EXHIBIT 10
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BUILDING LOAN AGREEMENT
dated as of April 17, 2001
among
FRIT SAN ▇▇▇▇ TOWN AND COUNTRY VILLAGE, LLC,
SAN ▇▇▇▇ RESIDENTIAL, INC. AND STREET RETAIL, INC.,
jointly and severally, as Borrower,
COMMERZBANK AG, NEW YORK BRANCH,
as Lender and Administrative Agent,
FLEET NATIONAL BANK,
as Lender and Syndication Agent,
BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH,
as Lender and Documentation Agent
and
THE OTHER LENDERS NAMED HEREIN,
as Lenders
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LOCATION OF PREMISES:
San ▇▇▇▇, Santa ▇▇▇▇▇ County, California
BUILDING LOAN AGREEMENT ("this Agreement") dated as of April 17, 2001 by
and among FRIT San ▇▇▇▇ Town and Country Village, LLC, a California limited
liability company ("FRIT LLC"), San ▇▇▇▇ Residential, Inc., a Maryland
corporation ("SJR") and Street Retail, Inc., a Maryland corporation (SRI; FRIT
LLC, SJR and SRI, hereinafter, jointly and severally, "Borrower"), Commerzbank
AG, New York Branch (in its individual capacity and not as Administrative Agent,
"Commerz"), Fleet National Bank ("Fleet"), Bayerische Hypo- und Vereinsbank AG,
New York Branch ("HVB") and the other lenders who are signatories to this
Agreement (Commerz, Fleet, HVB, the other Lenders who are signatory to this
Agreement and each other lender who may become a Lender pursuant to Section
3.05, Section 7.20 or Section 8.12, each, a "Lender" and collectively,
"Lenders") and Commerzbank AG, New York Branch, as Administrative Agent for
Lenders (together with its successors in such capacity, "Administrative Agent").
Borrower desires that Lenders extend credit as provided herein, and Lenders
are prepared to extend such credit on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, Borrower, Administrative Agent and Lenders hereby agree as
follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
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Section 1.01 Definitions. The following terms, as used herein, shall
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have the following meanings:
"Additional Costs" -- Any costs, losses or expenses actually incurred by any
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Lender which it determines are attributable to its making or maintaining
its Pro Rata Share of the Loan, or its obligation to make any Loan
advances, or any reduction in any amount receivable by any Lender under the
Loan or its Note.
"Administrative Agent's Office" -- Administrative Agent's Office as set forth on
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the signature page of this Agreement, or such other address in the United
States as Administrative Agent may designate by notice to Borrower and
Lenders.
"Affected Lender" -- Has the meaning specified in Section 3.05.
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"Affiliate" -- With respect to any Person (the "first Person"), any other Person
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(i) which directly or indirectly controls, or is controlled by, or is under
common control with, the first Person or (ii) 10% or more of the beneficial
interest in which is directly or indirectly owned or held by the first
Person. The term "control" means the possession, directly or indirectly,
of the power, alone, to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities,
by contract, or otherwise.
"Agents" -- Collectively, Commerz, Fleet and HVB.
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"Agents' Response Period" -- Has the meaning given to such term in Section 8.25.
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"Allocated Amounts" -- The amounts to be reasonably allocated by the Required
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Lenders to various portions of the Premises (other than the Excess Land) on
a cost basis at the time of the release of such portions as contemplated by
Section 8.24.
"Applicable Lending Office" -- For each Lender and for the portions of the
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outstanding principal balance under its Note bearing interest at the Prime
Based Rate or the LIBO Based Rate, as applicable, the lending office of
such Lender (or of an Affiliate of such Lender) designated as such on the
signature page hereof or in the applicable Assignment and Assumption
Agreement, or such other office of such Lender (or of an Affiliate of such
Lender) as such Lender may from time to time specify to Administrative
Agent and Borrower as the office by which the portions of the outstanding
principal balance under its Note bearing interest at the Prime Based Rate
or the LIBO Based Rate, as applicable, are to be made and maintained.
"Applicable Margin" -- With respect to the Prime Based Rate, 0.375% per annum;
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and with respect to the LIBO Based Rate, 2.125% per annum, subject, in each
case, to reduction in accordance with Section 2.20.
"Assignee" -- Has the meaning specified in Section 8.12.
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"Assignment and Assumption Agreement" -- An Assignment and Assumption Agreement,
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substantially in the form of EXHIBIT E, pursuant to which a Lender assigns
and an Assignee assumes rights and obligations in accordance with Section
8.12.
"Association" -- Has the meaning specified in the Mortgage.
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"Authorization Letter" -- A letter from Borrower to Administrative Agent in the
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form of EXHIBIT I setting forth, among other things, the name of each
individual authorized to execute Requisitions hereunder on Borrower's
behalf.
"Book Store Lease" -- A lease between Borrower, as landlord, and either ▇▇▇▇▇▇ &
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Noble or Border's (or a replacement tenant acceptable to the Required
Lenders), as tenant, covering no less than 20,000 SFGLA of the Retail
Improvements.
"Borrower's Accountants" - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other accounting firm
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selected by Borrower and reasonably acceptable to Administrative Agent.
"Borrower's Architects" -- BAR Architects (as to Buildings 3, 4 and 6) and ▇▇▇▇▇
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& ▇▇▇▇▇▇▇ International (as to Buildings 7 and 8), as the architects and/or
engineers responsible for preparing the Plans and supervising construction
of the Improvements, and any successors engaged with Administrative Agent's
consent.
"Building" -- Each of the separate buildings to be constructed on portions of
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the Premises as part of the Improvements and designated by number on the
Plans.
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"Building 5 Declaration" - The Declaration for Building Parcel 5 - ▇▇▇▇▇▇▇ Row,
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dated as of March 21, 2001, between FRIT LLC and the Hotel Operator.
"Building 5/Hotel Construction Contract" - Collectively, one or more
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construction contracts between the Hotel Operator and General Contractor
providing for the construction of the Hotel and the Building 5 Retail
Shell.
"Building 5 Retail Shell - Has the meaning specified in Section 8.32.
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"Building Loan Trust Account" -- A separate non-interest bearing bank account
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with the Depositary Bank which shall (i) not be drawn upon except to pay
Direct and Indirect Costs approved by Administrative Agent, (ii) be the
depository for all advances made to Borrower hereunder and (iii) be
established so that Administrative Agent receives, or is entitled to
receive upon request, from the Depositary Bank, duplicate copies of regular
monthly statements of all deposits and withdrawals.
"Business Day" -- Any day on which commercial banks are not authorized or
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required to close in New York City; and, whenever such day relates to a
LIBOR Amount, an Interest Period with respect to a LIBOR Amount, or notice
with respect to a LIBOR Amount, any such day in which dealings in Dollar
deposits are also carried out in the London interbank market and banks are
open for business in London.
"Change Orders" -- Any amendments or modifications to the Plans, General
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Contract or Major Subcontracts.
"Code" -- The Internal Revenue Code of 1986.
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"Collateral Assignments" -- Collectively, the FRIT Collateral Assignment and the
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FRIT LLC Collateral Assignment.
"Commitment Amount" -- At any time, the sum of the Principal Amount plus the
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remaining undisbursed amount, if any, of the Loan Amount.
"Completion Costs Guaranty" -- The Completion Costs Guaranty in respect of the
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Loan dated the date hereof, from Guarantor to Lenders.
"Completion Date" - April 1, 2003.
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"Construction Consultant" -- ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc., or other firm designated by
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Administrative Agent.
"Crate & Barrel Lease" -- A lease between Borrower, as landlord, and Euromarket
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Design, Inc. (or a replacement tenant acceptable to the Required Lenders),
as tenant, covering approximately 40,000 SFGLA of the Retail Improvements
in Building 1.
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"Debt Service Coverage" -- As of any date of determination, the quotient of (i)
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Net Operating Income as of the end of the most recently ended calendar
quarter, divided by (ii) Hypothetical Annual Debt Service as of the date of
determination.
"Declaration" - Has the meaning specified in the Mortgage.
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"Default" -- Any event or circumstance which, with the giving of notice or the
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passage of time, or both, would become an Event of Default.
"Default Rate" -- A rate equal to (i) with respect to those portions of the
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Principal Amount bearing interest at the Prime Based Rate, the Prime Based
Default Rate and (ii) with respect to LIBOR Amounts, a fixed rate of 3% per
annum in excess of the LIBO Based Rate in effect thereon at the current
Interest Period therefor and, thereafter, the Prime Based Default Rate.
"Delinquency Amount"; "Delinquency Notice"; "Delinquent Lender" -- Have the
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respective meanings specified in Section 7.16.
"Depositary Bank" - First Union National Bank.
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"Direct and Indirect Cost Statement" -- A statement, in the form of SCHEDULE I
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(or such other form as Administrative Agent may approve), of Direct Costs
and Indirect Costs incurred and to be incurred, trade by trade, to be
prepared by the General Contractor or Borrower and submitted to
Administrative Agent as part of each Requisition.
"Direct Costs" -- The aggregate costs of all labor, materials, equipment,
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fixtures and furnishings necessary for completion of the Improvements.
"Direct Costs Loan"; "Indirect Costs Loan" -- That portion of the Loan Amount
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applicable and equal to the sum of the Loan Budget Amounts for Direct Costs
and Indirect Costs, respectively, shown on the Project Cost Statement.
"Documentation Agent" -- HVB.
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"Dollars" and "$" -- Lawful money of the United States.
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"Electing Lender"; "Election Notice"; "Election Period" -- Have the respective
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meanings specified in Section 7.16.
"Eligible Assignee" -- Any (i) commercial bank, savings and loan association or
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savings bank organized under the Laws of the United States or any State
thereof, and having total assets in excess of $1,000,000,000; (ii) bank
(whether privately owned, publicly traded or government sponsored)
organized under the Laws of any other country or political subdivision
thereof, and having total assets in excess of $1,000,000,000; (iii) finance
company, insurance company or other financial institution that is engaged
in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business, and having assets in
4
excess of $1,000,000,000; or (iv) fund that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary
course of its business, and having assets in excess of $100,000,000.
"Employee Benefit Plan" -- Any employee benefit or other plan established or
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maintained, or to which contributions have been made, by Borrower or
Guarantor.
"ERISA" -- The Employee Retirement Income Security Act of 1974, including the
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rules and regulations promulgated thereunder.
"ERISA Affiliate" -- Any corporation which is a member of the same controlled
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group of corporations (within the meaning of Section 414(b) of the Code) as
Borrower and/or Guarantor, or any trade or business which is under common
control (within the meaning of Section 414(c) of the Code) with Borrower
and/or Guarantor, or any organization which is required to be treated as a
single employer with Borrower and/or Guarantor under Section 414(m) or
414(o) of the Code.
"Event of Default" -- Has the meaning given to such term in the Mortgage.
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"Excess Land" -- Those portions of the Premises consisting of an approximately
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0.5-acre portion of the lot upon which Building 3 is to be constructed and
an approximately 2.5-acre portion of the lot upon which Building 8 is to be
constructed, which portions are approximately delineated on EXHIBIT K, on
which none of the Improvements are to be constructed and which are intended
to be developed as the Phase II Development.
"Federal Funds Rate" -- For any day, the rate per annum equal to the weighted
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average of the rates on overnight federal funds transactions as published
by the Federal Reserve Bank of New York for such day, provided that (i) if
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such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the immediately preceding Business Day
as so published on the next succeeding Business Day and (ii) if no such
rate is so published for any day, the Federal Funds Rate for such day shall
be the average of the rates quoted by three (3) Federal Funds brokers to
Administrative Agent on such day on such transactions.
"Financial Statements" -- Statements of the assets, liabilities (direct or
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contingent), income, expenses and cash flow of Borrower and Guarantor,
prepared in accordance with GAAP.
"FRIT Collateral Assignment" -- The Collateral Assignment of Note and Deed of
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Trust, dated the date hereof, by Guarantor assigning the FRIT Deed of
Trust, together with the notes secured thereby, to Administrative Agent,
for the benefit of Lenders, as additional security for the payment and
performance of Borrower's obligations under the Loan.
"FRIT Deed of Trust" - The deed of trust, in the original principal amount of
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$4,250,000, dated as of November 3, 1998, as amended and increased to
$5,250,000 by an
5
Agreement Supplementing Deed of Trust, Security Agreement and Fixture
Filing (with Assignment of Rents and Leases), dated as of October 12, 2000,
as further amended by Partial Reconveyance dated February 22, 2001, and as
further amended by an Agreement Modifying Deed of Trust, dated as of
February 23, 2001, currently held by Guarantor on the fee interest of the
landlord under the Ground Lease in the Ground Lease Parcel, which Deed of
Trust Agreement Supplementing Deed of Trust, Partial Reconveyance and
Agreement Modifying Deed of Trust were recorded in the Office of the Santa
▇▇▇▇▇ County Recorder as Documents Nos. 14478448, 15421095, 15570306 and
15570305, respectively.
"FRIT LLC Collateral Assignment" -- The Collateral Assignment of Note and Deed
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of Trust, dated the date hereof, by FRIT LLC assigning the FRIT LLC Deed of
Trust, together with the note secured thereby, to Administrative Agent, for
the benefit of Lenders, as additional security for the payment and
performance of Borrower's obligations under the Loan.
"FRIT LLC Deed of Trust" -- The Deed of Trust and Assignment of Rents in the
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principal amount of $11,700,000, dated as of March 3, 1997, by SJR for the
benefit of FRIT LLC encumbering the property more particularly described
therein, which was recorded in the Office of the Santa ▇▇▇▇▇ County
Recorder as Document No. 13629698, as amended by an unrecorded First
Amendment to Deed of Trust, dated ________, 1997, between FRIT LLC and SJR,
as further amended by Partial Reconveyance, dated February 22, 2001,
recorded in said Office as Document No. 15570308, as further amended by
Agreement Modifying Deed of Trust, dated as of February 23, 2001, between
SJR and FRIT LLC, recorded in said Office as Document No. 15570307, and as
further amended by Partial Reconveyance, dated March 26, 2001, recorded in
said Office as Document No. 15607384.
"GAAP" -- Generally accepted accounting principles in the United States as in
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effect from time to time and consistently applied.
"General Contract" -- A guaranteed maximum price contract (together with all
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riders, addenda and other instruments referred to therein as "contract
documents") between Borrower and the General Contractor which requires the
General Contractor to provide, or supervise or manage the procurement of,
substantially all labor and materials needed for completion of the
Improvements (other than the Building 5 Retail Shell, which will be covered
by the Building 5/Hotel Construction Contract).
"General Contractor" -- Bovis Lend Lease, Inc.
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"Good Faith Contest" - The contest of an item if (i) the item is diligently
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contested in good faith by proceedings timely instituted, (ii) adequate
reserves are established with respect to the contested item, (iii) during
the period of such contest, the enforcement of any contested item is
effectively stayed and (iv) the failure to pay or comply with the contested
item during the period of the contest is not likely to
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have an adverse effect on (x) the Mortgaged Property or any part thereof or
on Lenders' interest therein or (y) the ability of Borrower to perform its
obligations under the Loan Documents.
"Governmental Authorities" -- The United States, the State of California and any
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political subdivision, agency, department, commission, board, bureau or
instrumentality of either of them, including any local authorities, which
exercises jurisdiction over Borrower, Guarantor, the Premises or the
Improvements.
"Ground Lease"; "Ground Lease Parcel" -- The Lease, dated November 3, 1998,
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between Retail Portfolio San ▇▇▇▇ LLC, as landlord, and SRI, as tenant, as
amended by letter agreement between them dated November 3, 1998, by
Amendment to Ground Lease, dated February 23, 2001 and by that certain
Agreement of Purchase and Sale, dated as of October 10, 2000, between said
landlord, as seller, and SRI, as buyer, as amended by Amendment to
Agreement of Purchase and Sale, dated February 23, 2001 (a memorandum of
which Lease, dated November 3, 1998, was recorded on November 3, 1998 in
the Office of the Santa ▇▇▇▇▇ County Recorder as Document No. 14478447,
which memorandum was amended by Amended and Restated Memorandum of Lease
dated as of February 23, 2001, recorded in said Office as Document No.
15570309); that portion of the Premises covered by the Ground Lease, which
portion is identified as Parcel III on Schedule A to the Mortgage and
formerly known as ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"Guarantor" -- Federal Realty Investment Trust, a Maryland real estate
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investment trust.
"Guaranty" -- Collectively, the Completion Costs Guaranty and the Payment
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Guaranty.
"Hazardous Materials" -- Has the meaning given to such term in the Mortgage.
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"Hotel" -- The approximately 214 - room hotel to be constructed and operated by
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the Hotel Operator above the Retail Improvements in Building 5.
"Hotel Lease" - The Hotel ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ Row Lease Agreement, dated as of
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March 21, 2001, between FRIT LLC, as Lessor, and the Hotel Operator, as
Lessee.
"Hotel Operator" - ▇▇▇▇▇▇▇ Row Hotel Partners L.P., a Texas limited partnership.
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"Hypothetical Annual Debt Service" -- For any date of determination, an amount
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equal to the greatest of (i) the constant annual payment of principal plus
interest required to fully amortize, over a term of thirty (30) years, a
hypothetical loan in an amount equal to the Commitment Amount as of such
date of determination, assuming such loan were to bear interest at a rate
equal to 1.75% per annum in excess of the percentage yield to maturity of
the then "on-the-run" ten (10)-year United States Treasury Note, (ii) 9.25%
of the Commitment Amount as of the date of determination or (iii) the sum
of the annualized interest (based on the weighted average actual interest
rate under the Notes as of such date of determination) on a hypothetical
loan in an amount equal to the Commitment
7
Amount plus scheduled principal actually payable on the Loan for the
succeeding twelve (12)-month period as of such date of determination.
"Improvements" -- A first-class, mixed-use retail/residential development
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consisting of the Retail Improvements and the Residential Improvements,
together with on-site parking structures containing approximately 1,473
spaces (i.e., a 226-space parking garage under Buildings 4 and 6 and 1,247
- -
spaces in and around Building 7), various driveways, roadways and open
parks, plazas and courtyard market areas, and the off-site improvements
described on EXHIBIT L (it being understood that the Tenant-Constructed
Improvements and Hotel do not constitute part of the "Improvements").
"Indemnity" -- An agreement from Borrower and Guarantor whereby, among other
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things, Administrative Agent and Lenders are indemnified regarding
Hazardous Materials.
"Indirect Costs" -- All costs of acquisition of the Premises and completion of
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the Improvements other than Direct Costs, including but not limited to,
architects' and attorneys' fees, ground rents, interest, real estate taxes,
survey costs and insurance premiums.
"Individual Loan Commitment" -- With respect to each Lender, the amount set
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forth below opposite the name of such Lender (subject to change in
accordance with the terms of this Agreement):
Lender Individual Loan Commitment
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Commerz $
Fleet
HVB
MidFirst Bank
Bayerische Landesbank,
Cayman Islands Branch
Landesbank Hessen-Thuringen
Girozentrale, New York Branch
Bank of Montreal
"Initial Advance" -- The first advance of Loan proceeds to be made hereunder.
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"Interest Period" -- The period during which interest at the LIBO Based Rate,
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determined as provided in this Agreement, shall be applicable to the LIBO
Rate Request Amount in question, provided, however, that each such period
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shall be either one (1), two (2), three (3) (or, if available, six (6) or
twelve (12)) months, which shall be measured from the date specified by
Borrower in each LIBO Rate Request for
8
the commencement of the computation of interest at the LIBO Based Rate, to
the numerically corresponding day in the calendar month in which such
period terminates (or, if there be no numerical correspondent in such
month, or if the date selected by Borrower for such commencement is the
last Business Day of a calendar month, then the last Business Day of the
calendar month in which such period terminates, or if the numerically
corresponding day is not a Business Day then the next succeeding Business
Day, unless such next succeeding Business Day enters a new calendar month,
in which case such period shall end on the next preceding Business Day) and
in no event shall any such period extend beyond the Maturity Date.
"Law" -- Any federal, state or local law, statute, rule, regulation, ordinance,
---
order, decree, directive, requirement, code, notice of violation or rule of
common law, now or hereafter in effect, and in each case as amended, and
any judicial or administrative interpretation thereof by a Governmental
Authority or otherwise, including any judicial or administrative order,
determination, consent decree or judgment.
"Lender Reply Period" -- Has the meaning specified in Section 8.11.
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"Lenders' Counsel" -- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, 1301 Avenue of the Americas, New
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York, New York 10019-6092.
"LIBO Based Rate" -- With respect to any LIBOR Amount, the rate per annum
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(expressed as a percentage) determined by Administrative Agent to be equal
to the sum of (i) the quotient of the LIBO Rate for the LIBOR Amount and
Interest Period in question divided by [1 minus the Reserve Requirement]
(at Administrative Agent's option, rounded up, if necessary, to the nearest
1/100 of 1%) and (ii) the Applicable Margin.
"LIBO Rate" -- The rate per annum (at Administrative Agent's option, rounded up,
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if necessary, to the nearest 1/32 of 1%) that appears on Dow ▇▇▇▇▇ Page
3750 at approximately 11:00 a.m. (London time) on the date (the "LIBOR
Determination Date") two (2) Business Days prior to the first day of the
applicable Interest Period, for amounts comparable to the LIBO Rate Request
Amount for the same period of time as the Interest Period selected by
Borrower in the LIBO Rate Request; or, if such rate does not appear on Dow
▇▇▇▇▇ Page 3750 as of approximately 11:00 a.m. (London time) on the LIBOR
Determination Date, the rate (at Administrative Agent's option, rounded up,
if necessary, to the nearest 1/32 of 1%) for deposits in Dollars for a
period comparable to the applicable Interest Period that appears on the
Reuters Screen LIBO Page as of approximately 11:00 a.m. (London time) on
the LIBOR Determination Date. If such rate does not appear on either Dow
▇▇▇▇▇ Page 3750 or on the Reuters Screen LIBO Page as of approximately
11:00 a.m. (London time) on the LIBOR Determination Date, the LIBO Rate for
the Interest Period will be determined on the basis of the offered rates
for deposits in Dollars for an amount comparable to the LIBO Rate Request
Amount for the same period of time as such Interest Period that are
9
offered by four (4) major banks in the London interbank market at
approximately 11:00 a.m. (London time) on the LIBOR Determination Date.
Administrative Agent will request that the principal London office of each
of the four (4) major banks provide a quotation of its Dollar deposit
offered rate. If at least two (2) such quotations are provided, the LIBO
Rate will be the arithmetic mean of the quotations. If fewer than two (2)
quotations are provided as requested, the LIBO Rate will be determined on
the basis of the rates quoted for loans in Dollars to leading European
banks for amounts comparable to such LIBO Rate Request Amount for the same
period of time as such Interest Period offered by major banks in New York
City at approximately 11:00 a.m. (New York time) on the LIBOR Determination
Date. In the event that Administrative Agent is unable to obtain any such
quotation as provided above, it will be deemed that the LIBO Rate cannot be
determined. For purposes of the foregoing definition, "Dow ▇▇▇▇▇ Page 3750"
means the display designated as "Page 3750" on the Dow ▇▇▇▇▇ Markets
Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association
as the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for Dollar deposits); and "Reuters
Screen LIBO Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying interbank rates
from London in Dollars).
"LIBO Rate Request" -- Borrower's telephonic notice (to be promptly confirmed in
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writing), to be received by Administrative Agent by 12 Noon (New York time)
four (4) Business Days prior to the date specified in the LIBO Rate Request
for the commencement of the Interest Period (which specified date must be a
Business Day), of (a) its intention to have (i) all or any portion of the
Principal Amount which is not then the subject of an Interest Period (other
than an Interest Period which is terminating on the Business Day specified
in the notice) and/or (ii) all or any portion of any advance of proceeds of
the Loan evidenced by the Notes which is to be made on the Business Day
specified in the notice, bear interest at the LIBO Based Rate and (b) the
Interest Period desired by Borrower in respect of the amount specified.
"LIBO Rate Request Amount" -- The amount, to be specified by Borrower in each
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LIBO Rate Request, which Borrower desires bear interest at the LIBO Based
Rate and which shall in no event be less than $1,000,000 and which, at
Administrative Agent's option, shall be an integral multiple of $100,000.
"LIBOR Amount" -- Each portion of the Principal Amount bearing interest at the
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LIBO Based Rate pursuant to a particular LIBO Rate Request.
"Loan" -- The Direct Costs Loan and Indirect Costs Loan, collectively, and in an
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amount initially equal to the Loan Amount.
"Loan Amount" -- $295,000,000.
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"Loan Budget Amounts" -- The portion of the Loan Amount set forth in Column D on
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the Project Cost Statement to be advanced for each category of Direct and
Indirect Costs.
"Loan Documents" -- This Agreement, the Notes, the Mortgage, the Guaranty, the
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Indemnity, the Collateral Assignments, the Authorization Letter, the
assignment required by Section 6.20, the assignment of letters of credit
required by paragraph (24) of Section 4.01(a), Uniform Commercial Code
financing statements in respect of the Mortgaged Property, and any other
collateral given as security for the Loan, and any other documents which
evidence or secure the Loan.
"Major Subcontractor"; "Major Subcontract" -- Any subcontractor or supplier
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engaged by the General Contractor and any contractor or supplier engaged by
Borrower, under one or more contracts or work orders aggregating $2,500,000
or more; any such contract or work order.
"Material Adverse Change" -- Either (i) a material adverse change in the status
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of the business, results of operations, financial condition, property or
prospects of Borrower or Guarantor or (ii) any event or occurrence of
whatever nature which is likely to (x) have a material adverse effect on
the ability of Borrower or Guarantor to perform their respective
obligations under the Loan Documents or (y) create, in the sole and
absolute judgment (reasonably exercised) of Administrative Agent, a
material risk of sale or forfeiture of any of the Mortgaged Property or
otherwise materially impair the Mortgaged Property or Lenders' rights
therein.
"Maturity Date" - April 17, 2004, subject to extension in accordance with
-------------
Section 2.18.
"Minimum Rental Advance Amount" -- The sum of: (i) the product of $38.70
-----------------------------
multiplied by 45% of the amount of SFGLA in the Retail Improvements plus
(ii) the actual annual rent being paid by any tenant pursuant to a
Qualifying Lease providing for Tenant-Constructed Improvements. For
example, assuming the total SFGLA of the Retail Improvements is 535,922 and
there is one tenant with a Qualifying Lease covering 30,000 SFGLA that is
required to construct Tenant-Constructed Improvements, receives no
allowance from Borrower and is obligated to pay $500,000 per year of base
rent, the Minimum Rental Advance Amount would be $8,672,085.50, calculated
as follows:
($38.70 X [(.45 X 535,922) - 30,000]) + $500,000 = $8,672,085.50
"Mortgage" -- The Deed of Trust, Assignment of Leases and Rents and Security
--------
Agreement with Fixture Filing, dated the date hereof, made by Borrower for
the benefit of Administrative Agent, as agent for Lenders, to secure the
payment and performance of Borrower's obligations hereunder, under the
Notes and otherwise in respect of the Loan, including any sums in addition
to the Loan Amount advanced by Lenders for completion of the Improvements.
"Mortgaged Property" -- The Premises and other property constituting the
------------------
"Mortgaged Property", as said quoted term is defined in the Mortgage.
11
"Multiemployer Plan" -- Any plan defined as such in Section 3(37) of ERISA.
------------------
"Net Operating Income" -- For any date of determination, an amount equal to:
--------------------
(a) all revenues of Borrower from the operation of the Premises and
Improvements during the applicable period set forth below, on an actual or
pro-forma basis as specified below, determined on a cash basis, including
all rental and other payments, including, without limitation, base rent,
additional rent, promotional revenues, percentage rent, parking rental and
payments for common area maintenance, taxes, insurance and operating
expenses, and excluding tenant security deposits collected but not applied
to tenants' obligations and interest on such deposits (to the extent such
interest is required to be returned to any tenant under an applicable lease
or rental agreement or under applicable Law); in the case of any date of
determination falling (x) during the Pre-Operating Period, the amount of
such revenues shall be a pro-forma amount based upon rents estimated to be
payable during the twelve (12)-month period commencing with the
determination date under signed Qualifying Leases and Residential Leases,
plus other estimated contractual revenue from the Premises and Improvements
approved by Administrative Agent during such twelve (12)-month period, (y)
during the Transition Period, the amount of such revenues shall be computed
as the sum of (A) actual revenues (other than revenues from Residential
Leases) from the Opening Date until the date of determination, (B) with
respect to any tenant from whom there were actual revenues included
pursuant to clause (A) above but who had free rent or a rent abatement for
any portion of the time from the Opening Date until the date of
determination (and which free rent or abatement period completely expired
before the date of determination), an amount equal to such rent abatement
or free rent for such tenant from the Opening Date until the date of
determination, (C) pro-forma revenues, based upon rent estimated to be
payable during the period from the date of determination until the first
anniversary of the Opening Date under Qualifying Leases pursuant to which
tenants are in occupancy and paying rent as of the determination date, (D)
pro-forma revenue from signed Residential Leases, based upon the rent
estimated to be payable under such Residential Leases during the twelve
(12)-month period commencing with the date of determination, and (E) other
estimated contractual revenue from the Premises and Improvements approved
by Administrative Agent during the period from the date of determination
through the first anniversary of the Opening Date or (z) during the
Operating Period, the amount of such revenues shall be the sum of (A)
actual revenues (other than revenues from Residential Leases) for the
twelve (12) month period ending with the date of determination, (B) with
respect to any tenant from whom there was actual revenue pursuant to clause
(A) above but who had free rent or a rent abatement during any portion of
such twelve (12) month period (and which free rent or abatement period
completely expired before the date of determination), an amount equal to
such rent abatement or free rent for such tenant during such period and (C)
pro-forma revenue from signed Residential Leases, based upon rent estimated
to be payable under such Residential Leases during the twelve (12)-month
period commencing with the date of determination;
12
minus
-----
(b) all expenses of Borrower in connection with the operation of the
Premises and Improvements during the applicable period set forth below, on
an actual or pro-forma basis as specified below, determined in accordance
with GAAP, including insurance premiums, real estate taxes, ground rents,
promotional expenses, maintenance and repair expenses, management fees (not
to be less than 3% of gross revenues from the Premises) and any other
operational expenses, all as determined on a cash basis, plus an annual
reserve of $.10 per SFGLA of the Retail Improvements and $200 per
Residential Unit, but not including (i) debt service payable under the
Loan, (ii) that portion of the cost of any capital improvements or
equipment which will be capitalized and depreciated or amortized on
Borrower's Financial Statements, including non-cash expenses such as
depreciation and amortization, (iii) that portion of brokerage commissions
and tenant incentives (including, without limitation, tenant improvement
costs and expenses) relating to the leasing of the Premises, or portions
thereof, and legal fees relating to negotiation of leases at the Premises,
or portions thereof that are capitalized and depreciated or amortized on
Borrower's Financial Statements in accordance with GAAP, (iv) costs of
repairing or restoring the Premises or portions thereof, after fire,
casualty or condemnation, (v) interest paid by Borrower to tenants on
security deposits collected under leases of the Premises or portions
thereof, (vi) any security deposits returned by Borrower during such period
to tenants under leases of the Premises, or portions thereof and (vii)
extraordinary and non-recurring expenses; in the case of any date of
determination falling (x) during the Pre-Operating Period, the amount of
such expenses shall be a pro-forma amount equal to the estimated expenses
for the first "stabilized year" as reflected in the appraisal delivered
pursuant to paragraph (4) of Section 4.01(a); or (y) during the Transition
Period or the Operating Period, actual expenses for the calendar quarter
ending with the date of determination, annualized. For purposes of
annualizing expenses, those expenses that relate to a period greater than
three (3) months will be spread uniformly over the period to which they
relate.
As used above, "Opening Date" means the date that the Improvements are
first open for business to the public, "Pre-Operating Period" means the
period of time prior to the date three (3) months after the Opening Date,
"Transition Period" means the period of time from and including the date
three (3) months after the Opening Date through the first anniversary of
the Opening Date and "Operating Period" means the period of time following
the first anniversary of the Opening Date.
Notwithstanding the foregoing provisions of this definition, (i) in all
computations of revenue, revenue from tenants who are bankrupt will not be
included and (ii) in the case of pro-forma computations of revenue,
percentage rent will not be included.
"Non-Delinquent Lender" -- Each Lender other than the Delinquent Lender(s).
---------------------
13
"Note"; "Notes" -- Have the respective meanings specified in Section 2.10.
---- -----
"Participant"; "Participation" -- Have the respective meanings specified in
----------- -------------
Section 8.12.
"Payment Guaranty" -- The Guaranty of Payment in respect of the Loan, dated the
----------------
date hereof, from Guarantor to Lenders.
"Pension Plan" -- Any employee pension benefit plan within the meaning of
------------
Section 3(2) of ERISA with respect to which Borrower, Guarantor or any
ERISA Affiliate at any relevant time has liability or an obligation to
contribute.
"Person" -- An individual, partnership, corporation, limited liability company,
------
business trust, joint stock company, trust, unincorporated association,
joint venture or other entity of whatever nature.
"Phase II Development" -- Has the meaning specified in clause (ii) of Section
--------------------
8.24.
"Plans" -- All final drawings, plans and specifications prepared by Borrower,
-----
Borrower's Architects, the General Contractor or Major Subcontractors, and
approved by Administrative Agent and the Construction Consultant, which
describe and show the labor, materials, equipment, fixtures and furnishings
necessary for the construction of the Improvements, including all
amendments and modifications thereof made by approved (to the extent
approval is required under this Agreement) Change Orders (and also showing
minimum grade of finishes and furnishings for all areas of the Improvements
to be leased or sold in ready-for-occupancy condition).
"Premises" -- The real property owned by Borrower described on Schedule A to the
--------
Mortgage and located as indicated on the cover hereof, upon part of which
the Improvements are to be constructed.
"Premises Documents" -- The Ground Lease and any other documents defined as such
------------------
in the Mortgage.
"Prime Based Default Rate" -- The rate per annum equal to 3% in excess of the
------------------------
Prime Based Rate.
"Prime Based Rate" -- The Applicable Margin plus the greater of (i) the Federal
----------------
Funds Rate plus 1/2 of 1% per annum or (ii) the prime or base commercial
lending rate as announced from time to time by Administrative Agent at
Administrative Agent's Office, each change in said rates to be effective as
of the date of such change.
"Principal Amount" -- At any time, the aggregate outstanding principal amount of
----------------
the Notes.
14
"Pro Rata Share" -- With respect to each Lender, the ratio of such Lender's
--------------
Individual Loan Commitment to the Loan Amount. As of the date hereof, the
Lenders' respective Pro Rata Shares are as follows:
Lender Pro Rata Share (%)
------ ------------------
"Project Cost Statement" -- A statement in the form of EXHIBIT A setting forth,
----------------------
by category, the Direct and Indirect Costs of completion of the
Improvements and the Loan Budget Amounts in respect of the Direct Costs
Loan and Indirect Costs Loan.
"Qualifying Lease" -- Any fully executed lease of portions of the Retail/Tenant-
----------------
Constructed Improvements having a minimum initial term of five (5) years,
under which there exists, as of any date of determination, no material
default, and which (i) when taken together with all other Qualifying Leases
(excluding ground leases under which Borrower does not provide a tenant
allowance), will yield a weighted average minimum rent for the first five
(5) years of the lease term equal to at least $38.70 per square foot or
(ii) is approved (or deemed to be approved) as such by Administrative Agent
or the Required Lenders, as the case may be, if such approval is required
pursuant to the terms of this Agreement.
"Regulation D"; "Regulation U" -- Regulations D and U, respectively, of the
------------ ------------
Board of Governors of the Federal Reserve System.
"Regulatory Change" -- With respect to any Lender and the charging and
-----------------
collecting of interest at the LIBO Based Rate, any change after the date
hereof in federal, state or foreign laws or regulations (including
Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying generally to the class of
banks including such Lender under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof, excluding any change the effect of which is
reflected in a change in the LIBO Based Rate.
"Release Parcel" Has the meaning specified in Section 8.24.
--------------
"Replacement Lender" -- Has the meaning specified in Section 7.20.
------------------
"Required Lenders" -- At any time, those Non-Delinquent Lenders holding at least
----------------
66-2/3% of that portion of the aggregate outstanding principal amount of
those of the Notes held by the Non-Delinquent Lenders.
"Requisition" -- A statement by or on behalf of Borrower in the form of EXHIBIT
-----------
B setting forth the amount of the Loan advance requested in each instance
and including:
(i) the Direct and Indirect Cost Statement;
15
(ii) the "Contractor's Cost Certification" in the form of EXHIBIT B-
1 or such other form (including AIA Document G702) as Administrative Agent
may approve;
(iii) "Payment Receipts/Lien Releases" from all contractors,
subcontractors or suppliers in the form of EXHIBIT B-2 or such other form
as Administrative Agent may approve;
(iv) proof of payment of all Indirect Costs covered by a previous
Requisition, provided that (a) reasonable substantiation, but not proof of
payment, shall be required for advances of the Loan Budget Amounts for
"Project Management Fees" and "Overhead and Supervision" and (b) proof of
payment shall not be required for any individual item of Indirect Costs in
an amount less than $10,000; and
(v) a Cost-to-Date Detail Report in the form of EXHIBIT B-3,
together with such other budget detail information as Administrative Agent
may reasonably request.
"Reserve Requirement" -- The rate at which reserves (including any marginal,
-------------------
supplemental or emergency reserves) are actually required to be maintained
by any Lender or any Lender's respective Participants, if any, under
Regulation D against "Euro-Currency Liabilities", as such quoted term is
used in Regulation D. Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be
maintained by any Lender or any Lender's respective Participants, if any,
by reason of any Regulatory Change against (i) any category of liabilities
which includes deposits by reference to which the LIBO Based Rate is to be
determined as provided in this Agreement or (ii) any category of extensions
of credit or other assets which includes loans the interest rate on which
is determined on the basis of rates used in determining the LIBO Rate.
"Residential Improvements" - Approximately 501 residential units (each, a
------------------------
"Residential Unit") to be located above the street-level Retail
Improvements and/or parking structures, consisting of 98 loft-style
Residential Units in Building 3, 100 loft-style Residential Units in
Building 4, 21 luxury Residential Units in Building 6, 246 flat/townhouse
Residential Units in Building 7 and 36 townhouse Residential Units in
Building 8.
"Residential Lease" -- Any fully executed lease of a Residential Unit which is
-----------------
on market or above-market terms.
"Residential Unit" -- Has the meaning specified in the definition of
----------------
"Residential Improvements" in this Section.
"Retail Improvements" -- Approximately 535,922 SFGLA of "main-street" retail
-------------------
space consisting of approximately 40,000 SFGLA in Building 1, approximately
41,331 SFGLA in Building 3, approximately 34,058 SFGLA in Building 4,
approximately 55,395 SFGLA in Building 5, approximately 51,345 SFGLA in
16
Building 6, approximately 89,034 SFGLA in Building 7, approximately 41,822
SFGLA in Building 8, approximately 93,487 SFGLA in Building 9 and a total
of approximately 89,450 SFGLA in Buildings 13 and 15 and in retail kiosks
located around Buildings 13 and 15, provided, however, that the Retail
-------- -------
Improvements shall not include any portions of such "main-street" retail
space that constitute Tenant-Constructed Improvements.
"Retail/Tenant-Constructed Improvements" -- Collectively, the Retail
--------------------------------------
Improvements and the Tenant-Constructed Improvements.
"SFGLA" -- Square feet of gross leasable area.
-----
"Stored Materials Statement" -- A statement in the form of SCHEDULE I-A which,
--------------------------
if advances are to be made for stored materials pursuant to Section 2.05,
shall be submitted with, and made a part of, the Direct and Indirect Cost
Statement.
"Substitute Lender" and "Substitution Notice" -- Have the respective meanings
----------------- -------------------
specified in Section 3.05.
"Supplemental Fee Letter" -- That certain letter agreement, dated the date
-----------------------
hereof, among Commerz, Fleet, HVB, Borrower and Guarantor, providing for,
among other things, Borrower's payment of certain fees in connection with
the Loan to and for the respective accounts of the parties specified
therein.
"Syndication Agent" -- Fleet.
-----------------
"Tenant-Constructed Improvements" - Any theater or other retail improvements to
-------------------------------
be constructed and operated by the tenant under the lease with Borrower
therefor, at the expense of such tenant.
"Title Insurer" -- First American Title Insurance Company or other issuer(s),
-------------
approved by Administrative Agent, of the title insurance policy or policies
insuring the Mortgage.
"United States" and "U.S." -- The United States of America.
------------- ----
"Vertical Subdivision" -- The airspace subdivision of the respective lots on
--------------------
which one or more of Buildings 3, 4 and 6, 5, 7, 8 and 13/15 are located
(Buildings 4 and 6 being located on the same lot) into, in the case of each
such lot that is so subdivided, two (2) or more separate legal parcels
containing, respectively, (i) portions of the Retail Improvements, (ii)
portions of the Residential Improvements, (iii) parking facilities and (iv)
in the case of the lot on which Building 13 is located, a central condensed
water system for the Improvements.
"Vertical Subdivision Documents" -- All documents effecting or relating to the
------------------------------
Vertical Subdivision, including, without limitation, any reciprocal
easement agreement for the regulation, operation, administration and
ownership of the portions of the Premises that are the subject thereof;
articles of incorporation, by-laws or other
17
organizational documents of any association formed to regulate, manage and
operate such portions of the Premises; subdivision maps and plats; deeds of
conveyance; and other documents required by the applicable subdivision
Laws, all of the foregoing to be satisfactory to Administrative Agent in
form and substance.
Section 1.02 Rules of Construction. Except as expressly provided
---------------------
otherwise, when used in this Agreement (i) "or" is not exclusive, (ii)
"hereunder", "herein", "hereof" and the like refer to this Agreement as a whole,
(iii) "Article", "Section", "Schedule" and "Exhibit" refer to Articles,
Sections, Schedules and Exhibits of this Agreement, (iv) terms defined in the
singular shall have a correlative meaning when used in the plural and vice
versa, (v) a reference to a Law includes any amendment, modification or
supplement to, or replacement of, such Law and (vi) a reference to a document
shall mean such document as the same may be amended, modified or supplemented
from time to time in accordance with its terms. The cover page and the Exhibits
and Schedules annexed hereto are incorporated as a part of this Agreement with
the same effect as if set forth in the body hereof. Any table of contents and
all captions and headings herein are for convenience only and shall not affect
the interpretation or construction hereof.
ARTICLE II
LOAN ADVANCES
-------------
Section 2.01 Advances Generally. Subject to the provisions of this
------------------
Agreement, each Lender will advance its Pro Rata Share of, and Borrower will
accept, the Loan Amount in installments as follows:
The Initial Advance will be made upon the satisfaction of the
applicable conditions set forth in Section 4.02, and all subsequent
advances shall be made monthly thereafter, upon the satisfaction of the
applicable conditions set forth in Section 4.03, in amounts which shall be
equal to the aggregate of the Direct and Indirect Costs incurred by
Borrower through the end of the period covered by the Requisition less:
----
(a) the greater of (x) 10% of such Direct Costs until such time
as the Improvements are 50% completed (as certified by the
Construction Consultant) and 0% thereafter, provided that there shall
be no retention in the case of "General Conditions" and "Contractor's
Fee" under the General Contract or in the case of tenant allowances or
tenant work not being performed by Borrower or (y) the actual
"Retained Amounts" specified on the Direct and Indirect Cost
Statement; and
---
(b) the total of the Loan advances theretofore made;
and, at the election of Administrative Agent, less any combination of the
--- ----
following further amounts:
18
(c) all or a portion of the amount by which any Direct or
Indirect Costs are or are estimated by Administrative Agent after
consultation with Borrower to be greater than the respective Loan
Budget Amounts for such costs; and/or
(d) any costs covered by the Requisition not approved, certified
or verified as provided in Section 2.02, any Indirect Costs covered by
a previous Requisition for which proof of payment (if required under
this Agreement) has not been received by Administrative Agent, and/or
any Direct Costs covered by a previous Requisition for which Payment
Receipts/Lien Releases have not been received by Administrative Agent
and the Construction Consultant.
Borrower shall use the proceeds of the Loan only for the payment of Direct
and Indirect Costs shown on a Requisition in accordance with the approved
Project Cost Statement and this Agreement. In no event shall proceeds of the
Loan be used, in whole or in part, for the purpose of purchasing or carrying
"margin stock", as such quoted term is defined in Regulation U, or in connection
with a hostile acquisition or for any illegal purpose.
The amount of each advance shall be a minimum of $1,000,000, unless the
undisbursed amount of the Loan is less than $1,000,000.
Section 2.02 Certification and Verification of Costs. Direct Costs are
---------------------------------------
to be certified by the General Contractor or Borrower's supervisor of
construction if there is no General Contractor. Verification of the monthly
progress and Direct Costs which have been incurred by Borrower from time to
time, and the estimated total Direct Costs, shall be conclusively determined by
the Construction Consultant, except that both Direct and Indirect Costs are also
subject to approval and verification by Administrative Agent from time to time.
Section 2.03 Procedures for Advances. All advances to Borrower are to
-----------------------
be made at Administrative Agent's Office. Borrower shall submit Requisitions to
Administrative Agent no later than 10:00 a.m. (New York time) on the date which
is seven (7) Business Days prior to the date the advance is to be made.
Administrative Agent, no later than four (4) Business Days prior to the date a
requested advance is to be made, shall (i) notify each Lender either by
telephone or by facsimile of the amount requested by Borrower, the amount
approved by Administrative Agent, the portion of such advance to be funded by
such Lender and the proposed date of such advance and (ii) send to each Lender
by facsimile the summary pages of Borrower's Requisition (without attachments
except for the Direct and Indirect Cost Statement). Not later than 10:00 a.m.
(New York time) on the date of each advance, each Lender shall, through its
Applicable Lending Office and subject to the conditions of this Agreement, make
the amount to be advanced by it on such day available to Administrative Agent,
at Administrative Agent's Office and in immediately available funds. The amount
so received by Administrative Agent shall, subject to the conditions of this
Agreement, be made available to Borrower, by Administrative Agent's depositing
said amount into the Building Loan Trust Account.
19
Subsequent to the making of an advance, Administrative Agent shall deliver to a
Lender, within five (5) Business Days of such Lender's request, such material
relating to the Requisition for such advance as such Lender may reasonably
request.
Section 2.04 Held-Back Amounts; Advances for Indirect Costs After
----------------------------------------------------
Completion. Amounts not advanced pursuant to paragraph (a) of Section 2.01
----------
during the course of construction of the Improvements shall be advanced upon the
satisfaction of the conditions set forth in Section 4.04. Loan Budget Amounts
for Indirect Costs not advanced prior to completion of construction of the
Improvements shall be advanced until exhausted, not more frequently than
monthly, for Indirect Costs as incurred after such completion.
Section 2.05 Stored Materials. Lenders shall not make advances of
----------------
proceeds of the Loan for building materials or furnishings not yet affixed to or
incorporated into the Improvements, except as provided in this Section. Lenders
shall make Loan Advances, in accordance with the terms of this Agreement, for
major building materials approved by Administrative Agent which are stored on
the Premises and intended to be incorporated into the Improvements pursuant to
the Plans, provided Administrative Agent shall have received (a) bills of sale
and other documentation evidencing payment in full of such materials, Borrower's
ownership thereof and the release of any right, title or lien in respect thereof
by any vendor, (b) evidence that such materials are covered by the insurance
policies required by this Agreement and are identified and protected against
loss, theft and damage in a manner acceptable to the Construction Consultant and
(c) evidence that advances made by Lenders for any materials stored on the
Premises do not, at any one time, exceed, in the aggregate, $10,000,000,
inclusive of the amount requested.
Lenders shall make Loan advances, in accordance with the terms of this
Agreement, for fully-fabricated major building materials approved by
Administrative Agent, which are stored at locations off the Premises (including
on the land owned by Borrower or its Affiliates adjacent to the Premises (the
"Neighboring Premises")) prior to their incorporation into the Improvements
pursuant to the Plans, provided that, in the case of each such advance,
Administrative Agent shall have received (i) such security agreements, financing
statements and other documents as Administrative Agent may require sufficient to
create, perfect and protect a first lien on said materials, (ii) evidence that
said materials are covered by the insurance policies required by this Agreement,
(iii) a written statement from the ▇▇▇▇▇▇ of said materials (in the event the
owner of the storage location is other than Borrower) to the effect that
Administrative Agent and the Construction Consultant may freely inspect said
materials at all reasonable times (Borrower hereby agreeing that Administrative
Agent and the Construction Consultant may freely inspect said materials stored
on the Premises or other property of Borrower at reasonable times), (iv)
evidence that advances made by Lenders for said materials stored off the
Premises do not, at any one time, exceed, in the aggregate, $10,000,000,
inclusive of the amount requested and (v) evidence that said materials stored
off the Premises in locations other than the Neighboring Premises do not exceed,
in the aggregate, $2,500,000, inclusive of the amount requested. Each request
for an advance of Loan proceeds for materials to be stored off-site shall
constitute Borrower's representation to
20
Lenders that said materials are (1) stored in a designated and secure area,
conspicuously marked to show that they are the subject of a security interest
held on behalf of Lenders, and that said materials will not be moved except in
connection with their delivery to the Premises, (2) effectively segregated from
all other materials of whatever kind located at the off-site location in
question and (3) reasonably anticipated to be incorporated into the Improvements
within one hundred twenty (120) days of the date of the advance therefor.
Borrower covenants to deliver to Administrative Agent within ten (10) days of
any such advance (x) paid bills or other documents of title which correspond to
the materials so purchased and stored off-site, (y) evidence that title to said
materials has passed to Borrower outright, and that no lien has or will be filed
or claimed by the seller in connection therewith and (z) a certificate of
Borrower to the effect that said materials are owned by Borrower outright, free
and clear of all liens other than the lien held on behalf of Lenders and that
all of the terms of this Section have been complied with (the representations
set forth above and the statements contained in such certificate shall be deemed
to be "representations and warranties" of Borrower with the same force and
effect as if they had been set forth in Article V of this Agreement and the
accuracy thereof shall be subject to independent verification by Administrative
Agent and the Construction Consultant).
Section 2.06 Contingency Advances. There shall be no advances of the
--------------------
Loan Budget Amounts for "Contingency" unless mutually agreed by Borrower and
Administrative Agent; provided, however, that, following such time as the
-------- -------
Improvements have been satisfactorily completed, lien-free, Borrower shall be
entitled to advances of said Loan Budget Amounts to the extent it has actually
incurred and paid Costs in respect of completion of the Improvements from its
own funds and in excess of amounts advanced hereunder and has provided
appropriate evidence of such payment to Administrative Agent.
Section 2.07 Reallocation of Amounts on Project Cost Statement. If at
-------------------------------------------------
any time the undisbursed balance of the Loan Budget Amount for any category of
cost shown on the Project Cost Statement (including, without limitation,
"Interest on Loan") is, in Administrative Agent's judgment, excessive, the
excess may be reallocated to any other Loan Budget Amount balance which
Administrative Agent deems to be insufficient after consultation with or upon
request of Borrower.
Section 2.08 Certain Limitations on Advances. Notwithstanding anything
-------------------------------
to the contrary contained herein, Lenders shall have no obligation to advance
any portion of the Loan Budget Amount, if any, for (a) "Tenant Work" (I) unless
Administrative Agent shall have received a copy, certified to be true and
complete, of the lease for space in the Improvements to which such Tenant Work
relates, and Administrative Agent or the Required Lenders, as the case may be,
shall have approved such lease, if such approval is required by this Agreement,
or (II) in an amount in excess of the TI Funding Amount. Notwithstanding the
foregoing, subject to satisfaction of all other conditions to funding set forth
in this Agreement, Lenders shall fund 100% of the amount requested by Borrower
for Tenant Work under the Crate & Barrel Lease as and when a request therefor is
included in a Requisition; and (b) "Interest on Loan" (i) if, when and to the
extent that Administrative Agent, in its sole judgment, determines that the
Premises and
21
Improvements are generating, on a cash basis, positive cash flow in excess of
Borrower's other usual, reasonable and customary expenses regarding the Premises
and Improvements or (ii) if and to the extent that Borrower shall have
previously paid any interest under the Notes from sources other than advances
hereunder or agreements supplemental hereto.
As used in this Section:
"Applicable TI Rate" shall mean: (a) $61.44 per square foot for the first
165,307 SFGLA for which Borrower submits a Requisition requesting payment of
costs for Tenant Work; (b) $43.88 per square foot for the next 165,307 SFGLA for
which Borrower submits a Requisition requesting payment of costs for Tenant
Work; and (c) a per square foot amount equal to the quotient of $4,352,560
divided by 165,308 square feet for the remaining SFGLA for which Borrower
submits a Requisition requesting payment of costs for Tenant Work. The
calculation of Applicable TI Rate shall not take into account the SFGLA leased
pursuant to the Crate & Barrel Lease.
"Tenant Work" shall mean any tenant improvement work performed or tenant
improvement allowances paid by Borrower to or for the benefit of tenants under
Qualifying Leases.
"TI Cost Pool" shall mean at any time an amount equal to the sum of the
Applicable TI Rate multiplied by the amount of SFGLA covered by Qualifying
Leases for which Borrower has submitted a Requisition requesting payment of
costs for Tenant Work.
"TI Cost Pool Balance" shall mean the amount in the TI Cost Pool, from time
to time, less the amount previously advanced to Borrower by Lenders for payment
of costs for Tenant Work.
"TI Funding Amount" shall mean the lesser of: (a) the TI Cost Pool Balance
at the time a Requisition is submitted by Borrower which includes a request for
payment of Tenant Work; or (b) the sum of (i) the actual amount actually
requested by Borrower for a particular tenant in a Requisition that includes a
request for Tenant Work plus (ii) any amounts in the TI Shortfall Pool.
"TI Shortfall Pool" shall mean at any time the aggregate difference between
amounts actually paid by Borrower to tenants under Qualifying Leases for Tenant
Work and the amounts previously funded by Lenders for Tenant Work for such
tenants, less the aggregate amount previously funded pursuant to clause (b)(ii)
----
of the definition of "TI Funding Amount" above.
Section 2.09 Nature of Lenders' Obligations; Borrower's Rights and
-----------------------------------------------------
Obligations in Event a Lender Fails to Make an Advance. The obligations of
------------------------------------------------------
Lenders under this Agreement are several, and no Lender shall be responsible for
the failure of any other Lender to fund the portion required to be funded by
such other Lender of an advance of the Loan. In cases where a Delinquent Lender
fails to fund the portion required to be funded by it of an advance and (x) none
of the other Lenders elects to be
22
an Electing Lender pursuant to Section 7.16 and to fund the Delinquent Lender's
share of the advance and (y) Borrower is unable to procure a Replacement Lender
in accordance with Section 7.20, the obligation of the Non-Delinquent Lenders to
fund their respective portions of such advance and each subsequent advance shall
be conditioned on (i) Borrower's committing in writing to Lenders, prior to any
such advance, that it will fund the entire Delinquency Amount and (ii)
Borrower's submitting satisfactory evidence to Administrative Agent, at the time
of each advance, that Borrower and/or Guarantor have paid, from their own funds,
a portion of the Direct and Indirect Costs that are the subject of such advance
in an amount equal to the Delinquent Lender's portion of such advance.
Section 2.10 Notes. The Loan shall be evidenced by notes of Borrower
-----
in the form of EXHIBIT H, duly completed and executed by Borrower (one for each
Lender in an amount equal to such Lender's Individual Loan Commitment, payable
for the account of such Lender's Applicable Lending Office), in an aggregate
principal amount equal to the Loan Amount (such notes, as the same may hereafter
be amended, modified, extended, severed, assigned, substituted, renewed or
restated from time to time (including, without limitation, any substitute notes
pursuant to Section 3.05, 7.16, 7.20 or 8.12), each, a "Note" and collectively,
the "Notes"). The Notes shall mature, and all outstanding principal and other
sums thereunder shall be paid in full, on the Maturity Date, as the same may be
accelerated or extended.
In case of any loss, theft, destruction or mutilation of any Lender's Note,
Borrower shall, upon its receipt of an affidavit of an officer of such Lender as
to such loss, theft, destruction or mutilation and an appropriate
indemnification, execute and deliver a replacement Note to such Lender in the
same principal amount and otherwise of like tenor as the lost, stolen, destroyed
or mutilated Note.
Section 2.11 Payments and Distributions; Certain Consequences of
---------------------------------------------------
Delinquent Lender Status. Borrower shall make each payment under this Agreement
------------------------
and under the Notes not later than 11:00 a.m. (New York time) on the date when
due to Administrative Agent at Administrative Agent's Office in immediately
available funds. Administrative Agent will thereafter, on the day of its receipt
of each such payment, cause to be distributed to each Lender such Lender's
appropriate share (based upon the respective outstanding principal amounts of
the Notes and the respective rates of interest thereunder) of the payments of
principal and interest, and its appropriate share of the payments of other sums,
in like funds for the account of such Lender's Applicable Lending Office.
Payments by Borrower hereunder or under the Notes or other Loan Documents shall
be made without setoff or counterclaim.
Except to the extent otherwise provided in this Agreement, whenever any
payment to be made under this Agreement or under the Notes is due on any day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and, if applicable, fees, as the case may
be.
Notwithstanding the foregoing provisions of this Section, (i)
Administrative Agent shall make no payment to a Delinquent Lender until the Non-
Delinquent Lenders
23
have been paid in full all outstanding principal, accrued and unpaid interest
and any other sums owing to them under the Loan Documents, it being understood
that payments of interest on account of the outstanding principal amount of the
Note held by the Delinquent Lender shall be held by Administrative Agent in a
non-interest bearing account and not distributed to the Delinquent Lender until
such time as all principal, interest and other sums due to the Non-Delinquent
Lenders have been paid in full, (ii) any payments (other than interest, as
provided in clause (i) above) that would otherwise be due a Delinquent Lender
shall be distributed to the Non-Delinquent Lenders until such time as all
principal, interest and other sums due to the Non-Delinquent Lenders have been
paid in full (except that any such amounts otherwise due a Delinquent Lender
received by Administrative Agent during an Election Period shall be retained by
Administrative Agent until the expiration of the Election Period and either paid
to the Delinquent Lender, if the delinquency is cured, or paid to the Non-
Delinquent Lenders, if the delinquency is not cured) and (iii) Administrative
Agent shall deduct, from amounts due (or, in the case of Delinquent Lender,
amounts that would otherwise be payable to such Delinquent Lender being held by
Administrative Agent pursuant to clause (i) above) Lender in default under its
obligations under Section 7.05, the amount owing by such Lender pursuant to said
Section 7.05 and pay the amount so deducted to itself, the other Lenders, or
such other party as is entitled to such amount, as applicable.
Notwithstanding anything to the contrary contained in this Agreement or the
Delinquent Lender's Note, to the extent a Delinquent Lender is obligated under
this Agreement to advance Loan proceeds in respect of interest on the Notes, and
fails to do so, and such amount is not funded by a Replacement Lender or
Electing Lender, such portion of the interest on the Delinquent Lender's Note
(i.e., the interest on the Delinquent Lender's Note that, absent the Delinquent
- -
Lender's Delinquency, would have been paid by advances from the Loan Budget
Amount for "Interest on Loan", until the same was fully disbursed) shall accrue
(without compounding) and payment thereof shall be deferred until the Maturity
Date (whether as stated or by acceleration or otherwise).
If, following such time as all amounts owing under the Loan to the Non-
Delinquent Lenders and Administrative Agent have been paid in full,
Administrative Agent is holding funds in respect of amounts payable to the
Delinquent Lender as provided in the third paragraph of this Section,
Administrative Agent shall file an interpleader action in New York State Supreme
Court, New York County and shall deposit the funds so held (less a sum equal to
Administrative Agent's reasonable fees and expenses in connection with said
interpleader action and deposit) with said court and Administrative Agent shall
thereupon be relieved of responsibility to any party with respect to the funds
deposited. Borrower and each Delinquent Lender hereby jointly and severally
agree to reimburse Administrative Agent for all costs and expenses that
Administrative Agent may incur in connection with the foregoing interpleader
action.
Except as provided above in this Section and in Section 7.16, each Lender's
interest in the Loan shall be of equal priority with the interest of each other
Lender.
Section 2.12 Interest. Borrower shall have the option, subject to the
--------
terms and conditions set forth in this Agreement, of paying interest on the
Principal Amount or
24
portions thereof at the Prime Based Rate or the LIBO Based Rate. If Borrower
desires the application of the LIBO Based Rate, it shall submit a LIBO Rate
Request to Administrative Agent, which LIBO Rate Request shall be irrevocable,
subject to Borrower's right to convert the rate of interest payable under the
Notes with respect to any LIBOR Amount from the LIBO Based Rate to the Prime
Based Rate as provided in Section 2.14. Administrative Agent shall, on the day
of its receipt of the LIBO Rate Request from Borrower, notify each Lender by
either telephone or by facsimile of the specified LIBOR Amount and the amount of
the Lender's portion thereof, the Interest Period and date of commencement
thereof, and the interest rate applicable to such LIBOR Amount. Each LIBO Rate
Request shall be applicable to the Notes in accordance with the Lenders'
respective Pro Rata Shares, so that, barring a conversion or suspension of the
LIBO Based Rate by one or more, but not all, Lenders, pursuant to Article III,
the outstanding principal amounts of each of the Notes shall contain segments
bearing interest at the Prime Based Rate and/or LIBO Based Rate(s) under
particular Interest Period(s), each of which segments shall correspond to a
proportional segment of the outstanding principal amount of every other Note.
Notwithstanding the foregoing, if a Lender shall fail to fund the portion it is
required to fund of any advance of the Loan and an Electing Lender shall commit
to fund the Delinquency Amount pursuant to Section 7.16, then from and after the
time of the first disbursement of the Delinquency Amount by the Electing Lender,
(i) in the case of a LIBO Rate Request with respect to an advance, such LIBO
Rate Request shall be applicable to the Notes in accordance with the respective
portions of such advance made by the Lenders; (ii) in the case of a LIBO Rate
Request with respect to a portion of the Principal Amount bearing interest at
the Prime Based Rate to be converted to the LIBO Based Rate, such LIBO Rate
Request shall be applicable to the Notes ratably in accordance with the portions
of the outstanding principal balances under the respective Notes bearing
interest at the Prime Based Rate; and (iii) in the case of a LIBO Rate Request
with respect to an existing LIBOR Amount that is to be the subject of a new
Interest Period, such LIBO Rate Request shall be applicable to the Notes ratably
in accordance with the respective portions of such existing LIBOR Amount
allocable to the respective Notes. In the event that Borrower fails to submit a
LIBO Rate Request with respect to a LIBOR Amount not later than 12 Noon (New
York time) four (4) Business Days prior to the last day of the relevant Interest
Period, the LIBOR Amount in question shall bear interest, commencing at the end
of such Interest Period, at the LIBO Based Rate for an Interest Period of one
(1) month.
Interest shall be computed on an actual/360-day basis (i.e., interest for
- -
each day during which any portion of the Principal Amount is bearing interest at
a particular interest rate per annum shall be computed at such rate divided by
360).
Borrower shall pay interest on the Principal Amount to Administrative Agent
for the account of Lenders. Interest on the Principal Amount shall be payable,
in arrears, monthly on the first day of the first month following the Initial
Advance and on the first day of each month thereafter until the Notes are repaid
in full.
Section 2.13 Limitation on Number of Interest Periods. Borrower shall
----------------------------------------
not have the right to have more than six (6) Interest Periods, in the aggregate,
in respect of
25
the Loan in effect at any one time, whether or not any portion of the Principal
Amount is then bearing interest at the Prime Based Rate.
Section 2.14 Conversions of Interest Rate. Provided there exists no
----------------------------
Event of Default, Borrower shall have the right to convert, from time to time,
the rate of interest payable under the Notes with respect to any portion of the
Principal Amount to the LIBO Based Rate or the Prime Based Rate, subject to the
terms of this Agreement (including, without limitation, the payment of all
amounts due in connection with any such conversion from the LIBO Based Rate on a
date other than the last day of an applicable Interest Period) and provided
--------
that, in the case of a conversion from the LIBO Based Rate, the entire LIBOR
Amount is the subject of the conversion. Conversions shall be accomplished (i)
in the case of a conversion from the Prime Based Rate to the LIBO Based Rate, by
Borrower's submission of a LIBO Rate Request in accordance with Section 2.12 or
(ii) in the case of a conversion from the LIBO Based Rate to the Prime Based
Rate, by Borrower's request to Administrative Agent by telephone (to be promptly
confirmed in writing), to be received by Administrative Agent at least four (4)
Business Days prior to the date specified for such conversion, specifying the
LIBOR Amount with respect to which the interest rate is to be converted and the
date of the conversion. On the date of its receipt of such request,
Administrative Agent shall notify each Lender thereof either by telephone or by
facsimile.
Section 2.15 Inapplicability of LIBO Based Rate. Any portion of the
----------------------------------
Principal Amount to which the LIBO Based Rate is not or cannot pursuant to the
terms of this Agreement be applicable shall bear interest at the Prime Based
Rate. Upon the occurrence of an Event of Default, the entire Principal Amount
shall, at the option of the Required Lenders, immediately and without notice to
Borrower, bear interest at the Prime Based Rate. In addition, during the
existence of an Event of Default, Borrower shall have no right to submit a LIBO
Rate Request with respect to any LIBOR Amount for which the current Interest
Period is expiring. The foregoing provisions shall not be construed as a waiver
by Lenders of their right to pursue any other remedies available to them under
the Mortgage or any other Loan Document nor shall they be construed to limit in
any way the application of the Default Rate as provided in the Mortgage.
Section 2.16 Late Payment Premium. Borrower shall pay to Administrative
--------------------
Agent for the account of Lenders a late payment premium in the amount of 5% of
any payments of principal (other than principal due on the Maturity Date, as it
may be accelerated or extended under the terms hereof) or interest under the
Loan made more than ten (10) days after the due date thereof, which late payment
premium shall be due with any such late payment.
Section 2.17 Voluntary Prepayments. Borrower may, upon at least thirty
---------------------
(30) days' notice (which notice shall be irrevocable) to Administrative Agent,
prepay the Principal Amount, in whole or part, without premium or penalty;
provided, however, that (i) any partial prepayment under this Section shall be
-------- -------
in a principal amount of not less than $1,000,000 and an integral multiple of
$100,000 (other than in the case of a prepayment pursuant to Section 8.24), (ii)
prepayment of a LIBOR Amount other than on the last day of the applicable
Interest Period shall be subject to the provisions of Section
26
3.03 and (iii) each prepayment under this Section shall include all interest
accrued on the amount of principal prepaid (and all late charges and other sums
that may be payable) through the date of prepayment. Amounts prepaid may not be
reborrowed.
Section 2.18 Extension(s) of Maturity Date. Borrower shall have the
-----------------------------
option, exercisable twice, to extend the Maturity Date for a period of one (1)
year, subject in each case (unless otherwise indicated), to (the "First
Extension Conditions" and "Second Extension Conditions", respectively) (i) the
absence of any Event of Default at both the time the option is exercised and on
the Maturity Date to be extended, (ii) Administrative Agent's receipt of (w) a
written request from Borrower for such extension between sixty (60) and one
hundred eighty (180) days prior to the Maturity Date to be extended (upon the
receipt of which Administrative Agent shall promptly commission the update to
the appraisal required by clause (3) or (6), as applicable, below), (x) no later
than one day prior to the Maturity Date to be extended, an extension fee, for
the account of Lenders in accordance with their respective Pro Rata Shares, in
the amount of .25% of the Commitment Amount as of the Maturity Date to be
extended, (y) such note extension agreement(s) as Administrative Agent may
reasonably require and (z) such interest rate protection agreements, and
assignments thereof, as Administrative Agent may reasonably require and (iii)
Administrative Agent's determination (which shall be conclusive so long as made
on a reasonable basis) that, as of the Maturity Date to be extended, Guarantor
is in compliance with the covenants set forth in paragraphs 9 and 10 of the
Payment Guaranty, and that,
for the first extension:
-----------------------
(1) the Improvements (other than (A) Building 5 and Building 9, (B)
unleased tenant space and (C) minor "punch-list" items) have been
satisfactorily completed, lien-free, in accordance with this Agreement and
all building and other permits necessary for the tenants thereof to begin
to fit out their premises have been issued by the appropriate Governmental
Authority;
(2) at least 75% of the total SFGLA in the Retail/Tenant-Constructed
Improvements is covered by Qualifying Leases (including the Book Store
Lease and the Crate & Barrel Lease ); and
(3) the Commitment Amount does not exceed 65% of the "stabilized"
value of the Premises (as reflected in an update to the appraisal delivered
pursuant to Section 4.01(a)(4), which updated appraisal shall be
commissioned by Administrative Agent at Borrower's expense); and,
for the second extension:
------------------------
(4) the Hotel, the Tenant-Constructed Improvements and the
Improvements (other than (A) unleased tenant space and (B) minor "punch-
list" items) have been satisfactorily completed, lien-free, in accordance
with this Agreement and final certificates of occupancy issued therefor by
the appropriate Governmental Authority;
27
(5) at least 85% of the total SFGLA in the Retail/Tenant-Constructed
Improvements is covered by Qualifying Leases (including the Book Store
Lease and the Crate & Barrel Lease) having an unexpired term of one (1)
year or more and at least 75% of the Residential Units is covered by
Residential Leases, in each case pursuant to which the tenants thereunder
are in occupancy and paying rent;
(6) the Commitment Amount does not exceed 65% of the "as-is" value of
the Premises (as reflected in an update to the appraisal delivered pursuant
to Section 4.01(a)(4), which updated appraisal shall be commissioned by
Administrative Agent at Borrower's expense); and
(7) Debt Service Coverage is at least 1.25;
provided, however, that the foregoing loan-to-value and Debt Service Coverage
-------- -------
conditions set forth in clauses (3), (6) and (7) above shall be deemed satisfied
if Borrower makes a partial prepayment of the Principal Amount on or before the
Maturity Date to be extended in an amount such that the requisite loan-to-value
or Debt Service Coverage, each recomputed based on the reduced Commitment
Amount, is attained.
Section 2.19 Required Amortization During Second Extension Term. If the
--------------------------------------------------
original Maturity Date is extended by Borrower for two (2) one year periods
pursuant to the exercise of its options to extend in accordance with the
provisions of Section 2.18, then, commencing on the first day of the second
month following the second such extension, and on the first day of each month
thereafter until the extended Maturity Date, Borrower shall, and hereby
covenants and promises to, make monthly payments in reduction of the Principal
Amount. The amount of such principal payments shall be computed in accordance
with a thirty (30)-year fully amortizing, constant payment mortgage schedule
based on the Commitment Amount at the time of the first such payment date and an
assumed per annum interest rate of 9.25%.
Section 2.20 Interest Rate Reduction.
-----------------------
(a) Provided there exists no Default or Event of Default, the Applicable
Margin with respect to the Prime Based Rate and the LIBO Based Rate shall be
reduced to (i) .25% per annum and 1.875% per annum, respectively, upon
Administrative Agent's determination (which shall be conclusive so long as made
on a reasonable basis) that (1) the Improvements (other than (A) Buildings 5 and
9, (B) unleased tenant space and (C) minor "punch list" items) have been
satisfactorily completed, lien-free, in accordance with this Agreement and all
building and other permits necessary for the tenants thereof to begin to fit out
their respective premises have been issued by the appropriate Governmental
Authority, (2) Debt Service Coverage is at least 1.00, provided, however, that
-------- -------
in computing Debt Service Coverage for purposes of this clause (C), the revenue
component of Net Operating Income under clause (a) of the definition thereof in
Section 1.01 of the Agreement shall, for any date of determination, be a pro-
forma amount computed as set forth in sub-clause (x) of said clause (a) but
based only on leases where all acceptance-of-possession co-tenancy requirements
have been satisfied and (3) Guarantor is in compliance with the covenants set
forth in paragraphs 9 and 10 of the
28
Payment Guaranty and (ii) .00% per annum and 1.625% per annum, respectively,
upon Administrative Agent's determination (which shall be conclusive so long as
made on a reasonable basis) that (1) the Hotel, the Tenant-Constructed
Improvements and the Improvements (other than (A) unleased tenant space in the
Improvements and (B) minor "punch-list" items) have been satisfactorily
completed, lien-free, in accordance with this Agreement and final certificates
of occupancy issued therefor by the appropriate Governmental Authority, (2) at
least 80% of the total SFGLA in the Retail/Tenant-Constructed Improvements is
covered by Qualifying Leases having an unexpired term of one (1) year or more,
and at least 80% of the Residential Units is covered by Residential Leases,
pursuant to which, in each case, the tenants thereunder are in occupancy and
paying rent, (3) Guarantor is in compliance with the covenants set forth in
paragraphs 9 and 10 of the Payment Guaranty and (4) Debt Service Coverage is at
least 1.30. The two (2) interest rate reductions provided for in this paragraph
are hereinafter referred to as the "First Rate Reduction" and the "Second Rate
Reduction", respectively.
(b) If at any time following Borrower's qualification for the First Rate
Reduction and/or the Second Rate Reduction pursuant to paragraph (a) above, the
conditions precedent to such reduction as set forth in said paragraph (a) cease
to be satisfied, then the Applicable Margins shall, automatically and without
the need for any further documentation or action of any kind, be increased
retroactively to the date any such condition ceased to be satisfied by the
amount of the prior reduction, subject, however, to further decrease and
increase in accordance with the provisions of this Section.
ARTICLE III
YIELD MAINTENANCE ETC.
----------------------
Section 3.01 Additional Costs and Other Effects of Regulatory Changes.
--------------------------------------------------------
Borrower shall pay directly to a Lender, promptly upon demand, such amounts as
are necessary to compensate such Lender for Additional Costs resulting from any
Regulatory Change which (i) subjects such Lender to any tax, duty or other
charge with respect to the Loan or its Note, or changes the basis of taxation of
any amounts payable to such Lender under the Loan or its Note (other than taxes
imposed on the overall net income of such Lender or of its Applicable Lending
Office by the jurisdiction in which such Lender's principal office or such
Applicable Lending Office is located), (ii) imposes, modifies or deems
applicable any reserve, special deposit or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender, (iii) imposes on such Lender or, in the case of
LIBOR Amounts, on the London interbank market, any other condition affecting the
Loan or its Note, or any of such extensions of credit or liabilities or (iv)
imposes any capital adequacy requirements on such Lender by virtue of the Loan
or the Notes. Such Lender will notify Borrower (with a copy to Administrative
Agent) of any event occurring after the date hereof which would entitle it to
compensation pursuant to this paragraph as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, and will
designate a different Applicable Lending Office for those portions of the Loan
affected
29
by such event if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in such Lender's sole opinion, be
disadvantageous to it, provided that such Lender shall have no obligation to so
--------
designate an Applicable Lending Office located in the United States.
Without limiting the effect of the immediately preceding paragraph, in the
event that, by reason of any Regulatory Change, (i) a Lender incurs Additional
Costs based on or measured by the excess above a specified level of the amount
of (1) a category of deposits or other liabilities of such Lender which includes
deposits by reference to which the LIBO Rate is determined as provided in this
Agreement and/or (2) a category of extensions of credit or other assets of such
Lender which includes loans the interest on which is determined on the basis of
rates referred to in the definition of "LIBO Rate" in Section 1.01, (ii) a
Lender becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold or (iii) it shall be unlawful or
impossible for a Lender to make or maintain its Pro Rata Share of the Loan (or
any portion thereof) at the LIBO Based Rate, then such Lender's obligation to
make or maintain its Pro Rata Share of the Loan (or portions thereof) at the
LIBO Based Rate (and Borrower's right to request the same) shall be suspended
and such Lender shall give notice thereof to Borrower (with a copy to
Administrative Agent) and, upon the giving of such notice, interest payable on
the affected Note shall be converted to the Prime Based Rate, unless such Lender
may lawfully continue to maintain its Pro Rata Share of the Loan (or any portion
thereof) then bearing interest at the LIBO Based Rate to the end of the current
Interest Period(s), at which time the interest rate on the affected Note shall
convert to the Prime Based Rate. If subsequent to any conversion to the Prime
Based Rate as provided above such Lender determines that such Regulatory Change
has ceased to be in effect, such Lender will so notify Borrower (with a copy to
Administrative Agent), and Borrower may convert the rate of interest payable
under the affected Note with respect to those portions of the Principal Amount
bearing interest at the Prime Based Rate to the LIBO Based Rate by submitting a
LIBO Rate Request in respect thereof and otherwise complying with the provisions
of this Agreement with respect thereto.
Determinations by each Lender of the existence or effect of any Regulatory
Change on its costs of making or maintaining its Pro Rata Share of the Loan, or
portions thereof, at the LIBO Based Rate, or on amounts receivable by it in
respect thereof, and of the additional amounts required to compensate such
Lender in respect of Additional Costs, shall be conclusive, so long as made on a
reasonable basis.
Section 3.02 Limitations on Availability of LIBO Based Rate. Anything
----------------------------------------------
herein to the contrary notwithstanding, if, at the time of or prior to the
determination of the LIBO Based Rate in respect of any LIBO Rate Request Amount
as provided in this Agreement, (i) Administrative Agent determines (which
determination shall be conclusive, so long as made on a reasonable basis) that
by reason of circumstances affecting the London interbank market generally,
adequate and fair means do not or will not exist for determining the LIBO Based
Rate applicable to an Interest Period or (ii) a Lender determines (which
determination shall be conclusive, so long as made on a reasonable basis) that
the LIBO Rate will not accurately reflect the cost to such Lender of making or
maintaining its Pro Rata Share of the Loan (or any portion thereof) at the
30
LIBO Based Rate, then Administrative Agent, in the case of the circumstances
described in clause (i) above, or such Lender, in the case of the circumstances
described in clause (ii) above, shall give Borrower prompt notice thereof (with
a copy to Administrative Agent in the case of the notice from such Lender), and
the LIBO Rate Request Amount in question, in the case of the circumstances
described in clause (i) above, or such Lender's portion thereof, in the case of
the circumstances described in clause (ii) above, shall bear interest, or
continue to bear interest, as the case may be, at the Prime Based Rate. If at
any time subsequent to Administrative Agent's or such Lender's giving of such
notice, Administrative Agent or such Lender, as the case may be, determines that
because of a change in circumstances the LIBO Based Rate is again available to
Borrower, Administrative Agent or such Lender, as the case may be, shall so
notify Borrower (with a copy to Administrative Agent, in the case of the notice
from such Lender) and Borrower may convert the rate of interest payable under
the Notes or such Lender's Note, as the case may be, from the Prime Based Rate
to the LIBO Based Rate by submitting a LIBO Rate Request in respect thereof and
otherwise complying with the provisions of this Agreement with respect thereto.
Section 3.03 Certain Compensation. Borrower shall pay directly to a
--------------------
Lender, immediately upon request and notwithstanding contrary provisions
contained in the Mortgage or other Loan Documents, such amounts as shall, in the
judgment of such Lender (which shall be conclusive so long as made on a
reasonable basis), compensate it for any loss, cost or expense incurred by it as
a result of (i) any payment or prepayment (under any circumstances whatsoever,
whether voluntary or involuntary) of any portion of the Principal Amount bearing
interest at the LIBO Based Rate on a date other than the last day of an
applicable Interest Period, (ii) the conversion (for any reason whatsoever,
whether voluntary or involuntary) of the rate of interest payable under such
Lender's Note from the LIBO Based Rate to the Prime Based Rate with respect to
any portion of the Principal Amount then bearing interest at the LIBO Based Rate
on a date other than the last day of an applicable Interest Period, (iii) the
failure of all or a portion of an advance of the Loan which was to have borne
interest at the LIBO Based Rate pursuant to a LIBO Rate Request to be made, (iv)
any failure by Borrower to prepay any portion of the Principal Amount bearing
interest at the LIBO Based Rate on the date specified in Borrower's notice of
prepayment or (v) the failure of Borrower to borrow, continue or convert in
accordance with a LIBO Rate Request submitted by it, which amounts shall
include, without limitation, an amount equal to the present value (using as a
discount rate the rate at which interest is computed pursuant to clause (y)
below) of the excess, if any, of (x) the amount of interest that would have
accrued at the LIBO Based Rate on the amount so prepaid, converted, not
advanced, not prepaid or not borrowed, continued or converted, as the case may
be, for the period from the date of occurrence to the last day of the applicable
Interest Period over (y) the amount of interest (as determined in good faith by
such Lender) that such Lender would have paid to Borrower (and other customers)
on a Euro-Dollar deposit placed by such Lender with leading banks in the London
interbank market for an amount comparable to the amount so prepaid, converted,
not advanced, not prepaid or not borrowed, continued or converted, as the case
may be, for the period from the date of occurrence to the last day of the
applicable Interest Period. A determination by a Lender as to the amounts
payable to it pursuant to this Section shall be conclusive absent manifest
error.
31
Section 3.04 Intentionally Omitted.
---------------------
Section 3.05 Substitution of Lenders. If any Lender (an "Affected
-----------------------
Lender") (i) makes demand upon Borrower for (or if Borrower is otherwise
required to pay) Additional Costs pursuant to Section 3.01 or (ii) gives notice
to Borrower that such Lender is unable to make or maintain its Pro Rata Share of
the Loan at the LIBO Based Rate as a result of a condition described in clause
(ii) of Section 3.02 or in the second paragraph of Section 3.01, Borrower may,
within ninety (90) days of receipt of such demand or notice, as the case may be,
give notice (a "Substitution Notice") to Administrative Agent and to each Lender
of its intention to replace such Affected Lender with another financial
institution (the "Substitute Lender") designated in such Substitution Notice.
If, within thirty (30) days of Administrative Agent's receipt of such
Substitution Notice, (x) Administrative Agent shall notify Borrower and each
Lender in writing that the Substitute Lender is reasonably satisfactory to the
Required Lenders and (y) the Affected Lender shall not agree to waive the
payment of the Additional Costs in question or the effect of the circumstances
described in clause (ii) of Section 3.02 or in the second paragraph of Section
3.01, then the Affected Lender shall, so long as no Default shall exist, assign
its Note and all of its rights and obligations under this Agreement to the
Substitute Lender, and the Substitute Lender shall assume all of the Affected
Lender's rights and obligations, pursuant to an agreement, substantially in the
form of an Assignment and Assumption Agreement, executed by the Affected Lender
and the Substitute Lender. In connection with such assignment and assumption,
the Substitute Lender shall pay to the Affected Lender an amount equal to the
outstanding principal amount under the Affected Lender's Note plus all interest
accrued thereon, plus all other amounts, if any (other than the Additional Costs
in question), then due and payable to the Affected Lender with respect to the
Loan; provided, however, that prior to or simultaneously with any such
-------- -------
assignment and assumption, Borrower shall have paid to such Affected Lender all
amounts properly demanded and unreimbursed under this Article III. Upon the
effective date of such assignment and assumption and the payment by the
Substitute Lender to Administrative Agent of a fee, for Administrative Agent's
own account, in the amount of $3,500, the Substitute Lender shall become a party
to this Agreement and shall have all the rights and obligations of a Lender as
set forth in such Assignment and Assumption Agreement, and the Affected Lender
shall be released from its obligations hereunder, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this Section, a note shall be issued to the Substitute Lender by
Borrower, in substitution for the Affected Lender's Note, and the Affected
Lender shall return its Note to Borrower. Such substitute note shall constitute
a "Note", and the obligations evidenced by such substitute note shall be secured
by the Mortgage. In connection with Borrower's execution of such substitute note
as aforesaid, Borrower shall deliver to Administrative Agent such evidence of
the due authorization, execution and delivery of the substitute note and any
related documents as Administrative Agent may reasonably request; provided,
--------
however, that Borrower shall not be required to deliver a legal opinion in
-------
connection with such substitute note. If the Substitute Lender is not
incorporated under the Laws of the United States or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
account, deliver to Borrower and Administrative Agent
32
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 7.13.
Borrower, Administrative Agent and Lenders shall execute such modifications
to the Loan Documents as shall, in the reasonable judgment of Administrative
Agent, be necessary or desirable in connection with the substitution of Lenders
in accordance with the foregoing provisions of this Section.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
Section 4.01 Conditions Precedent to Closing. Lenders shall not be
-------------------------------
obligated hereunder until the following conditions shall have been satisfied:
(a) Lenders shall have received and approved each of the following:
(1) Fees and Expenses. (i) Those fees required by the
-----------------
Supplemental Fee Letter to be paid on or before the date hereof and
(ii) all fees and expenses incurred by Agent (including, without
limitation, the reasonable fees and expenses of Lenders' Counsel, the
Construction Consultant, Lenders' environmental and insurance
consultants, and the preparer of the appraisal required by paragraph
(4) below);
(2) Loan Documents and Supplemental Fee Letter. This Agreement,
------------------------------------------
each of the other Loan Documents and the Supplemental Fee Letter, duly
executed by the parties thereto, and, where applicable, duly
acknowledged and in proper form for recording or filing, as the case
may be, and all necessary or desirable recordings and filings shall
have been duly made;
(3) Financial Statements. Current Financial Statements and such
--------------------
other financial data (including, without limitation, current financial
statements of tenants under leases in respect of the Premises and of
parties to any of the Premises Documents, and of the guarantor(s), if
any, of any such tenants or parties, as may in the possession of
Borrower or obtainable by Borrower with reasonable effort) as
Administrative Agent shall require;
(4) Appraisal. An independent M.A.I. appraisal of the Premises
---------
and Improvements, complying in all respects with the standards for
real estate appraisals established pursuant to the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, showing
that the Loan Amount does not exceed 65% of the stabilized value of
the Premises;
(5) Insurance Policies. The policies of insurance required by
------------------
the Mortgage, together with evidence of the payment of the premiums
therefor;
33
(6) Hazardous Materials Report(s)/Reliance Letter(s). A
------------------------------------------------
detailed Phase I environmental site assessment report (and, if
reasonably requested by Administrative Agent, a Phase II report)
regarding the Premises (with accompanying "reliance letters"), issued
by a properly qualified engineer;
(7) Title Policy. A paid title insurance policy (or policies),
------------
in the amount of the Mortgage, in ALTA 10-17-92 or other form approved
by Lenders' Counsel, issued by the Title Insurer, which shall insure
the Mortgage to be a valid lien on Borrower's interests in the
Premises free and clear of all defects and encumbrances except those
previously received and approved by Lenders' Counsel, and shall
contain:
(i) full coverage against mechanics' liens (filed and
inchoate).
(ii) a reference to the survey but no survey exceptions
except those theretofore approved by Lenders' Counsel,
(iii) such affirmative insurance and endorsements as
Lenders' Counsel may require, and
(iv) a Pending Disbursements Clause in the form of EXHIBIT
G,
and shall be accompanied by such reinsurance agreements between the
Title Insurer and title companies approved by Administrative Agent, in
ALTA 1994 facultative form, as Administrative Agent may require;
(8) Survey. A current ALTA/ACSM survey of the Premises,
------
certified to Administrative Agent and the Title Insurer, showing:
(i) the location of the perimeter of the Premises by
courses and distances,
(ii) all easements, rights-of-way, and utility lines
referred to in the title policy required by this Agreement or
which actually service or cross the Premises,
(iii) the lines of the streets abutting the Premises and
the width thereof, and any established building and setback
lines,
(iv) encroachments and the extent thereof upon the
Premises,
(v) the Improvements to the extent constructed, and the
relationship of the Improvements by distances to the perimeter of
the Premises, established building, setback and street lines,
34
(vi) if the Premises are described as being on a filed
map, a legend relating the survey to said map, and
(vii) all flood zone designations in respect of the
Premises;
(9) Leases and Premises Documents. Certified copies of all
-----------------------------
executed leases in respect of the Premises, accompanied by, in the
case of any leases demising in excess of 5,000 SFGLA specified by
Administrative Agent, estoppel certificates from the tenants
thereunder and, in the case of any leases specified by Administrative
Agent, notice-of-assignment letters in the form of EXHIBIT F in
respect thereof, executed by Borrower; certified copies of the
standard form of lease Borrower will use in connection with the
leasing of space in the Retail Improvements; and certified copies of
all Premises Documents, together with estoppel certificates from the
parties thereto;
(10) Counsel Opinions. Opinions of Borrower's counsel and local
----------------
counsel (and, if required by Administrative Agent, of a local counsel
selected by Administrative Agent or Lenders' Counsel) in form
satisfactory to Administrative Agent;
(11) Organizational Documents. If Borrower, Guarantor or any
------------------------
general partner or member of any of them is a corporation, current
copies of the following documents with respect to each:
(i) good-standing certificates from the jurisdiction of
its incorporation and the State of California,
(ii) a resolution, certified by the corporate secretary,
of the shareholders or directors of the corporation authorizing
the consummation of the transactions contemplated hereby and the
execution, delivery and performance of the Loan Documents and any
other documents to be executed, delivered or performed by said
corporation (including any substitute or replacement Notes to be
executed and delivered pursuant to the terms hereof), and
(iii) a certificate of the corporate secretary as to the
incumbency of the officers executing any of the documents
required hereby,
and, if Borrower, Guarantor or any general partner or member of any of
them is a partnership, venture, limited liability company or trust:
(iv) the entity's organizational agreement and all
amendments and attachments thereto, certified by a general
partner, venturer, member or trustee to be true and complete,
35
(v) any certificates filed or required to be filed by the
entity in the jurisdictions of its formation and the State of
California in order for it to do business in those jurisdictions,
and
(vi) evidence of the authorization of the consummation of
the transactions contemplated hereby and the execution, delivery
and performance of the Loan Documents and any other documents to
be executed, delivered and performed by said entity (including
any substitute or replacement Notes to be executed and delivered
pursuant to the terms hereof), and including any required
consents by partners, venturers, members, trustees or
beneficiaries;
(12) Permits and Approvals. Copies of any and all authorizations
---------------------
(including plot plan and subdivision approvals, zoning variances,
water, sewer, building and other permits) required by Governmental
Authorities or otherwise necessary for the construction, use,
occupancy and operation of the Premises and/or Improvements for the
purposes contemplated by the Plans in accordance with all applicable
Laws, all with respect only to the structure and foundations of
Buildings 3, 4, 6, 7 , 8 and 13/15;
(13) Management and Leasing Contracts. Certified copies of all
--------------------------------
agreements, if any, providing for or relating to the management or
leasing of the Premises or Improvements;
(14) Chattel Searches. UCC searches against Borrower or other
----------------
owner of the Premises;
(15) Plans, Etc. A complete set of the Plans and copies of a
-----------
soil-engineer's report, a site plan (showing all necessary approvals,
utility connections and site improvements) and all inspection and test
records and reports made by or for Borrower or Borrower's Architects,
all with respect only to Buildings 3, 4, 6, 7 and 8;
(16) Consultant's Report. A report from the Construction
-------------------
Consultant to the effects that (i) it has received and approved the
items required by paragraph (b) below, (ii) the Plans referred in
paragraph (15) above have been approved by all applicable Governmental
Authorities, (iii) the Improvements as shown by said Plans will comply
with applicable zoning and other Laws, including requirements for
parking spaces, (iv) a General Contract and Major Subcontracts are in
effect which satisfactorily provide for the construction of Buildings
3, 4, 6, 7 and 8, (v) all roads and utilities necessary for the full
utilization of the Improvements for their intended purposes have been
completed, or the presently installed and proposed roads and utilities
will be sufficient for the full utilization of the Improvements for
their intended purpose and will be available to and servicing the
Premises upon completion of the Improvements, (vi) the
36
construction of the Improvements theretofore performed, if any, was
performed in accordance with the Plans and (vii) construction of the
Improvements, along with all necessary roads and utilities, will be
finished on or before the Completion Date; and to such other effects
as Administrative Agent may reasonably request;
(17) Construction Contracts and Will-Serve Letters. Copies of
---------------------------------------------
the General Contract, the Major Subcontracts and Borrower's agreements
with Borrower's Architects, in each case certified by Borrower to be
true and complete, together with letters from Borrower's Architects
and the General Contractor in the forms of EXHIBITS C and D,
respectively, and letters also in the form of EXHIBIT D (modified
appropriately) (x) from all Major Subcontractors with whom Borrower
has a direct contract and (y) on a best-efforts basis, from each other
Major Subcontractor whose contract price is $10,000,000 or more;
provided, however, that, for purposes of the closing of the Loan, the
-------- -------
General Contract and Borrower's agreements with Borrower's Architects
need only cover Buildings 3, 4, 6, 7 and 8;
(18) Bonds. Either (x) performance bonds naming Administrative
-----
Agent as co-obligee and labor and materials payment bonds, each in AIA
Document No. A-312 (1984 Edition) form, for penal sums equal to the
amounts of such of the Major Subcontracts specified by Administrative
Agent or (y) a "subguard" insurance policy in respect of the
construction contracts for the Improvements, together with an
assignment thereof to Administrative Agent for the benefit of Lenders
(which assignment may be contained in the policy itself);
(19) Progress Schedule. A progress schedule or chart showing
-----------------
the interval of time over which each item of Direct Cost is projected
to be incurred or paid;
(20) Project Cost Statement. The Project Cost Statement;
----------------------
(21) Collateral Assignments, Etc. The Collateral Assignments
---------------------------
and the related absolute assignments (and, in the case of the FRIT LLC
Collateral Assignment, subordination agreement) required thereby,
together with the original notes and originals or certified copies of
the deeds of trust and other related documents being assigned; and an
agreement in recordable form subordinating the FRIT Deed of Trust to
the Ground Lease;
(22) Covenant Compliance Certificate. A certificate of the sort
-------------------------------
required by paragraph (3) of Section 6.18;
(23) Interest Rate Protection Strategy. A certificate, executed
---------------------------------
by an appropriate financial officer of Borrower, setting forth the
details
37
(including rates, terms and notional amounts) and timing of the
interest rate protection strategy that Borrower intends to employ in
respect of the Loan;
(24) Hotel-Related Documents. Certified copies of the Hotel
-----------------------
Lease, the Building 5 Declaration and the related Condensed Water
Agreement; the original letters of credit delivered by the Hotel
Operator pursuant to the Hotel Lease; a collateral assignment, duly
executed by FRIT LLC, to Administrative Agent of said letters of
credit; and transfer letters in blank executed by FRIT LLC, as
required by said collateral assignment; and
(25) Additional Documentation. Such other approvals, opinions
------------------------
or documents as Administrative Agent may reasonably request; and
(b) The Construction Consultant shall have received and approved each
of the following:
(1) Related Documents. Copies of the items required by
-----------------
paragraphs (6), (8), (12), (15), (17), (18), (19) and (20) of Section
4.01(a), together with copies of any leases or Premises Documents
which contain any requirements or specifications in respect of
construction of the Improvements; and
(2) Title Documents. Copies of any documents listed as
---------------
exceptions to title in the title policy required hereby which are
relevant to the construction or use of the Improvements.
Section 4.02 Conditions to Initial Advance. Lenders shall not be
-----------------------------
obligated to make the Initial Advance until the following conditions shall have
been satisfied:
(a) All conditions of Section 4.01 shall have been and remain,
satisfied as of the date of the Initial Advance;
(b) There shall exist no Default or Event of Default, and no Default
or Event of Default would result from the making of the Initial Advance;
(c) The representations and warranties made to Administrative Agent
or Lenders herein, in the other Loan Documents and in any other document,
certificate or statement executed or delivered to Administrative Agent or
Lenders in connection with the Loan shall be true and correct in all
material respects on and as of the date of the Initial Advance with the
same effect as if made on such date;
(d) The Improvements, if any, shall not have been materially injured
or damaged by fire or other casualty unless Administrative Agent shall have
received, for the account of Lenders, insurance proceeds or funds from
Borrower sufficient in the judgment of the Construction Consultant to
effect the satisfactory
38
restoration of the Improvements and to permit completion of the
Improvements prior to the Completion Date;
(e) Lenders (or, in the case of paragraph (4), Administrative Agent)
shall have received and approved each of the following:
(1) Title Continuation. A written continuation of or
------------------
endorsement to the title policy insuring the Mortgage, in a form
approved by Lenders' Counsel, conforming to the requirements of
EXHIBIT G and setting forth no additional exceptions except those
approved by Lenders' Counsel or otherwise expressly permitted by the
Loan Documents;
(2) Required Leases. To the extent not previously delivered
---------------
pursuant to paragraph (9) of Section 4.01(a), certified copies of all
leases in respect to the Premises (including, without limitation, (x)
Qualifying Leases (including the Book Store Lease and the Crate &
Barrel Lease) or (y) executed letters of intent or final leases out
for signature which, when finalized or executed, as the case may be,
would constitute Qualifying Leases, covering, in the aggregate, a
minimum of 45% of the total SFGLA in the Retail/Tenant-Constructed
Improvements and providing for an aggregate annual net base rent of at
least the Minimum Rental Advance Amount; provided, however, that no
-------- -------
more than 15% of the total SFGLA may be covered by the documents
described in clause (y) above in satisfaction of the foregoing
requirement) accompanied by tenant estoppel certificates and notice of
assignment letters as specified in paragraph (9) of Section 4.01(a);
and subordination and attornment agreements, in Administrative Agent's
usual form, in respect of such leases demising in excess of 5,000
SFGLA as Administrative Agent may require;
(3) Equity Investment. Prior to the Initial Advance, a
-----------------
certificate from Borrower demonstrating to Lenders that it has
invested equity in the Premises (i.e., by its payment of Direct or
- -
Indirect Costs) in an amount equal to at least the greater of (i)
$138,000,000 or (ii) the excess of (x) the total Direct and Indirect
Costs necessary for completion of the Improvements at the time of the
Initial Advance (as estimated by Lenders and the Construction
Consultant) over (y) the Loan Amount, which certificate shall be
accompanied by such evidence of such investment as Administrative
Agent may reasonably request;
(4) Association-Related Documents. The following documents,
-----------------------------
all satisfactory to Administrative Agent: certified copies of the
organizational documents of the Association; conditional resignations,
in the form of EXHIBIT J, of the members of the "Board" of the
Association and the "Architectural Committee" under the Declaration
and the officers of the Association; and written acknowledgment from
the Association that Administrative Agent is a "Mortgagee" entitled to
all the rights of a "Mortgagee" under the Declaration;
39
(5) Requisition. A Requisition for the Initial Advance,
-----------
together with such proof of incurrence of any Indirect Costs included
therein as may be required by the terms hereof; and
(6) Hotel-Related Documents. An executed subordination,
-----------------------
non-disturbance and attornment agreement with the Hotel Operator with
respect to the Hotel Lease; a certified copy of the Building 5/Hotel
Construction Contract; and payment and performance bonds (naming
Administrative Agent as an obligee) as are required to be delivered by
the Hotel Operator under the Hotel Lease; provided, however, that the
requirement for the Building 5/Hotel Construction Contract and related
bonds shall be deferred as provided in Section 8.28.
(f) The Construction Consultant shall have received and approved each
of the following:
(1) Related Documents. Copies of the items required by
-----------------
paragraph (3) of Section 4.02(e), together with any leases that
contain any requirements or specifications in respect of construction
of the Improvements; and
(2) Requisition. If the Initial Advance consists in whole or
-----------
in part of advances for Direct Costs, a copy of the Requisition
therefor.
Section 4.03 Conditions to Advances After the Initial Advance. Lenders'
------------------------------------------------
obligation to make advances of proceeds of the Loan after the Initial Advance
shall be subject to the satisfaction of the following conditions:
(a) All conditions of Sections 4.01 and 4.02 shall have been and
remain satisfied as of the date of such advances;
(b) There shall exist no Default or Event of Default, and no Default
or Event of Default would result from the making of the advance;
(c) The representations and warranties made to Administrative Agent
and/or Lenders herein, in the other Loan Documents and in any other
document, certificate or statement executed or delivered to Administrative
Agent and/or Lenders in connection with the Loan shall be true and correct
in all material respects on and as of the date of the advance with the same
effect as if made on such date;
(d) Administrative Agent shall have received a written continuation
report of or endorsement to the title policy insuring the Mortgage to the
date of such advance, in the form approved by Lenders' Counsel, conforming
to the pending disbursement requirements set forth in EXHIBIT G and setting
forth no additional exceptions (including survey exceptions) except those
that are approved by Lenders' Counsel or that result from encumbrances that
are expressly permitted by the Loan Documents;
40
(e) If required by the Title Insurer as a condition to issuing the
endorsement required by clause (d) above, or if otherwise reasonably
required by Administrative Agent, Administrative Agent shall have received
a survey of the Premises certified to it and the Title Insurer, updated,
with respect to all relevant requirements and information, to within ten
(10) days of the advance; and
(f) Administrative Agent and the Construction Consultant shall have
received a Requisition for the advance, together with such other
documentation and information as either of them may reasonably require.
Section 4.04 Conditions to Last Direct Costs Advance. In addition to
---------------------------------------
the requirements of Section 4.03, in the case of the last Direct Costs Loan
advance as provided in Section 2.04, Administrative Agent shall also have
received and approved:
(a) A report from the Construction Consultant to the effects that (i)
construction of the Improvements has been completed, and any necessary
utilities and roads have been finished and made available for use, in
accordance with the Plans and (ii) it has received satisfactory evidence of
the approval by all Governmental Authorities of the Tenant-Constructed
Improvements and the Improvements in their entirety for permanent
occupancy, and of the contemplated uses thereof, to the extent any such
approval is a condition of the lawful use and occupancy thereof;
(b) A current final survey of the Premises, certified to
Administrative Agent and the Title Insurer, showing the completed
Improvements;
(c) Evidence that Borrower has filed the notice, if any, of
completion of the Improvements necessary to establish commencement of the
shortest statutory period for the filing of mechanics' and materialmen's
liens; and
(d) To the extent any tenants under leases or any parties to the
Premises Documents have rights of approval with respect to construction of
the Improvements, certificates by such tenants or parties, to the effect
that, for purposes of such leases and Premises Documents, respectively, the
Improvements have been satisfactorily completed.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to Administrative Agent and Lenders that:
Section 5.01 Due Formation; Ownership; Power and Authority. FRIT LLC is
---------------------------------------------
a limited liability company, duly organized, validly existing and in good
standing under the Laws of the State of California, of which SRI is the sole
managing member and the owner of a 75% beneficial interest therein. SRI is a
corporation, duly organized, validly existing and in good standing under the
Laws of the State of Maryland, qualified
41
to do business and in good standing under the Laws of the State of California,
which is wholly-owned and controlled by Guarantor. SJR is a corporation, duly
organized, validly existing and in good standing under the Laws of the State of
Maryland, qualified to do business and in good standing under the Laws of the
State of California, 100% of the preferred stock of which is owned by FRIT LLC.
Guarantor is a publicly-owned real estate investment trust duly organized,
validly existing and in good standing under the Laws of the State of Maryland,
qualified to do business and in good standing under the Laws of the State of
California. Each of Borrower and Guarantor has full power and authority to
consummate the transactions contemplated hereby and to execute, deliver and
perform this Agreement and any other Loan Document to which it is a party. FRIT
LLC is not engaged in rendering "professional services", as such term is defined
in Section 13401(a) of the California Government Code and the local ordinances
enacted pursuant thereto.
Section 5.02 Legally Enforceable Agreements. The Supplemental Fee
------------------------------
Letter and each Loan Document to which Borrower or Guarantor is a party is a
legal, valid and binding obligation of such party, enforceable against Borrower
or Guarantor, as the case may be, in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar Laws affecting creditors' rights generally.
Section 5.03 Financial Statements. Financial Statements have been
--------------------
heretofore delivered to Lenders which are true, correct and current in all
respects and which fairly present the respective financial conditions of the
subjects thereof as of the respective dates thereof; no Material Adverse Change
has occurred since the respective dates thereof and no borrowings (other than
the Loan) which might give rise to a lien or claim against the Mortgaged
Property or proceeds of the Loan have been made by Borrower or others since the
dates thereof.
Section 5.04 Compliance With Laws; Payment of Taxes. Borrower and
--------------------------------------
Guarantor are in compliance with, and the transactions contemplated hereby and
by the other Loan Documents do not and will not violate any provision of, or
require any filing, registration, consent or approval under, any Law presently
in effect having applicability to Borrower or Guarantor; Borrower has filed all
tax returns (federal, state and local) required to be filed and has paid all
taxes, assessments and governmental charges and levies due and payable
(including those in respect of the Premises), including interest and penalties.
Section 5.05 Litigation. There are no actions, suits or proceedings
----------
pending or, to Borrower's knowledge, threatened against or affecting it, the
Premises, the validity or enforceability of the Mortgage or the priority of the
lien thereof at law, in equity or before or by any Governmental Authorities, nor
are there any material actions, suits or proceedings pending or, to Borrower's
knowledge, threatened against or affecting Guarantor, except, in any case above,
actions, suits or proceedings which have been disclosed to Administrative Agent
and Lenders in writing and which are fully covered by insurance or would, if
adversely determined, not substantially impair the ability of Borrower or
Guarantor to pay when due any amounts which may become payable under
42
the Notes or Guaranty or to otherwise pay and perform their respective
obligations in connection with the Loan; to Borrower's knowledge, neither it nor
Guarantor is in default with respect to any order, writ, injunction, decree or
demand of any court or Governmental Authorities.
Section 5.06 No Conflicts or Defaults. The consummation of the
------------------------
transactions contemplated hereby and the performance hereof and of the other
Loan Documents have not resulted and will not result in any breach of, or
constitute a default under, any mortgage, deed of trust, lease, bank loan or
credit agreement, corporate charter, by-laws, partnership agreement or other
instrument to which Borrower or Guarantor is a party or by which either of them
may be bound or affected.
Section 5.07 Solvency. Borrower and Guarantor are, and upon
--------
consummation of the transactions contemplated by this Agreement, the other Loan
Documents and any other related documents, will be, solvent.
Section 5.08 Governmental Regulation. Borrower is not subject to
-----------------------
regulation under the Investment Company Act of 1940 or any Law limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.
Section 5.09 Insurance. Borrower has in force, and has paid the
---------
premiums in respect of, all of the insurance required by the Mortgage.
Section 5.10 ERISA. Neither Borrower nor Guarantor nor any other
-----
Person, including any fiduciary, has engaged in any prohibited transaction (as
defined in Section 4975 of the Code or Section 406 of ERISA) which could subject
Borrower or Guarantor or any Person whom they have an obligation to indemnify to
any tax or penalty imposed under Section 4975 of the Code or Section 502 of
ERISA; neither Borrower nor Guarantor nor any ERISA Affiliate maintains,
contributes to or has any liability with respect to a Multiemployer Plan or any
other plan subject to Title IV of ERISA; each Employee Benefit Plan is
administered in accordance with its terms and, except as disclosed to
Administrative Agent in writing, in compliance with all applicable Laws,
including any reporting requirements; each Pension Plan intending to qualify
under Section 401(a) or 401(k) of the Code does so qualify; there is no lien
outstanding or security interest given in connection with a Pension Plan;
neither Borrower nor Guarantor nor any ERISA Affiliate has any liability with
respect to an accumulated funding deficiency (whether or not waived) under
Section 412 of the Code or Section 302 of ERISA; neither Borrower nor Guarantor
has any liability for retiree medical or death benefits (contingent or
otherwise) other than as required by Section 4980B of the Code; and no part of
the funds to be used by Borrower or Guarantor in satisfaction of their
respective obligations under this Agreement and the other Loan Documents
constitute "plan assets" of any "employee benefit plan" within the meaning of
ERISA or of any "plan" within the meaning of Section 4975(e)(1) of the Code, as
interpreted by the Internal Revenue Service and the United States Department of
Labor in rules, regulations, releases or bulletins or as interpreted under
applicable case law.
43
Section 5.11 Other Documents. All Qualifying Leases, Residential Leases
---------------
and Premises Documents are unmodified (other than de minimis modifications or
-- -------
those approved by Administrative Agent as required hereby) and in full force and
effect, there are, to Borrower's knowledge, no defaults (or events which with
notice or the passage of time, or both, would constitute such a default) under
any thereof and all conditions to the effectiveness and continuing effectiveness
thereof required to be satisfied as of the date hereof have been satisfied.
Section 5.12 No Default. There exists no Default or Event of Default.
----------
Section 5.13 Accuracy of Information; Full Disclosure. Neither this
----------------------------------------
Agreement nor any documents, financial statements, reports, notices, schedules,
certificates, statements or other writings furnished by or on behalf of Borrower
or Guarantor to Administrative Agent or Lenders in connection with the
negotiation of this Agreement or the other Loan Documents or the consummation of
the transactions contemplated hereby, or required herein or by the other Loan
Documents to be furnished by or on behalf of Borrower or Guarantor, contains any
untrue or misleading statement of a material fact or omits a material fact
necessary to make the statements herein or therein not misleading; there is no
fact which Borrower has not disclosed to Administrative Agent and Lenders in
writing which materially affects adversely or, so far as Borrower can now
foresee, will materially affect adversely any of the Mortgaged Property or the
business affairs or financial condition of Borrower or Guarantor, or the ability
of Borrower or Guarantor to perform this Agreement and the other Loan Documents.
Section 5.14 Separate Tax and Zoning Lot. The Premises constitutes one
---------------------------
or more distinct parcels for purposes of zoning and of taxes, assessments and
impositions (public or private) and are not otherwise considered as part of a
larger single lot for purposes of zoning or of taxes, assessments or impositions
(public or private).
Section 5.15 Requisition as Reaffirmation. Each Requisition submitted
----------------------------
to Administrative Agent, and the receipt of the funds requested thereby, shall
constitute an affirmation that the representations and warranties contained
herein and in the other Loan Documents remain true and correct as of the
respective dates of such Requisitions.
Section 5.16 Plans and Improvements. The approved Plans are scheduled
----------------------
by sheet number, title, date and revised date in the letter from Borrower's
Architects in the form of EXHIBIT C, which schedule is hereby certified by
Borrower to be true and correct, and are the same as the filed plans referred to
in the building permits for the Improvements; the Plans are satisfactory to it,
have been reviewed and approved by Guarantor, the General Contractor, the
tenants under any leases and the parties to any Premises Documents which require
approval of the Plans, Borrower's Architects and, to the extent required by
applicable Law or any restrictive covenant, by all Governmental Authorities and
the beneficiary of any such covenant; all construction, if any, already
performed on the Improvements has been performed on the Premises in all material
respects in accordance with the Plans approved by the Persons named above and
with any restrictive covenants applicable thereto; to Borrower's knowledge,
there are no structural defects in the Improvements or violations of any
requirement of any Governmental
44
Authorities with respect thereto; the Tenant-Constructed Improvements and the
Improvements and the planned use thereof comply with all applicable zoning and
other Laws (including requirements with regard to parking spaces) and
restrictive covenants affecting the Premises; and all requirements for such use
have been or will be, on a timely basis, satisfied.
Section 5.17 Utility Services. All utility services necessary for the
----------------
construction of the Tenant-Constructed Improvements and the Improvements and the
operation thereof for their intended purposes are available at the boundaries of
the Premises, including water supply, storm and sanitary sewer, gas, electric
power and telephone facilities.
Section 5.18 Creation of Liens. It has entered into no contract or
-----------------
arrangement of any kind the performance of which by the other party thereto
would give rise to a lien on the Mortgaged Property prior to the Mortgage except
for its arrangements with Borrower's Architects, the General Contractor, Major
Subcontractors and contractors or subcontractors who have filed lien waivers or
signed Payment Receipts/Lien Releases in the form of EXHIBIT B-2 for all
payments due under said arrangements as of the end of the period covered by the
last Requisition.
Section 5.19 Roads. All off-site roads necessary for the full utilization
-----
of the Improvements for their intended purposes have either been completed or
the necessary rights of way therefor have been acquired by appropriate
Governmental Authorities or dedicated to public use and accepted by said
Governmental Authorities, and all necessary steps have been taken by Borrower
and said Governmental Authorities to assure the complete construction and
installation thereof no later than the Completion Date or any earlier date
required by any Law, Premises Document or lease.
Section 5.20 Construction Prior to Closing. It advised the Title Insurer in
-----------------------------
writing prior to the issuance of the title policy insuring the Mortgage whether
any survey, soils-testing, site-development, excavation or other work related to
construction of the Improvements was begun or done before the Mortgage was
recorded.
ARTICLE VI
COVENANTS OF BORROWER
---------------------
Borrower covenants and agrees that it will promptly:
Section 6.01 Compliance with Laws; Payment of Taxes. Subject to Borrower's
--------------------------------------
right to contest taxes in accordance with Section 1.07 of the Mortgage, and
other than non-compliance with other Laws that are the subject of a Good Faith
Contest, comply with all Laws applicable to it or the Mortgaged Property, or any
part thereof, such compliance to include, without limitation, paying before the
same become delinquent all taxes, assessments and governmental charges imposed
on it or the Mortgaged Property, or any part thereof, and promptly furnish
Administrative Agent with
45
any reports in Borrower's possession or obtainable with reasonable effort of any
official searches made by Governmental Authorities and any claims of violations
thereof.
Section 6.02 Leases and Premises Documents. Deliver to Administrative
-----------------------------
Agent, promptly following the execution thereof, certified copies of all leases
(together with abstracts of such leases, as available) in respect of the
Premises and all Premises Documents and all amendments or supplements to any
thereof (in any case, whether executed before or after the date hereof) together
with (i) if requested by Administrative Agent, estoppel certificates (in the
case of leases demising in excess of 5,000 SFGLA) from, and current financial
statements of, the tenants thereunder or parties thereto, as the case may be,
and of the guarantor(s), if any, of such tenants or parties, as may be required
under the applicable leases or rental agreements and as may be in the possession
of Borrower or obtainable by Borrower with reasonable effort, and (ii) in the
case of all retail leases specified by Administrative Agent, a notice-of-
assignment letter in the form of EXHIBIT F; not (x) enter into any lease of the
Residential Improvements which is not a Residential Lease, or modify any
Residential Lease in such a manner that it would no longer constitute a
Residential Lease or (y) enter into any lease of the Retail/Tenant-Constructed
Improvements which (A) covers more than 5,000 SFGLA or has an initial term of
less than five (5) years, (B) when taken together with all existing Qualifying
Leases (excluding ground leases under which Borrower does not provide a tenant
allowance), will yield a weighted average minimum rent for the first five (5)
years of the lease term which is less than $38.70 per square foot or (C)
contains non-market landlord defaults or tenant termination rights after opening
and prior to the fifth anniversary of the commencement of the lease term and,
when taken together with all other leases containing any such defaults or
termination rights, exceeds 50,000 SFGLA, without, in any such case, the prior
written approval of Administrative Agent, such approval not to be unreasonably
withheld or delayed; not enter into any lease of the Retail/Tenant-Constructed
Improvements which covers more than 20,000 SFGLA without the prior written
approval of the Required Lenders, such approval not be unreasonably withheld or
delayed; not modify (other than de minimis modifications) any lease of the
----------
Retail/Tenant-Constructed Improvements that originally required the approval of
Administrative Agent or the Required Lenders, without the prior written approval
of Administrative Agent or the Required Lenders, as applicable, and not modify
any other lease of the Retail/Tenant-Constructed Improvements in such a manner
that it would not conform to the requirements of clause (y) above; and keep all
Premises Documents and, except as may be permitted by the Mortgage, all leases
in full force and effect.
Provided there exists no Event of Default, in any case where Administrative
Agent's or the Required Lenders' prior written approval is required pursuant to
this Section, Administrative Agent or the Required Lenders, as the case may be,
shall be deemed to have approved Borrower's written request for approval if
Administrative Agent fails to respond, either by reasonably requesting
additional documentation or information or by disapproving the request, within
ten (10) Business Days after Administrative Agent's receipt of such written
request for approval from Borrower, provided such request shall make specific
--------
reference to the provisions of this Section and shall expressly state, in solid
capital letters on the first page thereof: "YOU ARE HEREBY REMINDED THAT YOUR
FAILURE TO PROVIDE NOTIFICATION [Add
46
if applicable: ON BEHALF OF THE REQUIRED LENDERS] OF APPROVAL OR DISAPPROVAL, OR
TO REASONABLY REQUEST ADDITIONAL DOCUMENTATION OR INFORMATION, NOT LATER THAN
TEN (10) BUSINESS DAYS AFTER YOUR RECEIPT OF THIS REQUEST SHALL BE DEEMED TO
CONSTITUTE [YOUR] [THE REQUIRED LENDERS'] APPROVAL THEREOF." Notwithstanding the
provisions of Section 8.11, the Lender Reply Period with respect to requests
from Administrative Agent regarding approvals under this Section 6.02 shall be
five (5), rather than ten (10), Business Days.
Section 6.03 Continuing Accuracy of Representations and Warranties. Cause
-----------------------------------------------------
all of the representations and warranties made to Administrative Agent or
Lenders herein and in the other Loan Documents to be continuously true and
correct.
Section 6.04 Covenants, Restrictions and Easements. Comply with all
-------------------------------------
restrictions, covenants and easements affecting the Premises or the Improvements
and cause the satisfaction of all conditions hereof.
Section 6.05 Inspection and Cooperation. Permit Administrative Agent or any
--------------------------
Lender, their representatives and the Construction Consultant to enter upon the
Premises, inspect the Improvements and all materials to be used in the
construction thereof and examine all detailed plans and shop drawings which are
or may be kept at the construction site; cooperate and use commercially
reasonable efforts to cause the General Contractor and Major Subcontractors with
whom Borrower has a direct contract to cooperate with the Construction
Consultant to enable it to perform its functions hereunder; at the time of each
inspection by the Construction Consultant, make available to said consultant, on
demand, daily log sheets covering the period since the immediately preceding
inspection showing the date, weather, subcontractors on the job, number of
workers and status of construction.
Section 6.06 Payment of Costs. Pay all Direct and Indirect Costs and
----------------
expenses required for completion of the Improvements and the satisfaction of the
conditions hereof, including, without limitation:
(a) all document and stamp taxes, recording and filing expenses and
fees and commissions lawfully due to brokers in connection with the
transactions contemplated hereby,
(b) any taxes, insurance premiums, liens, security interests or other
claims or charges against the Premises or Improvements, and
(c) all costs of completion of the work to be performed by Borrower in
space to be occupied in the Improvements (including public space) to permit
the lawful occupancy thereof for the purposes contemplated by actual or
prospective lessees of such space as set forth in the individual leases or
subleases thereof or in detailed work letters or other agreements or letters
of intent with respect thereto, or, in cases where there are no such leases,
subleases, work letters or other documents as aforesaid, as set forth in
Borrower's standard work letter or the
47
standard forms of lease required by paragraph (9) of Section 4.01(a) and
Section 6.21, or, in cases where none of the foregoing exists, to the level of
building standard in accordance with industry practices, as conclusively
determined by the Construction Consultant.
Section 6.07 Brokers. Indemnify Administrative Agent and Lenders against
-------
claims of brokers (other than brokers engaged solely by Administrative Agent or
Lenders) arising by reason of the execution hereof or the consummation of the
transactions contemplated hereby.
Section 6.08 Construction of Improvements. Submit a Requisition for the
----------------------------
Initial Advance within one hundred twenty (120) days (provided, however, that
such period shall be extended by ninety (90) days if Borrower extends the
termination date for its entitlement to advances in accordance with Section
8.20) of the date hereof and for subsequent advances on a monthly basis
thereafter; cause construction of the Improvements to be prosecuted with
diligence and continuity in a good and workmanlike manner in accordance with the
Plans except during the existence of delays (for not more than thirty (30) days)
caused by events beyond its control; use only materials, fixtures, furnishings
and equipment in connection with construction of the Improvements that are not
used or obsolete; and complete construction of the Improvements (other than
Building 5 and Building 9), and the installation of all necessary roads and
utilities, in accordance with the Plans, on or before the Completion Date free
and clear of defects and liens or claims for liens for material supplied or
labor or services performed in connection with the construction of the
Improvements; time being of the essence as to this Section.
Section 6.09 Project Sign. Following the execution hereof, place a sign,
------------
at its own expense, on the Premises at a location satisfactory to Administrative
Agent indicating, among other things, that Agents are providing the financing
for construction of the Improvements.
Section 6.10 Building Loan Trust Account. Receive and deposit in the
---------------------------
Building Loan Trust Account all advances made hereunder; hold the same and the
right to receive the same as a trust fund for the purpose of paying only Direct
and Indirect Costs.
Section 6.11 Certain Materials to be Submitted. Deliver to Administrative
---------------------------------
Agent and the Construction Consultant copies of all contracts, bills of sale,
statements, receipted vouchers or agreements under which Borrower claims title
to any materials, fixtures or articles incorporated in the Improvements or
subject to the lien of the Mortgage, or under which it has incurred costs for
which it is entitled to an advance of proceeds of the Loan, and deliver to
Administrative Agent such other data or documents in connection with the
Improvements as Administrative Agent may from time to time request.
Section 6.12 Correction of Defects and Departures from Plans. Upon demand
-----------------------------------------------
of Administrative Agent or the Construction Consultant, correct any defects
48
(including structural) in the Improvements or any departures from the Plans not
approved by Administrative Agent.
Section 6.13 Change Orders. Not permit the performance of any work pursuant
-------------
to any Change Order or Plans that (A) will result in a change in the aggregate
of the contract prices for the construction of the Improvements in excess of
$750,000, or (B) together with the aggregate of Change Orders theretofore
executed by Borrower (excluding those approved by Administrative Agent pursuant
to this Section) will result in a change in such prices in excess of $5,000,000,
or (C) will result in a change in the character or scope of the Improvements,
until Administrative Agent shall have given specific written approval thereof;
it being understood that approval of any Plans or Change Order will not obligate
Lenders to increase or advance any Loan Budget Amount on account of any such
Plans or Change Order. Borrower shall promptly submit copies of all General
Contracts, Major Subcontracts, Plans and Change Orders to Administrative Agent,
whether or not Administrative Agent's approval thereof is required. Provided
there exists no Event of Default, in any case where Administrative Agent's
approval is required pursuant to this Section, Administrative Agent shall be
deemed to have approved Borrower's written request for approval if
Administrative Agent fails to respond, either by reasonably requesting
additional documentation or information or by disapproving the request, within
ten (10) Business Days after Administrative Agent's receipt of such written
request for approval from Borrower, provided such request shall make specific
--------
reference to the provisions of this Section and shall expressly state, in solid
capital letters on the first page thereof: "YOU ARE HEREBY REMINDED THAT YOUR
FAILURE TO PROVIDE NOTIFICATION OF APPROVAL OR DISAPPROVAL, OR TO REASONABLY
REQUEST ADDITIONAL DOCUMENTATION OR INFORMATION, NOT LATER THAN TEN (10)
BUSINESS DAYS AFTER YOUR RECEIPT OF THIS REQUEST SHALL BE DEEMED TO CONSTITUTE
YOUR APPROVAL THEREOF."
Section 6.14 Regarding Construction Contracts. Require covenants from the
--------------------------------
General Contractor and Major Subcontractors who have contracts directly with
Borrower (which covenants may be contained in such contractor's "will-serve"
letter) to the same effect as the covenant made by Borrower in the immediately
preceding Section; and provide in every General Contract (or in the General
Contractor's "will-serve" letter) that the General Contractor will deliver, upon
request, to Administrative Agent or the Construction Consultant copies of all
Major Subcontracts, Change Orders and any other contract, purchase order or
subcontract covering labor, materials, equipment or furnishings to or for the
Improvements, and the names of all Persons with whom the General Contractor has
contracted or intends to contract for the construction of the Improvements or
for the furnishing of labor or materials therefor.
Section 6.15 Security of Site. Employ suitable means to protect from theft
----------------
or vandalism all portions of the Improvements and all tools and building
materials stored on the Premises.
Section 6.16 Management, Leasing and Service Contracts. (i) Keep in full
-----------------------------------------
force and effect and not materially modify the management and/or leasing
agreement(s)
49
approved pursuant to paragraph (13) of Section 4.01(a) without the prior written
consent of the Required Lenders and (ii) deliver to Administrative Agent, as and
when executed, certified copies of all material maintenance and other material
service contracts entered into with respect to the Premises; and, unless the
contract provides for a thirty (30)-day termination right on the part of
Borrower or its successors or assigns, upon request of Administrative Agent,
cause the service provider under each such contract to deliver to Administrative
Agent a "will-serve" letter pursuant to which such service provider shall
undertake, inter alia, to continue performance on Lenders' behalf in the event
----- ----
of a Default or Event of Default without additional cost (other than sums owed
pursuant to such contract for services thereafter rendered to or for
Administrative Agent or Lenders at its or their request).
Section 6.17 Administration Fee. Pay to Administrative Agent, for its own
------------------
account, each installment of the administration fee required by the Supplemental
Fee Letter.
Section 6.18 Reporting Requirements. Furnish to Administrative Agent (it
----------------------
being understood that Administrative Agent shall provide, promptly upon request,
to each Lender):
(1) Annual Financial Statements. As soon as available and in any event
---------------------------
within one hundred twenty (120) days after the end of the respective fiscal
years of Borrower and Guarantor, Financial Statements of Borrower and
Guarantor, as of the end of and for such fiscal year, certified by the
principal financial or accounting officer of Borrower or Guarantor, as the
case may be, in reasonable detail, stating in comparative form the respective
figures for the preceding fiscal year and, in case of Guarantor, audited by
Borrower's Accountants; and accompanied by a detailed explanation in the event
any such Financial Statements are qualified;
(2) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within sixty (60) days after the end of each calendar quarter, Financial
Statements of Borrower and Guarantor, as of the end of and for such calendar
quarter, certified by the principal financial or accounting officer of
Borrower or Guarantor, as the case may be, in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period
in the preceding fiscal year;
(3) Certificate of No Default and Covenant Compliance. At the time of
-------------------------------------------------
the delivery of the Financial Statements required by paragraph (2) above, a
certificate of the principal financial or accounting officer of Borrower or
Guarantor, as the case may be, dated within five (5) days of the delivery of
such statements to Administrative Agent, stating that (x) such officer knows
of no Default or Event of Default which has occurred and is continuing, or, if
any such Default or Event of Default has occurred and is continuing,
specifying the nature and period of existence thereof and what action Borrower
or Guarantor has taken or proposes to take with respect thereto and (y) the
covenants contained in Section
50
6.19 hereof and in paragraphs 9 and 10 of the Payment Guaranty have been
complied with (or specifying those that have not been complied with) and
including detailed computations demonstrating such compliance (or non-
compliance);
(4) Notice of Litigation. Promptly after the commencement and
--------------------
knowledge thereof, notice of all actions, suits and proceedings before any
court or arbitrator or any Governmental Authorities, affecting Borrower,
Guarantor or all or any part of the Mortgaged Property which, if determined
adversely, is likely to result in a Material Adverse Change;
(5) Notices of Defaults. As soon as possible and in any event within
-------------------
ten (10) days after Borrower becomes aware of the occurrence of a material
Default or any Event of Default, a written notice setting forth the details of
such Default or Event of Default and the action that has been taken or is
proposed to be taken with respect thereto;
(6) Leasing Reports and Property Information. Monthly, (i) a current
----------------------------------------
certified leasing status report with respect to the Premises and a certified
rent roll containing the names of all lessees of the Premises, the terms of
their respective leases, the spaces occupied and the rentals payable
thereunder and specifying any co-tenancy or termination rights, together with
copies, certified to be true and complete, of such leases as may be requested
by Administrative Agent and (ii) a tenant sales report summary;
(7) Material Adverse Change. As soon as is practicable and in any
-----------------------
event within five (5) days after knowledge of the occurrence of any event or
circumstance which is likely to result in or has resulted in a Material
Adverse Change, written notice thereof;
(8) Bankruptcy of Tenants. Promptly after becoming aware of the same,
---------------------
written notice of the bankruptcy, insolvency or cessation of operations of any
tenant in the Retail/Tenant-Constructed Improvements;
(9) Offices. Thirty (30) days' prior written notice of any change in
-------
the chief executive office or principal place of business of Borrower or
Guarantor;
(10) Environmental and Other Notices. As soon as possible and in any
-------------------------------
event within five (5) days after receipt, copies of (a) all environmental
notices received by Borrower or Guarantor from any Governmental Authority or
any other Person which are not received in the ordinary course of business and
which relate to the Premises or to a situation which is likely to result in a
Material Adverse Change and (b) all reports in Borrower's possession or
obtainable with reasonable effort of any official searches made by any
Governmental Authority having jurisdiction over the Premises or the
Improvements, and of any claims of violations thereof;
51
(11) Insurance Coverage. Promptly, such information concerning
------------------
Borrower's or Guarantor's insurance coverage as Administrative Agent may
reasonably request;
(12) Operating Budgets. As soon as available and in any event within
-----------------
thirty (30) days after the end of each fiscal year, an operating budget and
forecasts for the Premises for the next fiscal year;
(13) Transfers. Prior to the consummation thereof, written notice of
---------
any transfers or other disposition (voluntarily or involuntarily) of interests
(direct or indirect) in Borrower; and
(14) General Information. Promptly, such other information respecting
-------------------
the condition or operations, financial or otherwise, of Borrower, Guarantor or
the Premises as Administrative Agent or any Lender may from time to time
reasonably request.
Section 6.19 Property Covenants. If, as of the end of any calendar quarter
------------------
during the second extension term contemplated by Section 2.18 (assuming an
effective exercise by Borrower of both of its options to extend the Maturity
Date, as provided in said Section) Debt Service Coverage is less than 1.25 then,
within ten (10) days after the earlier to occur of (i) notice by Administrative
Agent to Borrower of such condition or (ii) delivery by Borrower of statements
reflecting such condition, make a payment in reduction of the then Principal
Amount, in the amount necessary to cause Debt Service Coverage to be 1.25 or
greater.
Section 6.20 Interest Rate Protection and Assignment. Implement the
---------------------------------------
interest rate protection strategy when and as described in the certificate
delivered pursuant to paragraph (4) of Section 4.02(e) and, in connection
therewith, deliver to Administrative Agent a fully executed counterpart of an
interest rate protection agreement(s) between Borrower and a financial
institution acceptable to the Required Lenders consistent with said strategy,
together with an assignment of Borrower's rights thereunder to Administrative
Agent as security for the Loan, which assignment shall be acknowledged and
consented to by said financial institution.
Section 6.21 Residential Standard Form Lease. Prior to entering into any
-------------------------------
lease of any Residential Unit, deliver to Administrative Agent a certified copy
of the standard form of lease Borrower intends to use for the leasing of the
Residential Improvements, which standard form lease shall be subject to the
approval of the Required Lenders.
Section 6.22 Cost Sharing Agreement. Make when due all payments required to
----------------------
be made by FRIT LLC under the Cost Sharing Agreement, dated May 31, 2000,
between FRIT LLC and VF Mall LLC; and provide evidence to Administrative Agent
of the satisfactory completion (and approval by the applicable Governmental
Authorities) of the work required to be performed by VF Mall LLC under said Cost
Sharing Agreement when such work is completed.
52
Section 6.23 Declaration. Duly perform or cause to be performed all
-----------
obligations of the "Declarant" under the Declaration; and not allow any member
of the "Board" or "Architectural Committee" (as such quoted terms are defined in
the Declaration), or any officer of the Association, in any such case that was
appointed by Borrower, to resign or be removed from office, unless Borrower
shall have caused to be delivered to Administrative Agent a duly executed letter
of resignation from each successor or additional member or officer in the form
of EXHIBIT J.
ARTICLE VII
ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS
---------------------------------------------
Section 7.01 Appointment, Powers and Immunities of Administrative Agent.
----------------------------------------------------------
Each Lender hereby irrevocably appoints and authorizes Administrative Agent to
act as its agent hereunder and under any other Loan Document with such powers as
are specifically delegated to Administrative Agent by the terms of this
Agreement and any other Loan Document, together with such other powers as are
reasonably incidental thereto, and Administrative Agent hereby accepts such
appointment and authorization in accordance with such terms. Administrative
Agent shall perform its obligations under this Agreement and the other Loan
documents in good faith according to the same standard of care as that
customarily exercised by Administrative Agent in administering its own real
estate loans. Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and any other Loan Document
or required by Law, and shall not by reason of this Agreement be a fiduciary or
trustee for any Lender except to the extent that Administrative Agent acts as an
agent with respect to the receipt or payment of funds, nor shall Administrative
Agent have any fiduciary duty to Borrower nor shall any Lender have any
fiduciary duty to Borrower or any other Lender. No implied covenants,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against Administrative Agent. Neither
Administrative Agent nor any of its directors, officers, employees, agents,
attorneys-in-fact or Affiliates shall be responsible to Lenders for any
recitals, statements, representations or warranties made by Borrower or any
officer, partner or official of Borrower or any other Person contained in this
Agreement or any other Loan Document, or in any certificate or other document or
instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any lien
securing the obligations hereunder or thereunder or for any failure by Borrower
or any Guarantor to perform any of its obligations hereunder or thereunder.
Administrative Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither Administrative Agent nor any of its
directors, officers, employees, agents, attorneys-in-fact or Affiliates shall be
liable or responsible for any action taken or omitted to be taken
53
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith, except for its or their own gross negligence or willful
misconduct.
Section 7.02 Reliance by Administrative Agent. Administrative Agent shall
--------------------------------
be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Administrative Agent.
Administrative Agent may deem and treat each Lender as the holder of its Note
and interest in the Loan for all purposes hereof and shall not be required to
deal with any Person who has acquired a Participation in the Loan from a Lender.
As to any matters not expressly provided for by this Agreement or any other Loan
Document, Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, in accordance with instructions signed by the
Required Lenders, and such instructions of the Required Lenders and any action
taken or failure to act pursuant thereto shall be binding on all Lenders and any
other holder of all or any portion of the Loan or Participation therein.
Section 7.03 Defaults. Administrative Agent shall not be deemed to have
--------
knowledge of the occurrence of a Default or of an Event of Default unless
Administrative Agent has actual knowledge thereof or has received notice from a
Lender or Borrower specifying such Default or Event of Default and stating that
such notice is a "Notice of Default." In the event that Administrative Agent has
such actual knowledge or receives such a notice of the occurrence of a Default
or Event of Default, Administrative Agent shall give prompt notice thereof to
Lenders. Administrative Agent shall promptly send to each Lender a copy of any
notice of a Default or Event of Default that Administrative Agent sends to
Borrower or Guarantor. Administrative Agent, following consultation with
Lenders, shall (subject to Section 7.07) take such action with respect to such
Default or Event of Default which is continuing, including with respect to the
exercise of remedies or the realization on, or operation or disposition of, any
or all of the Mortgaged Property or any other collateral for the Loan, as shall
be directed by the Required Lenders; provided, however, that, unless and until
-------- -------
Administrative Agent shall have received such directions, Administrative Agent
may take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem to be in the best interest of
Lenders. In no event shall Administrative Agent be required to take any such
action which it determines to be contrary to the Loan Documents or to Law. Each
of Lenders acknowledges and agrees that no individual Lender may separately
enforce or exercise any of the provisions of any of the Loan Documents
(including, without limitation, the Notes) other than through Administrative
Agent.
Section 7.04 Rights of Administrative Agent as Lender. With respect to its
----------------------------------------
Note and interest in the Loan, Administrative Agent in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as Administrative Agent,
and the terms "Lender" and "Lenders" shall include Administrative Agent in its
capacity as a Lender. Administrative Agent and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to
(on a secured or unsecured basis), and
54
generally engage in any kind of banking, trust or other business with, Borrower
or Guarantor (and any Affiliates of them) as if it were not acting as
Administrative Agent.
Section 7.05 Sharing of Costs by Lenders; Indemnification of Administrative
--------------------------------------------------------------
Agent. Each Lender agrees to pay its ratable share, based on the respective
-----
outstanding principal balances under its Note and the other Notes, of any
reasonable expenses incurred (and not paid or reimbursed by Borrower after
demand for payment is made by Administrative Agent) by or on behalf of Lenders
in connection with any Default or Event of Default, including, without
limitation, costs of enforcement of the Loan Documents and any advances to pay
taxes or insurance premiums, to complete the Improvements or otherwise to
preserve the lien of the Mortgage or to preserve or protect the Mortgaged
Property. In the event a Lender fails to pay its share of expenses as aforesaid,
and all or a portion of such unpaid amount is paid by Administrative Agent
and/or one or more of the other Lenders, then the defaulting Lender shall
reimburse Administrative Agent and/or the other Lender(s) for the portion of
such unpaid amount paid by it or them, as the case may be, together with
interest thereon at the Prime Based Rate from the date of payment by
Administrative Agent and/or the other Lender(s). In addition, each Lender agrees
to reimburse and indemnify Administrative Agent (to the extent it is not paid by
on or behalf of Borrower, after demand for payment is made by Administrative
Agent, under Section 8.18 or under the applicable provisions of any other Loan
Document, but without limiting the obligation of Borrower under said Section
8.18 or such provisions), for such Lender's ratable share, based upon the
respective outstanding principal balances under its Note and the other Notes, of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in any way relating to or arising out of this Agreement,
any other Loan Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which Borrower is obligated to pay under
Section 8.18 or under the applicable provisions of any other Loan Document) or
the enforcement of any of the terms hereof or thereof or of any such other
documents or instruments; provided, however, that no Lender shall be liable for
-------- -------
(i) any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified or (ii) any loss of principal
or interest with respect to Administrative Agent's Note or interest in the Loan.
Section 7.06 Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender agrees that it has, independently and without reliance on Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own analysis of the collateral for the Loan and of
the credit of Borrower and Guarantor, and its own decision to enter into this
Agreement, and that it will, independently and without reliance upon
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any other Loan Document. Administrative Agent shall not be required to keep
itself informed as to the performance or observance by Borrower of this
Agreement or any other Loan Document or any other document referred to or
provided for herein or
therein or to inspect the properties (including, without limitation, the
Premises) or books of Borrower. Except for notices, reports and other documents
and information expressly required to be furnished to Lenders by Administrative
Agent hereunder, Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
affairs, financial condition or business of Borrower or Guarantor (or any
Affiliate of them) which may come into the possession of Administrative Agent or
any of its Affiliates. Administrative Agent shall not be required to file this
Agreement, any other Loan Document or any document or instrument referred to
herein or therein, for record or give notice of this Agreement, any other Loan
Document or any document or instrument referred to herein or therein, to anyone.
Section 7.07 Failure of Administrative Agent to Act. Except for action
--------------------------------------
expressly required of Administrative Agent hereunder, Administrative Agent shall
in all cases be fully justified in failing or refusing to act hereunder unless
it shall have received reasonable further assurances (which may include cash
collateral) of the indemnification obligations of Lenders under Section 7.05 in
respect of any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. If any indemnity
furnished to Administrative Agent for any purpose shall, in the reasonable
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for an additional indemnity and cease, or not
commence, the action indemnified against until such additional indemnity is
furnished.
Section 7.08 Resignation or Removal of Administrative Agent.
----------------------------------------------
Administrative Agent may resign on at least thirty (30) days' written notice to
Lenders and Borrower or upon the occurrence of an Event of Default; provided,
--------
however, that, absent the occurrence of an Event of Default, Administrative
-------
Agent agrees not to resign prior to substantial completion of the Improvements.
Administrative Agent may be removed by the Required Lenders (i) with cause, at
any time and (ii) without cause, in the event (x) Administrative Agent fails to
maintain an Individual Loan Commitment of at least $10,000,000 or (y) if Commerz
is Administrative Agent, it has an Individual Loan Commitment that is smaller
than that of Fleet or HVB or is less than $10,000,000, provided that, in any
--------
such case, Borrower and the other Lenders shall be promptly notified thereof.
Upon such resignation or removal of Administrative Agent, the Required Lenders
shall have the right to appoint a successor Administrative Agent, which
successor Administrative Agent shall (provided there exists no Event of Default)
be subject to Borrower's approval, such approval not to be unreasonably withheld
or delayed. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within twenty
(20) days after the resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
Lenders, appoint a successor Administrative Agent, which shall be one of
Lenders, within ten (10) days. The Required Lenders or the retiring
Administrative Agent, as the case may be, shall upon the appointment of a
successor Administrative Agent promptly so notify Borrower and the other
Lenders. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be
56
discharged from its duties and obligations hereunder. The retiring
Administrative Agent shall reasonably cooperate with such successor
Administrative Agent regarding the assumption of such duties. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article VII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent. The periodic administration fee paid to the retiring
Administrative Agent pursuant to the Supplemental Fee Letter shall be deemed
earned by such retiring Administrative Agent only to the extent of the actual
days elapsed in the period to which such administration fee relates, and upon
appointment of a successor Administrative Agent, the retiring Administrative
Agent shall pay to such successor a pro-rata portion of such periodic
administration fee based upon the number of days remaining in such period.
Section 7.09 Amendments Concerning Agency Function. Notwithstanding
-------------------------------------
anything to the contrary contained in this Agreement, Administrative Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Loan Document which affects its duties, rights, and/or
functions hereunder or thereunder unless it shall have given its prior written
consent thereto.
Section 7.10 Liability of Administrative Agent. Administrative Agent shall
---------------------------------
not have any liabilities or responsibilities to Borrower on account of the
failure of any Lender to perform its obligations hereunder or to any Lender on
account of the failure of Borrower to perform its obligations hereunder or under
any other Loan Document.
Section 7.11 Transfer of Agency Function. Without the consent of Borrower
---------------------------
or any Lender, Administrative Agent may at any time or from time to time
transfer its functions as Administrative Agent hereunder to any of its offices
wherever located in the United States, provided that Administrative Agent shall
--------
promptly notify Borrower and Lenders thereof.
Section 7.12 Non-Receipt of Funds by Administrative Agent; Adjustments.
---------------------------------------------------------
(a) Unless Administrative Agent shall have received notice from a Lender
or Borrower (either one as appropriate being the "Payor") prior to the date on
which such Lender is to make payment hereunder to Administrative Agent of Loan
proceeds or Borrower is to make payment to Administrative Agent, as the case may
be (either such payment being a "Required Payment"), which notice shall be
effective upon receipt, that the Payor will not make the Required Payment in
full to Administrative Agent, Administrative Agent may assume that the Required
Payment has been made in full to Administrative Agent on such date, and
Administrative Agent in its sole discretion may, but shall not be obligated to,
in reliance upon such assumption, make the amount thereof available to the
intended recipient on such date. If and to the extent the Payor shall not have
in fact so made the Required Payment in full to Administrative Agent, the
recipient of such payment shall repay to Administrative Agent forthwith on
demand such amount made available to it together with interest thereon, for each
day from the date such amount was so made available by Administrative Agent
until the date Administrative Agent recovers such amount, at the Federal Funds
Rate.
57
(b) If, after Administrative Agent has paid each Lender's share of any
payment received or applied by Administrative Agent in respect of the Loan, that
payment is rescinded or must otherwise be returned or paid over by
Administrative Agent, whether pursuant to any bankruptcy or insolvency Law,
sharing of payments clause of any loan agreement or otherwise, such Lender
shall, at Administrative Agent's request, promptly return its share of such
payment or application to Administrative Agent, together with such Lender's
proportionate share of any interest or other amount required to be paid by
Administrative Agent with respect to such payment or application. In addition,
if a court of competent jurisdiction shall adjudge that any amount received and
distributed by Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to Administrative
Agent its share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
Section 7.13 Withholding Taxes. Each Lender represents that it is entitled
-----------------
to receive any payments to be made to it hereunder without the withholding of
any tax and will furnish to Administrative Agent such forms, certifications,
statements and other documents as Administrative Agent may reasonably request
from time to time to evidence such Lender's exemption from the withholding of
any tax imposed by any jurisdiction or to enable Administrative Agent to comply
with any applicable Laws relating thereto. Without limiting the effect of the
foregoing, if any Lender is not created or organized under the Laws of the
United States or any State thereof, such Lender will furnish to Administrative
Agent Form W-8ECI or Form W-8BEN of the U.S. Internal Revenue Service, or such
other forms, certifications, statements or documents, duly executed and
completed by such Lender, as evidence of such Lender's complete exemption from
the withholding of United States tax with respect thereto. Administrative Agent
shall not be obligated to make any payments hereunder to such Lender in respect
of the Loan until such Lender shall have furnished to Administrative Agent the
requested form, certification, statement or document.
Section 7.14 Sharing of Payments among Lenders. If a Lender shall obtain
---------------------------------
payment of any principal of its Note or of interest thereon through the exercise
of any right of setoff, banker's lien or counterclaim, or by any other means
(including direct payment), and such payment results in such Lender receiving a
greater payment than it would have been entitled to had such payment been paid
directly to Administrative Agent for disbursement to Lenders, then such Lender
shall promptly purchase for cash from the other Lenders Participations in the
Loan in such amounts, and make such other adjustments from time to time as shall
be equitable, to the end that all Lenders shall share ratably the benefit of
such payment. To such end Lenders shall make appropriate adjustments among
themselves (by the resale of Participations sold or otherwise) if such payment
is rescinded or must otherwise be restored.
Section 7.15 Possession of Documents. Each Lender shall maintain
-----------------------
possession of its own Note. Administrative Agent shall hold all other Loan
Documents and related documents in its possession and maintain separate records
and accounts with respect to the Loan, reflecting the interests of Lenders in
the Loan, and shall permit
58
Lenders and their representatives access at all reasonable times to inspect such
Loan Documents, related documents, records and accounts.
Section 7.16 Effect of a Lender's Failure to Make an Advance. In the event
-----------------------------------------------
any Lender fails for any reason to fund the portion it is required to fund of
any advance of Loan proceeds by 3:00 p.m. (Eastern time) on the second Business
Day after the date established by Administrative Agent as the date such advance
is to be made, such Lender shall be a "Delinquent Lender" for all purposes
hereunder until and unless such delinquency is cured in accordance with the
terms of and by the time permitted under Section 7.17, and the following
provisions shall apply:
(a) Administrative Agent shall notify (such notice being referred to
as the "Delinquency Notice") each Lender and Borrower of any Lender's
failure to fund. Each Non-Delinquent Lender shall have the right, but in no
event or under any circumstance the obligation, to fund such Delinquent
Lender's portion of such advance, provided that, within twenty (20) days of
--------
the date of the Delinquency Notice (the "Election Period"), such Non-
Delinquent Lender or Lenders (each such Lender, an "Electing Lender")
irrevocably commit(s) by notice in writing (an "Election Notice") to
Administrative Agent, the other Lenders and Borrower to fund the Delinquent
Lender's portion of the advance that is the subject of the delinquency and
to assume the Delinquent Lender's obligations with respect to the advancing
of the entire undisbursed portion of the Delinquent Lender's Individual
Loan Commitment (such entire undisbursed portion of the Delinquent Lender's
Individual Loan Commitment, including its portion of the advance that is
the subject of the delinquency, the "Delinquency Amount"). If
Administrative Agent receives more than one Election Notice within the
Election Period, then the Electing Lenders sending such notices shall be
deemed to have committed to fund ratable shares of the Delinquency Amount
based upon the amounts of their respective Individual Loan Commitments. If
there are one or more Electing Lenders and the Delinquent Lender fails to
cure during the Election Period as provided in Section 7.17, then upon the
expiration of the Election Period, each Electing Lender's Individual Loan
Commitment shall be automatically increased by the Delinquency Amount (if
there is only one Electing Lender) or such Electing Lender's ratable share,
determined as aforesaid, of the Delinquency Amount (if there are two or
more Electing Lenders), and the Delinquent Lender's Individual Loan
Commitment shall automatically be reduced by the Delinquency Amount.
Administrative Agent shall thereupon notify Borrower and each Lender of (i)
the adjusted amounts of the Individual Loan Commitments and (ii) if the
advance that was the subject of the delinquency was not made pursuant to
Section 7.12 or was refunded by Borrower pursuant to paragraph (e) of this
Section, the rescheduled date of such advance (which shall be no sooner
than three (3) Business Days after such notice). In the event
Administrative Agent shall have funded, pursuant to Section 7.12, the
entire advance that was the subject of the delinquency (including the
Delinquent Lender's portion), and Borrower shall not have refunded such
advance pursuant to paragraph (e) of this Section, the Electing Lender(s)
shall remit to Administrative Agent the Delinquent Lender's portion of the
advance, or their ratable shares thereof, as the case may be, within three
(3)
59
Business Days of the notice provided for in the immediately preceding
sentence, and Administrative Agent shall reimburse itself from such funds
for making the Delinquent Lender's portion of the advance. Notwithstanding
anything to the contrary contained herein, if Administrative Agent advances
its own funds in respect of a Delinquent Lender's portion of an advance,
Administrative Agent shall be entitled to the interest on the portion of
the Principal Amount represented thereby, from the date Administrative
Agent makes such advance until the date it is reimbursed therefor.
(b) In connection with the adjustment of the amounts of the
Individual Loan Commitments of the Delinquent Lender and Electing Lender(s)
upon the expiration of the Election Period as aforesaid, Borrower covenants
that it shall, promptly following the request of the Electing Lender(s),
execute and deliver to each Electing Lender and the Delinquent Lender
substitute notes substantially in the form of EXHIBIT H and stating: "This
Note is a substitute note as contemplated by Section 7.16 of the Loan
Agreement; it replaces and is in lieu of that certain note made by Maker
dated [date of Note] to the order of [Lender] in the principal sum of
[Lender's original Individual Loan Commitment]." Such substitute notes
shall be in amounts equal to such Lenders' respective Individual Loan
Commitments, as adjusted. All such substitute notes shall constitute
"Notes" and the obligations evidenced by such substitute notes shall be
secured by the Mortgage. In connection with Borrower's execution of
substitute notes as aforesaid, Borrower shall deliver to Administrative
Agent such evidence of the due authorization, execution and delivery of the
substitute notes and any related documents as Administrative Agent may
reasonably request; provided that Borrower shall and be required to deliver
a legal opinion in connection with the substitute notes. The execution and
delivery of substitute notes as required above shall be a condition
precedent to any further advances of Loan proceeds. Upon receipt of its
substitute note, the Electing Lender and the Delinquent Lender will return
to Borrower their notes that were replaced, provided that the delivery of a
--------
substitute note to the Delinquent Lender pursuant to this Section 7.16
shall operate to void and replace the note(s) previously held by the
Delinquent Lender regardless of whether or not the Delinquent Lender
returns same as required hereby. Borrower, Administrative Agent and Lenders
shall execute such modifications to the Loan Documents as shall, in the
reasonable judgment of Administrative Agent, be necessary or desirable in
connection with the adjustment of the amounts of Individual Loan
Commitments in accordance with the foregoing provisions of this Section.
(c) In the event that no Lender elects to commit to fund the
Delinquency Amount within the Election Period as provided in paragraph (a)
of this Section, Administrative Agent shall, upon the expiration of the
Election Period, so notify Borrower and each Lender and the provisions of
Section 2.09 shall apply.
(d) Subject to a Delinquent Lender's right to cure as provided in
Section 7.17, but notwithstanding anything else to the contrary contained
in this
60
Agreement, the Delinquent Lender's interest in, and any and all amounts due
to a Delinquent Lender under, the Loan Documents (including, without
limitation, all principal, interest, fees and expenses) shall be
subordinate in lien priority and to the repayment of all amounts
(including, without limitation, interest) then or thereafter due or to
become due to the Non-Delinquent Lenders under the Loan Documents
(including future advances) and the Delinquent Lender, after it becomes
such, shall have no right to participate in any discussions among and/or
decisions by Lenders hereunder and/or under the other Loan Documents.
Further, subject to Section 7.17, any Delinquent Lender shall be bound by
any amendment to, or waiver of, any provision of, or any action taken or
omitted to be taken by Administrative Agent and/or the Non-Delinquent
Lenders under, any Loan Document which is made subsequent to the Delinquent
Lender's becoming a Delinquent Lender.
(e) If, pursuant to the operation of Section 7.12, an advance of Loan
proceeds is made without Administrative Agent's receipt of a Delinquent
Lender's portion thereof, in addition to Borrower's obligations under
Section 7.12, Borrower shall, upon demand of Administrative Agent, refund
the entire such advance to Administrative Agent. Borrower's failure to do
so within ten (10) days of such demand shall, notwithstanding anything to
the contrary contained herein or in the Mortgage, constitute an Event of
Default under the Mortgage. Upon its receipt of such funds from Borrower,
Administrative Agent shall promptly remit to each Non-Delinquent Lender its
appropriate share thereof.
Section 7.17 Cure by Delinquent Lender. A Delinquent Lender may cure
-------------------------
a delinquency arising out of its failure to fund its required portion of any
advance if, within the Election Period, it remits to Administrative Agent its
required portion of such advance (together with interest thereon at the Default
Rate from the date such advance was to have been made if such advance was made
by Administrative Agent and not refunded by Borrower pursuant to either Section
7.12 or paragraph (e) of Section 7.16), in which event Administrative Agent
shall so notify Borrower and the Non-Delinquent Lenders (i) of its receipt of
such funds and (ii)(A) if the advance that was the subject of the delinquency
shall not have been made (or shall have been refunded by Borrower pursuant to
paragraph (e) of Section 7.16), of the rescheduled date of the advance (which
shall be no sooner then three (3) Business Days after such notice) or (B) if
Administrative Agent shall have funded the entire advance that was the subject
of the delinquency (including the Delinquent Lender's portion) and Borrower
shall not have refunded such advance pursuant to paragraph (e) of Section 7.16,
of its intention to reimburse itself from funds received from the Delinquent
Lender (which reimbursement is hereby authorized) for funding the Delinquent
Lender's required portion of the advance. In the event any Delinquent Lender
cures a delinquency prior to the expiration of the Election Period (or
thereafter with the consent of all of the Non-Delinquent Lenders), such
Delinquent Lender nonetheless shall be bound by any amendment to or waiver of
any provision of, or any action taken or omitted to be taken by Administrative
Agent and/or the Non-Delinquent Lenders under, any Loan Document which is made
subsequent to that Lender's becoming a Delinquent Lender and prior to its curing
the delinquency as provided in this Section, provided that such amendment or
--------
waiver of action was taken in
61
accordance with the provisions of this Agreement. A Delinquent Lender shall have
absolutely no right to cure any delinquency after the expiration of the Election
Period unless all Non-Delinquent Lenders, in their sole discretion, elect to
permit such cure.
Section 7.18 Delinquent Lender Not Excused. Nothing contained in Sections
-----------------------------
7.16 or 7.17 shall release or in any way limit a Delinquent Lender's obligations
as a Lender hereunder and/or under any other of the Loan Documents. Further, a
Delinquent Lender shall indemnify and hold harmless Administrative Agent and
each of the Non-Delinquent Lenders from any claim, loss, or costs incurred by
Administrative Agent and/or the Non-Delinquent Lenders as a result of a
Delinquent Lender's failure to comply with the requirements of this Agreement,
including, without limitation, any and all additional losses, damages, costs and
expenses (including, without limitation, attorneys' fees) incurred by
Administrative Agent and any Lender as a result of and/or in connection with (i)
a Non-Delinquent Lender's acting as an Electing Lender, (ii) any enforcement
action brought by Administrative Agent against a Delinquent Lender and (iii) any
action brought against Administrative Agent and/or Lenders. The indemnification
provided above shall survive any termination of this Agreement.
Section 7.19 Notices Regarding Delinquent Lender. Notices by
-----------------------------------
Administrative Agent or Lenders pursuant to Sections 7.16 or 7.17 may be by
telephone (to be promptly confirmed in writing).
Section 7.20 Replacement Lender. In the event any Lender becomes a
------------------
Delinquent Lender and none of the other Lenders elects to be an Electing Lender
pursuant to Section 7.16, Borrower shall have the right, provided there exists
--------
no Default or Event of Default, to cause another financial institution
reasonably acceptable to the Required Lenders to assume the Delinquent Lender's
obligations with respect to the Delinquency Amount on the then-existing terms
and conditions of the Loan Documents (such replacement institution, a
"Replacement Lender"). Such assumption shall be pursuant to a written instrument
reasonably satisfactory to the Required Lenders. Upon such assumption and the
payment by the Replacement Lender to Administrative Agent of a fee, for
Administrative Agent's own account, in the amount of $3,500, the Replacement
Lender shall become a "Lender" for all purposes hereunder, with an Individual
Loan Commitment in an amount equal to the Delinquency Amount, and the Delinquent
Lender's Individual Loan Commitment shall automatically be reduced by the
Delinquency Amount. In connection with the foregoing, Borrower shall execute and
deliver to the Replacement Lender and the Delinquent Lender replacement notes
substantially in the form of EXHIBIT H and stating: "This Note is a replacement
note as contemplated by Section 7.20 of the Loan Agreement; it replaces and is
in lieu of that certain note made by Maker dated [date of Note] to the order of
[Delinquent Lender] in the principal sum of [Delinquent Lender's original
Individual Loan Commitment]." Such replacement notes shall be in amounts equal
to, in the case of the Replacement Lender's note, the Delinquency Amount and, in
the case of the Delinquent Lender's note, its Individual Loan Commitment, as
reduced as aforesaid. Such replacement notes shall constitute "Notes" and the
obligations evidenced thereby shall be secured by the Mortgage. In connection
with Borrower's execution of replacement notes as aforesaid, Borrower shall
deliver to Administrative Agent such evidence of the due authorization,
62
execution and delivery of the replacement notes and any related documents as
Administrative Agent may reasonably request. If the Replacement Lender is not
incorporated under the Laws of the United States or a State thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
account, deliver to Borrower and Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 7.13. The execution and delivery of replacement
notes as required above shall be a condition precedent to any further advances
of Loan proceeds. Upon receipt of its replacement note, the Delinquent Lender
will return to Borrower its note(s) that was replaced, provided that the
--------
delivery of a replacement note to the Delinquent Lender pursuant to this Section
7.20 shall operate to void and replace the note(s) previously held by the
Delinquent Lender regardless of whether or not the Delinquent Lender returns
same as required hereby.
Borrower, Administrative Agent and Lenders shall execute such modifications
to the Loan Documents as shall, in the reasonable judgment of Administrative
Agent, be necessary or desirable in connection with the substitution of Lenders
in accordance with the foregoing provisions of this Section.
Lenders shall reasonably cooperate with Borrower's attempts to obtain a
Replacement Lender, but they shall not be obligated to modify the Loan Documents
in connection therewith, other than modifications pursuant to the immediately
preceding paragraph. As part of the first advance of Loan proceeds following
the admission of the Replacement Lender, the Replacement Lender shall advance to
Borrower, subject to the satisfaction of all conditions of this Agreement, an
amount equal to the Direct and Indirect Costs paid by Borrower pursuant to
clause (ii) of Section 2.09.
Section 7.21 Special Provision Regarding Article VII. The provisions of
---------------------------------------
this Article VII (other than Sections 7.08 and 7.20) are solely for the benefit
of Administrative Agent and Lenders. Borrower shall not have any right to rely
on or enforce any of such provisions (other than Sections 7.08 and 7.20), any of
which may be amended, notwithstanding the provisions of Section 8.11, without
Borrower's execution or consent.
Section 7.22 Minimum Commitment by Agents. Notwithstanding the provisions
----------------------------
of Section 8.12, each of Commerz, Fleet and HVB hereby agrees, so long as there
exists no Event of Default, that it will maintain an Individual Loan Commitment
in the amount of at least $ and further agrees to hold and not to participate or
assign any of such amount other than an assignment to a Federal Reserve Bank,
unless otherwise consented to by Borrower, such consent not to be unreasonably
withheld or delayed.
Section 7.23 Approval of Required Lenders. In all cases where the
----------------------------
approval of the Required Lenders or all Lenders is required under this Agreement
or any of the other Loan Documents, Administrative Agent shall solicit from the
Required Lenders or Lenders such consent or approval and shall report to
Borrower whether such
63
consent or approval has been obtained, and Borrower shall have the right to rely
on such report by Administrative Agent.
ARTICLE VIII
GENERAL CONDITIONS AND PROVISIONS
---------------------------------
Section 8.01 Loan Balancing. If at any time Administrative Agent notifies
--------------
Borrower that, in Administrative Agent's sole judgment following consultation
with Borrower, the undisbursed balance of the Loan is insufficient to pay the
remaining Direct and Indirect Costs, Borrower shall, at its option, either (i)
within ten (10) days of Administrative Agent's notification as aforesaid,
deposit with Administrative Agent an amount equal to such deficiency, which
Administrative Agent may from time to time apply, or allow Borrower to apply, to
such Costs or (ii) pay for such Costs, as incurred, in the amount of such
deficiency so that the amount of the Loan which remains to be disbursed shall be
sufficient to pay all remaining Direct and Indirect Costs, and Borrower shall
furnish Administrative Agent with such evidence thereof as Administrative Agent
shall require. Borrower hereby agrees that Administrative Agent shall have a
lien on and security interest in, for the benefit of Lenders, any sums deposited
pursuant to clause (i) above and that Borrower shall have no right to withdraw
any such sums except for the payment of the aforesaid Costs as approved by
Administrative Agent. Lenders shall have no obligation to make any further
advances of proceeds of the Loan until the sums required to be deposited
pursuant to clause (i) above have been exhausted or until Borrower has actually
paid such Direct and Indirect Costs pursuant to clause (ii) above, as the case
may be, and, in either such case, the Loan is back "in balance". Any such sums
not used as provided in said clause (i) shall be released to Borrower when and
to the extent that Administrative Agent determines that the amount thereof is
more than the excess, if any, of the total remaining Costs of completion of the
Improvements over the undisbursed balance of the Loan; provided, however, that
-------- -------
should an Event of Default occur, Administrative Agent shall, at the option of
the Required Lenders, apply such amounts either to the Costs of completion of
the Improvements or to the immediate reduction of outstanding principal and/or
interest under the Notes.
Section 8.02 Advance Not Waiver. Any advance of Loan proceeds hereunder
------------------
made prior to or without the fulfillment by Borrower of all of the conditions
precedent thereto, whether or not known to Administrative Agent or Lenders,
shall not constitute a waiver by Administrative Agent or Lenders of the
requirement that all conditions, including the non-performed conditions, shall
be required with respect to all future advances.
Section 8.03 No Third-Party Beneficiaries. This Agreement is solely for
----------------------------
the benefit of Lenders, Administrative Agent and Borrower. All conditions of the
obligations of Lenders to make advances hereunder are imposed solely and
exclusively for the benefit of Lenders and may be freely waived or modified in
whole or in part by Lenders at any time if in their sole discretion they deem it
advisable to do so, and no Person other than Borrower (provided, however, that
-------- -------
all conditions have been satisfied)
64
shall have standing to require Lenders to make any Loan advances or to be a
beneficiary of this Agreement or any advances to be made hereunder.
Section 8.04 Authorization to Make Direct Advances. During the existence
-------------------------------------
of any Event of Default, Borrower hereby irrevocably authorizes Lenders to
advance any undisbursed Loan proceeds directly to the General Contractor, Major
Subcontractors and other Persons to pay for completion of the Improvements. All
such direct advances shall satisfy pro tanto the obligations of Lenders to
--- -----
Borrower hereunder regardless of the disposition thereof by the General
Contractor, any Major Subcontractor or other Person.
Section 8.05 Authorization to Advance for Interest. Borrower hereby
-------------------------------------
irrevocably authorizes Lenders to disburse proceeds of the Loan to pay interest
accrued on the Notes as it comes due, or (if Borrower fails to pay the same
within five (5) Business Days after notice by Administrative Agent of the same)
to pay any fees or expenses required to be paid by Borrower under this
Agreement, including, without limitation, the payment of the fees and expenses
of Lenders' Counsel and the Construction Consultant.
Section 8.06 Concerning Irrevocable Authorizations. Any and all advances
-------------------------------------
made at any time by Lenders pursuant to the irrevocable authorizations granted
by Sections 8.04 and 8.05 shall require no further direction, authorization or
request for disbursement from Borrower and, except in the case of advances under
Section 8.04, may be made whether or not there exists a Default or Event of
Default. Any and all such disbursements shall be added to the outstanding
principal balance evidenced by the Notes and shall be secured by the Mortgage.
The aforesaid authorizations shall (i) not prevent Borrower from paying the
contractors and other Persons, from paying the interest, or from satisfying the
conditions and obligations referred to in said Sections, out of its own funds,
(ii) in no event be construed so as to relieve Borrower or others from their
obligations to pay such contractors or other Persons, to pay interest as and
when due under the Notes, or to satisfy such conditions and obligations and
(iii) in no event obligate Lenders to disburse proceeds of the Loan for any such
purposes.
Section 8.07 Ratification of Requisition by Acceptance of Advance. By its
----------------------------------------------------
acceptance of any advance of Loan proceeds hereunder, Borrower shall be bound in
all respects by the Requisition submitted on its behalf in connection therewith
with the same force and effect as if Borrower had itself executed and submitted
the Requisition and whether or not the Requisition is executed and/or submitted
by an authorized Person.
Section 8.08 Documentation Etc. Satisfactory. All documentation and
-------------------------------
proceedings deemed by Administrative Agent or Lenders' Counsel to be necessary
or required in connection herewith and the documents relating hereto shall be
subject to the prior approval of, and satisfactory to, both of them as to form
and substance. In addition, the Persons responsible for the execution and
delivery of, and signatories to, all of such documentation, shall be reasonably
acceptable to, and subject to the reasonable approval of, Administrative Agent
and Lenders' Counsel. Administrative Agent or Lenders' Counsel shall receive
copies, certified if requested by either of them, of all documents
65
which they may reasonably require in connection with the transactions
contemplated hereby.
Section 8.09 Administrative Agent's Determination Conclusive.
-----------------------------------------------
Administrative Agent shall, at all times, be free to independently establish to
its satisfaction and in its absolute discretion (vis-a-vis Borrower) the
--- - ---
existence or nonexistence of any fact or facts the existence or nonexistence of
which is a condition hereof.
Section 8.10 Notices. Except as expressly provided otherwise, all
-------
notices, demands, consents, approvals and statements required or permitted
hereunder shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes when presented personally, three (3) days after
mailing by registered or certified mail, postage prepaid, or one (1) Business
Day after delivery to a nationally recognized overnight courier service
providing evidence of the date of delivery, marked for delivery on the following
business day, addressed to a party at its address on the signature page hereof
or of the applicable Assignment and Assumption Agreement, or at such other
address of which a party shall have notified the party giving such notice in
writing in accordance with the foregoing requirements.
Section 8.11 Amendments and Waivers. No amendment or material waiver of
----------------------
any provision of this Agreement or any other Loan Document, nor consent to any
material departure by Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the party against
whom such amendment, waiver or consent is sought to be enforced (it being
understood, however, that the signatures of the Required Lenders and, solely for
purposes of its acknowledgement thereof, Administrative Agent, shall be
necessary and sufficient to bind Lenders to any such amendment, waiver or
consent), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
--------
however, that no amendment, waiver or consent shall, unless in writing and
-------
signed by all Lenders (subject, however, to the provisions of Section 7.16(d)),
do any of the following: (i) reduce the principal of, or interest on, the Notes
or any fees due hereunder or any other amount due hereunder or under any other
Loan Document; (ii) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees due hereunder or under any other Loan
Document; (iii) change the definition of Required Lenders; (iv) release any
material portion of the Mortgaged Property or other collateral for the Loan
other than in accordance with the Loan Documents; (v) amend this Section or any
other provision requiring the consent of all Lenders; (vi) release, in whole or
in part, Guarantor other than in accordance with the Loan Documents; or (vii)
increase the Loan Amount. Without limiting the foregoing, acceptance by
Administrative Agent or Lenders of any sum required to be paid pursuant hereto
or to any other Loan Document, after its due date, or in an amount less than the
sum then due, shall not constitute a waiver by Administrative Agent or Lenders
of their right to require prompt payment when due of all other such sums or to
declare a default or to exercise such other rights provided herein or in the
other Loan Documents for such late or reduced payment.
66
All communications from Administrative Agent to Lenders requesting Lenders'
determination, consent, approval or disapproval (i) shall be given in the form
of a written notice to each Lender, (ii) shall be accompanied by or include a
description or copy of the matter or thing as to which such determination,
approval, consent or disapproval is requested and (iii) shall include
Administrative Agent's recommended course of action or determination in respect
thereof. Each Lender shall reply promptly, but in any event within ten (10)
Business Days (or five (5) Business Days with respect to any decision to
accelerate or stop acceleration of the Loan) after receipt of the request
therefor by Administrative Agent (the "Lender Reply Period"), subject to the
shorter period required by Section 6.02 regarding lease approvals. Unless a
Lender shall give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent (together with a written
explanation of the reasons behind such objection) within the Lender Reply
Period, such Lender shall be deemed to have approved or consented to such
recommendation or determination.
Section 8.12 Assignment; Participation. Any Non-Delinquent Lender may at
-------------------------
any time grant to one or more banks or other institutions (each, a
"Participant") participating interests in its Pro Rata Share of the Loan (each,
a "Participation"), provided that any such Participation shall be in the minimum
amount of $5,000,000. In the event of any such grant by a Lender of a
Participation to a Participant, such Lender shall remain responsible for the
performance of its obligations hereunder, and Borrower and Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations hereunder.
Upon request, each Lender agrees to provide Borrower and Administrative
Agent with notice of all Participations sold by such Lender. Borrower agrees to
provide all assistance reasonably requested by a Lender to enable such Lender to
sell Participations as aforesaid, or make assignments of its interest in the
Loan as hereinafter provided in this Section.
A Lender may at any time assign to (x) an Eligible Assignee with the
consent of Administrative Agent, which consent shall not be unreasonably
withheld or delayed, (y) any bank or other institution with the consent of
Administrative Agent and, provided there exists no Default or Event of Default,
of Borrower, which consents shall not be unreasonably withheld or delayed or (z)
one or more banks or other institutions which are Affiliates of a Lender (for
purposes of this paragraph, an Affiliate of a Lender shall include any financing
conduit or special purpose entity created to issue securities which are backed,
in part, by the Loan) (each such assignee under clauses (x), (y) or (z) above,
an "Assignee") all or a proportionate part of all of its rights and obligations
under this Agreement and its Note, and such Assignee shall assume rights and
obligations, pursuant to an Assignment and Assumption Agreement executed by such
Assignee and the assigning Lender, provided that, after giving effect to such
--------
assignment, in each case, the Assignee's portion of the Loan and, in the case of
a partial assignment of a Lender's interest, the assigning Lender's portion of
the Loan will each be equal to or greater than $5,000,000. Upon (i) execution
and delivery of such instrument, (ii) payment by such Assignee to the assigning
Lender of an amount equal to the purchase price agreed between such Lender and
such Assignee and (iii) in cases other than assignments to an
67
Affiliate of a Lender, payment by such Assignee to Administrative Agent of a
fee, for Administrative Agent's own account, in the amount of $3,500, such
Assignee shall be a party to this Agreement and shall have all the rights and
obligations of a Lender as set forth in such Assignment and Assumption
Agreement, and the assigning Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this paragraph, substitute notes, in the form of EXHIBIT H, shall be issued to
the assigning Lender (in the case of a partial assignment) and Assignee by
Borrower, in exchange for the return of the assigning Lender's original Note.
All such substitute notes shall constitute "Notes" and the obligations evidenced
by such substitute notes shall constitute obligations secured by the Mortgage.
In connection with Borrower's execution of substitute notes as aforesaid,
Borrower shall deliver to Administrative Agent such evidence of the due
authorization, execution and delivery of the substitute notes and any related
documents as Administrative Agent may reasonably request. If the Assignee is not
incorporated under the Laws of the United States or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
account, deliver to Borrower and Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 7.13.
Borrower, Administrative Agent and Lenders shall execute such modifications
to the Loan Documents as shall, in the reasonable judgment of Administrative
Agent, be necessary or desirable in connection with assignments in accordance
with the foregoing provisions of this Section. Borrower agrees to provide all
assistance reasonably requested by a Lender to enable such Lender to sell
Participations or make assignments of its interest in the Loan as provided in
this Section, provided, however, that Borrower shall not incur any unreasonable
-------- -------
cost or expense in connection therewith.
Any Lender may at any time freely assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank, central bank or
other applicable regulatory authority, whether as collateral or otherwise. No
such assignment shall release the transferor Lender from its obligations
hereunder.
Borrower recognizes that in connection with a Lender's selling of
Participations or making of assignments, any or all documentation, financial
statements, appraisals and other data, or copies thereof, relevant to Borrower,
Guarantor or the Loan may be exhibited to and retained by any such Participant
or Assignee or prospective Participant or Assignee. A Lender's delivery of any
financial statements and appraisals to any such Participant or Assignee or
prospective Participant or Assignee shall be done on a confidential basis.
Section 8.13 Setoff. In addition to (and without limitation of) any right
------
of setoff, bankers' lien or counterclaim Administrative Agent or any Lender may
otherwise have, Administrative Agent and each Lender shall be entitled, but only
with the prior consent of the Required Lenders and after consultation with
Lenders' Counsel, to offset balances (general or special, time or demand,
provisional or final) held by it for the account of Borrower at any of
Administrative Agent's or such Lender's offices against any amount payable by
Borrower to Administrative Agent or such Lender hereunder or
68
under any other Loan Document which is not paid when due (regardless of whether
such balances are then due to Borrower), in which case it shall promptly notify
Borrower and (in the case of a Lender) Administrative Agent thereof; provided,
--------
however, that Administrative Agent's or such Lender's failure to give such
-------
notice shall not affect the validity thereof.
Section 8.14 Successors and Assigns. Except as herein provided, this
----------------------
Agreement shall be binding upon and inure to the benefit of Borrower,
Administrative Agent and Lenders and their respective heirs, personal
representatives, successors and assigns. Notwithstanding the foregoing, Borrower
may not assign, transfer or set over to another, in whole or in part, all or any
part of its benefits, rights, duties and obligations hereunder, including, but
not limited to, performance of and compliance with conditions hereof and the
right to receive the proceeds of current or future advances.
Section 8.15 Severability. The provisions hereof are intended to be
------------
severable. Any provisions hereof, or the application thereof to any Person or
circumstance, which, for any reason, in whole or in part, is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof (or the remaining portions of such provision) or the
application thereof to any other Person or circumstance, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision (or portion thereof) or the application
thereof to any Person or circumstance in any other jurisdiction.
Section 8.16 Non-Waiver; Remedies Cumulative. No failure or delay on
-------------------------------
Administrative Agent's or any Lender's part in exercising any right, remedy,
power or privilege hereunder or under any of the other Loan Documents or
provided by law (hereinafter in this Section, each a "Remedy") shall operate as
a waiver of any such Remedy or shall be deemed to constitute Administrative
Agent's or any Lender's acquiescence in any default by Borrower or Guarantor
under any of said documents. A waiver by Administrative Agent or any Lender of
any Remedy on any one occasion shall not be construed as a bar to any other or
future exercise thereof or of any other Remedy. The Remedies are cumulative, may
be exercised singly or concurrently and are not exclusive of any other Remedies.
Section 8.17 Certain Waivers. Borrower hereby irrevocably and
---------------
unconditionally waives (i) promptness and diligence, (ii) notice of any actions
taken by Administrative Agent or any Lender hereunder or under any other Loan
Document or any other agreement or instrument relating hereto or thereto except
to the extent otherwise provided herein, (iii) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of Borrower's obligations hereunder and under the other Loan
Documents, the omission of or delay in which, but for the provisions of this
Section, might constitute grounds for relieving Borrower of any of its
obligations hereunder or under the other Loan Documents, (iv) any requirement
that Administrative Agent or any Lender protect, secure, perfect or insure any
lien on any collateral for the Loan or exhaust any right or take any action
against Borrower, Guarantor or any other Person or against any collateral for
the Loan, (v) any right or
69
claim of right to cause a marshalling of Borrower's assets and (vi) all rights
of subrogation or contribution, whether arising by contract or operation of law
or otherwise by reason of payment by Borrower pursuant hereto or to any other
Loan Document. BORROWER FURTHER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF
ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO THIS AGREEMENT, THE NOTES OR
OTHERWISE IN RESPECT OF THE LOAN, ANY AND EVERY RIGHT BORROWER MAY HAVE TO (W)
INJUNCTIVE RELIEF, (X) A TRIAL BY JURY, (Y) INTERPOSE ANY COUNTERCLAIM THEREIN,
OTHER THAN A COMPULSORY COUNTERCLAIM, AND (Z) HAVE THE SAME CONSOLIDATED WITH
ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING CONTAINED IN THE
IMMEDIATELY PRECEDING SENTENCE SHALL PREVENT OR PROHIBIT BORROWER FROM
INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST ADMINISTRATIVE AGENT OR
LENDERS WITH RESPECT TO ANY ASSERTED CLAIM.
Section 8.18 Expenses; Indemnification. Borrower covenants and agrees to
-------------------------
pay all costs, expenses and charges (including, without limitation, all fees and
charges of engineers, appraisers, environmental and insurance consultants, the
Construction Consultant and Lenders' Counsel) incurred by Agents or any Lender
in connection with (i) the preparation for and consummation of the transactions
contemplated hereby or for the performance hereof and of the other Loan
Documents, and for any services which may be required in addition to those
normally and reasonably contemplated hereby and (ii) the enforcement hereof or
of any or all of the other Loan Documents; provided, however, that Borrower
-------- -------
shall not be responsible for (1) the fees and expenses of legal counsel for
Lenders (other than Lenders' Counsel) incurred in connection with said counsel's
review of this Agreement and the other Loan Documents prior to execution and (2)
costs, expenses and charges incurred by Agents and Lenders in connection with
the administration or syndication of the Loan (other than the syndication costs
and expenses and the administration fees required by the Supplemental Fee Letter
and the fees and expenses of Lenders' Counsel and the Construction Consultant).
In connection with the foregoing, Lenders agree, to the extent practicable, to
appoint a single counsel and local counsel, selected by Administrative Agent, to
act on behalf of all Lenders in connection with the enforcement of the Loan
Documents. If Borrower fails to pay promptly any costs, charges or expense
required to be paid by it as aforesaid, and any Agent or any Lender pays such
costs, charges or expenses, Borrower shall reimburse such Agent or Lender, as
appropriate, on demand for the amounts so paid, together with interest thereon
at the Default Rate. Borrower further agrees to indemnify each Agent and each
Lender and their respective directors, officers, employees and agents from, and
hold each of them harmless against, (x) any and all losses arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to any
actual or proposed use by Borrower of the proceeds of the Loan, including,
without limitation, the fees and disbursements of counsel incurred in connection
with any such investigation, litigation or other proceedings and (y) any and all
claims, actions, suits, proceedings, costs, expenses, losses, damages and
liabilities of any kind, including in tort, penalties and interest, arising out
or by reason of any matter
70
relating, directly or indirectly, to the Mortgage or the ownership, condition,
development, construction, sale, rental or financing of the Premises or
Improvements or any part thereof (but excluding any such losses, liabilities,
claims, damages or expenses incurred solely by reason of the gross negligence or
willful misconduct of the party to be indemnified). The obligations of Borrower
under this Section and under Sections 3.01, 3.03 and 6.07 shall survive the
repayment of all amounts due under or in connection with any of the Loan
Documents and the termination of the Individual Loan Commitments.
Section 8.19 Counterparts. This Agreement may be executed in any number
------------
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 8.20 Lenders' Right to Terminate. In the event Borrower shall not
---------------------------
have satisfied the conditions precedent to its entitlement to advances of Loan
proceeds hereunder within one hundred twenty (120) days of the date hereof, the
Required Lenders shall have the absolute right, at their option, to terminate
Lenders' obligations to Borrower under this Agreement and the loan commitment
represented hereby; provided, however, that Borrower may extend such date by up
-------- -------
to three (3) periods of thirty (30) days each, upon payment to Administrative
Agent, for the account of Lenders, on the first day of each such thirty (30)-day
period, of an extension fee in an amount equal to, in each case, 0.041667% of
each Lender's Individual Loan Commitment. Each such fee shall be non-refundable
once paid. In the event of such termination, the Required Lenders shall direct
Administrative Agent to send notice thereof to the other Lenders and Borrower.
Section 8.21 Governing Law; Jurisdiction. This Agreement and the rights
---------------------------
and obligations of the parties hereunder shall in all respects be governed by,
and construed and enforced in accordance with, the Laws of the State of New York
(without giving effect to New York's principles of conflicts of law). Borrower,
Administrative Agent and each Lender hereby irrevocably submit to the non-
exclusive jurisdiction of any New York State or Federal court sitting in The
City of New York (or any county in New York State where any portion of the
Mortgaged Property is located) over any suit, action or proceeding arising out
of or relating to this Agreement, and Borrower hereby agrees and consents that,
in addition to any methods of service of process provided for under applicable
Law, all service of process in any such suit, action or proceeding in any New
York State or Federal court sitting in The City of New York (or such other
county in New York State) may be made by certified or registered mail, return
receipt requested, directed to Borrower at the address indicated on the
signature page hereof, and service so made shall be complete five (5) days after
the same shall have been so mailed.
Section 8.22 Integration. The Loan Documents and the Supplemental Fee
-----------
Letter constitute the entire agreement among Administrative Agent, Borrower and
Lenders relating to the transactions contemplated thereby (except with respect
to agreements among Lenders or with Administrative Agent relating solely to
compensation, consideration and the syndication of the Loan) and supersede any
prior oral or written statements or agreements with respect to such
transactions.
71
Section 8.23 Gross-Up For Taxes. All payments made by Borrower under this
------------------
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding income taxes and franchise or other taxes
(imposed in lieu of income taxes) imposed on a Lender as a result of a present
or former connection between such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Lender's having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or its Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") is required to be withheld from any amounts
payable to such Lender hereunder or under its Note, the amounts so payable to
such Lender shall be increased to the extent necessary to yield to such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable with respect to the Loan at the rates or in the amounts specified in
this Agreement and its Note; provided, however, that Borrower shall not be
-------- -------
required to increase any such amounts payable to such Lender if such Lender is
not organized under the Laws of the United States or a State thereof and such
Lender fails to comply with the requirements of Section 7.13. Whenever any Non-
Excluded Taxes are payable by Borrower, as promptly as possible thereafter
Borrower shall send to Administrative Agent for the account of such Lender a
certified copy of an original official receipt received by Borrower showing
payment thereof. If Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent the
required receipts or other required documentary evidence, Borrower shall
indemnify such Lender for any incremental taxes, interest or penalties that may
become payable by such Lender as a result of any such failure. The agreements in
this Section shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
Section 8.24 Partial Releases. Provided there exists no Default or Event
----------------
of Default, Administrative Agent shall release the lien and effect of the
Mortgage from portions of the Premises (each such portion of the Premises, a
"Release Parcel") as follows:
(i) All such releases shall be subject, in each case, to Borrower's
compliance with the provisions of Section 8.25, if applicable, and to
Administrative Agent's receipt of (A) evidence that the balance of the
Premises complies with all applicable zoning and other Laws, (B) an
endorsement to the title insurance policy for the Mortgage insuring that
(x) the Mortgage will in no way be impaired by virtue of the release of the
Release Parcel and (y) the subdivision of the Release Parcel has been
validly effected and the balance of the Premises constitutes a separate tax
and zoning lot, (C) a current survey of the Premises, specifically
delineating the Release Parcel, certified to Administrative Agent and the
Title Insurer, (D) such other documents (including, without limitation,
easement agreements), opinions and assurances as Administrative Agent or
Lenders' Counsel may reasonably request (all of the foregoing items (A)
72
through (D) to be received by Administrative Agent at least ten (10)
Business Days prior to the proposed release and be in form and substance
reasonably satisfactory to Administrative Agent and Lenders' Counsel), (E)
the appropriate release price, if any, required by subparagraph (iv) below,
to be applied by Administrative Agent to the repayment of the Principal
Amount and accrued and unpaid interest thereon and (F) payment of a $5,000
processing fee to Administrative Agent and Administrative Agent's out-of-
pocket expenses, including attorneys' fees and expenses, in connection
therewith.
(ii) The Excess Land shall be released, upon Borrower's written
request, as provided in subparagraph (i) above. Borrower covenants that if
the Excess Land is developed as part of the second phase of the overall
project of which the Improvements are a part (the "Phase II Development"),
such development shall be done generally in accordance with the conceptual
plans therefor submitted to Agents prior to the date hereof.
(iii) Portions of the Premises (other than the Excess Land) shall be
released, upon Borrower's written request, as provided in subparagraph (i)
above, and provided, further, that Administrative Agent shall have
-------- -------
determined (which determination shall be conclusive so long as made on a
reasonable basis) that (A) Guarantor is in compliance with the covenants
set forth in paragraphs 9 and 10 of the Payment Guaranty, (B) the then
Commitment Amount does not exceed (x) 65%, until such time as 25% of the
Premises (exclusive of the Excess Land), as determined on the basis of
Allocated Amounts, has been released as provided herein and (y) 60%,
thereafter, in each case of the "stabilized" value of those portions of the
Premises remaining subject to the Mortgage, exclusive of the Excess Land
(as reflected in an update to the appraisal delivered pursuant to Section
4.01(a)(4), which updated appraisal shall be commissioned by Administrative
Agent at Borrower's expense) and (C) Debt Service Coverage in respect of
those portions of the Premises remaining subject to the Mortgage (taking
into account the release price paid pursuant to subparagraph (iv) below)
will be equal to or greater than the Debt Service Coverage which existed
immediately prior to the release; provided, however, that the foregoing
-------- -------
loan-to-value and Debt Service Coverage conditions set forth in clauses (B)
and (C) above shall be deemed satisfied if Borrower either (x) makes a
partial prepayment of the Principal Amount no later than five (5) Business
Days prior to the date of the release in an amount such that the requisite
loan-to-value and Debt Service Coverage, each recomputed based on the
reduced Commitment Amount, are attained or (y) delivers to Administrative
Agent, for the benefit of Lenders, additional collateral for the payment
and performance of Borrower's obligations under the Loan in the form of (I)
cash, (II) an unconditional, irrevocable letter of credit issued to
Administrative Agent by a financial institution having a credit rating of A
or better by ▇▇▇▇▇'▇ Investor's Service, Inc. (or its equivalent by another
nationally recognized rating agency) and reasonably acceptable to
Administrative Agent and having an expiration date no earlier than one (1)
month subsequent to the Maturity Date or (III) marketable securities or
other collateral, in each case in an amount sufficient (assuming such
additional collateral were
73
applied in reduction of the Principal Amount) to cause the requisite loan-
to-value and Debt Service Coverage to be attained. Any cash collateral
delivered to Administrative Agent pursuant to this subparagraph (iii) shall
be deposited into an interest-bearing "blocked" cash collateral account to
be established with and held in the name of Administrative Agent. Any
additional collateral delivered pursuant to this subparagraph (iii) shall
be satisfactory, in form and substance, to Administrative Agent and the
collateral value thereof, other than in the cases of cash or letters of
credit, for purposes of this subparagraph, shall be conclusively determined
by Administrative Agent. Borrower hereby assigns any such account and all
sums therein, including earnings thereon, and any other additional
collateral delivered pursuant hereto, to Administrative Agent, for the
benefit of Lenders, as security for the Loan. Borrower acknowledges and
agrees that Administrative Agent shall receive and retain possession of all
documents or instruments constituting or evidencing any such additional
collateral to perfect its security interests therein. At any time following
the occurrence of an Event of Default, Administrative Agent may, upon the
direction of the Required Lenders, apply any and all such additional
collateral, including earnings thereon, to the immediate reduction of the
Principal Amount and/or accrued and unpaid interest and/or other sums
payable hereunder or under the Notes or other Loan Documents, in such order
and amounts as the Required Lenders shall elect. Administrative Agent is
hereby appointed Borrower's attorney-in-fact for the purpose of so dealing
with any additional collateral delivered pursuant hereto. Borrower agrees
to execute such further documents (including security agreements and UCC-1
financing statements) and do such further acts as Administrative Agent may
reasonably request to confirm or perfect the assignment and security
interests provided for in this subparagraph.
(iv) As a condition to releases of Release Parcels pursuant to
subparagraph (iii) above, Borrower shall be required to pay a release price
in an amount equal to 115% of the Allocated Amount therefor, together with
all accrued and unpaid interest thereon. No release price shall be required
for releases of Release Parcels pursuant to subparagraph (ii) above.
Notwithstanding anything to the contrary contained herein, if pursuant to
the foregoing provisions, the release of a Release Parcel under subparagraph
(iii) above and the application of the appropriate release price therefor
results in a reduction of the Commitment Amount to $100,000,000 or less, then,
within ten (10) days of Administrative Agent's request made at the direction of
the Required Lenders, Borrower shall, and hereby covenants and promises to,
repay the entire Principal Amount and all accrued and unpaid interest thereon,
and all other sums due to Lenders or Administrative Agent in connection with the
Loan, in full. Upon any such request by Administrative Agent, Borrower's
entitlement to further advances of the Loan Amount, and Lenders' respective
obligations to make such further advances, shall automatically terminate.
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Section 8.25 Special Provisions Regarding Financing of Phase II
--------------------------------------------------
Development.
-----------
(a) In the event that Borrower intends to proceed with the Phase II
Development (either directly or through an Affiliate) and to obtain third-party
financing in connection therewith, Borrower shall so notify Agents, which notice
shall include a reasonably detailed description of the Phase II Development and
the estimated costs thereof. Agents shall have a period (the "Agents' Response
Period") of thirty (30) days following their receipt of such notice (and such
supporting information as they may reasonably request within fifteen (15) days
after their receipt of such notice) within which to make a detailed proposal to
finance the Phase II Development.
(b) If Agents fail to make a proposal to finance the Phase II Development
within such time period, Borrower or Borrower's Affiliate shall have the right
to seek such financing from other third-party sources.
(c) In those cases where Agents make a proposal to finance the Phase II
Development, as contemplated by paragraph (a) above, and, after good faith
consideration of Agents' proposal, Borrower or Borrower's Affiliate does not
accept the same, Borrower or Borrower's Affiliate shall have the right to seek
such financing from other third-party sources and to close the same. If Borrower
opts to close other third-party financing of the Phase II Development in
accordance with this paragraph (c), Borrower shall, at the time of or prior to
the closing of such other third-party financing, convey to an Affiliate of
Borrower the land on which the Phase II Development is to be constructed, it
being understood that in no event shall Borrower undertake in its own name the
Phase II Development with such other third-party financing.
(d) The right of first offer described in this Section shall terminate
automatically without notice, and shall be of no force and effect, upon the
repayment of all sums owing by Borrower in connection with the Loan and the
termination of the lending commitments hereunder.
(e) Borrower covenants that the Phase II Development shall be undertaken
generally in accordance with the conceptual plans therefor submitted to Agents
prior to the date hereof.
Section 8.26 Subordination to Vertical Subdivision. Provided there exists
-------------------------------------
no Default or Event of Default, Administrative Agent shall, upon Borrower's
written request, consent to and subordinate the Mortgage to such subdivision
plat, master deed, reciprocal easement agreement, building declaration and/or
similar documents, all satisfactory in form and substance to Administrative
Agent, as may be necessary to effect the Vertical Subdivision, and shall execute
the appropriate instruments (satisfactory to Administrative Agent in all
respects) in recordable form to effect such consent and subordination, upon the
satisfaction of the following conditions:
(a) Administrative Agent shall have received the final Vertical
Subdivision Documents, which shall be in proper form for recording or
filing, as
75
necessary, in the appropriate offices, together with evidence of all
required approvals of Governmental Authorities;
(b) the title policy insuring the Mortgage shall have been endorsed
to provide affirmative insurance to the effect that the separate legal
parcels intended to be created by the Vertical Subdivision have been
validly created under applicable subdivision Laws and to such other effects
as Administrative Agent may reasonably require;
(c) Borrower shall have caused to be duly executed and delivered to
Administrative Agent, as additional security for the Loan, (i) an agreement
assigning all of Borrower's rights and privileges under the Vertical
Subdivision Documents and (ii) conditional resignations of the officers and
members of the Board of Directors or other governing body of any owners'
association created as part of the Vertical Subdivision, to the extent
elected, appointed or controlled by Borrower or its Affiliates;
(d) Administrative Agent shall have received an opinion from
Borrower's counsel to the effects that (i) the Vertical Subdivision
Documents satisfy all applicable requirements of Governmental Authorities
and have been duly executed and, where necessary, duly recorded or filed
pursuant to applicable Laws, (ii) all requirements of any applicable Law
have been duly satisfied and the Vertical Subdivision has been duly created
and no filing, registration or other compliance with any federal or state
securities or other Law will be required in connection with the sale of the
parcels created thereby, or if such filing is necessary, that the
applicable Law governing the same has been fully complied with and (iii)
the documents referred to in paragraph (c) of this Section have been duly
authorized, executed and delivered by the respective parties thereto and
are enforceable against said parties in accordance with their respective
terms; and
(e) Administrative Agent shall have received payment of all of its
out-of-pocket expenses, including attorneys' fees and expenses, in
connection with the Vertical Subdivision.
Section 8.27 FRIT LLC's Acquisition of Ground Lease Parcel. Subsequent to
---------------------------------------------
the date hereof, fee title to the Ground Lease Parcel will be acquired by FRIT
LLC from the landlord under the Ground Lease in a transaction which will also
involve the simultaneous (i) termination of the Ground Lease and (ii) repayment
in full of the indebtedness secured by the FRIT Deed of Trust, which
indebtedness and FRIT Deed of Trust are the subject of the FRIT Collateral
Assignment. The funds for the closing of such acquisition are included in the
Loan Budget Amount for "Ground Lease Parcel Acquisition" on the Project Cost
Statement, and, subject to the terms of this Agreement, such Loan Budget Amount
shall be advanced for such purpose. Borrower hereby notifies Administrative
Agent that the closing of such transaction is scheduled for October 12, 2001. In
the event an earlier closing date is triggered by notice to FRIT LLC by the
seller, Borrower shall notify Administrative Agent of such earlier closing date
promptly upon receipt of the seller's notice. Borrower further agrees that
contemporaneously with
76
such transaction it will, and will cause Guarantor to, execute and deliver such
agreements, in proper form for recording in the appropriate land records,
releasing/reconveying the FRIT Deed of Trust and confirming that the Mortgage
encumbers the fee interest in the Ground Lease Parcel free of the Ground Lease,
the FRIT Deed of Trust and related encumbrances as Administrative Agent may
reasonably request. Upon such delivery and provided the Title Insurer is
irrevocably and unconditionally committed to issue an endorsement to the title
policy insuring the Mortgage which removes the Ground Lease, the FRIT Deed of
Trust and related encumbrances as exceptions to title and adds the fee interest
in the Ground Lease Parcel to the insured premises thereunder without exceptions
other than those shown on the title policy issued to Administrative Agent at the
closing of the Loan and such additional exceptions as may be approved by
Administrative Agent, (x) Administrative Agent shall, on behalf of Lenders,
execute and deliver a release of SRI, in form reasonably acceptable to SRI,
releasing SRI from any and all liability under the Loan Documents and (y)
Administrative Agent shall execute and deliver to Borrower a termination of the
FRIT Collateral Assignment and a termination, in recordable form, of the related
absolute assignment delivered and recorded pursuant thereto.
Section 8.28 Deferral of Certain Construction-Related Conditions.
---------------------------------------------------
Section 4.01 requires that, as a condition to closing of the Loan, Borrower
shall deliver Plans, permits and authorizations and a General Contract or Major
Subcontracts covering only portions of the Improvements. The parties hereto
acknowledge and agree that Plans, permits and authorizations and General
Contract (or, in the case of Building 5, the Building5/Hotel Construction
Contract) with respect to the balance of the Improvements (the "Later
Improvements") will only be required as and when Borrower submits Requisitions
in respect of Direct and Indirect Costs relating to portions of Later
Improvements. In connection with the foregoing and with advances under Sections
4.02 and 4.03, Lenders acknowledge that the representations, warranties,
covenants and conditions in this Agreement with respect to Plans, construction
contracts and permits and authorizations shall apply only as Plans are prepared,
construction contracts are entered into and the requisite permits and
authorizations are procured. Notwithstanding the foregoing, all advances of
proceeds of the Loan remain subject to Borrower's satisfaction of all of the
other conditions and provisions of this Agreement, and the further conditions
that all advances of Loan proceeds shall be for and in respect of actual
construction and for work performed in accordance with approved Plans and valid
building and other permits and authorizations (as are then required given the
stage of construction) and pursuant to a General Contract (or Building 5/Hotel
Construction Contract) approved by Agents and the Construction Consultant (all
of which items shall be delivered to the Agents and the Construction Consultant
in sufficient time to allow reasonable time for review prior to the advance),
and in respect of which all representations, warranties, covenants and
conditions herein shall apply. Borrower covenants, promptly upon the execution
and procurement of, respectively, Plans, construction contracts and permits and
authorizations, to deliver the same to Agents and the Construction Consultant
and to otherwise comply with the provisions of this Agreement with respect
thereto.
77
Section 8.29 Subordination to Easement Plan. Provided there exists no
------------------------------
Default or Event of Default, Administrative Agent shall, upon Borrower's written
request, consent to and subordinate the Mortgage to an "Easement Plan" (as such
quoted term is defined in the Declaration) satisfactory in form and substance to
Administrative Agent, and shall execute the appropriate instruments
(satisfactory to Administrative Agent in all respects) in recordable form to
effect such consent and subordination, upon the satisfaction of the following
conditions:
(a) Borrower shall have caused to be duly executed and delivered to
Administrative Agent, an agreement, in form and substance satisfactory to
Administrative Agent, spreading the lien of the Mortgage to the Easement
Plan;
(b) Administrative Agent shall have received an endorsement,
satisfactory to it, to the title policy for the Mortgage to insure the
spreader agreement referred to in clause (a) above; and
(c) Administrative Agent shall have received payment of all of its
out-of-pocket expenses, including attorneys' fees and expenses, in
connection with the foregoing.
Section 8.30 Release of Common Road Parcel. Provided there exists no
-----------------------------
Default or Event of Default, Administrative Agent shall release the lien and
effect of the Mortgage from the portion of the Premises identified in Schedule A
of the Mortgage as "Parcel Four", subject to the satisfaction of the following
conditions: (i) all conditions to the making of the Initial Advance shall have
been satisfied, (ii) said portion of the Premises shall simultaneously be
conveyed to the Association as contemplated by, and subject to the terms of, the
Declaration and (iii) Administrative Agent shall have received an endorsement to
the title insurance policy for the Mortgage insuring the Mortgage will be in no
way impaired as a result of the release.
Section 8.31 Conveyance of Garage Portions. Notwithstanding the
-----------------------------
provisions of Section 2.01(l) of the Mortgage, provided there exists no Default
or Event of Default, Borrower shall be permitted to convey any or all of the
"Parking Garage Portions" (as defined in the Declaration) to the Association,
each such conveyance to be subject to the Mortgage, upon satisfaction of the
following conditions: (i) the Vertical Subdivision with respect to the relevant
lot(s) shall have occurred and all conditions in Section 8.26 with respect
thereto shall have been satisfied, such that the Parking Garage Portion(s) to be
conveyed constitute(s) separate legal parcel(s) and (ii) Administrative Agent
shall have received an opinion of counsel or other reasonable assurance that the
lien and effect of the Mortgage will not be impaired in any way as a result of
such conveyance.
Section 8.32 Building 5 Retail Shell Construction and Reimbursement.
------------------------------------------------------
Borrower, Lenders and Administrative Agent acknowledge and agree that a portion
of the Improvements, consisting of the Building 5 retail shell located beneath
the Hotel (the "Building 5 Retail Shell") is to be constructed on behalf of
Borrower by the Hotel Operator (and consequently is not covered by a General
Contract). The costs of such
78
construction are to be paid to or on behalf of Hotel Operator by FRIT LLC
pursuant to the Hotel Lease. Such obligations of FRIT LLC are covered under the
Loan Budget Amount for "General Contractor", representing a $7,484,444 portion
of said Loan Budget Amount. Said portion of said Loan Budget Amount shall be
advanced from time to time as construction of the Building 5 Retail Shell
progresses, subject to the receipt and approval (not to be unreasonably
withheld) by the Construction Consultant and Administrative Agent of copies of
the applicable requisition under the Hotel Lease and the supporting
documentation submitted with such requisition, together with such other
documentation, such as lien waivers, as Administrative Agent shall reasonably
request and shall be reasonably available to Borrower.
79
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first above written, the execution hereof by Borrower
constituting (a) a certification by the party or parties executing on its behalf
that the representations and warranties made in Article V are true and correct
as of the date hereof and that each of them duly holds and is incumbent in the
position indicated under his or her name and (b) the undertaking of said party
or parties that each Requisition, whether or not personally made by any or all
of them, shall constitute the personal affirmation on the part of each of them
that at the time thereof said representations and warranties are true and
correct.
FRIT SAN ▇▇▇▇ TOWN AND COUNTRY VILLAGE, LLC
By: Street Retail, Inc., its Managing Member
By ____________________________________
Name:
Title:
Address for notices:
c/o Federal Realty Investment Trust
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SAN ▇▇▇▇ RESIDENTIAL, INC.
By __________________________________________
Name:
Title:
Address for notices:
c/o Federal Realty Investment Trust
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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STREET RETAIL, INC.
By __________________________________________
Name:
Title:
Address for notices:
c/o Federal Realty Investment Trust
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
COMMERZBANK AG, NEW YORK BRANCH (as Lender and
Administrative Agent)
By __________________________________________
Name:
Title:
By __________________________________________
Name:
Title:
Address for notices and Applicable Lending Office:
Commerzbank AG, New York Branch
Real Estate Finance
2 World Financial Center
New York, New York 10281-1050
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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FLEET NATIONAL BANK
(as Lender and Syndication Agent)
By __________________________________________
Name:
Title:
Address for notices and Applicable Lending Office:
Fleet National Bank
Mail Stop: ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇- ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇
BRANCH (as Lender and Documentation Agent)
By __________________________________________
Name:
Title:
By __________________________________________
Name:
Title:
Address for notices and Applicable Lending Office:
Bayerische Hypo- und Vereinsbank AG, New York
Branch
Real Estate Lending
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
MIDFIRST BANK
By __________________________________________
Name:
Title:
Address for notices and
Applicable Lending Office:
MidFirst Bank
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BRANCH
By __________________________________________
Name:
Title:
By __________________________________________
Name:
Title:
Address for notices and
Applicable Lending Office:
Bayerische Landesbank,
Cayman Islands Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF MONTREAL
By __________________________________________
Name:
Title:
Address for notices and
Applicable Lending Office:
Bank of Montreal
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ BRANCH
By __________________________________________
Name:
Title:
By __________________________________________
Name:
Title:
Address for notices and
Applicable Lending Office:
Landesbank Hessen-Thuringen Girozentrale,
New York Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
85