purchase insurance covering
Terrorism Acts in an amount equal to the principal balance of the
Loans, but shall not be required to maintain the full amount of such
coverage if such coverage is not available at a cost of $3,000,000 per
annum or less, provided that in the event that $3,000,000 is not
sufficient to purchase such coverage in an amount equal to the
principal balance of the Loans, then Borrower shall obtain the greatest
amount of coverage obtainable at a cost of $3,000,000 per annum;
In the event that the limits of insurance in place covering Terrorism Acts on a
portfolio basis are exhausted by damage to a property other than the Trust
Property, then Borrower shall restore the coverage provided for in clause (x)
above (or any lesser amount of coverage that is available if such coverage is
not available), to the extent such insurance is commercially available; and
(xi) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time
to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to
the Trust Property located in or around the region in which the Trust
Property is located.
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(b) All insurance provided for in paragraph 3 (a) shall
be obtained under valid and enforceable policies (collectively, the "POLICIES"
or in the singular, the "POLICY"), and shall be subject to the reasonable
approval of Lender as to insurance companies, amounts, deductibles, loss payees
and insureds. The Policies (or a "cut-through" endorsement, approved by Lender,
with respect to any such Policy) shall be issued by financially sound and
responsible insurance companies authorized to do business in the State and,
except in the case of flood hazard insurance and earthquake insurance, having
either (i) a claims paying ability rating of "A" or better by Standard and
Poor's Ratings Services ("S&P") and an equivalent rating by ▇▇▇▇▇'▇ Investors
Service, Inc. ("MOODY'S") or (ii) if the Policies are provided through a
syndicate of companies, (A) at least 75% of the coverage and first layer of
coverage shall have a claims paying ability rating of "A, X" or better (and the
equivalent thereof) by A.M. Best's Key Rating Guide ("BEST"), (B) no more than
15% of the Policies shall have a claims paying ability rating of "A, VIII" or
less by Best and (C) no more than 10% of the Policies shall have a claims paying
ability rating of "A-, VII" or less by Best's. The Policies described in
paragraph 3(a) (other than those strictly limited to liability protection) shall
designate Lender as loss payee and Lender shall be an additional named insured,
as its interests may appear. Not less than ten (10) days prior to the expiration
dates of the Policies theretofore furnished to Lender, certificates of insurance
evidencing the Policies accompanied by evidence satisfactory to Lender of
payment of the premiums due thereunder shall be delivered by Borrower to Lender.
(c) Subject to the provisions of paragraph 6 hereof,
Borrower shall pay the premiums for such Policies (the "INSURANCE PREMIUMS") as
the same become due and payable and shall furnish to Lender evidence of the
renewal of each of the Policies with receipts for the payment of the Insurance
Premiums or other evidence of such payment reasonably satisfactory to Lender
(provided, however, that Borrower is not required to furnish such evidence of
payment to Lender in the event that such Insurance Premiums have been paid by
Lender pursuant to paragraph 6 hereof). If Borrower is required to furnish such
evidence and receipts pursuant to the preceding sentence and Borrower does not
furnish such evidence and receipts at least fifteen (15) days prior to the
expiration of any expiring Policy, then Lender may procure, but shall not be
obligated to procure, such insurance and pay the Insurance Premiums therefor,
and Borrower agrees to reimburse Lender for the cost of such Insurance Premiums
promptly on demand. Within thirty (30) Business Days after request by Lender,
Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices of owners of property similar to the Trust
Property located in or around the region in which the Trust Property is located
and as may be available at commercially reasonable rates. Lender acknowledges
that the Policies delivered with respect to the Trust Property as of the date
hereof satisfy the requirements of this paragraph 3. Such approval shall
continue in effect until the expiration or termination of such Policies provided
that there is not a downgrade by S&P, Moody's or Best of any insurer providing
such Policies and, as a result thereof, Borrower fails to satisfy the rating
criteria set forth in paragraph 3(b). Any renewal or replacement of such
Policies, however, shall require Lender's approval as provided above in this
paragraph 3 unless (i) the companies providing such renewal or replacement
Policies are licensed to do business in the state where the Trust Property is
located and have a claims paying ability rating by S&P, Moody's and Best's
Insurance Reports that satisfy the requirements set forth in paragraph 3(b)
above or that, subject to the provisions of paragraph 3(e) below, such rating is
no less than the rating as of the date hereof of the company providing the
insurance approved by
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Lender as of the date hereof, (ii) the coverage provided by such renewal or
replacement Policies is no less than the coverage approved by Lender as of the
date hereof, (iii) such renewal or replacement Policies contain in all material
respects the same terms and conditions as the Policies approved by Lender as of
the date hereof and (iv) Lender has not notified Borrower in accordance with
this paragraph 3 that the requirements for the Policies have changed since the
date hereof.
(d) The insurance coverage required under this paragraph
3 may be effected under one or more blanket Policies covering the Trust Property
and other property and assets not constituting a part of the Trust Property;
provided that any blanket Policy shall specify, except in the case of general
liability insurance, the portion of the total coverage of such blanket Policy
that is allocated exclusively to the Trust Property and shall comply in all
respects with the requirements of this paragraph 3. Lender hereby confirms that
it approves (i) the terms of the existing Property Insurance Sharing. Agreement
among Borrower and certain of its Affiliates, and (ii) that the Insurance
Premiums are financed through one or more finance companies (individually and/or
collectively, the "BLANKET INSURANCE PREMIUM FINANCING ARRANGEMENT" ) to whom
Borrower pays Borrower's allocable share of the annual initial deposit and the
monthly payments due for each blanket Policy to the applicable finance company
(with respect to each blanket Policy, such monthly payment, together with
one-twelfth (l/12th) of the allocable share of the annual initial deposit
necessary to accumulate such allocable share for such Policy at least thirty
(30) days prior to its due date, each, a "FINANCING INSTALLMENT").
(e) Notwithstanding anything to the contrary contained in
this paragraph 3, Lender shall accept an "all-risk" Policy issued by Factory
Mutual Insurance Company ("FACTORY MUTUAL"), so long as (I) Factory Mutual
maintains a general policy rating of "BBB" or better and a financial class of
"XIV" or better by Best and a claims paying ability rating of "A+" or better by
Fitch, and (II) in connection with any Securitization, Lender confirms that, in
Lender's reasonable determination based on information provided by any Rating
Agency, the ratings assigned to the portion of the Securitization represented by
the Loans will not be adversely affected as a result of such "all-risk" Policy
being issued by Factory Mutual. In the event that both of the conditions set
forth in clause (I) and (II) above are not being met at all times, then Borrower
shall at all times, at its sole cost and expense, maintain an "all risk" policy
that is otherwise in compliance with all of the applicable provisions of this
paragraph 3 and applicable Rating Agency requirements; provided that Borrower
shall have thirty (30) days (or such shorter period if the existing policies
would lapse prior to the end of such 30-day period) after the earlier of (A) the
failure of the condition in clause (I) above or (B) the date Lender notifies
Borrower of Lender's confirmation pursuant to clause (II) above to obtain an
"all risk" Policy meeting such applicable provisions and requirements (which may
be obtained through the issuance of a so-called "cut-through" endorsement).
4. CASUALTY.
(a) If the Trust Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (a "CASUALTY"), Borrower shall
give prompt notice thereof to Lender. Following the occurrence of a Casualty,
Borrower, regardless of whether insurance proceeds are available, shall promptly
proceed to restore, repair, replace or rebuild the same to be of at least
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equal value and of substantially the same character as prior to such damage or
destruction (a "CASUALTY RESTORATION"), all to be effected in accordance with
applicable law.
(b) If a Casualty covered by any of the Policies (an
"INSURED CASUALTY") occurs where the loss does not exceed $2,500,000, provided
no Default or Event of Default has occurred and is continuing, Borrower may
settle and adjust any claim without the prior consent of Lender; provided such
adjustment is carried out in a competent and timely manner, and Borrower is
hereby authorized to collect and receipt for the Insurance Proceeds (as
hereinafter defined). In the event of an Insured Casualty where the loss exceeds
$2,500,000 (a "SIGNIFICANT CASUALTY"), Lender may, in its sole discretion,
settle and adjust any claim without the consent of Borrower and agree with the
insurer(s) in a commercially reasonable manner on the amount to be paid on the
loss, and the Proceeds shall be due and payable solely to Lender and held by
Lender in the Casualty/Condemnation Subaccount and disbursed in accordance
herewith. If Borrower or any party other than Lender is a payee on any check
representing Proceeds with respect to a Significant Casualty, Borrower shall
immediately endorse, and cause all such third parties to endorse, such check
payable to the order of Lender. Borrower hereby irrevocably appoints Lender as
its attorney-in-fact, coupled with an interest, to endorse such check payable to
the order of Lender. The expenses incurred by Lender in the settlement,
adjustment and collection of the Proceeds shall become part of the Debt and
shall be reimbursed by Borrower to Lender upon demand. Notwithstanding anything
to the contrary contained herein, if in connection with a Casualty any insurance
carrier makes a payment under a property insurance Policy that Borrower proposes
be treated as business or rental interruption insurance, then, notwithstanding
any designation (or lack of designation) by the insurance carrier as to the
purpose of such payment, as between Lender and Borrower, such payment shall not
be treated as business or rental interruption insurance proceeds unless Borrower
has demonstrated to Lender's reasonable satisfaction that the remaining net
Proceeds that will be received from the property insurance carriers are
sufficient to pay 100% of the cost of fully restoring the Improvements or, if
such net Proceeds are to be applied to repay the Debt in accordance with the
terms hereof, that such remaining net Proceeds, together with any portion of the
amount treated as business or rental interruption insurance that will be paid to
Lender, will be sufficient to pay the Debt in full.
(c) Borrower shall promptly give Lender written notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding (a "CONDEMNATION") and shall deliver to Lender copies of any and all
papers served in connection with such Condemnation. Following the occurrence of
a Condemnation, Borrower, regardless of whether an Award (hereinafter defined)
is available, shall promptly proceed to restore, repair, replace or rebuild the
same to the extent practicable to be of at least equal value and of
substantially the same character as prior to such Condemnation (a "CONDEMNATION
RESTORATION", together with a Casualty Restoration, collectively a
"RESTORATION"), all to be effected in accordance with applicable law.
(d) Lender is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment ("AWARD") for any taking accomplished
through a Condemnation (a "TAKING") and to make any commercially reasonable
compromise or settlement in connection with any such Condemnation, subject to
the provisions of this Deed of Trust. Notwithstanding the foregoing, Borrower
shall have the right, provided no Default or Event of Default has occurred and
is
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continuing, to compromise and collect or receive any award that does not exceed
$2,500,000. Notwithstanding any Taking by any public or quasi-public authority
(including, without limitation, any transfer made in lieu of or in anticipation
of such a Taking), Borrower shall continue to pay the Debt at the time and in
the manner provided for in the Note, in this Deed of Trust and the other Loan
Documents and the Debt shall not be reduced unless and until any Award shall
have been actually received and applied by Lender to expenses of collecting the
Award and to discharge of the Debt. Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled to receive
out of the Award interest at the rate or rates provided in the Note. Borrower
shall cause any Award that is payable to Borrower to be paid directly to Lender.
The expenses incurred by Lender in the adjustment and collection of the Award
shall become part of the Debt and be secured hereby and shall be reimbursed by
Borrower to Lender upon demand.
(e) RESTORATION. The following provisions shall apply in
connection with the Restoration of the Premises and Improvements:
(i) If the Net Proceeds (hereinafter defined) shall be
less than Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000) and the costs of completing the Restoration shall be less
than Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000),
the Net Proceeds will be disbursed by Lender to Borrower upon receipt,
provided that all of the conditions set forth in paragraph 4(e)(iii)(A)
are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Deed of
Trust.
(ii) If the Net Proceeds are equal to or greater than Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000) or the
costs of completing the Restoration is equal to or greater than Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000) Lender
shall make the Net Proceeds available for the Restoration in accordance
with the provisions of this paragraph 4. The term "NET PROCEEDS" for
purposes of this paragraph 4 shall mean: (A) the net amount of all
insurance proceeds received by Lender pursuant to paragraph 3(a)(i),
(iv), (vi), (ix) and (x) (and any similar or comparable types of
insurance obtained pursuant to paragraph 3(a)(xi)) as a result of such
damage or destruction, after deduction of its reasonable costs and
expenses (including, but not limited to, reasonable counsel fees), if
any, in collecting same ("INSURANCE PROCEEDS"), or (B) the net amount
of the Award, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any,
actually incurred in collecting same ("CONDEMNATION PROCEEDS"),
whichever the case may be.
(iii) The Net Proceeds shall be made available to Borrower
for Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and
be continuing;
(B) (1) in the event the Net Proceeds are
Insurance Proceeds, less than thirty percent (30%) of the
total floor area of the Improvements has been
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damaged, destroyed or rendered unusable as a result of such
fire or other casualty or (2) in the event the Net Proceeds
are Condemnation Proceeds, less than fifteen percent (15%) of
the land constituting the Premises is taken, and such land is
located along the perimeter or periphery of the Premises, and
no portion of the Improvements is located in such land;
(C) The Required Leases (hereinafter defined)
and Leases demising in the aggregate a percentage amount equal
to or greater than the Rentable Space Percentage (hereinafter
defined) of the total rentable space in the Improvements shall
remain in full force and effect during and after the
completion of the Restoration, notwithstanding the occurrence
of any such fire or other casualty or taking, whichever the
case may be, and will require the tenants thereunder to make
all necessary repairs and restorations thereto at their sole
cost and expense. The term (x) "RENTABLE SPACE PERCENTAGE"
shall mean (1) in the event the Net Proceeds are Insurance
Proceeds, a percentage amount equal to seventy-five percent
(75%) and (2) in the event the Net Proceeds are Condemnation
Proceeds, a percentage amount equal to seventy-five percent
(75%) which Rentable Space Percentage shall, in each case,
include each of the Required Leases. For purposes of the
foregoing, the "REQUIRED LEASES" shall mean, collectively, the
Leases with ▇▇▇▇▇ Fargo Bank, National Association, ▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Oaktree Capital or any replacement
Lease executed and delivered in accordance with the terms and
provisions of paragraph 8 hereof with respect to the space
demised to any of the foregoing tenants, provided such
replacement Lease demises not less than 50,000 square feet;
(D) Borrower shall commence the Restoration as
soon as reasonably practicable (but in no event later than
ninety (90) days after such damage or destruction or taking,
whichever the case may be, occurs) and shall diligently pursue
the same to satisfactory completion;
(E) Lender shall be reasonably satisfied that
any operating deficits, including all scheduled payments of
principal and interest under the Note, which will be incurred
with respect to the Trust Property as a result of the
occurrence of any such fire or other casualty or taking,
whichever the case may be, will be covered out of (1) the Net
Proceeds, (2) the insurance coverage referred to in paragraph
3(a)(iii), if applicable, or (3) by other funds of Borrower;
(F) Lender shall be satisfied that the
Restoration will be completed on or before the earliest to
occur of (1) six (6) months prior to the Maturity Date, (2)
the earliest date required for such completion under the terms
of any Required Lease, (3) such time as may be required under
applicable zoning law, ordinance, rule or regulation in order
to repair and restore the Property to the condition it was in
immediately prior to such fire or other casualty or to as
nearly as possible the condition it was in immediately prior
to such taking, as applicable or (4) the expiration of the
insurance coverage referred to in paragraph 3(a)(iii);
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(G) the Trust Property and the use thereof after
the Restoration will be in compliance with and permitted under
all applicable zoning laws, ordinances, rules and regulations
and all necessary operating or reciprocal easement agreements
for the operation and maintenance of the Property are, or
remain, in effect;
(H) the Restoration shall be done and completed
by Borrower in an expeditious and diligent fashion and in
compliance with all applicable governmental laws, rules and
regulations (including, without limitation, all applicable
environmental laws); and
(I) such fire or other casualty or taking, as
applicable, does not result in a material loss of access to
the Trust Property.
(iv) Unless such amounts are payable to Borrower pursuant
to this paragraph 4, the Net Proceeds shall be held by Lender in an
interest-bearing account for the benefit of Borrower (which interest
shall be added to and become a part of the Net Proceeds) and, until
disbursed in accordance with the provisions of this paragraph 4, shall
constitute additional security for the Debt and other obligations under
the Loan Documents. The Net Proceeds shall be disbursed by Lender to,
or as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence reasonably satisfactory to Lender
that (A) all materials installed and work and labor performed (except
to the extent that they are to be paid for out of the requested
disbursement) in connection with the Restoration have been paid for in
full, and (B) there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to file same,
or any other liens or encumbrances of any nature whatsoever on the
Trust Property arising out of the Restoration which have not either
been fully bonded to the satisfaction of Lender and discharged of
record or in the alternative fully insured to the reasonable
satisfaction of Lender by the title company issuing the title insurance
policy.
(v) All plans and specifications required in connection
with any Restoration following a Casualty or Condemnation resulting in
Net Proceeds of $2,500,000 or more shall be subject to prior review and
reasonable acceptance in all respects by Lender and by an independent
consulting engineer selected by Lender (the "CASUALTY CONSULTANT")
provided that if the correspondence from Borrower to Lender requesting
approval of any such plans and specifications (or contractors,
subcontractors or materialmen in connection therewith) contains a bold
faced, conspicuous legend at the top of the first page stating that "IF
YOU FAIL TO RESPOND TO THIS REQUEST FOR APPROVAL IN WRITING WITHIN 15
BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN", and if Lender
fails to respond to such request for approval in writing within fifteen
(15) Business Days after receipt by Lender of such written request, the
related plans and specifications and all information reasonably
required in order to adequately review the same, then such approval
will be deemed given. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or
obtained in connection with the Restoration. The identity of the
contractors, subcontractors and materialmen engaged in any Restoration
following a Casualty or Condemnation resulting in Net Proceeds of
$2,500,000 or more, as well as the contracts
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under which they have been engaged, shall be subject to prior review
and acceptance by Lender and the Casualty Consultant, which acceptance
shall not be unreasonably withheld, conditioned or delayed. All costs
and expenses incurred by Lender in connection with making the Net
Proceeds available for the Restoration including, without limitation,
reasonable counsel fees and disbursements and the Casualty Consultant's
fees, shall be paid by Borrower.
(vi) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the
costs actually incurred from time to time for work in place as part of
the Restoration, as certified by the Casualty Consultant, minus the
Casualty Retainage. The term "CASUALTY RETAINAGE" shall mean an amount
equal to ten percent (10%) of the hard costs actually incurred for work
in place as part of the Restoration, as certified by the Casualty
Consultant, until the Restoration has been completed. The Casualty
Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this paragraph 4(e), be less than the
amount actually held back by Borrower from contractors, subcontractors
and materialmen engaged in the Restoration. The Casualty Retainage
shall not be released until the Casualty Consultant certifies to Lender
that the Restoration has been completed in accordance with the
provisions of this paragraph 4(e) and that all approvals necessary for
the re-occupancy and use of the Property have been obtained from all
appropriate governmental and quasi-governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the
Casualty Retainage; provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as
of the date upon which the Casualty Consultant certifies to Lender that
the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with
the provisions of the contractor's, subcontractor's or materialman's
contract, the contractor, subcontractor or materialman delivers the
lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested
by Lender or by the title company issuing the title insurance policy,
and Lender receives an endorsement to the title insurance policy
insuring the continued priority of the lien of the this Deed of Trust
and evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty
Retainage shall be approved by the surety company, if any, which has
issued a payment or performance bond with respect to the contractor,
subcontractor or materialman.
(vii) Lender shall not be obligated to make disbursements
of the Net Proceeds more frequently than once every calendar month.
(viii) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the reasonable opinion of Lender in
consultation with the Casualty Consultant, be sufficient to pay in full
the balance of the costs which are estimated by the Casualty Consultant
to be incurred in connection with the completion of the Restoration,
Borrower shall deposit the deficiency (the "Net PROCEEDS DEFICIENCY")
with Lender before any further disbursement of the Net Proceeds shall
be made. The Net Proceeds Deficiency deposited with Lender shall be
held by Lender and shall be disbursed for costs actually
-14-
incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until so
disbursed pursuant to this paragraph 4(e) shall constitute additional
security for the Debt and other obligations under the Loan Documents.
(ix) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited
with Lender after the Casualty Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of
this paragraph 4(e), and the receipt by Lender of evidence satisfactory
to Lender that all costs incurred in connection with the Restoration
have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be
continuing under the Note, this Deed of Trust or any of the other Loan
Documents.
(x) Notwithstanding the last sentence of paragraph
3(a)(iii) and provided no Event of Default exists hereunder, proceeds
received by Lender on account of the rental or business interruption
insurance specified in paragraph 3(a)(iii) above with respect to any
Casualty shall be deposited by Lender directly into the Cash Collateral
Account (as defined in the Cash Management Agreement) and allocated as
Rents in accordance with paragraph 10(a)(i) through (xi) of the Note
but (a) only to the extent it reflects a replacement for (i) lost Rents
that would have been due under Leases existing on the date of such
Casualty, and/or (ii) lost Rents under Leases that had not yet been
executed and delivered at the time of such Casualty which Borrower has
proven to the insurer under the related Policy would have been due
under such Leases (and then only to the extent such proceeds disbursed
by such insurer reflect a replacement for such past due Rents) and (b)
only to the extent necessary to fully make the disbursements required
by paragraph 10(a)(i) through (xi) of the Note. All other such proceeds
shall be held by Lender and disbursed in accordance with this paragraph
4(e).
(f) All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to paragraph 4(e)(ix) may be retained and applied by Lender
toward the payment of the Debt whether or not then due and payable in such
order, priority and proportions as Lender in its sole discretion shall deem
proper, or, at the discretion of Lender, the same may be paid, either in whole
or in part, to Borrower for such purposes as Lender shall designate, in its
discretion. So long as no Event of Default has occurred and is continuing, any
application of Net Proceeds to the Debt shall not require any payment of the
Yield Maintenance Premium or any other premium or penalty.
5. PAYMENT OF TAXES, ETC. Subject to the provisions of
paragraph 6 hereof, Borrower shall pay all taxes, assessments, water rates and
sewer rents, now or hereafter levied or assessed or imposed against the Trust
Property or any part thereof (the "TAXES") on or before the last date prior to
which any interest, late fees or penalties would begin to accrue (the
"DELINQUENCY DATE") and all ground rents, maintenance charges, other
impositions, and other charges, including, without limitation, vault charges and
license fees for the use of vaults, chutes and similar areas adjoining the
Premises, now or hereafter levied or assessed or imposed against the Trust
Property or any part thereof (the "OTHER CHARGES") as the same become due and
payable. Borrower will deliver to Lender receipts for payment or other evidence
satisfactory to
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Lender that the Taxes and Other Charges have been so paid or are not then
delinquent no later than the date on which the Taxes and/or Other Charges would
otherwise be delinquent if not paid; provided, however, Borrower shall not be
required to deliver to Lender such evidence of payment with respect to any Taxes
or Other Charges that are paid by Lender pursuant to paragraph 6 hereof.
Borrower shall not suffer and shall promptly cause to be paid and discharged any
lien or charge whatsoever which may be or become a lien or charge against the
Trust Property, and shall promptly pay for all utility services provided to the
Trust Property.
6. TAX AND INSURANCE IMPOUND FUND: DEFERRED MAINTENANCE
ESCROW FUND: OUTSTANDING TENANT ALLOWANCE ESCROW FUND: ▇▇▇▇▇▇ ▇▇▇▇ ESCROW FUND;
MINIMUM OCCUPANCY ESCROW FUND; REPLACEMENT/LEASING ESCROW FUND.
(a) Borrower shall pay to Lender (i) (A) with respect to
Taxes that are required to be paid prior to December 10, 2003 (which date is the
last date prior to which any interest, late fees or penalties would commence
accruing with respect to Taxes due and payable on November 1, 2003), on the date
hereof an amount equal to $1,187,817 and on each Payment Date (as defined in the
Note) up to and including the Payment Date occurring in November, 2003, an
amount equal to $296,954 and (B) on each Payment Date from and after the Payment
Date occurring in December, 2003, one-twelfth of the Taxes that Lender estimates
will be payable during the next ensuing twelve (12) months in order to
accumulate with Lender sufficient funds to pay all such Taxes at least thirty
(30) days prior to their Delinquency Date, and (ii) (A) on the date hereof, an
amount equal to $168,460 and (B) (1) for so long as the applicable Blanket
Insurance Premium Financing Arrangement remains in full force and effect, on
each Payment Date (as defined in the Note) the Financing Installment for the
next occurring payment under the applicable Blanket Insurance Premium Financing
Arrangement and/or (2) with respect to any Insurance Premiums not covered by a
Blanket Insurance Premium Financing Arrangement, on each Payment Date (as
defined in the Note) one-twelfth of the Insurance Premiums that Lender estimates
will be payable for the renewal of the coverage afforded by the Policies upon
the expiration thereof in order to accumulate with Lender sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in (i) and (ii) above hereinafter
called the "TAX AND INSURANCE IMPOUND FUND"). Lender will apply the Tax and
Insurance Impound Fund to payments of Taxes and Insurance Premiums required to
be made by Borrower pursuant to paragraphs 3 and 5 hereof and/or to payments due
to the applicable finance company under the applicable Blanket Insurance Premium
Financing Arrangement, as applicable. In making any payment relating to the Tax
and Insurance Impound Fund, Lender may do so according to any ▇▇▇▇, statement or
estimate procured from the appropriate public office (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such ▇▇▇▇, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax and Insurance Impound Fund shall exceed the amounts due for Taxes and
Insurance Premiums pursuant to paragraphs 3 and 5 hereof, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Impound Fund. In allocating
such excess, Lender may deal with the person shown on the records of Lender to
be the owner of the Trust Property. If at any time Lender determines that the
Tax and Insurance Impound Fund is not or will not be sufficient to pay the items
set forth in (i) and (ii) above, Lender shall notify Borrower of such
determination
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and Borrower shall increase its monthly payments to Lender by the amount that
Lender estimates is sufficient to make up the deficiency at least thirty (30)
days prior to delinquency of the Taxes and/or expiration of the Policies, as the
case may be. Until expended or applied as above provided, any amounts in the Tax
and Insurance Impound Fund shall constitute additional security for the Debt.
The Tax and Insurance Impound Fund shall not constitute a trust fund and may be
commingled with other monies held by Lender. The Tax and Insurance Impound Fund
shall be held in an interest bearing account in Lender's name at a financial
institution selected by Lender in its sole discretion. All earnings or interest
on the Tax and Insurance Impound Fund shall become part of the Tax and Insurance
Impound Fund and shall be disbursed in accordance with this paragraph 6(a). If
Lender so elects at any time, Borrower shall provide, at Borrower's expense, a
tax service contract for the Term issued by a tax reporting agency acceptable to
Lender. If Lender does not so elect, Borrower shall reimburse Lender for the
cost of making annual tax searches throughout the Term.
(b) Borrower shall pay to Lender on the date hereof the
sum of Fifty-Nine Thousand Two Hundred Seventy-Two and 00/100 Dollars ($59,272)
which shall be deposited with and held by Lender for repairs required to be made
to the Trust Property on or prior to the date that is six (6) months from the
date hereof, as such repairs are more particularly described on Exhibit C
attached hereto ("DEFERRED MAINTENANCE FUND"). Lender shall make disbursements
from the Deferred Maintenance Fund as requested by Borrower, and approved by
Lender in its sole discretion, no more frequently than once in any thirty (30)
day period of no less than $1,000.00 upon delivery by Borrower of Lender's
standard form of draw request accompanied by copies of invoices for the amounts
requested and, if required by Lender for requests in excess of $50,000.00 for a
single item, conditional lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender may
issue joint checks payable to Borrower and the contractor or other person to
whom payment is due with respect to any requested payment. Lender may require an
inspection of the Trust Property at Borrower's expense prior to making a monthly
disbursement in order to verify completion of repairs of items in excess of
$50,000.00 for which reimbursement or payment is sought. The Deferred
Maintenance Fund shall be held in an interest bearing account in Lender's name
at a financial institution selected by Lender in its sole discretion. All
earnings or interest on the Deferred Maintenance Fund shall be and become part
of such Deferred Maintenance Fund and shall be disbursed as provided in this
paragraph 6(b) Upon completion of the work set forth in Exhibit C attached
hereto, provided no Event of Default is then continuing, Lender shall disburse
to Borrower any and all funds remaining on deposit in the Deferred Maintenance
Fund. Until expended, applied or released as above provided, the Deferred
Maintenance Fund shall constitute additional security for the Debt. The Deferred
Maintenance Fund shall not constitute a trust fund and may be commingled with
other monies held by Lender.
(c) Subject to the provisions of paragraph 6(g) below,
Borrower shall pay to Lender on the date hereof an amount equal to $1,531,445
(the "OUTSTANDING TENANT ALLOWANCE AMOUNT") which shall be deposited with and
held by Lender for the tenant improvement and leasing commission obligations of
Borrower (the "OUTSTANDING TENANT ALLOWANCE OBLIGATIONS") outstanding on the
date hereof (as more particularly set forth on Exhibit D attached hereto) with
respect to all space at the Trust Property other than the ▇▇▇▇▇▇ ▇▇▇▇ Space (the
"OUTSTANDING TENANT ALLOWANCE ESCROW FUND"). Lender shall make disbursements
from the Outstanding Tenant Allowance Escrow Fund for any Outstanding Tenant
Allowance
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Obligations incurred by Borrower. Lender shall make disbursements as requested
by Borrower on a monthly basis in increments of no less than $1,000.00 upon
delivery by Borrower of Lender's standard form of draw request accompanied by
copies of invoices for the amounts requested for such Outstanding Tenant
Allowance Obligations and, if required by Lender, for requests in excess of
$550,000 (multiple payments made with respect to one tenant or contractor or
other person shall be aggregated for such $550,000 limit), conditional lien
waivers and releases from all parties furnishing materials and/or services in
connection with the requested payment. Lender may issue joint checks payable to
Borrower and the contractor or other person to whom payment is due with respect
to any requested payment. Lender may require an inspection of the Trust Property
at Borrower's expense prior to making a monthly disbursement in order to verify
completion of improvements for which reimbursement or payment is sought which
costs in the aggregate in excess of $550,000. The Outstanding Tenant Allowance
Escrow Fund shall be held in an interest bearing account in Lender's name at a
financial institution selected by Lender in its sole discretion. All earnings or
interest on the Outstanding Tenant Allowance Escrow Fund shall be and become
part of such Outstanding Tenant Allowance Escrow Fund and shall be disbursed as
provided in this paragraph 6(c). Upon payment in full of all Outstanding Tenant
Allowance Obligations, provided no Event of Default is then continuing, Lender
shall disburse to Borrower any and all funds remaining on deposit in the
Outstanding Tenant Allowance Escrow Fund. Until expended, applied or released as
above provided, the Outstanding Tenant Allowance Escrow Fund shall constitute
additional security for the Debt. The Outstanding Tenant Allowance Escrow Fund
shall not constitute a trust fund and may be commingled with other monies held
by Lender.
(d) Subject to the provisions of paragraph 6(g) below,
Borrower shall pay to Lender on the date hereof an amount equal to $15,827,393
(the "▇▇▇▇▇▇ ▇▇▇▇ RESERVE AMOUNT") which shall be deposited with and held by
Lender for the tenant improvement and leasing commission obligations of Borrower
(the "▇▇▇▇▇▇ ▇▇▇▇ TI/LC OBLIGATIONS") outstanding on the date hereof with
respect to the ▇▇▇▇▇▇ ▇▇▇▇ Space (the "▇▇▇▇▇▇ ▇▇▇▇ ESCROW FUND"). For purposes
hereof, "▇▇▇▇▇▇ ▇▇▇▇ SPACE" shall mean that certain space located at the Trust
Property consisting of approximately 268,268 rentable square feet located on
floors 44-53, inclusive, of the Improvements and demised under that certain
Office Lease between Borrower (or its predecessor-in-interest) and ▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP (or its predecessor-in-interest), dated May 22, 1980, as amended
by Amendment to Lease dated August 1, 1981, Amendment to Office Lease dated
November 30, 1984, Second Amendment to Lease and Agreement Re Fifteenth Floor
Additional Space dated April 1, 1988, Third Amendment to Lease and Agreement Re
Fifteenth Floor Additional Space dated June 16, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to Lease
and Agreement re: 38th and 39th Floor Additional Space dated August 1, 1989,
Fifth Amendment to Office Lease dated June 19, 2001, Sixth Amendment to Office
Lease dated as of August 26, 2002 and Seventh Amendment to Office Lease dated
April 18, 2003. Lender shall make disbursements from the ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund
for any ▇▇▇▇▇▇ ▇▇▇▇ TI/LC Obligations incurred by Borrower. Lender shall make
disbursements as requested by Borrower on a monthly basis in increments of no
less than $1,000.00 upon delivery by Borrower of Lender's standard form of draw
request accompanied by copies of invoices for the amounts requested for such
▇▇▇▇▇▇ ▇▇▇▇ TI/LC Obligations and, if required by Lender, for requests in excess
of $50,000 (multiple payments made with respect to one tenant or contractor or
other person shall be aggregated for such $50,000 limit), conditional lien
waivers and releases from all parties furnishing materials and/or services in
connection with the requested payment. Lender
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may issue joint checks payable to Borrower and the contractor or other person to
whom payment is due with respect to any requested payment. Lender may require an
inspection of the Trust Property at Borrower's expense prior to making a monthly
disbursement in order to verify completion of improvements for which
reimbursement or payment is sought which costs in the aggregate in excess of
$50,000. The ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund shall be held in an interest bearing
account in Lender's name at a financial institution selected by Lender in its
sole discretion. All earnings or interest on the ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund shall
be and become part of such ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund and shall be disbursed as
provided in this paragraph 6(d). Upon payment in full of all ▇▇▇▇▇▇ ▇▇▇▇ TI/LC
Obligations, provided no Event of Default is then continuing, Lender shall
disburse to Borrower any and all funds remaining on deposit in the ▇▇▇▇▇▇ ▇▇▇▇
Escrow Fund. Until expended, applied or released as above provided, the ▇▇▇▇▇▇
▇▇▇▇ Escrow Fund shall constitute additional security for the Debt. The ▇▇▇▇▇▇
▇▇▇▇ Escrow Fund shall not constitute a trust fund and may be commingled with
other monies held by Lender.
(e) Subject to the provisions of paragraph 6(g) below,
Borrower shall pay to Lender on each Payment Date from and including August 1,
2003 up to and including July 1, 2006, the sum of $101,705 (the "MONTHLY MINIMUM
OCCUPANCY RESERVE AMOUNT") which shall be deposited with and held by Lender for
the tenant improvement and leasing commission obligations of Borrower (the
"MINIMUM OCCUPANCY TI/LC OBLIGATIONS") with respect to that portion of the
currently vacant space at the Trust Property (the "MINIMUM OCCUPANCY SPACE")
that, if leased, would cause the occupancy level of the Trust Property to equal
or exceed ninety-two percent (92%) (the "MINIMUM OCCUPANCY ESCROW FUND"). Lender
shall make disbursements from the Minimum Occupancy Escrow Fund for any Minimum
Occupancy TI/LC Obligations incurred by Borrower. Lender shall make
disbursements as requested by Borrower on a monthly basis in increments of no
less than $1,000.00 upon delivery by Borrower of Lender's standard form of draw
request accompanied by copies of invoices for the amounts requested for such
Minimum Occupancy TI/LC Obligations and, if required by Lender, for requests in
excess of $50,000 (multiple payments made with respect to one tenant or
contractor or other person shall be aggregated for such $50,000 limit),
conditional lien waivers and releases from all parties furnishing materials
and/or services in connection with the requested payment. Lender may issue joint
checks payable to Borrower and the contractor or other person to whom payment is
due with respect to any requested payment. Lender may require an inspection of
the Trust Property at Borrower's expense prior to making a monthly disbursement
in order to verify completion of improvements for which reimbursement or payment
is sought which costs in the aggregate in excess of $50,000. The Minimum
Occupancy Escrow Fund shall be held in an interest bearing account in Lender's
name at a financial institution selected by Lender in its sole discretion. All
earnings or interest on the Minimum Occupancy Escrow Fund shall be and become
part of such Minimum Occupancy Escrow Fund and shall be disbursed as provided in
this paragraph 6(e). Upon payment in full of all Minimum Occupancy TI/LC
Obligations, provided no Event of Default is then continuing, Lender shall
disburse to Borrower any and all funds remaining on deposit in the Minimum
Occupancy Escrow Fund. Until expended, applied or released as above provided,
the Minimum Occupancy Escrow Fund shall constitute additional security for the
Debt. The Minimum Occupancy Escrow Fund shall not constitute a trust fund and
may be commingled with other monies held by Lender.
(f) (i) Subject to the provisions of paragraph 6(g)
below, Borrower shall pay to Lender (A) on each Payment Date the sum of $28,162
(the "MONTHLY REPLACEMENT ESCROW
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AMOUNT") which shall be deposited with and held by Lender for capital
improvements, replacements and repairs required to be made to the Trust Property
during the calendar year and for any other work approved by Lender and (B) on
each Payment Date the sum of $244,803.58 (the "MONTHLY LEASING ESCROW DEPOSIT"),
which shall be deposited with and held by Lender for tenant improvement and
leasing commission obligations incurred following the date hereof. In addition
to the Monthly Replacement Escrow Amount and the Monthly Leasing Escrow Deposit,
Borrower shall deposit the following amounts into the Replacement/Leasing Escrow
Fund (as hereinafter defined): (1) on each Payment Date from and including
October 1, 2004 up to and including September 1, 2005, all Excess Cash Flow (as
defined in the Note), but only until such time as there has been deposited in
the Replacement/Leasing Escrow Fund an additional amount of $522,320 for such
period from and after October 1, 2004; (2) on each Payment Date from and
including October 1, 2005 up to and including September 1, 2006, all Excess Cash
Flow (as defined in the Note), but only until such time as there has been
deposited in the Replacement/Leasing Escrow Fund an additional amount of
$522,320 for such period from and after October 1, 2005, and (3) on each Payment
Date from and including January 1, 2009, all Excess Cash Flow (as defined in the
Note), until such time as there has been deposited in the Replacement/Leasing
Escrow Fund an additional amount of $3,000,000 for such period from and after
January 1, 2009 (each of the deposits made pursuant to clauses (1), (2) and (3)
above are hereinafter referred to as the "ADDITIONAL MONTHLY LEASING ESCROW
DEPOSIT"; each of the Monthly Replacement Escrow Amounts, each of the Monthly
Leasing Escrow Deposits and each of the Additional Monthly Leasing Escrow
Deposits are collectively hereinafter referred to as the "REPLACEMENT/LEASING
ESCROW FUND"). The amounts on deposit in the Replacement/Leasing Escrow Fund
consisting of Monthly Replacement Escrow Amounts shall be hereinafter referred
to as the "REPLACEMENT DEPOSITS" and the amounts on deposit in the
Replacement/Leasing Escrow Fund consisting of Monthly Leasing Escrow Deposits
and Additional Monthly Leasing Escrow Deposits shall be hereinafter referred to
as the "LEASING DEPOSITS". Lender may reasonably reassess its estimate of the
monthly amount necessary to be deposited into the Replacement/Leasing Escrow
Fund and, upon notice to Borrower, Borrower shall be required to deposit into
the Replacement/Leasing Escrow Fund each month such reassessed amount. Lender
shall make disbursements from that portion of the Replacement/Leasing Escrow
Fund consisting of Replacement Deposits as requested by Borrower, and approved
by Lender in its sole discretion, no more frequently than once in any thirty
(30) day period of no less than $1,000.00 upon delivery by Borrower of Lender's
standard form of draw request accompanied by copies of invoices for the amounts
requested and, if required by Lender for requests in excess of $50,000.00 for a
single item, conditional lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender shall
make disbursements from that portion of the Replacement/Leasing Escrow Fund
consisting of Leasing Deposits for expenses reasonably incurred by Borrower for
new Leases, or extensions, modifications or renewals of existing Leases, entered
into by Borrower in accordance with the provisions of paragraph 8 below, no more
frequently than once in any thirty (30) day period in increments of no less than
$1,000.00 upon delivery by Borrower of Lender's standard form of draw request
accompanied by copies of invoices for the amounts requested for tenant
improvements and leasing commissions, the newly executed Lease, extension,
renewal, or modification (if not previously received by Lender) and, if required
by Lender, for requests in excess of $50,000 (multiple payments made with
respect to one tenant or contractor or other person shall be aggregated for such
$50,000 limit), conditional lien waivers and releases from all
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parties furnishing materials and/or services in connection with the requested
payment. Notwithstanding anything to the contrary contained herein, Borrower
shall not be entitled to any funds from the Replacement/Leasing Escrow Fund with
respect to any tenant improvements or leasing commissions allocable to the
▇▇▇▇▇▇ ▇▇▇▇ Space. Lender may issue joint checks payable to Borrower and the
contractor or other person to whom payment is due with respect to any requested
payment. Lender may require an inspection of the Trust Property at Borrower's
expense prior to making a monthly disbursement in order to verify completion of
improvements, replacements or repairs for which reimbursement or payment is
sought which costs in the aggregate in excess of $50,000. The
Replacement/Leasing Escrow Fund shall be held in an interest bearing account in
Lender's name at a financial institution selected by Lender in its sole
discretion. All earnings or interest on the Replacement/Leasing Escrow Fund
shall be and become part of such Replacement/Leasing Escrow Fund and shall be
disbursed as provided in this paragraph 6(f). Until expended or applied as above
provided, the Replacement/Leasing Escrow Fund shall constitute additional
security for the Debt. The Replacement/Leasing Escrow Fund shall not constitute
a trust fund and may be commingled with other monies held by Lender.
(ii) Notwithstanding the foregoing, Borrower shall not be
obligated to make any Monthly Leasing Escrow Deposits or Monthly Replacement
Escrow Amount deposits unless and until an NOI Trigger Event (as hereinafter
defined) occurs (it being agreed and acknowledged that Borrower shall be
obligated to make the Additional Monthly Leasing Escrow Deposits irrespective of
whether an NOI Trigger Event exists). From and after the occurrence and during
the continuance of an NOI Trigger Event, (A) Borrower shall deposit on each
Payment Date all Excess Cash Flow (as defined in the Note) into the
Replacement/Leasing Escrow Fund until the amount on deposit in the
Replacement/Leasing Escrow Fund equals (1) the product of (y) the Monthly
Leasing Escrow Deposit and (z) the number of months that the Loans have then
been outstanding, less (2) any amounts previously expended by Borrower for
tenant improvements, leasing commissions, capital improvements, replacements
and/or repairs for which Borrower would have otherwise been entitled to
disbursements from the Replacement/Leasing Escrow Fund pursuant to and in
accordance with paragraph 6(f)(i) in the event that Borrower had been making
Monthly Leasing Escrow Deposits and deposits of Monthly Replacement Escrow
Amounts pursuant to and in accordance with paragraph 6(f)(i) and for which
Borrower submits to Lender such invoices or other evidence of such expenditures
as Lender may reasonably require (the amount of such deposit is hereinafter
referred to as the "LEASING ESCROW FUND CATCH-UP DEPOSIT"), and (B) from and
after the month immediately following the month in which the amount on deposit
in the Replacement/Leasing Escrow Fund equals the Leasing Escrow Fund Catch-Up
Deposit, Borrower shall deposit on each Payment Date the Monthly Leasing Escrow
Deposit and the Monthly Replacement Escrow Amount.
(iii) For purposes of this paragraph 6(f), (A) "NOI TRIGGER
EVENT" shall mean any period commencing on the date in which it is determined
that the Net Operating Income for the calendar quarter immediately preceding the
date of such calculation is less than $23,000,000 and which shall be deemed to
continue until such time as the Net Operating Income equals or exceeds
$23,000,000 for two consecutive calendar quarters, (B) "NET OPERATING INCOME"
shall mean as of any date, (1) the annualized Gross Income from Operations (as
hereinafter defined) based on Leases In Place as of the most recently ended
calendar quarter less (2) the actual Operating Expenses incurred during the
preceding period of twelve consecutive calendar months ending on the last day of
the most recently ended calendar quarter (as adjusted pursuant to the
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definition of "Operating Expenses" below), as reasonably determined by Lender
and in accordance with current rating agency criteria, (C) "GROSS INCOME FROM
OPERATIONS" shall mean all income, computed in accordance with GAAP (as
hereinafter defined), except as otherwise provided herein, derived from the
ownership and operation of the Trust Property from whatever source, including,
but not limited to, rents, utility charges, escalations, forfeited security
deposits, service fees or charges, license fees, parking fees, and other
pass-throughs or reimbursements paid by tenants under Leases In Place with
respect to the Trust Property of any nature (adjusted for projected increases in
fixed expenses as provided in the definition of "Expenses" herein) but excluding
sales, use and occupancy or other taxes on receipts required to be accounted for
by Borrower to any government or governmental agency, refunds and uncollectible
accounts, interest on credit accounts, any one-time or other non-periodic
payments by tenants under their respective Leases other than pre-paid rent by
tenants (except that such prepaid rent shall not be deemed income until the
occurrence of the month in which such pre-paid rent was otherwise payable),
proceeds of casualty insurance and condemnation awards (other than business
interruption or other loss of income insurance) and any disbursements to
Borrower from any escrow fund established pursuant to any Loan Document, (D)
"LEASES IN PLACE" shall mean Leases of space at the Trust Property under which
the tenant has accepted the demised premises, opened for business and is then
obligated to pay rent (provided that Borrower shall not receive credit for rent
payable under such Lease during the period commencing on the latter to occur of
the date that is twelve (12) months prior to the expiration of the Lease term or
the date that the renewal or extension option in the Lease, if any, expires, if
(1) the Lease has not been renewed or extended pursuant to and in accordance
with the Lease, or (2) a replacement tenant has not executed a Lease for all or
a portion of the space then subject to the related Lease in Place in accordance
with the provisions of this Deed of Trust (but in the case of this clause (2),
Borrower shall only receive credit for rent payable under such Lease to the
extent of the space so re-let), and with respect to which no bankruptcy
proceeding has been commenced against the tenant that has not been dismissed;
provided that if a tenant that has a long-term unsecured debt rating of at least
"BBB-" or its equivalent ("investment grade") and no worse than a "stable"
outlook by any two of S&P, ▇▇▇▇▇'▇ and/or Fitch, such tenant shall not be
required to be open for business; provided, further, that if a Lease In Place is
subject to any unescrowed rent concession or credit, such unescrowed rent
concession or credit shall be deducted from the rent payable under such Lease In
Place when determining the rent payable under such Leases In Place, provided
that such rent concession or credit shall be amortized over the primary lease
term (excluding any extension options), provided such primary lease term shall
be reduced by assuming that any and all lease cancellation options contained in
such Lease are exercised. Above market rents payable under Leases In Place will
be adjusted, in Lender's reasonable determination, down to the applicable market
rents when determining the rent payable under such Lease In Place if the tenant
thereunder is not investment grade. (For purposes of this paragraph, ▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇ Fargo Bank, National Association and LAUSD will be
deemed to constitute investment grade tenants.), and (E) "OPERATING EXPENSES"
shall mean the total of all expenditures by Borrower, computed in accordance
with generally accepted accounting principles or the method used in connection
with the financial statements of Borrower delivered to Lender in connection with
the closing of the Loans ("GAAP"), except as otherwise provided herein, of
whatever kind relating to the operation, maintenance and management of the Trust
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, telecom costs, ordinary repairs and
maintenance,
-22-
insurance, license fees, property taxes and assessments, advertising and
marketing expenses, legal (other than costs and expenses relating to the Loans)
and accounting fees, management fees, payroll and related taxes, computer
processing charges, operational equipment or other lease payments as approved by
Lender for expenditures not included in the Approved Annual Budget (as defined
in the Note) for the Trust Property, and other similar costs (with adjustments
thereto with respect to changes in fixed costs based upon the most recently
available information to Borrower), but excluding capital expenditures for the
Trust Property, tenant improvement costs and leasing commissions for the Trust
Property, depreciation, debt service, contributions to any reserves required
under the Loan Documents and extraordinary, non-recurring expenses. To the
extent that the definitions of Net Operating Income, Gross Income from
Operations, Operating Expenses and Leases in Place deviate from GAAP, the
definitions of such terms contained herein shall govern.
(g) (i) In lieu of making the payments to either of the
▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund, the Outstanding Tenant Allowance Escrow Fund, the
Minimum Occupancy Escrow Fund or the Replacement/Leasing Escrow Fund, Borrower
may deliver to Lender one or more Letters of Credit (as hereinafter defined) in
accordance with the provisions of this Section 6(g). Additionally, Borrower may
deliver to Lender one or more Letters of Credit in accordance with the
provisions of this Section 6(g) in lieu of deposits previously made to the
▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund, the Outstanding Tenant Allowance Escrow Fund, the
Minimum Occupancy Escrow Fund or the Replacement/Leasing Escrow Fund and upon
such delivery, provided that no Event of Default is then continuing, obtain the
release of such amounts previously deposited. The aggregate amount of proceeds
available to be drawn under the Letters of Credit and cash on deposit in the
▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund, the Outstanding Tenant Allowance Escrow Fund, the
Minimum Occupancy Escrow Fund or the Replacement/Leasing Escrow Fund, as
applicable, shall at all times be at least equal to the aggregate amount which
Borrower is then required to have on deposit in the ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund, the
Outstanding Tenant Allowance Escrow Fund, the Minimum Occupancy Escrow Fund
and/or the Replacement/Leasing Escrow Fund, as applicable, pursuant to this Deed
of Trust. Borrower shall give Lender no less than thirty (30) days notice of
Borrower's election to deliver a Letter of Credit and Borrower shall pay to
Lender all of Lender's reasonable out-of-pocket costs and expenses in connection
therewith. Borrower shall not be entitled to draw from any such Letter of
Credit. Upon thirty (30) days notice to Lender, Borrower may replace a Letter of
Credit with a cash deposit to the ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund, the Outstanding
Tenant Allowance Escrow Fund, the Minimum Occupancy Escrow Fund or the
Replacement/Leasing Escrow Fund. Prior to the return of a Letter of Credit,
Borrower shall deposit an amount equal to the amount that would have accumulated
in the ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund, the Outstanding Tenant Allowance Escrow Fund,
the Minimum Occupancy Escrow Fund or the Replacement/Leasing Escrow Fund, as
applicable, and not been disbursed in accordance with this Deed of Trust if such
Letter of Credit had not been delivered. Each Letter of Credit delivered under
this Deed of Trust shall be additional security for the payment of the Debt.
Upon the occurrence of an Event of Default, Lender shall have the right, at its
option, to draw on any Letter of Credit and to apply all or any part thereof to
the payment of the items for which such Letter of Credit was established or to
apply each such Letter of Credit to payment of the Debt in such order,
proportion or priority as Lender may determine. On the Maturity Date, any such
Letter of Credit may be applied to reduce the Debt. In addition to any other
right Lender may have to draw upon a Letter of Credit pursuant to the terms and
conditions of this Deed of Trust, unless Borrower has deposited cash in the
applicable reserve fund sufficient to
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replace the Letter of Credit as provided above, Lender shall have the additional
rights to draw in full any Letter of Credit: (a) with respect to any evergreen
Letter of Credit, if Lender has received a notice from the issuing bank that the
Letter of Credit will not be renewed and a substitute Letter of Credit is not
provided at least ten (10) Business Days prior to the date on which the
outstanding Letter of Credit is scheduled to expire; (b) with respect to any
Letter of Credit with a stated expiration date, if Lender has not received a
notice from the issuing bank that it has renewed the Letter of Credit at least
ten (10) Business Days prior to the date on which such Letter of Credit is
scheduled to expire and a substitute Letter of Credit is not provided at least
ten (10) Business Days prior to the date on which the outstanding Letter of
Credit is scheduled to expire; (c) upon receipt of notice from the issuing bank
that the Letter of Credit will be terminated (except if the termination of such
Letter of Credit is permitted pursuant to the terms and conditions of this Deed
of Trust or a substitute Letter of Credit is provided); or (d) if Lender has
received notice that the bank issuing the Letter of Credit shall cease to be an
Eligible Institution (as hereinafter defined) and Borrower has not provided a
substitute Letter of Credit or deposited cash to replace the Letter of Credit
within five (5) days after Lender has received such notice. In the event that
Lender draws in full any Letter of Credit as a result of any of the events
described in clauses (a)-(d) above, provided there is no Event of Default then
continuing, (x) Lender shall deposit all proceeds of such Letter of Credit in
the applicable reserve fund that was not being funded with monthly cash deposits
as a result of such Letter of Credit having been posted and (y) if the proceeds
of such Letter of Credit exceed the amount that would have otherwise been on
deposit in such reserve fund in the event that Borrower had not posted such
Letter of Credit, any excess amounts shall remain on deposit in such reserve
fund and shall be credited against Borrower's future deposit obligations into
such reserve fund. Notwithstanding anything to the contrary contained in the
above, Lender is not obligated to draw any Letter of Credit upon the happening
of an event specified in (a), (b), (c) or (d) above and shall not be liable for
any losses sustained by Borrower due to the insolvency of the bank issuing the
Letter of Credit if Lender has not drawn the Letter of Credit.
(ii) For the purposes of this Section 6(e), (A) "LETTER OF
CREDIT" shall mean an irrevocable, unconditional, transferable, clean
sight draft letter of credit acceptable to Lender and the Rating
Agencies (either an evergreen letter of credit or one which does not
expire until at least thirty (30) days after the Maturity Date) for
which Borrower shall have no reimbursement obligation and which
reimbursement obligation is not secured by the Trust Property or any
other property pledged to secure the Note in favor of Lender and
entitling Lender to draw thereon in New York, New York, issued by a
domestic Eligible Institution or the U.S. agency or branch of a foreign
Eligible Institution. If at any time the bank issuing any such Letter
of Credit shall cease to be an Eligible Institution, subject to
Borrower's rights under clause (d) of paragraph 6(e)(i) above, Lender
shall have the right to draw down the same in full and hold the
proceeds of such draw in accordance with the applicable provisions
hereof and (B) "ELIGIBLE INSTITUTION" shall mean a federal or state
chartered depository institution or trust company insured by the
Federal Deposit Insurance Corporation the short term unsecured debt
obligations or commercial paper of which are rated at least A-l by S&P,
P-l by ▇▇▇▇▇'▇, and F-1+ by Fitch, Inc. in the case of accounts in
which funds are held for thirty (30) days or less or, in the case of
Letters of Credit or accounts in which funds are held for more than
thirty (30) days, the long term unsecured debt obligations of which are
rated at least "AA" by Fitch and S&P and "Aa2" by ▇▇▇▇▇'▇.
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(h) Borrower hereby pledges to Lender and grants to
Lender a security interest in any and all monies now or hereafter deposited in
the Tax and Insurance Impound Fund, the Deferred Maintenance Escrow Fund, the
▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund and the Replacement/Leasing Escrow Fund (collectively,
the "FUNDS") as additional security for the payment of the Debt. Upon the
occurrence of an Event of Default and prior to the acceptance of a cure thereof
by Lender, Lender shall have no obligation to disburse any amounts held in the
Funds to the Borrower and may apply any sums then present in such funds to the
payment of the Debt in any order in its sole discretion. All reasonable third
party out-of-pocket costs and expenses incurred by Lender in the disbursement of
any of the Funds, if any, shall be paid by Borrower promptly upon demand. The
Funds shall be held in a segregated account in Lender's name at a financial
institution selected by Lender in its sole discretion. At the direction of
Borrower, Lender shall deposit the amounts held in the Funds in Permitted
Investments (as defined herein) selected by Borrower. All investment earnings on
the Funds shall be (i) added to and become part of its respective Fund, (ii)
taxed as income of the Borrower, (iii) for the benefit of Borrower, subject to
Lender's rights pursuant to this Deed of Trust, and (iv) disbursed in accordance
herewith. Lender shall not be responsible for any losses resulting from the
investment of the Funds or for obtaining any specific level or percentage of
earnings on such investment.
(i) (i) Subject to the provisions of subparagraph (i)(ii)
below, for the purposes of this Deed of Trust, the term "PERMITTED INVESTMENTS"
shall mean any one or more of the following obligations or securities acquired
at a purchase price of not greater than par, including those issued by Servicer
(defined herein), the trustee under any Securitization or any of their
respective affiliates, payable on demand or having a maturity date not later
than the Business Day immediately prior to the first Payment Date following the
date of acquiring such investment (and in no event having maturities of more
than 365 days) and meeting one of the appropriate standards set forth below: (i)
obligations of, or obligations fully guaranteed as to payment of principal and
interest by, the United States or any 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 Fanners Home Administration
(certificates of beneficial ownership), the General Services Administration
(participation certificates), the U.S. Maritime Administration (guaranteed Title
XI financing), the Small Business Administration (guaranteed participation
certificates and guaranteed pool certificates), the U.S. Department of Housing
and Urban Development (local authority bonds) and the Washington Metropolitan
Area Transit Authority (guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (ii) Federal Housing Administration
debentures; (iii) obligations of the following United States government
sponsored agencies: Federal Home Loans Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated system wide bonds and notes), the Federal Home
Loans Banks (consolidated debt obligations), the Federal National Mortgage
Association (debt obligations), the Financing Corp. (debt obligations), and the
Resolution Funding Corp. (debt obligations); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal
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due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an "r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (iv) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with maturities of not
more than 365 days of any bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency
(defined herein) (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities issued
in connection with a Securitization or any class thereof); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (v) fully Federal Deposit Insurance
Corporation-insured demand and time deposits in, or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the
highest short term rating category and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities (as defined in the
Cooperation Letter) or any class thereof); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (vi) debt obligations with maturities of
not more than three hundred sixty-five (365) days and at all times rated by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities or any class thereof) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change, (B) if rated by S&P, must
not have an "r" highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to liquidation
prior to their maturity; (vii) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) with maturities of not more than three hundred sixty-five
(365) days and that at all times is rated by each Rating Agency (or, if not
rated by all
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Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to
each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities or any
class thereof) in its highest short-term unsecured debt rating; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity; and (viii) other security,
obligation or investment which has been approved as a Permitted Investment in
writing by (a) Lender and (b) each Rating Agency, as evidenced by a written
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, or any class thereof, 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 one hundred twenty percent (120%) of
the yield to maturity at par of such underlying investment. Notwithstanding
anything to the contrary contained herein, the Permitted Investments (i) through
(ix) above must have a ▇▇▇▇▇'▇ rating of (a) "A2 or P-1" if such investment has
a maximum maturity of one (1) month, (b) "A1 and P-1" if such investment has a
maximum maturity of three (3) months, (c) "Aa3 and P-1" if such investment has a
maximum maturity of six (6) months and (d) "AAA and P-1" if such investment has
a maximum maturity of more than six (6) months.
(ii) At any time when Borrower is not permitted under the
Loan Documents to select Permitted Investments, then for the purposes of this
Deed of Trust, the term "PERMITTED INVESTMENTS" shall mean any one or more of
the following obligations or securities acquired at a purchase price of not
greater than par, including those issued by Servicer (defined herein), the
trustee under any Securitization or any of their respective Affiliates, payable
on demand or having a maturity date not later than the Business Day immediately
prior to the first Payment Date following the date of acquiring such investment
(and in no event having maturities of more than 365 days) and meeting one of the
appropriate standards set forth below: (i) obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
Person controlled or supervised by and acting as an instrumentality of the
United States pursuant to authority granted by the Congress of the United States
provided such obligations are backed by the full faith and credit of the United
States of America and are one of the following: obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the General Services
Administration (participation certificates), the Small Business Administration
(guaranteed participation certificates and guaranteed pool certificates) or the
U.S. Department of Housing and Urban Development (local authority bonds);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must
not be subject to liquidation prior
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to their maturity; (ii) Federal Housing Administration debentures; and (iii)
obligations of the following United States government sponsored agencies:
Federal Home Loans Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated system wide bonds and notes), the Federal Home Loans Banks
(consolidated debt obligations) and the Federal National Mortgage Association
(debt obligations); provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; provided, however, that no obligation or security shall be a
Permitted Investment if (A) such obligation or security evidences a right to
receive only interest payments or (B) the right to receive principal and
interest payments on such obligation or security are derived from an underlying
investment that provides a yield to maturity in excess of one hundred twenty
percent (120%) of the yield to maturity at par of such underlying investment.
Notwithstanding anything to the contrary contained herein, the Permitted
Investments (i) through (ix) above must have a ▇▇▇▇▇'▇ rating of (a) "A2 or P-1"
if such investment has a maximum maturity of one (1) month, (b) "A1 and P-1" if
such investment has a maximum maturity of three (3) months, (c) "Aa3 and P-1" if
such investment has a maximum maturity of six (6) months and (d) "AAA and P-1"
if such investment has a maximum maturity of more than six (6) months.
7. ALTERATIONS. Borrower shall obtain Lender's prior
written consent, which consent shall not be unreasonably withheld or delayed, to
any alterations to the Improvements, the cost of which is reasonably anticipated
to exceed $1,000,000 (the "THRESHOLD AMOUNT") or that will have a material
adverse effect on Borrower's financial condition, the use, operation or value of
the Trust Property or the net operating income with respect to the Trust
Property, other than (a) tenant improvement work performed pursuant to the terms
of any Lease executed on or before the date hereof, (b) tenant improvement work
performed pursuant to the terms and provisions of a Lease executed after the
date hereof and not adversely affecting any structural component of any
Improvements, any utility or HVAC system contained in any Improvements or the
exterior of any building constituting a part of any Improvements (it being
understood that the foregoing provision shall not require Lender's consent to
Tenants' exterior signage pursuant to any Lease approved by Lender in accordance
with the terms and provisions of this Deed of Trust) or (c) alterations
performed in connection with the restoration of the Trust Property after the
occurrence of a Casualty or Condemnation in accordance with the terms and
provisions of this Deed of Trust. If Lender fails to respond to a request for
consent under this paragraph 7 within ten (10) Business Days of receipt thereof,
such consent shall be deemed granted, provided that such request shall have been
accompanied by all information requested by Lender or reasonably necessary for
Lender to evaluate such request and shall have clearly stated, in 14 point type
or greater, that if Lender fails to respond to such request within ten (10)
Business Days, Lender's consent shall be deemed to have been granted. If Lender
refuses to grant such consent, Lender shall specify in writing the reasons for
such refusal. Any approval by Lender of the plans, specifications or working
drawings for alterations of the Trust Property shall not create responsibility
or liability on behalf of Lender for their completeness, design, sufficiency or
their compliance with applicable laws. Lender may condition any such approval
upon receipt of a certificate of compliance with applicable laws from an
independent architect, engineer, or other person reasonably acceptable to
Lender. If the total unpaid amounts due and payable with
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respect to alterations to the Improvements (other than such amounts to be paid
or reimbursed by tenants under the Leases or paid from escrow accounts
established hereunder) shall at any time exceed the Threshold Amount, Borrower
shall promptly deliver to Lender as security for the payment of such amounts and
as additional security for Borrower's obligations under the Loan Documents any
of the following: (1) cash, (2) U.S. Treasury securities, (3) other securities
having a rating acceptable to Lender and that the applicable Rating Agencies
(hereinafter defined) have confirmed in writing will not, in and of itself,
result in a downgrade, withdrawal or qualification of the initial, or, if
higher, then current ratings assigned in connection with any securitization of
the Loans (a "SECURITIZATION"), or if a Securitization has not occurred, any
ratings to be assigned in connection with a Securitization, or (4) a Letter of
Credit. Such security shall be in an amount equal to the excess of the total
unpaid amounts with respect to alterations to the Improvements (other than such
amounts to be paid or reimbursed by tenants under the Leases or from escrow
accounts established hereunder) over the Threshold Amount. Upon completion of
the alterations to the satisfaction of Lender in its reasonable discretion
Lender shall promptly return to Borrower such additional security. For purposes
of this Deed of Trust, "RATING AGENCIES" shall mean, prior to the final
Securitization of the Loans, each of S&P, ▇▇▇▇▇'▇ and Fitch, Inc., or any other
nationally recognized statistical rating agency which has been designated by
Lender and, after the final Securitization of the Loans, shall mean any of the
foregoing that have rated any Securities.
8. LEASES AND RENTS.
(a) Borrower does hereby absolutely and unconditionally
assigns to Lender, all Borrower's right, title and interest in all current and
future Leases and Rents, it being intended by Borrower that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Lender shall not be construed to bind Lender
to the performance of any of the covenants, conditions or provisions contained
in any such Lease or otherwise impose any obligation upon Lender. Borrower
agrees to execute and deliver to Lender such additional instruments, in form and
substance satisfactory to Lender, as may hereafter be requested by Lender to
further evidence and confirm such assignment. Nevertheless, subject to the terms
of this paragraph, Lender grants to Borrower a revocable license to operate and
manage the Trust Property and to collect the Rents. Borrower shall hold the
Rents, or a portion thereof, sufficient to discharge all current sums due on the
Debt, in trust for the benefit of Lender for use in the payment of such sums.
Upon the occurrence of an Event of Default and prior to the acceptance of a cure
thereof by Lender, without the need for notice or demand, the license granted to
Borrower herein shall automatically be revoked, and Lender shall immediately be
entitled to possession of all Rents, whether or not Lender enters upon or takes
control of the Trust Property. Upon the acceptance by Lender of a cure of any
Event of Default, Lender shall reinstate the license granted to Borrower herein.
Lender is hereby granted and assigned by Borrower the right, at its option, upon
revocation of the license granted herein, to enter upon the Trust Property in
person, by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license may be applied toward payment of
the Debt in such priority and proportions as Lender in its sole discretion shall
deem proper.
(b) All Leases shall be subordinate to this Deed of Trust
and the tenant thereunder shall agree to attorn to Lender either pursuant to the
Lease or a subordination, nondisturbance and attornment agreement executed by
such tenant and Lender. None of the
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Leases shall contain any option to purchase, any right of first refusal to
purchase or any right to terminate the lease term (except for termination rights
(i) set forth in Leases executed prior to, or on, the date hereof or (ii)
arising from a taking or the destruction of all or substantially all of the
Trust Property or all or substantially all of a tenant's demised premises).
Leases executed after the date hereof shall not contain any provisions which
adversely affect the Trust Property or which might adversely affect the rights
of any holder of the Loans without the prior written consent of Lender. Each
tenant shall conduct business only in that portion of the Trust Property covered
by its lease. Upon request, Borrower shall furnish Lender with executed copies
of all Leases.
(c) Borrower shall not, without the prior consent of
Lender, which consent shall not be unreasonably withheld or conditioned (i)
enter into any Lease of all or any part of the Trust Property in excess of
27,013 rentable square feet (a "MAJOR LEASE"), (ii) cancel, terminate (other
than as a result of a tenant default thereunder), abridge or otherwise modify
the terms of any Major Lease unless such action is required by the terms
thereof, or accept a surrender thereof, (iii) consent to any assignment of or
subletting under any Major Lease not in accordance with its terms, (iv) cancel,
terminate, abridge or otherwise modify any guaranty of any Major Lease or the
terms thereof, (v) accept prepayments of installments of Rents for a period of
more than one (1) month in advance (other than estimated payments of
reimbursable expenses paid by tenants pursuant to their Leases) or (vi) further
assign the whole or any part of the Leases or the Rents. If Lender fails to
respond to a request for consent under this paragraph 8(c) within ten (10)
Business Days of receipt thereof, such consent shall be deemed granted, provided
that such request shall have been accompanied by all information requested by
Lender or reasonably necessary for Lender to evaluate such request and shall
have clearly stated, in 14 point type or greater, that if Lender fails to
respond to such request within ten (10) Business Days, Lender's consent shall be
deemed to have been granted. In the event that Lender refuses to grant any such
consent, Lender shall specify in writing the reasons for such refusal. In
addition, Borrower shall not (A) lease all or any part of the Trust Property,
(B) cancel, terminate (other than as a result of a tenant default thereunder),
abridge or otherwise modify the terms of any Lease, or accept a surrender
thereof, (C) consent to any assignment of or subletting under any Lease not in
accordance with its terms or (D) cancel, terminate, abridge or otherwise modify
any guaranty of any Lease or the terms thereof, unless such actions are
exercised for a commercially reasonable purpose in arms-length transactions for
market rate terms.
(d) Borrower (i) shall observe and perform all the
material obligations imposed upon the lessor, grantor or licensor, as
applicable, under the Leases and shall not do or permit to be done anything to
impair the value of the Leases as security for the Debt; (ii) shall promptly
send copies to Lender of all notices of default which Borrower shall send or
receive thereunder; (iii) shall enforce all the material terms, covenants and
conditions contained in the Leases upon the part of the lessee, grantee or
licensee, as applicable, thereunder to be observed or performed, short of
termination thereof (unless by reason of default thereunder); (iv) shall not
collect any of the Rents (other than estimated payments of reimbursable expenses
paid by tenants pursuant to their Leases) more than one (1) month in advance;
(v) shall not execute any other assignment of the lessor's interest in the
Leases or the Rents; (vi) shall, upon request of Lender, request and use
commercially reasonable efforts to obtain and deliver to Lender tenant estoppel
certificates from each commercial tenant at the Trust Property in form and
substance reasonably satisfactory to Lender, provided that Borrower shall not be
required to deliver such certificates
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more frequently than two (2) times in any calendar year; and (vii) shall execute
and deliver at the request of Lender all such further assurances, confirmations
and assignments in connection with the Trust Property as Lender shall from time
to time reasonably require.
(e) All security deposits of tenants, whether held in
cash or any other form, shall not be commingled with any other funds of Borrower
and, if cash, shall be deposited by Borrower at such commercial or savings bank
or banks, or otherwise held in compliance with applicable law, as may be
reasonably satisfactory to Lender. Any bond or other instrument which Borrower
is permitted to hold in lieu of cash security deposits under any applicable
legal requirements shall be maintained in full force and effect in the full
amount of such deposits unless replaced by cash deposits as hereinabove
described, shall (if issued after the date hereof) be fully assignable to Lender
and shall, in all respects, comply with any applicable legal requirements and
otherwise be reasonably satisfactory to Lender. Borrower shall, upon request,
provide Lender with evidence reasonably satisfactory to Lender of Borrower's
compliance with the foregoing. Following the occurrence and during the
continuance of any Event of Default, Borrower shall, upon Lender's request, if
permitted by any applicable legal requirements, rum over to Lender the security
deposits (and any interest theretofore earned thereon) with respect to all or
any portion of the Trust Property, to be held by Lender subject to the terms of
the Leases.
9. MAINTENANCE AND USE OF TRUST PROPERTY. Borrower shall
cause the Trust Property to be maintained in a good and safe condition and
repair. The Improvements and the Equipment shall not be removed, demolished or
materially altered without the consent of Lender except for (a) tenant
improvements permitted to be made without the consent of Lender pursuant to the
express terms of any Lease approved or deemed approved by Lender pursuant to
paragraph 8 hereof, (b) normal replacement of the Equipment and (c) work
required to be made by reason of the occurrence of an emergency (i.e., an
unexpected event which threatens imminent harm to persons or the Trust Property)
and with respect to which it would be impracticable, under the circumstances, to
obtain Lender's prior consent thereto, provided that Borrower shall notify
Lender as promptly as practicable with respect to any such emergency work
performed by Borrower. Borrower shall promptly comply in all material respects
with all laws, orders and ordinances affecting Borrower and the Trust Property
(including, without limitation, Prescribed Laws), or the use thereof; provided,
however, that after prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, such law, order and/or
ordinance, provided that (i) no Event of Default has occurred and is continuing;
(ii) such proceeding shall not be prohibited by the provisions of any other
instrument to which Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) neither the Trust Property nor
any part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof comply with such law, order and/or ordinance and pay all
costs, interest and penalties which may be payable in connection therewith; and
(v) such proceeding shall suspend the requirement of Borrower to comply with
such law, order and/or ordinance. Borrower shall not initiate, join in,
acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Trust Property or any part thereof. If under applicable
zoning provisions the use of all or any portion of the Trust Property is or
shall become a nonconforming use, Borrower will not cause or permit such
nonconforming use to be
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discontinued or abandoned without the express written consent of Lender.
Borrower shall not (i) change the use of the Trust Property, (ii) permit or
suffer to occur any waste on or to the Trust Property or to any portion thereof
or (iii) take any steps whatsoever to convert the Trust Property, or any portion
thereof, to a condominium or cooperative form of management, other than in
accordance with paragraph 10(i) hereof. Borrower will not install or permit to
be installed on the Premises any underground storage tank.
10. TRANSFER OR ENCUMBRANCE OF THE TRUST PROPERTY.
(a) Borrower acknowledges that Lender has examined and
relied on the credit worthiness and experience of Borrower in owning and
operating properties such as the Trust Property in agreeing to make the Loans,
and that Lender will continue to rely on Borrower's ownership of the Trust
Property as a means of maintaining the value of the Trust Property as security
for repayment of the Debt. Borrower acknowledges that Lender has a valid
interest in maintaining the value of the Trust Property so as to ensure that,
should Borrower default in the repayment of the Debt, Lender can recover the
Debt by a sale of the Trust Property. For purposes of this paragraph 10, an
"AFFILIATED MANAGER" shall mean any managing agent of the Trust Property (other
than ▇▇▇▇▇▇▇ Services, Inc.) in which Borrower or the OP or any other guarantor
of the Debt (the OP or any other such guarantor, "GUARANTOR") has, directly or
indirectly, any legal, beneficial or economic interest; a "RESTRICTED PARTY"
shall mean Borrower, the Guarantor, or any Affiliated Manager or any
shareholder, partner, member or non-member manager, or any direct or indirect
legal or beneficial owner, of Borrower, the Guarantor, or any Affiliated Manager
(other than ▇▇▇▇▇▇▇ Properties, Inc. (the "REIT" ), any Permitted Institutional
Transferee (as hereinafter defined) or any Person owning a direct or indirect
interest in the REIT, the OP or any Permitted Institutional Transferee); and a
"SALE OR PLEDGE" shall mean a voluntary or involuntary sale, conveyance,
transfer or pledge of a legal or beneficial interest.
(b) Except as expressly permitted pursuant to paragraph
10(h) hereof, Borrower shall not sell, convey, mortgage, grant, bargain,
encumber, pledge, assign, grant options with respect to, or otherwise transfer
or dispose of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) the Trust Property or any part thereof or any legal or beneficial
interest therein or permit a Sale or Pledge of an interest in any Restricted
Party (collectively a "TRANSFER"), other than pursuant to Leases of space in the
Improvements to tenants in accordance with the provisions of paragraph 8,
without the prior written consent of Lender.
(c) A Transfer shall include, but not be limited to, (i)
an installment sales agreement wherein Borrower agrees to sell the Trust
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower leasing all or a substantial part of the Trust Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rents; (iii) if
a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge
of such corporation's stock or the creation or issuance of new stock such that
more than ten percent (10%) of such corporation's stock shall be vested in a
party or parties who are not stockholders as of the date hereof; (iv) if a
Restricted Party is a limited or general partnership or joint venture, any
merger or consolidation of such Restricted Party or the change,
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removal, resignation or addition of a general partner thereof or the Sale or
Pledge of the partnership interest of any general partner of such Restricted
Party or any profits or proceeds relating to such partnership interest, or the
Sale or Pledge of limited partnership interests of such Restricted Party or any
profits or proceeds relating to such limited partnership interests or the
creation or issuance of new limited partnership interests of such Restricted
Party; (v) if a Restricted Party is a limited liability company, any merger or
consolidation of such Restricted Party or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) of such Restricted Party or the Sale or Pledge of the membership
interest of a managing member (or if no managing member, any member) of such
Restricted Party or any profits or proceeds relating to such membership
interest, or the Sale or Pledge of non-managing membership interests of such
Restricted Party or the creation or issuance of new non-managing membership
interests of such Restricted Party such that more than ten percent (10%) of such
limited liability company's non-managing membership interest shall be vested in
a party or parties who are not members as of the date hereof; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; or (vii) the removal
or the resignation of the managing agent (including, without limitation, an
Affiliated Manager) without Lender's consent other than in accordance with
paragraph 59.
(d) 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 sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Trust
Property in violation of this paragraph 10 without Lender's consent. This
provision shall apply to every sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Trust Property regardless of whether
voluntary or not, or whether or not Lender has consented to any previous sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Trust
Property.
(e) Lender's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Trust Property shall not be
deemed to be a waiver of Lender's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Trust Property made in contravention of this paragraph
shall be null and void and of no force and effect.
(f) Borrower agrees to bear and shall pay or reimburse
Lender on demand for all reasonable expenses (including, without limitation,
reasonable attorneys' fees and disbursements, title search costs and title
insurance endorsement premiums) incurred by Lender in connection with the
review, approval and documentation of any such sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer.
(g) Notwithstanding anything to the contrary contained in
this paragraph 10, so long as any guaranty of any portion of the Loans by ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ III and/or any of his Affiliates is in effect (other than (i) that
certain Non-Recourse Guaranty dated as of the date hereof made by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ III for the benefit of Lender, (ii) that certain Non-Recourse Guaranty
dated as of the date hereof made by the OP for the benefit of Lender and (iii)
any similar non-recourse guaranty in favor of Lender given in substitution for
the foregoing items (i)
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or (ii)), then at no time that any portion of the Loans remains outstanding
shall ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and/or any of his Affiliates own, directly or indirectly
(including through any Affiliate), more than fifty-eight percent (58%) of the
aggregate percentage interests in the Borrower unless, in connection with any
increase in such ownership, (x) the conditions set forth in subparagraphs
10(h)(i)(C) through (F) are or remain satisfied, and (y) if requested by any
Rating Agency, Borrower shall deliver a non-consolidation opinion acceptable to
Lender and the Rating Agencies with respect to such transfer which may be relied
upon by Lender, the Rating Agencies and their respective counsel and successors
and assigns; provided, however, that the restrictions in this Paragraph 10(g)
shall no longer be effective upon the acquisition by the OP of 100% of the
membership interests in Borrower Manager (as hereinafter defined) and Borrower
Member (as hereinafter defined).
(h) Notwithstanding anything to the contrary contained in
this paragraph 10 (including, without limitation, paragraph 10(b) and paragraph
10(c)), other than paragraph 10(g), the following Transfers shall not require
the prior written consent of Lender:
(i) Transfers of direct or indirect interests in any
Restricted Party provided that the following conditions are satisfied:
A. after taking into account any prior
Transfers pursuant to this subparagraph,
whether to the proposed transferee or
otherwise, no such Transfer (or series of
Transfers) shall result in (1) the proposed
transferee, together with all members of
his/her immediate family or any Affiliates
thereof, owning in the aggregate (directly,
indirectly or beneficially) more than
forty-nine percent (49%) of the interests in
Borrower (or any entity directly or
indirectly holding an interest in Borrower
that is a Restricted Party), or (2) a
Transfer in the aggregate of more than
forty-nine percent (49%) of the interests in
Borrower as of the date hereof, except in
either case for Transfers to a direct or
indirect interest holder of Borrower as of
the date hereof, or any Affiliate thereof,
provided that if reasonably requested by
Lender or if requested by any Rating Agency,
Borrower shall deliver a non-consolidation
opinion acceptable to Lender and the Rating
Agencies with respect to such transferee
which may be relied upon by Lender, the
Rating Agencies and their respective counsel
and successors and assigns;
B. after giving effect to such Transfer, the
REIT shall continue to own not less than a
fifty-one percent (51%) direct general
and/or limited partnership interest in the
OP and the REIT shall continue to Control
(hereinafter defined) Borrower and, subject
to the rights of Manager under the
Management Agreement (or any replacement
manager under a replacement management
agreement with respect to the Trust
Property, each as approved by Lender in
accordance with paragraph 59 of this Deed of
Trust), the day to day operations of the
Trust Property;
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C. Borrower shall give Lender notice of such
Transfer together with copies of all
instruments effecting such transfer not less
than ten (10) days prior to the date of such
Transfer;
D. no Event of Default or event which with the
giving of notice or the passage of time
would constitute an Event of Default shall
have occurred and remain uncured;
E. the single purpose nature and bankruptcy
remoteness of Borrower and its shareholders,
partners or members after such transfer,
shall satisfy Lender's then current
applicable underwriting criteria and
requirements; and
F. Lender shall have received payment of, or
reimbursement for, all costs and expenses
incurred by Lender in connection with such
Transfer (including, but not limited to,
reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
Notwithstanding the foregoing, in the event that such
Transfer is by a limited partner of the OP of such limited partner's
limited partnership interest in the OP, then Borrower shall not be
required to satisfy subparagraphs (i)(C) or (i)(F) above so long as
Borrower has satisfied subparagraphs (i)(A), (i)(B), (i)(D) and (i)(E)
above.
(ii) Transfers of direct or indirect interests in any
Restricted Party to a Permitted Institutional Transferee (hereinafter
defined) provided that the following conditions are satisfied:
A. no Event of Default or event which with the
giving of notice or the passage of time
would constitute an Event of Default shall
have occurred and remain uncured;
B. After such Transfer, fifty-one percent (51
%) or greater of the direct or indirect
interests of Borrower shall be owned by a
Permitted Institutional Transferee;
C. Borrower shall deliver to Lender a
non-consolidation opinion acceptable to
Lender and the Rating Agencies which may be
relied upon by Lender, the Rating Agencies
and their respective counsel and successor
and assigns;
D. Lender shall have confirmations in writing
from the Rating Agencies to the effect that
such Transfer will not result in a
requalification, downgrade or withdrawal of
any current securities ratings assigned in a
Securitization;
E. Borrower shall give Lender notice of such
transfer together with copies of all
instruments effecting such transfer not less
than ten (10) days prior to the date of such
Transfer;
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F. the single purpose nature and bankruptcy
remoteness of Borrower and its shareholders,
partners or members after such Transfer,
shall satisfy Lender's then current
applicable underwriting criteria and
requirements; and
G. Lender shall have received payment of, or
reimbursement for, all costs and expenses
incurred by Lender in connection with such
Transfer (including, but not limited to,
reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
For the purposes of this paragraph the term "PERMITTED
INSTITUTIONAL TRANSFEREE" means (a) one or more of the following: (i) a real
estate investment trust, bank, saving and loan association, investment bank,
insurance company, trust company, commercial credit corporation, pension plan,
pension fund or pension advisory firm, mutual fund, government entity or plan,
(ii) investment company, money management firm or "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act of 1933, as
amended, (iii) an institution substantially similar to any of the foregoing or
(iv) any entity Controlled (hereinafter defined) by any of the entities
described in clauses (i), (ii) or (iii) above which in each case (A) has total
assets (in name or under management) in excess of $600,000,000 and (except with
respect to a pension advisory firm or similar fiduciary) capital/statutory
surplus or shareholder's equity of $250,000,000 and (B) is regularly engaged in
the business of making or owning commercial real estate loans or operating
commercial mortgage properties or (b) any entity formed for the purpose of
owning or investing in commercial property and issuing syndication interests
that is approved by Lender, such approval not to be unreasonably withheld or
delayed. For purposes of this Section 10 "CONTROL" or "CONTROLLED" means the
ownership, directly or indirectly, in the aggregate of more than fifty percent
(50%) of the beneficial ownership interest of an entity and the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through the ability to exercise
voting power, by contract or otherwise.
(iii) (A) the Transfer or issuance of any securities,
options, warrants or other interests in the REIT or any entity owning
an interest in the REIT, (B) the merger or consolidation of the REIT or
(C) the merger or consolidation of the OP provided that in the case of
each of (B) and (C) above, the surviving entity shall be the REIT
and/or the OP, as applicable, and after giving effect to such merger or
consolidation, the REIT shall continue to own not less than a fifty-one
percent (51%) direct general and/or limited partnership interest in the
OP and the REIT shall continue to Control the Borrower and, subject to
the rights of Manager under the Management Agreement (or any
replacement manager under a replacement management agreement with
respect to the Trust Property, each as approved by Lender in accordance
with paragraph 59 of this Deed of Trust), the day to day operations of
the Trust Property.
(iv) pledges by the REIT, the OP or any entity holding any
direct or indirect interests in the REIT or the OP of their indirect
ownership interests in Borrower to any Permitted Institutional
Transferee providing a corporate line of credit or other financing to
the REIT, the OP or any entity holding any direct or indirect interests
in the REIT or the OP, provided that the indirect interests in Borrower
that are pledged as collateral
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comprise no more than thirty-three percent (33%) of the total value of
the collateral for such line of credit or other financing, and provided
that the following conditions are met:
(A) no Event of Default or event which with the
giving of notice or the passage of time would constitute an
Event of Default shall have occurred and remain uncured; and
(B) Lender shall have received payment of, or
reimbursement for, all costs and expenses incurred by Lender
in connection with such pledges (including, but not limited
to, reasonable attorneys' fees and costs and expenses of the
Rating Agencies).
(v) transfers by the REIT, the OP and/or their respective
Affiliates of up to seventy-five percent (75%) of the direct or
indirect ownership interests in the Borrower and/or other indirect
ownership interests in the Trust Property to a Permitted Institutional
Transferee provided that the following conditions are met:
(A) no Event of Default or event which with the
giving of notice or the passage of time would constitute an
Event of Default shall have occurred and remain uncured;
(B) Lender shall have confirmations in writing
from the Rating Agencies to the effect that such transfers
will not result in a requalification, downgrade or withdrawal
of any current securities rating assigned in a Securitization;
(C) Borrower shall deliver to Lender a
non-consolidation opinion acceptable to Lender and the Rating
Agencies which may be relied upon by Lender, the Rating
Agencies and their respective counsel and successor and
assigns;
(D) the REIT and/or its Affiliates shall
continue to act as property manager and leasing agent and
manage the day to day operations of the Trust Property; and
(E) Lender shall have received payment of, or
reimbursement for, all costs and expenses incurred by Lender
in connection with such transfer (including, but not limited
to, reasonable attorneys' fees and costs and expenses of the
Rating Agencies).
(vi) the restructuring of the ownership interests in the
Trust Property held by the REIT, the OP or any entity holding any
direct or indirect interests in the REIT or the OP, provided that the
following conditions are met:
(A) no Event of Default or event which with the
giving of notice or the passage of time would constitute an
Event of Default shall have occurred and remain uncured;
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(B) such restructuring does not reduce the
REIT's or the OP's aggregate ownership interests in the Trust
Property;
(C) in the event that such restructuring shall
result in any Person, together with any Affiliates thereof,
that prior to such restructuring, owned in the aggregate
(directly, indirectly or beneficially) less than forty-nine
percent (49%) of the interests in Borrower (or any entity
directly or indirectly holding an interest in Borrower),
owning in the aggregate (directly, indirectly or beneficially)
more than forty-nine percent (49%) of the interests in
Borrower (or any entity directly or indirectly holding an
interest in Borrower), then Borrower shall deliver a non-
consolidation opinion acceptable to Lender and the Rating
Agencies with respect to such entity which may be relied upon
by Lender, the Rating Agencies and their respective counsel
and successors and assigns;
(D) In the event that such restructuring
requires a new non-consolidation opinion pursuant to
subparagraph (C) above, Borrower shall give Lender notice of
such restructuring together with copies of all instruments
effecting such restructuring not less than ten (10) days prior
to the date of such restructuring;
(E) In the event that such restructuring
requires a new non-consolidation opinion pursuant to
subparagraph (C) above, Lender shall have received payment of,
or reimbursement for, all costs and expenses incurred by
Lender in connection with such restructuring (including, but
not limited to, reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
(vii) pledges of Borrower's interests in equipment and/or
fixtures in connection with purchase money financing of such equipment
and/or fixtures, subject to the requirements of paragraph 12(a)(ii)(P)
of this Deed of Trust.
(viii) Transfers of ownership interests in the direct and
indirect members of Borrower in connection with the transactions
consummated substantially concurrently with the contribution of assets
to the OP and the initial public offering of shares in the REIT,
including, without limitation, the termination of the Management
Agreement and the substitution of the OP as the property manager
pursuant to the OP Management Agreement (as hereinafter defined).
(ix) If the OP does not consummate the acquisition of 100%
of the membership interests in North Tower Manager, LLC, a Delaware
limited liability company ("BORROWER MANAGER") and North Tower Member,
LLC, a Delaware limited liability company ("BORROWER MEMBER"), then
Borrower Manager and Borrower Member may, subject to Lender's approval
which may not be unreasonably withheld or delayed, each amend their
respective operating agreements to provide, among other things, that
the member of such entity that is not an Affiliate of Guarantor shall
be entitled to a priority special preferred return (as agreed upon
between the members of such entity) and shall be entitled to appoint
all of the members of the management committee of such entity; provided
that at all times from and after such amendments,
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Borrower shall continue to be in compliance with the terms and
provisions of paragraph 12 of this Deed of Trust.
Lender shall respond to any requests made by Borrower pursuant
to this paragraph 10(h) in a prompt manner. In the event that Lender claims that
Borrower has not satisfied any of the requirements of this paragraph 10(h),
Lender shall specify in writing the reason why any conditions are deemed not
satisfied.
11. REPRESENTATIONS AND COVENANTS CONCERNING THE BORROWER
AND TRUST PROPERTY. Borrower represents, warrants and covenants as follows:
(a) Organization and Existence. Borrower is duly
organized and validly existing as a limited liability company in good standing
under the laws of Delaware and is in good standing in all other jurisdictions in
which Borrower is transacting business. Borrower has the power and authority to
execute, deliver and perform the obligations imposed on it under the Loan
Documents and to consummate the transactions contemplated by the Loan Documents.
(b) Authorization. Borrower has taken all necessary
actions for the authorization of the borrowing on account of the Loans and for
the execution and delivery of the Loan Documents, including, without limitation,
that those members of Borrower whose approval is required by the terms of
Borrower's organizational documents have duly approved the transactions
contemplated by the Loan Documents and have authorized execution and delivery
thereof by the respective signatories. To the best of Borrower's knowledge, no
other consent by any local, state or federal agency is required in connection
with the execution and delivery of the Loan Documents.
(c) Valid Execution and Delivery. All of the Loan
Documents requiring execution by Borrower have been duly and validly executed
and delivered by Borrower.
(d) Enforceability. All of the Loan Documents constitute
valid, legal and binding obligations of Borrower and are fully enforceable
against Borrower in accordance with their terms by Lender and its successors,
transferees and assigns, subject only to bankruptcy laws, and general
principles of equity, insolvency, reorganization, arrangement, moratorium,
receivership or other similar laws relating to or affecting the rights of
creditors.
(e) No Defenses. The Note, this Deed of Trust and the
other Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense, nor would the operation of any of the terms of the
Note, this Deed of Trust or any of the other Loan Documents, or the exercise of
any right thereunder, render this Deed of Trust unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury.
(f) Defense of Usury. Borrower knows of no facts that
would support a claim of usury to defeat or avoid its obligation to repay the
principal of, interest on, and other sums or amounts due and payable under, the
Loan Documents.
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(g) No Conflict/Violation of Law. The execution, delivery
and performance of the Loan Documents by the Borrower will not cause or
constitute a default under or conflict with the organizational documents of
Borrower, any Guarantor or any general partner or managing member of Borrower or
any Guarantor. The execution, delivery and performance of the obligations
imposed on Borrower under the Loan Documents will not cause Borrower to be in
default, including after due notice or lapse of time or both, under the
provisions of any agreement, judgment or order to which Borrower is a party or
by which Borrower is bound.
(h) Compliance with Applicable Laws and Regulations. All
of the Improvements and the use of the Trust Property comply in all material
respects with, and shall remain in compliance in all material respects with, all
applicable statutes, rules, regulations and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Trust Property,
including all applicable Prescribed Laws (as hereinafter defined) and all
applicable statutes, rules and regulations pertaining to requirements for equal
opportunity, anti-discrimination, fair housing, environmental protection, zoning
and land use. The Improvements comply in all material respects with, and shall
remain in compliance in all material respects with, applicable health, fire and
building codes. Borrower is not aware of any illegal activities relating to
controlled substances on the Trust Property. All certifications, permits,
licenses and approvals, including, without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of the Trust Property as an office building have been obtained and are
in full force and effect. All of the Improvements comply with all material
requirements of any applicable zoning and subdivision laws and ordinances. For
the purposes of this Deed of Trust, "PRESCRIBED LAWS" shall mean , collectively,
(i) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)
(The USA PATRIOT Act), (ii) Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism,
(iii) the International Emergency Economic Power Act, 50 U.S.C. Section 1701 et.
seq. and (iv) all other legal requirements relating to money laundering or
terrorism.
(i) Consents Obtained. All consents, approvals,
authorizations, orders or filings with any court or governmental agency or body,
if any, required for the execution, delivery and performance of the Loan
Documents by Borrower have been obtained or made.
(j) No Litigation. Except as otherwise disclosed to
Lender in writing, there are no pending actions, suits or proceedings,
arbitrations or governmental investigations against the Trust Property, an
adverse outcome of which would materially affect the Borrower's performance
under the Note, this Deed of Trust or the other Loan Documents.
(k) Title. The Borrower has good and marketable fee
simple title to the Trust Property, and good title to the Equipment, subject to
no liens, charges or encumbrances other than the Permitted Exceptions and liens,
charges or encumbrances otherwise expressly permitted by the Loan Documents. The
possession of the Trust Property has been peaceful and undisturbed and title
thereto has not been disputed or questioned to the best of Borrower's knowledge.
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(1) Permitted Exceptions. The Permitted Exceptions do not
and will not materially and adversely affect (1) the ability of the Borrower to
pay in full the principal and interest on the Note in a timely manner or (2) the
use of the Trust Property for the use currently being made thereof, the
operation of the Trust Property as currently being operated or the value of the
Trust Property.
(m) First Lien. Upon the execution by the Borrower and
the recording of this Deed of Trust, and upon the filing of UCC-1 financing
statements or amendments thereto, the Lender will have a valid first lien on the
Trust Property and a valid security interest in the Equipment subject to no
liens, charges or encumbrances other than the Permitted Exceptions and liens,
charges or encumbrances otherwise expressly permitted by the Loan Documents.
(n) ERISA. (i) Borrower shall not engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender of any of its rights under the Note, this
Deed of Trust and the Other Loan Document) to be a non-exempt (under a statutory
or administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(ii) Borrower further covenants and agrees to deliver to
Lender such certifications or other evidence from time to time
throughout the term of the Loans, as requested by Lender in its sole
discretion, that (A) Borrower is not an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a "governmental plan" within the meaning of Section 3(32) of ERISA;
(B) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (C)
one or more of the following circumstances is true:
(x) Equity interests in Borrower are publicly
offered securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(y) Less than 25 percent of each outstanding
class of equity interests in Borrower are held by "benefit
plan investors" within the meaning of 29 C.F.R.
Section 2510.3-101(f)(2);or
(z) Borrower qualifies as an "operating company"
or a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e) or an investment company
registered under The Investment Company Act of 1940.
(iii) As of the date hereof and throughout the term of this
Deed of Trust, Borrower is not and will not be an "employee benefit
plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, and the assets of Borrower do not and will not constitute
"plan assets" of one or more such plans for purposes of Title I of
ERISA. As of the date hereof and throughout the term of this Deed of
Trust, Borrower is not and will not be a "governmental plan" within the
meaning of Section 3(32) of ERISA and transactions by or with Borrower
are not and will not be subject to state statutes applicable to
Borrower regulating investments of and fiduciary obligations with
respect to governmental plans.
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(o) Contingent Liabilities. The Borrower has no known
material contingent liabilities that would materially affect the Borrower's
performance under the Note, this Deed of Trust or the other Loan Documents.
(p) No Other Obligations. The Borrower has no material
financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Borrower is a party or
by which the Borrower or the Trust Property is otherwise bound, other than
obligations incurred in the ordinary course of the operation of the Trust
Property and other than obligations under the Leases, this Deed of Trust and the
other Loan Documents.
(q) Fraudulent Conveyance. The Borrower (1) has not
entered into the Loans or any Loan Document with the actual intent to hinder,
delay, or defraud any creditor and (2) received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Giving effect to the
Loans contemplated by the Loan Documents, the fair saleable value of the
Borrower's assets exceed and will, immediately following the execution and
delivery of the Loan Documents, exceed the Borrower's total liabilities,
including, without limitation, subordinated, unliquidated, disputed or
contingent liabilities. The fair saleable value of the Borrower's assets is and
will, immediately following the execution and delivery of the Loan Documents, be
greater than the Borrower's probable liabilities, including the maximum amount
of its contingent liabilities or its debts as such debts become absolute and
matured. The 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.
The Borrower does not intend to, and does not believe that it will, incur debts
and liabilities (including, without limitation, contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
the Borrower).
(r) Investment Company Act. The Borrower is not (1) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (2) 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 (3)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
(s) Access/Utilities. The Trust Property has adequate
rights of access to public ways and is served by adequate water, sewer, sanitary
sewer and storm drain facilities. Other than as disclosed on the Survey (as
hereinafter defined), all public utilities necessary to the continued use and
enjoyment of the Trust Property as presently used and enjoyed are located in the
public right-of-way abutting the Trust Property, and all such utilities are
connected so as to serve the Trust Property without passing over other property.
All roads necessary for the full utilization of the Trust Property for its
current purpose have been completed and dedicated to public use and accepted by
all governmental authorities or are the subject of access easements for the
benefit of the Trust Property.
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(t) Taxes Paid. Borrower has filed all federal, state,
county and municipal tax returns required to have been filed by Borrower, and,
except as otherwise disclosed to Lender in writing, has paid all taxes which
have become due pursuant to such returns or to any notice of assessment received
by Borrower, and Borrower has no knowledge of any basis for additional
assessment with respect to such taxes other than a possible reassessment of the
Trust Property for real estate tax purposes resulting from transactions
occurring in connection with the contribution of an indirect interest in the
Trust Property to the OP on or prior to the date hereof.
(u) Single Tax Lot. The Premises consists of a single lot
or multiple tax lots; no portion of said tax lot(s) covers property other than
the Premises or a portion of the Premises and no portion of the Premises lies in
any other tax lot.
(v) Special Assessments. Except as disclosed in the title
insurance policy, there are no pending or, to the knowledge of the Borrower,
proposed special or other assessments for public improvements or otherwise
affecting the Trust Property, nor, to the knowledge of the Borrower, are there
any contemplated improvements to the Trust Property that may result in such
special or other assessments.
(w) Intentionally Omitted.
(x) Intentionally Omitted,
(y) Misstatements of Fact. No statement of fact made in
the Loan Documents contains any untrue statement of a material fact or omits to
state any material fact known to Borrower or its Affiliates necessary to make
statements contained herein or therein not misleading. There is no fact
presently known to the Borrower which has not been disclosed which materially
adversely affects, nor as far as the Borrower can foresee, might materially
adversely affect the business, operations or condition (financial or otherwise)
of Borrower.
(z) Condition of Improvements. Except as may be expressly
disclosed in the engineering reports obtained and submitted to Lender, the Trust
Property has not been damaged by fire, water, wind or other cause of loss which
has not been fully restored in all material respects.
(aa) No Insolvency or Judgment. Neither Borrower, nor any
general partner or member of Borrower, nor any Guarantor of the Loans is
currently (a) the subject of or a party to any completed or pending bankruptcy,
reorganization or insolvency proceeding; or (b) the subject of any judgment
unsatisfied of record or docketed in any court of the state in which the Trust
Property is located or in any other court located in the United States. The
Loans will not render the Borrower nor any general partner or member of Borrower
insolvent. As used herein, the term "insolvent" means that the sum total of all
of an entity's liabilities (whether secured or unsecured, contingent or fixed,
or liquidated or unliquidated) is in excess of the value of all such entity's
non-exempt assets, i.e., all of the assets of the entity that are available to
satisfy claims of creditors.
(bb) No Condemnation. No part of any property subject to
the Deed of Trust has been taken in condemnation or other like proceeding to an
extent which would impair the value of the Trust Property, the Deed of Trust or
the Loans or the usefulness of such property for
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the purposes for which it is currently being operated, nor is any proceeding
pending, threatened or known to be contemplated for the partial or total
condemnation or taking of the Trust Property.
(cc) No Labor or Materialmen Claims. Except for those
improvements and other work performed in the ordinary course of business with
respect to which any applicable payments are not more than 60 days past due, all
parties furnishing labor and materials for which payment is due and payable as
of the date hereof have been paid in full and, except for such liens or claims
insured against by the policy of title insurance to be issued in connection with
the Loans, there are no mechanics', laborers' or materialmens' liens or claims
outstanding for work, labor or materials affecting the Trust Property, whether
prior to, equal with or subordinate to the lien of the Deed of Trust.
(dd) No Purchase Options. No tenant, person, party, firm,
corporation or other entity has an option to purchase the Trust Property, any
portion thereof or any interest therein other than options, rights of first
refusal and similar rights to lease space in the Improvements granted to a
tenant pursuant to its respective Lease or in another writing otherwise
delivered to Lender and other than rights of first refusal contained in
operating agreements of members of Borrower in favor of members of the members
of Borrower in the event of a sale of the Trust Property by Borrower.
(ee) Leases. The Trust Property is not subject to any
Leases other than the Leases described in the rent roll delivered to Lender in
connection with this Deed of Trust, together with the schedules and the exhibits
attached to such rent roll (collectively, the "RENT ROLL") and any existing
subleases thereunder. No person has any possessory interest in the Trust
Property or right to occupy the same except under and pursuant to the provisions
of the Leases (and any existing subleases thereunder). As of the date hereof (i)
the Borrower is the owner and holder of the landlord's interest under each
Lease; (ii) there are no prior assignments of the landlord's interest in any
Lease or any portion of Rents which are presently outstanding and have priority
over the Assignment of Leases and Rents (the "ASSIGNMENT OF LEASES AND RENTS"),
dated the date hereof, given by Borrower to Lender and intended to be duly
recorded; (iii) true and correct copies of the Leases have been delivered by
Borrower to Lender and the Leases have not been further modified or amended,
except as disclosed to Lender in writing on or prior to the date hereof; (iv)
each Lease is in full force and effect; (v) except as disclosed on the Rent Roll
or in any tenant estoppels delivered to Lender in connection with the Loans
(collectively, the 'TENANT ESTOPPELS"), neither Borrower nor, to Borrower's
knowledge, any tenant under any Lease is in default under any of the material
terms, covenants or provisions of the Lease, and, except as disclosed to Lender
in writing, Borrower knows of no event which, but for the passage of time or the
giving of notice or both, would constitute an event of default under any Lease;
(vi) except as expressly set forth in the Leases, the Tenant Estoppels or on the
Rent Roll, there are no offsets or defenses to the payment of any portion of the
Rents; and (vii) except as disclosed on the Rent Roll or in any Tenant Estoppel,
all Rents due and payable under each Lease have been paid in full and, except
for estimated payments of operating expenses and taxes made by tenants in
accordance with their Leases, no said Rents have been paid more than one (1)
month in advance of the due dates thereof. For purposes of the preceding
sentence, the term "Lease" shall exclude subleases.
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(ff) Intentionally Omitted.
(gg) Boundary Lines. Except as disclosed in the survey of
the Premises and Improvements delivered to Lender in connection with the funding
of the Loans (the "SURVEY"), to Borrower's knowledge, (i) all of the
Improvements which were included in determining the appraised value of the Trust
Property lie wholly within the boundaries and building restriction lines of the
Trust Property, (ii) no improvements on adjoining properties encroach upon the
Trust Property, and (iii) no easements or other encumbrances upon the Premises
encroach upon any of the Improvements, so as to materially and adversely affect
the value or marketability of the Trust Property except those which are insured
against by title insurance.
(hh) Survey. To Borrower's knowledge, the Survey does not
fail to reflect any material matter affecting the Premises or the Improvements
or the title thereto.
(ii) Forfeiture. There has not been and shall never be
committed by Borrower or, to Borrower's knowledge, any other person in occupancy
of or involved with the operation or use of the Trust Property any act or
omission affording the federal government or any state or local government the
right of forfeiture as against the Trust Property or any part thereof or any
monies paid in performance of Borrower's obligations under any of the Loan
Documents.
(jj) Management Agreement. The Property Management
Agreement dated as of October 1, 1984, as amended (the "INITIAL MANAGEMENT
AGREEMENT"), between Borrower's predecessor-in-interest and ▇▇▇▇▇▇▇ Partners
Development, Ltd., a California limited partnership ("INITIAL MANAGER"),
pursuant to which Initial Manager operates the Trust Property is in full force
and effect and there is no default or violation by any party thereunder. The fee
due under the Initial Management Agreement, and the terms and provisions of the
Initial Management Agreement, are subordinate to this Deed of Trust and Initial
Manager agrees to attorn to Lender pursuant to and in accordance with that
certain Assignment and Subordination of Management Agreement dated of even date
herewith by and among Borrower, Initial Manager and Lender. Borrower shall not
terminate, cancel, modify, renew or extend the Initial Management Agreement, or
enter into any agreement relating to the management or operation of the Trust
Property with Initial Manager or any other party, in each case in violation of
the Loan Documents, without the express written consent of Lender, which consent
shall not be unreasonably withheld; provided, however, that upon contribution of
assets to the OP and initial public offering of shares in the REIT, the Initial
Management Agreement may be terminated and the OP may be substituted as property
manager (the Initial Manager or the OP, in its capacity as property manager, as
applicable, being hereinafter referred to as "MANAGER" ) pursuant to that
certain Property Management and Leasing Agreement dated on or about the date
hereof by and between Borrower and the OP (the "OP MANAGEMENT AGREEMENT" ; the
Initial Management Agreement or the OP Management Agreement, as applicable,
being hereinafter referred to as the "MANAGEMENT AGREEMENT").
(kk) No Broker. No financial advisors, brokers,
underwriters, placement agents, agents or finders have been dealt with by the
Borrower in connection with the Loans.
12. SINGLE PURPOSE ENTITY/SEPARATENESS.
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(a) Borrower represents, warrants and covenants that as
of the date hereof:
(i) Intentionally Omitted.
(ii) Borrower is, shall be and continue to be until the
Debt has been paid in full, a Special Purpose Bankruptcy Remote Entity.
A "SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY" means a corporation or
limited liability company which at all times on and after the date
hereof:
(A) is organized solely for the purpose of, and
is not engaged and will not engage in any business unrelated
to acquiring, developing, owning, holding, selling, leasing,
transferring, exchanging, managing and operating the Trust
Property, borrowing the Loans and entering into, and
performing its obligations under, the Loan Documents with the
Lender, refinancing the Trust Property in connection with a
permitted repayment of the Loans, and transacting lawful
business that is incident, necessary and appropriate to
accomplish the foregoing;
(B) does not have and will not have any assets
other than those related to the Trust Property;
(C) will not engage in, seek or consent to, any
dissolution, winding up, liquidation, consolidation or merger,
any sale of all or substantially all of its assets, any
transfer of shareholder or membership interests in Borrower or
any amendment of its articles of incorporation, articles of
organization, certificate of formation or operating agreement
(as applicable) with respect to the matters set forth in this
paragraph in each case except as permitted in the Loan
Documents or consented to by Lender in writing;
(D) if such entity is a corporation, has at
least two Independent Directors (hereinafter defined), and
will not cause or allow the board of directors of such entity
to take any action requiring the unanimous affirmative vote of
100% of the members of its board of directors unless each
Independent Director shall have participated in such vote;
(E) if such entity is a Delaware limited
liability company, has (A) a Board of Managers with at least
two Independent Managers and (B) at least two springing
members;
(F) if such entity is (A) a limited liability
company, has articles of organization, a certificate of
formation and/or an operating agreement, as applicable, or (B)
a corporation, has a certificate of incorporation or articles
that, in each case, provides that such entity will not: (1)
dissolve, merge, liquidate, consolidate; (2) sell all or
substantially all of its assets or the assets of any entity in
which it has a direct or indirect legal or beneficial
ownership interest; (3) engage in any other business activity,
or amend its organizational documents with respect to the
matters set forth in this paragraph without the consent of the
Lender; or (4) without the affirmative vote of the Independent
Directors and of all other directors of the corporation, or of
the Independent Managers, as applicable,
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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;
(G) is and covenants to remain solvent and pay
its debts and liability (including, as applicable, shared
personnel and overhead expenses) from its assets as the same
shall become due, and is maintaining and covenants to 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;
(H) will not fail to correct any known
misunderstanding regarding the separate identity of such
entity;
(I) will maintain its accounts, books and
records separate from any other Person and will file its own
tax returns to the extent required by law, except to the
extent that it is required or permitted to file consolidated
tax returns by law;
(J) will maintain its own records, books,
resolutions and agreements;
(K) will not commingle its funds or assets with
those of any other Person;
(L) will hold its assets in its own name;
(M) will maintain its financial statements,
accounting records and other entity documents separate from
any other person and will not permit its assets to be listed
as assets on the financial statement of any other entity
except as required by generally accepted accounting principles
or by law; provided, however, that if Borrower's assets are
reported on a consolidated basis, any such consolidated
financial statement shall contain a note indicating that
Borrower's separate assets and liabilities are neither
available to pay the debts of the consolidated entity nor
constitute obligations of the consolidated entity;
(N) will pay its own liabilities and expenses,
including the salaries of its own employees, if any, out of
its own funds and assets, and will maintain a sufficient
number of employees in light of its contemplated business
operations;
(O) will observe all corporate or limited
liability company formalities, as applicable;
(P) has and will have no Indebtedness other than
(i) the Loans, (ii) liabilities incurred in the ordinary
course of business relating to the ownership and operation of
the Trust Property (including, but not limited to, the
Financing Installment pursuant to paragraph 3(d) hereof and
trade payables) and the routine administration of Borrower,
which do not in the aggregate exceed Four Million and No/100
Dollars ($4,000,000), and which are not more than sixty (60)
days past the date incurred and which amounts are normal and
reasonable under the circumstances, provided such liabilities
are not evidenced by a note and are paid
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when due, and (iii) such other liabilities that may be
permitted pursuant to this Deed of Trust (including, but not
limited to, liens against the Trust Property and obligations
to tenants under Leases that are executed in accordance with
the terms and provisions of paragraph 8 of this Deed of Trust)
or the other Loan Documents;
(Q) 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 Deed of
Trust or the other Loan Documents;
(R) will not acquire obligations or securities
of its partners, members or shareholders or any other
Affiliate except as permitted pursuant to this Deed of Trust
or the other Loan Documents;
(S) 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;
(T) maintains and uses and will maintain and use
separate invoices and checks bearing its name. The invoices
and checks utilized by the Special Purpose Bankruptcy Remote
Entity or utilized to collect its funds or pay its expenses
shall bear its own name and shall not bear the name of any
other entity unless such entity is clearly designated as being
the Special Purpose Bankruptcy Remote Entity's agent;
(U) except as permitted pursuant to this Deed of
Trust or the other Loan Documents, will not pledge its assets
for the benefit of any other Person;
(V) 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 other than an
Affiliate of Borrower and not as a division or part of any
other Person;
(W) 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;
(X) will not make loans (other than tenant
improvement allowances and other concessions in the nature of
loans under the Leases) to any Person or hold evidence of
indebtedness issued by any other person or entity (other than
cash and Permitted Investments or other investment-grade
securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity);
(Y) will not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division
or part of it, and shall not identify itself as a division of
any other Person;
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(Z) will not enter into or be a party to, any
transaction with its partners, members, shareholders or
Affiliates except (A) 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 (B) in connection with the Loan
Documents;
(AA) other than with respect to matters covered
by an errors and omissions insurance policy, will not have any
obligation to, and will not, indemnify its partners, officers,
directors or members, as the case may be, or any such
obligation will be 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;
(BB) will not form, acquire or hold any
subsidiary other than as shown on the organizational chart
furnished to Lender in connection with the Loans;
(CC) except as provided for in any guaranty that
is part of the Loan Documents including, without limitation,
(i) that certain Guarantee (Secured Loan) executed by ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ III and certain other parties naming Lender and
others as beneficiaries dated on or about the date hereof (the
"BOTTOM DOLLAR GUARANTY"), provided, however, that new
parties, except for new parties that have been consented to by
Lender in writing as of the date hereof, will not be added as
guarantors under the Bottom Dollar Guaranty unless Borrower
delivers to Lender a "substantive non-consolidation opinion"
satisfactory to Lender and the Rating Agencies that include a
pairing between such new guarantor and Borrower; and (ii)
either (A) that certain Guarantee (Secured Loan-Deed of Trust
Note B) (Bunker Hill) dated on or about the date hereof made
by ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd., a California limited
partnership, for the benefit of Lender (the "BH GUARANTY") or
(B) that certain Guarantee (Secured Loan-Deed of Trust Note B)
dated on or about the date hereof made by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
III for the benefit of Lender (the "RFM GUARANTY"), does not
and will not have any of its obligations guaranteed by any
Affiliate;
(DD) will comply with all of the terms and
provisions contained in its organizational documents
(EE) with respect to Borrower only, will not
permit any Affiliate or constituent party independent access
to its bank accounts other than with respect to the Manager in
its capacity as Manager pursuant to the Management Agreement;
(FF) with respect to Borrower only, will
continuously maintain its resolutions, agreements and other
instruments regarding the transactions contemplated by the
Loans as official records;
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(GG) will reasonably allocate overhead in good
faith and consistent with sound accounting practices;
(HH) with respect to Borrower only, other than
the Guaranty, the Bottom Dollar Guaranty and either the BH
Guaranty or the RPM Guaranty, will not hold out the credit of
any other person or entity as being responsible for its
obligations or seek or obtain credit based on the credit of
any other person or entity; and
(II) will make all oral and written
communications, including, without limitation, letters,
invoices, purchase orders, contracts, statements, and
applications, solely in the name of Borrower if from Borrower.
(b) Intentionally Omitted.
(c) For purposes of this Deed of Trust, the
following defined terms shall have the respective meaning:
(i) "AFFILIATE" means, with respect to any
person or entity, (a) any corporation in which such entity or any
partner, shareholder, director, officer, member, or manager of such
entity directly or indirectly owns or controls more than ten percent
(10%) of the beneficial interest, (b) any partnership, joint venture or
limited liability company in which such entity or any partner,
shareholder, director, officer, member, or manager of such entity is a
partner, joint venturer or member, (c) any trust in which such entity
or any partner, shareholder, director, officer, member or manager of
such entity is a trustee or beneficiary, (d) any entity of any type
which is directly or indirectly owned or controlled by such entity or
any partner, shareholder, director, officer, member or manager of such
entity, (e) any partner, shareholder, director, officer, member,
manager or employee of such entity, or (f) any Person related by birth,
adoption or marriage to any partner, shareholder, director, officer,
member, manager, or employee of such entity.
(ii) "INDEBTEDNESS" means, for any Person,
without duplication: (a) all indebtedness of such Person, including,
but not limited to, amounts for borrowed money, for amounts drawn under
a letter of credit, or for the deferred purchase price of property for
which such Person or its assets is liable, (b) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for
which such Person would be liable, if such amounts were advanced under
the credit facility, (c) all amounts required to be paid by such Person
as a guaranteed payment to partners or a preferred or special dividend,
including any mandatory redemption of shares or interests, (d) all
indebtedness guaranteed by such Person, directly or indirectly, (e) all
obligations under leases that constitute capital leases for which such
Person is liable, and (f) all obligations of such Person under interest
rate swaps, caps, floors, collars and other interest hedge agreements,
in each case whether such Person is liable contingently or otherwise,
as obligor, Guarantor or otherwise, or in respect of which obligations
such Person otherwise assures a creditor against loss.
(iii) "INDEPENDENT DIRECTOR" OR "INDEPENDENT
MANAGER" means a person who is not and will not be while serving and
for the prior five (5) years has not been (a) a
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member (other than as a holder of a potential interest in a "special
purpose" single member limited liability company that was to vest upon
any event pursuant to which the single member ceases to be the single
member of such limited liability company), director (other than an
Independent Director), manager (other than an Independent Manager),
employee, attorney, or counsel of Borrower or its Affiliates, (b) is
not a creditor, customer, supplier or other person who derives any of
its purchases or revenues from its activities with Borrower or its
Affiliates, or (c) is not a member of the immediate family of any
member, manager, employee, attorney, creditor, customer, supplier or
other person referred to above or (d) a person controlling or under the
common control of anyone listed in (a) - (c). A person that otherwise
satisfies the foregoing shall not be disqualified from serving as an
Independent Director or Independent Manager if such individual is at
the time of initial appointment, or at any time while serving as an
Independent Director or Independent Manager, as applicable, an
Independent Director or Independent Manager of a "Special Purpose
Entity" affiliated with Borrower.
(iv) "PERSON" means any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
trustee, estate, limited liability company, unincorporated
organization, real estate investment trust, government or any agency or
political subdivision thereof, or any other form of entity.
(d) The representations and warranties set forth in this
paragraph 12 shall survive for so long as any amount remains payable to Lender
under this Deed of Trust or any other Loan Document.
(e) All of the assumptions made in that certain
substantive non-consolidation opinion letter dated the date hereof, delivered by
▇▇▇, Castle and ▇▇▇▇▇▇▇▇▇ LLP in connection with the Loans (the "INSOLVENCY
Opinion") including, but not limited to, any exhibits attached thereto, are true
and correct hi all material respects. Borrower has complied and will comply in
all material respects with all of the assumptions made with respect to it in the
Insolvency Opinion. To the best of Borrower's knowledge, each entity other than
the Borrower with respect to which an assumption is made in the Insolvency
Opinion has complied and will comply in all material respects with all of the
assumptions made with respect to it in the Insolvency Opinion.
13. ESTOPPEL CERTIFICATES AND NO DEFAULT AFFIDAVITS.
After request by Lender, Borrower shall within ten (10) days furnish Lender with
a statement, duly acknowledged and certified, setting forth (i) the amount of
the original principal amount of the Note, (ii) the unpaid principal amount of
the Note, (iii) the rate of interest of the Note, (iv) the date installments of
interest and/or principal were last paid, (v) any known offsets or defenses to
the payment of the Debt, if any, (vi) that the Note, this Deed of Trust and the
other Loan Documents are valid, legal and binding obligations and have not been
modified or if modified, giving particulars of such modification; and (vii)
reaffirming all representations and warranties of Borrower set forth herein and
in the other Loan Documents as of the date requested by Lender or, to the extent
of any changes to any such representations and warranties, so stating such
changes.
14. Controlling Agreement. It is expressly stipulated and
agreed to be the intent of Borrower, and Lender at all times to comply with
applicable state law or applicable
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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 paragraph 14 (and the similar paragraph contained in the
Note) shall control every other covenant and agreement in this Deed of Trust and
the other Loan Documents. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under the
Note or under any of the other Loan Documents, 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 Note, or if 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 on the
principal balance of the Note and all other Debt without any resulting
prepayment penalty or premium (or, if the Note and all other Debt have been or
would thereby be paid in full, refunded to Borrower), and the provisions of the
Note and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Debt 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 herein or in any
of the other Loan Documents, 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.
15. CHANGES IN LAWS REGARDING TAXATION. If any law is
enacted or adopted or amended after the date of this Deed of Trust which deducts
the Debt from the value of the Trust Property for the purpose of taxation or
which imposes a tax, either directly or indirectly, on the Debt or Lender's
interest in the Trust Property, Borrower will pay such tax, with interest and
penalties thereon, if any. In the event Lender is advised by counsel chosen by
it that the payment of such tax or interest and penalties by Borrower would be
unlawful or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then in any such event, Lender shall have the option, by
written notice of not less than one hundred twenty (120) days, to declare the
Debt immediately due and payable without any prepayment consideration except
that if an Event of Default has occurred, then the Borrower shall pay to Lender
an additional amount equal to the Yield Maintenance Premium (as defined in the
Note).
16. No CREDITS ON ACCOUNT OF THE DEBT. Borrower will not
claim or demand or be entitled to any credit or credits on account of the Debt
for any part of the Taxes or Other Charges assessed against the Trust Property,
or any part thereof, and no deduction shall otherwise be made or claimed from
the assessed value of the Trust Property, or any part thereof, for real estate
tax purposes by reason of this Deed of Trust or the Debt. In the event such
claim, credit or deduction shall be required by law, Lender shall have the
option, by written notice of not less than one hundred twenty (120) days, to
declare the Debt immediately due and payable without any prepayment
consideration except that if an Event of Default has occurred, then the Borrower
shall pay to Lender an additional amount equal to the Yield Maintenance Premium.
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17. DOCUMENTARY STAMPS. If at any time the United States
of America, any State thereof or any subdivision of any such State shall require
revenue or other stamps to be affixed to the Note or this Deed of Trust, or
impose any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
18. BOOKS AND RECORDS.
(a) The financial statements heretofore furnished to
Lender are, as of the dates specified therein, complete and correct in all
material respects and fairly present in all material respects the financial
condition of the Borrower and any other persons or entities that are the subject
of such financial statements, and are prepared in accordance with generally
accepted accounting principles. Since the date of such financial statements,
there has been no materially adverse change in the financial condition,
operation or business of Borrower from that set forth in said financial
statements.
(b) Borrower will maintain full and accurate books of
accounts and other records reflecting the results of the operations of the Trust
Property and will furnish to Lender on or before forty-five (45) days after the
end of each calendar quarter the following items, each certified by Borrower as
being true and correct in all material respects: (i) a written statement (rent
roll) dated as of the last day of each such calendar quarter identifying each of
the Leases (excluding subleases) by the term, space occupied, rental required to
be paid, security deposit paid, any rental concessions, and a report identifying
any defaults or payment delinquencies thereunder; (ii) monthly and year to date
operating statements prepared for each calendar month during each such calendar
quarter, noting Net Operating Income, Gross Income from Operations, and
Operating Expenses, and including an itemization of actual (not pro forma)
capital expenditures and other information necessary and sufficient under
generally accepted accounting practices to fairly represent the financial
position and results of operation of the Trust Property during such calendar
month, all in form satisfactory to Lender; (iii) a property balance sheet for
each such calendar quarter; (iv) a comparison of the budgeted income and
expenses and the actual income and expenses for year to date together with a
detailed explanation of any variances of five percent (5%) or more between
budgeted and actual amounts for such year to date period; and (v) a calculation
reflecting the Debt Service Coverage Ratio (as hereinafter defined) as of the
last day of each such calendar quarter. Until a Securitization has occurred,
Borrower shall furnish monthly each of the items listed in the immediately
preceding sentence within thirty (30) days after the end of such month. Within
one hundred twenty (120) days following the end of each calendar year (provided,
however, if requested by Lender, Borrower shall use commercially reasonable
efforts to provide Lender with any unaudited annual statements prior to such
date), Borrower shall furnish statements of its financial affairs and condition
including a balance sheet and a statement of profit and loss for the Borrower in
such detail as Lender may reasonably request, and setting forth the financial
condition and the income and expenses for the Trust Property for the immediately
preceding calendar year, which statements shall be prepared by Borrower.
Borrower's annual financial statements shall include (x) a list of the tenants,
if any, occupying more than twenty (20%) percent of the total floor area of the
Improvements, and (y) a breakdown showing the year in which each Lease then in
effect expires and the percentage of total floor area of the Improvements and
the percentage of base rent with respect to which Leases shall expire in each
such year, each such percentage to be expressed on both a per year and a
cumulative basis. Borrower's annual financial statements shall be accompanied by
a certificate
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executed by a financial officer of Borrower or the REIT, as applicable, stating
that each such annual financial statement presents fairly the financial
condition of the Trust Property being reported upon and shall be audited by a
"Big Four" accounting firm or other independent certified public accountant
reasonably acceptable to Lender, which audited financial statements may be in
the form of schedules to the audited consolidated financial statements of the
REIT. Each such annual financial statement shall be prepared in accordance with
generally accepted accounting principles consistently applied or the method used
in connection with the financial statements delivered to Lender in connection
with the closing of the Loans. At any time and from time to time Borrower shall
deliver to Lender or its agents such other financial data as Lender or its
agents shall reasonably request with respect to the ownership, maintenance, use
and operation of the Trust Property.
(c) For the purposes of this Deed of Trust, the term
"DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the applicable period in
which: (A) the numerator is the Net Operating Income (excluding interest on
credit accounts) for such period as set forth in the statements required
hereunder and (B) the denominator is the aggregate amount of principal and
interest due and payable for such period under the Note.
19. PERFORMANCE OF OTHER AGREEMENTS. Borrower shall
observe and perform each and every material term to be observed or performed by
Borrower pursuant to the terms of any agreement or recorded instrument affecting
or pertaining to the Trust Property.
20. FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, mortgages, assignments,
notices of assignment, Uniform Commercial Code financing statements or
continuation statements, transfers and assurances as Lender shall, from time to
time, require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lender the property and rights hereby deeded, mortgaged, given,
granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which
Borrower may be or may hereafter become bound to convey or assign to Lender, or
for carrying out the intention or facilitating the performance of the terms of
this Deed of Trust or for filing, registering or recording this Deed of Trust or
for facilitating the sale of the Loans and the Loan Documents as described in
paragraph 61 below. Borrower, promptly upon demand, will execute and deliver and
hereby authorizes Lender to execute in the name of Borrower or without the
signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements, chattel mortgages or other instruments, to evidence more
effectively the security interest of Lender in the Trust Property. Upon
foreclosure, the appointment of a receiver or any other relevant action,
Borrower will, at the cost of Borrower and without expense to Lender, cooperate
fully and completely to effect the assignment or transfer of any license,
permit, agreement or any other right necessary or useful to the operation of or
the Trust Property. Borrower grants to Lender and Trustee upon the occurrence of
an Event of Default and prior to the acceptance of a cure thereof by Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender
and Trustee at law and in equity, including, without limitation, such rights and
remedies available to Lender and Trustee pursuant to this paragraph.
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21. RECORDING OF DEED OF TRUST. Etc. Borrower forthwith
upon the execution and delivery of this Deed of Trust and thereafter, from time
to time, will cause this Deed of Trust, and any security instrument creating a
lien or security interest or evidencing the lien hereof upon the Trust Property
and each instrument of further assurance to be filed, registered or recorded in
such manner and in such places as may be required by any present or future law
in order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Lender in, the Trust Property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Deed of Trust, any deed of
trust supplemental hereto, any security instrument with respect to the Trust
Property and any instrument of further assurance, and all federal, state, county
and municipal, taxes, duties, imposts, assessments and charges arising out of or
in connection with the execution and delivery of this Deed of Trust, any deed of
trust supplemental hereto, any security instrument with respect to the Trust
Property or any instrument of further assurance, except where prohibited by law
so to do. Borrower shall hold harmless and indemnify Lender, its successors and
assigns, against any liability incurred by reason of the imposition of any tax
on the making and recording of this Deed of Trust.
22. REPORTING REQUIREMENTS. Borrower agrees to give
prompt notice to Lender of the insolvency or bankruptcy filing of Borrower or
the death, insolvency or bankruptcy filing of any Guarantor.
23. EVENTS OF DEFAULT. The Debt shall become immediately
due and payable at the option of Lender upon the happening of any one or more of
the following events of default (each an "EVENT OF DEFAULT"):
(a) if any portion of the Debt that is due on a Payment
Date is not paid on or before the related Payment Date or, for any payment other
than payments due on a Payment Date, the date on which such payment is due;
(b) subject to Borrower's right to contest as provided
herein, if any of the Taxes are not paid prior to the date that any interest,
late fees or other penalties would accrue thereon or any of the Other Charges
are not paid when the same are due and payable (unless sums equaling the amount
of Taxes and Other Charges then due and payable have been delivered to Lender in
accordance with paragraph 6 hereof);
(c) if the Policies are not kept in full force and
effect, or if the Policies or certificates evidencing such Policies are not
delivered to Lender within fifteen (15) days after request;
(d) except as expressly permitted by the terms of this
Deed of Trust or the other Loan Documents, if Borrower transfers or encumbers
any portion of the Trust Property without Lender's prior written consent;
(e) if any representation or warranty of Borrower, or of
any Guarantor, made herein or in any other Loan Document or in any certificate,
report, financial statement or other instrument or document furnished to Lender
in connection with the Loans shall have been false or misleading in any material
respect when made, provided that if such misrepresentation was
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not intentional, is susceptible to cure and Lender will not be adversely
affected by a delay in enforcing its remedy under the Loan Documents, Borrower
shall have thirty (30) days after notice thereof to cure such default;
(f) if Borrower or any Guarantor shall make an assignment
for the benefit of creditors or if Borrower shall generally not be paying its
debts as they become due;
(g) if a receiver (other than a receiver appointed by
Lender), liquidator or trustee of Borrower or of any Guarantor shall be
appointed or if Borrower or any Guarantor shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in by, Borrower or any
Guarantor or if any proceeding for the dissolution or liquidation of Borrower or
of any Guarantor shall be instituted; however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower or such Guarantor, upon the same not being discharged, stayed or
dismissed within ninety (90) days;
(h) if Borrower shall be in default under any other deed
of trust or security agreement covering any part of the Trust Property whether
it be superior or junior in lien to this Deed of Trust;
(i) subject to Borrower's right to contest as provided
herein, if the Trust Property becomes subject to any mechanic's, materialman's
or other lien that is not otherwise permitted by the Loan Documents and such
lien is not removed of record within thirty (30) days of the filing or recording
of such lien (except a lien for local real estate taxes and assessments or
special taxes not then due and payable);
(j) if Borrower fails to cure properly any violations of
laws or ordinances affecting or which may be interpreted to affect the Trust
Property within thirty (30) days after Borrower first receives notice of any
such violations; provided, however, that if such violation is reasonably
susceptible of cure, but not within such thirty (30) day period and the
applicable law or ordinance permits such longer period within which to cure such
violation, then Borrower shall be permitted up to an additional sixty (60) days
to cure such violation provided that Borrower diligently and continuously
pursues such cure;
(k) except as permitted in this Deed of Trust, the
alteration, improvement, demolition or removal of any of the Improvements
without the prior consent of Lender;
(l) if Borrower shall continue to be in default under any
term, covenant, or provision of the Note or any of the other Loan Documents,
beyond applicable notice and/or cure periods contained in those documents;
(m) if Borrower fails to cure a default under any other
term, covenant or provision of this Deed of Trust within thirty (30) days after
Borrower first receives notice of any such default; provided, however, if such
default is reasonably susceptible of cure, but not within such thirty (30) day
period, then Borrower may be permitted up to an additional sixty (60) days to
cure such default provided that Borrower diligently and continuously pursues
such cure;
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(n) if without Lender's prior written consent, except as
otherwise expressly permitted by the Loan Documents, (i) the Management
Agreement is terminated, (ii) the ownership, management or control of Manager is
transferred, (iii) there is a material change in the Management Agreement, or
(iv) there shall be a material default by Borrower under the Management
Agreement that is not cured within any applicable notice or cure period provided
under the Management Agreement;
(o) if Borrower ceases to continuously operate the Trust
Property or any material portion thereof as an office building for any reason
whatsoever (other than temporary cessation in connection with any repair or
renovation thereof undertaken with the consent of Lender);
(p) if any of the assumptions contained in the Insolvency
Opinion, or in any other "non-consolidation" opinion delivered to Lender in
connection with the Loans, or in any other "non-consolidation" delivered
subsequent to the closing of the Loans, is or shall become untrue in any
respect; or
(q) if Borrower fails to comply with the covenants as to
Prescribed Laws set forth in paragraph 9 hereof.
24. LATE PAYMENT CHARGE. If any portion of the Debt is
not paid on or before the date on which such payment is due after the expiration
of any applicable grace period, Borrower shall pay to Lender upon demand an
amount equal to the lesser of five percent (5%) of such due and unpaid portion
of the Debt or the maximum amount permitted by applicable law in order to defray
a portion of the expenses incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment, and such amount shall be secured by this Deed of Trust.
25. RIGHT TO CURE DEFAULTS. Upon the occurrence of any
Event of Default and prior to the acceptance of a cure thereof by Lender or if
Borrower fails to make any payment (including, without limitation, any required
payments for taxes, insurance or to discharge any liens with respect to the
Property) or to do any act as herein provided, Lender may, but without any
obligation to do so and without notice to or demand on Borrower and without
releasing Borrower from any obligation hereunder, make or do the same in such
manner and to such extent as Lender may deem necessary to protect the security
hereof. Lender is authorized to enter upon the Trust Property for such purposes
or appear in, defend, or bring any action or proceeding to protect its interest
in the Trust Property or to foreclose this Deed of Trust or collect the Debt,
and the cost and expense thereof (including reasonable attorneys' fees and
disbursements to the extent permitted by law), with interest at the Default Rate
(as defined in the Note) for the period after notice from Lender that such cost
or expense was incurred to the date of payment to Lender, shall constitute a
portion of the Debt, shall be secured by this Deed of Trust and the other Loan
Documents and shall be due and payable to Lender upon demand.
26. ADDITIONAL REMEDIES.
(a) Upon the occurrence of any Event of Default, subject
to the requirements and limitations of applicable law, Lender or Trustee may
take such action, without notice or
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demand, as it deems advisable to protect and enforce its rights against Borrower
and in and to the Trust Property by Lender itself or through Trustee or
otherwise, including, without limitation, the following actions, each of which
maybe pursued concurrently or otherwise, at such time and in such order as
Lender may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Lender:
(i) declare the entire Debt to be immediately due and
payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete
foreclosure of this Deed of Trust in which case the Trust Property or
any interest therein may be sold for cash or upon credit in one or more
parcels or in several interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Deed of Trust for the
portion of the Debt then due and payable, subject to the continuing
lien of this Deed of Trust for the balance of the Debt not then due;
(iv) sell for cash or upon credit the Trust Property or
any part thereof and all estate, claim, demand, right, title and
interest of Borrower therein and rights of redemption thereof, pursuant
to the power of sale contained herein or otherwise, at one or more
sales, as an entirety or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by
law;
(v) institute an action, suit or proceeding in equity for
the specific performance of any covenant, condition or agreement
contained herein, or in any of the other Loan Documents;
(vi) recover judgment on the Note either before, during or
after any proceedings for the enforcement of this Deed of Trust;
(vii) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Trust Property, without notice and
without regard for the adequacy of the security for the Debt and
without regard for the solvency of the Borrower, any Guarantor or of
any person, firm or other entity liable for the payment of the Debt;
(viii) enforce Lender's interest in the Leases and Rents and
enter into or upon the Trust Property, either personally or by its
agents, nominees or attorneys and dispossess Borrower and its agents
and servants therefrom, and thereupon Lender may (A) use, operate,
manage, control, insure, maintain, repair, restore and otherwise deal
with all and every part of the Trust Property and conduct the business
thereat; (B) complete any construction on the Trust Property in such
manner and form as Lender deems advisable; (C) make alterations,
additions, renewals, replacements and improvements to or on the Trust
Property; (D) exercise all rights and powers of Borrower with respect
to the Trust Property, whether in the name of Borrower or otherwise,
including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, ▇▇▇ for, collect
and receive all Rents; and (E) apply the receipts from the Trust
Property to the payment of the Debt, after deducting therefrom all
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expenses (including reasonable attorneys' fees and disbursements)
incurred in connection with the aforesaid operations and all amounts
necessary to pay the taxes, assessments insurance and other charges in
connection with the Trust Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents and
employees;
(ix) require Borrower to pay monthly in advance to Lender,
or any receiver appointed to collect the Rents, the fair and reasonable
rental value for the use and occupation of any portion of the Trust
Property occupied by Borrower and require Borrower to vacate and
surrender possession to Lender of the Trust Property or to such
receiver and, in default thereof, evict Borrower by summary proceedings
or otherwise; or
(x) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform Commercial Code
including without limitation the right to receive and/or establish a
lock box for all Rents proceeds from the Intangibles and any other
receivables or rights to payments of Borrower relating to the Trust
Property.
In the event of a sale, by foreclosure or otherwise, of less
than all of the Trust Property, this Deed of Trust shall continue as a lien on
the remaining portion of the Trust Property.
(b) The proceeds of any sale made under or by virtue of
this paragraph, together with any other sums which then may be held by Lender
under this Deed of Trust, whether under the provisions of this paragraph or
otherwise, shall be applied by Lender to the payment of the Debt in such
priority and proportion as Lender in its sole discretion shall deem proper.
(c) Except as may be prohibited by applicable law, Lender
may adjourn from time to time any sale by it to be made under or by virtue of
this Deed of Trust by announcement at the time and place appointed for such sale
or for such adjourned sale or sales; and, except as otherwise provided by any
applicable provision of law, Lender or Trustee, without further notice or
publication, may make such sale at the time and place to which the same shall be
so adjourned.
(d) Upon the completion of any sale or sales pursuant
hereto, Lender, or an officer of any court empowered to do so, shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. Lender and Trustee are hereby irrevocably appointed the true and
lawful attorney of Borrower, in its name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the Trust Property and
rights so sold and for that purpose Lender and Trustee may execute all necessary
instruments of conveyance, assignment and transfer, and may substitute one or
more persons with like power, Borrower hereby ratifying and confirming all that
its said attorney or such substitute or substitutes shall lawfully do by virtue
hereof. Except as may be prohibited by applicable law, any sale or sales made
under or by virtue of this paragraph, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
Borrower in and to the properties and rights
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so sold, and shall be a perpetual bar both at law and in equity against Borrower
and against any and all persons claiming or who may claim the same, or any part
thereof from, through or under Borrower.
(e) Upon any sale made under or by virtue of this
paragraph, whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Lender may bid for and acquire the Trust Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Debt the net sales price after deducting therefrom the
expenses of the sale and costs of the action and any other sums which Lender is
authorized to deduct under this Deed of Trust.
(f) Except as may be prohibited by applicable law, no
recovery of any judgment by Lender and no levy of an execution under any
judgment upon the Trust Property or upon any other property of Borrower shall
affect in any manner or to any extent the lien of this Deed of Trust upon the
Trust Property or any part thereof, or any liens, rights, powers or remedies of
Lender hereunder, but such liens, rights, powers and remedies of Lender shall
continue unimpaired as before.
(g) Lender may terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided in
this paragraph at any time before the conclusion thereof, as determined in
Lender's sole discretion and without prejudice to Lender.
(h) Lender may resort to any remedies and the security
given by the Note, this Deed of Trust or the Loan Documents in whole or in part,
and in such portions and in such order as determined by Lender's sole
discretion. Except as may be prohibited by applicable law, no such action shall
in any way be considered a waiver of any rights, benefits or remedies evidenced
or provided by the Note, this Deed of Trust or any of the other Loan Documents.
The failure of Lender or Trustee to exercise any right, remedy or option
provided in the Note, this Deed of Trust or any of the other Loan Documents
shall not be deemed a waiver of such right, remedy or option or of any covenant
or obligation secured by the Note, this Deed of Trust or the other Loan
Documents. No acceptance by Lender of any payment after the occurrence of any
Event of Default and no payment by Lender of any obligation for which Borrower
is liable hereunder shall be deemed to waive or cure any Event of Default with
respect to Borrower, or Borrower's liability to pay such obligation. Except as
may be prohibited by applicable law, no sale of all or any portion of the Trust
Property, no forbearance on the part of Lender or Trustee, and no extension of
time for the payment of the whole or any portion of the Debt or any other
indulgence given by Lender or Trustee to Borrower, shall operate to release or
in any manner affect the interest of Lender in the remaining Trust Property or
the liability of Borrower to pay the Debt. No waiver by Lender or Trustee shall
be effective unless it is in writing and then only to the extent specifically
stated. All costs and expenses of Lender and Trustee in exercising the rights
and remedies under this paragraph 26 (including reasonable attorneys' fees and
disbursements to the extent permitted by law), shall be paid by Borrower
immediately upon notice from Lender or Trustee, with interest at the Default
Rate for the period after notice from Lender or Trustee and such costs and
expenses shall constitute a portion of the Debt and shall be secured by this
Deed of Trust.
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(i) The interests and rights of Lender under the Note,
this Deed of Trust or in any of the other Loan Documents shall not be impaired
by any indulgence, including (i) any renewal, extension or modification which
Lender may grant with respect to any of the Debt, (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which Lender
may grant with respect to the Trust Property or any portion thereof; or (iii)
any release or indulgence granted to any maker, endorser, Guarantor or surety of
any of the Debt.
27. RIGHT OF ENTRY. In addition to any other rights or
remedies granted under this Deed of Trust, Lender, Trustee and their agents,
during the Term, shall have the right upon reasonable notice to Borrower to
enter and inspect the Trust Property during normal business hours in a manner
which does not unreasonably interfere with tenants or occupants thereof. The
cost of such inspections or audits shall be borne by Borrower should Lender
determine that an Event of Default exists, including the cost of all follow up
or additional investigations or inquiries deemed reasonably necessary by Lender.
The cost of such inspections, if not paid for by Borrower promptly upon demand,
may be added to the principal balance of the sums due under the Note and this
Deed of Trust and shall bear interest thereafter until paid at the Default Rate
if not paid within five (5) days after such demand.
28. SECURITY AGREEMENT.
(a) This Deed of Trust is both a real property mortgage
and a "security agreement" within the meaning of the Uniform Commercial Code.
The Trust Property includes both real and personal property and all other rights
and interests, whether tangible or intangible in nature, of Borrower in the
Trust Property. Borrower by executing and delivering this Deed of Trust has
granted and hereby grants to Lender and Trustee, as security for the Debt, a
security interest in the Trust Property to the full extent that the Trust
Property may be subject to the Uniform Commercial Code (said portion of the
Trust Property so subject to the Uniform Commercial Code being called in this
paragraph the "COLLATERAL"). This Deed of Trust shall also constitute a
"fixture filing" for the purposes of the Uniform Commercial Code. As such, this
Deed of Trust covers all items of the Collateral that are or are to become
fixtures. Information concerning the security interest herein granted may be
obtained from the parties at the addresses of the parties set forth in the first
paragraph of this Deed of Trust.
(b) If an Event of Default shall occur, Lender and
Trustee, in addition to any other rights and remedies which it may have, shall
have and may exercise immediately and without demand, any and all rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code, including, without limiting the generality of the foregoing, the right to
take possession of the Collateral or any part thereof, and to take such other
measures as Lender or Trustee may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Lender or Trustee,
Borrower shall at its expense assemble the Collateral and make it available to
Lender and Trustee at a convenient place acceptable to Lender. Borrower shall
pay to Lender and Trustee on demand any and all expenses, including attorneys'
fees and disbursements, incurred or paid by Lender and Trustee in protecting the
interest in the Collateral and in enforcing the rights hereunder with respect to
the Collateral. Any notice of sale, disposition or other intended action by
Lender and Trustee with respect to the Collateral sent to Borrower in accordance
with the provisions hereof at least ten (10) Business Days prior to such action,
shall constitute commercially reasonable notice to Borrower. The
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proceeds of any disposition of the Collateral, or any part thereof, may be
applied by Lender to the payment of the Debt in such priority and proportions as
Lender in its sole discretion shall deem proper. In the event of any change in
name, identity or structure of Borrower, Borrower shall notify Lender and
Trustee thereof and promptly after request shall execute (if necessary), file
and record such Uniform Commercial Code forms as are necessary to maintain the
priority of Lender's lien upon and security interest in the Collateral, and
shall pay all expenses and fees in connection with the filing and recording
thereof. If Lender shall require the filing or recording of additional Uniform
Commercial Code forms or continuation statements, Borrower shall, promptly after
request, execute (if necessary), file and record such Uniform Commercial Code
forms or continuation statements as Lender shall deem necessary, and shall pay
all expenses and fees in connection with the filing and recording thereof, it
being understood and agreed, however, that no such additional documents shall
increase Borrower's obligations under the Note, this Deed of Trust and any of
the other Loan Documents. Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to file with the appropriate public
office on its behalf any financing or other statements signed only by Lender, as
secured party, in connection with the Collateral covered by this Deed of Trust.
29. ACTIONS AND PROCEEDINGS. Lender or Trustee has the
right to appear in and defend any action or proceeding brought with respect to
the Trust Property and to bring any action or proceeding, in the name and on
behalf of Borrower, which Lender, in its sole discretion, decides should be
brought to protect their interest in the Trust Property. Lender shall, at its
option, be subrogated to the lien of any deed of trust or other security
instrument discharged in whole or in part by the Debt, and any such subrogation
rights shall constitute additional security for the payment of the Debt.
30. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due
under this Deed of Trust, the Note and the other Loan Documents shall be payable
without setoff, counterclaim or any deduction whatsoever. Borrower hereby waives
the right to assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Lender or
Trustee is a participant, or arising out of or in any way connected with this
Deed of Trust, the Note, any of the other Loan Documents, or the Debt.
31. CONTEST OF CERTAIN CLAIMS. Notwithstanding the
provisions of paragraphs 5 and 23 hereof, Borrower shall not be in default for
failure to pay or discharge Taxes, Other Charges or mechanic's or materialman's
lien asserted against the Trust Property if, and so long as, (a) Borrower shall
have notified Lender of same within five (5) Business Days of obtaining
knowledge thereof; (b) Borrower shall diligently and in good faith contest the
same by appropriate legal proceedings which shall operate to prevent the
enforcement or collection of the same and the sale of the Trust Property or any
part thereof, to satisfy the same; (c) Borrower shall have furnished to Lender a
cash deposit (which may consist in whole or in part of funds contained in an
existing reserve previously established by Borrower in connection with the Loans
for the specific purpose of paying the items being contested), or an indemnity
bond satisfactory to Lender with a surety reasonably satisfactory to Lender, in
an amount equal to one hundred twenty-five percent (125%) of the amount of the
Taxes, Other Charges or mechanic's or materialman's lien claim, plus a
reasonable additional sum to pay all costs, interest and penalties that may be
imposed or incurred in connection therewith, to assure payment of the matters
under contest and to prevent any sale or forfeiture of the Trust Property or any
part thereof;
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(d) Borrower shall promptly upon final determination thereof pay the amount of
any such Taxes, Other Charges or claim so determined, together with all costs,
interest and penalties which may be payable in connection therewith; (e) the
failure to pay the Taxes, Other Charges or mechanic's or materialman's lien
claim does not constitute a default under any other deed of trust, mortgage or
security interest covering or affecting any part of the Trust Property; and (f)
notwithstanding the foregoing, Borrower shall immediately upon request of Lender
pay (and if Borrower shall fail so to do, Lender may, but shall not be required
to, pay or cause to be discharged or bonded against) any such Taxes, Other
Charges or claim notwithstanding such contest, if in the opinion of Lender, the
Trust Property or any part thereof or interest therein may be in danger of being
sold, forfeited, foreclosed, terminated, cancelled or lost. Lender may pay over
any such cash deposit or part thereof to the claimant entitled thereto at any
time when, in the reasonable judgment of Lender, the entitlement of such
claimant is established.
32. RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall
have the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender or Trustee thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Borrower existing at the time such earlier
action was commenced.
33. MARSHALLING AND OTHER MATTERS. Borrower hereby
waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Trust Property or any part thereof or any interest therein. Further, Borrower
hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Deed of Trust on behalf of Borrower, and
on behalf of each and every person acquiring any interest in or title to the
Trust Property subsequent to the date of this Deed of Trust and on behalf of all
persons to the extent permitted by applicable law.
34. HAZARDOUS SUBSTANCES. Borrower hereby represents and
warrants to Lender that, to Borrower's knowledge, except as disclosed in the
report, dated May 23, 2003 prepared by Certified Environments, Inc. (the "PHASE
I REPORT") and delivered to Lender in connection with the Loans: (a) the Trust
Property is not in violation of any local, state, federal or other governmental
authority, statute, ordinance, code, order, decree, law, rule or regulation
pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or clean-up including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), the Resource Conservation and Recovery Act, as
amended ("RCRA"), the Emergency Planning and Community Right-to-know Act of
1986, as amended, the Hazardous Substances Transportation Act, as amended, the
Solid Waste Disposal Act, as amended, the Clean Water Act, as amended, the Clean
Air Act, as amended, the Toxic Substance Control Act, as amended, the Safe
Drinking Water Act, as amended, the Occupational Safety and Health Act, as
amended, any state super-lien and environmental clean-up statutes and all rules
and regulations adopted in respect to the foregoing laws whether presently in
force or coming into being and/or effectiveness hereafter (collectively,
"ENVIRONMENTAL LAWS"); (b) the Trust Property is not subject to any private or
governmental lien or judicial or administrative notice or action or inquiry,
investigation or claim relating to hazardous and/or toxic, dangerous and/or
regulated, substances, wastes, materials, raw
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materials which include hazardous constituents, pollutants or contaminants
including without limitation, petroleum, tremolite, anthlophylie, actinolite or
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"); (c) no Hazardous
Substances are or have been (including the period prior to Borrower's
acquisition of the Trust Property) discharged, generated, treated, disposed of
or stored on, incorporated in, or removed or transported from the Trust Property
other than in compliance with all Environmental Laws; (d) no Hazardous
Substances are present in, on or under any nearby real property which could
migrate to or otherwise affect the Trust Property and which would reasonably be
likely to result in a requirement under applicable Environmental Laws to
remediate the Trust Property; and (e) no underground storage tanks exist on any
of the Trust Property. So long as Borrower owns or is in possession of the Trust
Property, Borrower (i) shall keep or cause the Trust Property to be kept free
from Hazardous Substances except those in compliance with all Environmental
Law.s or any permits issued with respect thereto, (ii) shall promptly notify
Lender if Borrower shall become aware of any Hazardous Substances on the Trust
Property and/or if Borrower shall become aware that the Trust Property is in
violation of any Environmental Laws and/or if Borrower shall become aware of any
condition on the Trust Property which shall pose a threat to the health, safety
or welfare of humans, and (iii) shall remove or remediate such Hazardous
Substances and/or cure such violations and/or remove or remediate such threats,
as applicable, as required by law (or as shall be reasonably required by Lender
in the case of removal or remediation which is not required by law, but in
response to the opinion of a licensed hydrogeologist, licensed environmental
engineer or other qualified consultant engaged by Lender ("LENDER'S CONSULTANT")
provided that such removal, remediation or cure is reasonably necessary to
eliminate imminent danger to the health, safety or welfare of humans and would
customarily be performed by prudent owners of properties similar to the Trust
Property in similar circumstances), promptly after Borrower becomes aware of
same, at Borrower's sole expense. Notwithstanding anything to the contrary in
this paragraph, the Borrower, Manager and/or tenants on the Trust Property may
use and store ordinary amounts of Hazardous Substances at the Trust Property if
such use or storage is in connection with business supplies used by Borrower, a
tenant in accordance with the terms of its Lease or by Manager pursuant to the
Management Agreement or is in connection with the ordinary cleaning and
maintenance of the Trust Property so long as such use and storage (A) does not
violate any applicable Environmental Laws and (B) is not the subject of any
specific recommendations in the Phase I Report that would prohibit such use or
storage. Nothing herein shall prevent Borrower from recovering such expenses
from any other party that may be liable for such removal or cure. The
obligations and liabilities of Borrower under this paragraph 34 shall survive
any termination, satisfaction, or assignment of this Deed of Trust and the
exercise by Lender of any of its rights or remedies hereunder, including,
without limitation, the acquisition of the Trust Property by foreclosure or a
conveyance in lieu of foreclosure.
35. ASBESTOS. Borrower represents and warrants that to
Borrower's knowledge no asbestos or any substance or material containing
asbestos ("ASBESTOS") is located on the Trust Property except as may have been
disclosed in the Phase I Report delivered to Lender in connection with the
Loans. Borrower shall not install in the Trust Property, nor permit to be
installed in the Trust Property, Asbestos and shall remove any Asbestos promptly
upon discovery to the satisfaction of Lender, at Borrower's sole expense.
Borrower shall in all
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instances comply with, and ensure compliance by all occupants of the Trust
Property with, all applicable federal, state and local laws, ordinances, rules
and regulations with respect to Asbestos, and shall keep the Trust Property free
and clear of any liens imposed pursuant to such laws, ordinances, rules or
regulations. In the event that Borrower receives any notice or advice from any
governmental agency or any source whatsoever with respect to Asbestos on,
affecting or installed on the Trust Property, Borrower shall promptly notify
Lender. The obligations and liabilities of Borrower under this paragraph 35
shall survive any termination, satisfaction, or assignment of this Deed of Trust
and the exercise by Lender of any of its rights or remedies hereunder, including
but not limited to, the acquisition of the Trust Property by foreclosure or a
conveyance in lieu of foreclosure.
36. ENVIRONMENTAL MONITORING. Borrower shall give prompt
written notices to Lender of: (a) any proceeding or inquiry by any party with
respect to the presence of any Hazardous Substance or Asbestos on, under, from
or about the Trust Property, (b) all claims made or threatened by any third
party against Borrower or the Trust Property relating to any loss or injury
resulting from any Hazardous Substance or Asbestos, and (c) Borrower's discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of the Trust Property that could reasonably be expected to cause the Trust
Property to be subject to any investigation or cleanup pursuant to any
Environmental Law. Borrower shall permit Lender to join and participate in, as a
party if it so elects, any legal proceedings or actions initiated with respect
to the Trust Property in connection with any actual or alleged violation of
Environmental Law or the presence of Hazardous Substance at the Trust Property,
and Borrower shall pay all reasonable attorneys' fees and disbursements incurred
by Lender in connection therewith. Upon Lender's request, at any time and from
time to time while this Deed of Trust is in effect but not more frequently than
once per calendar year, unless Lender has determined (in the exercise of its
good faith judgment) that reasonable cause exists for the performance of an
environmental inspection or audit of the Trust Property, Borrower shall provide
at Borrower's sole expense, (i) an inspection or audit of the Trust Property
prepared by a licensed hydrogeologist or licensed environmental engineer
approved by Lender indicating the presence or absence of Hazardous Substances
on, in or near the Trust Property, and (ii) an inspection or audit of the Trust
Property prepared by a duly qualified engineering or consulting firm approved by
Lender, indicating the presence or absence of Asbestos on the Trust Property;
provided, however, any such inspection or audit requested by Lender, during the
Term, in excess of one (1) inspection during each five (5) year period
commencing upon the date hereof, shall be performed at Lender's expense unless
an Event of Default exists or Lender has determined (in the exercise of its good
faith and judgment) that reasonable cause exists for the performance of an
environmental inspection or audit. If Borrower fails to provide such inspection
or audit within sixty (60) days after such request Lender may order same, and
Borrower hereby grants to Lender and its employees and agents access to the
Trust Property and a license to undertake such inspection or audit upon
reasonable prior notice to Borrower and in a manner that does not unreasonably
interfere with tenants or occupants thereof. The cost of such inspection or
audit obtained by Lender upon Borrower's failure to do so shall bear interest
from the date such costs are incurred by Lender until paid at the Default Rate
and shall be due and payable by Borrower to Lender within ten (10) days after
demand, and if not so paid, may be added to the Debt. In the event that any
environmental site assessment report prepared in connection with such inspection
or audit recommends that an operations and maintenance plan be implemented for
Asbestos or any Hazardous Substance, Borrower shall cause such operations and
maintenance plan to be prepared
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and implemented at Borrower's expense upon request of Lender. In the event that
any investigation, site monitoring, containment cleanup, removal, restoration,
or other work of any kind is reasonably necessary under an applicable
Environmental Law (the "REMEDIAL WORK"), Borrower shall promptly commence and
thereafter diligently prosecute to completion all such Remedial Work, provided
that in any event Borrower shall complete such Remedial Work within the time
required by applicable Environmental Law. All Remedial Work shall be performed
by contractors approved in advance by Lender, and under the supervision of a
consulting engineer approved by Lender. All costs and expenses of such Remedial
Work shall be paid by Borrower including, without limitation, Lender's
reasonable attorneys' fees and disbursements incurred in connection with
monitoring or review of such Remedial Work. In the event Borrower shall fail to
timely commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, Lender may, but shall not be required to, cause
such Remedial Work to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall bear interest from the date such costs
are incurred by Lender until paid at the Default Rate and shall be due and
payable by Borrower to Lender within ten (10) days after demand, and if not so
paid, may be added to the Debt.
37. HANDICAPPED ACCESS.
(a) Borrower agrees that the Trust Property shall at all
times comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988 (if
applicable), all state and local laws and ordinances related to handicapped
access and all rules, regulations, and orders issued pursuant thereto including,
without limitation, the Americans with Disabilities Act Accessibility Guidelines
for Buildings and Facilities (collectively "ACCESS LAWS").
(b) Notwithstanding any provisions set forth herein or in
any other document regarding Lender's approval of alterations of the Trust
Property, Borrower shall not alter the Trust Property in any manner which would
increase Borrower's responsibilities for compliance with the applicable Access
Laws without the prior written approval of Lender except for tenant improvements
constructed by Borrower or by any of its tenants that are otherwise permitted by
the terms of this Deed of Trust or the other Loan Documents. Lender may
condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer, or other person acceptable to Lender.
(c) Borrower agrees to give prompt notice to Lender of
the receipt by Borrower of any complaints related to violation of any Access
Laws and of the commencement of any proceedings or investigations which relate
to compliance with applicable Access Laws.
38. INDEMNIFICATION. In addition to any other
indemnifications provided herein or in the other Loan Documents, Borrower shall
protect, defend, indemnify and save harmless Lender and Trustee from and against
all liabilities, obligations, claims, demands, damages, penalties, causes of
action, losses, fines, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements), imposed upon or incurred by or
asserted against Lender or Trustee by reason of (a) ownership of this Deed of
Trust, the Trust Property or any interest therein or receipt of any Rents; (b)
any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Trust Property or any part
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thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (c) any use, nonuse or condition in, on or about
the Trust Property or any part thereof or on adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (d) any failure on
the part of Borrower to perform or comply with any of the terms of this Deed of
Trust; (e) performance of any labor or services or the furnishing of any
materials or other property in respect of the Trust Property or any part
thereof; (f) the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release, or threatened release of any Hazardous Substance
or Asbestos on, from, or affecting the Trust Property; (g) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Substance or Asbestos; (h) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Substance or Asbestos; (i) any violation of the Environmental Laws, which are
based upon or in any way related to such Hazardous Substance or Asbestos
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; (j) any failure of the Trust
Property to comply with any Access Laws; (k) any representation or warranty made
in the Note, this Deed of Trust or any of the other Loan Documents being false
or misleading in any material respect as of the date such representation or
warranty was made; (1) any claim by brokers, finders or similar persons claiming
to be entitled to a commission in connection with the Loans, any Lease or other
transaction involving the Trust Property or any part thereof under any legal
requirement or any liability asserted against Lender with respect thereto; and
(m) the claims of any lessee of any or any portion of the Trust Property or any
person acting through or under any lessee or otherwise arising under or as a
consequence of any Lease. Notwithstanding the foregoing, Borrower shall not be
liable under such indemnification to the extent such liabilities, obligations,
claims, demands, damages, penalties, causes of action, losses, fines, costs or
expenses result from the gross negligence, willful misconduct or illegal acts of
Lender or Lender's agents or from any Hazardous Substance or Asbestos introduced
onto the Trust Property by Lender or its agents or which are introduced onto the
Trust Property by a third party after foreclosure or conveyance in lieu of
foreclosure or actual possession of the Trust Property by Lender or its agents
and such indemnification shall not inure to the benefit of any future owner of
the Trust Property other than Lender, its nominees and their respective
Affiliates or the purchaser of the Trust Property by foreclosure of the Deed of
Trust or deed in lieu thereof. Any amounts payable, to Lender or Trustee by
reason of the application of this paragraph shall be. secured by this Deed of
Trust and shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender or Trustee
until paid if not paid within five (5) days of demand therefor. The obligations
and liabilities of Borrower under this paragraph 38 shall survive any
termination, satisfaction, or assignment of this Deed of Trust and the exercise
by Lender of any of its rights or remedies hereunder, including, but not limited
to, the acquisition of the Trust Property by foreclosure or a conveyance in lieu
of foreclosure.
39. NOTICES. Any notice, report, demand or other
instrument authorized or required to be given or furnished ("NOTICES") shall be
in writing and shall be given as follows: (a) by hand delivery; (b) by deposit
in the United States mail as first class certified mail, return receipt
requested, postage paid; (c) by overnight nationwide commercial courier service;
or (d) by telecopy transmission (other than for notices of default) with a
confirmation copy to be delivered by duplicate notice in accordance with any of
clauses (a)-(c) above, in each case, addressed to the party intended to receive
the same at the following address(es):
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Lender:
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage Loans Department
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Borrower:
North Tower, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III and
▇▇▇▇ ▇. Lammas, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇, Castle & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Trustee:
Commonwealth Land Title Company
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Any party may change the address to which any such Notice is
to be delivered, by furnishing ten (10) days written notice of such change to
the other parties in accordance with the provisions of this paragraph 39.
Notices shall be deemed to have been given on the date they are actually
received; provided, that the inability to deliver Notices because of a changed
address of which no Notice was given, or rejection or refusal to accept any
Notice offered for delivery shall be deemed to be receipt of the Notice as of
the date of such inability to deliver or rejection or refusal to accept
delivery. Notice for either party may be given by its respective counsel.
Additionally, notice from Lender may also be given by the Servicer.
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40. AUTHORITY.
(a) Borrower represents and warrants that it has full
power, authority and right to execute, deliver and perform its obligations
pursuant to this Deed of Trust, and to deed, mortgage, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and assign
the Trust Property pursuant to the terms hereof and to keep and observe all of
the terms of this Deed of Trust on Borrower's part to be performed.
(b) Borrower represents and warrants that Borrower is not
a "foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended, and applicable Treasury Department
regulations, including temporary regulations (the "CODE").
41. WAIVER OF NOTICE. Borrower shall not be entitled to
any notices of any nature whatsoever from Lender or Trustee except with respect
to matters for which this Deed of Trust or the other Loan Documents specifically
and expressly provide for the giving of notice by Lender or Trustee to Borrower
and except with respect to matters for which Lender or Trustee is required by
applicable law to give notice, and Borrower hereby expressly waives the right to
receive any notice from Lender or Trustee with respect to any matter for which
this Deed of Trust or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender or Trustee to Borrower.
42. REMEDIES OF BORROWER. Other than with respect to
instances in which Lender has acted in bad faith, in the event that a claim or
adjudication is made that Lender has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Deed of Trust or any of
the other Loan Documents, it has an obligation to act reasonably or promptly,
neither Lender nor Trustee shall be liable for any monetary damages, and
Borrower's remedies shall be limited to injunctive relief or declaratory
judgment.
43. SOLE DISCRETION OF LENDER. Wherever pursuant to this
Deed of Trust, Lender exercises any right given to it to consent or not consent
or approve or disapprove, or any arrangement or term is to be satisfactory to
Lender, the decision of Lender to consent or not consent, to approve or
disapprove or to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Lender and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein.
44. NON-WAIVER. The failure of Lender to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Deed of Trust. Borrower shall not be relieved of Borrower's
obligations hereunder by reason of (a) the failure of Lender to comply with any
request of Borrower or Guarantor to take any action to foreclose this Deed of
Trust or otherwise enforce any of the provisions hereof or of the Note, or the
other Loan Documents, (b) the release, regardless of consideration, of the whole
or any part of the Trust Property, or of any person liable for the Debt or any
portion thereof, or (c) any agreement or stipulation by Lender extending the
time of payment or otherwise modifying or supplementing the terms of the Note,
this Deed of Trust or any of the other Loan Documents. Lender may resort for the
payment of the Debt to any other security held by Lender in such order and
manner as Lender, in its sole discretion, may elect. Lender or Trustee may take
action to recover the Debt, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of
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Lender or Trustee thereafter to foreclosure this Deed of Trust. The rights and
remedies of Lender or Trustee under this Deed of Trust shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Lender or Trustee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision. Lender
or Trustee shall not be limited exclusively to the rights and remedies herein
stated but shall be entitled to every right and remedy now or hereafter afforded
at law or in equity.
45. NO ORAL CHANGE. This Deed of Trust, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
46. LIABILITY. If Borrower consists of more than one
person or entity, the obligations and liabilities of each such person or entity
hereunder shall be joint and several. Subject to the provisions hereof requiring
Lender's consent to any transfer of the Trust Property, this Deed of Trust shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
47. INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Note or this Deed of Trust is held to be invalid, illegal or
unenforceable in any respect, the Note and this Deed of Trust shall be construed
without such provision.
48. HEADINGS, Etc. The headings and captions of various
paragraphs of this Deed of Trust are for convenience of reference only and are
not to be construed as defining or limiting, in any way, the scope or intent of
the provisions hereof.
49. DUPLICATE ORIGINALS. This Deed of Trust may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to be an original.
50. DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Deed of Trust may be used interchangeably in singular or plural form and
the word "Borrower" shall mean "each Borrower and any subsequent owner or owners
of the Trust Property or any part thereof or any interest therein," the word
"Lender" shall mean "Lender and any subsequent holder of the Note," the word
"Trustee" shall mean "Trustee and any subsequent holder of this Deed of Trust,"
the word "Note" shall mean "the Note and any other evidence of indebtedness
secured by this Deed of Trust," the word "person" shall include an individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, and any other entity, and the words "Trust Property"
shall include any portion of the Trust Property and any interest therein and the
words "attorneys' fees" shall include any and all reasonable attorneys' fees,
paralegal and law clerk fees, including, without limitation, fees at the
pre-trial, trial and appellate levels incurred or paid by Lender in protecting
its interest in the Trust Property and Collateral and enforcing its rights
hereunder. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.
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51. HOMESTEAD. Borrower hereby waives and renounces all
homestead and exemption rights provided by the Constitution and the laws of the
United States and of any state, in and to the Trust Property as against the
collection of the Debt, or any part hereof.
52. ASSIGNMENTS. Lender shall have the right to assign or
transfer its rights under this Deed of Trust without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Lender under this Deed
of Trust.
53. WAIVER OF JURY TRIAL. BORROWER HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY" SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE NOTE, THIS DEED OF TRUST, OR THE OTHER 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 IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
54. GOVERNING LAW. (A) THIS DEED OF TRUST WAS NEGOTIATED
IN THE STATE OF NEW YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE 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, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS DEED OF TRUST 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 (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY
LAW, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS PARAGRAPH 54(A) ABOVE,
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS
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THIS DEED OF TRUST AND THE NOTE, AND THIS DEED OF TRUST AND THE NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR BORROWER ARISING OUT OF OR RELATING TO THIS DEED OF TRUST MAY AT LENDER'S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND BORROWER WAIVES .ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT CORPORATION TRUST COMPANY, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK
BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE
A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND 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.
55. TRUSTEE'S FEES: SUBSTITUTE TRUSTEE.
(a) Borrower shall pay all costs, fees and expenses
incurred by Trustee and Trustee's agents and counsel in connection with the
performance by Trustee of Trustee's duties hereunder and all such costs, fees
and expenses shall be secured by this Deed of Trust.
(b) Trustee shall be under no duty to take any action
hereunder except as expressly required hereunder or by law, or to perform any
act which would involve Trustee in any expense or liability or to institute or
defend any suit in respect hereof, unless properly indemnified to Trustee's
reasonable satisfaction. Trustee, by acceptance of this Deed of Trust, covenants
to perform and fulfill the trusts herein created, being liable, however, only
for willful negligence or misconduct, and hereby waives any statutory fee and
agrees to accept reasonable compensation, in lieu thereof, for any services
rendered by Trustee in accordance with the terms
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hereof. Lender may remove Trustee at any time or from time to time and select a
successor trustee. In the event of the death, removal, resignation, refusal to
act, or inability to act of Trustee, or in its sole discretion for any reason
whatsoever, Lender may, without notice and without specifying any reason
therefor and without applying to any court, select and appoint a successor
trustee, by an instrument recorded wherever this Deed of Trust is recorded and
all powers, rights, duties and authority of Trustee, as aforesaid, shall
thereupon become vested in such successor. Such substitute trustee shall not be
required to give bond for the faithful performance of the duties of Trustee
hereunder unless required by Lender. The procedure provided for in this
paragraph for substitution of Trustee shall be in addition to and not in
exclusion of any other provisions for substitution, by law or otherwise.
56. POWER OF SALE.
(a) Upon the occurrence of an Event of Default, Trustee,
or the agent or successor of Trustee, at the request of Lender, shall sell or
offer for sale the Trust Property in such portions, order and parcels as Lender
may determine with or without having first taken possession of same, to the
highest bidder for cash at one or more public auctions in accordance with the
terms and provisions of the law of the State in which the Trust Property is
located. Such sale shall be made at the area within the courthouse of the county
in which the Trust Property (or any portion thereof to be sold) is situated
(whether the parts or parcels thereof, if any, in different counties are
contiguous or not, and without the necessity of having any personal property
hereby secured present at such sale) which is designated by the applicable court
of such County as the area in which public sales are to take place, or, if no
such area is designated, at the area at the courthouse designated in the notice
of sale as the area in which the sale will take place, on such day and at such
times as permitted under applicable law of the State where the Trust Property is
located, after advertising the time, place and terms of sale and that portion of
the Trust Property in accordance with such law, and after having served written
or printed notice of the proposed sale by certified mail on each Borrower
obligated to pay the Note and other secured indebtedness secured by this Deed of
Trust according to the records of Lender in accordance with applicable law. The
affidavit of any person having knowledge of the facts to the effect that such
service was completed shall be prima facie evidence of the fact of service.
At any such public sale, Trustee may execute and deliver in
the name of Borrower to the purchaser a conveyance of the Trust Property or any
part of the Trust Property in fee simple. In the event of any sale under this
Deed of Trust by virtue of the exercise of the powers herein granted, or
pursuant to any order in any judicial proceeding or otherwise, the Trust
Property may be sold in its entirety or in separate parcels and in such manner
or order as Lender in its sole discretion may elect, and if Lender so elects,
Trustee may sell the personal property covered by this Deed of Trust at one or
more separate sales in any manner permitted by the Uniform Commercial Code of
the State in which the Trust Property is located, and one or more exercises of
the powers herein granted shall not extinguish or exhaust such powers, until all
the Trust Property is sold or the Note and other secured indebtedness is paid in
full. If the Note and other secured indebtedness is now or hereafter further
secured by any chattel mortgages, pledges, contracts or guaranty, assignments of
lease, or other security instruments, Lender at its option may exhaust the
remedies granted under any of said security instruments either concurrently or
independently, and in such order as Lender may determine.
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(b) Upon any foreclosure sale or sales of all or any
portion of the Trust Property under the power herein granted, Lender may bid for
and purchase the Trust Property and shall be entitled to apply all or any part
of the Debt as a credit to the purchase price.
(c) In the event of a foreclosure or a sale of all or any
portion of the Trust Property under the power herein granted, the proceeds of
said sale shall be applied, in whatever order Lender in its sole discretion may
decide, to the expenses of such sale and of all proceedings in connection
therewith (including, without limitation, attorneys' fees and expenses), to fees
and expenses of Trustee (including, without limitation, Trustee's attorneys'
fees and expenses), to insurance premiums, liens, assessments, taxes and charges
(including, without limitation, utility charges advanced by Lender), to payment
of the outstanding principal balance of the Debt, and to .the accrued interest
on all of the foregoing; and the remainder, if any, shall be paid to Borrower,
or to the person or entity lawfully entitled thereto.
57. RECOURSE PROVISIONS. Subject to the qualifications
below, Lender shall not enforce the liability and obligation of Borrower or its
constituent members, partners, shareholders, directors, employees or agents or
the direct or indirect constituent members, partners, shareholders, directors,
employees or agents thereof (collectively, the "BORROWER PARTIES") or any other
Person, to perform and observe the obligations contained in this Deed of Trust,
the Note or any of the other Loan Documents by any action or proceeding wherein
a money judgment shall be sought against any of the Borrower Parties or any
other Person, except that Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon the Trust Property, the Rents or any other
collateral given to Lender pursuant to this Deed of Trust and the other Loan
Documents; provided, however, that, except as specifically provided herein, any
judgment in any such action or proceeding shall be enforceable against the
Borrower Parties only to the extent of their interest in the Trust Property, the
Rents and in any other collateral given to Lender, and Lender, by accepting this
Deed of Trust, the Note and the other Loan Documents, agrees that it shall not
▇▇▇ for, seek or demand any deficiency judgment against any of the Borrower
Parties or any other Person in any such action or proceeding under or by reason
of or in connection with this Deed of Trust, the Note or any of the other Loan
Documents. The provisions of this paragraph shall not, however, (i) constitute a
waiver, release or impairment of any obligation evidenced or secured by this
Deed of Trust, the Note or any of the other Loan Documents; (ii) impair the
right of Lender to name any of the Borrower Parties, as a party defendant in any
action or suit for foreclosure and sale under this Deed of Trust; (iii) affect
the validity or enforceability of any guaranty made in connection with the Loans
or any rights and remedies of Lender thereunder; (iv) impair the right of Lender
to obtain the appointment of a receiver; (v) impair the enforcement of the
Assignment of Leases and Rents executed in connection herewith; or (vi)
constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower (but not against any members of Borrower or their direct
or indirect constituent members or partners or any other Person), by money
judgment or otherwise, to the extent of any loss, damage, cost, expense,
liability, claim or other obligation incurred by Lender (including attorneys'
fees and costs reasonably incurred) arising out of or in connection with the
following:
(a) fraud or intentional misrepresentation by Borrower or
any Guarantor in connection with the Loans;
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(b) intentional physical waste (including, but not
limited to, waste due to gross negligence) by Borrower or any affiliate thereof;
provided, however, such physical waste shall exclude wear and tear to the Trust
Property that occurs in the ordinary course of business of the Trust Property by
Borrower or any affiliate thereof;
(c) the material breach of any representation, warranty,
covenant or indemnification provision in that certain Environmental and
Hazardous Substance Indemnification Agreement of even date herewith given by
Borrower to Lender or in this Deed of Trust concerning Environmental Laws,
Hazardous Substances and Asbestos;
(d) the removal or disposal by Borrower or any affiliate
thereof of any portion of the Trust Property after an Event of Default, unless
such portion of the Trust Property is replaced by an item of equal or greater
value as determined by Lender in its reasonable discretion;
(e) the misapplication or conversion by Borrower or any
affiliate thereof of (i) any insurance proceeds paid by reason of any loss,
damage or destruction to the Trust Property, (ii) any awards or other amounts
received in connection with the condemnation of all or a portion of the Trust
Property, (iii) any Rents following an Event of Default or (iv) any Rents paid
more than one month in advance;
(f) failure to pay charges for labor or materials or
taxes or other charges that can create liens superior to the lien of this Deed
of Trust on any portion of the Trust Property unless such taxes or other charges
are being contested in accordance herewith; and
(g) any security deposits collected by Borrower or any
affiliate thereof with respect to the Trust Property which are not delivered to
Lender upon a foreclosure of the Trust Property or action in lieu thereof,
except to the extent any such security deposits were applied in accordance with
the terms and conditions of any of the Leases prior to the occurrence of the
Event of Default that gave rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in any of the Loan
Documents (i) Lender shall not be deemed to have waived any right which Lender
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Debt secured by
this Deed of Trust or to require that all collateral shall continue to secure
all of the Debt owing to Lender in accordance with the Loan Documents, and (ii)
the Debt shall become fully recourse to Borrower (but not its members or other
direct or indirect constituent members or partners or any other Person) in the
event that: (A) the first full Monthly Payment Amount (as defined in the Note)
under the Note is not paid when due; (B) other than in connection with a default
under paragraph 12(a)(ii)(G) hereof, Borrower fails to maintain its status as a
Special Purpose Bankruptcy Remote Entity in accordance with the provisions of
this Deed of Trust and such failure results in the substantive consolidation of
Borrower with another Person; (C) except as otherwise permitted pursuant to the
Loan Documents, Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary lien encumbering the Trust Property;
(D) except as otherwise permitted pursuant to the Loan Documents, Borrower fails
to obtain Lender's prior written consent to any assignment, transfer, or
conveyance of the Trust Property or any interest therein as and to the
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extent required by this Deed of Trust; or (E) (1) a receiver (other than a
receiver appointed by Lender), liquidator or trustee of Borrower or Guarantor
shall be appointed which is not dismissed within ninety (90) days, or (2) if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by Borrower
or Guarantor, or (3) if Borrower or Guarantor files an answer consenting to, or
otherwise joining in, any involuntary petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law filed against it by-any other Person, or is found pursuant to a final,
unappealable order of a court of competent jurisdiction to have solicited or
caused to be solicited creditors to file any involuntary petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law against Borrower or Guarantor, or (4) if
Borrower or Guarantor are found, pursuant to a final unappealable order of a
court of competent jurisdiction, to have been in collusion with creditors that
initiate a bankruptcy action or proceeding against Borrower or Guarantor.
58. CASH MANAGEMENT AGREEMENT. On or before the date
hereof Borrower covenants and agrees to enter into one or more servicing account
agreements, lockbox servicing agreements and/or cash management agreements
acceptable to Lender between Borrower, Manager, Lender and, as applicable, one
or more certain financial institutions (together with any modification,
amendment, substitution or replacement thereof, hereinafter collectively
referred to as the "CASH MANAGEMENT AGREEMENT"). All Rents shall be applied as
set forth in the Cash Management Agreement and the escrows and reserves required
hereunder shall be funded as provided therein. The Borrower shall pay all costs
and expenses required under the Cash Management Agreement. Upon the occurrence
and during the continuance of an Event of Default, Lender may apply any sums
then held pursuant to the Cash Management Agreement to the payment of the Debt
in any order in its sole discretion. Until expended or applied, amounts held
pursuant to the Cash Management Agreement shall constitute additional security
for the Debt.
59. MANAGEMENT OF THE TRUST PROPERTY.
(a) Borrower shall maintain, or cause to be maintained,
the Management Agreement in full force and effect and timely perform all of
Borrower's obligations thereunder and enforce performance of all obligations of
the Manager thereunder, and except as otherwise permitted by the Loan Documents,
not permit the termination or amendment of the Management Agreement unless the
prior written consent of Lender is first obtained, which consent shall not be
unreasonably withheld, conditioned or delayed. Borrower shall cause the Manager
to enter into an assignment and subordination of the management agreement in
form satisfactory to Lender (the "SUBORDINATION OF MANAGEMENT AGREEMENT"). The
Subordination of Management Agreement shall assign and subordinate the Manager's
interests in the Trust Property and all fees and other rights of the Manager
pursuant to the Management Agreement to the rights of Lender. Upon an Event of
Default, Borrower shall, at Lender's request made at any time while such Event
of Default continues, terminate, or cause the termination of, the Management
Agreement. Except with respect to the transactions contemplated by paragraph 11
(jj) above, which transactions are hereby pre-approved by Lender, Borrower shall
not enter into any agreement relating to the management of the Trust Property
with any party without the express written consent of Lender (which consent
shall not be unreasonably withheld to the extent that such manager is an
affiliate of Borrower); provided, however, with respect to a new manager such
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consent may also be conditioned upon Borrower delivering evidence (i) in writing
from the applicable Rating Agencies to the effect that such new manager and
management agreement will not result in a downgrade, withdrawal or qualification
of the respective ratings then in effect for any Securities issued in connection
with a Securitization, and (ii) satisfactory to Lender (which shall include, at
the request of Lender, a legal non-consolidation opinion acceptable to Lender)
that the single purpose nature and bankruptcy remoteness of Borrower, its
shareholders, partners or members, as the case may be, after the engagement of
the new manager are in accordance with the requirements of Rating Agencies. If
at any time Lender consents to the appointment of a new manager, such new
manager and Borrower shall, as a condition of Lender's consent, execute an
assignment and subordination of such management agreement in the form then used
by Lender.
(b) The Borrower, upon the request of Lender, shall
terminate the Manager, without penalty or fee, if at any time during the Loans
(a) the Manager shall become insolvent or a debtor in any bankruptcy or
insolvency proceeding, (b) there exists an Event of Default for which Lender has
not accepted a cure thereof or (c) the Maturity Date has occurred and the Loans
have not been repaid. At such time as the Manager may be removed pursuant to and
in accordance with the terms and provisions of the Loan Documents, a replacement
manager and management agreement acceptable to Lender and the applicable Rating
Agencies in their sole discretion shall assume management of the Property and
shall receive a property management fee not to exceed the then current market
rates.
60. SERVICER. At the option of Lender, the Loans may be
serviced by a servicer and/or trustee (collectively, the "SERVICER") selected by
Lender and Lender may delegate all or any portion of its responsibilities under
this Deed of Trust and the other Loan Documents to the Servicer pursuant to a
servicing or other agreement (the "SERVICING AGREEMENT") between Lender and
Servicer. Borrower shall be responsible for any set-up fees or any other costs
and expenses relating to or arising under the Servicing Agreement; provided,
however, that such fees and expenses do not exceed one (1) basis point per
annum. Lender agrees that the Servicing Agreement shall require the Servicer to
act within the specified time periods set forth in the Loan Documents,
including, but not limited to, in providing consents or approvals as required
under the terms thereof.
61. COMPONENT NOTES. Lender, without in any way limiting
Lender's other rights hereunder, in its sole and absolute discretion, shall have
the right, at no cost or expense to Borrower, at any time prior to or in
connection with a Securitization or a sale of the Loans or any portion thereof
or any interest therein, to require Borrower to execute and deliver replacement
"component" notes (including senior and junior notes), which notes may be paid
in such order of priority as may be designated by Lender, or a single note
replacing the existing "component" notes eliminating the "component" note
structure, or to coordinate the maturity dates of the Note, provided that (i)
the aggregate principal amount of such "component" notes or the principal
balance of such single note, as applicable, shall equal the outstanding
principal balance of the Loans (or applicable portion thereof) immediately prior
to the creation of such replacement "component" notes or such single note, as
applicable, (ii) the weighted average interest rate of all such replacement
"component" notes or such single note, as applicable, shall on the date created
equal the weighted average interest rate which was applicable to the Loans
immediately prior to the creation of such replacement "component" notes or such
single note, as applicable, (iii) the
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debt service payments on all such replacement "component" notes or such single
note, as applicable, shall on the date created equal the debt service payments
which were due under the Loans immediately prior to the creation of such
replacement component notes or such single note, as applicable, (iv) the
maturity date, the amortization schedule and the other terms and provisions of
each of the replacement "component" notes or such single note, as applicable,
shall be identical in substance and substantially similar in form to the note
that such "component" notes or such single note, as applicable, replace and the
other Loan Documents, (v) under all circumstances, Note B (or any "component"
notes issued in substitution therefor) and either the BH Guaranty or the RFM
Guaranty (whichever is then in effect) shall be maintained separate from Note A
and as part of the Loans, and (vi) the original note that is replaced by such
component notes shall be delivered to Borrower. Borrower shall cooperate with
all reasonable requests of Lender in order to establish the "component" notes
and shall execute and deliver such documents in compliance with this paragraph
61 as shall reasonably be required by Lender and any Rating Agency in connection
therewith, all in form and substance reasonably satisfactory to Lender and
satisfactory to any Rating Agency, including, without limitation, the severance
of security documents if requested. In the event Borrower fails to execute and
deliver such documents to Lender within ten (10) Business Days following notice
of such request by 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 reasonably necessary to effect such
transactions, Borrower ratifying all that such attorney shall do by virtue
thereof.
It shall be an Event of Default under this Deed of Trust, the
Note and the other Loan Documents if Borrower fails to comply with any of the
terms, covenants or conditions of this Section 61 after expiration often (10)
Business Days after notice thereof.
62. MISCELLANEOUS.
(a) Any consent or approval by Lender in any single
instance shall not be deemed or construed to be Lender's consent or approval in
any like matter arising at a subsequent date, and the failure of Lender to
promptly exercise any right, power, remedy, consent or approval provided herein
or at law or in equity shall not constitute or be construed as a waiver of the
same nor shall Lender be estopped from exercising such right, power, remedy,
consent or approval at a later date. Any consent or approval requested of and
granted by Lender pursuant hereto shall be narrowly construed to be applicable
only to Borrower and the matter identified in such consent or approval and no
third party shall claim any benefit by reason thereof, and any such consent or
approval shall not be deemed to constitute Lender a venturer or partner with
Borrower nor shall privity of contract be presumed to have been established with
any such third party. If Lender deems it to be in its best interest to retain
assistance of persons, firms or corporations (including, without limitation,
attorneys, title insurance companies, appraisers, engineers and surveyors) with
respect to a request for consent or approval, Borrower shall reimburse Lender
for all costs reasonably incurred in connection with the employment of such
persons, firms or corporations.
(b) Borrower covenants and agrees that during the Term,
unless Lender shall have previously consented in writing, (a) Borrower will take
no action that would cause it to become an "employee benefit plan" as defined in
29 C.F.R. Section 2510.3-101, or "assets of a
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governmental plan" subject to regulation under the state statutes, and (b)
Borrower will not sell, assign or transfer the Trust Property, or any portion
thereof or interest therein, to any transferee that does not execute and deliver
to Lender its written assumption of the obligations of this covenant. Borrower
further covenants and agrees to protect, defend, indemnify and hold Lender
harmless from and against all loss, cost, damage and expense (including without
limitation, all attorneys' fees and excise taxes, costs of correcting any
prohibited transaction or obtaining an appropriate exemption) that Lender may
incur as a result of Borrower's breach of this covenant. This covenant and
indemnity shall survive the extinguishment of the lien of this Deed of Trust by
foreclosure or action in lieu thereof; furthermore, the foregoing indemnity
shall supersede any limitations on Borrower's liability under any of the Loan
Documents.
(c) The Loan Documents contain the entire agreement
between Borrower and Lender relating to or connected with the Loans. Any other
agreements relating to or connected with the Loans not expressly set forth in
the Loan Documents are null and void and superseded in their entirety by the
provisions of the Loan Documents.
(d) Borrower hereby covenants and agrees not to commit,
or to knowingly permit or suffer to exist any act, omission or circumstance
affording any right of forfeiture. In furtherance thereof, Borrower hereby
indemnifies Lender and agrees to defend and hold Lender harmless from and
against any loss, damage or injury by reason of the breach of the covenants and
agreements or the representations and warranties set forth in this paragraph.
Without limiting the generality of the foregoing, the filing of formal charges
or the commencement of proceedings which are not promptly dismissed against
Borrower or all or any part of the Trust Property under any federal or state law
for which forfeiture of the Trust Property or any part thereof or of any monies
paid in performance of Borrower's obligations under the Loan Documents is a
likely result, shall, at the election of Lender, constitute an Event of Default
hereunder without notice or opportunity to cure.
(e) Borrower acknowledges that, with respect to the
Loans, Borrower is relying solely on its own judgment and advisors in entering
into the Loans without relying in any manner on any statements, representations
or recommendations of Lender or any parent, subsidiary or affiliate of Lender.
Borrower acknowledges that Lender engages in the business of real estate
financings and other real estate transactions and investments which may be
viewed as adverse to or competitive with the business of the Borrower or its
Affiliates. Borrower acknowledges that it is represented by competent counsel
and has consulted counsel before executing the Loan Documents.
(f) Borrower covenants and agrees to pay Lender upon
receipt of written notice from Lender, all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Lender in
connection with (i) the preparation, negotiation, execution and delivery of this
Deed of Trust and the other Loan Documents; (ii) Borrower's performance of and
compliance with Borrower's respective agreements and covenants contained in this
Deed of Trust and the other Loan Documents on its part to be performed or
complied with after the date hereof; (iii) Lender's performance and compliance
with all agreements and conditions contained in this Deed of Trust and the other
Loan Documents on its part to be performed or complied with after the date
hereof; (iv) the negotiation, preparation, execution and delivery of any
consents, amendments, waivers or other modifications to this Deed of Trust and
the other
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Loan Documents; and (v) the filing and recording fees and expenses, title
insurance fees and expenses, and other similar expenses incurred in creating and
perfecting the lien in favor of Lender pursuant to this Deed of Trust and the
other Loan Documents.
PART II
STATE SPECIFIC PROVISIONS
63. PRINCIPLES OF CONSTRUCTION. In the event of any
inconsistencies between the terms and provisions of this Part II Deed of Trust
and Part I of this Deed of Trust, the terms and provisions of this Part II shall
govern and control.
64. ADDITIONAL REMEDIES PROVISIONS. Lender shall have the
following remedies under this Deed of Trust, in addition to any other remedies
stated in this Deed of Trust (all of which are cumulative and nonexclusive):
(a) Judicial Action. Bring an action in any court of
competent jurisdiction to foreclose this Deed of Trust or to obtain specific
performance of any covenant or agreement contained herein or in the other Loan
Documents.
(b) Foreclosure By Power of Sale.
(i) Should Lender elect to foreclose by exercise of the
power of sale herein contained, Lender shall deliver to Trustee a
written declaration of default and demand for sale, and shall deposit
with Trustee this Deed of Trust and the Note and such receipts and
evidence of expenditures made and secured hereby as Trustee may
require.
(ii) Upon receipt of notice from Lender, Trustee shall
cause to be recorded, published and delivered to Borrower such notice
of default and election to sell as is then required by law. Trustee
shall, without demand on Borrower, after lapse of such time as may then
be required by law and after recordation of such notice of default and
after notice of sale having been given as required by law, sell the
Trust Property at the time and place of sale fixed by it in said notice
of sale, either as a whole, or in separate lots or parcels or items and
in such order as Lender may direct Trustee so to do, at public auction
to the highest bidder, for cash in lawful money of the United States
payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the
property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matter or fact shall be prima
facie evidence of the truthfulness thereof. Any person, including
without limitation Borrower, Trustee or Lender, may purchase at such
sale, and Borrower hereby covenants to warrant and defend the title of
such purchaser or purchasers.
(iii) Subject to applicable law, Trustee may postpone the
sale of all or any portion of the Property by public announcement at
the time and place of sale, and from time to time thereafter may
postpone such sale by public announcement or subsequently noticed sale,
and without further notice make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.
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(c) Unified Sale of Real Property. Fixtures and Personal
Property. Notwithstanding any other provisions of this Deed of Trust, Lender may
elect to proceed against any or all of the real property, personal property and
fixtures constituting the Trust Property in any manner permitted under UCC
Section 9501(4)(a) or any successor statute thereof; and if the Lender elects to
proceed in the manner permitted under UCC Section 9501(4)(a)(ii) or any
successor statute thereof, Lender may further elect to proceed by judicial or
nonjudicial foreclosure with respect to all or any of the real property,
personal property and fixtures covered hereby, as designated by Lender, and
Lender or the Trustee (as applicable) are hereby authorized and empowered to
conduct any such sale of any real property, personal property and fixtures in
accordance with the procedures applicable to real property. Where the Trust
Property consists of real property and personal property, any reinstatement of
the Debt secured hereby, following an Event of Default and an election by the
Lender to accelerate the maturity of said obligation, which is made by Borrower
or any other person or entity permitted to exercise the right of reinstatement
under Section 2924c of the California Civil Code or any successor statute, shall
not invalidate, rescind or otherwise affect any sale, disposition or other
proceeding held or conducted with respect to any personal property or fixtures
prior to such reinstatement.
(d) Receiver. Lender shall be entitled, as a matter of
absolute right and without regard to the value of any security for the Debt or
the solvency of any person liable therefor, to the appointment of a receiver for
the Trust Property upon ex parte application to any court of competent
jurisdiction. Borrower waives any right to any hearing or notice of hearing
prior to the appointment of a receiver. Such receiver and his agents shall be
empowered (i) to take possession of the Trust Property and any businesses
conducted by Borrower or any other person thereon and any business assets used
in connection therewith and, if the receiver deems it appropriate, to operate
the same, (ii) to exclude Borrower and Borrower's agents, servants, and
employees from the Trust Property, (iii) to collect the rents, issues, profits,
and income therefrom, (iv) to complete any construction which may be in
progress, (v) to do such maintenance and make such repairs and alterations as
the receiver deems necessary, (vi) to use all stores of materials, supplies, and
maintenance equipment on the Trust Property and replace such items at the
expense of the receivership estate, (vii) to pay all taxes and assessments
against the Trust Property, all premiums for insurance thereon, all utility and
other operating expenses, and all sums due under any prior or subsequent
encumbrance, and (viii) generally to do anything which Borrower could legally do
if Borrower were in possession of the Trust Property. All expenses incurred by
the receiver or his agents shall constitute a part of the Debt. Any revenues
collected by the receiver shall be applied first to the expenses of the
receivership, including attorneys' fees incurred by the receiver and by Lender,
together with interest thereon at the Default Rate from the date incurred until
repaid, and the balance shall be applied toward the Debt or in such other manner
as the court may direct. Unless sooner terminated with the express consent of
Lender or by court order, any such receivership will continue until the Debt has
been discharged in full, or until title to the Trust Property has passed after
foreclosure sale and all applicable periods of redemption have expired. Lender's
rights hereunder include its rights under California Code of Civil Procedure
Section 564, as such section may be amended from time to time.
(e) UCC. Exercise any or all rights and remedies granted
to a secured party upon default under the UCC, in such order and in such manner
as Lender, in its sole discretion but subject to applicable law, may determine,
including, without limiting the generality of the
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foregoing: (i) the right to take possession of the personal property or any part
thereof, and to take such other measures as Lender may deem necessary for the
care, protection and preservation of the personal property, and (ii) the right
to require Borrower at its expense to assemble the personal property and make it
available to Lender at a convenient place acceptable to Lender. Any notice of
sale, disposition or other intended action by Lender with respect to the
personal property sent to Borrower in accordance with the provisions hereof at
least ten (10) Business Days prior to such action, shall constitute commercially
reasonable notice to Borrower.
(f) Action for Breach of Contract. In accordance with
California Code of Civil Procedure Section 736, as such section may be amended
from time to time, Lender may bring an action for breach of contract against
Borrower for breach of any "environmental provision" (as such term is defined in
such section) made by Borrower herein or in any other Loan Document, for the
recovery of damages and/or for the enforcement of the environmental provision.
(g) Waiver of Security. In accordance with California
Code of Civil Procedure Section 726.5, as such Section may be amended from time
to time, Lender may waive the security of this Deed of Trust as to any parcel of
the Trust Property that is "environmentally impaired" or is an "affected parcel"
(as such terms are defined in such Section), and as to any personal property
attached to such parcel, and thereafter may exercise against Borrower, to the
extent permitted by such Section 726.5 and subject to paragraph 57 hereof, the
rights and remedies of an unsecured creditor, including reduction of Lender's
claim against Borrower to judgment, and any other rights and remedies permitted
by law. In the event the Lender elects, in accordance with California Code of
Civil Procedure Section 726.5, to waive all or part of the security of this Deed
of Trust and proceed against Borrower on an unsecured basis, the valuation of
the real property, the determination of the environmentally impaired status of
such security and any cause of action for a money judgment shall, at the request
of Lender, be referred to a referee in accordance with California Code of Civil
Procedure Sections 638 et seq. Such referee shall be an independent and
unaffiliated M.A.I, appraiser selected by Lender and approved by Borrower, which
approval shall not be unreasonably withheld or delayed. The decision of such
referee shall be binding upon both Borrower and Lender, and judgment upon the
award rendered by such referee shall be entered in the court in which such
proceeding was commenced in accordance with California Code of Civil Procedure
Sections 644 and 645. Borrower shall pay all reasonable costs and expenses
incurred by Lender in connection with any proceeding under California Code of
Civil Procedure Section 726.5, as such section may be amended from time to time.
(h) Other. Exercise all other rights, remedies and
recourses granted under the Loan Documents or otherwise available at law or in
equity.
(i) Separate Sales. The Trust Property may be sold in one
or more parcels and in such manner and order as Lender, in its sole discretion,
may direct Trustee so to do. A sale of less than the whole of the Trust Property
or any defective or irregular sale made hereunder shall not exhaust the power of
sale provided for herein, and subsequent sales may be made hereunder until all
obligations secured hereby have been satisfied, or the entire Trust Property
sold, without defect or irregularity.
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(j) Credit Bids. At any sale or disposition of any or all
of the Trust Property-held or made under the power of sale granted in this Deed
of Trust or in connection with judicial proceedings, or by virtue of a judgment
and decree of foreclosure and sale, if Lender is the purchaser at such sale or
disposition Lender shall have the right to offset its bid at such sale to the
extent of the Debt, including the portion of the Debt attributable to the
expenses of sale, costs of any action and other sums for which Borrower is
obligated to pay or reimburse Lender or Trustee under this Deed of Trust.
65. DEED OF TRUST NOT TO SECURE ENVIRONMENTAL COVENANTS,
OBLIGATIONS, AND INDEMNITIES OR GUARANTY OBLIGATIONS. Notwithstanding anything
in this Deed of Trust to the contrary, this Deed of Trust is not intended to,
and by the express provisions hereof, does not secure (a) any environmental (i)
covenant, (ii) obligation or (iii) indemnity of Borrower made or provided
herein, or in the Environmental and Hazardous Substance Indemnification
Agreement executed simultaneously herewith, or (b) the obligations of any (i)
Guarantor of any Debt or (ii) third party indemnitor under the Environmental and
Hazardous Substance Indemnification Agreement or under any other indemnity.
66. ADDITIONAL WAIVERS.
(a) Borrower has read and hereby approves the Note, this
Deed of Trust, the other Loan Documents and all other agreements and documents
relating thereto. Borrower acknowledges that it has been represented by counsel
of its choice to review this Deed of Trust, the Note, the other Loan Documents
and all other documents relating thereto and said counsel has explained and
Borrower understands the provisions thereof, or that Borrower has voluntarily
declined to retain such counsel.
(b) Borrower hereby expressly waives diligence, demand,
presentment, protest and notice of every kind and nature whatsoever (unless as
otherwise required under this Deed of Trust or the other Loan Documents) and
waives any right to require Lender to enforce any remedy against any Guarantor,
endorser or other person whatsoever prior to the exercise of its rights and
remedies hereunder or otherwise. Borrower waives any right to require Lender to:
(i) proceed or exhaust any collateral security given or held by Lender in
connection with the Debt; (ii) give notice of the terms, time and place of any
public or private sale of any real or personal property security for the Debt or
other guaranty of the Debt; or (iii) pursue any other remedy in Lender's power
whatsoever.
(c) Until all Debt shall have been paid in full,
Borrower: (i) shall not have any right of subrogation to any of the rights of
Lender against any Guarantor, maker or endorser; (ii) waives any right to
enforce any remedy which Lender now has or may hereafter have against any other
Guarantor, maker or endorser; and (iii) waives any benefit of, and any other
right to participate in, any collateral security for the Debt or any guaranty of
the Debt now or hereafter held by Lender.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, Borrower has executed this instrument the
day and year first above written.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Principal Manager
By: ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd.,
a California limited partnership,
its Administrative Agent
By: ▇▇▇▇▇▇▇ Partners BGHS, LLC,
a California limited liability company,
its general partner
By: ▇▇▇▇▇▇▇ Partners SCS, Inc.,
a California corporation,
its manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
STATE OF CALIFORNIA, County of Los Angeles ss:
On June 16, 2003, before me, ▇▇▇▇ ▇. ▇▇▇▇, a notary public for said
state, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
Witness my hand and official seal.
Signature: ▇▇▇▇ ▇. ▇▇▇▇
My commission expires: 8.16.05
[Notary Seal]
EXHIBIT A
LEGAL DESCRIPTION
EXH. A-l
EXHIBIT B
RESERVED
EXH. ▇-▇
EXHIBIT C
REQUIRED REPAIRS
EXH. C-l
EXHIBIT D
OUTSTANDING TENANT ALLOWANCE OBLIGATIONS
EXH. ▇-▇
▇▇▇▇▇ Fargo Tower Expense
----------------- ----------
Outstanding Tenant Improvement and Leasing Commissions:
▇▇▇▇▇ Bailentine TI $ 97,524
La Petite Boulangerie TI 7,345
LAUSD Extension TI 317,202
Copy Page TI 5,659
Bank One TI 194
Zevnick Norton TI 108,504
Roebeks TI 2.335
▇▇▇▇ & Company LC 1,782
▇▇▇▇▇▇ & Rygel Extension TI 783.480
LAUSD 23rd Floor Allowance 206,920
-----------
Total Outstanding TI/LC 1,531,445
▇▇▇▇▇▇ & ▇▇▇▇ Parking Discount Buyout and Outstanding ▇▇▇▇▇▇ & ▇▇▇▇ TI/LC:
▇▇▇▇▇▇ and ▇▇▇▇ Initial TI Allowance 1,716,915
▇▇▇▇▇▇ and ▇▇▇▇ Renovation TI Allowance 9,610,835
▇▇▇▇▇▇ and ▇▇▇▇ Additional 2004 TI Allowance 1,501,738
▇▇▇▇▇▇ and ▇▇▇▇ Leasing Commission 1,600,487
▇▇▇▇▇▇ and ▇▇▇▇ Parking Discount Buyout 1,397,368
-----------
Total Outstanding ▇▇▇▇▇▇ and ▇▇▇▇ TI/LC 15,827,393
CASH MANAGEMENT AGREEMENT
(this "AGREEMENT").
dated as of June 26, 2003
among
NORTH TOWER, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("BORROWER"),
▇▇▇▇▇▇▇ PROPERTIES, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "MANAGER")
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(together with its successors and
assigns, the "LENDER")
and
WACHOVIA BANK, NATIONAL ASSOCIATION
8739 Research Drive, URP4
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(the "DEPOSIT BANK")
WHEREAS, pursuant to that certain Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, dated as of the date
hereof (the "DEED OF TRUST"). made by Borrower, as trustor for the benefit of
Lender, as beneficiary, the Lender has provided financing (the "LOANS") to the
Borrower secured by the property owned by the Borrower and described in the Deed
of Trust (collectively, the "PROPERTY"); and
WHEREAS, the Lender shall deliver to the bank (the "CLEARING
BANK") maintaining the operating account of the Borrower (the "CLEARING
ACCOUNT") a Clearing Bank Instruction Letter in the form attached as Exhibit A
hereto (together with any modifications, amendments or replacements thereof, the
"INSTRUCTION LETTER"), which provides that all Rents (as defined in the Deed of
Trust) be deposited in such Clearing Account upon delivery of the Instruction
Letter, and swept periodically into the accounts established hereunder.
NOW THEREFORE, in consideration of the mutual promises
contained herein and for other good and valuable consideration the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
(a) As used herein the following capitalized terms shall have
the respective meanings set forth below:
"ACCOUNT PROCEEDS" shall mean any and all Rents and other
revenue in connection with the Property that is deposited by any Clearing Bank,
the Borrower, the Manager or otherwise into the Cash Collateral Account from
time to time.
"BORROWER REMAINDER ACCOUNT" shall mean the account of
Borrower to which monies in the Borrower Remainder Sub-account are allocated in
accordance with the terms hereof.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any day on which commercial banks in New York, New York or the City in
which the Deposit Bank is located are required or permitted by law to be closed.
"CASH COLLATERAL ACCOUNT" shall have the meaning ascribed to
such term in Section 2 hereof.
"CERTIFICATES" means the securities issued in connection with
a Securitization of the Loans.
"CLEARING ACCOUNT" shall have the meaning given such term in
the Recitals.
"CLEARING BANK" shall have the meaning given such term in the
Recitals.
"COLLATERAL" shall mean each of the items pledged by Borrower
in Section 6(c) hereof.
"COLLECTION PERIOD" with respect to any Payment Date, shall
mean the period of days from the Payment Date occurring during the month
immediately preceding the Payment Date to the day immediately preceding such
Payment Date. With respect to the first Payment Date, the Collection Period
shall commence on and include the date hereof and end on and include the day
immediately preceding such first Payment Date.
"DEED OF TRUST" shall have the meaning given such term in the
Recitals.
"DEPOSIT BANK" shall mean Wachovia Bank, National Association
or such other bank or banks selected by the Lender to maintain the Cash
Collateral Account.
"ELIGIBLE ACCOUNT" either (i) an account or accounts
maintained with an Eligible Bank or (ii) a Trust Account. Eligible Accounts
shall bear interest.
"ELIGIBLE BANK" shall mean a bank that (i) satisfies the
Rating Criteria and (ii) insures deposits held by such bank through the Federal
Deposit Insurance Corporation.
"INSTRUCTION LETTER" shall have the meaning ascribed to such
term in the Recitals.
"LOANS" shall have the meaning ascribed to such term in the
Recitals.
"LOAN DOCUMENTS" shall have the meaning set forth for such
term in the Deed of Trust.
"LOAN SATISFACTION EVENT" shall mean the satisfaction in full
of the Obligations.
"LOAN SUB-ACCOUNTS" shall have the meaning ascribed to such
term in Section 2(c).
"MONTHLY PAYMENT AMOUNT" shall have the meaning given to such
term in the Note.
"NOTE" shall mean, collectively, that certain (a) Substitute
Promissory Note A-l dated as of June 26, 2003 made by Borrower to Lender in the
original principal amount of Ninety-Two Million Five Hundred Twenty-Eight
Thousand Six Hundred Eighty-Eight and No/100 Dollars ($92,528,688.00) ("NOTE
A-l'"), (b) Substitute Promissory Note A-2 dated as of June 26, 2003 made by
Borrower to Lender in the original principal amount of Ninety-Two Million One
Hundred Fifty-Nine Thousand Three Hundred Twelve and No/100 Dollars
($92,159,312.00) ("NOTE A-2"). (c) Substitute Promissory Note B-1 dated as of
June 26, 2003 made by Borrower to Lender in the original principal amount of
Thirty-Two Million Seven Hundred Twenty-One Thousand Three Hundred Twelve and
No/100 Dollars ($32,721,312.00) ("NOTE B-1") and (d) Substitute Promissory Note
B-2 dated as of June 26, 2003 made by Borrower to Lender in the original
principal amount of Thirty-Two Million Five Hundred Ninety Thousand Six Hundred
Eighty-Eight and No/100 Dollars ($32,590,688.00) ("NOTE B-2"), as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
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"OBLIGATIONS" shall mean any and all debt, liabilities and
obligations of the Borrower to the Lender pursuant to or in connection with the
Loans, whether now or hereafter existing, including without limiting the
generality of the foregoing, the indebtedness evidenced by the Note, all
interest accruing thereon, and any and all debt, liabilities and obligations of
the Borrower under the Loan Documents.
"OPERATING EXPENSES" shall mean, collectively, Cash Expenses
(as defined in the Note) and Extraordinary Expenses (as defined in the Note).
"PAYMENT DATE" shall have the meaning given to such term in
the Note.
"PERMITTED INVESTMENTS" shall have the meaning given to such
term in the Deed of Trust.
"PERSON" shall mean any individual, sole proprietorship,
partnership, limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party or government (whether territorial, national, federal, state,
county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"PROPERTY" shall have the meaning ascribed to such term in the
Recitals.
"RATING AGENCIES" shall mean (i) any nationally-recognized
statistical rating organizations that provide a rating on any Certificates on
the date of issuance of the Certificates or (ii) prior to the issuance of the
Certificates, Moody's (as defined in the Deed of Trust), S&P (as defined in the
Deed of Trust) and any other nationally-recognized statistical rating
organizations that have been designated by the Lender in its sole discretion.
"RATING CRITERIA" with respect to any Person, shall mean that
(i) the short-term unsecured debt obligations of such Person are rated at least
"A-l" by S&P, "P-l" by Moody's and, if rated by another Rating Agency, are rated
in an equivalent category by such other Rating Agency, if deposits are held by
such person for a period of less than 30 days, or (ii) the long-term unsecured
debt obligations of such Person are rated at least "AA-" by S&P, "Aa2" by
Moody's and, if rated by another Rating Agency, are rated in an equivalent
category by such other Rating Agency, if deposits are held by such person for a
period of 30 days or more.
"RECONCILIATION DATE" shall mean, as applicable, January 31st,
April 30th, July 31st, and October 31st of each year that the Loans remain
outstanding.
"RENTS" shall have the meaning ascribed to such term in the
Deed of Trust.
"SECURITIZATION" shall have the meaning given to such term in
the Deed of Trust.
"SERVICER" shall mean a servicer or account administrator of
the Lender designated by and acting for the benefit of the Lender.
"TRUST ACCOUNT" shall mean a segregated trust account
maintained by a corporate trust department of a federal depository institution
or a state chartered depository institution
-3-
subject to regulations regarding fiduciary funds on deposit similar to Title 12
of the Code of Federal Regulations Section 9.10(B) which has corporate trust
powers and is acting in its fiduciary capacity.
(b) The meanings given to capitalized terms defined herein
shall be equally applicable in both singular and plural forms of such terms.
(c) Capitalized terms used and not defined herein shall have
the respective meanings given to such terms in the Deed of Trust.
SECTION 2. ESTABLISHMENT OF THE CASH COLLATERAL ACCOUNT.
(a) The Lender has established and will maintain while the
Loans are outstanding a cash collateral account (which account shall be an
Eligible Account or may be a book-entry sub-account of an Eligible Account) at
the Deposit Bank (the "CASH COLLATERAL ACCOUNT") which shall be entitled
"Greenwich Capital Financial Products, Inc. as Beneficiary of North Tower, LLC
Cash Collateral Account". In connection with a Securitization, the Lender shall
have the right to cause Deposit Bank to entitle the Cash Collateral Account with
such other designation as the Lender may select in its reasonable discretion to
reflect such assignment or transfer. The Lender shall, or shall cause the
Servicer to, cause the Deposit Bank to deposit into the Cash Collateral Account,
all Rents and other amounts transferred to the Deposit Bank from the Clearing
Bank.
(b) The Cash Collateral Account shall be an interest bearing
Eligible Account. The interest rate with respect to funds held in the Cash
Collateral Account shall be the rate for such deposits as is customarily paid by
the Deposit Bank. All interest income or other earnings on funds, if any,
remaining in the Cash Collateral Account shall be for the benefit of the
Borrower and credited to, and become a part of, the Cash Collateral Account. The
Cash Collateral Account shall be assigned the federal tax identification number
of the Borrower, which number is ▇▇-▇▇▇▇▇▇▇. Borrower shall provide Lender or
the Deposit Bank, at any time upon request of Lender, with a Form W-8 or W-9 to
evidence Borrower is not subject to any back-up withholding under the United
States Internal Revenue Code. Prior to application in accordance with the terms
hereof, all amounts in the Cash Collateral Account shall remain an asset of
Borrower, subject to the lien and security interest granted Lender hereunder,
and subject to all of the terms and conditions of this Agreement and the other
Loan Documents.
(c) The following sub-accounts (collectively, the "LOAN
SUB-ACCOUNTS") of the Cash Collateral Account shall be maintained on a
ledger-entry basis:
(i) "▇▇▇▇▇▇ ▇▇▇▇ TI/LC Escrow Sub-account";
(ii) "Deferred Maintenance Escrow Sub-account";
(iii) "Outstanding Tenant Allowance Escrow
Sub-account";
(iv) "Minimum Occupancy Escrow Sub-account";
(v) "Tax and Insurance Impound Fund
Sub-account";
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(vi) "Monthly Debt Service Sub-account";
(vii) "Replacement/Leasing Escrow Sub-account";
(viii) "Operating Expense Sub-account";
(ix) "Borrower Remainder Sub-account";
(x) "Junior Management Fee Subaccount";
(xi) "Casualty and Condemnation Proceeds
Sub-account"; and
(xii) "Extraordinary Receipts Sub-account".
Amounts allocated to the Loan Sub-accounts shall be disbursed
in accordance with the terms of this Agreement and the Deed of Trust.
(d) (i) The Lender shall deliver one or more executed
Instruction Letters to the Clearing Bank. If the Clearing Bank shall request any
changes, modifications or supplements to any Instruction Letter to conform to
the Clearing Bank's customary practice or requirements, as the same may change
from time to time, then if such changes, modifications or supplements are
reasonably acceptable to Lender, Borrower shall execute and deliver to Lender
such instruments as the Clearing Bank shall reasonably request to effectuate
such modifications or changes. In the event the Borrower fails to execute such
Instruction Letter as provided above within three (3) Business Days after
receipt of written request for such execution, Borrower hereby appoints the
Lender as its attorney-in-fact with full authority to enter into replacement
Instruction Letter(s) and to execute on behalf of the Borrower any new modified
Instruction Letter acceptable to the proposed Clearing Bank. All costs and
expenses incurred by the Lender to negotiate and execute any modified
Instruction Letter shall be paid by the Borrower.
(ii) If the Clearing Bank fails to perform its
obligations as set forth in the Instruction Letter, then, upon the request of
Lender, within ten (10) Business Days, the Borrower will establish a new
Eligible Account (which shall become the Clearing Account) at a bank selected by
the Borrower and reasonably acceptable to Lender and shall cause all funds in
the existing Clearing Account to be transferred to the new Clearing Account and
any future Rents from the Property to be deposited in such new Clearing Account.
(iii) In the event that Borrower requests that a
new Clearing Account be established (which new Clearing Account shall be an
Eligible Account), and Lender consents to such change, which consent shall not
be unreasonably withheld or delayed, Borrower shall, prior to the establishment
of such account, execute a replacement Instruction Letter to cover the new
account, which replacement Instruction Letter shall be in the form of the
Instruction Letter annexed hereto as Exhibit A with such changes thereto as may
be requested by such new Clearing Bank in order to conform such Instruction
Letter with such new bank's customary practice. The existing Clearing Account
shall remain in effect until Borrower has executed a replacement Instruction
Letter for the new Clearing Account and the new Clearing Bank has acknowledged
receipt of such replacement Instruction Letter and has agreed to comply with the
instructions contained therein by executing an Acknowledgment in the form of
Schedule I
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attached to Exhibit A attached hereto, and Borrower may rescind its request for
a new Clearing Account in the event Borrower does not approve of any changes to
the form of the Instruction Letter annexed hereto as Exhibit A requested by such
new Clearing Bank.
(e) The Lender or the Servicer shall, at the direction of
Borrower, direct the Deposit Bank to invest amounts allocated to the Cash
Collateral Account in Permitted Investments selected by the Borrower. All
earnings on such Permitted Investments on funds allocated to the Cash Collateral
Account shall be (a) added to and become part of the Cash Collateral Account,
(b) taxed as income of the Borrower, (c) for the benefit of the Borrower,
subject to Lender's rights pursuant to this Agreement, and (d) remitted to
Borrower jointly once per calendar quarter, provided that no Event of Default
has occurred and is continuing, to the extent not already disbursed or applied
in accordance with this Agreement. Borrower shall have liability for any loss in
investments of funds that are invested in Permitted Investments and no such loss
or liability shall affect Borrower's obligations to make all payments and
deposits required to be made by Borrower under the Loan Documents.
Notwithstanding anything to the contrary in this Agreement or in any of the
other Loan Documents, upon the occurrence and during the continuance of an Event
of Default, Borrower shall have no right to select Permitted Investments.
(f) It is the intention of the parties hereto that the
entire amounts deposited in the Cash Collateral Account (or as much thereof as
the Lender may reasonably arrange to invest) may be invested in Permitted
Investments selected by the Borrower, and, in such event, that the Cash
Collateral Account shall be a so-called "zero balance" account (unless it is a
Trust Account). All funds in the Cash Collateral Account that are invested in a
Permitted Investment are deemed to be held in the Cash Collateral Account for
all purposes of the Deed of Trust and the other Loan Documents.
(g) In order to further secure the performance by the
Borrower of the Obligations and as a material inducement for the Lender to make
the Loans in accordance with the terms of the Loan Documents, the Borrower
hereby (i) requests that the Cash Collateral Account be established on its
behalf at the Deposit Bank in the name set forth above and (ii) acknowledges
that (A) the Cash Collateral Account will be subject to the sole dominion,
control and discretion of the Lender (which may be exercised through the
Servicer), subject to the terms, covenants and conditions of this Agreement and
the Deed of Trust, (B) the Lender shall have the sole right to make withdrawals
or transfers of funds from the Cash Collateral Account and (C) neither the
Borrower nor any other Person claiming on behalf of or through the Borrower
shall have any right or authority, whether express or implied, to make use of,
or withdraw any funds, investments or other properties from, the Cash Collateral
Account, or to give any instructions with respect to the Cash Collateral
Account.
(h) Deposit Bank will send a monthly report to Borrower
(in a manner consistent with Deposit Bank's standard practice) by regular U.S.
mail at the Borrower's address specified above, which monthly report shall
specify the balance of, and credits and charges to, the Cash Collateral Account
and each Sub-account thereof for each calendar day of the previous month.
Deposit Bank will send to the Lender (in a manner consistent with Deposit Bank's
standard practices), by regular U.S. mail at the Lender's address specified,
copies of all correspondence, notices, account statements and other information
(but not canceled checks)
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which Deposit Bank is obligated to send to Borrower. Deposit Bank also agrees to
provide to each of Borrower and the Lender (as a service under this Agreement)
copies of account statements and other account information, including account
balances, by telephone and by computer communication, to the extent practicable
and as shall have been requested by Borrower or by Lender. Borrower shall be
deemed at all times to have consented to Deposit Bank's release of such account
information to Lender. Deposit Bank's liability for failure to comply with this
Section shall not exceed the cost of providing such information.
SECTION 3. ALLOCATION AND DISBURSEMENT OF FUNDS IN THE CASH COLLATERAL
ACCOUNT.
(a) With respect to each Collection Period, the Lender or
the Servicer shall allocate, and shall cause the Deposit Bank to allocate, from
time to time during such Collection Period the amounts deposited in the Cash
Collateral Account in the order and priority set forth in paragraph 10 of the
Note, such allocation to be done promptly upon receipt of any deposits. Amounts
deposited in the Deferred Maintenance Fund pursuant to paragraph 6(b) of the
Deed of Trust shall be allocated to the Deferred Maintenance Escrow Sub-account.
Amounts deposited in the ▇▇▇▇▇▇ ▇▇▇▇ Escrow Fund pursuant to paragraph 6(d) of
the Deed of Trust shall be allocated to the ▇▇▇▇▇▇ ▇▇▇▇ TI/LC Escrow
Sub-account. Amounts deposited in the Outstanding Tenant Allowance Escrow Fund
pursuant to paragraph 6(c) of the Deed of Trust shall be allocated to the
Outstanding Tenant Allowance Escrow Sub-account. Amounts deposited in the
Minimum Occupancy Escrow Fund pursuant to paragraph 6(e) of the Deed of Trust
shall be allocated to the Minimum Occupancy Escrow Sub-account. Amounts
deposited in the Tax and Insurance Impound Fund pursuant to paragraph 6(a) of
the Deed of Trust shall be allocated to the Tax and Insurances Impound Fund
Sub-account. Amounts deposited in the Replacement/Leasing Escrow Fund pursuant
to paragraph 6(f) of the Deed of Trust shall be allocated to the
Replacement/Leasing Escrow Sub-account.
(b) Each Collection Period, the Lender or the Servicer
shall disburse or cause the Deposit Bank to disburse:
(i) Amounts allocated to the Tax and Insurance
Impound Fund Sub-account as set forth in paragraph 6(a) of the Deed of Trust;
(ii) Amounts allocated to the Deferred
Maintenance Escrow Sub-account as set forth in paragraph 6(b) of the Deed of
Trust;
(iii) Amounts allocated to the Outstanding Tenant
Allowance Escrow Sub-account as set forth in paragraph 6(c) of the Deed of
Trust;
(iv) Amounts allocated to the ▇▇▇▇▇▇ ▇▇▇▇ TI/LC
Escrow Sub-account as set forth in paragraph 6(d) of the Deed of Trust;
(v) Amounts allocated to the Minimum Occupancy
Escrow Sub-account as set forth in paragraph 6(e) of the Deed of Trust;
(vi) Amounts allocated to the Monthly Debt
Service Sub-account to the Lender on the related Payment Date;
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(vii) Amounts allocated to the Replacement/Leasing
Escrow Sub-account as set forth in paragraph 6(f) of the Deed of Trust;
(viii) Amounts allocated to the Operating Expense
Sub-account on each Business Day to the following bank account (the "OPERATING
ACCOUNT") (the amount to be sent to such Operating Account to be determined in
accordance with paragraph 10(a)(v), (vi) and (viii) of the Note and pursuant to
the Approved Annual Budget for Borrower as such Approved Annual Budget may be
adjusted in accordance with paragraph 10(d) of the Note):
Bank: Bank of the West
ABA#: ▇▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Account: North Tower, LLC Operating Account
Account #: 729-012138
(ix) Amounts allocated to the Junior Management
Fee Subaccount to the following bank account:
Bank: Bank of the West
ABA#: ▇▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Account: ▇▇▇▇▇▇▇ Properties, L.P.
Account #: 729-003749
(x) Amounts allocated to the Borrower Remainder
Sub-account to the following bank account:
Bank: Bank of the West
ABA#: ▇▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Account: North Tower, LLC Borrower Remainder Account
Account#: 729-012146
SECTION 4. FEES.
(a) The Borrower agrees to pay the fees of the Clearing
Bank and Deposit Bank in accordance with the customary fees charged by the
Clearing Bank and Deposit Bank for the services described herein, as such fees
are established from time to time.
(b) Upon the request of the Borrower, the Clearing Bank
and Deposit Bank shall include their fees and the payment status thereof in an
account analysis statement.
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SECTION 5. TERMINATION.
(a) The Lender may replace the Deposit Bank with a new
Deposit Bank upon five days' notice to the Borrower. The Borrower hereby agrees
that it shall take all reasonable action necessary to facilitate the transfer of
the respective obligations, duties and rights of the Deposit Bank to the
successor thereof selected by the Lender in its sole discretion.
(b) The Lender shall terminate this Agreement upon the
occurrence of a Loan Satisfaction Event and return to Borrower all monies then
held in the Cash Collateral Account promptly after liquidating all Permitted
Investments.
(c) This Agreement may be terminated by Deposit Bank at
any time on not less than thirty (30) days' prior written notice to each of the
Borrower and the Lender. Deposit Bank's rights to receive reimbursement from the
Borrower under Section 4 of this Agreement and Borrower's indemnification of
Deposit Bank under Section 14 of this Agreement shall survive any termination of
this Agreement. Upon termination of this Agreement, all funds remaining in the
Cash Collateral Account shall be forwarded by Deposit Bank directly to Lender,
unless Deposit Bank shall have received written instruction from the Lender
prior to the expiration of the thirty (30) day period set forth above directing
Deposit Bank to send such funds to the Borrower or another depository
institution approved in writing by the Lender and the Borrower.
SECTION 6. MATTERS CONCERNING THE BORROWER.
(a) Borrower hereby represents, warrants and covenants to
Lender that:
(i) Intentionally deleted.
(ii) The Borrower or the Manager shall, within
three (3) Business Days of the date hereof or within three (3) Business Days of
the date such accounts are opened, whichever is later, instruct all Persons that
presently or hereafter maintain open accounts with Borrower or the Manager, or
with whom the Manager or the Borrower presently or hereafter does business on an
"accounts receivable" basis with respect to the Property, to deliver all
payments due under such accounts to the Clearing Bank at a lock box address at
the Clearing Bank (the "LOCK BOX ADDRESS") in the form of checks or equivalent
instruments for the payment of money. Neither the Borrower nor the Manager shall
direct any such Person to make payments due under such accounts in any other
manner.
(iii) Pursuant to an instruction letter in the
form of Exhibit B hereto (a "LESSEE PAYMENT DIRECTION LETTER"), the Borrower or
the Manager shall, within three (3) Business Days of the date hereof, notify and
advise, or will, for Leases executed after the date hereof, promptly notify and
advise, each tenant of the Property (collectively, the "TENANTS") under each
lease with respect to the Property (whether such lease is presently effective or
executed after the date hereof), to send directly to the Lockbox Address
promptly when due all payments, whether in the form of checks, cash, drafts,
money orders or any other type of payment whatsoever of rent or any other item
payable to the Borrower as landlord under such Leases. The foregoing
requirements need not be satisfied with respect to any Lease executed
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after the date hereof to the extent the terms and conditions of the Lessee
Payment Direction Letter are incorporated in the applicable Lease.
(iv) If notwithstanding the provisions of this
Section 6(a), Borrower or Manager (or any affiliate thereof) receives any Rents
then (x) Borrower or Manager (or such affiliate) shall be deemed to hold such
Rents in trust for Lender and (y) Borrower or Manager shall deposit with the
Clearing Bank within one (1) Business Day of receipt all such Rents received by
Borrower or Manager (or such affiliate).
(b) Upon request of Lender, Borrower shall deliver to
Lender such evidence as Lender may reasonably request to evidence that Borrower
is complying with the provisions of this Section 6(a). Without the prior written
consent of the Lender, neither the Borrower nor the Manager shall (i) terminate,
amend, revoke or modify any Lessee Payment Direction Letter in any manner or
(ii) direct or cause any Tenant to pay any amount in any manner other than as
provided specifically in the Lessee Payment Direction Letter.
(c) The Borrower hereby pledges, transfers and assigns to
the Lender, and grants to the Lender, as additional security for the payment and
performance of the Obligations, a continuing perfected first priority security
interest in and to, and a first lien upon, (i) the Cash Collateral Account, the
Clearing Account, the Operating Account and all of the Borrower's right, title
and interest in and to all cash, property or rights transferred to or deposited
therein from time to time, (ii) all earnings, investments and securities held in
the Cash Collateral Account in accordance with this Agreement and (iii) any and
all proceeds of the foregoing. This Agreement and the pledge, assignment and
grant of security interest made hereby shall secure payment of all amounts
payable by the Borrower to the Lender under the Note and the other Obligations.
The Borrower acknowledges that the Servicer, Clearing Bank and Deposit Bank are
acting as the agent of, and at the direction of, the Lender in connection with
the subject matter of this Agreement. The Borrower further agrees to execute,
acknowledge, deliver, file or do at its sole cost and expense, all other acts,
assignments, notices, agreements or other instruments as the Lender may
reasonably require in order to effectuate, assure, convey, secure, assign,
transfer and convey unto the Lender any of the rights granted by this Agreement
and to more fully perfect and protect any lien or security interest granted
hereby.
(d) In its sole discretion, the Borrower may, from time
to time deposit amounts into the Cash Collateral Account in respect of any Loan
Sub-account and/or the Operating Account from sources of the Borrower other than
those received by the Clearing Bank with respect to the then-current Collection
Period; provided, that if the Borrower deposits such amounts, the amounts
deposited shall be subject to all of the terms hereof as if not separately
deposited by the Borrower, and may not be withdrawn except as otherwise provided
for in this Agreement. Nothing contained herein shall impair or otherwise limit
Borrower's obligations to timely make the payments (including, without
limitation, interest and principal) required by the Note, the Deed of Trust and
the other Loan Documents, it being understood that such payments shall be so
timely made in accordance with the Loan Documents regardless of the amounts on
deposit in the Clearing Account or Cash Collateral Account.
(e) The Borrower hereby covenants and agrees that amounts
allocated to the Operating Expense Sub-account with respect to the payment of
operating expenses or capital
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expenditures shall be used only for payment of checks made by the Borrower for
the payment of operating expenses or capital expenditures incurred in the
ownership and operation of the Property and reasonably approved by the Lender or
permitted by the Loan Documents. In any month, Borrower shall be entitled to
receive and use for Cash Expenses an amount in excess of the budgeted amount
("BUDGET VARIANCES") for such month set forth in the Approved Annual Budget by
requesting the same in writing not less than three (3) Business Days prior to
the first day of the Collection Period during which such Budget Variances are to
be disbursed so long as the aggregate amount of all such Budget Variances so
requested by Borrower in any month does not exceed an amount that, together with
any Budget Variances previously disbursed to Borrower in such calendar year, is
greater than five percent (5%) of the total budgeted expenditures (excluding any
contingency line item) for such calendar year as set forth in the then current
Approved Annual Budget.
(f) On or before the last day of each calendar quarter,
Borrower shall prepare and deliver to Lender a financial statement (the "ACTUAL
EXPENDITURE STATEMENT") in form and substance satisfactory to Lender in all
material respects setting forth all amounts expended for Operating Expenses
during the immediately preceding calendar quarter, including showing variances
from budget and setting forth a short explanation of any variance in excess of
ten percent (10%) of the budget line item in question and identifying any
payment made to an affiliate and the reasons therefor. Each Actual Expenditure
Statement shall be certified by an officer of Borrower or the REIT as being
true, correct and complete in all material respects and include a certification
that all amounts transferred to the Operating Account pursuant to this Agreement
were expended for Operating Expenses substantially in accordance with this
Agreement or shall be credited against or returned to the Cash Collateral
Account as provided below. Borrower shall promptly deliver to Lender such
further documentation (including, without limitation, invoices, canceled checks
or copies of contracts) and information as Lender may reasonably request
regarding any payments described in the Actual Expenditure Statement. On each
Reconciliation Date during the term of the Loans, if the Actual Expenditure
Statements for the immediately preceding calendar quarter indicate that the
Operating Expenses actually incurred and paid during such calendar quarter, plus
the amount necessary to maintain the Operating Account Balance Floor (as
hereinafter defined) in the Operating Account as of the last day of such
calendar quarter, were less than the amount disbursed to the Operating Account
during such calendar quarter (the positive difference in the amount disbursed to
the Operating Account and the amount actually spent on Operating Expenses is
hereafter referred to as the "EXPENSE SURPLUS"), then the funds allocated for
Operating Expenses to be disbursed to the Operating Expense Sub-account on the
next occurring Payment Date in accordance with the Approved Annual Budget (as
defined in the Note) (the "ALLOCATED DISBURSEMENT AMOUNT") shall be reduced by
an amount equal to the Expense Surplus; provided, further, that if the Allocated
Disbursement Amount is less than the Expense Surplus, then Borrower, prior to
the next occurring Payment Date, shall deposit into the Cash Collateral Account
the amount by which the Expense Surplus exceeds the Allocated Disbursement
Amount (the "ALLOCATION SURPLUS"). If Borrower shall fail to, within the
described required time periods, (i) so deposit any such Allocation Surplus into
the Cash Collateral Account, or (ii) provide the Actual Expenditure Statements
required by the terms hereof or (iii) after written request of Lender, provide
evidence of expenditures or (iv) provide to Lender the items described in
paragraph 18(b) of the Deed of Trust in accordance with the terms of such
paragraph 18(b) and (in the case of any of (i), (ii), (iii) or (iv)) such
failure continues for ten (10) or more days after
-11-
notice of such failure, then in addition to any other remedies which Lender may
have with respect thereto, Lender may elect not to fund the Operating Expense
Sub-account from monies in the Cash Collateral Account or Lender may continue to
hold the funds in the Operating Expense Sub-account until such failure is cured.
SECTION 7. CERTAIN MATTERS REGARDING THE LENDER.
(a) The parties agree that the Deposit Bank shall pay
over to the Lender all amounts deposited in any account maintained hereunder on
demand, provided, that in making such demand, the Lender gives notice to
Borrower of such demand, in writing, signed by the Lender or an authorized agent
thereof, and that an Event of Default under the Deed of Trust has occurred and
is continuing. Notwithstanding the foregoing, the Borrower shall not be deemed
to have waived any rights the Borrower may have against the Lender if it is
determined that the Lender acted improperly.
(b) Upon the occurrence and during the continuance of an
Event of Default, Lender may exercise in respect of the Collateral all rights
and remedies available to Lender hereunder or under the other Loan Documents or
otherwise available at law or in equity. Without limiting the generality of the
foregoing or the provisions of paragraph (a) above, upon the occurrence and
during the continuance of an Event of Default, Borrower acknowledges and agrees
that it will have no further right to request or otherwise require Lender to
disburse funds from the Clearing Account or the Cash Collateral Account in
accordance with the terms of this Agreement, it being agreed that Lender may, at
its option, (i) direct the Deposit Bank to continue to hold the funds in the
Cash Collateral Account and/or (ii) continue from time to time to apply all or
any portion of the funds held in the Cash Collateral Account to any payment(s)
which such funds could have been applied to prior to such Event of Default (or
to pay Cash Expenses, Net Capital Expenditures (as defined in the Note) and
Extraordinary Expenses directly), to the extent and in such order and manner as
Lender in its sole discretion may determine, and/or (iii) direct that the
Deposit Bank or Clearing Bank from time to time disburse all or any portion of
the funds held in the Cash Collateral Account or other Collateral then or
thereafter held by the Deposit Bank or Clearing Bank, as applicable, to Lender,
in which event Lender may apply the funds held in the Cash Collateral Account or
other Collateral to the Obligations in any order and in such manner as Lender
may determine in its sole discretion.
(c) Upon the occurrence and during the continuance of any
Event of Default, Lender may, at any time or from time to time, subject to the
requirements of applicable law, collect, appropriate, redeem, realize upon or
otherwise enforce its rights with respect to the Collateral, and without the
need to institute any legal action, make demand, exhaust any other remedies or
otherwise proceed to enforce its rights, provided that Lender gives notice to
Borrower, in writing, that an Event of Default has occurred and is continuing.
(d) No failure on the part of Lender to exercise, and no
delay in exercising, any right under this Agreement or the Deed of Trust shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right under this Agreement or the other Loan Documents. The remedies
provided in this Agreement, the Note, the Deed of Trust and the other Loan
Documents are cumulative and not exclusive of any remedies provided at law or in
equity.
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SECTION 8. MATTERS CONCERNING THE DEPOSIT BANK.
(a) Borrower hereby authorizes and directs Deposit Bank
to comply, and Deposit Bank agrees to comply, with instructions originated by
the Lender in accordance with this Agreement directing the disposition of funds
from time to time in the Cash Collateral Account or as to any other matters
relating to the Cash Collateral Account without further consent by Borrower, but
subject to the terms of this Agreement.
(b) All defenses of Deposit Bank under the Agreement and
Articles 3, 4, and 4A of the Uniform Commercial Code (as adopted in the State
where the respective Account is located) as to the payment and collection of
items shall also be applicable to and enforceable against the Lender. Each of
Borrower and the Lender hereby authorizes and instructs Deposit Bank to supply
Borrower's or the Lender's endorsement, as appropriate, to any items that
Deposit Bank receives and deposits for collection to the Cash Collateral
Account.
(c) Deposit Bank will not exercise any security interest
(except for the security interest provided in Section 4-210 of the Uniform
Commercial Code as adopted in the State where the Cash Collateral Account is
located), lien, right of setoff, deduction, recoupment or banker's lien or any
other interest in or against the Cash Collateral Account, and Deposit Bank
hereby subordinates any such security interest, lien or right which it may have
against the Cash Collateral Account, except that Deposit Bank may set off and
charge against the Cash Collateral Account for (i) the face amount of each
Returned Item (hereinafter defined), (ii) all usual and customary service
charges, (iii) account maintenance fees, (iv) transfer fees, (v) out-of-pocket
fees and expenses incurred by Deposit Bank in connection with the enforcement of
this Agreement, (vi) adjustments or corrections of posting or encoding errors,
and (vii) any other items normally chargeable to an account, whether incurred
before or after the date of this Agreement. As used in this Agreement, "RETURN
ITEM" shall mean (i) any items deposited into the Cash Collateral Account either
before or after the date of this Agreement and returned unpaid or otherwise
uncollected, whether for insufficient funds or for any other reason, and without
regard to the timeliness of such return or the occurrence or timeliness of any
drawee's notice of nonpayment; (ii) any items subject to a claim against Deposit
Bank for breach of transfer or presentment warranty under the Uniform Commercial
Code (as adopted in the State where the Cash Collateral Account is located),
(iii) any ACH entry credited to the Cash Collateral Account and returned unpaid
or subject to an adjustment entry under applicable clearing house rules, whether
for insufficient funds or for any other reason, and without regard to the
timeliness of such return or adjustment; (iv) any credit to the Cash Collateral
Account from a merchant card transaction against which a contractual demand for
chargeback has been made; and (v) any credit to the Cash Collateral Account made
in error.
(d) Deposit Bank shall be entitled to rely conclusively
upon any notice or instruction it receives from the Lender and which Deposit
Bank believes in good faith to be a notice or instruction from the Lender, and
Deposit Bank shall have no obligation to investigate or verify the authenticity
or correctness of any such notice or instruction. Deposit Bank shall have no
liability to Borrower for honoring any instruction Deposit Bank receives from
the Lender regarding the Cash Collateral Account. Deposit Bank shall be fully
discharged from liability with respect to any funds on deposit in the Cash
Collateral Account to the extent that Deposit
-13-
Bank honors and follows instructions it receives from the Lender and transfers
any of such funds to, or on the instructions of, the Lender.
(e) In the event a third party shall assert an adverse
claim by legal process against the Cash Collateral Account or any sums on
deposit therein, whether such claim shall arise by tax lien, execution of
judgment, attachment, garnishment, levy, claim of a trustee in bankruptcy or
debtor-in-possession, or a competing lien creditor or other judicial or
regulatory order or process (each, a "CLAIM"), Deposit Bank may, in addition to
other remedies it may possess under this Agreement or at law or in equity, (i)
suspend disbursements from the Cash Collateral Account reasonably sufficient to
satisfy such Claim, without any liability until Deposit Bank shall have received
an appropriate court order or other assurances acceptable to Deposit Bank in its
sole discretion establishing that funds may continue to be disbursed according
to instructions then applicable to the Cash Collateral Account, and/or (ii)
immediately interplead all such funds in the Cash Collateral Account into the
registry of the appropriate court located in the State where the Cash Collateral
Account is maintained, and Borrower and the Lender, jointly and severally, shall
pay promptly all of Deposit Bank's costs, expenses and attorneys' reasonable
fees incurred in connection with such Claim. If a bankruptcy or insolvency
proceeding shall have been commenced by or against Borrower, Deposit Bank shall
be entitled to refuse to permit deposits to, or withdrawals and/or transfers
from, the Cash Collateral Account without any liability until Deposit Bank shall
have received an appropriate court order or other assurances acceptable to
Deposit Bank in its sole discretion establishing that continued deposits to, or
withdrawals and/or transfers from, the Cash Collateral Account are authorized
and do not and will not violate any law, regulation, or order of any court.
SECTION 9. CASUALTY AND CONDEMNATION PROCEEDS SUB-ACCOUNT; EXTRAORDINARY
RECEIPTS SUB-ACCOUNT.
Notwithstanding anything to the contrary contained herein, the
following items of Rents shall be deposited and held in the Loan Sub-accounts
described below and shall be applied in the order of priority set forth in this
Section 9, and Borrower shall advise Lender at the time of receipt thereof of
the nature of such Receipt so that Lender shall have sufficient time to instruct
the Deposit Bank to deposit and hold such amounts in the appropriate Loan
Sub-account:
(a) Proceeds of any insurance, including, without
limitation, rent or business interruption insurance, which amounts shall be
deposited in the Casualty and Condemnation Proceeds Sub-account and shall be
applied (by instructions of Lender or Servicer to the Deposit Bank) in
accordance with the provisions of the Deed of Trust applicable thereto.
(b) Condemnation awards, which amounts shall be deposited
in the Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Deed of Trust applicable thereto.
(c) Real estate tax refunds (net of any reasonable and
customary fees and disbursements of tax certiorari counsel deducted from such
refund to pay such counsel's fee), which amount shall be deposited in the
Extraordinary Receipts Sub-account and shall thereafter be transferred (by
instructions of Lender to the Deposit Bank) to the Operating Account to the
-14-
extent required to pay refunds due to any tenants of the Property (based on a
certificate of Borrower as to the tenants entitled to receive such refunds and
the amounts thereof), except Lender reserves the right to pay (or have the
Servicer pay) any such tenant directly using monies so deposited in the
Extraordinary Receipts Sub-account, in lieu of transferring such monies to the
Operating Account for such payment. Lender or Servicer shall apply any excess,
after the aforesaid payment, as if ordinary Rents deposited in the Cash
Collateral Account.
(d) Damages or other payments in excess of $250,000 in
settlement of claims by Borrower against any tenant in connection with the
Property and arising out of such tenant's Lease, including, without limitation,
pertaining to any rejection, termination or cancellation of any Lease (including
in any bankruptcy case), Lease buy-out, and surrender payments from tenants or
any holdover rents or use and occupancy fees from tenants or former tenants
shall be deposited in the Extraordinary Receipts Sub-account. With respect to
any monies deposited in the Extraordinary Receipts Sub-account pursuant to this
paragraph (d), Lender shall direct Deposit Bank to apply the amount so deposited
(or the portion thereof specified below) as if ordinary Rents to be applied in
accordance with the terms of this Agreement for the month in question as
follows: (i) if the amount so deposited was paid under or with respect to a
Lease, either (x) each month, that portion of the amount so deposited that
equals the total amount paid divided by the number of months remaining in the
term of such Lease (at the time of any such cancellation, termination or
rejection) or (y) if Borrower shall satisfy Lender that the event resulting in
such payment did not materially adversely affect the fair market value of the
Property and that the Property would satisfy a Debt Service Coverage Ratio test
at least equal to 1.10:1.0 (provided that such Debt Service Coverage Ratio test
shall exclude any rents from the Lease from which such payments were received
and which payments are the subject of the requested disbursement), the entire
amount so deposited shall, provided no Event of Default is then continuing, be
disbursed on the next Payment Date to the Borrower Remainder Sub-account and
(ii) with respect to any other amount deposited in the Extraordinary Receipts
Sub-account pursuant to this paragraph (d), (x) if insufficient funds exist
during any month to make all payments to be made for such month prior to the
disbursement to the Borrower Remainder Sub-account, the portion of the amount so
deposited as is necessary to eliminate any such deficiency or (y) if Borrower
shall satisfy Lender that the event resulting in such payment did not materially
adversely affect the fair market value of the Property and that the Property
would satisfy a Debt Service Coverage Ratio test at least equal to 1.10:1.0
(provided that such Debt Service Coverage Ratio test shall exclude any rents
from the Lease from which such payments were received and which payments are the
subject of the requested disbursement), the entire amount so deposited shall,
provided no Event of Default is then continuing, be disbursed on the next
Payment Date to the Borrower Remainder Sub-account.
(e) All sums paid with respect to a modification of any
Lease or otherwise paid in connection with Borrower taking any action under any
Lease (e.g., granting a consent) or waiving any provision thereof, but only to
the extent any such payment exceeds $250,000 (if such sums paid do not exceed
$250,000, such payment shall be deposited in the Clearing Account and applied as
ordinary Rents) shall be deposited in the Extraordinary Receipts Sub-account and
shall be applied (by instruction of Lender or Servicer to Deposit Bank) as
provided in any consent of Lender given in connection with any such action, or,
if no such direction is given, shall (i) in the case of any modification which
reduces the rent paid under any Lease or shortens the term of such Lease, either
(x) be applied as Rents available for distribution
-15-
in accordance with the provisions of this Agreement for the month in question
only as to that portion of the amount so deposited with Lender as Lender, in its
reasonable discretion, shall determine represents reduced rent or lost rent in
the applicable month under any such Lease as a result of any such modification
or (y) if Borrower shall satisfy Lender that the event resulting in such payment
did not materially adversely affect the fair market value of the Property and
that the Property would satisfy a Debt Service Coverage Ratio test at least
equal to 1.10:1.0 (provided that such Debt Service Coverage Ratio test shall
exclude any rents from the Lease from which such payments were received and
which payments are the subject of the requested disbursement), the entire amount
so deposited shall, provided no Event of Default is then continuing, be
disbursed on the next Payment Date to the Borrower Remainder Sub-account and
(ii) in all other cases, only be applied as Rents available for distribution in
accordance with the provisions of this Agreement for the month in question if
and to the extent either subclause (x) or (y) of paragraph (d)(ii) above shall
be applicable.
If the fees and disbursements of tax certiorari counsel
described in paragraph (c) above shall not have been deducted from the real
estate tax refunds by such counsel prior to payment of such refunds to Borrower,
then such fees and disbursements may be paid as part of Cash Expenses, provided
such fees and disbursements are commercially reasonable. References to
application of any amounts received by Borrower by reason of any action taken by
Borrower under or with respect to a Lease, or otherwise, is not intended in any
manner to allow Borrower to take such action in prohibition of any other
provision of the Loan Documents. Except as expressly set forth in any judgment
of any court exercising jurisdiction thereover or in any agreement with the
Tenant approved by Lender, Lender shall in its reasonable judgment determine the
amount of any payment described in paragraph (d) that falls within clause (i)(x)
or (ii)(x) thereof as opposed to clause (i)(y) or (ii)(y) thereof.
SECTION 10. OPERATING ACCOUNT. On the date hereof, Borrower shall
deposit in the Operating Account an amount equal to $500,000 (the "OPERATING
ACCOUNT BALANCE FLOOR"), which amount shall be funded with the proceeds of the
Loans and which may be used by Borrower from time to time to pay Operating
Expenses at the Property in accordance with the terms of this Agreement and the
other Loan Documents. If, as a result of payment of Operating Expenses at the
Property in accordance with the terms of this Agreement and the other Loan
Documents, the amount on deposit in the Operating Account shall at any time be
less than the Operating Account Balance Floor, then the amount to be disbursed
to the Operating Account pursuant to and in accordance with Section 3(b)(vi)
hereof shall be increased by an amount necessary to achieve a balance in the
Operating Account of no less than the Operating Account Balance Floor.
SECTION 11. SUCCESSORS AND ASSIGNS; ASSIGNMENTS; AGENTS.
(a) This Agreement shall bind and inure to the benefit of
and be enforceable by the Borrower, the Lender and the Manager and their
respective successors and assigns.
(b) The Lender shall have the right to assign or transfer
rights and obligations under this Agreement without limitation. Any assignee or
transferee of Lender shall be entitled to all the benefits afforded the Lender
under this Agreement; provided, that such assignee or transferee shall upon
written request deliver to the other parties hereto written confirmation that
-16-
such assignee or transferee agrees to be bound by the terms of this Agreement
and is also the assignee or transferee of the Note and the other Loan Documents.
(c) The Borrower shall have the right to assign and
transfer its rights and obligations hereunder only with the prior written
consent of the Lender.
(d) Any duties or actions of the Lender hereunder may be
performed by the Lender or its agent(s), including without limitation, any
Servicer or trustee in a Securitization, which includes the Loans.
SECTION 12. AMENDMENT.
This Agreement may be amended from time to time in writing by
all parties hereto. All amendments to this Agreement shall be in writing.
SECTION 13. NOTICES.
Notices to the parties hereto shall be addressed and delivered
in the manner set forth in the Deed of Trust. Unless otherwise expressly
provided herein, all such notices, to be effective, shall be in writing
(including by facsimile), and shall be deemed to have been duly given or made
(a) when delivered by hand or by nationally recognized overnight carrier, (b)
upon receipt after being deposited in the mail, certified mail and postage
prepaid or (c) in the case of facsimile notice, when sent and electronically
confirmed, addressed as set forth above.
SECTION 14. LIMITATION ON LIABILITY.
(a) Lender shall not be liable for any acts, omissions,
errors in judgment or mistakes of fact or law, including, without limitation,
acts, omissions, errors or mistakes with respect to the Collateral, except for
those arising as a result of Lender's active gross negligence, illegal acts or
willful misconduct. Without limiting the generality of the foregoing, except as
otherwise expressly provided for herein or as required by applicable law, Lender
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not Lender has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other right pertaining to any
Collateral. Lender is hereby authorized by Borrower to act on any written
instruction believed by Lender in good faith to have been given or sent by
Borrower.
(b) The provisions of Section 57 of the Deed of Trust are
hereby incorporated by reference as if fully set forth herein.
(c) Deposit Bank will use the due care in performing its
duties and responsibilities under this Agreement and shall only be responsible
for the loss that a court having jurisdiction over the Cash Collateral Account
shall have determined, in a final and unappealable judgment, had been incurred
by Borrower or the Lender solely as a result of Deposit Bank's gross negligence
or willful misconduct. Deposit Bank shall have no liability to any party for
failure of, or delay in, its performance under this Agreement as a result of any
act of God, fire, other catastrophe, force majeure, electrical or computer or
telecommunications
-17-
failure, any event beyond the control of Deposit Bank, or fraud committed by any
third party. Nothing in this Agreement shall create any agency, fiduciary, joint
venture or partnership relationship between Deposit Bank and Borrower or the
Lender. Borrower hereby indemnifies Deposit Bank and holds it harmless against
any loss, damage or expense (including attorneys' reasonable fees and expenses,
court costs and other expenses) including, but not limited to, unpaid charges,
fees, and Returned Items for which the Lender and/or Borrower originally
received credit or remittance, which loss, damage or expense Deposit Bank may
suffer as a result of entering into, or acting pursuant to, this Agreement,
honoring any instruction Deposit Bank receives from the Lender with respect to
the Cash Collateral Account or, to the extent required by this Agreement, not
honoring any instructions it receives from Borrower with respect to the Cash
Collateral Account, except for those losses, damages, or expenses that a court
having jurisdiction shall have determined in a final and unappealable judgment
resulted solely from Deposit Bank's gross negligence or willful misconduct. In
no event shall Deposit Bank be liable to any other party under this Agreement
for lost profits or special, indirect, exemplary, consequential or punitive
damages, even if Deposit Bank shall have been advised of the possibility of such
damages.
SECTION 15. MORTGAGEE-IN-POSSESSION.
Borrower hereby confirms and agrees that notwithstanding the
provisions of this Agreement, Borrower retains sole control of the operation and
maintenance of the Property, subject to the obligations of Borrower under the
Deed of Trust, the Assignment of Leases and Rents and the other Loan Documents,
and Lender is not and shall not be deemed to be a mortgagee in possession.
SECTION 16. GOVERNING LAW.
WITH REGARD TO THE OPERATION OF THE CASH COLLATERAL ACCOUNT
AND THE PAYMENT OF CHECKS AND OTHER ITEMS AGAINST THE CASH COLLATERAL ACCOUNT,
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA. WITH REGARD TO ISSUES OF PERFECTION, PRIORITY AND
SECURITY INTEREST, REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR
PURPOSES OF THE UCC (AS DEFINED IN THE DEED OF TRUST), DEPOSIT BANK AGREES THAT
NEW YORK SHALL BE DEEMED TO BE DEPOSIT BANK'S JURISDICTION (WITHIN THE MEANING
OF SECTIONS 8-110 AND 9-304 OF THE UCC), EXCEPT AS SET FORTH ABOVE, THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 17. DUPLICATE ORIGINALS; COUNTERPARTS.
This Agreement may be executed in any number of duplicate
originals and each duplicate original shall be deemed to be an original. This
Agreement may be executed in several counterparts, each of which counterparts
shall be deemed an original instrument and all of which together shall
constitute a single Agreement. The failure of any party hereto to execute this
-18-
Agreement, or any counterpart hereof, shall not relieve the other signatories
from their obligations hereunder.
SECTION 18. WAIVER OF JURY TRIAL. EXCEPT AS MAY BE PROHIBITED BY
APPLICABLE LAW, EACH OF THE LENDER, DEPOSIT BANK AND BORROWER IRREVOCABLY WAIVES
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY
COUNTERCLAIM) OF ANY TYPE IN WHICH THE LENDER, DEPOSIT BANK OR BORROWER IS A
PARTY AS TO ALL MATTERS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT.
[NO FURTHER TEXT ON THIS PAGE]
-19-
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement in several counterparts (each of which shall be deemed an original) as
of the date first above written.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Manager and Member
By: ▇▇▇▇▇▇▇ Properties, L.P.,
a Maryland limited partnership,
its Member
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
MANAGER:
▇▇▇▇▇▇▇ PROPERTIES, L.P.,
a Maryland limited partnership
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its sole general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
LENDER:
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: ASSOCIATE
EXHIBIT A
CLEARING BANK INSTRUCTION LETTER
[TO BE SIGNED BY BORROWER AND BANK AT LOAN CLOSING]
June 26, 2003
Bank of the West
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇ Fargo Center (North Tower), Los Angeles, California
Ladies and Gentlemen:
North Tower, LLC, a Delaware limited liability company (the
"BORROWER"), has entered into that certain Deed of Trust, Assignment of Leases
and Rents, Security Agreement and Fixture Filing (the "DEED OF TRUST"), dated as
of June 26, 2003, given by Borrower for the benefit of Greenwich Capital
Financial Products, Inc. (together with its successors and assigns, the
"LENDER"), pursuant to which the Lender has provided financing to the Borrower
secured by the Deed of Trust encumbering that certain property described in the
caption of this letter (the "PROPERTY"). The Property is currently being managed
by ▇▇▇▇▇▇▇ Properties, L.P. (the "MANAGER").
Currently, the Borrower maintains the following account (the
"CLEARING ACCOUNT") with you:
Name: North Tower, LLC
Account No.: 729-012062
The Borrower hereby notifies you that the Lender has required
that it implement certain automatic clearing and processing functions and hereby
instructs you, commencing on the date hereof (the "SWEEP COMMENCEMENT DATE"), to
disburse all revenues from the Property ("REVENUES") deposited in the Clearing
Account from time to time in accordance with the following terms and provisions:
Promptly upon receipt of this letter, you shall establish a
post office box address in which the Borrower shall cause all Revenues in the
form of checks, money orders and similar instruments to be deposited. Within one
Business Day (as defined below) of receipt, you, as the "CLEARING BANK," shall
receive and process all Revenues and shall deposit the same into the Clearing
Account. Checks made payable to the Borrower, the Manager or the Clearing
Account shall be deemed suitable for deposit in the Clearing Account. Items
deposited with Clearing Bank that are returned for insufficient or uncollected
funds will be redeposited the first time. Items returned unpaid a second time
shall be processed in accordance with the standard procedures of the Clearing
Bank.
EXH. A-1
The Clearing Account shall be an account of each Borrower but
shall be under the sole dominion and control of the Lender and any servicer (a
"SERVICER") or other designee of the Lender named below or in a subsequent
written notice from the Lender. The Clearing Account shall be assigned the
federal tax identification number of the Borrower, which number is ▇▇-▇▇▇▇▇▇▇.
You shall hold amounts on deposit in the Clearing Account as agent for the
Lender and shall not commingle such amounts with any other amounts held by you
on behalf of the Lender, the Borrower or any other person or entity. If, in
accordance with standard operating procedures, the Clearing Account may be
established as a trust account for the benefit of the Lender, Borrower directs
that the Clearing Account be maintained as such an account.
The Borrower hereby notifies the Clearing Bank that, in
accordance with the Deed of Trust, the Clearing Account and all amounts held
therein from time to time, and all renewals, replacements and substitutions
therefor, have been irrevocably pledged to the Lender as additional security for
the loan evidenced by the Deed of Trust. In connection with such pledge, the
Borrower hereby waives all right of withdrawal from the Clearing Account.
The Borrower hereby irrevocably instructs and authorizes you,
beginning on the first business day after the Sweep Commencement Date, to
disburse on each business day of each week via the ACH System, if available, or
otherwise by wire transfer, all amounts constituting available funds on deposit
in the Clearing Account to the following account:
[ ]
[ ]
[ ]
[ ]
If transferring such amounts by the ACH System and if required
by Clearing Bank, each such transfer shall be initiated by the Lender or by the
Servicer. If the Clearing Bank provides electronic data transfer services, the
Clearing Bank shall provide the Lender and the Servicer access to the Clearing
Bank's electronic data transfer system for purposes of effecting such transfers.
At any time that funds may not be transferred as described above in this
paragraph, the Clearing Bank shall transfer amounts by wire transfer of
immediately available funds.
The instructions set forth herein are irrevocable and are not
subject to modification in any manner, except that the Lender or the Servicer
may, by written notice to you, amend the instructions contained herein.
In the event that the Clearing Bank fails to acknowledge that
its procedures with respect to the Clearing Account are governed by this letter
due to an objection to the terms hereof or otherwise, the Borrower hereby
appoints the Lender as its attorney-in-fact with full authority to make
reasonable changes to this letter and to execute on behalf of the Borrower any
new modified letter acceptable to the proposed Clearing Bank.
In accordance with the Clearing Bank's procedures, the
Clearing Bank shall maintain a record of all deposits and transfers from the
Clearing Account and furnish statements to Borrower and Lender, on a monthly
basis, of all such transactions.
EXH. A-2
Clearing Bank assumes no duty to discharge any obligation of
Borrower to Lender or others. If Clearing Bank disburses payments later than set
forth herein, its liability for making late disbursements shall not exceed the
amount of interest which would have been paid on such funds if they had been
deposited in the Clearing Account in a timely manner. Clearing Bank shall not be
responsible for any consequential, incidental, indirect or special damage which
would exceed this amount in connection with any such disbursements deemed late,
including, but not limited to, disbursements deemed late resulting from Clearing
Bank's acts, nor shall Clearing Bank be responsible for any claim, loss,
liability, cost, expense or delay caused by equipment breakdown, electrical or
mechanical failure, causes beyond Clearing Bank's reasonable control, the
failure of either party to give Clearing Bank clear and explicit notices and
instructions, or damages caused (in whole or in part) by the party seeking
redress. Borrower and Lender understand and agree that the Clearing Account and
the fees charged by Clearing Bank have been established in contemplation of the
limitation on Clearing Bank's liability set forth in this paragraph.
Except for events of Clearing Bank's negligence or willful
misconduct (and in any such event, subject to the damage limitations set forth
above), Borrower agrees to indemnify, defend and hold Clearing Bank, its parent,
affiliates, subsidiaries, and their respective officers, employees and agents
harmless from and against all claims, actions, damages, losses, liabilities and
expenses (including reasonable attorney's fees and court costs) arising out of
Clearing Bank's actions or omissions pursuant to this Agreement.
The parties hereto agree that Clearing Bank's sole
responsibility to Lender, Borrower, Manager or any third party for errors made
by Clearing Bank in processing any Rents shall be to process a correcting entry
in the next regularly scheduled processing of the work after receipt of
notification from Lender or its designee, Borrower or any third party.
Clearing Bank shall make every reasonable effort to deliver
the advices, copies and reports required by this Instruction Letter by the
mutually agreed upon time but does not guarantee a specific delivery time.
Accordingly, Clearing Bank's sole responsibility to Lender or any third party
with respect to the time of delivery of the advices, copies and reports required
by this Instruction Letter shall be to deliver such advices, copies and reports
as close to the mutually agreed upon time as may be reasonably practicable.
If Clearing Bank is unable to debit the Clearing Account for
any reason or if the Clearing Account contains insufficient funds from which to
reimburse itself on a particular business day for any of the charges to the
Clearing Account set forth on Schedule 2 attached hereto, Clearing Bank is
entitled to recover the insufficiency from incoming funds deposited into the
Clearing Account that business day. If, upon the next business day, the Clearing
Account continues to contain insufficient funds, Borrower agrees to reimburse
Clearing Bank promptly upon receiving Clearing Bank's notice of the same.
Matters not covered by this letter shall be determined in
accordance with the customary procedures of the Clearing Bank and in the event
of a conflict between the terms of this letter and the customary procedures of
the Clearing Bank, the terms of this letter shall govern.
EXH. A-3
The undersigned also notifies you that the name and address of
the current Servicer with respect to the Cash Management Agreement is:
Bank of the West
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Cash Management Services
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If you have any questions concerning this letter or the Cash
Management Agreement, please contact________________of the Lender at
(_____)_____-_____ or_______________of the Servicer at (▇▇▇) ▇▇▇-▇▇▇▇.
The address of the current Manager is:
▇▇▇▇▇▇▇ Properties, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXH. A-4
Please acknowledge receipt of this letter and your agreement
to the terms described herein by executing and returning to the Borrower an
acknowledgment in the form of Schedule 1 hereto.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Manager and Member
By: ▇▇▇▇▇▇▇ Properties, L.P.,
a Maryland limited partnership,
its Member
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its general partner
By:______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
ACKNOWLEDGED AND AGREED:
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., a Delaware corporation
By:____________________________________________
Name:
Title:
SCHEDULE 1
ACKNOWLEDGMENT
________,2003
North Tower, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is made to that certain Clearing Bank Instruction
Letter, dated _____________________________, 2003 (the "INSTRUCTION LETTER")
from North Tower, LLC (the "BORROWER"). I, _____________________________, on
behalf of Bank of the West (the "BANK"), hereby acknowledge receipt of the
instructions set forth in the Instruction Letter and notice of the pledges and
security interest described therein. The Bank hereby agrees to perform the
instructions set forth in the Instruction Letter upon the delivery by Greenwich
Capital Financial Products, Inc. (the "LENDER") of the Instruction Letter.
BANK OF THE WEST
By:_________________________
Name:
Title:
LOCK BOX ADDRESS:
North Tower, LLC
P.O. Box__________
Los Angeles, California 90054-______
SCH. 1-1
SCHEDULE 2
CLEARING BANK FEES
SCH. 2-1
EXHIBIT B
FORM OF LESSEE PAYMENT DIRECTION LETTER
[MANAGER LETTERHEAD]
[Date]
[Addressee]
Re: Payment Direction Letter for [Property]
Dear[_________]:
[BORROWER], the owner of the [PROPERTY] (the "PROPERTY"), has
mortgaged the Property to Greenwich Capital Financial Products, Inc. (together
with its successors and assigns, the "LENDER") and has agreed that all rents due
for the Property will be paid directly to a bank selected by the Lender.
Therefore, from and after [DATE], all rent to be paid by you under the [LEASE]
between you and [BORROWER/MANAGER] (the "LEASE") should be sent directly to the
following address:
[Clearing Bank Name]
[Lockbox Address]
All checks should be made out to the "[BORROWER]".
These payment instructions cannot be withdrawn or modified
without the prior written consent of the Lender or its agent (the "SERVICER"),
or pursuant to a joint written instruction from the Borrower and the Lender or
the Servicer. Until you receive written instructions from the Lender or the
Servicer, continue to send all rent payments due under the Lease to [Clearing
Bank Name]. All rent payments must be delivered to [Clearing Bank Name] no later
than the day on which such amounts are due under the Lease.
EXH. B-1
If you have any questions concerning this letter, please
contact [_______________ ] at [________]. We appreciate your cooperation in this
matter.
▇▇▇▇▇▇▇ PROPERTIES, L.P.,
a Maryland limited partnership
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its sole general partner
By:______________________________-
Name:
Title:
EXH. B-2
SUBSTITUTE PROMISSORY NOTE A-l
$92,528,688.00 June 26, 2003
1. For value received, NORTH TOWER, LLC, a Delaware
limited liability company, having its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower"), promises
to pay to the order of GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation ("Lender"), at its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such place as the holder hereof may from
time to time designate in writing, the principal sum of Ninety-Two Million Five
Hundred Twenty-Eight Thousand Six Hundred Eighty-Eight and No/100 Dollars
($92,528,688.00), or so much as may have been advanced hereunder, in lawful
money of the United States of America, with interest thereon to be computed on
the unpaid principal balance from time to time outstanding at a fixed rate per
annum equal to 4.68% (the "Interest Rate").
2. Principal and interest under this Substitute
Promissory Note A-l (this "NOTE") shall be paid by Borrower as follows:
A. A payment of interest only on the date hereof for the
interest accrual period from the date hereof to and including June 30, 2003;
B. Commencing on August 1, 2003 and on each Payment Date
(as hereinafter defined) thereafter up to but excluding the Payment Date
occurring on July 1, 2006 (the "AMORTIZATION DATE"). Borrower shall pay to
Lender a monthly amount equal to interest only on the outstanding principal
balance of this Note that accrued during the prior Collection Period (as defined
in the Cash Management Agreement);
C. Commencing on the Amortization Date and on each
Payment Date thereafter through and including the Maturity Date, Borrower shall
pay to Lender a monthly amount of $478,777.10 (such amounts described in
paragraph 2.B. and 2.C. of this Note, as applicable, are hereinafter the
"MONTHLY PAYMENT AMOUNT"): and
D. The balance of the principal sum of this Note
together with unpaid interest hereon shall be due and payable on the Maturity
Date.
E. Interest on the principal sum of this Note shall be
calculated on the basis of the actual number of days elapsed and a three hundred
sixty (360) day year. In computing the number of days during which interest
accrues, the day on which funds are initially advanced shall be included
regardless of the time of day such advance is made. All amounts due under this
Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
3. As used in this Note:
(a) The term "ANNUAL BUDGET" shall mean an annual budget
submitted by Borrower to Lender in accordance with the terms of paragraph 10(d)
herein.
(b) The term "APPROVED ANNUAL BUDGET" shall have the
meaning set forth in paragraph 10(d) hereof.
(c) The term "ASSIGNMENT OF LEASES" shall mean that
certain Assignment of Leases and Rents of even date herewith executed by
Borrower in favor of Lender.
(d) The term "BUSINESS DAY" shall mean any day except a
Saturday, Sunday or other day on which commercial banks are required or
permitted by law to close in New York City.
(e) The term "CAPITAL EXPENDITURES" shall mean for any
period, the amount expended for items capitalized under generally accepted
accounting principles including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements.
(f) The term "CASH EXPENSES" shall mean for any period,
the operating expenses for the Trust Property as set forth in an Approved Annual
Budget to the extent that such expenses are actually incurred by Borrower minus
payments into the Tax and Insurance Impound Fund and the Replacement/Leasing
Escrow Fund.
(g) The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
(h) The term "DEBT" shall mean the whole of the principal
sum of the Notes, together with all interest accrued or due and unpaid thereon
and all other sums due under the Loan Documents.
(i) The term "DEED OF TRUST" shall mean that certain Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
of even date herewith in the aggregate amount of the Notes given by Borrower for
the use and benefit of Lender covering the fee estate of certain premises as
more particularly described therein.
(j) The term "DEFAULT RATE" shall mean, a rate per annum
which is equal to the lesser of (i) the maximum rate permitted by applicable
law, or (ii) five percent (5%) above the Interest Rate.
(k) The term "DEFEASANCE COLLATERAL" shall mean U.S.
Obligations which provide payments (i) on or prior to, but as close as possible
to, all Payment Dates under the Notes after the Defeasance Date and up to and
including the Maturity Date, and (ii) in amounts equal to or greater than the
Scheduled Defeasance Payments.
(l) The term "EXTRAORDINARY EXPENSE" shall mean an
extraordinary operating expense or capital expense not set forth in the Approved
Annual Budget or allotted for in the Replacement/Leasing Escrow Fund.
(m) The term "LOANS" shall mean those certain loans made
by Lender to Borrower contemporaneously herewith as evidenced by the Notes and
secured inter alia by the Deed of Trust.
(n) The term "LOAN DOCUMENTS" shall mean collectively the
Notes, the Deed of Trust, the Assignment of Leases and any and all other
documents securing, evidencing, or
-2-
guaranteeing all or any portion of the Loans or otherwise executed and/or
delivered in connection with the Notes and the Loans.
(o) The term "MATURITY DATE" shall mean July 1, 2010,
provided that, in the event that the Loans are accelerated pursuant to the terms
of this Note or the other Loan Documents, the Maturity Date shall be the date of
such acceleration.
(p) The term "Net CAPITAL EXPENDITURES" shall mean for
any period the amount by which Capital Expenditures during such period exceeds
reimbursements for such items during such period from any fund established
pursuant to the Loan Documents.
(q) The term "NOTE B" shall mean, collectively,
Substitute Promissory Note ▇-▇ and Substitute Promissory Note B-2.
(r) The term "NOTES" shall mean, collectively, this Note,
Substitute Promissory Note A-2 and Note B.
(s) The term "PAYMENT DATE" shall mean the first (1st)
day of each calendar month during the term of this Note; provided, however that
if the first (1st) day of any given month is not a Business Day, then amounts
due on the Payment Date for such month shall be due on the immediately
succeeding Business Day.
(t) The term "RELEASE DATE" shall mean the earlier to
occur of (i) July 1, 2007 and (ii) the date that is two (2) years from the
"startup day" (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of the Loans.
(u) The term "REMIC TRUST" shall mean a "real estate
mortgage investment conduit" within the meaning of Section 860D of the Code that
holds this Note.
(v) The term "SCHEDULED DEFEASANCE PAYMENTS" shall mean
the Monthly Payment Amount required under the Notes for all Payment Dates
occurring after the Defeasance Date (including, on the Maturity Date, the
remaining outstanding principal balance on the Notes as of the Maturity Date).
(w) The term "SUBSTITUTE PROMISSORY NOTE A-2" shall mean
that certain Substitute Promissory Note A-2 dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $92,159,312.00.
(x) The term "SUBSTITUTE PROMISSORY NOTE B-1" shall mean
that certain Substitute Promissory Note ▇-▇ dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $32,721,312.
(y) The term "SUBSTITUTE PROMISSORY NOTE B-2" shall mean
that certain Substitute Promissory Note B-2 dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $32,590,688.
(z) The term "U.S. OBLIGATIONS" shall mean direct full
faith and credit obligations of the United States of America that are not
subject to prepayment, call or early redemption or such other obligations
(designated by Borrower) of the United States of America or another Person that
the Rating Agencies have confirmed, or shall confirm, in writing will not,
-3-
in and of themselves, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with any
securitization of the Loans.
(aa) The term "YIELD MAINTENANCE PREMIUM" shall mean an
amount which, when added to the outstanding principal amount of the Loans, would
be sufficient to purchase U.S. Obligations which provide payments (a) on or
prior to, but as close as possible to, all successive scheduled Payment Dates
under the Notes arising from and after the date of determination of such Yield
Maintenance Premium through the Maturity Date and (b) in amounts equal to the
Monthly Payment Amount required under the Notes through the Maturity Date
together with the outstanding principal balance of the Notes as of the Maturity
Date assuming all such Monthly Payments are made (including any servicing costs
associated therewith), in all cases without duplication among this Note,
Substitute Promissory Note A-2, Substitute Promissory Note ▇-▇ and Substitute
Promissory Note B-2. In no event shall the Yield Maintenance Premium be less
than zero.
All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Deed of Trust.
4. The outstanding principal balance of this Note shall
bear interest throughout the term of this Note at the Interest Rate as set forth
herein.
5. (a) This Note shall mature on the Maturity Date, at
which time the entire loan evidenced by this Note shall be due and payable.
(b) If any sum payable under this Note is not paid on or
before 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 in order to defray a portion of the
expenses incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. If
the day when any payment required under this Note is due is not a Business Day,
then payment shall be due on the immediately succeeding Business Day.
6. The Debt or any portion thereof shall without notice
become immediately due and payable at the option of Lender upon the happening of
any Event of Default. In the event that it should become necessary to employ
counsel to collect or enforce the Debt or to protect or foreclose the security
therefor, Borrower also shall pay on demand all costs of collection incurred by
Lender, including attorneys' fees and costs reasonably incurred for the services
of counsel whether or not suit be brought.
7. Borrower does hereby agree that upon the occurrence
and during the continuance of an Event of Default (including upon the failure of
Borrower to pay the Debt in full on the Maturity Date), Lender shall be entitled
to receive and Borrower shall pay interest on the entire unpaid principal sum
and any other amounts due at the Default Rate.
8. This Note, together with Substitute Promissory Note
A-2, Substitute Promissory Note B-1 and Substitute Promissory Note B-2, is
evidence of the Loans and of the obligation of the Borrower to repay the Loans
in accordance with the terms thereof. This Note is secured inter alia by (i) the
Deed of Trust, (ii) an Assignment of Leases, and (iii) the other Loan Documents.
-4-
9. (a) Borrower expressly waives any right to prepay the
Loans, in whole or in part, except as hereinafter provided.
(b) Notwithstanding anything herein or in any other Loan
Documents to the contrary, except if expressly required or permitted under any
Loan Document (including as a result of any of the prepayment events specified
in paragraph 4(f) of the Deed of Trust), Borrower may not voluntarily prepay the
Loans, in whole or in part, prior to the Payment Date occurring in April, 2010
(the "LOCK OUT DATE"). From and after the Lock Out Date, Borrower shall have the
right to prepay all or any portion of the Loans provided that Borrower gives
Lender at least 15 days' prior written notice thereof. If any such prepayment is
not made on a Payment Date, Borrower shall also pay interest that would have
accrued on such prepaid amount 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 Loans shall be applied by Lender as follows in the
following order of priority: (i) First, to reasonable costs and expenses,
including without limitation, reasonable attorneys' fees incurred in connection
with the voluntary prepayment, (ii) Second, to accrued and unpaid interest due
on this Note and Substitute Promissory Note A-2, pro-rata until the interest due
thereon for this Note and Substitute Promissory Note A-2 has been paid in full;
(iii) Third, to accrued and unpaid interest due on Substitute Promissory Note
▇-▇ and Substitute Promissory Note B-2, pro rata until the interest due thereon
for Substitute Promissory Note ▇-▇ and Substitute Promissory Note B-2 has been
paid in full; (iv) Fourth, to the principal balance of this Note and Substitute
Promissory Note ▇- ▇, ▇▇▇-▇▇▇▇; (v) Fifth, to the principal balance of
Substitute Promissory Note ▇-▇ and Substitute Promissory Note B-2, pro rata; and
(vi) Sixth, to any other amounts then due and owing under the Loan Documents.
Any such prepayment shall be made without payment of the Yield Maintenance
Premium.
(c) Provided no Event of Default shall be continuing,
Borrower shall have the right on any Payment Date after the Release Date and
prior to the Lock Out Date to voluntarily defease the entire principal amount of
the Loans and obtain a release of the Lien of the Deed of Trust by providing
Lender with the Defeasance Collateral (a "DEFEASANCE EVENT"), subject to the
satisfaction of the following conditions precedent:
(i) Borrower shall give Lender not less than
thirty (30) days prior written notice specifying a date (the "DEFEASANCE DATE")
on which the Defeasance Event is to occur.
(ii) Borrower shall pay to Lender (A) all
payments of principal (if any) and interest due on the Loans to and including
the Defeasance Date and (B) all other sums, then due under the Notes, the Deed
of Trust and the other Loan Documents;
(iii) Borrower shall deposit the Defeasance
Collateral into the Defeasance Collateral Account and otherwise comply with the
provisions of subsections (d) and (e) of this Paragraph 9;
(iv) Borrower shall execute and deliver to Lender
a Security Agreement in respect of the Defeasance Collateral Account and the
Defeasance Collateral;
(v) Borrower shall deliver or cause to be
delivered to Lender an opinion or opinions of counsel for Borrower that is
standard in commercial lending transactions
-5-
and subject only to customary qualifications, assumptions and exceptions
opining, among other things, that (i) Lender has a legal and valid perfected
security interest in the Defeasance Collateral Account and the Defeasance
Collateral, (ii) if a securitization has occurred, the REMIC Trust formed
pursuant to such securitization will not fail to maintain its status as a "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code as a result of a Defeasance Event pursuant to this ▇▇▇▇▇▇▇▇▇ ▇, (▇▇▇)
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 Bankruptcy Code or applicable state law (assuming the Debt is fully
secured) and (iv) a non-consolidation opinion with respect to the Successor
Borrower;
(vi) Borrower shall deliver to Lender a letter
issued by each of the applicable Rating Agencies (as defined in the Cash
Management Agreement) which confirms that the taking of the action referenced
therein will not result in any qualification, withdrawal or downgrading of any
existing ratings of securities created in a Securitization;
(vii) Borrower shall deliver a certificate to
Lender which is signed by a senior executive officer of Borrower, or an entity
that directly or indirectly controls the management of Borrower, certifying that
the requirements set forth in this Paragraph 9 have been satisfied;
(viii) Borrower shall deliver a letter of a "big
four" or other nationally recognized public accounting firm acceptable to Lender
confirming that the 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 Event, including
Lender's reasonable attorneys' fees and expenses and Rating Agency fees and
expenses.
(d) On or before the date on which Borrower delivers the
Defeasance Collateral, Borrower shall open at any Eligible Institution (as
defined in the Cash Management Agreement) the defeasance collateral account (the
"DEFEASANCE COLLATERAL ACCOUNT") which shall at all times be an Eligible Account
(as defined in the Cash Management Agreement). The Defeasance Collateral Account
shall contain only (i) Defeasance Collateral, and (ii) cash from interest and
principal paid on the Defeasance Collateral. All cash from interest and
principal payments paid on the Defeasance Collateral up to the Monthly Payment
Amount shall be paid over to Lender on each Payment Date and applied to accrued
and unpaid interest; provided that prior to any such Payment Date, all cash from
interest and principal payments paid on the Defeasance Collateral may be
invested in Permitted Investments selected by Borrower. Any cash from interest
and principal paid on the Defeasance Collateral not needed to pay accrued and
unpaid interest shall be retained in the Defeasance Collateral Account as
additional collateral for the Loans and may be invested in Permitted Investments
selected by Borrower. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral is deposited to enter into an agreement with Borrower and
Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Defeasance
Collateral in accordance with this Note. The Successor Borrower shall be the
owner of the Defeasance
-6-
Collateral Account and shall report all income accrued on Defeasance Collateral
for federal, state and local income tax purposes in its income tax return.
Borrower shall prepay all cost 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.
(e) In connection with a Defeasance Event under this
Paragraph 9, Borrower shall, if required by the Rating Agencies or if Borrower
elects to do so, establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a Special Purpose Bankruptcy Remote Entity and which
shall be approved by the Rating Agencies. Any such Successor Borrower may, at
Borrower's option, be an Affiliate of Borrower unless the Rating Agencies shall
require otherwise. Borrower shall transfer and assign all obligations, rights
and duties under and to the Notes, together with the Defeasance Collateral to
such Successor Borrower. Such Successor Borrower shall assume the obligations
under the Notes and the Security Agreement and Borrower shall be relieved of its
obligations under such documents and the Loan Documents (except for any
environmental indemnities or other obligations that survive repayment of the
Loans). Borrower shall pay a minimum of $1,000 to any such Successor Borrower as
consideration for assuming the obligations under the Notes and the Security
Agreement. Borrower shall pay all costs and expenses incurred by Lender,
including Lender's reasonable attorney's fees and expenses, incurred in
connection therewith.
(f) Mandatory prepayments made in connection with the
application pursuant to the Deed of Trust of insurance proceeds or condemnation
awards shall be paid in the amounts and at the times specified in the Deed of
Trust, and, notwithstanding anything herein to the contrary, provided that no
Event of Default has occurred and is continuing no Yield Maintenance Premium or
other premium shall be due or payable in connection with any such mandatory
prepayment whenever paid.
(g) Except as otherwise expressly provided in paragraph
9(f) hereof, the Yield Maintenance Premium shall be due, to the extent permitted
by applicable law, under any and all circumstances where all or any portion of
the Loans are paid prior to the Lock Out Date as a result of an involuntary
prepayment or a voluntary prepayment, even if such prepayment results from
Lender's exercise of its rights upon Borrower's default and acceleration of the
Maturity Date (irrespective of whether foreclosure proceedings have been
commenced), and shall be in addition to any other fees or sums due hereunder or
under any of the other Loan Documents. THE YIELD MAINTENANCE PREMIUM REQUIRED BY
THIS SUBPARAGRAPH 9 IS ACKNOWLEDGED BY BORROWER TO BE PARTIAL COMPENSATION TO
LENDER FOR THE COST OF REINVESTING THE LOAN PROCEEDS AND FOR THE LOSS OF THE
CONTRACTED RATE OF RETURN ON THE LOANS. FURTHERMORE, BORROWER ACKNOWLEDGES THAT
THE LOSS THAT MAY BE SUSTAINED BY LENDER AS A RESULT OF SUCH PREPAYMENT BY
BORROWER IS NOT SUSCEPTIBLE OF PRECISE CALCULATION AND THE YIELD MAINTENANCE
PREMIUM REPRESENTS THE GOOD FAITH EFFORT OF BORROWER AND LENDER TO COMPENSATE
LENDER FOR SUCH LOSS. EXCEPT AS EXPRESSLY PERMITTED IN THIS PARAGRAPH 9,
BORROWER EXPRESSLY WAIVES ALL RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 2954.10 (OR OTHERWISE) TO PREPAY THE LOANS PRIOR TO
-7-
THE LOCK OUT DATE, IN WHOLE OR IN PART, WITHOUT PENALTY, WHETHER VOLUNTARILY OR
UPON ACCELERATION OF THE MATURITY DATE OF THE LOANS, AND AGREES THAT IF, FOR ANY
REASON A PREPAYMENT OF ALL OR ANY OF THE LOANS IS MADE PRIOR TO THE LOCK OUT
DATE, WHETHER VOLUNTARILY OR UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY
DATE OF THE LOANS BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWER UNDER ANY LOAN
DOCUMENT, THEN BORROWER SHALL BE OBLIGATED TO PAY, CONCURRENTLY THEREWITH, THE
YIELD MAINTENANCE PREMIUM SPECIFIED ABOVE. BY INITIALING THIS PROVISION IN THE
SPACE PROVIDED BELOW, BORROWER DECLARES THAT LENDER'S AGREEMENT TO MAKE THE
LOANS AT THE INTEREST RATE AND ON THE OTHER TERMS SET FORTH HEREIN CONSTITUTES
ADEQUATE AND VALUABLE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY BORROWER, FOR
THIS WAIVER AND AGREEMENT.
______________________
INITIALS
10. (a) Borrower, Lender and ▇▇▇▇▇▇▇ Properties, L.P., as
manager, have entered into the Cash Management Agreement dated the date hereof.
Borrower shall cause all Rents to be deposited in the Clearing Account (as
defined in the Cash Management Agreement) pursuant to the Cash Management
Agreement. All Rents deposited in the Cash Collateral Account (as defined in the
Cash Management Agreement) shall be allocated to the sub-accounts established
pursuant to, and as defined in, the Cash Management Agreement in the following
order of priority:
(i) First, to fund the Tax and Insurance
Impound Fund Subaccount (as defined in the Cash Management Agreement) until the
amount on deposit therein is equal to the amount required to be deposited in the
Tax and Insurance Impound Fund on the related Payment Date in accordance with
the terms and conditions of the Deed of Trust;
(ii) Second, to fund the Monthly Debt
Service Subaccount (as defined in the Cash Management Agreement) until the
amount on deposit therein is equal to the Monthly Payment Amount and the Monthly
Payment Amount payable under Substitute Promissory Note A-2, Substitute
Promissory Note ▇-▇ and Substitute Promissory Note B-2;
(iii) Third, to fund the Monthly Debt Service
Subaccount with any other amounts due to the Lender under the Loan Documents not
otherwise addressed by this paragraph 10;
(iv) Fourth, in the event that (A) an NOI
Trigger Event has occurred and is then continuing and (B) the Leasing Escrow
Fund Catch-Up Deposit is then fully on deposit in the Replacement/Leasing Escrow
Fund Sub-account (as defined in the Cash Management Agreement), to fund the
Replacement/Leasing Escrow Fund Subaccount until the amount on deposit therein
is equal to the sum of the Monthly Replacement Escrow Amount and the Monthly
Leasing Escrow Deposit on the related Payment Date in accordance with the terms
and conditions of the Deed of Trust, but subject to paragraph 6(f) of the Deed
of Trust, if applicable;
-8-
(v) Fifth, to fund the Operating Expense
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the sum of (A) the Cash Expenses for the prior
calendar month pursuant to the terms and conditions of the related Approved
Annual Budget (as such Approved Annual Budget may be adjusted in accordance with
paragraph 10(d) below), (B) any additional amount for Cash Expenses requested
pursuant to and in accordance with Section 6(e) of the Cash Management Agreement
and (C) any additional amount (if any) that, after taking into account funds
deposited in the Operating Expense Subaccount pursuant to clauses (A) and (B)
above, causes the amount on deposit in such Operating Expense Subaccount to
equal the Operating Account Balance Floor (as defined in the Cash Management
Agreement); provided, however, in no event shall any amounts be funded in the
Operating Expense Subaccount pursuant to this clause (v) to the extent that such
amounts represent any compensation due to an affiliated property manager in
excess of $1,000,000 for the then existing calendar year;
(vi) Sixth, to fund the Operating Expense
Subaccount with any Net Capital Expenditures for the prior calendar month
pursuant to the terms and conditions of the related Approved Annual Budget;
(vii) Seventh, to fund the Minimum Occupancy
Escrow Fund Subaccount until the amount on deposit therein is equal to the
Monthly Minimum Occupancy Reserve Deposit on the related Payment Date in
accordance with the terms and conditions of the Deed of Trust;
(viii) Eighth, to fund the Operating Expense
Subaccount with any Extraordinary Expenses approved by Lender for the prior
calendar month, if any (such Rents as remain after the application of Rents in
accordance with items (i) through this item (viii), the "EXCESS CASH FLOW");
(ix) Ninth, all Excess Cash Flow to fund the
Replacement/Leasing Escrow Fund Sub-Account until all Additional Monthly Leasing
Escrow Deposits required pursuant to the provisions of Section 6(f) of the Deed
of Trust have been funded in accordance with the terms and conditions of the
Deed of Trust;
(x) Tenth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is not then fully on deposit in the Replacement/Leasing Escrow
Fund Sub-account, to fund the Replacement/Leasing Escrow Fund Subaccount until
the amount on deposit therein is equal to the amount required to fund the
Leasing Escrow Fund Catch-Up Deposit on the related Payment Date in accordance
with the terms and conditions of the Deed of Trust, but subject to paragraph
6(f) of the Deed of Trust, if applicable;
(xi) Eleventh, to pay to the Junior Management
Fee Subaccount (as defined in the Cash Management Agreement) any compensation
due to an affiliated property manager in excess of the amount permitted to be
paid pursuant to clause (v) above; and
(xii) Lastly, to pay to the Borrower Remainder
Subaccount (as defined in the Cash Management Agreement) any excess amounts.
-9-
(b) Nothing in this paragraph 10 shall limit, reduce or
otherwise affect Borrower's obligations to make payments of the Monthly Payment
Amount, payments to the Tax and Insurance Impound Fund, the Replacement/Leasing
Escrow Fund and any other amounts due hereunder and under the other Loan
Documents, whether or not Rents are available to make such payments.
(c) Intentionally Omitted.
(d) Not later than each December 15 during the term of
the Loans, Borrower shall submit to Lender a detailed budget (an "ANNUAL
BUDGET") for the Trust Property covering the calendar year commencing on the
following January 1, each of which budgets shall be subject to Lender's
approval, not to be unreasonably withheld, (provided that Borrower shall have
the option to submit to Lender a revised budget not later than June 30 of each
year during the term of the Loans to adjust such budget on the basis of the
actual results of Borrower to such point in such calendar year) (each such
budget, when so approved, is referred to as an "APPROVED ANNUAL BUDGET"). Until
such time that Lender approves a proposed Annual Budget, Borrower may operate
under the most recently Approved Annual Budget (adjusted to reflect actual
increases in real estate taxes, insurance premiums, utilities expenses, labor
costs, interest and other fixed costs with respect to the ownership, operation
and financing of the Trust Property).
11. It is expressly stipulated and agreed to be the
intent of Borrower and Lender 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 paragraph (and the similar paragraph
contained in the Deed of Trust) shall control every other covenant and agreement
in the Notes and the other Loan Documents. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount
called for under this Note or under any of the other Loan Documents, 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 Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Lender's express intent that all
excess amounts theretofore collected by Lender shall be credited on the
principal balance of this Note (without any resulting prepayment penalty or
premium) and all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
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 herein or in any of the other Loan Documents,
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.
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12. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought. Whenever used,
the singular number shall include the plural, the plural the singular, and the
words "LENDER" and "BORROWER" shall include their respective successors,
assigns, heirs, executors and administrators. If Borrower consists of more than
one person or party, the obligations and liabilities of each such person or
party shall be joint and several.
13. Except as provided in the Loan Documents, Borrower
and all others who may become liable for the payment of all or any part of the
Debt do hereby severally waive presentment and demand for payment, notice of
dishonor, protest, notice of protest, notice of nonpayment, notice of intent to
accelerate the maturity hereof and of acceleration. No release of any security
for the Debt or any person liable for payment of the Debt, no extension of time
for payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Loan Documents made by agreement between
Lender and any other person or party shall release, modify, amend, waive,
extend, change, discharge, terminate or affect the liability of Borrower, and
any other person or party who may become liable under the Loan Documents for the
payment of all or any part of the Debt.
14. The provisions of paragraph 57 of the Deed of Trust
are hereby incorporated by reference as if fully set forth herein.
15. (a) Any and all payments by Borrower to Lender
hereunder and under the other Loan Documents shall, provided that Lender
complies with the requirements of paragraph 15c) hereof, be made free and clear
of, and without deduction for, any and all present or future taxes, levies,
imposts, deductions, charges, withholdings or liabilities with respect thereto,
except for the following, for which Borrower (and its direct or indirect members
or other constituent members or partners) shall not be responsible: (i) taxes
imposed on or measured by Lender's net income or net receipts; or (ii) franchise
taxes imposed on Lender by the jurisdiction in which (A) Lender is organized,
(B) Lender is "doing business" (unless such determination of "doing business" is
made solely as a result of Lender's interest in the Loans and the security
therefor), or (C) Lender's applicable lending office is located (all such taxes,
levies, imposts, deductions, charges or withholdings and liabilities (except
those described in the foregoing clauses (i) and (ii)) being hereinafter
referred to as "LOAN TAXES"). If Borrower shall be required by law to deduct or
withhold any Loan Taxes from or in respect of any sum payable hereunder or under
any other Loan Document, then (1) any such sum payable hereunder or under any
other Loan Document shall be increased as may be necessary so that after making
all required deductions or withholdings (including deductions applicable to
additional sums payable under this paragraph 15) Lender receives an amount equal
to the sum it would have received had no such deductions or withholdings
(including deductions applicable to additional sums payable under this paragraph
15 been made, (2) Borrower shall make such deductions or withholdings, and (3)
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable law. Borrower (but not its direct or
indirect members or other constituent members or partners) will indemnify Lender
for the full amount of any Loan Taxes (including, without limitation, any Loan
Taxes (as well as taxes described in clauses (i) and (ii) of the second
preceding sentence) imposed by any jurisdiction on any amounts payable under
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this paragraph 15) paid or payable by Lender and any liability (including,
without limitation, penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Loan Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability delivered
to Borrower by Lender shall be conclusive absent manifest error. The agreements
and obligations of Borrower contained in this paragraph 15 shall survive the
payment in full of principal and interest under this Note.
(b) Within thirty (30) days after the date of any payment
of Loan Taxes withheld by Borrower in respect of any payment to Lender, Borrower
will furnish to Lender the original or a certified copy of a receipt or other
evidence satisfactory to Lender evidencing payment thereof.
(c) If Lender is a U.S. Person (other than the Lender
originally named herein), Lender shall deliver to Borrower, upon request, a Form
W-9 (unless it establishes to the reasonable satisfaction of Borrower that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax). If Lender is not a U.S. Person, Lender shall deliver to
Borrower, upon request, (a) two duly completed and signed copies of either
Internal Revenue Service Form W-8BEN (claiming an exemption from or a reduction
in United States withholding tax under an applicable treaty) or its successor
form or Form W-8ECI (claiming an exemption from United States withholding tax as
effectively connected income) or its successor form and related applicable
forms, as the case may be; or (b) in the case of a foreign Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and that cannot
comply with the requirements of clause (a) above, (x) a statement to the effect
that such Lender is eligible for a complete exemption from withholding of United
States Taxes under Section 871(h) or 881(c) of the Code, and (y) two duly
completed and signed copies of Internal Revenue Service Form W-8BEN or
successor and related applicable forms. If Lender is not a U.S. Person, Lender
further undertakes to deliver to Borrower additional forms described in clause
(a) or (b) of the preceding sentence (or any successor forms) or other manner of
certification, as the case may be, (A) on or before the date that any such form
expires or becomes obsolete, (B) after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower, and (C)
such extensions or renewals thereof as may reasonably be requested by Borrower,
certifying that Lender is entitled to receive payments hereunder without
deduction or withholding of any Loan Taxes. However, in the event that any
change in law, rule, regulation, treaty or directive, or in the interpretation
or application thereof (a "LAW CHANGE"), has occurred prior to the date on which
any delivery pursuant to the preceding sentence would otherwise be required
which renders such form inapplicable, or which would prevent Lender from duly
completing and delivering any such form, or if such Law Change results in Lender
being unable to deliver a Form W-9 (or other satisfactory evidence that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax), Lender shall not be obligated to deliver such forms but shall,
promptly following such Law Change, but in any event prior to the time the next
payment hereunder is due following such Law Change, advise Borrower in writing
whether it is capable of receiving payments without any deduction or withholding
of Loan Taxes. In the event of such Law Change, Borrower shall have the
obligation to make Lender whole and to "gross-up" under paragraph 15(a) hereof,
despite the failure by Lender to deliver such forms.
(d) If Lender receives a refund in respect of Loan Taxes
paid by Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to
-12-
paragraph 15(a) hereof in connection with such refunded Loan Taxes, to Borrower;
provided, however, that Borrower agrees to promptly return such refund to Lender
if it receives notice from Lender that it is required to repay such refund.
Nothing contained herein shall be construed to require Lender to seek any refund
and Lender shall have no obligation to Borrower to do so.
(e) All amounts payable under this paragraph 15 shall
constitute additional interest hereunder and shall be secured by the Deed of
Trust and the other Loan Documents. The provisions of this paragraph 15 shall
survive any payment or prepayment of the Loans and any foreclosure or
satisfaction of the Deed of Trust.
16. Borrower represents that Borrower has full power,
authority and legal right to execute, deliver and perform its obligations
pursuant to the Notes, the Deed of Trust and the other Loan Documents and that
the Notes, the Deed of Trust and the other Loan Documents constitute valid and
binding obligations of Borrower subject only to bankruptcy laws, general
principals of equity, insolvency, reorganization, arrangement, moratorium,
receivership or other similar laws relating to or affecting the rights of
creditors.
17. All notices or other communications required or
permitted to be given pursuant hereto shall be given in the manner specified in
the Deed of Trust directed to the parties at their respective addresses as
provided therein.
18. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES 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 IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
19. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THIS NOTE 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, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED
-13-
PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO
THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT,
TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE
OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL
LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO
THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS NOTE, AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇ PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION
TRUST COMPANY, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 MAILED OR DELIVERED TO
BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND 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.
20. Application of Payments. This Note, together with Substitute
Promissory Note A-2 is Note A referred to in the Deed of Trust. Unless otherwise
expressly provided in this Note or elected by Lender, payments made by Borrower
in respect of the principal and interest of the Loans shall be applied as
follows:
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(a) first, to accrued and unpaid interest due on this
Note and Substitute Promissory Note A-2, pro-rata,
until the interest due thereon has been paid in full;
(b) second, to accrued and unpaid interest due on
Substitute Promissory Note ▇-▇ and Substitute
Promissory Note B-2, pro rata, until the interest
due thereon has been paid in full;
(c) third, to the principal balance of this Note and
Substitute Promissory Note A-2, pro rata, until the
principal due thereon has been paid in full; and
(d) fourth, to the principal balance of Substitute
Promissory Note ▇-▇ and Substitute Promissory Note
B-2, pro rata, until the principal due thereon has
been paid in full.
21. The principal amount of this Note shall be advanced to
Borrower in two advances, an initial advance of $83,783,221.98 made by Lender to
Borrower on the date hereof and a subsequent advance of the difference between
the foregoing amount and the stated principal amount of this Note (the
"SUBSEQUENT ADVANCE") to be made by Lender to Borrower on the Business Day
immediately succeeding the date hereof (the "SUBSEQUENT ADVANCE DATE"). Provided
that (i) no default hereunder or under the other Loan Documents has occurred and
is continuing and (ii) Commonwealth Land Title Insurance Company (the "ESCROW
AGENT"). the master escrow agent in connection with the initial public offering
of the common stock of ▇▇▇▇▇▇▇ Properties, Inc. (the "▇▇▇▇▇▇▇ IPO") has entered
into an escrow agreement with Lender agreeing to hold and disburse the
Subsequent Advance in accordance with the terms hereof, Lender shall deposit the
Subsequent Advance with the Escrow Agent by wire transfer by 11:00 a.m. on the
Subsequent Advance Date and shall use commercially reasonable efforts do so by
11:00 a.m. New York time on such date. The Escrow Agent shall be authorized to
release the Subsequent Advance to or at the direction of Borrower upon (a)
confirmation by the Escrow Agent to Lender that Escrow Agent has received
sufficient funds to close the ▇▇▇▇▇▇▇ IPO and pay all costs and expenses in
connection therewith and all other authorizations that it requires to release
such funds, and (b) authorization from Lender to Escrow Agent authorizing such
release. In the event that the Escrow Agent has not been authorized to release
the Subsequent Advance prior to 4:00 p.m. on the Subsequent Advance Date, the
Escrow Agent shall return the Subsequent Advance to Lender and thereafter
Borrower shall not have any right to receive any portion of the Subsequent
Advance.
22. Borrower, and by its acceptance hereof, Lender, agrees that
this Note is made by Borrower and accepted by Lender, pursuant to that certain
Note Splitter Agreement, Modification of Loan Documents and Reaffirmation of
Guaranty dated the date hereof, together with Substitute Promissory Note A-2, in
substitution and replacement of that certain Deed of Trust Note A made by
Borrower in favor of Lender in the original principal amount of $184,688,000.00,
dated June 26, 2003 ("ORIGINAL NOTE"), on which Original Note there is now
outstanding the aggregate principal amount of $184,688,000.00 and Borrower, and
by its acceptance hereof, Lender, agrees that this Note, together with
Substitute Promissory Note A-2, evidences the same indebtedness evidenced by the
Original Note and does not create or evidence any new or additional
indebtedness.
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[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered as of the day and year first above written.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Principal Manager
By: ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd.,
a California limited partnership,
its Administrative Agent
By: ▇▇▇▇▇▇▇ Partners BGHS, LLC,
a California limited liability company,
its general partner
By: ▇▇▇▇▇▇▇ Partners SSC, Inc.,
a California corporation,
its manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
SUBSTITUTE PROMISSORY NOTE A-2
$92,159,312.00 June 26, 2003
1. For value received, NORTH TOWER, LLC, a Delaware
limited liability company, having its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower"), promises
to pay to the order of GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation ("Lender"), at its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such place as the holder hereof may from
time to time designate in writing, the principal sum of Ninety-Two Million One
Hundred Fifty-Nine Thousand Three Hundred Twelve and No/100 Dollars
($92,159,312.00), or so much as may have been advanced hereunder, in lawful
money of the United States of America, with interest thereon to be computed on
the unpaid principal balance from time to time outstanding at a fixed rate per
annum equal to 4.68% (the "Interest Rate").
2. Principal and interest under this Substitute
Promissory Note A-2 (this "NOTE") shall be paid by Borrower as follows:
A. A payment of interest only on the date hereof for the
interest accrual period from the date hereof to and including June 30, 2003;
B. Commencing on August 1, 2003 and on each Payment Date
(as hereinafter defined) thereafter up to but excluding the Payment Date
occurring on July 1, 2006 (the "AMORTIZATION DATE"). Borrower shall pay to
Lender a monthly amount equal to interest only on the outstanding principal
balance of this Note that accrued during the prior Collection Period (as defined
in the Cash Management Agreement);
C. Commencing on the Amortization Date and on each Payment
Date thereafter through and including the Maturity Date, Borrower shall pay to
Lender a monthly amount of $476,865.81 (such amounts described in paragraph 2.B.
and 2.C. of this Note, as applicable, are hereinafter the "MONTHLY PAYMENT
AMOUNT"): and
D. The balance of the principal sum of this Note together
with unpaid interest hereon shall be due and payable on the Maturity Date.
E. Interest on the principal sum of this Note shall be
calculated on the basis of the actual number of days elapsed and a three hundred
sixty (360) day year. In computing the number of days during which interest
accrues, the day on which funds are initially advanced shall be included
regardless of the time of day such advance is made. All amounts due under this
Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
3. As used in this Note:
(a) The term "ANNUAL BUDGET" shall mean an annual
budget submitted by Borrower to Lender in accordance with the terms of paragraph
10(d) herein.
(b) The term "APPROVED ANNUAL BUDGET" shall have the
meaning set forth in paragraph 10(d) hereof.
(c) The term "ASSIGNMENT OF LEASES" shall mean that
certain Assignment of Leases and Rents of even date herewith executed by
Borrower in favor of Lender.
(d) The term "BUSINESS DAY" shall mean any day except a
Saturday, Sunday or other day on which commercial banks are required or
permitted by law to close in New York City.
(e) The term "CAPITAL EXPENDITURES" shall mean for any
period, the amount expended for items capitalized under generally accepted
accounting principles including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements.
(f) The term "CASH EXPENSES" shall mean for any period,
the operating expenses for the Trust Property as set forth in an Approved Annual
Budget to the extent that such expenses are actually incurred by Borrower minus
payments into the Tax and Insurance Impound Fund and the Replacement/Leasing
Escrow Fund.
(g) The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
(h) The term "DEBT" shall mean the whole of the principal
sum of the Notes, together with all interest accrued or due and unpaid thereon
and all other sums due under the Loan Documents.
(i) The term "DEED OF TRUST" shall mean that certain Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
of even date herewith in the aggregate amount of the Notes given by Borrower for
the use and benefit of Lender covering the fee estate of certain premises as
more particularly described therein.
(j) The term "DEFAULT RATE" shall mean, a rate per annum
which is equal to the lesser of (i) the maximum rate permitted by applicable
law, or (ii) five percent (5%) above the Interest Rate.
(k) The term "DEFEASANCE COLLATERAL" shall mean U.S.
Obligations which provide payments (i) on or prior to, but as close as possible
to, all Payment Dates under the Notes after the Defeasance Date and up to and
including the Maturity Date, and (ii) in amounts equal to or greater than the
Scheduled Defeasance Payments.
(1) The term "EXTRAORDINARY EXPENSE" shall mean an
extraordinary operating expense or capital expense not set forth in the Approved
Annual Budget or allotted for in the Replacement/Leasing Escrow Fund.
(m) The term "LOANS" shall mean those certain loans made
by Lender to Borrower contemporaneously herewith as evidenced by the Notes and
secured inter alia by the Deed of Trust.
(n) The term "LOAN DOCUMENTS" shall mean collectively the
Notes, the Deed of Trust, the Assignment of Leases and any and all other
documents securing, evidencing, or
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guaranteeing all or any portion of the Loans or otherwise executed and/or
delivered in connection with the Notes and the Loans.
(o) The term "MATURITY DATE" shall mean July 1, 2010,
provided that, in the event that the Loans are accelerated pursuant to the terms
of this Note or the other Loan Documents, the Maturity Date shall be the date of
such acceleration.
(p) The term "Net CAPITAL EXPENDITURES" shall mean for
any period the amount by which Capital Expenditures during such period exceeds
reimbursements for such items during such period from any fund established
pursuant to the Loan Documents.
(q) The term "NOTE B" shall mean, collectively,
Substitute Promissory Note ▇-▇ and Substitute Promissory Note B-2.
(r) The term "NOTES" shall mean, collectively, this Note,
Substitute Promissory Note A-l and Note B.
(s) The term "PAYMENT DATE" shall mean the first (1st)
day of each calendar month during the term of this Note; provided, however that
if the first (1st) day of any given month is not a Business Day, then amounts
due on the Payment Date for such month shall be due on the immediately
succeeding Business Day.
(t) The term "RELEASE DATE" shall mean the earlier to
occur of (i) July 1, 2007 and (ii)the date that is two (2) years from the
"startup day" (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of the Loans.
(u) The term "REMIC TRUST" shall mean a "real estate
mortgage investment conduit" within the meaning of Section 860D of the Code that
holds this Note.
(v) The term "SCHEDULED DEFEASANCE PAYMENTS" shall mean
the Monthly Payment Amount required under the Notes for all Payment Dates
occurring after the Defeasance Date (including, on the Maturity Date, the
remaining outstanding principal balance on the Notes as of the Maturity Date).
(w) The term "SUBSTITUTE PROMISSORY NOTE A-1" shall mean
that certain Substitute Promissory Note A-l dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $92,528,688.00.
(x) The term "SUBSTITUTE PROMISSORY NOTE B-1" shall mean
that certain Substitute Promissory Note ▇-▇ dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $32,721,312.
(y) The term "SUBSTITUTE PROMISSORY NOTE B-2" shall mean
that certain Substitute Promissory Note B-2 dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $32,590,688.
(z) The term "U.S. OBLIGATIONS" shall mean direct full
faith and credit obligations of the United States of America that are not
subject to prepayment, call or early redemption or such other obligations
(designated by Borrower) of the United States of America or another Person that
the Rating Agencies have confirmed, or shall confirm, in writing will not,
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in and of themselves, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with any
securitization of the Loans.
(aa) The term "YIELD MAINTENANCE PREMIUM" shall mean
an amount which, when added to the outstanding principal amount of the Loans,
would be sufficient to purchase U.S. Obligations which provide payments (a) on
or prior to, but as close as possible to, all successive scheduled Payment Dates
under the Notes arising from and after the date of determination of such Yield
Maintenance Premium through the Maturity Date and (b) in amounts equal to the
Monthly Payment Amount required under the Notes through the Maturity Date
together with the outstanding principal balance of the Notes as of the Maturity
Date assuming all such Monthly Payments are made (including any servicing costs
associated therewith), in all cases without duplication among this Note,
Substitute Promissory Note A-1, Substitute Promissory Note ▇-▇ and Substitute
Promissory Note B-2. In no event shall the Yield Maintenance Premium be less
than zero.
All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Deed of
Trust.
4. The outstanding principal balance of this Note shall
bear interest throughout the term of this Note at the Interest Rate as set forth
herein.
5. (a) This Note shall mature on the Maturity Date, at
which time the entire loan evidenced by this Note shall be due and payable.
(b) If any sum payable under this Note is not paid
on or before 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 in order to defray a portion of
the expenses incurred by Lender in handling and processing such delinquent
payment and to compensate Lender for the loss of the use of such delinquent
payment. If the day when any payment required under this Note is due is not a
Business Day, then payment shall be due on the immediately succeeding Business
Day.
6. The Debt or any portion thereof shall without notice
become immediately due and payable at the option of Lender upon the happening of
any Event of Default. In the event that it should become necessary to employ
counsel to collect or enforce the Debt or to protect or foreclose the security
therefor, Borrower also shall pay on demand all costs of collection incurred by
Lender, including attorneys' fees and costs reasonably incurred for the services
of counsel whether or not suit be brought.
7. Borrower does hereby agree that upon the occurrence
and during the continuance of an Event of Default (including upon the failure of
Borrower to pay the Debt in full on the Maturity Date), Lender shall be entitled
to receive and Borrower shall pay interest on the entire unpaid principal sum
and any other amounts due at the Default Rate.
8. This Note, together with Substitute Promissory Note
A-1, Substitute Promissory Note ▇-▇ and Substitute Promissory Note B-2 is
evidence of the Loans and of the obligation of the Borrower to repay the Loans
in accordance with the terms thereof. This Note is secured inter alia by (i) the
Deed of Trust, (ii) an Assignment of Leases, and (iii) the other Loan Documents.
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9. (a) Borrower expressly waives any right to prepay the
Loans, in whole or in part, except as hereinafter provided.
(b) Notwithstanding anything herein or in any other
Loan Documents to the contrary, except if expressly required or permitted under
any Loan Document (including as a result of any of the prepayment events
specified in paragraph 4(f) of the Deed of Trust), Borrower may not voluntarily
prepay the Loans, in whole or in part, prior to the Payment Date occurring in
April, 2010 (the "LOCK OUT DATE"). From and after the Lock Out Date, Borrower
shall have the right to prepay all or any portion of the Loans provided that
Borrower gives Lender at least 15 days' prior written notice thereof. If any
such prepayment is not made on a Payment Date, Borrower shall also pay interest
that would have accrued on such prepaid amount 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 Loans shall be applied by Lender as
follows in the following order of priority: (i) First, to reasonable costs and
expenses, including without limitation, reasonable attorneys' fees incurred in
connection with the voluntary prepayment, (ii) Second, to accrued and unpaid
interest due on this Note and Substitute Promissory Note A-l, pro rata until the
interest due thereon for this Note and Substitute Promissory Note A-l has been
paid in full; (iii) Third, to accrued and unpaid interest due on Substitute
Promissory Note ▇-▇ and Substitute Promissory Note B-2, pro rata, until the
interest due thereon for Substitute Promissory Note ▇-▇ and Substitute
Promissory Note B-2 has been paid in full; (iv) Fourth, to the principal balance
of this Note and Substitute Promissory Note ▇- ▇, pro rata; (v) Fifth, to the
principal balance of Substitute Promissory Note ▇-▇ and Substitute Promissory
Note B-2, pro rata; and (vi) Sixth, to any other amounts then due and owing
under the Loan Documents. Any such prepayment shall be made without payment of
the Yield Maintenance Premium.
(c) Provided no Event of Default shall be
continuing, Borrower shall have the right on any Payment Date after the Release
Date and prior to the Lock Out Date to voluntarily defease the entire principal
amount of the Loans and obtain a release of the Lien of the Deed of Trust by
providing Lender with the Defeasance Collateral (a "DEFEASANCE EVENT"), subject
to the satisfaction of the following conditions precedent:
(i) Borrower shall give Lender not less
than thirty (30) days prior written notice specifying a date (the "DEFEASANCE
DATE") on which the Defeasance Event is to occur.
(ii) Borrower shall pay to Lender (A) all
payments of principal (if any) and interest due on the Loans to and including
the Defeasance Date and (B) all other sums, then due under the Notes, the Deed
of Trust and the other Loan Documents;
(iii) Borrower shall deposit the Defeasance
Collateral into the Defeasance Collateral Account and otherwise comply with the
provisions of subsections (d) and (e) of this Paragraph 9;
(iv) Borrower shall execute and deliver to
Lender a Security Agreement in respect of the Defeasance Collateral Account and
the Defeasance Collateral;
(v) Borrower shall deliver or cause to be
delivered to Lender an opinion or opinions of counsel for Borrower that is
standard in commercial lending transactions
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and subject only to customary qualifications, assumptions and exceptions
opining, among other things, that (i) Lender has a legal and valid perfected
security interest in the Defeasance Collateral Account and the Defeasance
Collateral, (ii) if a securitization has occurred, the REMIC Trust formed
pursuant to such securitization will not fail to maintain its status as a "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code as a result of a Defeasance Event pursuant to this ▇▇▇▇▇▇▇▇▇ ▇, (▇▇▇)
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 Bankruptcy Code or applicable state law (assuming the Debt is fully
secured) and (iv) a non-consolidation opinion with respect to the Successor
Borrower;
(vi) Borrower shall deliver to Lender a letter
issued by each of the applicable Rating Agencies (as defined in the Cash
Management Agreement) which confirms that the taking of the action referenced
therein will not result in any qualification, withdrawal or downgrading of any
existing ratings of securities created in a Securitization;
(vii) Borrower shall deliver a certificate to
Lender which is signed by a senior executive officer of Borrower, or an entity
that directly or indirectly controls the management of Borrower, certifying that
the requirements set forth in this Paragraph 9 have been satisfied;
(viii) Borrower shall deliver a letter of a "big
four" or other nationally recognized public accounting firm acceptable to Lender
confirming that the 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 Event, including
Lender's reasonable attorneys' fees and expenses and Rating Agency fees and
expenses.
(d) On or before the date on which Borrower delivers the
Defeasance Collateral, Borrower shall open at any Eligible Institution (as
defined in the Cash Management Agreement) the defeasance collateral account (the
"DEFEASANCE COLLATERAL Account") which shall at all times be an Eligible Account
(as defined in the Cash Management Agreement). The Defeasance Collateral Account
shall contain only (i) Defeasance Collateral, and (ii) cash from interest and
principal paid on the Defeasance Collateral. All cash from interest and
principal payments paid on the Defeasance Collateral up to the Monthly Payment
Amount shall be paid over to Lender on each Payment Date and applied to accrued
and unpaid interest; provided that prior to any such Payment Date, all cash from
interest and principal payments paid on the Defeasance Collateral may be
invested in Permitted Investments selected by Borrower. Any cash from interest
and principal paid on the Defeasance Collateral not needed to pay accrued and
unpaid interest shall be retained in the Defeasance Collateral Account as
additional collateral for the Loans and may be invested in Permitted Investments
selected by Borrower. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral is deposited to enter into an agreement with Borrower and
Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Defeasance
Collateral in accordance with this Note. The Successor Borrower shall be the
owner of the Defeasance
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Collateral Account and shall report all income accrued on Defeasance Collateral
for federal, state and local income tax purposes in its income tax return.
Borrower shall prepay all cost 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.
(e) In connection with a Defeasance Event under this
Paragraph 9, Borrower shall, if required by the Rating Agencies or if Borrower
elects to do so, establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a Special Purpose Bankruptcy Remote Entity and which
shall be approved by the Rating Agencies. Any such Successor Borrower may, at
Borrower's option, be an Affiliate of Borrower unless the Rating Agencies shall
require otherwise. Borrower shall transfer and assign all obligations, rights
and duties under and to the Notes, together with the Defeasance Collateral to
such Successor Borrower. Such Successor Borrower shall assume the obligations
under the Notes and the Security Agreement and Borrower shall be relieved of its
obligations under such documents and the Loan Documents (except for any
environmental indemnities or other obligations that survive repayment of the
Loans). Borrower shall pay a minimum of $1,000 to any such Successor Borrower as
consideration for assuming the obligations under the Notes and the Security
Agreement. Borrower shall pay all costs and expenses incurred by Lender,
including Lender's reasonable attorney's fees and expenses, incurred in
connection therewith.
(f) Mandatory prepayments made in connection with the
application pursuant to the Deed of Trust of insurance proceeds or condemnation
awards shall be paid in the amounts and at the times specified in the Deed of
Trust, and, notwithstanding anything herein to the contrary, provided that no
Event of Default has occurred and is continuing no Yield Maintenance Premium or
other premium shall be due or payable in connection with any such mandatory
prepayment whenever paid.
(g) Except as otherwise expressly provided in paragraph
9(f) hereof, the Yield Maintenance Premium shall be due, to the extent permitted
by applicable law, under any and all circumstances where all or any portion of
the Loans are paid prior to the Lock Out Date as a result of an involuntary
prepayment or a voluntary prepayment, even if such prepayment results from
Lender's exercise of its rights upon Borrower's default and acceleration of the
Maturity Date (irrespective of whether foreclosure proceedings have been
commenced), and shall be in addition to any other fees or sums due hereunder or
under any of the other Loan Documents. THE YIELD MAINTENANCE PREMIUM REQUIRED BY
THIS SUBPARAGRAPH 9 IS ACKNOWLEDGED BY BORROWER TO BE PARTIAL COMPENSATION TO
LENDER FOR THE COST OF REINVESTING THE LOAN PROCEEDS AND FOR THE LOSS OF THE
CONTRACTED RATE OF RETURN ON THE LOANS. FURTHERMORE, BORROWER ACKNOWLEDGES THAT
THE LOSS THAT MAY BE SUSTAINED BY LENDER AS A RESULT OF SUCH PREPAYMENT BY
BORROWER IS NOT SUSCEPTIBLE OF PRECISE CALCULATION AND THE YIELD MAINTENANCE
PREMIUM REPRESENTS THE GOOD FAITH EFFORT OF BORROWER AND LENDER TO COMPENSATE
LENDER FOR SUCH LOSS. EXCEPT AS EXPRESSLY PERMITTED IN THIS PARAGRAPH 9,
BORROWER EXPRESSLY WAIVES ALL RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 2954.10 (OR OTHERWISE) TO PREPAY THE LOANS PRIOR TO
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THE LOCK OUT DATE, IN WHOLE OR IN PART, WITHOUT PENALTY, WHETHER VOLUNTARILY OR
UPON ACCELERATION OF THE MATURITY DATE OF THE LOANS, AND AGREES THAT IF, FOR ANY
REASON A PREPAYMENT OF ALL OR ANY OF THE LOANS IS MADE PRIOR TO THE LOCK OUT
DATE, WHETHER VOLUNTARILY OR UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY
DATE OF THE LOANS BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWER UNDER ANY LOAN
DOCUMENT, THEN BORROWER SHALL BE OBLIGATED TO PAY, CONCURRENTLY THEREWITH, THE
YIELD MAINTENANCE PREMIUM SPECIFIED ABOVE. BY INITIALING THIS PROVISION IN THE
SPACE PROVIDED BELOW, BORROWER DECLARES THAT LENDER'S AGREEMENT TO MAKE THE
LOANS AT THE INTEREST RATE AND ON THE OTHER TERMS SET FORTH HEREIN CONSTITUTES
ADEQUATE AND VALUABLE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY BORROWER, FOR
THIS WAIVER AND AGREEMENT.
_________________
INITIALS
10. (a) Borrower, Lender and ▇▇▇▇▇▇▇ Properties, L.P., as
manager, have entered into the Cash Management Agreement dated the date hereof.
Borrower shall cause all Rents to be deposited in the Clearing Account (as
defined in the Cash Management Agreement) pursuant to the Cash Management
Agreement. All Rents deposited in the Cash Collateral Account (as defined in the
Cash Management Agreement) shall be allocated to the sub-accounts established
pursuant to, and as defined in, the Cash Management Agreement in the following
order of priority:
(i) First, to fund the Tax and Insurance Impound
Fund Subaccount (as defined in the Cash Management Agreement) until the amount
on deposit therein is equal to the amount required to be deposited in the Tax
and Insurance Impound Fund on the related Payment Date in accordance with the
terms and conditions of the Deed of Trust;
(ii) Second, to fund the Monthly Debt Service
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the Monthly Payment Amount and the Monthly Payment
Amount payable under Substitute Promissory Note A-l, Substitute Promissory Note
▇-▇ and Substitute Promissory Note B-2;
(iii) Third, to fund the Monthly Debt Service
Subaccount with any other amounts due to the Lender under the Loan Documents not
otherwise addressed by this paragraph 10;
(iv) Fourth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is then fully on deposit in the Replacement/Leasing Escrow Fund
Sub-account (as defined in the Cash Management Agreement), to fund the
Replacement/Leasing Escrow Fund Subaccount until the amount on deposit therein
is equal to the sum of the Monthly Replacement Escrow Amount and the Monthly
Leasing Escrow Deposit on the related Payment Date in accordance with the terms
and conditions of the Deed of Trust, but subject to paragraph 6(f) of the Deed
of Trust, if applicable;
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(v) Fifth, to fund the Operating Expense
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the sum of (A) the Cash Expenses for the prior
calendar month pursuant to the terms and conditions of the related Approved
Annual Budget (as such Approved Annual Budget may be adjusted in accordance with
paragraph 10(d) below), (B) any additional amount for Cash Expenses requested
pursuant to and in accordance with Section 6(e) of the Cash Management Agreement
and (C) any additional amount (if any) that, after taking into account funds
deposited in the Operating Expense Subaccount pursuant to clauses (A) and (B)
above, causes the amount on deposit in such Operating Expense Subaccount to
equal the Operating Account Balance Floor (as defined in the Cash Management
Agreement); provided, however, in no event shall any amounts be funded in the
Operating Expense Subaccount pursuant to this clause (v) to the extent that such
amounts represent any compensation due to an affiliated property manager in
excess of $1,000,000 for the then existing calendar year;
(vi) Sixth, to fund the Operating Expense
Subaccount with any Net Capital Expenditures for the prior calendar month
pursuant to the terms and conditions of the related Approved Annual Budget;
(vii) Seventh, to fund the Minimum Occupancy
Escrow Fund Subaccount until the amount on deposit therein is equal to the
Monthly Minimum Occupancy Reserve Deposit on the related Payment Date in
accordance with the terms and conditions of the Deed of Trust;
(viii) Eighth, to fund the Operating Expense
Subaccount with any Extraordinary Expenses approved by Lender for the prior
calendar month, if any (such Rents as remain after the application of Rents in
accordance with items (i) through this item (viii), the "EXCESS CASH FLOW"):
(ix) Ninth, all Excess Cash Flow to fund the
Replacement/Leasing Escrow Fund Sub-Account until all Additional Monthly Leasing
Escrow Deposits required pursuant to the provisions of Section 6(f) of the Deed
of Trust have been funded in accordance with the terms and conditions of the
Deed of Trust;
(x) Tenth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is not then fully on deposit in the Replacement/Leasing Escrow
Fund Sub-account, to fund the Replacement/Leasing Escrow Fund Subaccount until
the amount on deposit therein is equal to the amount required to fund the
Leasing Escrow Fund Catch-Up Deposit on the related Payment Date in accordance
with the terms and conditions of the Deed of Trust, but subject to paragraph
6(f) of the Deed of Trust, if applicable;
(xi) Eleventh, to pay to the Junior Management
Fee Subaccount (as defined in the Cash Management Agreement) any compensation
due to an affiliated property manager in excess of the amount permitted to be
paid pursuant to clause (v) above; and
(xii) Lastly, to pay to the Borrower Remainder
Subaccount (as defined in the Cash Management Agreement) any excess amounts.
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(b) Nothing in this paragraph 10 shall limit, reduce or
otherwise affect Borrower's obligations to make payments of the Monthly Payment
Amount, payments to the Tax and Insurance Impound Fund, the Replacement/Leasing
Escrow Fund and any other amounts due hereunder and under the other Loan
Documents, whether or not Rents are available to make such payments.
(c) Intentionally Omitted.
(d) Not later than each December 15 during the term of
the Loans, Borrower shall submit to Lender a detailed budget (an "ANNUAL
BUDGET") for the Trust Property covering the calendar year commencing on the
following January 1, each of which budgets shall be subject to Lender's
approval, not to be unreasonably withheld, (provided that Borrower shall have
the option to submit to Lender a revised budget not later than June 30 of each
year during the term of the Loans to adjust such budget on the basis of the
actual results of Borrower to such point in such calendar year) (each such
budget, when so approved, is referred to as an "APPROVED ANNUAL BUDGET"). Until
such time that Lender approves a proposed Annual Budget, Borrower may operate
under the most recently Approved Annual Budget (adjusted to reflect actual
increases in real estate taxes, insurance premiums, utilities expenses, labor
costs, interest and other fixed costs with respect to the ownership, operation
and financing of the Trust Property).
11. It is expressly stipulated and agreed to be the intent of
Borrower and Lender 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 paragraph (and the similar paragraph
contained in the Deed of Trust) shall control every other covenant and agreement
in the Notes and the other Loan Documents. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount
called for under this Note or under any of the other Loan Documents, 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 Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Lender's express intent that all
excess amounts theretofore collected by Lender shall be credited on the
principal balance of this Note (without any resulting prepayment penalty or
premium) and all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
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 herein or in any of the other Loan Documents,
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.
-10-
12. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought. Whenever used,
the singular number shall include the plural, the plural the singular, and the
words "LENDER" and "BORROWER" shall include their respective successors,
assigns, heirs, executors and administrators. If Borrower consists of more than
one person or party, the obligations and liabilities of each such person or
party shall be joint and several.
13. Except as provided in the Loan Documents, Borrower
and all others who may become liable for the payment of all or any part of the
Debt do hereby severally waive presentment and demand for payment, notice of
dishonor, protest, notice of protest, notice of nonpayment, notice of intent to
accelerate the maturity hereof and of acceleration. No release of any security
for the Debt or any person liable for payment of the Debt, no extension of time
for payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Loan Documents made by agreement between
Lender and any other person or party shall release, modify, amend, waive,
extend, change, discharge, terminate or affect the liability of Borrower, and
any other person or party who may become liable under the Loan Documents for the
payment of all or any part of the Debt.
14. The provisions of paragraph 57 of the Deed of Trust
are hereby incorporated by reference as if fully set forth herein.
15. (a) Any and all payments by Borrower to Lender
hereunder and under the other Loan Documents shall, provided that Lender
complies with the requirements of paragraph 15c) hereof, be made free and clear
of, and without deduction for, any and all present or future taxes, levies,
imposts, deductions, charges, withholdings or liabilities with respect thereto,
except for the following, for which Borrower (and its direct or indirect members
or other constituent members or partners) shall not be responsible: (i) taxes
imposed on or measured by Lender's net income or net receipts; or (ii) franchise
taxes imposed on Lender by the jurisdiction in which (A) Lender is organized,
(B) Lender is "doing business" (unless such determination of "doing business" is
made solely as a result of Lender's interest in the Loans and the security
therefor), or (C) Lender's applicable lending office is located (all such taxes,
levies, imposts, deductions, charges or withholdings and liabilities (except
those described in the foregoing clauses (i) and (ii)) being hereinafter
referred to as "LOAN TAXES"). If Borrower shall be required by law to deduct or
withhold any Loan Taxes from or in respect of any sum payable hereunder or under
any other Loan Document, then (1) any such sum payable hereunder or under any
other Loan Document shall be increased as may be necessary so that after making
all required deductions or withholdings (including deductions applicable to
additional sums payable under this paragraph 15) Lender receives an amount equal
to the sum it would have received had no such deductions or withholdings
(including deductions applicable to additional sums payable under this paragraph
15 been made, (2) Borrower shall make such deductions or withholdings, and (3)
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable law. Borrower (but not its direct or
indirect members or other constituent members or partners) will indemnify Lender
for the full amount of any Loan Taxes (including, without limitation, any Loan
Taxes (as well as taxes described in clauses (i) and (ii) of the second
preceding sentence) imposed by any jurisdiction on any amounts payable under
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this paragraph 15) paid or payable by Lender and any liability (including,
without limitation, penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Loan Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability delivered
to Borrower by Lender shall be conclusive absent manifest error. The agreements
and obligations of Borrower contained in this paragraph 15 shall survive the
payment in full of principal and interest under this Note.
(b) Within thirty (30) days after the date of any payment
of Loan Taxes withheld by Borrower in respect of any payment to Lender, Borrower
will furnish to Lender the original or a certified copy of a receipt or other
evidence satisfactory to Lender evidencing payment thereof.
(c) If Lender is a U.S. Person (other than the Lender
originally named herein), Lender shall deliver to Borrower, upon request, a Form
W-9 (unless it establishes to the reasonable satisfaction of Borrower that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax). If Lender is not a U.S. Person, Lender shall deliver to
Borrower, upon request, (a) two duly completed and signed copies of either
Internal Revenue Service Form W-8BEN (claiming an exemption from or a reduction
in United States withholding tax under an applicable treaty) or its successor
form or Form W-8ECI (claiming an exemption from United States withholding tax as
effectively connected income) or its successor form and related applicable
forms, as the case may be; or (b) in the case of a foreign Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and that cannot
comply with the requirements of clause (a) above, (x) a statement to the effect
that such Lender is eligible for a complete exemption from withholding of United
States Taxes under Section 871(h) or 881(c) of the Code, and (y) two duly
completed and signed copies of Internal Revenue Service Form W- 8BEN or
successor and related applicable forms. If Lender is not a U.S. Person, Lender
further undertakes to deliver to Borrower additional forms described in clause
(a) or (b) of the preceding sentence (or any successor forms) or other manner of
certification, as the case may be, (A) on or before the date that any such form
expires or becomes obsolete, (B) after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower, and (C)
such extensions or renewals thereof as may reasonably be requested by Borrower,
certifying that Lender is entitled to receive payments hereunder without
deduction or withholding of any Loan Taxes. However, in the event that any
change in law, rule, regulation, treaty or directive, or in the interpretation
or application thereof (a "LAW CHANGE"), has occurred prior to the date on which
any delivery pursuant to the preceding sentence would otherwise be required
which renders such form inapplicable, or which would prevent Lender from duly
completing and delivering any such form, or if such Law Change results in Lender
being unable to deliver a Form W-9 (or other satisfactory evidence that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax), Lender shall not be obligated to deliver such forms but shall,
promptly following such Law Change, but in any event prior to the time the next
payment hereunder is due following such Law Change, advise Borrower in writing
whether it is capable of receiving payments without any deduction or withholding
of Loan Taxes. In the event of such Law Change, Borrower shall have the
obligation to make Lender whole and to "gross-up" under paragraph 15(a) hereof,
despite the failure by Lender to deliver such forms.
(d) If Lender receives a refund in respect of Loan Taxes
paid by Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to
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paragraph 15(a) hereof in connection with such refunded Loan Taxes, to Borrower;
provided, however, that Borrower agrees to promptly return such refund to Lender
if it receives notice from Lender that it is required to repay such refund.
Nothing contained herein shall be construed to require Lender to seek any refund
and Lender shall have no obligation to Borrower to do so.
(e) All amounts payable under this paragraph 15 shall
constitute additional interest hereunder and shall be secured by the Deed of
Trust and the other Loan Documents. The provisions of this paragraph 15 shall
survive any payment or prepayment of the Loans and any foreclosure or
satisfaction of the Deed of Trust.
16. Borrower represents that Borrower has full power,
authority and legal right to execute, deliver and perform its obligations
pursuant to the Notes, the Deed of Trust and the other Loan Documents and that
the Notes, the Deed of Trust and the other Loan Documents constitute valid and
binding obligations of Borrower subject only to bankruptcy laws, general
principals of equity, insolvency, reorganization, arrangement, moratorium,
receivership or other similar laws relating to or affecting the rights of
creditors.
17. All notices or other communications required or
permitted to be given pursuant hereto shall be given in the manner specified in
the Deed of Trust directed to the parties at their respective addresses as
provided therein.
18. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES 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 IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
19. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THIS NOTE 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, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED
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PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO
THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT,
TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE
OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL
LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO
THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS NOTE, AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION
TRUST COMPANY, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 MAILED OR DELIVERED TO
BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND 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.
20. Application of Payments. This Note, together with
Substitute Promissory Note A-l is Note A referred to in the Deed of Trust.
Unless otherwise expressly provided in this Note or elected by Lender, payments
made by Borrower in respect of the principal and interest of the Loans shall be
applied as follows:
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(a) first, to accrued and unpaid interest due on this
Note and Substitute Promissory Note A-1, pro rata,
until the interest due thereon has been paid in full;
(b) second, to accrued and unpaid interest due on
Substitute Promissory Note ▇-▇ and Substitute
Promissory Note B-2, pro rata, until the interest
due thereon has been paid in full;
(c) third, to the principal balance of this Note and
Substitute Promissory Note A-l,pro rata, until the
principal due thereon has been paid in full; and
(d) fourth, to the principal balance of Substitute
Promissory Note ▇-▇ and Substitute Promissory Note
B-2, pro rata, until the principal due thereon has
been paid in full.
21. The principal amount of this Note shall be advanced
to Borrower in two advances, an initial advance of $83,448,758.02 made by Lender
to Borrower on the date hereof and a subsequent advance of the difference
between the foregoing amount and the stated principal amount of this Note (the
"SUBSEQUENT ADVANCE") to be made by Lender to Borrower on the Business Day
immediately succeeding the date hereof (the "SUBSEQUENT ADVANCE DATE"). Provided
that (i) no default hereunder or under the other Loan Documents has occurred and
is continuing and (ii) Commonwealth Land Title Insurance Company (the "ESCROW
AGENT"), the master escrow agent in connection with the initial public offering
of the common stock of ▇▇▇▇▇▇▇ Properties, Inc. (the "▇▇▇▇▇▇▇ IPO") has entered
into an escrow agreement with Lender agreeing to hold and disburse the
Subsequent Advance in accordance with the terms hereof, Lender shall deposit the
Subsequent Advance with the Escrow Agent by wire transfer by 11:00 a.m. on the
Subsequent Advance Date and shall use commercially reasonable efforts do so by
11:00 a.m. New York time on such date. The Escrow Agent shall be authorized to
release the Subsequent Advance to or at the direction of Borrower upon (a)
confirmation by the Escrow Agent to Lender that Escrow Agent has received
sufficient funds to close the ▇▇▇▇▇▇▇ IPO and pay all costs and expenses in
connection therewith and all other authorizations that it requires to release
such funds, and (b) authorization from Lender to Escrow Agent authorizing such
release. In the event that the Escrow Agent has not been authorized to release
the Subsequent Advance prior to 4:00 p.m. on the Subsequent Advance Date, the
Escrow Agent shall return the Subsequent Advance to Lender and thereafter
Borrower shall not have any right to receive any portion of the Subsequent
Advance.
22. Borrower, and by its acceptance hereof, Lender,
agrees that this Note is made by Borrower and accepted by Lender, pursuant to
that certain Note Splitter Agreement, Modification of Loan Documents and
Reaffirmation of Guaranty dated the date hereof, together with Substitute
Promissory Note A-l, in substitution and replacement of that certain Deed of
Trust Note A made by Borrower in favor of Lender in the original principal
amount of $184,688,000.00, dated June 26, 2003 ("ORIGINAL NOTE"), on which
Original Note there is now outstanding the aggregate principal amount of
$184,688,000.00 and Borrower, and by its acceptance hereof, Lender, agrees that
this Note, together with Substitute Promissory Note A-l, evidences the same
indebtedness evidenced by the Original Note and does not create or evidence any
new or additional indebtedness.
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[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, Borrower has caused this Note to be
executed and delivered as of the day and year first above written.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Principal Manager
By: ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd.,
a California limited partnership,
its Administrative Agent
By: ▇▇▇▇▇▇▇ Partners BGHS, LLC,
a California limited liability company,
its general partner
By: ▇▇▇▇▇▇▇ Partners SCS, Inc.,
a California corporation,
its manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
SUBSTITUTE PROMISSORY NOTE ▇-▇
$32,721,312.00 June 26, 2003
1. For value received, NORTH TOWER, LLC, a Delaware
limited liability company, having its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower"), promises
to pay to the order of GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation ("Lender"), at its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such place as the holder hereof may from
time to time designate in writing, the principal sum of Thirty-Two Million Seven
Hundred Twenty-One Thousand Three Hundred Twelve and No/100 Dollars
($32,721,312.00), in lawful money of the United States of America, with interest
thereon to be computed on the unpaid principal balance from time to time
outstanding at a fixed rate per annum equal to 4.68% (the "Interest Rate").
2. Principal and interest under this Substitute
Promissory Note ▇-▇ (this "NOTE") shall be paid by Borrower as follows:
A. A payment of interest only on the date hereof for the
interest accrual period from the date hereof to and including June 30,2003;
B. Commencing on August 1, 2003 and on each Payment Date (as
hereinafter defined) thereafter up to but excluding the Payment Date occurring
on July 1, 2006, (the "AMORTIZATION DATE"), Borrower shall pay to Lender a
monthly amount equal to interest only on the outstanding principal balance of
this Note that accrued during the prior Collection Period (as defined in the
Cash Management Agreement);
C. Commencing on the Amortization Date and on each Payment
Date thereafter through and including the Maturity Date, Borrower shall pay to
Lender a monthly amount of $169,311.97 (such amounts described in paragraph 2.B.
and 2.C. of this Note, as applicable, are hereinafter the "MONTHLY PAYMENT
AMOUNT"); and
D. The balance of the principal sum of this Note together with
unpaid interest hereon shall be due and payable on the Maturity Date.
E. Interest on the principal sum of this Note shall be
calculated on the basis of the actual number of days elapsed and a three hundred
sixty (360) day year. In computing the number of days during which interest
accrues, the day on which funds are initially advanced shall be included
regardless of the time of day such advance is made. All amounts due under this
Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
3. As used in this Note:
(a) The term "ANNUAL BUDGET" shall mean an annual budget
submitted by Borrower to Lender in accordance with the terms of paragraph 10(d)
herein.
(b) The term "APPROVED ANNUAL BUDGET" shall have the
meaning set forth in paragraph 10(d) hereof.
(c) The term "ASSIGNMENT OF LEASES" shall mean that
certain Assignment of Leases and Rents of even date herewith executed by
Borrower in favor of Lender.
(d) The term "BUSINESS DAY" shall mean any day except a
Saturday, Sunday or other day on which commercial banks are required or
permitted by law to close in New York City.
(e) The term "CAPITAL EXPENDITURES" shall mean for any
period, the amount expended for items capitalized under generally accepted
accounting principles including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements.
(f) The term "CASH EXPENSES" shall mean for any period,
the operating expenses for the Trust Property as set forth in an Approved Annual
Budget to the extent that such expenses are actually incurred by Borrower minus
payments into the Tax and Insurance Impound Fund and the Replacement/Leasing
Escrow Fund.
(g) The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
(h) The term "DEBT" shall mean the whole of the principal
sum of the Notes, together with all interest accrued or due and unpaid thereon
and all other sums due under the Loan Documents.
(i) The term "DEED OF TRUST" shall mean that certain Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
of even date herewith in the aggregate amount of the Notes given by Borrower for
the use and benefit of Lender covering the fee estate of certain premises as
more particularly described therein.
(j) The term "DEFAULT RATE" shall mean, a rate per annum
which is equal to the lesser of (i) the maximum rate permitted by applicable
law, or (ii) five percent (5%) above the Interest Rate.
(k) The term "DEFEASANCE COLLATERAL" shall mean U.S.
Obligations which provide payments (i) on or prior to, but as close as possible
to, all Payment Dates under the Notes after the Defeasance Date and up to and
including the Maturity Date, and (ii) in amounts equal to or greater than the
Scheduled Defeasance Payments.
(1) The term "EXTRAORDINARY EXPENSE" shall mean an
extraordinary operating expense or capital expense not set forth in the Approved
Annual Budget or allotted for in the Replacement/Leasing Escrow Fund.
(m) The term "LOANS" shall mean those certain loans made
by Lender to Borrower contemporaneously herewith as evidenced by the Notes and
secured inter alia by the Deed of Trust.
(n) The term "LOAN DOCUMENTS" shall mean collectively the
Notes, the Deed of Trust, the Assignment of Leases and any and all other
documents securing, evidencing, or
2
guaranteeing all or any portion of the Loans or otherwise executed and/or
delivered in connection with the Notes and the Loans.
(o) The term "MATURITY DATE" shall mean August 1, 2010,
provided that, in the event that the Loans are accelerated pursuant to the terms
of this Note or the other Loan Documents, the Maturity Date shall be the date of
such acceleration.
(p) The term "NET CAPITAL EXPENDITURES" shall mean for
any period the amount by which Capital Expenditures during such period exceeds
reimbursements for such items during such period from any fund established
pursuant to the Loan Documents.
(q) The term "NOTE A" shall mean, collectively,
Substitute Promissory Note A-l and Substitute Promissory Note A-2.
(r) The term "Notes" shall mean, collectively, this Note,
Substitute Promissory Note B-2, Substitute Promissory Note A-l and Substitute
Promissory Note A-2.
(s) The term "PAYMENT DATE" shall mean the first (1st)
day of each calendar month during the term of this Note; provided, however that
if the first (1st) day of any given month is not a Business Day, then amounts
due on the Payment Date for such month shall be due on the immediately
succeeding Business Day.
(t) The term "RELEASE DATE" shall mean the earlier to
occur of (i) July 1, 2007 and (ii) the date that is two (2) years from the
"startup day" (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of the Loans.
(u) The term "REMIC TRUST" shall mean a "real estate
mortgage investment conduit" within the meaning of Section 860D of the Code that
holds this Note.
(v) The term "SCHEDULED DEFEASANCE PAYMENTS" shall mean
the Monthly Payment Amount required under the Notes for all Payment Dates
occurring after the Defeasance Date (including, on the Maturity Date, the
remaining outstanding principal balance on the Notes as of the Maturity Date).
(w) The term "SUBSTITUTE PROMISSORY NOTE A-1" shall mean
that certain Substitute Promissory Note A-l dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $92,528,688.00.
(x) The term "SUBSTITUTE PROMISSORY NOTE A-2" shall mean
that certain Substitute Promissory Note A-2 dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $92,159,312.00.
(y) The term "SUBSTITUTE PROMISSORY NOTE B-2" shall mean
that certain Substitute Promissory Note B-2 dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $32,590,688.00.
(z) The term "U.S. OBLIGATIONS" shall mean direct full
faith and credit obligations of the United States of America that are not
subject to prepayment, call or early redemption or such other obligations
(designated by Borrower) of the United States of America or another Person that
the Rating Agencies have confirmed, or shall confirm, in writing will not,
3
in and of themselves, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with any
securitization of the Loans.
(aa) The term "YIELD MAINTENANCE PREMIUM" shall mean an
amount which, when added to the outstanding principal amount of the Loans, would
be sufficient to purchase U.S. Obligations which provide payments (a) on or
prior to, but as close as possible to, all successive scheduled Payment Dates
under the Notes arising from and after the date of determination of such Yield
Maintenance Premium through the Maturity Date and (b) in amounts equal to the
Monthly Payment Amount required under the Notes through the Maturity Date
together with the outstanding principal balance of the Notes as of the Maturity
Date assuming all such Monthly Payments are made (including any servicing costs
associated therewith) in all cases without duplication among this Note,
Substitute Promissory Note B-2, Substitute Promissory Note A-l and Substitute
Promissory Note A-2. In no event shall the Yield Maintenance Premium be less
than zero.
All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Deed of Trust.
4. The outstanding principal balance of this Note shall
bear interest throughout the term of this Note at the Interest Rate as set forth
herein.
5. (a) This Note shall mature on the Maturity Date, at
which time the entire loan evidenced by this Note shall be due and payable.
(b) If any sum payable under this Note is not paid on or
before 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 in order to defray a portion of the
expenses incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. If
the day when any payment required under this Note is due is not a Business Day,
then payment shall be due on the immediately succeeding Business Day.
6. The Debt or any portion thereof shall without notice
become immediately due and payable at the option of Lender upon the happening of
any Event of Default. In the event that it should become necessary to employ
counsel to collect or enforce the Debt or to protect or foreclose the security
therefor, Borrower also shall pay on demand all costs of collection incurred by
Lender, including attorneys' fees and costs reasonably incurred for the services
of counsel whether or not suit be brought.
7. Borrower does hereby agree that upon the occurrence
and during the continuance of an Event of Default (including upon the failure of
Borrower to pay the Debt in full on the Maturity Date), Lender shall be entitled
to receive and Borrower shall pay interest on the entire unpaid principal sum
and any other amounts due at the Default Rate.
8. This Note, together with Substitute Promissory Note
B-2, Substitute Promissory Note A-l and Substitute Promissory Note A-2, is
evidence of the Loans and of the obligation of the Borrower to repay the Loans
in accordance with the terms thereof. This Note is secured inter alia by (i) the
Deed of Trust, (ii) an Assignment of Leases, and (iii) the other Loan Documents.
4
9. (a) Borrower expressly waives any right to prepay the
Loan, in whole or in part, except as hereinafter provided.
(b) Notwithstanding anything herein or in any other Loan
Documents to the contrary, except if expressly required or permitted under any
Loan Document (including as a result of any of the prepayment events specified
in paragraph 4(f) of the Deed of Trust), Borrower may not voluntarily prepay the
Loan, in whole or in part, prior to the Payment Date occurring in April, 2010
(the "LOCK OUT DATE"). From and after the Lock Out Date, Borrower shall have the
right to prepay all or any portion of the Loan provided that Borrower gives
Lender at least 15 days' prior written notice thereof. If any such prepayment is
not made on a Payment Date, Borrower shall also pay interest that would have
accrued on such prepaid amount 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 reasonable costs and expenses,
including without limitation, reasonable attorneys' fees incurred in connection
with the voluntary prepayment, (ii) Second, to accrued and unpaid interest due
on Substitute Promissory Note A-l and Substitute Promissory Note A-2, pro rata,
until the interest due thereon for Substitute Promissory Note A-l and Substitute
Promissory Note A-2 has been paid in full; (iii) Third, to accrued and unpaid
interest due on this Note and Substitute Promissory Note B-2, pro-rata, until
the interest due thereon for this Note and Substitute Promissory Note B-2 has
been paid in full; (iv) Fourth, to the principal balance of Substitute
Promissory Note A-l and Substitute Promissory Note A-2, pro rata, (v) Fifth, to
the principal balance of this Note and Substitute Promissory Note B-2, pro-
rata; and (vi) Sixth, to any other amounts then due and owing under the Loan
Documents. Any such prepayment shall be made without payment of the Yield
Maintenance Premium.
(c) Provided no Event of Default shall be continuing,
Borrower shall have the right on any Payment Date after the Release Date and
prior to the Lock Out Date to voluntarily defease the entire principal amount of
the Loans and obtain a release of the Lien of the Deed of Trust by providing
Lender with the Defeasance Collateral (a "DEFEASANCE EVENT"), subject to the
satisfaction of the following conditions precedent:
(i) Borrower shall give Lender not less than
thirty (30) days prior written notice specifying a date (the "DEFEASANCE DATE")
on which the Defeasance Event is to occur.
(ii) Borrower shall pay to Lender (A) all
payments of principal (if any) and interest due on the Loans to and including
the Defeasance Date and (B) all other sums, then due under the Notes, the Deed
of Trust and the other Loan Documents;
(iii) Borrower shall deposit the Defeasance
Collateral into the Defeasance Collateral Account and otherwise comply with the
provisions of subsections (d) and (e) of this Paragraph 9;
(iv) Borrower shall execute and deliver to Lender
a Security Agreement in respect of the Defeasance Collateral Account and the
Defeasance Collateral;
(v) Borrower shall deliver or cause to be
delivered to Lender an opinion or opinions of counsel for Borrower that is
standard in commercial lending transactions and subject only to customary
qualifications, assumptions and exceptions opining, among other
5
things, that (i) Lender has a legal and valid perfected security interest in the
Defeasance Collateral Account and the Defeasance Collateral, (ii) if a
securitization has occurred, the REMIC Trust formed pursuant to such
securitization will not fail to maintain its status as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code as a result
of a Defeasance Event pursuant to this ▇▇▇▇▇▇▇▇▇ ▇, (▇▇▇) 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 Bankruptcy
Code or applicable state law (assuming the Debt is fully secured) and (iv) a
non-consolidation opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender a letter
issued by each of the applicable Rating Agencies (as defined in the Cash
Management Agreement) which confirms that the taking of the action referenced
therein will not result in any qualification, withdrawal or downgrading of any
existing ratings of securities created in a Securitization;
(vii) Borrower shall deliver a certificate to
Lender which is signed by a senior executive officer of Borrower, or an entity
that directly or indirectly controls the management of Borrower, certifying that
the requirements set forth in this Paragraph 9 have been satisfied;
(viii) Borrower shall deliver a letter of a "big
four" or other nationally recognized public accounting firm acceptable to Lender
confirming that the 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 Event, including
Lender's reasonable attorneys' fees and expenses and Rating Agency fees and
expenses.
(d) On or before the date on which Borrower delivers the
Defeasance Collateral, Borrower shall open at any Eligible Institution (as
defined in the Cash Management Agreement) the defeasance collateral account (the
"DEFEASANCE COLLATERAL ACCOUNT") which shall at all times be an Eligible Account
(as defined in the Cash Management Agreement). The Defeasance Collateral Account
shall contain only (i) Defeasance Collateral, and (ii) cash from interest and
principal paid on the Defeasance Collateral. AH cash from interest and principal
payments paid on the Defeasance Collateral up to the Monthly Payment Amount
shall be paid over to Lender on each Payment Date and applied to accrued and
unpaid interest; provided that prior to any such Payment Date, all cash from
interest and principal payments paid on the Defeasance Collateral may be
invested in Permitted Investments selected by Borrower. Any cash from interest
and principal paid on the Defeasance Collateral not needed to pay accrued and
unpaid interest shall be retained in the Defeasance Collateral Account as
additional collateral for the Loans and may be invested in Permitted Investments
selected by Borrower. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral is deposited to enter into an agreement with Borrower and
Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Defeasance
Collateral in accordance with this Note. The Successor Borrower shall be the
owner of the Defeasance Collateral Account and shall report all income accrued
on Defeasance Collateral for federal, state
6
and local income tax purposes in its income tax return. Borrower shall prepay
all cost 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.
(e) In connection with a Defeasance Event under this
Paragraph 9, Borrower shall, if required by the Rating Agencies or if Borrower
elects to do so, establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a Special Purpose Bankruptcy Remote Entity and which
shall be approved by the Rating Agencies. Any such Successor Borrower may, at
Borrower's option, be an Affiliate of Borrower unless the Rating Agencies shall
require otherwise. Borrower shall transfer and assign all obligations, rights
and duties under and to the Notes, together with the Defeasance Collateral to
such Successor Borrower. Such Successor Borrower shall assume the obligations
under the Notes and the Security Agreement and Borrower shall be relieved of its
obligations under such documents and the Loan Documents (except for any
environmental indemnities or other obligations that survive repayment of the
Loans). Borrower shall pay a minimum of $1,000 to any such Successor Borrower as
consideration for assuming the obligations under the Notes and the Security
Agreement. Borrower shall pay all costs and expenses incurred by Lender,
including Lender's reasonable attorney's fees and expenses, incurred in
connection therewith.
(f) Mandatory prepayments made in connection with the
application pursuant to the Deed of Trust of insurance proceeds or condemnation
awards shall be paid in the amounts and at the times specified in the Deed of
Trust, and, notwithstanding anything herein to the contrary, provided that no
Event of Default has occurred and is continuing no Yield Maintenance Premium or
other premium shall be due or payable in connection with any such mandatory
prepayment whenever paid.
(g) Except as otherwise expressly provided in paragraph
9(f) hereof, the Yield Maintenance Premium shall be due, to the extent permitted
by applicable law, under any and all circumstances where all or any portion of
the Loans are paid prior to the Lock Out Date as a result of an involuntary
prepayment or a voluntary prepayment, even if such prepayment results from
Lender's exercise of its rights upon Borrower's default and acceleration of the
Maturity Date (irrespective of whether foreclosure proceedings have been
commenced), and shall be in addition to any other fees or sums due hereunder or
under any of the other Loan Documents. THE YIELD MAINTENANCE PREMIUM REQUIRED BY
THIS SUBPARAGRAPH 9 IS ACKNOWLEDGED BY BORROWER TO BE PARTIAL COMPENSATION TO
LENDER FOR THE COST OF REINVESTING THE LOAN PROCEEDS AND FOR THE LOSS OF THE
CONTRACTED RATE OF RETURN ON THE LOANS. FURTHERMORE, BORROWER ACKNOWLEDGES THAT
THE LOSS THAT MAY BE SUSTAINED BY LENDER AS A RESULT OF SUCH PREPAYMENT BY
BORROWER IS NOT SUSCEPTIBLE OF PRECISE CALCULATION AND THE YIELD MAINTENANCE
PREMIUM REPRESENTS THE GOOD FAITH EFFORT OF BORROWER AND LENDER TO COMPENSATE
LENDER FOR SUCH LOSS. EXCEPT AS EXPRESSLY PERMITTED IN THIS PARAGRAPH 9,
BORROWER EXPRESSLY WAIVES ALL RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL
7
CODE SECTION 2954.10 (OR OTHERWISE) TO PREPAY THE LOANS PRIOR TO THE LOCK OUT
DATE, IN WHOLE OR IN PART, WITHOUT PENALTY, WHETHER VOLUNTARILY OR UPON
ACCELERATION OF THE MATURITY DATE OF THE LOAN, AND AGREES THAT IF, FOR ANY
REASON A PREPAYMENT OF ALL OR ANY OF THE LOANS IS MADE PRIOR TO THE LOCK OUT
DATE, WHETHER VOLUNTARILY OR UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY
DATE OF THE LOANS BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWER UNDER ANY LOAN
DOCUMENT, THEN BORROWER SHALL BE OBLIGATED TO PAY, CONCURRENTLY THEREWITH, THE
YIELD MAINTENANCE PREMIUM SPECIFIED ABOVE. BY INITIALING THIS PROVISION IN THE
SPACE PROVIDED BELOW, BORROWER DECLARES THAT LENDER'S AGREEMENT TO MAKE THE
LOANS AT THE INTEREST RATE AND ON THE OTHER TERMS SET FORTH HEREIN CONSTITUTES
ADEQUATE AND VALUABLE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY BORROWER, FOR
THIS WAIVER AND AGREEMENT.
__________________
INITIALS
10. (a) Borrower, Lender and ▇▇▇▇▇▇▇ Properties, L.P., as
manager, have entered into the Cash Management Agreement dated the date hereof.
Borrower shall cause all Rents to be deposited in the Clearing Account (as
defined in the Cash Management Agreement) pursuant to the Cash Management
Agreement. All Rents deposited in the Cash Collateral Account (as defined in the
Cash Management Agreement) shall be allocated to the sub-accounts established
pursuant to, and as defined in, the Cash Management Agreement in the following
order of priority:
(i) First, to fund the Tax and Insurance Impound
Fund Subaccount (as defined in the Cash Management Agreement) until the amount
on deposit therein is equal to the amount required to be deposited in the Tax
and Insurance Impound Fund on the related Payment Date in accordance with the
terms and conditions of the Deed of Trust;
(ii) Second, to fond the Monthly Debt Service
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the Monthly Payment Amount and the Monthly Payment
Amount under Substitute Promissory Note A-l, Substitute Promissory Note A-2 and
Substitute Promissory Note B-2;
(iii) Third, to fund the Monthly Debt Service
Subaccount with any other amounts due to the Lender under the Loan Documents not
otherwise addressed by this paragraph 10;
(iv) Fourth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is then fully on deposit in the Replacement/Leasing Escrow Fund
Sub-account (as defined in the Cash Management Agreement), to fund the
Replacement/Leasing Escrow Fund Subaccount until the amount on deposit therein
is equal to the sum of the Monthly Replacement Escrow Amount and the Monthly
Leasing Escrow Deposit on the related Payment Date in accordance with the terms
8
and conditions of the Deed of Trust, but subject to paragraph 6(f) of the Deed
of Trust, if applicable;
(v) Fifth, to fund the Operating Expense
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the sum of (A) the Cash Expenses for the prior
calendar month pursuant to the terms and conditions of the related Approved
Annual Budget (as such Approved Annual Budget may be adjusted in accordance with
paragraph 10(d) below), (B) any additional amount for Cash Expenses requested
pursuant to and in accordance with Section 6(e) of the Cash Management Agreement
and (C) any additional amount (if any) that, after taking into account funds
deposited in the Operating Expense Subaccount pursuant to clauses (A) and (B)
above, causes the amount on deposit in such Operating Expense Subaccount to
equal the Operating Account Balance Floor (as defined in the Cash Management
Agreement); provided, however, in no event shall any amounts be funded in the
Operating Expense Subaccount pursuant to this clause (v) to the extent that such
amounts represent any compensation due to an affiliated property manager in
excess of $1,000,000 for the then existing calendar year;
(vi) Sixth, to fund the Operating Expense
Subaccount with any Net Capital Expenditures for the prior calendar month
pursuant to the terms and conditions of the related Approved Annual Budget;
(vii) Seventh, to fund the Minimum Occupancy
Escrow Fund Subaccount until the amount on deposit therein is equal to the
Monthly Minimum Occupancy Reserve Deposit on the related Payment Date in
accordance with the terms and conditions of the Deed of Trust;
(viii) Eighth, to fund the Operating Expense
Subaccount with any Extraordinary Expenses approved by Lender for the prior
calendar month, if any (such Rents as remain after the application of Rents in
accordance with items (i) through this item (viii), the "EXCESS CASH FLOW"):
(ix) Ninth, all Excess Cash Flow to fund the
Replacement/Leasing Escrow Fund Sub-Account until all Additional Monthly Leasing
Escrow Deposits required pursuant to the provisions of Section 6(f) of the Deed
of Trust have been funded in accordance with the terms and conditions of the
Deed of Trust;
(x) Tenth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is not then fully on deposit in the Replacement/Leasing Escrow
Fund Sub-account, to fund the Replacement/Leasing Escrow Fund Subaccount until
the amount on deposit therein is equal to the amount required to fund the
Leasing Escrow Fund Catch-Up Deposit on the related Payment Date in accordance
with the terms and conditions of the Deed of Trust, but subject to paragraph
6(f) of the Deed of Trust, if applicable;
(xi) Eleventh, to pay to the Junior Management
Fee Subaccount (as defined in the Cash Management Agreement) any compensation
due to an affiliated property manager in excess of the amount permitted to be
paid pursuant to clause (v) above; and
9
(xii) Lastly, to pay to the Borrower Remainder
Subaccount (as defined in the Cash Management Agreement) any excess amounts.
(b) Nothing in this paragraph 10 shall limit, reduce or
otherwise affect Borrower's obligations to make payments of the Monthly Payment
Amount, payments to the Tax and Insurance Impound Fund, the Replacement/Leasing
Escrow Fund and any other amounts due hereunder and under the other Loan
Documents, whether or not Rents are available to make such payments.
(c) Intentionally Omitted.
(d) Not later than each December 15 during the term of
the Loans, Borrower shall submit to Lender a detailed budget (an "ANNUAL
BUDGET") for the Trust Property covering the calendar year commencing on the
following January 1, each of which budgets shall be subject to Lender's
approval, not to be unreasonably withheld, (provided that Borrower shall have
the option to submit to Lender a revised budget not later than June 30 of each
year during the term of the Loans to adjust such budget on the basis of the
actual results of Borrower to such point in such calendar year) (each such
budget, when so approved, is referred to as an "APPROVED ANNUAL BUDGET"). Until
such time that Lender approves a proposed Annual Budget, Borrower may operate
under the most recently Approved Annual Budget (adjusted to reflect actual
increases in real estate taxes, insurance premiums, utilities expenses, labor
costs, interest and other fixed costs with respect to the ownership, operation
and financing of the Trust Property).
11. It is expressly stipulated and agreed to be the
intent of Borrower and Lender 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 paragraph (and the similar paragraph
contained in the Deed of Trust) shall control every other covenant and agreement
in the Notes and the other Loan Documents. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount
called for under this Note or under any of the other Loan Documents, 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 Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Lender's express intent that all
excess amounts theretofore collected by Lender shall be credited on the
principal balance of this Note (without any resulting prepayment penalty or
premium) and all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
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 herein or in any of the other Loan Documents,
it is not the intention of Lender to accelerate the maturity of any interest
10
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
12. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought. Whenever used,
the singular number shall include the plural, the plural the singular, and the
words "LENDER" and "BORROWER" shall include their respective successors,
assigns, heirs, executors and administrators. If Borrower consists of more than
one person or party, the obligations and liabilities of each such person or
party shall be joint and several.
13. Except as provided in the Loan Documents, Borrower
and all others who may become liable for the payment of all or any part of the
Debt do hereby severally waive presentment and demand for payment, notice of
dishonor, protest, notice of protest, notice of nonpayment, notice of intent to
accelerate the maturity hereof and of acceleration. No release of any security
for the Debt or any person liable for payment of the Debt, no extension of time
for payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Loan Documents made by agreement between
Lender and any other person or party shall release, modify, amend, waive,
extend, change, discharge, terminate or affect the liability of Borrower, and
any other person or party who may become liable under the Loan Documents for the
payment of all or any part of the Debt.
14. The provisions of paragraph 57 of the Deed of Trust
are hereby incorporated by reference as if fully set forth herein.
15. (a) Any and all payments by Borrower to Lender
hereunder and under the other Loan Documents shall, provided that Lender
complies with the requirements of paragraph 15(c) hereof, be made free and clear
of, and without deduction for, any and all present or future taxes, levies,
imposts, deductions, charges, withholdings or liabilities with respect thereto,
except for the following, for which Borrower (and its direct or indirect members
or other constituent members or partners) shall not be responsible: (i) taxes
imposed on or measured by Lender's net income or net receipts; or (ii) franchise
taxes imposed on Lender by the jurisdiction in which (A) Lender is organized,
(B) Lender is "doing business" (unless such determination of "doing business" is
made solely as a result of Lender's interest in the Loans and the security
therefor), or (C) Lender's applicable lending office is located (all such taxes,
levies, imposts, deductions, charges or withholdings and liabilities (except
those described in the foregoing clauses (i) and (ii)) being hereinafter
referred to as "LOAN TAXES"). If Borrower shall be required by law to deduct or
withhold any Loan Taxes from or in respect of any sum payable hereunder or under
any other Loan Document, then (1) any such sum payable hereunder or under any
other Loan Document shall be increased as may be necessary so that after making
all required deductions or withholdings (including deductions applicable to
additional sums payable under this paragraph 15), Lender receives an amount
equal to the sum it would have received had no such deductions or withholdings
(including deductions applicable to additional sums payable under this paragraph
15) been made, (2) Borrower shall make such deductions or withholdings, and (3)
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable law. Borrower (but not its direct or
indirect members or other
11
constituent members or partners) will indemnify Lender for the full amount of
any Loan Taxes (including, without limitation, any Loan Taxes (as well as taxes
described in clauses (i) and (ii) of the second preceding sentence) imposed by
any jurisdiction on any amounts payable under this paragraph 15) paid or payable
by Lender and any liability (including, without limitation, penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Loan Taxes were correctly or legally asserted. A certificate as to the amount of
such payment or liability delivered to Borrower by Lender shall be conclusive
absent manifest error. The agreements and obligations of Borrower contained in
this paragraph 15 shall survive the payment in full of principal and interest
under this Note.
(b) Within thirty (30) days after the date of any payment
of Loan Taxes withheld by Borrower in respect of any payment to Lender, Borrower
will furnish to Lender the original or a certified copy of a receipt or other
evidence satisfactory to Lender evidencing payment thereof.
(c) If Lender is a U.S. Person (other than the Lender
originally named herein), Lender shall deliver to Borrower, upon request, a Form
W-9 (unless it establishes to the reasonable satisfaction of Borrower that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax). If Lender is not a U.S. Person, Lender shall deliver to
Borrower, upon request, (a) two duly completed and signed copies of either
Internal Revenue Service Form W-8BEN (claiming an exemption from or a reduction
in United States withholding tax under an applicable treaty) or its successor
form or Form W-8ECI (claiming an exemption from United States withholding tax as
effectively connected income) or its successor form and related applicable
forms, as the case may be; or (b) in the case of a foreign Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and that cannot
comply with the requirements of clause (a) above, (x) a statement to the effect
that such Lender is eligible for a complete exemption from withholding of United
States Taxes under Section 871(h) or 881(c) of the Code, and (y) two duly
completed and signed copies of Internal Revenue Service Form W- 8BEN or
successor and related applicable forms. If Lender is not a U.S. Person, Lender
further undertakes to deliver to Borrower additional forms described in clause
(a) or (b) of the preceding sentence (or any successor forms) or other manner of
certification, as the case may be, (A) on or before the date that any such form
expires or becomes obsolete, (B) after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower, and (C)
such extensions or renewals thereof as may reasonably be requested by Borrower,
certifying that Lender is entitled to receive payments hereunder without
deduction or withholding of any Loan Taxes. However, in the event that any
change in law, rule, regulation, treaty or directive, or in the interpretation
or application thereof (a "LAW CHANGE"), has occurred prior to the date on which
any delivery pursuant to the preceding sentence would otherwise be required
which renders such form inapplicable, or which would prevent Lender from duly
completing and delivering any such form, or if such Law Change results in Lender
being unable to deliver a Form W-9 (or other satisfactory evidence that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax), Lender shall not be obligated to deliver such forms but shall,
promptly following such Law Change, but in any event prior to the time the next
payment hereunder is due following such Law Change, advise Borrower in writing
whether it is capable of receiving payments without any deduction or withholding
of Loan Taxes. In the event of such Law Change, Borrower shall have the
obligation to make Lender whole and to "gross-up" under paragraph 15(a) hereof,
despite the failure by Lender to deliver such forms.
12
(d) If Lender receives a refund in respect of Loan Taxes
paid by Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to paragraph 15(a) hereof in connection with
such refunded Loan Taxes, to Borrower; provided, however, that Borrower agrees
to promptly return such refund to Lender if it receives notice from Lender that
it is required to repay such refund. Nothing contained herein shall be construed
to require Lender to seek any refund and Lender shall have no obligation to
Borrower to do so.
(e) All amounts payable under this paragraph 15 shall
constitute additional interest hereunder and shall be secured by the Deed of
Trust and the other Loan Documents. The provisions of this paragraph 15 shall
survive any payment or prepayment of the Loans and any foreclosure or
satisfaction of the Deed of Trust.
16. Borrower represents that Borrower has full power,
authority and legal right to execute, deliver and perform its obligations
pursuant to the Notes, the Deed of Trust and the other Loan Documents and that
the Notes, the Deed of Trust and the other Loan Documents constitute valid and
binding obligations of Borrower subject only to bankruptcy laws, general
principals of equity, insolvency, reorganization, arrangement, moratorium,
receivership or other similar laws relating to or affecting the rights of
creditors.
17. All notices or other communications required or
permitted to be given pursuant hereto shall be given in the manner specified in
the Deed of Trust directed to the parties at their respective addresses as
provided therein.
18. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES 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 IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
19. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THIS NOTE 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, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED
13
STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT
TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF
THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
NOTE, AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION
TRUST COMPANY, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 MAILED OR DELIVERED TO
BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND 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.
20. Application of Payments. This Note together with
Substitute Promissory Note B-2 is Note B referred to in the Deed of Trust.
Unless otherwise expressly provided in this Note or elected by Lender, payments
made by Borrower in respect of the principal and interest of the Loans shall be
applied as follows:
14
(a) first, to accrued and unpaid interest due on
Substitute Promissory Note A-l and Substitute
Promissory Note A-2, pro rata, until the interest due
thereon has been paid in full;
(b) second, to accrued and unpaid interest due on this
Note and Substitute Promissory Note B-2, pro rata,
until the interest due thereon has been paid in full;
(c) third, to the principal balance of Substitute
Promissory Note A-l and Substitute Promissory Note
A-2, pro rata, until the principal due thereon has
been paid in full; and
(d) fourth, to the principal balance of this Note and
Substitute Promissory Note B-2, pro rata, until the
principal due thereon has been paid in full.
21. Borrower, and by its acceptance hereof, Lender,
agrees that this Note is made by Borrower and accepted by Lender, pursuant to
that certain Note Splitter Agreement, Modification of Loan Documents and
Reaffirmation of Guaranty dated the date hereof, together with Substitute
Promissory Note B-2, in substitution and replacement of that certain Deed of
Trust Note B made by Borrower in favor of Lender in the original principal
amount of $65,312,000.00, dated June 26, 2003 ("ORIGINAL NOTE"), on which
Original Note there is now outstanding the aggregate principal amount of
$65,312,000.00 and Borrower, and by its acceptance hereof, Lender, agrees that
this Note, together with Substitute Promissory Note B-2, evidences the same
indebtedness evidenced by the Original Note and does not create or evidence any
new or additional indebtedness.
[NO FURTHER TEXT ON THIS PAGE]
15
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed and delivered as of the day and year first above written.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Principal Manager
By: ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd.,
a California limited partnership,
its Administrative Agent
By: ▇▇▇▇▇▇▇ Partners BGHS, LLC,
a California limited liability company,
its general partner
By: ▇▇▇▇▇▇▇ Partners SSC, Inc.,
a California corporation,
its manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
SUBSTITUTE PROMISSORY NOTE B-2
$32,590,688.00 June 26, 2003
1. For value received, NORTH TOWER, LLC, a Delaware
limited liability company, having its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower"), promises
to pay to the order of GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation ("Lender"), at its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such place as the holder hereof may from
time to time designate in writing, the principal sum of Thirty-Two Million Five
Hundred Ninety Thousand Six Hundred Eighty-Eight and No/100 Dollars
($32,590,688.00), in lawful money of the United States of America, with interest
thereon to be computed on the unpaid principal balance from time to time
outstanding at a fixed rate per annum equal to 4.68% (the "Interest Rate").
2. Principal and interest under this Substitute
Promissory Note B-2 (this "Note") shall be paid by Borrower as follows:
A. A payment of interest only on the date hereof for the
interest accrual period from the date hereof to and including June 30,2003;
B. Commencing on August 1, 2003 and on each Payment Date (as
hereinafter defined) thereafter up to but excluding the Payment Date occurring
on July 1, 2006, (the "AMORTIZATION DATE"). Borrower shall pay to Lender a
monthly amount equal to interest only on the outstanding principal balance of
this Note that accrued during the prior Collection Period (as defined in the
Cash Management Agreement);
C. Commencing on the Amortization Date and on each Payment
Date thereafter through and including the Maturity Date, Borrower shall pay to
Lender a monthly amount of $168,636.08 (such amounts described in paragraph 2.B.
and 2.C. of this Note, as applicable, are hereinafter the "MONTHLY PAYMENT
AMOUNT"); and
D. The balance of the principal sum of this Note together with
unpaid interest hereon shall be due and payable on the Maturity Date.
E. Interest on the principal sum of this Note shall be
calculated on the basis of the actual number of days elapsed and a three hundred
sixty (360) day year. In computing the number of days during which interest
accrues, the day on which funds are initially advanced shall be included
regardless of the time of day such advance is made. All amounts due under this
Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
3. As used in this Note:
(a) The term "ANNUAL BUDGET" shall mean an annual budget
submitted by Borrower to Lender in accordance with the terms of paragraph 10(d)
herein.
(b) The term "APPROVED ANNUAL BUDGET" shall have the
meaning set forth in paragraph 10(d) hereof.
(c) The term "ASSIGNMENT OF LEASES" shall mean that
certain Assignment of Leases and Rents of even date herewith executed by
Borrower in favor of Lender.
(d) The term "BUSINESS DAY" shall mean any day except a
Saturday, Sunday or other day on which commercial banks are required or
permitted by law to close in New York City.
(e) The term "CAPITAL EXPENDITURES" shall mean for any
period, the amount expended for items capitalized under generally accepted
accounting principles including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements.
(f) The term "CASH EXPENSES" shall mean for any period,
the operating expenses for the Trust Property as set forth in an Approved Annual
Budget to the extent that such expenses are actually incurred by Borrower minus
payments into the Tax and Insurance Impound Fund and the Replacement/Leasing
Escrow Fund.
(g) The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
(h) The term "DEBT" shall mean the whole of the principal
sum of the Notes, together with all interest accrued or due and unpaid thereon
and all other sums due under the Loan Documents.
(i) The term "DEED OF TRUST" shall mean that certain Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
of even date herewith in the aggregate amount of the Notes given by Borrower for
the use and benefit of Lender covering the fee estate of certain premises as
more particularly described therein.
(j) The term "DEFAULT RATE" shall mean, a rate per annum
which is equal to the lesser of (i) the maximum rate permitted by applicable
law, or (ii) five percent (5%) above the Interest Rate.
(k) The term "DEFEASANCE COLLATERAL" shall mean U.S.
Obligations which provide payments (i) on or prior to, but as close as possible
to, all Payment Dates under the Notes after the Defeasance Date and up to and
including the Maturity Date, and (ii) in amounts equal to or greater than the
Scheduled Defeasance Payments.
(l) The term "EXTRAORDINARY EXPENSE" shall mean an
extraordinary operating expense or capital expense not set forth in the Approved
Annual Budget or allotted for in the Replacement/Leasing Escrow Fund.
(m) The term "LOANS" shall mean those certain loans made
by Lender to Borrower contemporaneously herewith as evidenced by the Notes and
secured inter alia by the Deed of Trust.
(n) The term "LOAN DOCUMENTS" shall mean collectively the
Notes, the Deed of Trust, the Assignment of Leases and any and all other
documents securing, evidencing, or
2
guaranteeing all or any portion of the Loans or otherwise executed and/or
delivered in connection with the Notes and the Loans.
(o) The term "MATURITY DATE" shall mean August 1, 2010,
provided that, in the event that the Loans are accelerated pursuant to the terms
of this Note or the other Loan Documents, the Maturity Date shall be the date of
such acceleration.
(p) The term "NET CAPITAL EXPENDITURES" shall mean for
any period the amount by which Capital Expenditures during such period exceeds
reimbursements for such items during such period from any fund established
pursuant to the Loan Documents.
(q) The term "NOTE A" shall mean, collectively,
Substitute Promissory Note A-1 and Substitute Promissory Note A-2.
(r) The term "NOTES" shall mean, collectively, this Note,
Substitute Promissory Note ▇-▇, Substitute Promissory Note A-l and Substitute
Promissory Note A-2.
(s) The term "PAYMENT DATE" shall mean the first (1st)
day of each calendar month during the term of this Note; provided, however that
if the first (1st) day of any given month is not a Business Day, then amounts
due on the Payment Date for such month shall be due on the immediately
succeeding Business Day.
(t) The term "RELEASE DATE" shall mean the earlier to
occur of (i) July 1, 2007 and (ii) the date that is two (2) years from the
"startup day" (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of the Loans.
(u) The term "REMIC TRUST" shall mean a "real estate
mortgage investment conduit" within the meaning of Section 860D of the Code that
holds this Note.
(v) The term "SCHEDULED DEFEASANCE PAYMENTS" shall mean
the Monthly Payment .Amount required under the Notes for all Payment Dates
occurring after the Defeasance Date (including, on the Maturity Date, the
remaining outstanding principal balance on the Notes as of the Maturity Date).
(w) The term "SUBSTITUTE PROMISSORY NOTE A-1" shall mean
that certain Substitute Promissory Note A-l dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $92,528,688.00.
(x) The term "SUBSTITUTE PROMISSORY NOTE A-2" shall mean
that certain Substitute Promissory Note A-2 dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $92,159,312.00.
(y) The term "SUBSTITUTE PROMISSORY NOTE B-1" shall mean
that certain Substitute Promissory Note ▇-▇ dated of even date herewith by
Borrower in favor of Lender in the original principal amount of $32,721,312.00.
(z) The term "U.S. OBLIGATIONS" shall mean direct full
faith and credit obligations of the United States of America that are not
subject to prepayment, call or early redemption or such other obligations
(designated by Borrower) of the United States of America or another Person that
the Rating Agencies have confirmed, or shall confirm, in writing will not,
3
in and of themselves, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with any
securitization of the Loans.
(aa) The term "YIELD MAINTENANCE PREMIUM" shall mean an
amount which, when added to the outstanding principal amount of the Loans, would
be sufficient to purchase U.S. Obligations which provide payments (a) on or
prior to, but as close as possible to, all successive scheduled Payment Dates
under the Notes arising from and after the date of determination of such Yield
Maintenance Premium through the Maturity Date and (b) in amounts equal to the
Monthly Payment Amount required under the Notes through the Maturity Date
together with the outstanding principal balance of the Notes as of the Maturity
Date assuming all such Monthly Payments are made (including any servicing costs
associated therewith) in all cases without duplication among this Note,
Substitute Promissory Note B-1, Substitute Promissory Note A-l and Substitute
Promissory Note A-2. In no event shall the Yield Maintenance Premium be less
than zero.
All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Deed of Trust.
4. The outstanding principal balance of this Note shall
bear interest throughout the term of this Note at the Interest Rate as set forth
herein.
5. (a) This Note shall mature on the Maturity Date, at
which time the entire loan evidenced by this Note shall be due and payable.
(b) If any sum payable under this Note is not paid on or
before 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 in order to defray a portion of the
expenses incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. If
the day when any payment required under this Note is due is not a Business Day,
then payment shall be due on the immediately succeeding Business Day.
6. The Debt or any portion thereof shall without notice
become immediately due and payable at the option of Lender upon the happening of
any Event of Default. In the event that it should become necessary to employ
counsel to collect or enforce the Debt or to protect or foreclose the security
therefor, Borrower also shall pay on demand all costs of collection incurred by
Lender, including attorneys' fees and costs reasonably incurred for the services
of counsel whether or not suit be brought.
7. Borrower does hereby agree that upon the occurrence
and during the continuance of an Event of Default (including upon the failure of
Borrower to pay the Debt in full on the Maturity Date), Lender shall be entitled
to receive and Borrower shall pay interest on the entire unpaid principal sum
and any other amounts due at the Default Rate.
8. This Note, together with Substitute Promissory
Note B-1, Substitute Promissory Note A-l and Substitute Promissory Note A-2, is
evidence of the Loans and of the obligation of the Borrower to repay the Loans
in accordance with the terms thereof. This Note is secured inter alia by (i) the
Deed of Trust, (ii) an Assignment of Leases, and (iii) the other Loan Documents.
4
9. (a) Borrower expressly waives any right to prepay the
Loan, in whole or in part, except as hereinafter provided.
(b) Notwithstanding anything herein or in any other Loan
Documents to the contrary, except if expressly required or permitted under any
Loan Document (including as a result of any of the prepayment events specified
in paragraph 4(f) of the Deed of Trust), Borrower may not voluntarily prepay the
Loan, in whole or in part, prior to the Payment Date occurring in April, 2010
(the "LOCK OUT DATE"). From and after the Lock Out Date, Borrower shall have the
right to prepay all or any portion of the Loan provided that Borrower gives
Lender at least 15 days' prior written notice thereof. If any such prepayment is
not made on a Payment Date, Borrower shall also pay interest that would have
accrued on such prepaid amount 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 reasonable costs and expenses,
including without limitation, reasonable attorneys' fees incurred in connection
with the voluntary prepayment, (ii) Second, to accrued and unpaid interest due
on Substitute Promissory Note A-l and Substitute Promissory Note A-2, pro rata,
until the interest due thereon for Note A has been paid in full; (iii) Third, to
accrued and unpaid interest due on this Note and Substitute Promissory Note ▇-▇,
pro rata, until the interest due thereon for this Note and Substitute Promissory
Note ▇-▇ has been paid in full; (iv) Fourth, to the principal balance of
Substitute Promissory Note A-l and Substitute Promissory Note A-2, pro rata; (v)
Fifth, to the principal balance of this Note and Substitute Promissory Note ▇-▇,
pro rata; and (vi) Sixth, to any other amounts then due and owing under the Loan
Documents. Any such prepayment shall be made without payment of the Yield
Maintenance Premium.
(c) Provided no Event of Default shall be continuing,
Borrower shall have the right on any Payment Date after the Release Date and
prior to the Lock Out Date to voluntarily defease the entire principal amount of
the Loans and obtain a release of the Lien of the Deed of Trust by providing
Lender with the Defeasance Collateral (a "DEFEASANCE EVENT"), subject to the
satisfaction of the following conditions precedent:
(i) Borrower shall give Lender not less than
thirty (30) days prior written notice specifying a date (the "DEFEASANCE DATE")
on which the Defeasance Event is to occur.
(ii) Borrower shall pay to Lender (A) all
payments of principal (if any) and interest due on the Loans to and including
the Defeasance Date and (B) all other sums, then due under the Notes, the Deed
of Trust and the other Loan Documents;
(iii) Borrower shall deposit the Defeasance
Collateral into the Defeasance Collateral Account and otherwise comply with the
provisions of subsections (d) and (e) of this Paragraph 9;
(iv) Borrower shall execute and deliver to Lender
a Security Agreement in respect of the Defeasance Collateral Account and the
Defeasance Collateral;
(v) Borrower shall deliver or cause to be
delivered to Lender an opinion or opinions of counsel for Borrower that is
standard in commercial lending transactions and subject only to customary
qualifications, assumptions and exceptions opining, among other
5
things, that (i) Lender has a legal and valid perfected security interest in the
Defeasance Collateral Account and the Defeasance Collateral, (ii) if a
securitization has occurred, the REMIC Trust formed pursuant to such
securitization will not fail to maintain its status as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code as a result
of a Defeasance Event pursuant to this ▇▇▇▇▇▇▇▇▇ ▇, (▇▇▇) 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 Bankruptcy
Code or applicable state law (assuming the Debt is fully secured) and (iv) a
non-consolidation opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender a letter
issued by each of the applicable Rating Agencies (as defined in the Cash
Management Agreement) which confirms that the taking of the action referenced
therein will not result in any qualification, withdrawal or downgrading of any
existing ratings of securities created in a Securitization;
(vii) Borrower shall deliver a certificate to
Lender which is signed by a senior executive officer of Borrower, or an entity
that directly or indirectly controls the management of Borrower, certifying that
the requirements set forth in this Paragraph 9 have been satisfied;
(viii) Borrower shall deliver a letter of a "big
four" or other nationally recognized public accounting firm acceptable to Lender
confirming that the 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 Event, including
Lender's reasonable attorneys' fees and expenses and Rating Agency fees and
expenses.
(d) On or before the date on which Borrower delivers the
Defeasance Collateral, Borrower shall open at any Eligible Institution (as
defined in the Cash Management Agreement) the defeasance collateral account (the
"DEFEASANCE COLLATERAL ACCOUNT") which shall at all times be an Eligible Account
(as defined in the Cash Management Agreement). The Defeasance Collateral Account
shall contain only (i) Defeasance Collateral, and (ii) cash from interest and
principal paid on the Defeasance Collateral. All cash from interest and
principal payments paid on the Defeasance Collateral up to the Monthly Payment
Amount shall be paid over to Lender on each Payment Date and applied to accrued
and unpaid interest; provided that prior to any such Payment Date, all cash from
interest and principal payments paid on the Defeasance Collateral may be
invested in Permitted Investments selected by Borrower. Any cash from interest
and principal paid on the Defeasance Collateral not needed to pay accrued and
unpaid interest shall be retained in the Defeasance Collateral Account as
additional collateral for the Loans and may be invested in Permitted Investments
selected by Borrower. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral is deposited to enter into an agreement with Borrower and
Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Defeasance
Collateral in accordance with this Note. The Successor Borrower shall be the
owner of the Defeasance Collateral Account and shall report all income accrued
on Defeasance Collateral for federal, state
6
and local income tax purposes in its income tax return. Borrower shall prepay
all cost 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.
(e) In connection with a Defeasance Event under this
Paragraph 9, Borrower shall, if required by the Rating Agencies or if Borrower
elects to do so, establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a Special Purpose Bankruptcy Remote Entity and which
shall be approved by the Rating Agencies. Any such Successor Borrower may, at
Borrower's option, be an Affiliate of Borrower unless the Rating Agencies shall
require otherwise. Borrower shall transfer and assign all obligations, rights
and duties under and to the Notes, together with the Defeasance Collateral to
such Successor Borrower. Such Successor Borrower shall assume the obligations
under the Notes and the Security Agreement and Borrower shall be relieved of its
obligations under such documents and the Loan Documents (except for any
environmental indemnities or other obligations that survive repayment of the
Loans). Borrower shall pay a minimum of $1,000 to any such Successor Borrower as
consideration for assuming the obligations under the Notes and the Security
Agreement. Borrower shall pay all costs and expenses incurred by Lender,
including Lender's reasonable attorney's fees and expenses, incurred in
connection therewith.
(f) Mandatory prepayments made in connection with the
application pursuant to the Deed of Trust of insurance proceeds or condemnation
awards shall be paid in the amounts and at the times specified in the Deed of
Trust, and, notwithstanding anything herein to the contrary, provided that no
Event of Default has occurred and is continuing no Yield Maintenance Premium or
other premium shall be due or payable in connection with any such mandatory
prepayment whenever paid.
(g) Except as otherwise expressly provided in paragraph
9(f) hereof, the Yield Maintenance Premium shall be due, to the extent permitted
by applicable law, under any and all circumstances where all or any portion of
the Loans are paid prior to the Lock Out Date as a result of an involuntary
prepayment or a voluntary prepayment, even if such prepayment results from
Lender's exercise of its rights upon Borrower's default and acceleration of the
Maturity Date (irrespective of whether foreclosure proceedings have been
commenced), and shall be in addition to any other fees or sums due hereunder or
under any of the other Loan Documents. THE YIELD MAINTENANCE PREMIUM REQUIRED BY
THIS SUBPARAGRAPH 9 IS ACKNOWLEDGED BY BORROWER TO BE PARTIAL COMPENSATION TO
LENDER FOR THE COST OF REINVESTING THE LOAN PROCEEDS AND FOR THE LOSS OF THE
CONTRACTED RATE OF RETURN ON THE LOANS. FURTHERMORE, BORROWER ACKNOWLEDGES THAT
THE LOSS THAT MAY BE SUSTAINED BY LENDER AS A RESULT OF SUCH PREPAYMENT BY
BORROWER IS NOT SUSCEPTIBLE OF PRECISE CALCULATION AND THE YIELD MAINTENANCE
PREMIUM REPRESENTS THE GOOD FAITH EFFORT OF BORROWER AND LENDER TO COMPENSATE
LENDER FOR SUCH LOSS. EXCEPT AS EXPRESSLY PERMITTED IN THIS PARAGRAPH 9,
BORROWER EXPRESSLY WAIVES ALL RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 2954.10 (OR OTHERWISE) TO PREPAY THE LOANS PRIOR TO THE LOCK OUT DATE,
IN WHOLE OR IN PART, WITHOUT PENALTY, WHETHER
7
VOLUNTARILY OR UPON ACCELERATION OF THE MATURITY DATE OF THE LOAN, AND AGREES
THAT IF, FOR ANY REASON A PREPAYMENT OF ALL OR ANY OF THE LOANS IS MADE PRIOR TO
THE LOCK OUT DATE, WHETHER VOLUNTARILY OR UPON OR FOLLOWING ANY ACCELERATION OF
THE MATURITY DATE OF THE LOANS BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWER
UNDER ANY LOAN DOCUMENT, THEN BORROWER SHALL BE OBLIGATED TO PAY, CONCURRENTLY
THEREWITH, THE YIELD MAINTENANCE PREMIUM SPECIFIED ABOVE. BY INITIALING THIS
PROVISION IN THE SPACE PROVIDED BELOW, BORROWER DECLARES THAT LENDER'S AGREEMENT
TO MAKE THE LOANS AT THE INTEREST RATE AND ON THE OTHER TERMS SET FORTH HEREIN
CONSTITUTES ADEQUATE AND VALUABLE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY
BORROWER, FOR THIS WAIVER AND AGREEMENT.
___________
INITIALS
10. (a) Borrower, Lender and ▇▇▇▇▇▇▇ Properties, L.P., as
manager, have entered into the Cash Management Agreement dated the date hereof.
Borrower shall cause all Rents to be deposited in the Clearing Account (as
defined in the Cash Management Agreement) pursuant to the Cash Management
Agreement. All Rents deposited in the Cash Collateral Account (as defined in the
Cash Management Agreement) shall be allocated to the sub-accounts established
pursuant to, and as defined in, the Cash Management Agreement in the following
order of priority:
(i) First, to fund the Tax and Insurance Impound
Fund Subaccount (as defined in the Cash Management Agreement) until the amount
on deposit therein is equal to the amount required to be deposited in the Tax
and Insurance Impound Fund on the related Payment Date in accordance with the
terms and conditions of the Deed of Trust;
(ii) Second, to fund the Monthly Debt Service
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the Monthly Payment Amount and the Monthly Payment
Amount under Substitute Promissory Note A-l, Substitute Promissory Note A-2 and
Substitute Promissory Note ▇-▇;
(iii) Third, to fund the Monthly Debt Service
Subaccount with any other amounts due to the Lender under the Loan Documents not
otherwise addressed by this paragraph 10;
(iv) Fourth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is then fully on deposit in the Replacement/Leasing Escrow Fund
Sub-account (as defined in the Cash Management Agreement), to fund the
Replacement/Leasing Escrow Fund Subaccount until the amount on deposit therein
is equal to the sum of the Monthly Replacement Escrow Amount and the Monthly
Leasing Escrow Deposit on the related Payment Date in accordance with the terms
and conditions of the Deed of Trust, but subject to paragraph 6(f) of the Deed
of Trust, if applicable;
8
(v) Fifth, to fund the Operating Expense
Subaccount (as defined in the Cash Management Agreement) until the amount on
deposit therein is equal to the sum of (A) the Cash Expenses for the prior
calendar month pursuant to the terms and conditions of the related Approved
Annual Budget (as such Approved Annual Budget may be adjusted in accordance with
paragraph 10(d) below), (B) any additional amount for Cash Expenses requested
pursuant to and in accordance with Section 6(e) of the Cash Management Agreement
and (C) any additional amount (if any) that, after taking into account funds
deposited in the Operating Expense Subaccount pursuant to clauses (A) and (B)
above, causes the amount on deposit in such Operating Expense Subaccount to
equal the Operating Account Balance Floor (as defined in the Cash Management
Agreement); provided, however, in no event shall any amounts be funded in the
Operating Expense Subaccount pursuant to this clause (v) to the extent that such
amounts represent any compensation due to an affiliated property manager in
excess of $1,000,000 for the then existing calendar year;
(vi) Sixth, to fund the Operating Expense
Subaccount with any Net Capital Expenditures for the prior calendar month
pursuant to the terms and conditions of the related Approved Annual Budget;
(vii) Seventh, to fund the Minimum Occupancy
Escrow Fund Subaccount until the amount on deposit therein is equal to the
Monthly Minimum Occupancy Reserve Deposit on the related Payment Date in
accordance with the terms and conditions of the Deed of Trust;
(viii) Eighth, to fund the Operating Expense
Subaccount with any Extraordinary Expenses approved by Lender for the prior
calendar month, if any (such Rents as remain after the application of Rents in
accordance with items (i) through this item (viii), the "EXCESS CASH FLOW");
(ix) Ninth, all Excess Cash Flow to fund the
Replacement/Leasing Escrow Fund Sub-Account until all Additional Monthly Leasing
Escrow Deposits required pursuant to the provisions of Section 6(f) of the Deed
of Trust have been funded in accordance with the terms and conditions of the
Deed of Trust;
(x) Tenth, in the event that (A) an NOI Trigger
Event has occurred and is then continuing and (B) the Leasing Escrow Fund
Catch-Up Deposit is not then fully on deposit in the Replacement/Leasing Escrow
Fund Sub-account, to fund the Replacement/Leasing Escrow Fund Subaccount until
the amount on deposit therein is equal to the amount required to fund the
Leasing Escrow Fund Catch-Up Deposit on the related Payment Date in accordance
with the terms and conditions of the Deed of Trust, but subject to paragraph
6(f) of the Deed of Trust, if applicable;
(xi) Eleventh, to pay to the Junior Management
Fee Subaccount (as defined in the Cash Management Agreement) any compensation
due to an affiliated property manager in excess of the amount permitted to be
paid pursuant to clause (v) above; and
(xii) Lastly, to pay to the Borrower Remainder
Subaccount (as defined in the Cash Management Agreement) any excess amounts.
9
(b) Nothing in this paragraph 10 shall limit, reduce or
otherwise affect Borrower's obligations to make payments of the Monthly Payment
Amount, payments to the Tax and Insurance Impound Fund, the Replacement/Leasing
Escrow Fund and any other amounts due hereunder and under the other Loan
Documents, whether or not Rents are available to make such payments.
(c) Intentionally Omitted.
(d) Not later than each December 15 during the term of
the Loans, Borrower shall submit to Lender a detailed budget (an "ANNUAL
BUDGET") for the Trust Property covering the calendar year commencing on the
following January 1, each of which budgets shall be subject to Lender's
approval, not to be unreasonably withheld, (provided that Borrower shall have
the option to submit to Lender a revised budget not later than June 30 of each
year during the term of the Loans to adjust such budget on the basis of the
actual results of Borrower to such point in such calendar year) (each such
budget, when so approved, is referred to as an "APPROVED ANNUAL BUDGET"). Until
such time that Lender approves a proposed Annual Budget, Borrower may operate
under the most recently Approved Annual Budget (adjusted to reflect actual
increases in real estate taxes, insurance premiums, utilities expenses, labor
costs, interest and other fixed costs with respect to the ownership, operation
and financing of the Trust Property).
11. It is expressly stipulated and agreed to be the
intent of Borrower and Lender 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 paragraph (and the similar paragraph
contained in the Deed of Trust) shall control every other covenant and agreement
in the Notes and the other Loan Documents. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount
called for under this Note or under any of the other Loan Documents, 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 Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Lender's express intent that all
excess amounts theretofore collected by Lender shall be credited on the
principal balance of this Note (without any resulting prepayment penalty or
premium) and all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
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 herein or in any of the other Loan Documents,
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.
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12. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought. Whenever used,
the singular number shall include the plural, the plural the singular, and the
words "LENDER" and "BORROWER" shall include their respective successors,
assigns, heirs, executors and administrators. If Borrower consists of more than
one person or party, the obligations and liabilities of each such person or
party shall be joint and several.
13. Except as provided in the Loan Documents, Borrower
and all others who may become liable for the payment of all or any part of the
Debt do hereby severally waive presentment and demand for payment, notice of
dishonor, protest, notice of protest, notice of nonpayment, notice of intent to
accelerate the maturity hereof and of acceleration. No release of any security
for the Debt or any person liable for payment of the Debt, no extension of time
for payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Loan Documents made by agreement between
Lender and any other person or party shall release, modify, amend, waive,
extend, change, discharge, terminate or affect the liability of Borrower, and
any other person or party who may become liable under the Loan Documents for the
payment of all or any part of the Debt.
14. The provisions of paragraph 57 of the Deed of Trust
are hereby incorporated by reference as if fully set forth herein.
15. (a) Any and all payments by Borrower to Lender
hereunder and under the other Loan Documents shall, provided that Lender
complies with the requirements of paragraph 15(c) hereof, be made free and clear
of, and without deduction for, any and all present or future taxes, levies,
imposts, deductions, charges, withholdings or liabilities with respect thereto,
except for the following, for which Borrower (and its direct or indirect members
or other constituent members or partners) shall not be responsible: (i) taxes
imposed on or measured by Lender's net income or net receipts; or (ii) franchise
taxes imposed on Lender by the jurisdiction in which (A) Lender is organized,
(B) Lender is "doing business" (unless such determination of "doing business" is
made solely as a result of Lender's interest in the Loans and the security
therefor), or (C) Lender's applicable lending office is located (all such taxes,
levies, imposts, deductions, charges or withholdings and liabilities (except
those described in the foregoing clauses (i) and (ii)) being hereinafter
referred to as "LOAN TAXES"). If Borrower shall be required by law to deduct or
withhold any Loan Taxes from or in respect of any sum payable hereunder or under
any other Loan Document, then (1) any such sum payable hereunder or under any
other Loan Document shall be increased as may be necessary so that after making
all required deductions or withholdings (including deductions applicable to
additional sums payable under this paragraph 15), Lender receives an amount
equal to the sum it would have received had no such deductions or withholdings
(including deductions applicable to additional sums payable under this paragraph
15) been made, (2) Borrower shall make such deductions or withholdings, and (3)
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable law. Borrower (but not its direct or
indirect members or other constituent members or partners) will indemnify Lender
for the full amount of any Loan Taxes (including, without limitation, any Loan
Taxes (as well as taxes described in clauses (i) and (ii) of the second
preceding sentence) imposed by any jurisdiction on any amounts payable under
11
this paragraph 15) paid or payable by Lender and any liability (including,
without limitation, penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Loan Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability delivered
to Borrower by Lender shall be conclusive absent manifest error. The agreements
and obligations of Borrower contained in this paragraph 15 shall survive the
payment in full of principal and interest under this Note.
(b) Within thirty (30) days after the date of any payment
of Loan Taxes withheld by Borrower in respect of any payment to Lender, Borrower
will furnish to Lender the original or a certified copy of a receipt or other
evidence satisfactory to Lender evidencing payment thereof.
(c) If Lender is a U.S. Person (other than the Lender
originally named herein), Lender shall deliver to Borrower, upon request, a Form
W-9 (unless it establishes to the reasonable satisfaction of Borrower that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax). If Lender is not a U.S. Person, Lender shall deliver to
Borrower, upon request, (a) two duly completed and signed copies of either
Internal Revenue Service Form W-8BEN (claiming an exemption from or a reduction
in United States withholding tax under an applicable treaty) or its successor
form or Form W-8ECI (claiming an exemption from United States withholding tax as
effectively connected income) or its successor form and related applicable
forms, as the case may be; or (b) in the case of a foreign Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and that cannot
comply with the requirements of clause (a) above, (x) a statement to the effect
that such Lender is eligible for a complete exemption from withholding of United
States Taxes under Section 871(h) or 881(c) of the Code, and (y) two duly
completed and signed copies of Internal Revenue Service Form W- 8BEN or
successor and related applicable forms. If Lender is not a U.S. Person, Lender
further undertakes to deliver to Borrower additional forms described in clause
(a) or (b) of the preceding sentence (or any successor forms) or other manner of
certification, as the case may be, (A) on or before the date that any such form
expires or becomes obsolete, (B) after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower, and (C)
such extensions or renewals thereof as may reasonably be requested by Borrower,
certifying that Lender is entitled to receive payments hereunder without
deduction or withholding of any Loan Taxes. However, in the event that any
change in law, rule, regulation, treaty or directive, or in the interpretation
or application thereof (a "LAW CHANGE"), has occurred prior to the date on which
any delivery pursuant to the preceding sentence would otherwise be required
which renders such form inapplicable, or which would prevent Lender from duly
completing and delivering any such form, or if such Law Change results in Lender
being unable to deliver a Form W-9 (or other satisfactory evidence that it is
otherwise eligible for an exemption from backup withholding tax or other
withholding tax), Lender shall not be obligated to deliver such forms but shall,
promptly following such Law Change, but in any event prior to the time the next
payment hereunder is due following such Law Change, advise Borrower in writing
whether it is capable of receiving payments without any deduction or withholding
of Loan Taxes. In the event of such Law Change, Borrower shall have the
obligation to make Lender whole and to "gross-up" under paragraph 15(a) hereof,
despite the failure by Lender to deliver such forms.
(d) If Lender receives a refund in respect of Loan Taxes
paid by Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to
12
paragraph 15(a) hereof in connection with such refunded Loan Taxes, to Borrower;
provided, however, that Borrower agrees to promptly return such refund to Lender
if it receives notice from Lender that it is required to repay such refund.
Nothing contained herein shall be construed to require Lender to seek any refund
and Lender shall have no obligation to Borrower to do so.
(e) All amounts payable under this paragraph 15 shall
constitute additional interest hereunder and shall be secured by the Deed of
Trust and the other Loan Documents. The provisions of this paragraph 15 shall
survive any payment or prepayment of the Loans and any foreclosure or
satisfaction of the Deed of Trust.
16. Borrower represents that Borrower has full power,
authority and legal right to execute, deliver and perform its obligations
pursuant to the Notes, the Deed of Trust and the other Loan Documents and that
the Notes, the Deed of Trust and the other Loan Documents constitute valid and
binding obligations of Borrower subject only to bankruptcy laws, general
principals of equity, insolvency, reorganization, arrangement, moratorium,
receivership or other similar laws relating to or affecting the rights of
creditors.
17. All notices or other communications required or
permitted to be given pursuant hereto shall be given in the manner specified in
the Deed of Trust directed to the parties at their respective addresses as
provided therein.
18. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES 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 IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
19. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THIS NOTE 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, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY
13
INTERESTS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS NOTE, AND THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION
TRUST COMPANY, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 MAILED OR DELIVERED TO
BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND 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.
20. Application of Payments. This Note together with
Substitute Promissory Note B-1 is Note B referred to in the Deed of Trust.
Unless otherwise expressly provided in this Note or elected by Lender, payments
made by Borrower in respect of the principal and interest of the Loans shall be
applied as follows:
14
(a) first, to accrued and unpaid interest due on
Substitute Promissory Note A-1 and Substitute
Promissory Note A-2, pro rata, until the interest due
thereon has been paid in full;
(b) second, to accrued and unpaid interest due on this
Note and Substitute Promissory Note B-1, pro rata,
until the interest due thereon has been paid in full;
(c) third, to the principal balance of Substitute
Promissory Note A-1 and Substitute Promissory Note
A-2, pro rata, until the principal due thereon has
been paid in full; and
(d) fourth, to the principal balance of this Note and
Substitute Promissory Note B-1,pro rata, until the
principal due thereon has been paid in full.
21. Borrower, and by its acceptance hereof, Lender,
agrees that this Note is made by Borrower and accepted by Lender, pursuant to
that certain Note Splitter Agreement, Modification of Loan Documents and
Reaffirmation of Guaranty dated the date hereof, together with Substitute
Promissory Note B-1, in substitution and replacement of that certain Deed of
Trust Note B made by Borrower in favor of Lender in the original principal
amount of $65,312,000.00, dated June 26, 2003 ("ORIGINAL NOTE"), on which
Original Note there is now outstanding the aggregate principal amount of
$65,312,000.00 and Borrower, and by its acceptance hereof, Lender, agrees that
this Note, together with Substitute Promissory Note B-1, evidences the same
indebtedness evidenced by the Original Note and does not create or evidence any
new or additional indebtedness.
[NO FURTHER TEXT ON THIS PAGE]
15
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed and delivered as of the day and year first above written.
BORROWER:
NORTH TOWER, LLC,
a Delaware limited liability company
By: North Tower Manager, LLC,
a Delaware limited liability company,
its Principal Manager
By: ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd.,
a California limited partnership,
its Administrative Agent
By: ▇▇▇▇▇▇▇ Partners BGHS, LLC,
a California limited liability company,
its general partner
By: ▇▇▇▇▇▇▇ Partners SCS, Inc.,
a California corporation
its manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President