EXHIBIT 5.1
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SENIOR UNSECURED
REVOLVING LINE OF CREDIT AGREEMENT
between
▇▇ ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
and
▇▇ ▇▇▇▇▇ REALTY CORP.
and
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION
OF ▇▇▇▇▇▇ BROTHERS HOLDINGS INC.,
Individually as a Co-Lender and as Agent for one or more Co-Lenders
and as Syndication Agent
Dated as of December 18, 1997
$140,000,000.00
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY. . . . . . . 30
Section 2.01 Advances . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.02 Notice of Borrowing. . . . . . . . . . . . . . . . . 31
Section 2.03 Disbursement of Funds. . . . . . . . . . . . . . . . 31
Section 2.04 The Note . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.05 Interest. . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.06 Interest Periods. . . . . . . . . . . . . . . . . . . 33
Section 2.07 Minimum Amount of Eurodollar Portions. . . . . . . . 34
Section 2.08 Conversion or Continuation. . . . . . . . . . . . . . 34
Section 2.09 Voluntary Reduction of Facility Amount; Extension of
Maturity Date; Termination of Facility Amount. . . . 35
Section 2.10. Principal Payments. . . . . . . . . . . . . . . . . . 36
Section 2.11 Voluntary Prepayments. . . . . . . . . . . . . . . . 36
Section 2.12 Mandatory Prepayments. . . . . . . . . . . . . . . . 36
Section 2.13 Application of Payments and Prepayments. . . . . . . 36
Section 2.14 Method and Place of Payment. . . . . . . . . . . . . 36
Section 2.15 Fees. . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.16 Interest Rate Unascertainable,
Increased Costs, Illegality. . . . . . . . . . . . . 37
Section 2.17 Funding Losses. . . . . . . . . . . . . . . . . . . . 40
Section 2.18 Increased Capital. . . . . . . . . . . . . . . . . . 41
Section 2.19 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.20 Use of Proceeds and Limitations on Advances. . . . 43
Section 2.21 Intentionally Deleted. . . . . . . . . . . . . . . . 43
Section 2.22 Intentionally Deleted . . . . . . . . . . . . . . . . 43
Section 2.23 Intentionally Deleted. . . . . . . . . . . . . . . . 43
Section 2.24 Decision Making by Agent . . . . . . . . . . . . . . 43
Section 2.25 Additional Unencumbered Assets . . . . . . . . . . . 43
Section 2.26 Pro Rata Interests . . . . . . . . . . . . . . . . . 44
SECTION 3. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 44
Section 3.01 Conditions Precedent to the Initial Advance. . . . . 44
Section 3.02 Conditions Precedent to All Advances of the Loan. . . 50
Section 3.03 Acceptance of Borrowings. . . . . . . . . . . . . . . 51
Section 3.04 Sufficient Counterparts. . . . . . . . . . . . . . . 51
SECTION 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 52
Section 4.01 Organizational Status. . . . . . . . . . . . . . . . 52
Section 4.02 Power and Authority. . . . . . . . . . . . . . . . . 52
Section 4.03 No Violation. . . . . . . . . . . . . . . . . . . . . 52
Section 4.04 Litigation. . . . . . . . . . . . . . . . . . . . . . 53
Section 4.05 Financial Statements: Financial Condition; etc. . . . 53
Section 4.06 Solvency. . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.07 Material Adverse Change. . . . . . . . . . . . . . . 53
Section 4.08 Use of Proceeds; Margin Regulations. . . . . . . . . 53
Section 4.09 Governmental Approvals. . . . . . . . . . . . . . . . 54
Section 4.10 Completed Repairs. . . . . . . . . . . . . . . . . . 54
Section 4.11 Tax Returns and Payments. . . . . . . . . . . . . . . 54
Section 4.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.13 Closing Date Transactions. . . . . . . . . . . . . . 55
Section 4.14 Representations and Warranties in Loan Documents. . . 55
Section 4.15 True and Complete Disclosure. . . . . . . . . . . . . 55
Section 4.16 Ownership of Real Property Assets;
Existing Security Instruments . . . . . . . . . . . . 56
Section 4.17 No Default. . . . . . . . . . . . . . . . . . . . . . 56
Section 4.18 Licenses, etc. . . . . . . . . . . . . . . . . . . . 56
Section 4.19 Compliance With Law. . . . . . . . . . . . . . . . . 57
Section 4.20 Brokers . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.21 Judgments . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.22 Property Manager . . . . . . . . . . . . . . . . . . 57
Section 4.23 Assets of the REIT . . . . . . . . . . . . . . . . . 57
Section 4.24 REIT Status . . . . . . . . . . . . . . . . . . . . . 58
Section 4.25 Operations . . . . . . . . . . . . . . . . . . . . . 58
Section 4.26 Stock . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 4.27 Ground Leases . . . . . . . . . . . . . . . . . . . . 58
Section 4.28 Guarantors . . . . . . . . . . . . . . . . . . . . . 58
Section 4.29 Status of Property . . . . . . . . . . . . . . . . . 58
Section 4.30 Survival . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 61
Section 5.01 Financial Reports . . . . . . . . . . . . . . . . . . 62
Section 5.02 Books, Records and Inspections . . . . . . . . . . . 65
Section 5.03 Maintenance of Insurance. . . . . . . . . . . . . . . 65
Section 5.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.05 Corporate Franchises; Conduct of Business . . . . . . 70
Section 5.06 Compliance with Law. . . . . . . . . . . . . . . . . 70
Section 5.07 Performance of Obligations. . . . . . . . . . . . . . 70
Section 5.08 Stock . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 5.09 Change in Rating . . . . . . . . . . . . . . . . . . 71
Section 5.10 Maintenance of Properties. . . . . . . . . . . . . . 71
Section 5.11 Compliance with ERISA. . . . . . . . . . . . . . . . 71
Section 5.12 Settlement/Judgment Notice . . . . . . . . . . . . . 72
Section 5.13 Acceleration Notice . . . . . . . . . . . . . . . . . 72
Section 5.14 Intentionally Deleted. . . . . . . . . . . . . . . . 72
Section 5.15 Intentionally Deleted. . . . . . . . . . . . . . . . 72
Section 5.16 Minimum Net Worth . . . . . . . . . . . . . . . . . . 73
Section 5.17 Total Indebtedness . . . . . . . . . . . . . . . . . 73
Section 5.18 Coverage Ratios . . . . . . . . . . . . . . . . . . . 73
Section 5.19 Replacement Reserve . . . . . . . . . . . . . . . . . 73
Section 5.20 Intentionally Deleted . . . . . . . . . . . . . . . . 73
Section 5.21 Manager . . . . . . . . . . . . . . . . . . . . . . . 74
Section 5.22 Further Assurances . . . . . . . . . . . . . . . . . 74
Section 5.23 REIT Status . . . . . . . . . . . . . . . . . . . . . 74
Section 5.24 Additional Covenants . . . . . . . . . . . . . . . . 74
Section 5.25 Minimum Unencumbered Assets . . . . . . . . . . . . . 74
Section 5.26 Keep Well Covenants. . . . . . . . . . . . . . . . . 74
Section 5.27 Existing Environmental Conditions,
Required Repairs and
Preparation of Environmental Reports. . . . . . . . . 75
Section 5.28 Unused Borrowing Capacity . . . . . . . . . . . . . . 75
Section 5.29 Compliance with Terms of Leaseholds . . . . . . . . . 76
Section 5.30 Equity or Debt Offerings . . . . . . . . . . . . . . 76
Section 5.31 Notice of Certain Events . . . . . . . . . . . . . . 76
Section 5.32 17 Battery Place Condominium . . . . . . . . . . . . 76
SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 76
Section 6.01 Bar Building and ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇. . . . . . . . . . 76
Section 6.02 Intentionally Deleted . . . . . . . . . . . . . . . . 76
Section 6.03 Liens. . . . . . . . . . . . . . . . . . . . . . . . 77
Section 6.04 Restriction on Fundamental Changes. . . . . . . . . . 77
Section 6.05 Transactions with Affiliates. . . . . . . . . . . . . 78
Section 6.06 Plans. . . . . . . . . . . . . . . . . . . . . . . . 78
Section 6.07 Distributions . . . . . . . . . . . . . . . . . . . . 78
Section 6.08 Tenant Concentration . . . . . . . . . . . . . . . . 79
Section 6.09 Restriction on Prepayment of Unsecured Debt . . . . . 79
Section 6.10 Real Property Assets . . . . . . . . . . . . . . . . 79
Section 6.11 Maximum Secured Recourse Indebtedness . . . . . . . . 79
Section 6.12 Organizational Documents . . . . . . . . . . . . . . 79
Section 6.13 Negative Pledge Covenant . . . . . . . . . . . . . . 79
Section 6.14 Unsecured Debt of Guarantors . . . . . . . . . . . . 80
Section 6.15 Restrictions on Investments . . . . . . . . . . . . . 80
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 81
Section 7.01 Events of Default. . . . . . . . . . . . . . . . . . 81
Section 7.02 Rights and Remedies. . . . . . . . . . . . . . . . . 84
SECTION 8. INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . 85
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.01 Payment of Agent's and Syndication
Agent's Expenses, Indemnity, etc. . . . . . . . . . . 85
Section 9.02 Notices. . . . . . . . . . . . . . . . . . . . . . . 86
Section 9.03 Successors and Assigns . . . . . . . . . . . . . . . 88
Section 9.04 Amendments and Waivers. . . . . . . . . . . . . . . . 88
Section 9.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . 89
Section 9.06 Governing Law; Submission to Jurisdiction. . . . . . 89
Section 9.07 Confidentiality Disclosure of Information. . . . . . 90
Section 9.08. Recourse . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.09. Sale of Loan, Co-Lenders, Participations and
Servicing . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.10 Borrower's and the REIT's Assignment . . . . . . . . 94
Section 9.11 Counterparts. . . . . . . . . . . . . . . . . . . . . 94
Section 9.12 Effectiveness. . . . . . . . . . . . . . . . . . . . 94
Section 9.13 Headings Descriptive. . . . . . . . . . . . . . . . . 94
Section 9.14 Marshaling; Recapture. . . . . . . . . . . . . . . . 94
Section 9.15 Severability. . . . . . . . . . . . . . . . . . . . . 94
Section 9.16 Survival. . . . . . . . . . . . . . . . . . . . . . . 94
Section 9.17 Domicile of Loan Portions. . . . . . . . . . . . . . 95
Section 9.18 Intentionally Deleted. . . . . . . . . . . . . . . . 95
Section 9.19 Calculations; Computations . . . . . . . . . . . . . 95
Section 9.20 WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . 95
Section 9.21 No Joint Venture . . . . . . . . . . . . . . . . . . 95
Section 9.22 Estoppel Certificates. . . . . . . . . . . . . . . . 95
Section 9.23 No Other Agreements. . . . . . . . . . . . . . . . . 96
Section 9.24 Controlling Document. . . . . . . . . . . . . . . . . 96
Section 9.25 No Benefit to Third Parties. . . . . . . . . . . . . 96
Section 9.26 Joint and Several. . . . . . . . . . . . . . . . . . 96
SCHEDULES
Schedule 1 Unencumbered Assets
Schedule 2 List of Real Property Assets
Schedule 3 Loan Parties, Operating Entities and Subsidiaries
Schedule 4 Required Estoppel Certificates
Schedule 5 Litigation
Schedule 6 Employee Benefit Plans
Schedule 7 Permitted Liens as of Closing Date
Schedule 8 REIT Assets
Schedule 9A REIT Business Operations
Schedule 9B Borrower Business Operations
Schedule 10 Ground Leases
Schedule 11 Mortgage Assets
Schedule 12 Exception to Representations and Warranties
Schedule 13 Permitted Investments
Schedule 14 Guarantors
Schedule 15 Management Agreements
Schedule 16 Post-Closing Repairs
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B The Note
Exhibit C Notice of Conversion or Continuation
Exhibit D Notice of Voluntary Reduction of Facility Amount
Exhibit E Voluntary Prepayment Notice
Exhibit F Subordination of Management Agreement
Exhibit G Ground Lease Estoppel
Exhibit H Compliance Certificate
THIS SENIOR UNSECURED REVOLVING LINE OF CREDIT AGREEMENT, dated as
of December 18, 1997 is made among ▇▇ ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P. (the
"Borrower"), ▇▇ ▇▇▇▇▇ REALTY CORP. (the "REIT") and ▇▇▇▇▇▇ BROTHERS HOLDINGS
INC., D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION OF ▇▇▇▇▇▇ BROTHERS HOLDINGS INC., a
Delaware corporation, ("▇▇▇▇▇▇") individually as a Co-Lender ("Lender") and
as Agent for one or more Co-Lenders ("Agent") and as Syndication Agent
("Syndication Agent").
SECTION 1. DEFINITIONS.
Section 1.01 Definitions. As used herein, the following terms
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shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural number the singular.
"Adjusted EBITDA" shall mean with respect to any Person for any
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period, EBITDA less (a) gains and/or losses on asset sales and debt
restructurings, (b) Minimum Capital Expenditure Reserves, and (c) straight
line rent adjustments for the applicable period.
"Adjusted NOI" shall mean for any Real Property Asset, the product
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of (i) Net Operating Income for the three (3) month period immediately
preceding the date of determination, multiplied by (ii) four (4); for the
purposes of this definition, the Adjusted NOI for the Bar Building shall
mean, until and unless Borrower shall own the fee simple and leasehold title
to the Bar Building, the product of (a) the lesser of (1) the actual cash
received and applied to interest then due to Borrower under the Bar Building
Loan Documents during the three (3) month period immediately preceding the
date of determination on account of the interest becoming payable during such
period, less Minimum Capital Expenditures Reserves and Minimum Management
Fees for such period and (2) the Net Operating Income of the Bar Building for
such period, less Minium Capital Expenditures Reserves and Minimum Management
Fees for such period multiplied by (b) four (4).
"Administrative Fee" shall have the meaning provided in Section
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2.15(b).
"Administrative Fee Letter" shall mean those certain letter
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agreements between any successor Agent and Borrower and the REIT providing
for the payment of the Administrative fee set forth therein.
"Advance" shall mean each advance and readvance of the principal
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balance of the Loan.
"Affiliate" shall mean, with reference to a specified Person, any
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Person that directly or indirectly through one or more intermediaries
Controls or is Controlled by or is under common Control with the specified
Person and any Subsidiaries (including Consolidated Subsidiaries) of such
specified Person.
"Agent" shall have the meaning provided in the opening paragraph
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of this Agreement and in Section 9.09(e).
"Agreement" shall mean this Senior Unsecured Revolving Line of
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Credit Agreement as the same may from time to time hereafter be modified,
supplemented or amended.
"Agreement of Sale" means that certain Amended and Restated
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Agreement of Sale dated as of June 23, 1997 between 17 Battery Upper Partners
and SLG 17 Battery LLC.
"Annual Operating Budget" shall have the meaning provided in
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Section 5.01.
"Applicable Laws" shall mean all existing and future federal,
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state and local laws, statutes, orders, ordinances, rules, and regulations or
orders, writs, injunctions or decrees of any court affecting Borrower, any
Loan Party or any Real Property Asset, or the use thereof including, but not
limited to, all zoning, fire safety and building codes, the Americans with
Disabilities Act, and all Environmental Laws (as defined in the Environmental
Indemnity).
"Appraisal" shall mean an appraisal prepared in accordance with the
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requirements of FIRREA, prepared by an independent third party appraiser
holding an MAI designation, who is state licensed or state certified in the
State of New York, who meets the requirements of FIRREA and who has at least
ten (10) years real estate experience appraising properties of a similar
nature and type as ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇ and who is otherwise reasonably
satisfactory to the Agent.
"Appraisal Period" shall mean, with respect to ▇▇▇ ▇.▇▇/▇▇/ ▇▇▇▇▇▇,
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each eighteen (18) month period commencing on the date of the Appraisal of
▇▇▇ ▇.▇▇/▇▇/ ▇▇▇▇▇▇ that was delivered to Agent prior to Closing and each
Appraisal of ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇ delivered thereafter to Agent pursuant to
clause (iii) of the definition of Total Unencumbered Asset Value.
"Assets" of any Person means all assets of such Person that would,
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in accordance with GAAP, be classified as assets of a company conducting a
business the same as or similar to that of such Person, including without
limitation, all Real Property Assets and Permitted Investments.
"Assignment and Assumption" shall have the meaning provided in
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Section 9.09.
"Assumed Debt Service" means with respect to all Unsecured Debt of
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any Person for any period, the aggregate annual payment of interest and
principal that would be due on such Unsecured Debt assuming an annual loan
constant equal to the Treasury Rate in effect as of the date of calculation.
"Bankruptcy Code" shall mean Title 11 of the United States Code
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entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time
promulgated thereunder, and any comparable applicable foreign laws relating
to bankruptcy, insolvency or creditors' rights.
"Bar Building" shall mean those certain Real Property Assets
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located at ▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ and ▇▇ ▇▇▇▇ ▇▇/▇▇/
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Bar Building Asset" shall mean the Bar Building and the Bar
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Building Loan Documents .
"Bar Building Event of Default" shall mean a "Forbearance
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Termination Default", as such term is defined under the Settlement
Agreement.
"Bar Building Loan Documents" shall mean the Bar Building Notes,
----------------------------
the Bar Building Mortgages, the Settlement Agreement, the Cash Management
Agreement, the Transfer and Escrow Agreement, the Bar Building Management
Agreement and any other documents or instruments evidencing, recurring, or
guaranteeing the Bar Building Notes or perfecting Borrower's Lien on the Bar
Building.
"Bar Building Management Agreement" shall mean that certain
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management agreement dated June 2, 1996 between the Bar Building Mortgagor
and ▇▇ ▇▇▇▇▇ Management Corp. with respect to the Bar Building.
"Bar Building Mortgages" shall mean the mortgages securing the Bar
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Building Notes and encumbering the Bar Building, as more fully described
therein.
"Bar Building Mortgagor" shall mean, collectively, Bar Building
----------------------
Associates Joint Venture, a New York joint venture with respect to the fee
interest in ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ and Lawplaza, Inc., a New
York corporation with respect to the leasehold estate in ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, together with their respective successors and assigns.
"Bar Building Notes" shall mean those two certain mortgage notes
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in the principal amount of $15,000,000.00 and $3,000,000.00, respectively,
and more particularly described on Schedule 11 attached hereto, as the same
may be modified, amended or supplemented.
"Base Period" shall have the meaning provided in Section 5.18(a).
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"Base Rate" shall mean, on any particular date, a rate per annum
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equal to the rate of interest publicly announced by Agent as its prime rate
in effect on such day, with any change in said rate to be effective as of the
date of such change; however, if ▇▇▇▇▇▇ is the Agent or if any successor
agent does not announce its rate or ceases to announce a prime rate, Base
Rate shall mean, on any particular date, a rate per annum equal to the rate
of interest published in The Wall Street Journal as the "prime rate", as in
effect on such day, with any change in the Base Rate resulting from a change
in said prime rate to be effective as of the date of the relevant change in
said prime rate; provided, however, that if more than one prime rate is
published in The Wall Street Journal for a day, the average of the prime
rates shall be used; provided, further, however, that the prime rate (or the
average of the prime rates) will be rounded to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
In the event that The Wall Street Journal should cease or
temporarily interrupt publication, then the Base Rate shall mean the daily
average prime rate published in another business newspaper, or business
section of a newspaper, of national standing chosen by Agent. If The Wall
Street Journal resumes publication, the substitute index will immediately be
replaced by the prime rate published in The Wall Street Journal.
In the event that a prime rate is no longer generally published or
is limited, regulated or administered by a governmental or quasi-governmental
body, then Agent shall select a comparable interest rate index which is
readily available to Borrower and verifiable by Borrower but is beyond the
control of Agent or any Co-Lender. Agent shall give Borrower prompt written
notice of its choice of a substitute index and when the change became
effective.
Such substitute index will also be rounded to the nearest 1/16 of
1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
The determination of the Base Rate by Agent shall be conclusive
absent manifest error.
"Base Rate Margin" means the applicable percentage per annum set
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forth in the column "Base Rate Margin" determined by reference to the column
(a) "Unsecured Debt Rating of Borrower" then in effect in the event such a
rating is assigned by the Rating Agencies or (b) "Leverage Ratio" then in
effect in the event (i) an Unsecured Debt Rating of Borrower has not been
assigned by the Rating Agencies or (ii) the rating assigned by such Rating
Agencies is worse than BBB-/Baa3, each as set forth below:
Unsecured Debt
Rating of Borrower Leverage Ratio Base Rate Margin
BBB-/Baa3 or better <35% 0%
greater than or equal to 35% and
lesser than or equal to 45% .10%
>45% 0.25%
The Base Rate Margin for the Base Rate Portion shall be determined
by reference to the Unsecured Debt Rating of Borrower or Leverage Ratio, as
applicable, in effect from time to time, and each change in the Base Rate
Margin shall be effective immediately following the date such Unsecured Debt
Rating or Leverage Ratio, as applicable, is announced or determined pursuant
to the Compliance Certificate of Borrower.
"Base Rate Portion" shall mean the portion of the Loan made and/or
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being maintained at a rate of interest based upon the Base Rate.
"Best" shall mean A.M. Best Company, Inc.
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"Book Value" shall mean, with respect to any asset of any Person,
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the net book value of such assets that is reflected on such Person's
consolidated financial statements, including any deduction, adjustment or
allowance made at any time for depreciation, amortization, or otherwise as
calculated and prepared in accordance with GAAP.
"Borrower" shall have the meaning provided in the first paragraph
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of this Agreement and any successor Borrower expressly permitted hereunder.
"Borrowing" shall mean a borrowing of one Type of Advance from
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Agent and the Co-Lenders on a given date (or resulting from conversions or
continuations on a given date), having in the case of Eurodollar Portions the
same Interest Period.
"Business Day" shall mean (i) for all purposes other than as
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covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which Agent, or
any Co-Lender or banking institutions are authorized or required by law or
other government actions to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Portions, any day which is a Business Day described in clause (i)
and which is also a day for trading by and between banks for U.S. dollar
deposits in the relevant interbank Eurodollar market.
"Capital Expenditures" shall mean, for any Person, for any period,
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all expenditures made by such Person during such period for equipment, fixed
assets, real property or improvements, or for replacements or substitutions
therefor or additions thereto, that have a useful life of more than one year.
"Capitalized Lease" as to any Person shall mean (i) any lease of
-----------------
property, real or personal, the obligations under which are capitalized on
the consolidated balance sheet of such Person and its Subsidiaries, and (ii)
any other such lease to the extent that the then present value of the minimum
rental commitment thereunder should, in accordance with GAAP, be capitalized
on a balance sheet of the lessee.
"Capitalized Lease Obligations" as to any Person shall mean all
-----------------------------
obligations of such Person and its Subsidiaries under or in respect of
Capitalized Leases.
"Cash Collateral Disbursement Account" shall have the meaning
------------------------------------
provided in the Cash Management Agreement.
"Cash Equivalents" shall mean any of the following, to the extent
----------------
owned by a Person free and clear of all Liens: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) Federally
insured certificates of deposit of or time deposits with any commercial bank
that is a Co-Lender or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause (c)
below, is organized under the laws of the United States or any State thereof
and has combined capital and surplus of at least $1 billion or (c) commercial
paper issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Services.
"Cash Management Agreement" shall mean that certain Management
-------------------------
Agreement dated June 28, 1996 between the Bar Building Mortgagor, ▇▇ ▇▇▇▇▇
Management Corp. and The Travellers Insurance Company as assigned by various
mesne assignments to Borrower, as the same may be modified, amended or
supplemented from time to time.
"Change in Law" shall have the meaning provided in Section 2.19(c).
-------------
"Closing Date" shall mean the date of this Agreement.
------------
"Code" shall mean the Internal Revenue Code of 1986, as amended
----
from time to time, and any successor statute, together with all final rules
and regulations from time to time promulgated thereunder.
"Co-Lender" shall mean any entity or entities to which Lender sells
---------
with novation all or any part of its right, title and interest in, to and
under the Loan, and any successors or assigns of Lender or any Co-Lender
pursuant to Section 9.09.
"Commitment" shall mean each Co-Lender's obligations under the Loan
----------
Documents to make Advances.
"Common OP Units" shall mean all limited partnership interests in
---------------
the Borrower other than Preferred OP Units.
"Compliance Certificate" shall have the meaning set forth in
----------------------
Section 5.01(b)(ii).
"Consolidated Interest Expense" means with respect to any Person
-----------------------------
for any period, without duplication of interest previously included in such
calculation, interest accrued or payable by such Person and its Subsidiaries
during such period in respect of Total Debt determined on a consolidated
basis in accordance with GAAP.
"Consolidated Subsidiaries" shall mean those Persons (including
-------------------------
Borrower) set forth on Schedule 3 hereof, and any other Persons required to
be consolidated with Borrower or the REIT under GAAP in Borrower's or the
REIT's consolidated financial statements, and only for so long as (i) such
Persons continue to be required to be consolidated with Borrower or the REIT
under GAAP in Borrower's or the REIT's consolidated financial statements or
(ii) none of the events described in Section 7.01(e) have occurred with
respect to any such Persons.
"Contingent Obligation" as to any Person shall mean any obligation
---------------------
of such Person guaranteeing or intended to guarantee any Indebtedness, leases
(including Capitalized Leases) dividends or other obligations ("primary
-------
obligations") of any other Person (the "primary obligor") in any manner,
----------- ---------------
whether directly or indirectly, including, without limitation, any obligation
of such Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor,(ii) to advance or supply funds (x) for the purchase or payment of
any such primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth,
solvency or other financial condition of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof: provided, however, that the term Contingent Obligation
-------- -------
shall not include endorsements of instruments for deposit or collection in
the ordinary course of business or obligations of such Person which would not
be required to be disclosed under GAAP as liabilities or footnoted on such
Person's financial statement. The amount of any accrued or accruable
Contingent Obligation shall be determined in accordance with GAAP.
"Contract Rate" shall mean the rate or rates of interest (which
-------------
rate shall include the applicable margin added thereto pursuant to the terms
of this Agreement) per annum provided for in this Agreement which are
applicable to the Loan from time to time so long as no Event of Default has
occurred and is continuing. If more than one rate of interest is applicable
to the Loan, then, unless the context indicates that the Contract Rate is to
be determined for each Loan Portion, the Contract Rate shall be the average
of such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%)
with such average to be weighted according to the relative size of the Loan
Portions to which such different rates are applicable. The determination of
the Contract Rate by Agent shall be conclusive absent manifest error.
"Control" shall mean in (a) in the case of a corporation,
-------
ownership, directly or through ownership of other entities, of at least ten
percent (10%) of all the voting stock (exclusive of stock which is voting
only as required by applicable law or in the event of nonpayment of dividends
and pays dividends only on a nonparticipating basis at a fixed or floating
rate), and (b) in the case of any other entity, ownership, directly or
through ownership of other entities, of at least ten percent (10%) of all of
the beneficial equity interests therein (calculated by a method that excludes
from equity interests, ownership interests that are nonvoting (except as
required by applicable law or in the event of nonpayment of dividends or
distributions) and pay dividends or distributions only on a non-participating
basis at a fixed or floating rate) or, in any case, (c) the power directly or
indirectly, to direct or control, or cause the direction of, the management
policies of another Person, whether through the ownership of voting
securities, general partnership interests, common directors, trustees,
officers by contract or otherwise. The terms "controlled" and "controlling"
shall have meanings correlative to the foregoing definition of "Control."
"Current Co-Lender"shall mean each of the Co-Lenders which is not
-----------------
a Defaulting Co-Lender.
"Debt Service" means with respect to any Person for any period, the
------------
sum (without duplication) of (a) Consolidated Interest Expense of such Person
for such period plus (b) scheduled principal amortization of Total Debt and
any unscheduled principal amortization payments actually made or required to
be made during such period pursuant to a settlement of debt (giving effect to
any principal payments actually made or required to be made other than
scheduled balloon payments due on the applicable maturity date that are not
then due or past due and voluntary prepayments) of such Person for such
period (whether or not such required payments are made).
"Default" shall mean any event, act or condition which shall have
-------
occurred and which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default.
"Default Rate" shall mean for each Loan Portion the lesser of
------------
(a) the Maximum Legal Rate or (b) the greater of (i) the rate per annum
determined by adding four percent (4%) per annum to (A) the Contract Rate
applicable to each Loan Portion immediately prior to a Default until the
expiration of the applicable Interest Periods, and (B) the sum of the
Eurodollar Rate Margin and the Eurodollar Rate for an Interest Period of one
month, as the same shall adjust each month, thereafter, or (ii) the rate per
annum determined by adding four percent (4%) per annum to the Base Rate as
from time to time is in effect.
"Defaulting Co-Lender" shall have the meaning ascribed to it in
--------------------
Section 9.09(d).
"Distribution" shall mean any dividends (other than dividends
------------
payable solely in equities), distributions, return of capital to any
stockholders, general or limited partners or members, distributions or
delivery of property or cash to stockholders, general or limited partners or
members, or any redemption, retirement, purchase or other acquisition,
directly or indirectly, of any shares of any class of capital stock now or
hereafter outstanding (or any options or warrants issued with respect to
capital stock) general or limited partnership interest, or, without
duplication, the setting aside of any funds for the foregoing; provided,
however, that the foregoing definition shall not be deemed to include
payments of any of the foregoing interests made in the form of salaries,
bonuses, wages or similar employee compensation.
"Dollars" and the symbol "$" each mean the lawful money of the
------- -
United States of America.
"Domestic Lending Office" shall mean the office set forth in
-----------------------
Section 9.02 for Agent and the Co-Lenders, or such other office as may be
designated from time to time by written notice to Borrower.
"EBITDA" shall mean with respect to any Person for any period,
------
earnings (or losses) before interest and taxes of such Person and its
Subsidiaries for such period plus, to the extent deducted in computing such
earnings (or losses) before interest (including, without limitation, the
interest portion of payments made under Capitalized Leases) and taxes,
depreciation and amortization expense and other non-cash charges, all as
determined on a consolidated basis with respect to such Person and its
Subsidiaries in accordance with GAAP; provided, however, EBITDA shall exclude
earnings or losses resulting from (i) cumulative changes in accounting
practices, (ii) discontinued operations, (iii) extraordinary items, (iv) net
income or net losses of any entity acquired in a pooling of interest
transaction for the period prior to the acquisition, (v) net income or net
losses of a Subsidiary or any other Loan Party that is unavailable to the
Borrower or the REIT, (vi) net income or net losses not readily convertible
into Dollars or remittable to the United States, (vii) gains and losses from
the sale of assets, and (viii) net income or net losses from corporations,
partnerships, associations, joint ventures or other entities in which the
Borrower, the REIT or a Subsidiary thereof has a minority interest and in
which neither Borrower, the REIT or their Subsidiaries has Control, except to
the extent actually received.
"Employee Benefit Plan" shall mean an employee benefit plan within
---------------------
the meaning of Section 3(3) of ERISA.
"Engineering Reports" shall have the meaning provided in Section
-------------------
3.01(p).
"Environmental Indemnity" shall mean that certain environmental
-----------------------
indemnity agreement dated the date hereof given by Borrower and the REIT to
the Agent, individually as a Co-Lender and as Agent, and ▇▇▇▇▇▇ as
Syndication Agent and Co-Lender, as the same may be supplemented or amended
from time to time.
"Environmental Laws"shall have the meaning provided in the
------------------
Environmental Indemnity.
"Environmental Reports" shall mean written environmental site
---------------------
assessments, prepared by independent qualified environmental professionals
reasonably acceptable to Agent, for each Real Property Asset, containing the
following: (1) a Phase I environmental site assessment analyzing the presence
of environmental contaminants, polychlorinated biphenyls or storage tanks and
other Hazardous Substances at each of the Real Property Assets, the risk of
contamination from off-site Hazardous Substances and compliance with
Environmental Laws, such assessments shall be conducted in accordance with
ASTM Standard E 1527-93, or any successor thereto published by ASTM, with
respect to each of the Real Property Assets, (ii) an asbestos survey of each
of the Real Property Assets, which shall include random sampling of materials
and air quality testing, (iii) if any of the Real Property Assets is used for
residential housing, an assessment of the presence of lead-based paint, lead
in water and radon in the improvements (other than units that are not owned
or leased by Borrower, the REIT, any other Loan Party or any Affiliate
thereof), and (iv) such further site assessments Agent may reasonably require
or request due to the results obtained in (i), (ii) or (iii) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time and any successor statute, together with
all final rules and regulations promulgated thereunder. Section references
to ERISA are to ERISA, as in effect at the date of this Agreement and any
provisions of ERISA substituted therefor.
"ERISA Controlled Group" means any corporation or entity or trade
----------------------
or business or person that is a member of any group described in Section
414(b), (c), (m) or (o) of the Code of which Borrower, the REIT or any
Guarantor is a member.
"Eurocurrency Reserve Requirements" shall mean, with respect to
---------------------------------
each day during an Interest Period for Eurodollar Portions, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Federal Reserve Board or other governmental authority or agency having
jurisdiction with respect thereto for determining the maximum reserves
(including, without limitation, basic, supplemental, marginal and emergency
reserves) for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D) maintained by a member bank of the Federal
Reserve System.
"Eurodollar Base Rate" shall mean, for any Interest Period, the
--------------------
rate per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period which appears on the Telerate Page 3750
as of 11:00 a.m. (London, England time) two (2) Business Days prior to the
first day of such Interest Period. The determination of the Eurodollar Base
Rate by Agent shall be conclusive absent manifest error.
"Eurodollar Lending Office" shall mean the office of Agent (or any
-------------------------
Co-Lender) designated as such by Agent from time to time by written notice to
Borrower.
"Eurodollar Portions" shall mean each portion of the Loan made
-------------------
and/or being maintained at a rate of interest calculated by reference to the
Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day during an
---------------
Interest Period for Eurodollar Portions, a rate per annum equal to the
Eurodollar Base Rate, or, if any Co-Lender is subject to Eurocurrency Reserve
Requirements, whether or not such reserves are actually incurred or
maintained, the average of the Eurodollar Base Rate and the Adjusted
Eurodollar Base Rate (defined below), with such average to be weighted
according to the percentage of the Eurodollar Portion subject to such Co-
Lender's interest in the Loan and the balance of such Eurodollar Portion.
The Adjusted Eurodollar Base Rate shall mean a rate per annum, determined for
each day during an Interest Period in accordance with the following formula
(rounded upwards to the nearest whole multiple of l/16th of one percent):
Eurodollar Base Rate
---------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Rate Margin" means the applicable percentage per annum
----------------------
set forth in the column "Eurodollar Rate Margin" determined by reference to
the column (a) "Unsecured Debt Rating of Borrower" then in effect in the
event such a rating is assigned by the Rating Agencies or (b) "Leverage
Ratio" then in effect in the event an Unsecured Debt Rating of Borrower has
not been assigned by the Rating Agencies or the rating assigned by such
Rating Agencies is worse than BBB-/Baa3, each as set forth below:
Unsecured Debt Eurodollar Rate
Rating of Borrower Leverage Ratio Margin
<35% 1.20%
greater than or equal to 35% and
less than or equal to 45% 1.30%
>45% 1.45%
BBB-/Baa3 1.15%
BBB/Baa2 or better 1.10%
The Eurodollar Rate Margin for the Eurodollar Rate Portions shall
be determined by reference to the Unsecured Debt Rating of Borrower or
Leverage Ratio, as applicable, and any change in the Eurodollar Rate Margin
shall be effective immediately following the date such Unsecured Debt Rating
or Leverage Ratio, as applicable, is announced or determined, pursuant to the
Compliance Certificate of Borrower.
"Event of Default" shall have the meaning provided in Section 7.
----------------
"Extension Fee" shall mean a non-refundable fee equal to 0.25% of
-------------
the Facility Amount.
"Facility Amount" shall initially mean U.S. $140,000,000.00, as
---------------
such amount may be permanently or temporarily reduced pursuant to Sections
2.09 or 2.12 or otherwise pursuant to the terms and conditions of this
Agreement.
"Facility Fee" shall have the meaning provided in the Fee Letter.
------------
"Federal Reserve Board" shall mean the Board of Governors of the
---------------------
Federal Reserve System as constituted from time to time, or any successor
thereto in function.
"Fees" shall mean all amounts payable pursuant to Sections 2.09,
----
2.15, 2.17 and 9.01.
"Fee Letter" shall mean that certain letter agreement between
----------
Borrower, the REIT and ▇▇▇▇▇▇ dated the date hereof.
"Financial Covenants" shall mean Sections 5.16, 5.17, 5.18, 5.25,
-------------------
5.28, 6.07, 6.08 and 6.11.
"FIRREA" means the Financial Institutions Reform, Recovery and
------
Enforcement Act of 1989, as amended from time to time.
"Fixed Charges" means the amount of scheduled lease payments with
-------------
respect to leasehold interests or obligations of the subject Person with
respect to Capitalized Leases and dividends and distributions on all classes
of preferred stock or Preferred OP Units of such Person.
"Funding Costs" shall have the meaning provided in Section 2.17.
-------------
"Funds from Operations" shall mean consolidated net income (loss)
---------------------
before extraordinary items, computed in accordance with GAAP, plus, to the
extent deducted in determining net income (loss) and without duplication, (i)
gains (or losses) from debt restructuring and sales of property (or
adjustments to basis of properties or other assets), (ii) non-recurring
charges, (iii) provisions for losses, (iv) real estate related depreciation,
amortization and other non-cash charges (excluding amortization of financing
costs), and (v) amortization of organizational expenses minus, to the extent
included in net income (loss) and without duplication, (a) non-recurring
income and (b) equity income (loss) from unconsolidated partnerships and
joint ventures less the proportionate share of funds from operations of such
partnerships and joint ventures, which adjustments shall be calculated on a
consistent basis.
"Furnished Information" shall have the meaning provided in Section
---------------------
4.15.
"GAAP" shall mean United States generally accepted accounting
----
principles on the date hereof and as in effect from time to time during the
term of this Agreement, and consistent with those utilized in the preparation
of the financial statements referred to in Section 4.05.
"Ground Lease" shall mean those ground leases described on Schedule
------------
10 and any other ground lease that complies with the provisions set forth in
Section 4.27.
"Ground Lease Estoppel" shall have the meaning provided in Section
---------------------
3.01(a)(xi).
"Guarantor" shall mean the Loan Parties identified on Schedule 14
---------
and each owner, other than the Borrower and the REIT, of an Unencumbered
Asset.
"Guaranty" shall mean that certain Guaranty of Payment dated the
--------
date hereof made by the Guarantors to Agent, the Syndication Agent and the
Co-Lenders, as the same may be supplemented or amended from time to time.
"Hazardous Substances" shall have the meaning provided in the
--------------------
Environmental Indemnity.
"Improvements" shall mean any building, structure, fixture,
------------
addition, enlargement, extension, modification, repair, replacement or
improvement now or hereafter located or erected on any Real Property Asset.
"Increased Capital Costs" shall have the meaning provided in
-----------------------
Section 2.18.
"Indebtedness" of any Person shall mean, without duplication, (i)
------------
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument, (iii) the
outstanding undrawn amount of all letters of credit issued for the account of
such Person and, without duplication, all un-reimbursed amounts drawn
thereunder, (iv) all indebtedness of any other person or entity secured by
any Lien on any property owned by such Person, whether or not such
indebtedness has been assumed, (v) all Contingent Obligations of such Person,
(vi) all Unfunded Benefit Liabilities of such Person, (vii) all payment
obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors,
collars and similar agreements) and currency swaps and similar agreements,
(viii) all indebtedness and liabilities of such Person secured by any Lien or
mortgage on any property of such Person, whether or not the same would be
classified as a liability on a balance sheet, (ix) the liability of such
Person in respect of banker's acceptances and the estimated liability under
any participating mortgage, convertible mortgage or similar arrangement, (x)
the aggregate principal amount of rentals or other consideration payable by
such Person in accordance with GAAP over the remaining unexpired term of all
Capitalized Leases of such Person, (xi) all judgments or decrees by a court
or courts or competent jurisdiction entered against such Person, (xii) all
indebtedness, payment obligations, contingent obligations, etc. of any
partnership in which such Person holds a general partnership interest,
provided that if such indebtedness is non-recourse, only the portion of such
indebtedness equal to such Person's percentage ownership interest in such
partnership shall be included in this definition, (xiii) all convertible debt
and subordinated debt owed by such Person, (xiv) all Preferred OP Units (if
any) and preferred stock issued by such Person that, in either case, are
redeemable for cash on a mandatory basis, a cash equivalent, a note
receivable or similar instrument or are convertible on a mandatory basis to
Indebtedness as defined herein (other than Indebtedness described in clauses
(iii), (vi), (x), (xi) or (xiv) of this definition), and (xv) all
obligations, liabilities, reserves and any other items which are listed as a
liability on a balance sheet of such Person determined on a consolidated
basis in accordance with GAAP, but excluding (A) all general contingency
reserves and reserves for deferred income taxes and investment credit and (B)
all customary trade payables and accrued expenses not more than sixty (60)
days past due and (C) any indebtedness of such Person evidenced by a note or
notes that is secured by a pledge of cash or Cash Equivalents with a value
equal to or greater than the amount of the related indebtedness and which
generates cash flow sufficient to pay all sums due on such indebtedness when
the same are due and payable.
"Indemnitee" shall have the meaning provided in Section 9.01(c).
----------
"Intercreditor Agreement" shall have the meaning provided in
-----------------------
Section 9.04.
"Interest Period" shall have the meaning provided in Section 2.06.
---------------
"Investment Grade Tenant" shall mean any tenant which has an
-----------------------
Unsecured Debt Rating of BBB- or better as assigned by S&P or Baa3 or better
as assigned by Moody's.
"Leases" shall mean all leases and other agreements, whether or not
------
in writing, to which an owner of a Real Property Asset is a party or by which
such owner is bound, pursuant to which a Person is permitted to use, enjoy or
occupy all or any portion of any Real Property Asset, whether heretofore or
hereafter entered into.
"Leverage Ratio" means, with respect to the REIT, the Borrower and
--------------
their Consolidated Subsidiaries, the ratio, expressed as a percentage, of
(a) such Person's Total Debt to (b) the Total Value of such Person's Assets.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, collateral assignment, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
effect as any of the foregoing, inchoate liens arising under ERISA to secure
the Contingent Liabilities of Borrower, the REIT, or any Loan Party, and the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction, domestic or foreign in
connection with the creation of a security interest.
"Loan" shall mean, in the aggregate, the then outstanding and
----
unpaid Advances made to Borrower under this Agreement and the Note pursuant
to the terms hereof, the aggregate outstanding principal amount of which
shall not exceed at any time the Facility Amount.
"Loan Documents" shall mean this Agreement, the Note, the Guaranty,
--------------
the Environmental Indemnity, the Subordination of Management Agreement, the
Ground Lease Estoppel, the Intercreditor Agreement, and any other documents
or instruments evidencing, securing or guaranteeing the Loan.
"Loan Party" shall mean, individually and collectively, as the
----------
context requires, Borrower, the REIT, each Guarantor, and the general
partners of Borrower if Borrower is a limited partnership, and the managing
members of Borrower if Borrower is a limited liability company.
"Loan Portion" shall mean the Base Rate Portion and each Eurodollar
------------
Portion of the Loan.
"Majority Co-Lenders" shall have the meaning provided in the
-------------------
Intercreditor Agreement, provided that prior to Syndication, it shall mean
the Lender. With respect to the provisions of this Agreement requiring the
consent, approval, disapproval or determination of the Majority Co-Lenders,
each Current Co-Lender's Pro Rata Interest shall be used as the means of
calculating the Majority Co-Lenders and the term "Majority Co-Lenders" shall
mean those Current Co-Lenders whose Pro Rata Interests, at any time, in the
aggregate, is equal to or greater than the percentage prescribed in
Intercreditor Agreement based solely on the aggregate owned by all Current
Co-Lenders; the Pro Rata Interests in the Loan of Defaulting Co-Lenders shall
not be taken into account in the calculation of the Majority Co-Lenders.
"Management Agreements" shall mean those management agreements
---------------------
described on Schedule 15, and any subsequent management agreements entered
into pursuant to Section 5.21.
"Manager" shall mean ▇▇ ▇▇▇▇▇ Management LLC or another wholly
-------
owned Affiliate or Subsidiary of Borrower.
"Margin Stock" shall have the meaning provided such term in
------------
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean any condition which has a
-----------------------
material adverse effect upon (i) the business, operations, properties, assets
or condition (financial or otherwise) of Borrower or the REIT or any of the
Loan Parties, taken as a whole, or (ii) the ability of Borrower or the REIT
or the Loan Parties to perform, or of Agent, or any Co-Lender to enforce, any
of the Obligations.
"Maturity Date" shall mean December 18, 2000, as such date may be
-------------
extended pursuant to Section 2.09(b) or such earlier date on which the
principal balance of the Loan and all other sums due in connection with the
Loan shall be due as a result of the acceleration of the Loan.
"Maximum Legal Rate" shall mean the maximum nonusurious interest
------------------
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws
of such state or states whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions of the Loan.
"Minimum Capital Expenditure Reserves" shall mean, for any Real
------------------------------------
Property Asset, $0.40 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Minimum Leasing Commission Reserves" shall mean for any Real
-----------------------------------
Property Asset, $0.51 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Minimum Management Fees" shall mean three percent (3%) of Rents
-----------------------
from the related Real Property Asset for the three (3) month period
immediately preceding the calculation.
"Minimum Reserves" shall mean the sum of Minimum Capital
----------------
Expenditure Reserves, Minimum Tenant Improvement Reserves and Minimum Leasing
Commission Reserves.
"Minimum Tenant Improvement Reserves" shall mean for any Real
-----------------------------------
Property Asset, $1.78 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Moody's" shall mean ▇▇▇▇▇'▇ Investor Service, Inc.
-------
"Multiemployer Plan" shall mean a Plan which is a "multiemployer
------------------
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Operating Income" shall mean, with respect to any Real
--------------------
Property Asset, for the period of determination, the Rents derived from the
customary operation of such Real Property Asset, less Operating Expenses
attributable to such Real Property Asset, and shall include only the sum of
(i) the Rents received or expected to be received, and earned in accordance
with GAAP, pursuant to Leases in place under which the tenant is in occupancy
of the premises demised thereunder (unless such tenant has not taken
occupancy due to tenant improvement work or tenant build-out that is not the
subject of dispute and is not yet completed) on the date of such calculation
and under which Tenant is on a full rent paying basis and is not more than
thirty (30) days delinquent in such rent payments, plus (ii) other income
actually received and earned in accordance with GAAP with respect to such
Real Property Asset, plus (iii) rent loss or business interruption insurance
proceeds received or expected to be received during or relating to such
period due to a casualty that has occurred prior to the date of calculation
plus (iv) parking or other income, less Operating Expenses actually paid or
payable on an accrual basis in accordance with GAAP attributable to such Real
Property Asset during such period, as set forth on operating statements and
schedules reasonably satisfactory to Agent. Net Operating Income shall be
calculated in accordance with customary accounting principles applicable to
real estate. Notwithstanding the foregoing, Net Operating Income shall not
include (i) any condemnation or insurance proceeds (excluding rent loss or
business interruption insurance proceeds as described above), (ii) any
proceeds resulting from the sale, exchange, transfer, financing or
refinancing of all or any portion of the Real Property Asset for which it is
to be determined, (iii) amounts received from tenants as security deposits
unless actually applied toward the payment of rent or additional rent in
accordance with the terms of such tenant's lease, (iv) interest income and
(v) any type of income otherwise included in Net Operating Income but paid
directly by any tenant to a Person other than Borrower or a Loan Party or its
agents or representatives.
"Net Worth" shall mean, with respect to a Person, consolidated net
---------
worth as calculated in accordance with GAAP.
"New Manager" shall have the meaning provided in Section 5.21.
-----------
"Non-use Fee" shall have the meaning provided in Section 2.15(a).
-----------
"Non-use Fee Due Date" shall mean the date which is five (5)
--------------------
business days after the date Agent has furnished Borrower with an invoice
showing the amount of the quarterly Non-use Fee and a detailed calculation of
the same in accordance with Section 2.15.
"Note" shall have the meaning provided in Section 2.04.
----
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
2.02.
"Notice of Conversion or Continuation" shall have the meaning
------------------------------------
provided in Section 2.08.
------------
"Obligations" shall mean all payment, performance and other
-----------
obligations, liabilities and indebtedness of every nature of (i) Borrower and
the REIT from time to time owing to Agent or any Co-Lender under or in
connection with this Agreement or any other Loan Document, or (ii) the REIT
and the other Loan Parties under or in connection with the Guaranty or any
other Loan Documents.
"Occupancy Level" shall mean, for each Real Property Asset, the
---------------
percentage of rentable square feet in such Real Property Asset actually
occupied by tenants under their respective Leases on a full rent paying basis
or during any free rent period provided for in such Lease. For purposes of
this definition, if a tenant has sublet all or a portion of the premises
demised under its Lease, and such subtenant is actually occupying such
premises or portion thereof, the tenant shall be deemed to be actually
occupying such premises or portion thereof, as the case may be.
"110 E. ▇▇▇▇ ▇▇▇▇▇▇" shall mean that certain Real Property Asset
------------------
located at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Operating Entities" shall mean those partnership or limited
------------------
liability companies set forth on Schedule 3, as such Schedule may be amended
or supplemented from time to time, and any partnership or limited liability
company, in which the Borrower or the REIT, own singly or together, a
majority or all of the economic interest therein and either the Borrower or
the REIT, either directly or indirectly, is the sole managing general partner
or sole managing member.
"Operating Expenses" shall mean, with respect to any Real Property
------------------
Asset, for any given period (and shall include the pro rata portion for such
period of all such expenses attributable to, but not paid during, such
period), all out-of-pocket expenses to be paid or payable, as determined in
accordance with GAAP, by Borrower, the REIT or the applicable Loan Party
during that period in connection with the operation of such Real Property
Asset for which it is to be determined, including without limitation and
without duplication:
(i) expenses for cleaning, repair, maintenance, decoration and
painting of the such Real Property Asset (including, without limitation,
parking lots and roadways), net of any insurance proceeds in respect of
any of the foregoing;
(ii) wages (including overtime payments), benefits, payroll taxes
and all other related expenses for Borrower's, the REIT's or other Loan
Party's on-site personnel, up to and including (but not above) the level
of the on-site manager, engaged in the repair, operation and maintenance
of such Real Property Asset and service to tenants and on-site personnel
engaged in audit and accounting functions performed by Borrower, the
REIT or the applicable Loan Party;
(iii) management fees pursuant to the Management Agreement, but in
no event less than the Minimum Management Fees. Such fees shall include
all fees for management services whether such services are performed at
such Real Property Asset or off-site;
(iv) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, utility or similar
item and the cost of building and cleaning supplies;
(v) the cost of any leasing commissions and tenant concessions or
improvements payable by Borrower, the REIT or any Loan Party pursuant to
any leases which are in effect for such Real Property Asset at the
commencement of that period as such costs are recognized in accordance
with GAAP, but in no event less than the Minimum Leasing Commission
Reserves and Minimum Tenant Improvement Reserves with respect to such
period, respectively;
(vi) rent, liability, casualty, fidelity, errors and omissions,
liability, workmen's compensation and other insurance premiums;
(vii) legal, accounting and other professional fees and expenses;
(viii) the cost of all equipment to be used in the ordinary course
of business, which is not capitalized in accordance with GAAP.
(ix) real estate, personal property and other taxes;
(x) advertising and other marketing costs and expenses;
(xi) the Minimum Capital Expenditure Reserves;
(xii) casualty losses to the extent not reimbursed by an
independent third party; and
(xiii) if applicable, all common area charges, maintenance charges
and other assessments or charges under any condominium regime.
Notwithstanding the foregoing, Operating Expenses shall not include (i)
depreciation or amortization or any other non-cash item of expense; (ii)
interest, principal, fees, costs and expense reimbursements of Agent and the
Co-Lenders in administering the Loan; or (iii) any expenditure (other than
leasing commissions, tenant improvement costs and replacement reserves as
described above) which is properly treatable as a capital item under GAAP.
"OP Units" shall mean the Common OP Units and the Preferred OP
--------
Units.
"Other Assets" shall mean all Assets of a Person that are not Real
------------
Property Assets.
"Participant" shall have the meaning provided in Section 9.09(i).
-----------
"PBGC" shall mean the Pension Benefit Guaranty Corporation
----
established under ERISA, or any successor thereto.
"Permitted Investments" shall mean, at any time, (a) fee simple or
---------------------
leasehold interests (which comply with the requirements of Section 4.27)
owned entirely by the Borrower in real property located in the borough of
Manhattan, City of New York, New York and improved by fully operational Class
B or better office buildings, provided however, that fifteen percent (15%) of
the Total Value of such Assets may be real property located outside of the
borough of Manhattan, and (b) all of the categories of investments, as
limited individually as a percentage of the Total Value of all of Borrower's
consolidated Assets in the table below, which, when combined, shall be not
in excess of the lesser of (i) thirty percent (30%) of Borrower's Net Worth
as of the date of calculation, and (ii) fifteen percent (15%) of the Total
Value of all of Borrower's consolidated Assets as of the date of calculation:
Maximum percentage of
Total Value of
Borrower's
Permitted Investment Consolidated Assets
-------------------- ---------------------
Mortgages, deeds of trust, deeds to secure debt or similar instruments or
receivables that are a Lien on real property which are improved by fully 15%
operational Class B or better office buildings and secure indebtedness
evidenced by a note or bond (excluding the Bar Building Mortgages)
Partnerships or limited liability companies in which the Borrower owns a
majority of the economic interest and the Borrower, either directly or
indirectly, is the sole managing general partner or the sole managing member
and which partnership or limited liability company primarily owns real 15%
properties which are improved by fully operational Class B or better office
buildings, and further, that the Borrower or a Subsidiary thereof is both
the managing agent and leasing agent of such properties.
Partnerships or limited liability companies in which the Borrower either (a)
owns less than a majority of the economic interest and/or (b) is the not the
sole managing general partner and/or (c) is not the sole managing member, but
is the both the managing and leasing agent (either directly or indirectly) 10%
and which partnership or limited liability company primarily owns real
properties which are improved by fully operational Class B or better office
buildings
For purposes of calculating the foregoing: (A) the amount of each
Permitted Investment will be deemed to be the Book Value of such Asset; and
(B) partnerships and limited liability companies for purposes of determining
Permitted Investments shall not include partnerships and limited liability
companies that are wholly owned and controlled by the Partnership, either
directly or indirectly. Undeveloped land and land that is then being
developed are also not Permitted Investments. In addition, Permitted
Investments which relate to investments in (1) direct fee or leasehold
interests on, (2) mortgages or other security instruments on, or (3)
interests in entities owning, real property not located in the borough of
Manhattan, City of New York, New York, shall not in the aggregate exceed,
without duplication, fifteen percent (15%) of the Total Value of Borrower's
consolidated Assets. Notwithstanding the foregoing, the Borrower's
investment in (x) the mortgage encumbering ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
as more fully described in Schedule 13, shall be deemed a Permitted
Investment during the period commencing on the Closing Date and ending on
March 1, 1998, (y) the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage shall be deemed a Permitted
Investment, and (z) SLG 17 Battery LLC's tenancy-in-common interest in ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, as more fully described in Schedule 13, shall be deemed a
Permitted Investment, notwithstanding that in each case it may otherwise
breach the limitations set forth above with respect to the maximum percentage
of Borrower's Net Worth and Total Value of Borrower's consolidated Assets;
provided, however, that the Permitted Investment limitations set forth above
shall be deemed to have been utilized due to the ▇▇▇▇ ▇▇▇▇▇▇▇▇ mortgage and
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage and tenancy-in-common interest, and any further
investments in mortgages and partnership interests, shall be subject to the
Permitted Investment limitations after consideration of the inclusion of the
▇▇▇▇ ▇▇▇▇▇▇▇▇ mortgage and ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage and tenancy-in-common
interests. Any modification, waiver or amendment of the limitations on
Permitted Investments set forth above shall be subject to the consent or
approval of the Majority Co-Lenders.
"Permitted Liens" shall have the meaning provided in Section 6.03.
---------------
"Person" shall mean and include any individual, partnership, joint
------
venture, firm, corporation, limited liability company, association, company,
trust or other enterprise or any government or political subdivision or
agency, department or instrumentality thereof.
"Plan" means any employee benefit plan subject to the provisions
----
of Title IV of ERISA or which is subject to the provisions of Section 412 of
the Code or Section 302 of ERISA, for which Borrower, any other Loan Party or
any member of either of their ERISA Controlled Group has any obligation or
liability, or potential obligation or liability, whether direct or indirect.
"Plan Asset Entity" shall mean any "employee benefit plan" as
-----------------
defined in ERISA, any "plan" as defined in Section 4975 of the Code, and any
entity any portion or all of the assets of which are deemed pursuant to
United States Department of Labor Regulation Section 2510.3-101 or otherwise
pursuant to ERISA or the Code to be, for any purpose of ERISA or Section 4975
of the Code, assets of any such "employee benefit plan" or "plan" which
invests in such entity.
"Policies" shall have the meaning provided in Section 5.03(c).
--------
"Post-Closing Repairs" shall have the meaning provided in Section
--------------------
5.27(b).
"Preferred OP Units" shall mean those limited partnership interests
------------------
(if any) in the Borrower having a priority or preferred status (relative to
all other limited partnership interests in the Borrower) with respect to
distributions or returns of the holders of such units.
"Pro Rata Interest" shall mean the proportionate share of each Co
-----------------
Lender in the Loan, this Agreement, the other Loan Documents and the
obligations to make Advances pursuant to the terms of this Agreement.
Notwithstanding the foregoing, with respect to any approvals, consents or
determinations that are to be made by the Majority Co-Lenders, Pro Rata
Interest shall mean, with respect to each Current Co-Lender, a percentage
equal to the amount of the Loan owned by such Current Co-Lender divided by
the aggregate amount of the Loan owned by all of the Current Co-Lenders,
multiplied by 100.
"Purchase Price" shall mean, with respect to any Real Property
--------------
Asset, the actual purchase price paid for the Real Property Asset, including
the actual outstanding principal balance of any mortgage liens to which title
was taken subject or were granted to an independent third party lender or to
the seller to finance the purchase of such Real Property Asset only, but
excluding all closing costs, (e.g., transfer taxes, mortgage taxes, title
insurance premiums) and excluding all closing adjustments.
"Qualifying Insurer" shall have the meaning provided in Section
------------------
5.03(c).
"Quarter" shall mean a period of ninety (90) days.
-------
"Rating Agencies" shall mean both Standard & Poor's Rating Services
---------------
and ▇▇▇▇▇'▇ Investor Service, Inc. If either of such agencies discontinue
its rating of Borrower or the REIT or its ratings of real estate investment
trusts generally, Agent and the Majority Co-Lenders shall, within six (6)
months of such discontinuance, agree upon another nationally recognized
statistical ratings agency that assigns a rating to Borrower and the REIT
("Substitute Rating Agency"), and the term Rating Agencies shall include such
Substitute Rating Agency. During any time that only one Rating Agency is
assigning a rating to Borrower and the REIT, that agency's rating shall be
used for all calculations under this Agreement.
"REIT" shall have the meaning set forth in the opening paragraph
----
of this Agreement.
"Real Property Assets" shall mean the real property set forth on
--------------------
Schedules 2A and 2B, as such Schedules may be amended or supplemented from
time to time, and all real property owned, directly or indirectly, wholly or
partly, by Borrower, the REIT, any Operating Entity or any other Loan Party
(including, without limitation, all Unencumbered Assets), subject to the
conditions of Sections 6.10.
"Recourse Indebtedness" of any Person means all Indebtedness of
---------------------
such Person and its Subsidiaries for which recourse for payment may be made
against such Person for the obligations secured thereunder. For purposes of
this definition, if only a portion of such Indebtedness is recourse to such
Person the entire amount of such Indebtedness shall be deemed to be Recourse
Indebtedness.
"Register" shall have the meaning provided in Section 9.09.
--------
"Regulation D" shall mean Regulation D of the Federal Reserve Board
------------
as from time to time in effect and any successor to all or any portion
thereof.
"Rents" shall mean all income, rents, additional rents, revenues,
-----
issues and profits (including all oil and gas or other mineral royalties and
bonuses) and all pass-throughs and tenant's required contributions for taxes,
insurance, maintenance costs, utilities, tenant improvements, leasing
commissions, capital expenditures and other items accrued to Borrower or any
Loan Party from the Real Property Assets (other than tenant security
deposits).
"Reportable Event" has the meaning set forth in Section 4043(c)(3),
----------------
(5), (6) or (13) of ERISA (other than a Reportable Event as to which the
provision of 30 days' notice to the PBGC is waived under applicable
regulations).
"Responsible Officer" means the Chairman of the Board, President,
-------------------
the Chief Operating Officer, the Chief Financial Officer, the Chief Executive
Officer, the Executive Vice President or the Senior Vice President-Finance of
the REIT.
"Restoration" shall have the meaning provided in Section 5.03(h).
-----------
"S&P" shall mean Standard & Poor's Rating Services.
---
"Secured Indebtedness" shall mean, with respect to any Person, the
--------------------
outstanding principal balance of all Indebtedness which is secured by any
collateral or Assets of such Person and is evidenced by a promissory note or
other instrument or written agreement. For purposes of this definition,
Secured Indebtedness shall also include all Unsecured Debt (excluding the
Guaranty) of all Subsidiaries and Affiliates of such Person.
"Secured Recourse Indebtedness" shall mean, with respect to any
-----------------------------
Person, all Secured Indebtedness that is also Recourse Indebtedness,
including, without limitation, Capitalized Leases of the related Real
Property Assets of such Person.
"17 Battery Place" shall mean that certain Real Property Asset
----------------
located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"17 Battery Place Cash Collateral Agreement" means that certain
------------------------------------------
Cash Collateral Agreement dated December 19, 1997 between 17 Battery Upper
Partners and SLG 17 Battery LLC.
"17 Battery Place Mortgage" means that certain mortgage dated
-------------------------
December 19, 1997 in the principal amount of $15,500,000.00 granted by 17
Battery Upper Partners to Borrower on 17 Battery Upper Partner's tenancy-in-
common interest in ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, together with the note or notes secured
thereby.
"17 Battery Place Tenancy Agreement" shall mean that certain
----------------------------------
tenancy-in-common agreement dated December 19, 1997 between SLG 17 Battery
LLC and 17 Battery Upper Partners with respect to ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"17 Battery Place Transaction Documents" means the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Tenancy Agreement, the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage, the Agreement of Sale, the
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Cash Collateral Agreement and other documents evidencing,
guaranteeing or securing the obligations under the foregoing documents.
"17 Battery Upper Partners" shall mean 17 Battery Upper Partners
-------------------------
LLC, a New York limited liability company.
"Settlement Agreement" shall mean that certain settlement agreement
--------------------
dated June 28, 1996 between the Bar Building Mortgagor and The Travellers
Insurance Company, as amended by that certain First Amendment to Settlement
Agreement and First Amendment to Consent, Direction and Recognition
Agreement, each dated June 28, 1996 between the Bar Building Mortgagor and
The Travellers Insurance Company, as the same may be modified, amended or
supplemented from time to time.
"Solvent" as to any Person shall mean that (i) the sum of the
-------
assets of such Person, at a fair valuation based upon appraisals or
comparable valuation, will exceed its liabilities, including contingent
liabilities, (ii) such Person will have sufficient capital with which to
conduct its business as presently conducted and as proposed to be conducted
and (iii) such Person has not incurred debts, and does not intend to incur
debts, beyond its ability to pay such debts as they mature. For purposes of
this definition, "debt" means any liability on a claim, and "claim" means
---- -----
(x) a right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, or (y) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such Contingent Liabilities, such
liabilities shall be computed in accordance with GAAP at the amount which, in
light of all the facts and circumstances existing at the time, represents the
amount which can reasonably be expected to become an actual or matured
liability.
"Subordination of Management Agreement" shall mean a Subordination
-------------------------------------
of Management Agreement substantially in the form set forth as Exhibit "F"
hereto.
"Subsidiary" of any Person shall mean and include (i) any
----------
corporation Controlled by such Person, directly or indirectly through one or
more intermediaries, and (ii) any partnership, association, joint venture or
other entity Controlled by such Person, directly or indirectly through one or
more intermediaries and (iii) all of the parties listed as Subsidiaries on
Schedule 3.
"Substantial Asset" shall mean Real Property Assets of Borrower,
-----------------
the REIT and any other Loan Party which, in the aggregate, constitutes more
than 15% of the consolidated Net Operating Income of Borrower, the REIT and
the other Loan Parties, derived from all Real Property Assets.
"Substitute Rating Agency" shall have the meaning provided in the
------------------------
definition of "Rating Agencies".
"Syndication" shall have the meaning provided in Section 9.09(c).
-----------
"Syndication Agent" shall have the meaning provided in the opening
------------------
paragraph of this Agreement.
"Taxes" shall have the meaning provided in Section 2.19.
-----
"Telerate Page 3750" means the display designated as "Page 3750"
------------------
on the Telerate 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 U.S. Dollar deposits).
"Term Loan" shall mean that certain loan made pursuant to a loan
---------
agreement dated August 20, 1997, between Lehman and New Green 50W23 Realty
LLC, secured by property known as ▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Termination Event" shall mean (i) a Reportable Event, or (ii) the
-----------------
initiation of any action by Borrower, any member of Borrower's or any other
Loan Party's ERISA Controlled Group or any other person to terminate a Plan
or the treatment of an amendment to an ERISA Plan as a termination under
ERISA, in either case, which would result in liability to Borrower, any Loan
Party or any of their ERISA Controlled Group in excess of $500,000, (iii) the
institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan,
(iv) any partial or total withdrawal from a Multiemployer Plan which in
either case, which would result in liability to Borrower, any Loan Party or
any of their ERISA Controlled Groups in excess of $500,000 or (v) the taking
of any action would require security to the Plan under Section 401(a)(29) of
the Code.
"Title Policies" shall have the meaning provided in Section
--------------
3.01(j).
"Title Searches" shall mean (i) reports of UCC, tax lien, judgment
--------------
and litigation searches with respect to any Person and (ii) searches of title
to each of the Real Property Assets.
"Total Debt" means with respect to any Person at any time, all
----------
Indebtedness of such Person as determined on a consolidated basis in
accordance with GAAP plus projected amortization of tenant improvement costs
and leasing commissions over the succeeding twelve (12) months which are
capitalized as of the date of determination in accordance with GAAP (assuming
amortization on a straight line basis over the related base lease term).
"Total Unencumbered Asset Value" means the sum, without
------------------------------
duplication, of the aggregate value of all Unencumbered Assets, calculated as
of the date of determination as follows:
(i) for Unencumbered Assets that have been owned or leased for
less than three (3) months prior to the date of determination, an amount
equal to ninety-five percent (95%) of the Purchase Price for such
Unencumbered Assets; and
(ii) for Unencumbered Assets that have been owned for more than
three (3) months prior to the date of determination, the Adjusted NOI
for such Unencumbered Assets divided by 0.10; and
(iii) notwithstanding the foregoing, provided that ▇▇▇ ▇. ▇▇/▇▇/
▇▇▇▇▇▇ is an Unencumbered Asset, until June 1, 1999 (the initial
Appraisal Period), the value for ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇ shall be equal to
$28,100,000.00; provided that, in the event of a material casualty to,
or condemnation of, ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇, the value of ▇▇▇ ▇. ▇▇/▇▇/
▇▇▇▇▇▇ shall be calculated in accordance with clause (i) or (ii) above,
as applicable; upon completion of restoration (or upon the expiration of
the initial Appraisal Period), Borrower may deliver a then current
Appraisal of ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇ reasonably satisfactory to the
Majority Co-Lenders, and the value of ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇ for the
Appraisal Period beginning on the date of such then current Appraisal
shall be the appraised value pursuant to said Appraisal.
Provided that if SLG 17 Battery LLC's tenancy-in-common interest in ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ is an Unencumbered Asset, the value for ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall
be calculated solely on the basis of the Purchase Price of, or the Adjusted
NOI from, as applicable, the tenancy-in-common interest owned by the SLG 17
Battery LLC.
"Total Value" means the sum, without duplication, of (i) the Total
-----------
Unencumbered Asset Value and (ii) the aggregate value of all Assets of
Borrower on a consolidated basis that are not Unencumbered Assets, calculated
as of the date of determination as follows:
(i) for Real Property Assets (other than Unencumbered Assets) that
have been owned for less than three (3) months prior to the date of
determination, an amount equal to ninety-five percent (95%) of the
Purchase Price for such Real Property Assets;
(ii) for Real Property Assets (other than the Unencumbered Assets)
that have been owned for more than three (3) months prior to the date
of determination, the Adjusted NOI for such Real Property Assets divided
by 0.10;
(iii) for Permitted Investments (other than the Unencumbered
Assets and other Real Property Assets), the Book Value of such Assets;
and
(iv) Borrower's unrestricted cash and Cash Equivalents as of the
date of determination, calculated in accordance with GAAP.
"Transaction Costs" shall mean all costs and expenses paid or
-----------------
payable by Borrower or any other Loan Party relating to the Transactions
including, without limitation, the costs and expenses of the Syndication
Agent and Agent in conducting its due diligence with respect to the
Transactions, financing fees, commitment fees, advisory fees, reasonable
legal fees, reasonable accounting fees, and title insurance charges, whether
directly or as reimbursement to the Syndication Agent or Agent.
"Transactions" shall mean each of the transactions contemplated by
------------
the Loan Documents.
"Transfer And Escrow Agreement" shall mean that certain Transfer
-----------------------------
and Escrow Agreement dated June 28, 1996 between the Bar Building Mortgagor,
The Travellers Insurance Company and Chicago Title Insurance Company, as
escrow agent, as the same may be modified, amended or supplemented.
"Transferee" shall have the meaning provided in Section 9.07.
----------
"Treasury Rate" shall mean the semi-annual yield (without de-
-------------
compounding), as reported in The Wall Street Journal (or if such rate is not
published therein, in the Federal Reserve Statistical Release H.15 - Selected
Interest Rates under the heading "U.S. Government Securities/Treasury
constant maturities") on the date of calculation (provided, however, if such
date is not a Business Day, then on the next succeeding Business Day) for the
current U.S. Treasury security with a maturity date most closely
approximating the date which is 10 years from such date of calculation, plus
2.75%. In the event such rate is not published in either The Wall Street
Journal or Release H.15, Agent shall select a comparable publication to
determine the Treasury Rate.
"Type" shall mean the type of any portion of the Loan determined
----
with respect to the interest option applicable thereto, i.e., the Base Rate
----
Portion or a Eurodollar Portion.
"UCC Searches" shall have the meaning provided in Section 3.01(g).
------------
"Unencumbered Assets" shall mean those Real Property Assets set
-------------------
forth on Schedule 1, as such Schedule may be amended or supplemented from
time, (i) against which there are no liens or encumbrances except for
Permitted Liens, (ii) with respect to which Borrower has complied with all
the requirements of Sections 2.25 and 3.01, (iii) which are improved by Class
B (or better) office buildings, (iv) which are free of all material
structural and title defects and other material adverse matters; (v) which
are (i) in compliance, in all material respects, with all applicable
Environmental Laws, and (ii) do not contain any Hazardous Substances, in each
case as initially verified by an Environmental Report reasonably satisfactory
to the Agent; (vi) which have an Occupancy Level of 70% per better (or, with
respect to ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, 65% or better) provided that the weighted
average Occupancy Level for all Unencumbered Assets is 85% or better;
(vii) which are 100% owned in fee simple by, or 100% leased pursuant to a
Ground Lease (which has been approved by the Majority Co-Lenders) to, the
Borrower or a Subsidiary of Borrower that is wholly owned, directly or
indirectly, by Borrower; notwithstanding the foregoing, the Bar Building
Asset and SLG 17 Battery LLC's tenancy-in-common interest in ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
shall both be deemed an Unencumbered Asset provided that each complies with
all the other conditions set forth herein; (viii) which are managed by
Borrower or a wholly owned Affiliate or Subsidiary of Borrower; and
(ix) which Agent and the Majority Co-Lenders have agreed in writing are to be
deemed Unencumbered Assets for purposes of this Agreement pursuant to Section
2.25; provided, however, that if a Bar Building Event of Default has occurred
and is continuing or the Bar Building Mortgagor or the Bar Building is
subject to or is an asset in any bankruptcy or similar insolvency proceeding,
the Bar Building Asset shall not be treated as an Unencumbered Asset and
provided, further that (a) if Borrower's interest in the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage is sold, transferred, assigned, pledged or otherwise encumbered, or
(b) if any default occurs and continues beyond the expiration of any
applicable notice or cure period under any of the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Transaction Documents, or (c) 17 Battery Upper Partners or ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
is subject to or is an asset in any bankruptcy or similar insolvency
proceeding or subject to a federal tax lien or claim, SLG 17 Battery LLC's
tenancy-in-common interest in ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall not be treated as an
Unencumbered Asset.
Any Asset which complies with all the requirements for an
Unencumbered Asset and which is owned by a Subsidiary of Borrower shall not
be deemed an Unencumbered Asset unless there are no liens or encumbrances on
any stock, limited partnership, member or other beneficial interest in such
entity except for Permitted Liens.
"Unfunded Benefit Liabilities" means with respect to any Plan at
----------------------------
any time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan (on the basis of assumptions prescribed by the PBGC for the purpose of
Section 4044 of ERISA).
"Unsecured Debt" shall mean, with respect to a Person, the
--------------
outstanding principal balance of all Indebtedness which is not secured by any
collateral or Assets of such Person and which is evidenced by a promissory
note or other instrument or written agreement, including without limitation,
the outstanding principal balance of the Loan and including all Capitalized
Leases of Unencumbered Assets.
"Unsecured Debt Rating" shall mean with respect to a Person, the
---------------------
rating assigned by the Rating Agencies to such Person's long term unsecured
debt obligations; provided, however, that if such ratings are not equivalent,
the lower rating shall apply.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY.
Section 2.01 Advances. (a) Subject to and upon the terms and
--------
conditions herein set forth, Lender and each Co-Lender agrees, at any time
and from time to time on and after the Closing Date and prior to the Maturity
Date, to make its pro rata share of Advances to Borrower, which Advances
shall not exceed in aggregate principal amount at any time outstanding, the
Facility Amount at such time.
(b) Advances may be voluntarily prepaid pursuant to Section 2.11,
and, subject to the other provisions of this Agreement, including, without
limitation, Sections 2.09, 2.10 and 2.12, any amounts so prepaid may be re-
borrowed prior to the Maturity Date. All outstanding Advances shall mature
on the Maturity Date, without further action on the part of Agent or any Co-
Lender.
(c) Each Advance of the Loan shall be in the aggregate minimum
amount of One Million Dollars (U.S. $1,000,000.00) or any integral multiple
of One Hundred Thousand Dollars (U.S. $100,000.00) in excess thereof. No
Advance shall be made after the Maturity Date.
(d) The obligation of Lender and each Co-Lender to make their pro
rata share of each Advance of the Loan is several and not joint. Neither
Agent, Lender nor any Co-Lender shall be liable for the failure of any other
Co-Lender to fund its pro rata share of any Advance hereunder.
Section 2.02 Notice of Borrowing. Whenever Borrower desires an
-------------------
Advance hereunder, it shall give Agent at Agent's office prior to 10:00
A.M., New York City time, telex, facsimile, or telephonic notice (promptly
confirmed in writing) of each Advance to be made hereunder, at least three
(3) Business Days prior to such Advance being made with respect to Eurodollar
Portions, and at least one (1) Business Day prior to such Advance being made
with respect to Base Rate Portions. Each such notice (a "Notice of
Borrowing") (i) shall be irrevocable, (ii) shall be executed on behalf of
Borrower and the REIT by a Responsible Officer of Borrower or of the REIT,
(iii) shall specify (w) the aggregate principal amount of the requested
Advance, (x) the date of Borrowing (which shall be a Business Day), (y) the
initial Interest Period to be applicable thereto and (z) the Type of Advance,
(or, if at the time of such request, Eurodollar Loan Portions are not
available pursuant to Section 2.16, that such Advance shall be a Base Rate
Portion), (iv) shall certify that, taking into account the amount of the
requested Advance, to the best of Borrower's knowledge, no Default or Event
of Default has occurred and is continuing, all provisions of the Loan
Documents including, but not limited to the Financial Covenants, will be
complied with after giving effect to such Advance, (v) shall contain a
description of the intended use of the Advance and (vi) shall be in the form
annexed hereto as Exhibit "A".
Agent shall, upon determining the Eurodollar Rate for any Interest
Period, promptly notify Borrower thereof.
Section 2.03 Disbursement of Funds. No later than 2:00 P.M., New
---------------------
York City time on the date specified in each Notice of Borrowing, provided
all conditions precedent to the making of such Advance have been complied
with, Agent will make available to Borrower by disbursing to or at the
direction of Borrower, or by depositing in Borrower's account at Agent's
office, the amount of the requested Advance to the extent that Agent has
received, in immediately available federal funds, each Co-Lender's pro rata
share of such Advance from each Co-Lender.
Section 2.04 The Note. (a) Borrower's and the REIT's obligation
--------
to pay the principal of, and interest on, the Loan shall be evidenced by the
promissory note (as amended, modified, supplemented, extended or
consolidated, the "Note") duly executed and delivered by Borrower and the
REIT substantially in the form of Exhibit "B" hereto in a principal amount
equal to the Facility Amount with blanks appropriately completed in
conformity herewith. The Note shall (i) be payable to the order of Agent, on
behalf of the Co-Lenders, (ii) be dated the Closing Date, and (iii) mature on
the Maturity Date. If required by a Co-Lender that is not a Co-Lender as of
the date hereof, Borrower and the REIT hereby agree to execute a supplemental
Note in the principal amount of such Co-Lender's pro rata share of the
Facility Amount, substantially in the form of Exhibit "B" hereto, with blanks
appropriately completed, and such supplemental Note shall (i) be payable to
order of Agent, on account of such Co-Lender, (ii) be dated as of the Closing
Date, and (iii) mature on the Maturity Date. Such supplemental Note shall
provide that it evidences a portion of the existing indebtedness hereunder
and not any new or additional indebtedness of Borrower or the REIT.
(b) Agent is hereby authorized, at its option, (i) to endorse on
the schedule attached to each Note (or on a continuation of such schedule
attached to each such Note and made a part thereof) an appropriate notation
evidencing the date and amount of each Advance evidenced thereby and the pro
rata share thereof of each Co-Lender, and the date and amount of each
principal and interest payment in respect thereof, and/or (ii) to record such
Advances and such payments in its books and records. Such schedule or such
books and records, as the case may be, shall be conclusive and binding on
Borrower and the REIT absent manifest error, provided that the failure to
make any notation shall not affect the obligations of Borrower, any Guarantor
or the REIT or the rights of Lender or any Co-Lender hereunder or under the
Guaranty.
Section 2.05 Interest. (a) Borrower and the REIT shall pay
--------
interest in respect of the unpaid principal amount of the Base Rate Portion
from the date of the making of the Base Rate Portion until the Base Rate
Portion shall be paid in full, or converted to a Eurodollar Portion, at a
rate per annum which shall be equal to the sum of the Base Rate Margin plus
the Base Rate in effect from time to time, such rate to change as and when
the Base Rate changes.
(b) Intentionally Deleted.
---------------------
(c) Borrower and the REIT shall pay interest in respect of the
unpaid principal amount of each Eurodollar Portion from the date of the
making of such Eurodollar Portion until such Eurodollar Portion shall be paid
in full, continued as a Eurodollar Portion or converted to a Base Rate
Portion at a rate per annum which shall be equal to the sum of the Eurodollar
Rate Margin plus the relevant Eurodollar Rate.
(d) In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of
the Loan and, to the extent permitted by law, overdue interest in respect of
the Loan, shall bear interest at the Default Rate, calculated from the date
such payment was due without regard to any grace or cure periods contained
herein.
(e) Interest on the Loan shall accrue from and including the date
of each Borrowing thereof to but excluding the date of any repayment thereof
(provided that any Advance borrowed and repaid on the same day shall accrue
one day's interest) and Borrower and the REIT shall pay such interest in
respect of the Base Rate Portion or any Eurodollar Portion, (A) monthly in
arrears on the first Business Day of each calendar month, (B) on the date of
any prepayment or conversion (on the amount prepaid or converted), (C) on the
Maturity Date (whether by acceleration or otherwise) and (D) after the
Maturity Date, on demand.
(f) Interest on the outstanding principal balance of the Loan
shall be calculated on the basis of a three hundred sixty (360) day year
based on the actual number of days elapsed.
(g) This Agreement and the Note are subject to the express
condition that at no time shall Borrower or the REIT be obligated or required
to pay interest on the principal balance of the Loan at a rate which could
subject Lender or any Co-Lender to either civil or criminal liability as a
result of being in excess of the Maximum Legal Rate. If by the terms of this
Agreement or the Loan Documents, Borrower or the REIT is at any time required
or obligated to pay interest on the principal balance due hereunder at a rate
in excess of the Maximum Legal Rate, the interest rate or the Default Rate,
as the case may be, shall be deemed to be immediately reduced to the Maximum
Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal (first
applied to the Base Rate Portions) and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Agent for the use,
forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so
that the rate or amount of interest on account of the Loan does not exceed
the Maximum Legal Rate of interest from time to time in effect and applicable
to the Loan for so long as the Loan is outstanding.
Section 2.06 Interest Periods. (a) Borrower shall, in each Notice
----------------
of Borrowing or Notice of Conversion or Continuation in respect of the making
of, conversion into or continuation of a Eurodollar Portion, select the
interest period (each an "Interest Period") applicable to such Eurodollar
Portion, which Interest Period shall, at the option of Borrower, be either a
one month, two-month or three-month period, provided that:
(i) the Interest Period for any Eurodollar Portion shall commence
on the date of the making of such Advance (including the date of any
conversion from the Base Rate Portion) and each Interest Period
occurring thereafter in respect of such Portion shall commence on the
date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day which
is not an Business Day, such Interest Period shall expire on the next
succeeding Business Day;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month; and
(iv) no Interest Period in respect of any Eurodollar Portion shall
extend beyond the Maturity Date.
(b) If upon the expiration of any Interest Period, Borrower has
failed to elect or confirm a new Interest Period or Eurodollar Base Rate to
be applicable to any Eurodollar Portion in accordance with Section 2.08,
Borrower shall be deemed to have elected to convert such Eurodollar Portion
into a Base Rate Portion effective as of the expiration date of such current
Interest Period.
Section 2.07 Minimum Amount of Eurodollar Portions. All
-------------------------------------
advances, borrowings, conversions, continuations, payments, prepayments and
selection of Interest Periods hereunder shall be made or selected so that,
after giving effect thereto, each Eurodollar Portion shall (i) have a
principal amount equal to or greater than One Million Dollars (U.S.
$1,000,000.00) and (ii) be in an integral multiple of $100,000.00 in excess
of such minimum amount. There shall be no more than five (5) Eurodollar
Portions outstanding at any one time.
Section 2.08 Conversion or Continuation. (a) Subject to the
--------------------------
other provisions hereof, Borrower shall have the option (i) to convert at any
time all or any part of the outstanding Base Rate Portion to Eurodollar
Portions, or (ii) to continue all or any part of the outstanding Eurodollar
Portions as Eurodollar Portions for an additional Interest Period, on the
expiration of the Interest Period applicable thereto (or prior to such
expiration date, provided Borrower pays Funding Costs in connection therewith
pursuant to Section 2.17); provided that no Loan Portion may be continued as,
or converted into, a Eurodollar Portion when any Default with respect to the
payment of money or any Event of Default has occurred and is continuing or
(iii) to convert at any time all or any portion of the outstanding Eurodollar
Portions to a Base Rate Portion. In the event Eurodollar Portions are not
available pursuant to Section 2.16, Borrower shall be deemed to have elected
to convert such Eurodollar Portions into a Base Rate Portion, and if such
conversion occurs prior to the expiration date of the applicable Interest
Period, Borrower shall also pay all Funding Costs and other costs, expenses
and losses in connection therewith pursuant to Sections 2.16 and 2.17.
(b) In order to elect to convert or continue a Loan Portion under
this Section 2.08, Borrower shall deliver an irrevocable notice thereof in
the form annexed hereto as Exhibit "C" (a "Notice of Conversion or
Continuation") to Agent no later than 11:00 A.M., New York City time, (which
notice may be by facsimile transmission provided that an original is
delivered prior to the close of business on the immediately succeeding
Business Day) three (3) Business Days prior to the proposed conversion or
continuation date in the case of a conversion to, or a continuation of, a
Eurodollar Portion. A Notice of Conversion or Continuation shall specify (v)
the requested conversion or continuation date (which shall be a Business
Day), (w) the amount and Type of the Loan Portion to be converted or
continued, (x) whether a conversion or continuation is requested, (y) in the
case of a conversion to, or a continuation of, a Eurodollar Portion, the
requested Interest Period and (z) the Contract Rate applicable to the Loan
Portion to be converted or continued as previously quoted by Agent.
Section 2.09 Voluntary Reduction of Facility Amount; Extension
-------------------------------------------------
of Maturity Date; Termination of Facility Amount. (a) Upon at least three
------------------------------------------------
(3) Business Days' prior irrevocable written notice to Agent in the form
annexed hereto as Exhibit "D" (or telephonic notice promptly confirmed in
writing), Borrower shall have the right, without premium or penalty to
permanently reduce the Facility Amount, provided that (a) Borrower may not
reduce the Facility Amount below the aggregate principal amount outstanding
under the Loan at the time of such requested reduction, (unless Borrower
simultaneously prepays the Loan to the extent necessary so that the aggregate
principal amount outstanding does not exceed such reduced Facility Amount,
together with any applicable Funding Costs and accrued interest as a result
of such prepayment), (b) any such partial reduction shall be in the minimum
aggregate amount of Five Million Dollars (U.S. $5,000,000.00) or any integral
multiple of One Million Dollars (U.S. $1,000,000.00) in excess thereof, and
(c) Borrower may not reduce the Facility Amount to an amount less than Twenty
Five Million Dollars (U.S. $25,000,000.00) unless the Loan is terminated and
prepaid in full pursuant to Section 2.09(c). Any reduction of the Facility
Amount shall be permanent and be applied pro rata to Lender's and each Co-
Lender's respective percentage interest in the Loan.
(b) Borrower may request an extension of the initial Maturity Date
for an additional twelve (12) month period by giving Agent written notice to
extend on or prior to the date that is three (3) months prior to the initial
Maturity Date. Such request shall be accompanied by a Compliance Certificate
of Borrower as required pursuant to Section 5.01(b)(ii). If Agent so
requests, Borrower shall also deliver the agreed upon procedures letter
pursuant to Section 5.01(b)(iii). Agent shall, upon approval or disapproval
of the Co-Lenders, consent to or deny, as applicable, such request for
extension. If Agent does not give written notice to Borrower of Co-Lender's
acceptance or denial of such extension request on or prior to the date which
is one (1) month prior to the initial Maturity Date, then Agent and the Co-
lenders shall be deemed to have denied Borrower's request for extension of
the Maturity Date. If the Co-Lenders consent to the extension, the
nonrefundable Extension Fee shall be payable by Borrower on account of its
exercise of and Co-Lenders' granting of the extension option provided for
herein within five (5) Business Days of Co-Lenders' consenting to such
extension. The payment of the Extension Fee, to the extent received, shall
constitute payment by Borrower to each Co-lender in the amount of such Co-
Lender's pro rata share in such fee.
(c) Upon at least three (3) Business Days prior irrevocable
written notice to Agent, Borrower shall have the right to terminate the Loan,
this Agreement and reduce the Facility Amount to zero, provided that
Borrower, on the date specified in such notice, pays to Agent, on behalf of
the Co-Lenders, the entire outstanding principal balance of the Loan,
together with all interest accrued and unpaid thereon, all Funding Costs, and
all other sums due under the Note, this Agreement and the other Loan
Documents; upon such termination, Lender and the Co-Lenders shall have no
further obligation to make any Advances.
Section 2.10. Principal Payments. Borrower shall pay the then
------------------
outstanding principal balance of the Loan together with all accrued and
unpaid interest thereon and all other sums then due and payable under this
Agreement and the other Loan Documents on the Maturity Date.
Section 2.11 Voluntary Prepayments. Borrower and the REIT shall
---------------------
have the right to prepay the Loan, in whole or in part, from time to time on
the following terms and conditions: (a) Borrower shall give Agent written
notice (or telephonic notice promptly confirmed in writing), in the form
attached hereto as Exhibit E, which notice shall be irrevocable, of its
intent to prepay all or a portion of the Loan, at least three (3) Business
Days prior to a prepayment, which notice shall specify the amount of such
prepayment and what Loan Portions are to be prepaid and, in the case of
Eurodollar Portions, the specific Borrowing(s) pursuant to which made, (b)
each prepayment shall be in an aggregate principal amount of One Million
Dollars (U.S. $1,000,000.00) or any integral multiple of One Hundred Thousand
U.S. Dollars (U.S. $100,000.00) in excess thereof, and (c) prepayments of
Eurodollar Portions made pursuant to this Section on a date other than the
last day of the Interest Period applicable thereto shall be accompanied by
payment of any Funding Costs which Lender and the Co-Lenders shall incur as a
result of such early payment. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein.
Section 2.12 Mandatory Prepayments. On each day on which the
---------------------
Facility Amount is reduced pursuant to the terms of this Agreement, Borrower
shall prepay the Loan to the extent, if any, that the outstanding principal
amount of the Loan exceeds such reduced Facility Amount, together with any
applicable Funding Costs and accrued interest as a result of such payment.
Section 2.13 Application of Payments and Prepayments. Unless
---------------------------------------
specifically provided otherwise, all payments and prepayments of the Loan,
whether voluntary or otherwise, shall be applied first, to unpaid Fees, any
reasonable out-of-pocket costs and expenses of Agent and any Co-Lender
arising as a result of such prepayment and any Funding Costs, second, to pay
any accrued and unpaid interest then payable with respect to the Loan, and
third, to pay the outstanding principal amount of the Loan. Payments applied
to the outstanding principal amount of the Loan shall be first applied to the
Base Rate Portion of the Loan, and then to pay the Eurodollar Portions of the
Loan being repaid in the order of such Loan Portion's maturity.
Section 2.14 Method and Place of Payment.
--------------------------
(a) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Note shall be made to
Agent not later than 1:00 p.m., eastern time, on the date when due and shall
be made in lawful money of the United States of America in immediately
available funds at Agent's Office, and any funds received by Agent after such
time shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day. Each payment (including all prepayments on account
of principal and interest on the Loan), to the extent received, shall
constitute payment by Borrower and the REIT to each Co-Lender in the amount
of such Co-Lender's pro rata share of such payment.
(b) Except as expressly provided to the contrary in Section 2.06
hereof, whenever any payment to be made hereunder or under the Note or other
Loan Documents shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business
Day and, with respect to payments of principal, interest shall be payable at
the applicable rate during such extension.
(c) All payments made by Borrower hereunder, under the Note and
the other Loan Documents, shall be made irrespective of, and without any
deduction for, any setoff or counterclaims.
Section 2.15 Fees. (a) Borrower and the REIT shall pay to Agent
----
a fee (the "Non-use Fee"), computed at the per annum rate (based on a year of
360 days, for the actual number of days elapsed) of one-quarter of one
percent (0.25%) on the average daily unfunded portion of the Facility Amount,
from and including the Closing Date through and including the Maturity Date,
payable, in arrears, on the Non-use Fee Due Date through the Maturity Date.
Agent shall notify Borrower within three (3) Business Days of the last day of
the calendar quarter of the amount of the Non-Use fee then due. Each payment
of the Non-use Fee, to the extent received by Agent, shall constitute payment
by Borrower and the REIT to each Co-Lender in the amount of such Co-Lender's
Pro Rata Interest of the Non-use Fee.
(b) Borrower and the REIT shall pay to Agent an administrative fee
as compensation for administering and servicing the Loan and performing its
duties under this Agreement and the Loan Documents (the "Administrative Fee")
pursuant to the terms of the Fee Letter, and upon completion of the
Syndication pursuant to the Administrative Fee Letter. The Administrative
Fee shall be paid in advance on the date set forth in the Administrative Fee
Letter and on the first day of each twelfth calendar month thereafter.
Section 2.16 Interest Rate Unascertainable, Increased Costs,
-----------------------------------------------
Illegality. (a) In the event that Agent has reasonably determined, or has
----------
been notified by any Co-Lender that it has reasonably determined (which
determination or notice shall, absent manifest error, be final and conclusive
and binding upon all parties hereto) that:
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of the Eurodollar Rate; or
(ii) at any time, that the relevant Eurodollar Rate applicable to
any of its Eurodollar Portions shall not represent the effective pricing
to Lender or the Co-Lenders for funding or maintaining its Eurodollar
Portions, or Lender and the Co-Lenders shall incur increased costs or
reduction in the amounts received or receivable hereunder in respect of
any Eurodollar Portion, in any such case because of (x) any change since
the date of this Agreement in any applicable law or governmental rule,
regulation, guideline, order, request or directive or any interpretation
thereof and including the introduction of any new law or governmental
rule, regulation, guideline, order, request or directive (such as, for
example, but not limited to, a change in official reserve requirements,
but, in all events, excluding reserves required under Regulation D of
the Federal Reserve Board to the extent included in the computation of
the Eurodollar Rate), whether or not having the force of law and whether
or not failure to comply therewith would be unlawful, and/or (y) other
circumstances affecting Lender, any Co-Lender or the interbank
Eurodollar market or the position of Lender or any Co-Lender in such
market; or
(iii) at any time, that the making or continuance by it of any
Eurodollar Portion has become unlawful in order for Lender or any Co-
Lender, in good faith, to comply with any law or governmental rule,
regulation, guideline, order, request or directive (whether or not hav-
ing the force of law and whether or not failure to comply therewith
would be unlawful), or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or ad-
ministration thereof, or has become impracticable as a result of a
contingency occurring after the date of this Agreement which materially
and adversely affects the interbank Eurodollar market;
then, and in any such event, Agent shall, promptly after making such
determination or receiving notice thereof from any Co-Lender, give notice by
telephone promptly confirmed in writing to Borrower. Thereafter (x) in the
case of clause (i) above, Borrower's right to request advances, conversions
or continuations of Eurodollar Portions shall be suspended, and any Notice of
Borrowing, or Notice of Conversion or Continuation given by Borrower with
respect to any Borrowing of Eurodollar Portions which has not yet been made
shall be deemed canceled and rescinded by Borrower, (y) in the case of clause
(ii) above, Borrower and the REIT shall pay to Agent, upon such Agent's
written demand therefor to Borrower, such additional amounts (in the form of
an increased rate of interest, or a different method of calculating interest,
or otherwise, as Agent shall reasonably determine) as shall be required to
compensate Lender and any Co-Lender for such increased costs or reduction in
amounts received or receivable hereunder (it being understood and agreed by
the parties hereto that in the event that Agent shall fail to notify Borrower
promptly after such determination, then Borrower and the REIT shall not be
liable to pay to Agent any additional amounts relating to the period prior to
Agent's notifying Borrower, and (z) in the case of clause (iii) above,
Borrower shall take one of the actions specified in clause (b) below as
promptly as possible and, in any event, within the time period required by
law. The written demand provided for in clause (y) shall demonstrate in
reasonable detail the circumstances giving rise to such demand and the
calculation of the amounts demanded; provided that Borrower and the REIT
shall not be obligated to pay an amount in excess of the amount directly
attributable to the Loan hereunder (it being understood and agreed that Agent
shall not be required to deliver any documentation substantiating such
amounts).
(b) In the case of any Eurodollar Portion or requested Eurodollar
Portion affected by the circumstances described in clause (a)(ii) above,
Borrower may, and in the case of any Eurodollar Portion affected by the
circumstances described in clause (a)(iii) above, Borrower shall, either (i)
if any such Eurodollar Portion has not yet been made but is then the subject
of a Notice of Borrowing or a Notice of Conversion or Continuation, be deemed
to have canceled and rescinded such notice, or (ii) if any such Eurodollar
Portion is then outstanding, require Agent to convert each such Eurodollar
Portion into a Base Rate Portion at the end of the applicable Interest Period
or such earlier time as may be required by law, in each case by giving Agent
notice (by telephone promptly confirmed in writing) thereof within two (2)
Business Days after Borrower was notified by Agent pursuant to clause (a)
above.
(c) In the event that following the giving of notice based on the
conditions described in clause (a)(i) above that such conditions no longer
exist, Agent shall promptly give written notice thereof to Borrower,
whereupon Borrower's right to request Eurodollar Portions from Agent and
Lender's and any Co-Lender's obligation to make Eurodollar Portions shall be
automatically restored and until such time as Borrower has delivered a Notice
of Conversion or Continuation, the entire Loan shall be deemed to be a
Eurodollar Portion with an Interest Period of one month at a Contract Rate
determined as of the date that Eurodollar Portions are again available to
Borrower.
(d) In the event that following its giving of a notice based on
the conditions described in clause (a)(iii) above that such conditions no
longer exist, Agent shall promptly give written notice thereof to Borrower,
whereupon Borrower's right to request Eurodollar Portions from Agent and
Lender's and any Co-Lender's obligation to make Eurodollar Portions shall be
automatically restored and until such time as Borrower has delivered a Notice
of Conversion or Continuation, the entire Loan shall be deemed to be a
Eurodollar Portion with an Interest Period of one month at a Contract Rate
determined as of the date that Eurodollar Portions are again available to
Borrower.
(e) The amount of any increased costs or reductions in amounts
referred to in Section 2.16(a)(ii) with respect to Lender and each Co-Lender
shall be based on the assumption that Lender and any Co-Lender funded all of
its Eurodollar Portions in the interbank Eurodollar market, although the
parties hereto agree that Lender or Co-Lender may fund all or any portion of
a Eurodollar Portion, in any manner it independently determines. For
purposes of any demand for payment made by Agent under Sections 2.16(a)(ii)
or 2.18, in attributing Lender's or any Co-Lender's general costs relating to
eurocurrency operations or its commitments or customers, or in averaging any
costs over a period of time, Agent and the affected Co-Lender may use any
reasonable attribution and/or averaging method which it deems appropriate,
reasonable and practical. The agreements in this Section 2.16 shall survive
the termination of this Agreement and the payment of the Note and all other
Obligations.
Section 2.17 Funding Losses. Borrower and the REIT shall
--------------
compensate Lender and the Co-Lenders for all reasonable losses, expenses and
liabilities, to the extent actually incurred (including, without limitation,
any loss, expense or liability incurred by Lender or any Co-Lender in
connection with the liquidation or reemployment of deposits or funds required
by it to make or carry its Eurodollar Portions), excluding loss of
anticipated profits ("Funding Costs"), that Lender or any Co-Lender sustains:
(a) if for any reason (other than a default by Agent or any Co-Lender) a
Borrowing of, or conversion from or into, or a continuation of, Eurodollar
Portions does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion or Continuation (whether or not rescinded, canceled
or withdrawn or deemed rescinded, canceled or withdrawn, pursuant to Section
2.16(a) or 2.16(b) or otherwise), (b) if any prepayment (whether voluntary or
mandatory), repayment (including, without limitation, payment after accel-
eration) or conversion of any of its Eurodollar Portions occurs on a date
which is not the last day of the Interest Period applicable thereto, (c) if
any prepayment of any of its Eurodollar Portions is not made on any date
specified in a notice of prepayment given by Borrower, or (d) as a
consequence of any default by Borrower or the REIT in repaying its Eurodollar
Portions or any other amounts owing hereunder in respect of its Eurodollar
Portions when required by the terms of this Agreement. Borrower shall pay
such Funding Costs on the date specified for conversion or continuation of
any Eurodollar Portion, the date of prepayment or repayment of any Eurodollar
Portion under clause (b) or (c) above, or within five (5) Business Days of
written demand therefor by Agent with respect to clause (d) above.
Calculation of all amounts payable to Agent under this Section 2.17 shall be
made on the assumption that Lender and each Co-Lender has funded its relevant
Eurodollar Portion through (i) the purchase of a Eurodollar deposit bearing
interest at the Eurodollar Rate in an amount equal to the amount of such
Eurodollar Portion with a maturity equivalent to the Interest Period
applicable to such Eurodollar Portion, and (ii) the transfer of such
Eurodollar deposit from an offshore office of Lender or any Co-Lender to a
domestic office of Lender and the Co-Lenders in the United States of America,
provided that Lender and the Co-Lenders may fund their Eurodollar Portions in
any manner that they in their sole discretion choose and the foregoing
assumption shall only be made in order to calculate amounts payable under
this Section 2.17. Agent shall provide Borrower with a statement detailing
the basis for requesting such amounts and the calculation thereof, and such
statement shall, absent manifest error, be final and conclusive and binding
upon Borrower, the REIT and all Loan Parties). The agreements in this Section
2.17 shall survive the termination of this Agreement and the payment of the
Note and all other Obligations.
Section 2.18 Increased Capital. With respect to each Eurodollar
-----------------
Portion, if Agent shall have reasonably determined (or received notice from
any Co-Lender of its reasonable determination that) in good faith, that
compliance with any applicable law, rule, regulation, guideline, request or
directive (whether or not having the force of law), other than increases in
rates of taxation or other matters not directly related to increased capital
costs, which shall be imposed, issued or amended from and after the date of
this Agreement by any governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital or assets of Lender or any Co-Lender as a consequence of its
commitments or obligations hereunder, then from time to time, upon Agent's
delivering a written demand therefor to Borrower, setting forth its
reasonable calculations, Borrower and the REIT shall pay to Agent on demand
such additional amount or amounts ("Increased Capital Costs") as will
compensate Lender and any Co-Lender for such reduction. Such calculations
may use any reasonable averaging and attribution methods selected by Agent
and the affected Co-Lenders. The agreements in this Section 2.18 shall
survive the termination of this Agreement and the payment of the Note and all
other Obligations.
Section 2.19 Taxes. (a) All payments made by Borrower or the
-----
REIT under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority excluding, in the case of Lender or
any Co-Lender, net income and franchise taxes imposed on Agent, Lender, any
Co-Lender or Participant (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called "Taxes").
(b) Notwithstanding anything to the contrary herein, if at any
time or from time to time Taxes are required to be deducted or withheld from
the payments required to be made to Lender or any Co-Lender hereunder solely
by reason of a Change in Law after the date hereof (other than as a result of
any transfer or assignment of any of the obligations of Borrower hereunder),
all payments required to be made by Borrower and the REIT hereunder
(including any additional amounts that may be payable pursuant to this clause
(b)) shall be increased to the extent required so that the net amount
received by Lender or any Co-Lender after the deduction or withholding of
Taxes imposed solely by reason of a Change in Law after the date hereof will
be not less than the full amount that would otherwise have been receivable
had no such deduction or withholding been imposed by reason of such Change in
Law. In the event that this clause (b) shall be operative, Borrower and the
REIT shall promptly provide to Agent evidence of payment of such Taxes to the
appropriate taxing authority and shall promptly forward to Agent any official
tax receipts or other documentation with respect to the payment of the Taxes
as may be issued by the taxing authority. If Borrower or the REIT fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit
to Agent the required receipts or other required documentary evidence,
Borrower and the REIT shall indemnify Agent and any Co-Lender for any
incremental taxes, interest or penalties that may become payable by Lender or
Co-Lender as a result of any such failure. The agreements in this Section
2.19 shall survive the termination of this Agreement and the payment of the
Note and all other Obligations.
(c) For purposes of this Section 2.19 the term "Change in Law"
shall mean the following events: (i) the enactment of any legislation by the
United States, including the enactment, amendment or modification of a
treaty; (ii) the lapse, by its terms, of any law of the United States or any
treaty to which the United States is a party; or (iii) the promulgation of
any temporary or final regulation under the Code.
(d) Each Co-Lender that is not incorporated under the laws of the
United States of America or a state thereof agrees that, prior to the first
date on which any payment is due to it hereunder, it will deliver to Borrower
and Agent (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Co-Lender is entitled to receive payments
under this Agreement and the Note payable to it, without deduction or with-
holding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Co-Lender required to deliver to Borrower and Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the preceding sentence further undertakes to
deliver to Borrower and Agent two further copies of the said letter and Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or other
manner of certification, as the case may be, on or before the date that any
such letter or form expires (which, in the case of the Form 4224, is the last
day of each U.S. taxable year of the non-U.S. Co-Lender) or becomes obsolete
or after the occurrence of any event requiring a change in the most recent
letter and form previously delivered by it to Borrower and Agent, and such
other extensions or renewals thereof as may reasonably be requested by
Borrower or Agent, certifying in the case of a Form 1001 or 4224 that such
Co-Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless in
any such case an event (including, without limitation, any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or
which would prevent such Co-Lender from duly completing and delivering any
such letter or form with respect to it and such Co-Lender advises Borrower
and Agent that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax, and in the case of a Form
W-8 or W-9, establishing an exemption from United States backup withholding
tax. Notwithstanding clause (a) of this Section 2.19, if a Co-Lender fails to
provide a duly completed Form 1001 or 4224 or other applicable form and,
under applicable law, in order to avoid liability for Taxes, Borrower is
required to withhold on payments made to such Co-Lender that has failed to
provide the applicable form, Borrower shall be entitled to withhold the
appropriate amount of Taxes. In such event, Borrower shall promptly provide
to such Co-Lender or Agent evidence of payment of such Taxes to the
appropriate taxing authority and shall promptly forward to such Co-Lender or
Agent any official tax receipts or other documentation with respect to the
payment of the Taxes as may be issued by the taxing authority.
Section 2.20 Use of Proceeds and Limitations on Advances.
-------------------------------------------
Borrower shall use the proceeds of the Loan solely to provide short-term
financing for (i) the acquisition of fee and ground leasehold interests in
Real Property Assets wholly owned by the Borrower which are fully operational
Class B (or better) office buildings, (ii) capital improvements, expansion or
renovation to Real Property Assets of the type described in clause (i) above,
owned by Borrower or any Loan Party, (iii) working capital, (iv) the
refinancing of mortgage debt encumbering properties of the type described in
clause (i) above, and (v) the acquisition of the Permitted Investments.
Section 2.21 Intentionally Deleted.
---------------------
Section 2.22 Intentionally Deleted.
---------------------
Section 2.23 Intentionally Deleted.
---------------------
Section 2.24 Decision Making by Agent. Borrower and the REIT
------------------------
acknowledge and agree that all approvals, consents, requests, calculations,
determinations, decisions, waivers, amendments and modifications that Agent
is entitled to make under this Agreement are subject to the approval or
consent of some or all of the Co-Lenders pursuant to the terms and conditions
of this Agreement and the Intercreditor Agreement, whether or not such
approval or consent is expressly stated herein or otherwise.
Section 2.25 Additional Unencumbered Assets. If Borrower desires
------------------------------
to add an Unencumbered Asset for purposes of this Agreement, it shall notify
Agent and together with such notification, deliver to Agent, with respect to
such Asset the documentation required in ▇▇▇▇▇▇▇ ▇.▇▇(▇)(▇▇▇▇), (▇), (▇),
(▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇) (and if Borrower or any Guarantor owns
a leasehold interest in such Asset, Section 3.01(a)(xi)) and such other items
as Agent and the Co-Lenders may reasonably request, which information shall
be current as of the date delivered and consistent with the time frames set
forth in Section 3.01; i.e., all dates related to the Closing Date in Section
3.01 shall be deemed related to the date of the addition of the proposed
Asset to the Unencumbered Asset pool. If such Asset is owned by a Loan Party
other than a Guarantor or Borrower, such Loan Party shall execute and deliver
a guaranty in the form of the Guaranty, together with the items required in
3.01(b), (c), (d) and (m) with respect to such Loan Party and Guarantor. If
such Asset is subject to no Liens or encumbrances other than Permitted Liens,
complies with the requirements set forth in the definition of Unencumbered
Assets, and is otherwise reasonably satisfactory to Agent and the Majority
Co-Lenders, Agent shall confirm to Borrower in writing that such Asset shall
be deemed an Unencumbered Asset and Schedule 1 shall be amended accordingly.
Section 2.26 Pro Rata Interests. The liabilities of each of the
------------------
Co-Lenders are several and not joint, and each Co-Lenders' obligations to
Borrower and the REIT under this Agreement shall be reduced by the amount of
any Assignment and Assumption. No Co-Lender shall be responsible for the
obligations of any other Co-Lender. Each Co-Lender shall be liable to
Borrower and the REIT only for their respective proportionate shares of the
Loan and of the obligations and liabilities of the Lender under the Loan
Documents. If for any reason any of the Co-Lenders shall fail or refuse to
abide by their obligations under this Agreement, the other Co-Lenders shall
not be relieved of their obligations, if any, hereunder, including their
obligations to make their pro rata share of any Advance on the date set forth
for such Advance in the Notice of Borrowing; notwithstanding the foregoing,
the Co-Lenders shall have the right, but not the obligation, at their sole
option, to make the defaulting Co-Lender's pro rata share of such Advance
pursuant to the terms of the Intercreditor Agreement.
SECTION 3. CONDITIONS PRECEDENT.
Section 3.01 Conditions Precedent to the Initial Advance. The
-------------------------------------------
obligation of Lender and each Co-Lender to make the initial Advance of the
Loan (or its pro rata share thereof) on the Closing Date is subject to the
satisfaction by Borrower on the Closing Date of the following conditions
precedent:
(a) Loan Documents.
--------------
(i) Line of Credit Agreement. Borrower and the REIT shall have
------------------------
executed and delivered this Agreement to the Syndication Agent.
(ii) The Note. Borrower and the REIT shall have executed and
--------
delivered to the Syndication Agent the Note in the amount, maturity and
as otherwise provided herein.
(iii) Intentionally Deleted.
---------------------
(iv) Intentionally Deleted.
---------------------
(v) Environmental Indemnity. Borrower and the REIT shall have
-----------------------
executed and delivered to the Syndication Agent the Environmental
Indemnity.
(vi) Subordination of Management Agreement Borrower and the
-------------------------------------
appropriate Loan Parties shall have executed and delivered to the
Syndication Agent the Subordination of Management Agreement with respect
to each Real Property Asset substantially in the form set forth as
Exhibit "F" hereto (the "Subordination of Management Agreement").
(vii) Guaranty. The Guarantors shall have executed and delivered
--------
the Guaranty to the Syndication Agent.
(viii) Borrower shall have delivered copies and The 17 Battery
Transaction Documents.
(ix) Borrower shall have delivered copies of The Bar Building Loan
Documents.
(x) Intentionally Deleted.
---------------------
(xi) Ground Leases. If the Borrower or any other Loan Party owns
-------------
a leasehold estate in an Unencumbered Asset, (A) a certified copy of the
Ground Lease for such Unencumbered Asset, together with all amendments
and modifications thereto and a recorded memorandum thereof, which
Ground Lease shall be reasonably satisfactory in all material respects
to Agent and all of the Co-Lenders and (B) a Ground Lease Estoppel
substantially in the form of Exhibit "G" hereto (a "Ground Lease
Estoppel"), executed by the fee owner and ground lessor of such
Unencumbered Asset, which estoppel shall be reasonably satisfactory to
Agent.
(xii) Intentionally Deleted.
---------------------
(xiii) Flood Plain. The Syndication Agent shall have received
-----------
reasonably satisfactory evidence indicating which of the Unencumbered
Assets are in a flood plain.
(b) Opinions of Counsel.
-------------------
The Syndication Agent shall have received legal opinions, dated the
Closing Date, from counsel to Borrower and the other Loan Parties, in form
and substance reasonably satisfactory to the Syndication Agent and all of the
Co-Lenders and its counsel, that, among other things: (i) this Agreement and
the Loan Documents have been duly authorized, executed and delivered by
Borrower and the REIT and the other Loan Parties (to the extent a party
thereto) and are valid and enforceable against such Persons in accordance
with their terms, subject to bankruptcy and equitable principles; (ii) that
Borrower, the REIT and the Loan Parties and are qualified to do business and
in good standing under the laws of the jurisdiction in which it is organized,
in which it is transacting business and where the Real Property Assets are
located; and (iii) the Loan does not violate any usury laws.
(c) Organizational Documents. The Syndication Agent shall have
------------------------
received (i) with respect to Borrower and each of the Loan Parties which is a
corporation, the certificate of incorporation of Borrower and such Loan
Party, as amended, modified or supplemented to the Closing Date, certified to
be true, correct and complete by the appropriate Secretary of State as of a
date not more than thirty (30) days prior to the Closing Date, together with
a good standing certificate from such Secretary of State and a good standing
certificate from the Secretaries of State (or the equivalent thereof) of each
other State in which each Real Property Asset is located and in which each of
them is required to be qualified to transact business, each to be dated a
date not more than thirty (30) days prior to the Closing Date, (ii) with
respect to Borrower and each of the Loan Parties which is a limited
partnership, the agreement of limited partnership of such Person, as amended,
modified or supplemented to the Closing Date, certified to be true, correct
and complete by a general partner of such Person, together with a copy of the
certificate of limited partnership of such entity, as amended, modified or
supplemented to the Closing Date, certified to be true, correct and complete
by the appropriate Secretary of State as of a date not more than thirty (30)
days prior to the Closing Date, together with a good standing certificate
from such Secretary of State and a good standing certificate from the
Secretary of State (or the equivalent thereof) of each other State in which
each such Person is required to be qualified to transact business, each to be
dated not more than thirty (30) days prior to the Closing Date, (iii) with
respect to Borrower and each of the Loan Parties which is a general
partnership, the agreement of general partnership of Borrower and such Loan
Party, as amended, modified or supplemented to the Closing Date, certified to
be true, complete and correct by a general partner of Borrower and such Loan
Party, together with a copy of Borrower's and of such Loan Party's doing
business certificate (or the equivalent thereof), as amended, modified or
supplemented to the Closing Date, certified to be true, correct and complete
by the appropriate Secretary of State (or County Clerk's or Recorder's
Office, as the case may be) as of a date not more than thirty (30) days prior
to the Closing Date, in each case reasonably satisfactory to the Syndication
Agent and all of the Co-Lenders and (iv) evidence reasonably satisfactory to
the Syndication Agent and all of the Co-Lenders that the REIT is a "qualified
real estate investment trust" as defined in Section 856 of the Code,
including, without limitation, copies of the REIT's real estate investment
trust registration statement and all amendments thereto, any similar material
documents filed with the United States Securities and Exchange Commission or
issued in connection with a public offering of equity securities by Borrower
or the REIT.
(d) Certified Resolutions, etc. The Syndication Agent shall have
--------------------------
received a certificate of the secretary or assistant secretary of Borrower
and each of the Loan Parties which is a corporation and dated the Closing
Date, certifying (i) the names and true signatures of the incumbent officers
of such Person authorized to sign the applicable Loan Documents, (ii) the
by-laws of such Person as in effect on the Closing Date, (iii) the
resolutions of such Person's board of directors approving and authorizing the
execution, delivery and performance of all Loan Documents executed by such
Person, and (iv) that there have been no changes in the certificate of
incorporation of such Person since the date of the most recent certification
thereof by the appropriate Secretary of State.
(e) Intentionally Deleted.
---------------------
(f) Insurance. The Syndication Agent shall have received
---------
certificates of insurance demonstrating insurance coverage in respect of each
of the Real Property Assets of types, in amounts, and with insurers
reasonably satisfactory to the Syndication Agent and all of the Co-Lenders
and otherwise in compliance with the terms, provisions and conditions of
Section 5.03 and, with respect to the Bar Building, the Bar Building Loan
Documents.
(g) Lien Search Reports. The Syndication Agent shall have
-------------------
received satisfactory (i.e., showing no Liens other than Permitted Liens) UCC
searches, together with tax lien, judgment and litigation searches conducted
in the appropriate jurisdictions by a search firm reasonably acceptable to
the Syndication Agent and all of the Co-Lenders with respect to the
Unencumbered Assets, Borrower, each of the other Loan Parties and the Bar
Building Mortgagor (collectively, the "UCC Searches").
------------
(h) Intentionally Deleted.
---------------------
(i) Intentionally Deleted.
---------------------
(j) Title Insurance Policies; Surveys. The Syndication Agent shall
---------------------------------
have received copies of title policies issued by a title insurance company
reasonably satisfactory to the Syndication Agent and all of the Co-Lenders,
in form and substance reasonably satisfactory to the Syndication Agent and
all of the Co-Lenders, insuring the Borrower's or the appropriate Loan
Party's good and marketable fee simple or leasehold title to the Unencumbered
Assets, together with a title "bring down" or lien search showing no liens or
encumbrances other than Permitted Liens (the "Title Policies") and (ii) a
recent survey with respect to each of the Unencumbered Assets certified to
Agent, its successors and assigns, dated or re-dated within 120 days prior to
the Closing Date prepared by a land surveyor licensed in each of the states
where the Unencumbered Assets are located pursuant to the then current New
York standards for title surveys and otherwise reasonably satisfactory to the
Syndication Agent and all of the Co-Lenders.
(k) Financial Statements. The Syndication Agent shall have
--------------------
received the (i) consolidated audited financial statements of Borrower, the
REIT and their Consolidated Subsidiaries for the most recently ended fiscal
year of Borrower, the REIT and their Consolidated Subsidiaries and the
unaudited consolidated financial statements of Borrower, REIT and their
Consolidated Subsidiaries for each fiscal quarter of Borrower, the REIT and
their Consolidated Subsidiaries ending since the end of such entity's most
recent fiscal year and (ii) for each Unencumbered Asset, annual operating
statements and occupancy statements for Borrower's most recent fiscal year
together with current year to date operating statements, current occupancy
statements and the operating and capital budget approved by Borrower or the
appropriate Loan Party for the current fiscal year. Such financial
statements shall be reasonably acceptable to the Syndication Agent and all of
the Co-Lenders, and each such statement shall be certified by a Responsible
Officer of the REIT on behalf of the REIT and the Borrower that, as of the
Closing Date, except as reflected in any subsequent such statement which is
delivered to the Agent and the Co-Lenders, there has been no material adverse
change in the financial condition of any Real Property Asset or Borrower, the
REIT or the respective Loan Parties since the date thereof.
(l) Environmental Matters. The Syndication Agent shall have
---------------------
received Environmental Reports dated within six (6) months of the Closing
Date with respect to each of the Unencumbered Assets (and, if requested by
the Syndication Agent, each other Real Property Asset), each of which shall
be in form and substance reasonably satisfactory to the Syndication Agent and
all of the Co-Lenders.
(m) Fees and Operating Expenses. The Syndication Agent shall have
---------------------------
received, for its and the Co-Lenders' account as applicable, all Transaction
Costs, the Fees and other fees and expenses due and payable hereunder on or
before the Closing Date, including, without limitation, the reasonable costs
of all engineering, environmental and real property appraisal reports
required to be delivered hereunder, if any, and the reasonable fees and
expenses accrued through the Closing Date, of counsel retained by the
Syndication Agent.
(n) Consents, Licenses, Approvals, etc. The Syndication Agent
-----------------------------------
shall have received certified copies of all consents, licenses and approvals,
if any, required in connection with the execution, delivery and performance
by Borrower and the other Loan Parties, and the validity and enforceability
against Borrower and the other Loan Parties, of the Loan Documents, or in
connection with any of the Transactions, and such consents, licenses and
approvals shall be in full force and effect.
(o) Appraisal. The Syndication Agent shall have received an
---------
Appraisal of ▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇ reasonably satisfactory to the Syndication
Agent and all of the Co-Lenders.
(p) Engineering Reports. The Syndication Agent shall have received
-------------------
engineering reports (the "Engineering Reports") dated within six (6) months
prior to the Closing Date and in form and substance reasonably satisfactory
to Agent and all of the Co-Lenders with respect to each of the Unencumbered
Assets; such engineering reports shall be prepared in accordance with the
Syndication Agent's then current guidelines for property inspection reports
by licensed engineers reasonably acceptable to the Syndication Agent and all
of the Co-Lenders, and such Engineering Report should state, among other
things, that each Unencumbered Asset is in good condition and repair, free
from damage and waste (reasonable wear and tear excepted) and is in
substantial compliance with the Americans with Disabilities Act except as set
forth on Schedule 16 attached hereto.
(q) Zoning Compliance. The Syndication Agent shall have received
-----------------
evidence reasonably satisfactory to the Syndication Agent and all of the Co-
Lenders to the effect that each of the Unencumbered Assets and the use
thereof are in substantial compliance with the applicable zoning,
subdivision, and all other applicable federal, state or local laws and
ordinances affecting each of the Unencumbered Assets, and that all building
and operating licenses and permits necessary for the use and occupancy of
each of the Unencumbered Assets as an office building including, but not
limited to, current certificates of occupancy, if available, have been
obtained and are in full force and effect.
(r) Leases. The Syndication Agent shall have received certified
------
copies of all Leases with respect to each Unencumbered Assets which shall be
reasonably satisfactory to the Syndication Agent and all of the Co-Lenders.
(s) Contracts and Agreements. The Syndication Agent shall have
------------------------
received certified copies of all contracts and agreements relating to the
management, leasing and operation of each of the Unencumbered Assets each of
which shall be reasonably satisfactory to the Syndication Agent and all of
the Co-Lenders.
(t) Plans and Specifications. The Syndication Agent shall have
------------------------
been provided access to the of plans and specifications for each of the
Unencumbered Assets.
(u) Representations and Warranties. The Syndication Agent shall
------------------------------
have received the Compliance Certificate executed by a Responsible Officer of
the REIT on behalf of the REIT and Borrower for itself and as general partner
of Borrower certifying that all of the representations and warranties
contained in this Agreement and the other Loan Documents are true and correct
in all material respects with respect to each of the Real Property Assets,
Borrower and each Loan Party, and that to the best of its knowledge, there is
no Default or Event of Default hereunder.
(v) Certification as to Covenants. The Syndication Agent shall
-----------------------------
have received a certificate of a Responsible Officer of the REIT on behalf of
the REIT and Borrower and as general partner of Borrower, together with other
evidence reasonably satisfactory to the Syndication Agent and all of the Co-
Lenders (which shall include the Financial Covenant calculations) that, as of
the Closing Date, the Financial Covenants are satisfied and that, as of the
Closing Date and after giving effect to the Transaction to be consummated
thereon, to the best of its knowledge, there is no Default or Event of
Default hereunder.
(w) Certification as to Applicable Laws. The Syndication Agent
-----------------------------------
shall have received such evidence as the Syndication Agent and all of the Co-
Lenders shall deem reasonably necessary to establish (including, without
limitation, a certificate of the REIT for itself and as general partner of
Borrower) that each Real Property Asset is in material compliance with all
Applicable Laws as of the Closing Date.
(x) Additional Matters. The Syndication Agent shall have received
------------------
such other certificates, opinions, documents and instruments relating to the
Transactions as may have been reasonably requested by the Syndication Agent
and any of the Co-Lenders, and all corporate and other proceedings and all
other documents (including, without limitation, all documents referred to
herein and not appearing as exhibits hereto) and all legal matters in
connection with the Transactions shall be reasonably satisfactory in form and
substance to the Syndication Agent and all of the Co-Lenders.
Section 3.02 Conditions Precedent to All Advances of the Loan.
------------------------------------------------
The obligation of Lender and each Co-Lender to make any Advance under the
Loan (including the initial Advance made on or after the Closing Date) (or
its pro rata share thereof) is subject to the satisfaction on the date such
Advance is made of the following conditions precedent:
(a) Representations and Warranties. The representations and
------------------------------
warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date) shall be true and correct in all material respects on such date both
before and after giving effect to the making of such Advance.
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such date either before or after
giving effect to the making of such Advance and Borrower shall be in
compliance with all of the Financial Covenants.
(c) No Injunction. No law or regulation shall have been adopted,
-------------
no order, judgment or decree of any governmental authority shall have been
issued, and no litigation shall be pending or threatened in writing, which in
the good faith judgment of Agent would enjoin, prohibit or restrain, or
impose or result in the imposition of any material adverse condition upon,
the making of the Advances or Borrower's, the REIT's or any Guarantor's
obligation to pay (or Agent or any Co-Lender's rights to receive payment) of
the Loan and the other Obligations or the consummation of the Transactions.
(d) No Material Adverse Effect. No event, act or condition shall
--------------------------
have occurred and be continuing after the Closing Date which has had or could
be reasonably expected to have a Material Adverse Effect.
(e) Notice of Borrowing. Agent shall have received a fully
-------------------
executed Notice of Borrowing or Notice of Conversion or Continuation, as the
case may be, in respect of the Advance to be made on such date, together with
a fully executed Compliance Certificate incorporating all material
modifications and changes required to be made to the most recent Compliance
Certificate delivered prior to the date of the requested Advance, including,
without limitation, the effect of the requested Advance.
(f) No Litigation. Except for matters identified on Schedule 5 (as
-------------
the same may be amended or supplemented), no actions, suits or proceedings
shall be pending or threatened with respect to the Transactions or the Loan
Documents, Borrower or any of the other Loan Parties, or with respect to the
Real Property Assets, could be reasonably expected to, individually or in the
aggregate, result in a Material Adverse Effect and matters identified on
Schedule 5, individually or in the aggregate, have not resulted in a Material
Adverse Effect.
(g) Title Insurance Searches. Agent or any Co-Lender may elect,
------------------------
in its sole discretion, to perform or have performed Title Searches with
respect to some or all of the Unencumbered Assets on a semi-annual basis at
Borrower's sole cost and expense. The results of all such Title Searches
shall be reasonably satisfactory to Agent.
(h) UCC Searches. Agent shall have received reasonably
------------
satisfactory (i.e., showing no Liens other than Permitted Liens) UCC
searches, together with tax lien, judgment and litigation searches conducted
in the appropriate jurisdictions and as requested by Agent performed by a
search firm reasonably acceptable to Agent with respect to the Unencumbered
Assets Borrower and each of the other Loan Parties.
(i) Additional Matters. Agent shall have received such other
------------------
certificates, opinions, documents and instruments relating to the subject
Transactions as may have been reasonably requested by or any of the Co-
Lenders and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and not
appearing as exhibits hereto) and all legal matters in connection with the
subject Transactions shall be reasonably satisfactory in form and substance
to Agent and the Majority Co-Lenders.
Section 3.03 Acceptance of Borrowings. The acceptance by Borrower
------------------------
of the proceeds of each Advance shall constitute a representation and war-
ranty by Borrower to Agent and the Co-Lenders that all of the conditions
required to be satisfied under this Section 3 in connection with the making
of such Advance have been satisfied.
Section 3.04 Sufficient Counterparts. All certificates,
-----------------------
agreements, legal opinions and other documents and papers referred to in this
Section 3, unless otherwise specified, shall be delivered to Agent and shall
be reasonably satisfactory in form and substance to Agent and the Majority
Co-Lenders (unless the form thereof is prescribed herein) and Borrower shall
deliver sufficient counterparts of all such materials for distribution to
Agent and each Co-Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce Agent, Lender and the Co-Lender to enter into
this Agreement and to make the Loan, Borrower and the other Loan Parties make
the following representations and warranties, which shall survive the
execution and delivery of this Agreement and the Note and the making of the
Loan and each Advance:
Section 4.01 Organizational Status. Each of Borrower and the
---------------------
other Loan Parties (a) is a duly organized and validly existing corporation
or partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
formation, (b) has all requisite power and authority, to own its property and
assets (including the Real Property Assets), the Bar Building Asset and all
other Permitted Investments and to transact the business in which it is
engaged or presently proposes to engage (including this Transaction) and (c)
has duly qualified and is authorized to do business and is in good standing
as a foreign corporation or foreign partnership, as the case may be, in every
jurisdiction in which it owns or leases real property (including the Real
Property Assets) or in which the nature of its business requires it to be so
qualified.
Section 4.02 Power and Authority. Each of Borrower and the other
-------------------
Loan Parties has the power and authority to execute, deliver and carry out
the terms and provisions of each of the Loan Documents to which it is a party
and has taken all necessary action, to authorize the execution, delivery and
performance by it of such Loan Documents to which it is a party. Each of
Borrower and the other Loan Parties has duly executed and delivered each such
Loan Document, and each such Loan Document constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, except as
enforcement may be limited by applicable insolvency, bankruptcy or other laws
affecting creditors' rights generally, and by general principles of equity
whether enforcement is sought in a proceeding in equity or at law.
Section 4.03 No Violation. Neither the execution, delivery or
------------
performance by Borrower or any other Loan Party of the Loan Documents to
which it is a party, nor the compliance by such Person with the terms and
provisions thereof nor the consummation of the Transactions, (a) will
contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumental-
ity having jurisdiction thereof, or (b) will conflict with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the Assets
(including the Real Property Assets) of Borrower or any of the other Loan
Parties (or of any partnership of which such Person is a partner) pursuant to
the terms of any indenture, mortgage, deed of trust, agreement or other
instrument to which Borrower or any of the other Loan Parties (or of any
partnership of which such Person is a partner) is a party or by which it or
any of its Assets (including the Real Property Assets) is bound or to which
it may be subject, or (c) will, with respect to Borrower or any Loan Party
which is a partnership, violate any provisions of the partnership agreement
of such Person (or the partnership agreement of any partnership of which such
Person is a partner), or (d) will, with respect to the Borrower or any of the
Loan Parties which is a corporation, violate any provision of the Certificate
of Incorporation or By-Laws of such Person.
Section 4.04 Litigation. Except as set forth on Schedule 5,
----------
there are no actions, suits or proceedings, judicial, administrative or
otherwise, pending or, to the best of Borrower's or the REIT's knowledge,
threatened with respect to any of the Transactions or Loan Documents,
Borrower, the REIT, or any of the other Loan Parties, or with respect to the
Real Property Assets, that could be reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect. All matters set
forth on Schedule 5 do not, individually or in the aggregate, result in a
Material Adverse Effect.
Section 4.05 Financial Statements: Financial Condition; etc. The
----------------------------------------------
financial statements delivered pursuant to Section 3.01(k) were prepared in
accordance with GAAP consistently applied and fairly present the financial
condition and the results of operations of Borrower, the REIT and their
Consolidated Subsidiaries and the Unencumbered Assets covered thereby on the
dates and for the periods covered thereby, except as disclosed in the notes
thereto and, with respect to interim financial statements, subject to
normally recurring year-end adjustments and the absence of full footnote
disclosures. Neither Borrower nor the REIT nor any of their Consolidated
Subsidiaries has any material liability (contingent or otherwise) not
reflected in such financial statements or in the notes thereto. There has
been no adverse change in any condition, fact, circumstance or event that
would make any such information inaccurate, incomplete or otherwise
misleading or would affect Borrower's or the REIT's ability to perform its
obligations under this Agreement.
Section 4.06 Solvency. On the Closing Date and after and giving
--------
effect to the Transactions, Borrower and the Loan Parties will be Solvent.
Section 4.07 Material Adverse Change. Since the date of the most
-----------------------
recent audited financial statements delivered pursuant to Section 3.01(k),
there has occurred no event, act or condition, and to the best of Borrower's
or the REIT's knowledge, there is no prospective event or condition which has
had, or is in good faith anticipated to have, a Material Adverse Effect.
Section 4.08 Use of Proceeds; Margin Regulations. All proceeds
-----------------------------------
of each Advance will be used by Borrower and the REIT only in accordance with
the provisions of Section 2.20. No part of the proceeds of any Advance will
be used by Borrower and the REIT to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock. Neither the making of any Advance nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of Regulations G, T, U or
X of the Federal Reserve Board.
Section 4.09 Governmental Approvals. No order, consent,
----------------------
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required (or if required, has been
obtained) to authorize, or is required in connection with (i) the execution,
delivery and performance of any Loan Document or the consummation by Borrower
or any Loan Party of any of the Transactions or (ii) the legality, validity,
binding effect or enforceability against Borrower or any Loan Party of any
Loan Document.
Section 4.10 Completed Repairs. All of the maintenance/repair
-----------------
and environmental conditions set forth on Schedule 16 hereto that are marked
as completed or remediated on such Schedule have been completed or remediated
as applicable.
Section 4.11 Tax Returns and Payments. Borrower, the REIT and
------------------------
the other Loan Parties have filed all tax returns required to be filed by
them for which the filing date has passed and not been extended and has paid
all taxes and assessments payable by such Persons which have become due,
other than (a) those not yet delinquent or (b) those that are reserved
against in accordance with GAAP which are being diligently contested in good
faith by appropriate proceedings.
Section 4.12 ERISA. Neither Borrower nor any of the other Loan
-----
Parties has any Employee Benefit Plans other than those listed on Schedule 6.
No accumulated funding deficiency (as defined in Section 412 of the Code or
Section 302 of ERISA) or Reportable Event has occurred with respect to any
Plan. As of the Closing Date, the Unfunded Benefit Liabilities do not in the
aggregate exceed $1,000,000. Borrower, the other Loan Parties and each
member of their respective ERISA Controlled Group have complied in all
material respects with the requirements of ERISA and the Code and plan
documents for each Employee Benefit Plan and Plans and are not in default (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan. With respect to any Multiemployee Plan, neither Borrower
nor any of the other Loan Parties, nor any member of their respective ERISA
Controlled Groups is subject to any current or potential withdrawal liability
or annual withdrawal liability payments, which, individually or in the
aggregate, could materially adversely affect any of such Persons. To the
knowledge of Borrower, the other Loan Parties and their respective ERISA
Controlled Group, no Multiemployer Plan is or is likely to be in
reorganization (within the meaning of Section 4241 of ERISA or Section 418 of
the Code) or is insolvent (as defined in Section 4245 of ERISA). No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Plan (other than routine contributions thereto) or any
trust established under Title IV of ERISA (other than routine contributions
thereto) has been, or is expected by Borrower, the other Loan Parties, or any
member of their respective ERISA Controlled Group to be, incurred by
Borrower, the other Loan Parties, or any member of their respective ERISA
Controlled Group. Except as otherwise disclosed on Schedule 6 hereto, none of
Borrower, the other Loan Parties, nor, any member of their respective ERISA
Controlled Group has any liability (contingent or otherwise) with respect to
any post-retirement benefit under any "welfare plan" (as defined in Section
3(1) of ERISA), other than liability for continuation coverage under Part 6
of Title I of ERISA or any corresponding state or local law or ordinance. No
lien under Section 412(n) of the Code or 302(f) of ERISA or requirement to
provide security under Section 401(a)(29) of the Code or Section 307 of ERISA
has been or is reasonably expected by Borrower, the other Loan Parties, or
any member of their respective ERISA Controlled Group to be imposed on the
assets of Borrower, the other Loan Parties, or any member of their respective
ERISA Controlled Group. Neither Borrower nor any other Loan Party is a party
to any collective bargaining agreement which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.
Neither Borrower nor any Loan Party nor any of their ERISA Controlled Group
has engaged in any transaction prohibited by Section 406 of ERISA or Section
4975 of the Code for which a statutory or administrative exemption was not
available, which could result in any material liability being imposed on any
such Person or in a Material Adverse Effect. As of the Closing Date and
throughout the term of the Loan, neither Borrower nor any other Loan Party is
or will be an "employee benefit plan" as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, and none of the assets of Borrower or
any other Loan Party will constitute "plan assets" of one or more such plans
for purposes of Title I of ERISA. As of the Closing Date and throughout the
term of the Loan, neither Borrower nor any other Loan Party is or will be a
"governmental plan" within the meaning of Section 3(3) of ERISA and neither
Borrower nor any other Loan Party will be subject to state statutes
applicable to Borrower or such Loan Party regulating investments and
fiduciary obligations, of Borrower or any Loan Party with respect to
governmental plans.
Section 4.13 Closing Date Transactions. On the Closing Date and
-------------------------
immediately prior to the making of the initial Advance hereunder, the
Transactions (other than the making of the Loan) intended to be consummated
on the Closing Date will have been consummated substantially in accordance
with the terms of the relevant Loan Documents and in accordance with all
Applicable Laws. All consents and approvals of, and filings and
registrations with, and all other actions by, any Person (other than Agent,
Syndication Agent or any Co-Lender) required in order to make or consummate
such Transactions have been obtained, given, filed or taken and are or will
be in full force and effect.
Section 4.14 Representations and Warranties in Loan Documents.
------------------------------------------------
All representations and warranties made by Borrower, the REIT or any other
Loan Party in the Loan Documents are true and correct in all material
respects.
Section 4.15 True and Complete Disclosure. All factual
----------------------------
information (taken as a whole) furnished by or on behalf of Borrower, the
REIT or any other Loan Party in writing to Agent and/or the Syndication Agent
on or prior to the Closing Date, for purposes of or in connection with this
Agreement or any of the Transactions (the "Furnished Information") is, and
all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Borrower or any other Loan Party in writing to Agent and/or
the Syndication Agent will be, true, accurate and complete in all material
respects and will not omit any material fact necessary to make such
information (taken as a whole) not misleading on the date as of which such
information is dated or furnished. As of the Closing Date, there are no
facts, events or conditions directly and specifically affecting Borrower, the
REIT or any other Loan Party known to Borrower or the REIT or any other Loan
Party and not disclosed to Agent and the Syndication Agent, in the Furnished
Information, in the Schedules attached hereto or in the other Loan Documents,
which, individually or in the aggregate, have or could be reasonably expected
to have a Material Adverse Effect.
Section 4.16 Ownership of Real Property Assets; Existing Security
----------------------------------------------------
Instruments. Borrower or the Operating Entities have good and marketable fee
-----------
simple or leasehold title in all of the Real Property Assets (other than the
Bar Building; with respect to ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, such title is in the form of
a tenancy-in-common interest as more fully described in the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenancy Agreement) and good title to all of their personal property subject
to no Lien of any kind except for Permitted Liens. The Bar Building Mortgagor
has a good and marketable fee simple or leasehold title and leasehold estate,
respectively, in the Bar Building. Borrower, or a Guarantor, as applicable,
has good and marketable fee simple title to all of the Unencumbered Assets.
As of the date of this Agreement, there are no options or other rights to
acquire any of the Unencumbered Assets that run in favor of any Person and
there are no mortgages, deeds of trust, indentures, debt instruments or other
agreements creating a Lien against any of the Unencumbered Assets other than
Permitted Liens.
Section 4.17 No Default. To the best of Borrower's and the other
----------
Loan Party's knowledge, no Default or Event of Default exists under or with
respect to any Loan Document. To the best knowledge of Borrower and the
other Loan Parties, no Bar Building Event of Default exists. To the best
knowledge of Borrower and the other Loan Parties, neither Borrower, any Loan
Party nor any of their respective Subsidiaries or the Bar Building Mortgagor
is in default in any material respect beyond any applicable grace period
under or with respect to any other material agreement, instrument or
undertaking to which it is a party or by which it or any of its properties or
assets is bound in any respect, the existence of which default could result
in a Material Adverse Effect. To the best knowledge of Borrower and the
other Loan Parties, neither the Bar Building Mortgagor nor the Bar Building
is subject to or is an asset in any bankruptcy or similar insolvency
proceeding.
Section 4.18 Licenses, etc. Borrower or the applicable Loan
-------------
Party has obtained and holds in full force and effect, all material
franchises, trademarks, tradenames, copyrights, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements,
rights of way and other rights, consents and approvals which are necessary
for the operation of the Real Property Assets and their respective businesses
as presently conducted.
Section 4.19 Compliance With Law. Borrower, the REIT and each
-------------------
Loan Party is in compliance with all Applicable Laws and other laws, rules,
regulations, orders, judgments, writs and decrees, noncompliance with which
would likely result in a Material Adverse Effect.
Section 4.20 Brokers. Borrower, the REIT, each Loan Party, Agent
-------
and each Co-Lender hereby represent and warrant that no brokers or finders
were used by them in connection with procuring the financing contemplated
hereby and Borrower and the REIT hereby agree to indemnify and save Agent and
each Co-Lender harmless from and against any and all liabilities, losses,
costs and expenses (including attorneys' fees or court costs) suffered or
incurred by Agent or any Co-Lender as a result of any claim or assertion by
any party claiming by, through or under Borrower, the REIT or any Loan Party,
that it is entitled to compensation in connection with the financing
contemplated hereby and Agent and each Co-Lender hereby agrees to indemnify
and save Borrower harmless from and against any and all liabilities, losses,
costs and expenses (including attorneys' fees or court costs) suffered or
incurred by Borrower as a result of any claim or assertion by any party
claiming by, through or under Agent or any Co-Lender that it is entitled to
compensation in connection with the financing contemplated hereby.
Section 4.21 Judgments. There are no judgments, decrees, or
---------
orders of any kind against Borrower or any Loan Party unpaid of record which
would materially and adversely affect the ability of Borrower or any Loan
Party to comply with its obligations under the Loan or this Agreement in a
timely manner. There are (i) no federal tax claims or liens assessed or
filed against Borrower or any Loan Party or, to the best of Borrower's
knowledge, against 17 Battery Upper Partners, (ii) to the best of Borrower's
knowledge, none of the Bar Building Mortgagor, the Bar Building, 17 Battery
Upper Partners or ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ is subject to or is an asset in any
bankruptcy or similar insolvency proceeding, and (iii) there are no material
judgments against Borrower or any Loan Party unsatisfied of record or
docketed in any court of the States in which the Real Property Assets are
located or in any other court located in the United States and no petition in
bankruptcy or similar insolvency proceeding has ever been filed by or against
Borrower or any Loan Party, and neither Borrower nor any Loan Party has ever
made any assignment for the benefit of creditors or taken advantage of any
insolvency act or any act for the benefit of debtors.
Section 4.22 Property Manager. As of the date hereof, the
----------------
manager of the Real Property Assets is the Manager. The Manager is an
Affiliate of the REIT. The leasing agent for the Real Property Assets and
the Bar Building is the Manager.
Section 4.23 Assets of the REIT. The sole assets of the REIT are
------------------
its general partnership interest in the Borrower, such other assets that may
be incidental to or required in connection with the ownership of such general
partnership interest, and as set forth on Schedule 8. The REIT is the sole
general partner of the Borrower.
Section 4.24 REIT Status. The REIT is a "qualified real estate
-----------
investment trust", as defined in Section 856 of the Code.
Section 4.25 Operations. The REIT conducts its business only
----------
through Borrower, except as described on Schedule 9A and the Borrower
conducts its business only in its own name, except as described on Schedule
9B.
Section 4.26 Stock. The REIT lists all of its outstanding shares
-----
of stock on the New York Stock Exchange.
Section 4.27 Ground Leases. With respect to those Real Property
-------------
Assets in which Borrower or any other Loan Party or, in the case of the Bar
Building, the Bar Building Mortgagor, holds a leasehold estate in the entire
Real Property Asset under a ground lease, with respect to each such ground
lease (i) Borrower or the respective Loan Party or the Bar Building Mortgagor
is the owner of a valid and subsisting interest as tenant under the Ground
Lease; (ii) the Ground Lease is in full force and effect, unmodified and not
supplemented by any writing or otherwise; (iii) all rent, additional rent and
other charges reserved therein have been paid to the extent they are payable
to the date hereof; (iv) the remaining term of the Ground Lease, including
all extension options that may be unilaterally exercised by the tenant
thereunder as of right, is at least twenty-five (25) years after the Maturity
Date; (v) Borrower or the respective Loan Party or the Bar Building Mortgagor
enjoys the quiet and peaceful possession of the estate demised thereby,
subject to any sublease; (vi) to the best knowledge of the Borrower and/or
the applicable Loan Party, the Borrower or the respective Loan Party or the
Bar Building Mortgagor is not in default under any of the terms thereof and
there are no circumstances which have occurred and, with the passage of time
or the giving of notice or both, would constitute an event of default
thereunder; (vii) to the best knowledge of the Borrower and/or the applicable
Loan Party, the lessor under the Ground Lease is not in default under any of
the terms or provisions thereof on the part of the lessor to be observed or
performed; (viii) to the best knowledge of the Borrower and/or the applicable
Loan Party, the lessor under the Ground Lease has satisfied all of its repair
or construction obligations, if any, to date pursuant to the terms of the
Ground Lease; (ix) Schedule 10 lists all the Ground Leases to which any of
the Real Property Assets are subject and all amendments and modifications
thereto; and (x) the lessor indicated on Schedule 10 for each Ground Lease is
the current lessor under the related Ground Lease.
Section 4.28 Guarantors. Each Guarantor is a wholly-owned
----------
Subsidiary of Borrower.
Section 4.29 Status of Property. With respect to each Real
------------------
Property Asset, except as set forth on Schedule 12:
(a) No portion of any improvement on the Real Property Asset is
located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located
within any such area, Borrower or the respective Loan Party has obtained and
will maintain the insurance prescribed in Section 5.03 hereof.
(b) Borrower or the respective Loan Party has obtained all
necessary certificates, licenses and other approvals, governmental and
otherwise, necessary for the operation of the Real Property Asset and the
conduct of its business and all required zoning, building code, land use,
environmental and other similar permits or approvals, all of which are in
full force and effect as of the date hereof.
(c) To the best knowledge of Borrower or the REIT, the Real
Property Asset and the present and contemplated use and occupancy thereof are
in full compliance with all applicable zoning ordinances (without reliance
upon grandfather provisions or adjoining or other properties), building
codes, land use and environmental laws, laws relating to the disabled
(including, but not limited to, the ADA) and other similar laws.
(d) The Real Property Asset is served by all utilities required
for the current or contemplated use thereof. All utility service is provided
by public utilities and the Real Property Asset has accepted or is equipped
to accept such utility service.
(e) All public roads and streets necessary for service of and
access to the Real Property Asset for the current or contemplated use thereof
have been completed, are serviceable and all-weather and are physically and
legally open for use by the public.
(f) The Real Property Asset is served by public water and sewer
systems or, if the Real Property Asset is not serviced by a public water and
sewer system, such alternate systems are adequate and meet, in all material
respects, all requirements and regulations of, and otherwise complies in all
material respects with, all Applicable Laws.
(g) Neither Borrower nor the respective Loan Party is aware of any
latent or patent structural or other significant deficiency of the Real
Property Asset. The Real Property Asset is free of damage and waste that
would materially and adversely affect the value of the Real Property Asset,
is in good repair and there is no deferred maintenance other than ordinary
wear and tear. The Real Property Asset is free from damage caused by fire or
other casualty. There is no pending or, to the actual knowledge of Borrower
or the REIT, threatened condemnation proceedings affecting the Real Property
Asset, or any part thereof.
(h) To the best knowledge of Borrower or the REIT, all costs and
expenses of any and all labor, materials, supplies and equipment used in the
construction of the improvements on the Real Property Asset have either (i)
been paid in full, (ii) are not yet due and payable or (iii) are being
contested in good faith by Borrower or the applicable Loan Party. Subject to
Borrower's or the respective Loan Party's right to contest as set forth in
any Permitted Mortgage Debt related to such Real Property Asset, there are no
mechanics' or similar liens or claims that have been filed and recorded for
work, labor or materials that affects the Real Property Asset and that are or
may be liens prior to, or coordinate with, the lien of this Security
Instrument.
(i) Borrower or the respective Loan Party has paid in full for,
and is the owner of, all furnishings, fixtures and equipment (other than
tenants' property) used in connection with the operation of the Real Property
Asset, free and clear of any and all security interests, liens or
encumbrances, except for Permitted Liens and purchase money financing which
is not a Lien on the fee title of such Real Property Asset and is incurred in
the ordinary course of business.
(j) All liquid and solid waste disposal, septic and sewer systems
located on the Real Property Asset are in a good and safe condition and
repair and in compliance with all Applicable Laws.
(k) All amenities, access routes or other items that materially
benefit the Real Property Asset are under direct control of Borrower or the
respective Loan Party, constitute permanent easements that benefit all or
part of the Real Property Asset or are public property, and the Real Property
Asset, by virtue of such easements or otherwise, is contiguous to a
physically open, dedicated all weather public street, and has the necessary
permits for ingress and egress.
(l) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments (including assessments payable in future
installments), insurance premiums, leasehold payments, or other outstanding
charges affecting the Real Property Asset.
(m) The Real Property Asset is assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate from any
adjoining land or improvements not constituting a part of such lot or lots,
and no other land or improvements is assessed and taxed together with the
Real Property Asset or any portion thereof.
(n) With respect to Leases which relate to Real Property Assets
owned by Borrower or the respective Loan Party, (i) Borrower or the
respective Loan Party is the sole owner of the entire lessor's interest in
the Leases; (ii) to the best knowledge of Borrower or the REIT, the Leases
are valid and enforceable; (iii) the terms of all alterations, modifications
and amendments to the Leases are reflected in the certified occupancy
statement delivered to and approved by Agent; (iv) with respect to the
Unencumbered Assets none of the rents reserved in the Leases have been
assigned or otherwise pledged or hypothecated; (v) none of the rents have
been collected for more than one (1) month in advance; (vi) the premises
demised under the Leases have been completed and the tenants under the Leases
have accepted the same and have taken possession of the same on a rent-paying
basis; (vii) to the best knowledge of Borrower or the REIT, there exist no
offsets or defenses to the payment of any portion of the rents; (viii) with
respect to Unencumbered Assets no Lease contains an option to purchase,
right of first refusal to purchase, or any other similar provision; (ix) no
person or entity has any possessory interest in, or right to occupy, the Real
Property Asset except under and pursuant to a Lease; (x) with respect to
Unencumbered Assets, there are no prior assignments, pledges, hypothecations
or other encumbrances of any Leases or any portion of rents due and payable
or to become due and payable thereunder which are presently outstanding; and
(xi) the Real Property Asset is not subject to any Lease other than the
Leases described in the rent rolls delivered pursuant to Section 5.01(a).
(o) No portion of the Real Property Asset has been or will be
purchased with proceeds of any illegal activity.
(p) All contracts, agreements, consents, waivers, documents and
writings of every kind or character at any time to which the Borrower or any
Loan Party is a party to be delivered to Agent pursuant to any of the
provisions hereof are valid and enforceable against the Borrower and such
Loan Party and, to the best knowledge of Borrower, are enforceable against
all other parties thereto, and in all respects are what they purport to be
and, to the best knowledge of Borrower, to the extent that any such writing
shall impose any obligation or duty on the party thereto or constitute a
waiver of any rights which any such party might otherwise have, said writing
shall be valid and enforceable against said party in accordance with the
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally.
Section 4.30 Survival. The foregoing representations and
--------
warranties shall survive the execution and delivery of this Agreement and
shall continue in full force and effect until the indebtedness evidenced by
the Note has been fully paid and satisfied and Lender and the Co-Lenders have
no further commitment to advance funds hereunder. The request for any
Advance under this Agreement by Borrower or on its behalf shall constitute a
certification that the aforesaid representations and warranties are true and
correct in all material respects as of the date of such request, except to
the extent any such representation or warranty shall relate solely to an
earlier date.
SECTION 5. AFFIRMATIVE COVENANTS.
Borrower and the REIT covenant and agree that on and after the
Closing Date and until the Obligations (other than inchoate indemnity and
expense reimbursement obligations) are paid in full:
Section 5.01 Financial Reports. (a) Borrower will furnish to
-----------------
Agent: (i) annual audited consolidated financial statements of the REIT and
its Consolidated Subsidiaries prepared in accordance with GAAP within 90 days
(or within up to 105 days if Borrower receives such an extension from the
Securities and Exchange Commission) of the end of the REIT's fiscal year
prepared by nationally recognized independent public accountants (which
accountant's opinion shall be unqualified) including the related consolidated
statements of income, cash flow and retained earnings and setting forth in
comparative form the figures for the corresponding prior year period; (ii)
within 45 days after the close of each quarterly accounting period in each
fiscal year, the management prepared consolidated balance sheet of each of
the REIT and its Consolidated Subsidiaries and each of Borrower and its
Consolidated Subsidiaries, as of the end of such quarterly period and the
related consolidated statements of income, cash flow and retained earnings
for such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, each prepared in accordance
with GAAP (subject to non-material audit adjustments and the absence of full
footnote disclosures); (iii) quarterly and annual operating statements
(prepared on a basis consistent with that used in the preparation of the GAAP
aforesaid financial statements of the REIT) for each Unencumbered Asset,
including a comparison with the most recent Annual Operating Budget, within
45 days of the end of each calendar quarter, (iv) annual unaudited
consolidated financial statements of Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP (subject, in the case of
unaudited statements, to non-material audit adjustments and the absence of
full footnote disclosures) within 90 days of the end of Borrower's fiscal
year and, if audited, prepared by independent public accountants (which
accountant's opinion shall be unqualified), including the related
consolidated statements of income, cash flow and retained earnings and
setting forth in comparative form the figures for the corresponding prior
year period; and (v) copies of all of the REIT's and Borrower's quarterly and
annual filings with the Securities and Exchange Commission and all
shareholder reports and letters to the REIT's and Borrower's shareholders or
partners, as the case may be and all other publicly released information
promptly but in no event later than thirty (30) days after their filing or
mailing; and (vi) an annual operating and capital budget for each of the
Unencumbered Assets (the "Annual Operating Budget"), including cash flow
projections for the upcoming year, presented on a monthly basis consistent
with the quarterly and annual operating statements referred to in clause
(iii) above at least 30 days prior to the start of each calendar year.
Borrower and the REIT will furnish such additional reports or data, but no
more often than on a quarterly basis, as Agent may reasonably request
including, without limitation, monthly operating statements, a certified rent
roll, leasing and management reports for each Unencumbered Asset, and an
accounting for security deposits. Borrower and the REIT shall maintain a
system of accounting capable of furnishing all such information and data, and
shall maintain its books and records respecting financial and accounting
matters in a proper manner and on a basis consistent with that used in the
preparation of the aforesaid financial statements of Borrower.
(b) Officer's Certificates; Comfort Letters. (i) At the time of
---------------------------------------
the delivery of the financial statements under clause (a) above, Borrower
shall provide a certificate signed by a Responsible Officer of the REIT on
behalf of the Borrower and the REIT for itself and as general partner of
Borrower that such (x) financial statements have been prepared in accordance
with GAAP (unless such financial statements are not required to be prepared
in accordance with GAAP pursuant to this Agreement) and fairly present the
consolidated financial condition and the results of operations of the REIT,
its Consolidated Subsidiaries, Borrower, its Consolidated Subsidiaries and
the Unencumbered Assets, as applicable, on the dates and for the periods
indicated, subject, in the case of interim financial statements, to normally
recurring year end adjustments, (y) to the best knowledge of Borrower and the
REIT that no Default or Event of Default has occurred on the date of such
certificate or, if any Default or Event of Default has occurred and is
continuing on such date, specifying the nature and extent thereof and the
action Borrower has taken, is taking and/or proposes to take in respect
thereof and (z) that since the date of the most recent prior annual and
quarterly financial statements delivered pursuant to such clause no change
has occurred in the financial position of Borrower or the REIT or their
respective Consolidated Subsidiaries, which change could result in a Material
Adverse Effect, and (ii) at the time of delivery of the Annual Operating
Budget pursuant to Section 5.01(a)(v), a written statement of the assumptions
used in connection with respect to the Annual Operating Budget, together with
a certificate of the REIT for itself and as general partner of Borrower to
the effect that such budget and assumptions are reasonable and represent
Borrower's or the appropriate Loan Party's good faith estimate of such Net
Operating Income and anticipated capital expenditures, it being understood
and agreed that there may often be a difference between financial projections
and actual results.
(ii) Within 45 days of the end of each calendar quarter, Borrower
shall provide a certificate of the REIT for itself and as a general partner
of Borrower substantially in the form attached as Exhibit "H" hereto
("Compliance Certificate") certifying that no Default or Event of Default has
occurred, that there has been no change in the REIT's tax status as a real
estate investment trust, as defined under Section 856 of the Code, and
demonstrating compliance with the Financial Covenants and with Section 6.15
hereof (including providing copies of the most recently available unaudited
operating statements of the Unencumbered Assets) and the provisions of
Sections 5.12, 5.13, 5.19, 5.27(b), 5.31 and 6.09, and containing
calculations verifying such compliance commencing with the calendar quarter
ending on December 31, 1997; provided that the certificate for the last
calendar quarter with respect to Sections 5.16, 5.17, 5.18, 6.07 and 6.11 may
be delivered within 90 days after the end of such fiscal year with the
audited financial statements for the year then ended.
(iii) Within 90 days of the end of Borrower's fiscal year through
the Maturity Date, Borrower and the REIT, at Borrower and the REIT's sole
cost and expense, shall provide an agreed upon procedures letter or audit
prepared by a nationally recognized independent certified public accounting
firm satisfactory to Agent verifying that the covenants contained in Sections
5.16, 5.17, 5.18, 5.19, 6.07 and 6.11 are complied with at the end of such
period.
(c) Notice of Default or Litigation. Promptly after Borrower or
-------------------------------
any other Loan Party obtains actual knowledge thereof, Borrower and the REIT
shall give Agent notice of (i) the occurrence of a Default or any Event of
Default, (ii) the occurrence of (v) any default that is not cured, or any
event of default, under any partnership agreement of Borrower, any Loan
Party, any mortgage, deed of trust, indenture or other debt or security
instrument, covering obligations in a principal amount in excess of
$1,000,000.00 and covering any of the Assets of Borrower or (w) any event of
default under any other material agreement to which Borrower, the REIT or any
other Loan Party is a party, which, if not cured could be reasonably expected
to result in a Material Adverse Effect, (x) the occurrence of any Bar
Building Event of Default, (y) any event, act or condition which may render
the Transfer and Escrow Agreement and the related Bar Building Loan Documents
unenforceable in whole or part, (z) if the Bar Building Mortgagor or the Bar
Building or 17 Battery Upper Partners or ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ or any interest
therein is subject to any bankruptcy or similar insolvency proceeding, (iii)
if 17 Battery Upper Partners or ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ is subject to any federal
tax lien or claim, (iv) any litigation or governmental proceeding pending or
threatened (in writing) against Borrower, the REIT or any other Loan Party or
the Bar Building Mortgagor or 17 Battery Upper Partners which could be
reasonably expected to result in a Material Adverse Effect and (iv) any other
event, act or condition which could be reasonably expected to result in a
Material Adverse Effect. Each notice delivered pursuant to this Section
5.01(c) shall be accompanied by a certificate of the REIT for itself and as
general partner of Borrower setting forth the details of the occurrence
referred to therein and describing the actions Borrower and the REIT have
taken, are taking or propose to take with respect thereto.
(d) Asset Information. Promptly after they have been prepared,
-----------------
but in no event later than the time frames set forth in Section 5.01(a),
Borrower shall deliver to Agent schedules that provide the following
information:
(i) Funds from Operations of Borrower and the REIT
calculation for the preceding quarter;
(ii) Adjusted NOI for the preceding quarter for each Real
Property Asset;
(iii) Consolidated listing of all Unsecured Debt, Secured
Indebtedness and Secured Recourse Indebtedness;
(iv) Listing of the Book Value of each Permitted Investment;
and
(v) Listing of all Real Property Assets and Other Assets
acquired, transferred or sold during the preceding quarter and the
Purchase Price paid or price received, as the case may be, for such
Asset.
(e) Intentionally Deleted.
---------------------
(f) Tenants. With respect to Unencumbered Assets, Borrower shall
-------
notify Agent within 15 days of any change in occupancy, lease commencement,
extension, expiration, termination or default with respect to tenants under
any lease for more than 10,000 square feet.
(g) Tax Returns. Promptly after they are filed with the Internal
-----------
Revenue Service, copies of all annual federal income tax returns and
amendments thereto of the Borrower, the REIT and the Loan Parties.
(h) Condemnation and Casualty. Borrower shall immediately notify
-------------------------
Agent of any fire or other casualty or any pending or threatened condemnation
or eminent domain proceeding with respect to all or any portion of an
Unencumbered Asset.
(i) Other Information. From time to time, Borrower shall provide
-----------------
such other information and financial documents relating to Borrower as Agent
may reasonably request subject to the terms of any written confidentiality
agreements to which Borrower is a party.
Section 5.02 Books, Records and Inspections. Borrower shall, and
------------------------------
shall cause each applicable Loan Party to, at Borrower's or such Loan Party's
principal place of business or at each Real Property Asset, keep proper books
of record and account in which full, true and correct entries shall be made.
Borrower shall and shall cause each applicable Loan Party to, permit officers
and designated representatives of Agent, at Agent's expense to visit and
inspect any of the Real Property Assets, and to examine and copy the books of
record and account of Borrower and any Loan Party and the Real Property
Assets (including, without limitation, leases, statements, bills and
invoices), discuss the affairs, finances and accounts of Borrower and any
Loan Party, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable notice and at such reasonable
times as Agent may desire. Any Co-Lender may accompany the Agent on such
visit or inspection.
Section 5.03 Maintenance of Insurance. (a) Borrower and the
------------------------
other Loan Parties shall (i) maintain with financially sound and reputable
insurance companies insurance on itself and its Other Assets in commercially
reasonable amounts, (ii) maintain Agent as named additional insured in re-
spect of any such liability insurance required to be maintained hereunder,
and (iii) furnish to Agent from time to time, upon written request, certifi-
▇▇▇▇▇ of insurance or certified copies or abstracts of all insurance policies
required under this Agreement and such other information relating to such
insurance as Agent or any Co-Lender may reasonably request.
(b) With respect to the Bar Building, Borrower shall require the
Bar Building Mortgagor to carry the insurance coverage required under the Bar
Building Loan Documents; with respect to each Real Property Asset other than
the Bar Building, Borrower shall obtain and maintain, or cause to be
maintained, insurance providing at least the following coverages; provided,
however, that Borrower shall insure or provide gap insurance for such risks
and in such amounts as may be necessary to provide the coverage set forth
below for the Bar Building:
(i) comprehensive all risk insurance on the Real Property
Assets, including contingent liability from Operation of Building Laws,
Demolition Costs and Increased Cost of Construction Endorsements, in
each case (A) in an amount equal to 100% of the "Full Replacement Cost,"
which for purposes of this Agreement shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities
and footings) with a waiver of depreciation, but the amount shall in no
event be less than the outstanding principal balance of the Note; (B)
containing an agreed amount endorsement with respect to the improvements
owned or leased by Borrower waiving all co-insurance provisions; (C)
providing for no deductible in excess of $50,000; and (D) containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement if any of the
improvements or the use of the Real Property Asset shall at any time
constitute legal non-conforming structures or uses. The Full
Replacement Cost shall be redetermined from time to time (but not more
frequently than once in any twenty-four (24) calendar months) at the
request of Agent by an appraiser or contractor designated and paid by
Borrower and approved by Agent, which approval shall not be unreasonably
withheld, or by an engineer or appraiser in the regular employ of the
insurer. After the first appraisal, additional appraisals may be based
on construction cost indices customarily employed in the trade. No
omission on the part of Agent to request any such ascertainment shall
relieve Borrower of any of its obligations under this Section. In
addition, Borrower shall obtain (y) flood hazard insurance if any
portion of the improvements is currently or at any time in the future
located in a federally designated "special flood hazard area", or
otherwise required by Agent and (z) earthquake insurance in amounts and
in form and substance satisfactory to Agent and the Majority Co-Lenders
in the event the Real Property Asset is located in an area with a high
degree of seismic activity, or otherwise as required by Agent, provided
that the insurance pursuant to clauses (y) and (z) hereof shall be on
terms consistent with the comprehensive all risk insurance policy
required under this Section 5.03, except that the deductible on such
insurance shall not be in excess of five percent (5%) of the appraised
value of the Real Property Asset;
(ii) commercial general liability insurance against claims
for personal injury, bodily injury, death or property damage occurring
upon, in or about the Real Property Asset, such insurance (A) to be on
the so-called "occurrence" form with a combined single limit of not less
than $1,000,000; (B) to continue at not less than the aforesaid limit
until required to be changed by Agent in writing by reason of changed
economic conditions making such protection inadequate; and (C) to cover
at least the following hazards: (1) premises and operations; (2)
products and completed operations on an "if any" basis; (3) independent
contractors; and (4) blanket contractual liability for all written and
oral contracts;
(iii) business income and rent loss insurance (A) covering
all risks required to be covered by the insurance provided for in
Subsection 5.03(b)(i); (B) containing an extended period of indemnity
endorsement which provides that after the physical loss to the
improvements and personal property has been repaired, the continued loss
of income will be insured until such income either returns to the same
level it was at prior to the loss, or the expiration of twelve (12)
months from the date of the loss, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such
period; and (C) in an amount equal to 100% of the projected gross income
from the Real Property Asset for a period of twelve (12) months. The
amount of such business income insurance shall be determined prior to
the date hereof and at least once each year thereafter based on the
greatest of: (x) Borrower's reasonable estimate of the gross income
from the Real Property Asset; and (y) the estimate of gross income set
forth in the annual operating budget delivered pursuant to Section
5.01(a);
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Real Property
Asset (A) owner's contingent or protective liability insurance covering
claims not covered by or under the terms or provisions of the above
mentioned commercial general liability insurance policy; and (B) the
insurance provided for in clause (i) above written in a so-called
builder's risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to Section 5.03(b)(i), (3)
including permission to occupy the Real Property Asset, and (4) with an
agreed amount endorsement waiving co-insurance provisions;
(v) if Borrower now or hereafter has any employees, workers'
compensation, subject to the statutory limits of the state in which the
Real Property Asset is located, and employer's liability insurance (A)
with a limit per accident and per disease per employee, and (B) in an
amount for disease aggregate in respect of any work or operations on or
about the Real Property Asset, or in connection with the Real Property
Asset or its operation (if applicable), in each case reasonably required
by Agent;
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Agent on terms
consistent with the commercial general liability insurance policy
required under Subsection 3.3(a)(ii);
(vii) umbrella liability insurance in an amount not less than
$20,000,000 per occurrence on terms consistent with the commercial
general liability insurance policy required under Subsection 3.3(a)(ii);
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence of $5,000,000; and
(ix) such other insurance and in such amounts as Agent from
time to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to
the Real Property Asset located in or around the region in which the
Real Property Asset is located.
(c) All insurance provided for hereunder shall be obtained under
valid and enforceable policies (the "Policies" or in the singular, the
"Policy"), and shall be subject to the approval of Agent and the Majority Co-
Lenders (which approval shall not be unreasonably withheld) as to insurance
companies, amounts, forms, deductibles, loss payees and insurers. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the state in which the Real Property
Asset is located. Each insurance company must have a rating of "A" or better
for claims paying ability assigned by Standard & Poor's Rating Group or, if
Standard & Poor's Rating Group does not assign a rating for such insurance
company, such insurance company must have a general policy rating of A or
better and a financial class of VIII or better by Best (each such insurer
shall be referred to below as a "Qualified Insurer"). Not less than thirty
(30) days prior to the expiration dates of the Policies theretofore furnished
to Agent, certified copies of the Policies marked "premium paid" or
accompanied by evidence reasonably satisfactory to Agent of payment of the
premiums due thereunder shall be delivered by Borrower to Agent; provided,
however, that in the case of renewal Policies, Borrower may furnish Agent
with binders therefor to be followed by the original Policies when issued.
(d) Borrower shall not obtain (i) any umbrella or blanket
liability or casualty Policy unless, in each case, such Policy is approved in
advance in writing by Agent and approved by the Majority Co-Lenders (which
consent shall not be unreasonably withheld) and such Policy is issued by a
Qualified Insurer, or (ii) separate insurance concurrent in form or
contributing in the event of loss with that required in Section 5.03(b) to be
furnished by, or which may be reasonably required to be furnished by,
Borrower. In the event Borrower obtains separate insurance or an umbrella or
a blanket Policy, Borrower shall notify Agent of the same and shall cause
certified copies of each Policy to be delivered as required in Section
5.03(b). Any blanket insurance Policy shall (a) specifically allocate to the
Real Property Asset the amount of coverage from time to time required
hereunder or (b) be written on an occurrence basis for the coverages required
hereunder with a limit per occurrence in an amount equal to the amount of
coverage required hereunder and shall otherwise provide the same protection
as would a separate Policy insuring only the Property in compliance with the
provisions of Section 5.03(b).
(e) All Policies of insurance provided for in Section 5.03(b)
shall contain clauses or endorsements to the effect that:
(i) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least 30
days' written notice to Agent and any other party named therein as an
insured; and
(ii) each Policy shall provide that the issuers thereof shall
give written notice to Agent if the Policy has not been renewed thirty
(30) days prior to its expiration.
(f) Borrower shall furnish to Agent, on or before thirty (30) days
after the close of each of Borrower's fiscal years, a statement certified by
Borrower or a duly authorized officer of Borrower of the amounts of insurance
maintained in compliance herewith, of the risks covered by such insurance and
of the insurance company or companies which carry such insurance and, if
requested by Agent, verification of the adequacy of such insurance by an
independent insurance broker or appraiser acceptable to Agent.
(g) If at any time Agent is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Agent
shall have the right, without notice to Borrower to take such action as Agent
deems reasonably necessary to protect its interest in the Real Property
Assets, including, without limitation, the obtaining of such insurance
coverage as Agent and the Co-Lenders deems appropriate, and all reasonable
expenses incurred by Agent and the Co-Lenders in connection with such action
or in obtaining such insurance and keeping it in effect shall be paid by
Borrower and the REIT to Agent promptly after demand and shall bear interest
in accordance with Section 10.2 hereof.
(h) If the Real Property Assets shall be damaged or destroyed, in
whole or in part, by fire or other casualty, or condemned or taken by eminent
domain, Borrower shall give prompt notice of such damage or taking to Agent
and shall promptly commence and diligently prosecute the completion of the
repair and restoration of the Real Property Asset as nearly as possible to
the condition the Real Property Asset was in immediately prior to such fire
or other casualty or taking (the "Restoration"). Borrower shall pay all
costs of such Restoration whether or not such costs are covered by insurance
or any condemnation award.
Section 5.04 Taxes. Borrower and the other Loan Parties shall
-----
pay or cause to be paid, when due (i.e., before any penalty or fine could be
levied or charged), all taxes, charges and assessments and all other lawful
claims required to be paid by Borrower, the other Loan Parties, except as
contested in good faith and by appropriate proceedings diligently conducted,
if adequate reserves have been established with respect thereto in accordance
with GAAP. Upon request from Agent, Borrower shall provide evidence to Agent
of payment of such taxes, charges, assessments and other lawful claims.
Section 5.05 Corporate Franchises; Conduct of Business. (a)
-----------------------------------------
Borrower and each Loan Party shall do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and
good standing in the State of its organization and in each state in which a
Real Property Asset is located, and its respective franchises, licenses,
permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals, except
where the failure to so preserve any of the foregoing (other than existence
and good standing) would not, individually or in the aggregate, result in a
Material Adverse Effect.
(b) The Borrower shall carry on and conduct its business in
substantially the same manner and substantially the same field of enterprise
as it is presently conducted and only by the Borrower through itself or the
Guarantors, except as described on Schedule 9B.
(c) The REIT shall carry on and conduct its business in
substantially the same manner and substantially the same field of enterprise
as it is presently conducted and only through Borrower, except as described
in Schedule 9A.
--
Section 5.06 Compliance with Law. Borrower and the other Loan
-------------------
Parties shall comply with all Applicable Laws, rules, statutes, regulations,
decrees and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of their
business and the ownership of their property (including the Real Property
Assets), except for such laws, rules, statutes, regulations, decrees, orders
and restrictions, (a) which Borrower or such other Loan Party are contesting
in good faith and in compliance with and pursuant to appropriate proceedings
diligently prosecuted (provided that such contest does not and cannot (i)
expose any of Agent, the Co-Lenders Borrower, the other Loan Parties to any
criminal liability or penalty, (ii) give rise to a Lien against any of the
Assets or any Real Property Asset, or (iii) otherwise materially adversely
affect any of the Assets or the value thereof), or (b) the failure to observe
which, taken individually or in the aggregate, could not be reasonably
expected to result in a Material Adverse Effect. Borrower, the REIT and the
applicable Loan Parties shall not use or permit the use of all or any portion
of any Real Property Asset for any illegal activity.
Section 5.07 Performance of Obligations. Borrower, the REIT and
--------------------------
each Loan Party shall perform all of their obligations under the terms of
each mortgage, indenture, security agreement, debt instrument, lease,
undertaking and contract by which it or any of its Real Property Assets is
bound or to which it is a party.
Section 5.08 Stock. The REIT shall cause its issued and
-----
outstanding shares of stock to be listed for trading on the New York Stock
Exchange.
Section 5.09 Change in Rating. Borrower shall promptly notify
----------------
Agent in writing of the initial receipt of and any subsequent change,
downgrade or withdrawal, or threatened change, downgrade or withdrawal of
Borrower's or the REIT's Unsecured Debt Rating.
Section 5.10 Maintenance of Properties. Borrower and the other
-------------------------
Loan Parties shall ensure that the Real Property Assets are kept in their
current condition and repair, normal wear and tear, pending capital
improvements and casualty damage in the process of being repaired or restored
excepted.
Section 5.11 Compliance with ERISA. (a) Borrower and the other
---------------------
Loan Parties shall maintain each Employee Benefit Plan and Plan in material
compliance with all material applicable requirements of ERISA and the Code
and with all material applicable final regulations promulgated thereunder.
Borrower and the other Loan Parties shall provide to Agent, within ten (10)
days of sending or receipt by Borrower or the other Loan Parties, copies of
all filings or correspondence with the Internal Revenue Service, PBGC,
Department of Labor, Plan, Multiemployer Plan or union, regarding any Plan,
or regarding or disclosing any liability or potential liability or violation
of law under any Employee Benefit Plan.
(b) Borrower and the other Loan Parties shall also provide to
Agent, with ten (10) days of filing or receipt by Borrower or the other Loan
Parties, (i) any notice from the Department of Labor or Internal Revenue
Service of assessment or investigation regarding a prohibited transaction
under Section 4975 of the Code or Section 406 of ERISA, (ii) any notice from
a Multiemployer Plan of withdrawal with respect to a Multiemployer Plan,
(iii) notice from the Internal Revenue Service of imposition of excise tax
with respect to an Employee Benefit Plan, (iv) any Form 5500 filed by any
Borrower or Loan Party with respect to an Employee Benefit Plan which
includes a qualified accountant's opinion, or (v) notice regarding a proposed
termination from the PBGC.
(c) Neither Borrower nor any other Loan Party shall engage in any
transaction which could reasonably be expected to cause any obligation, or
action taken or to be taken, hereunder (or the exercise by Agent or the Co-
Lenders of any of its rights under this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA or result in a violation of a
state statute regulating governmental plans that would subject Agent or any
Co-Lender to liability for a violation of ERISA or such a state statute.
(d) Borrower and the REIT further covenant and agree to deliver to
Agent such certifications or other evidence from time to time throughout the
term of the Loan, as reasonably requested by Agent or the Co-Lenders in their
sole discretion, that (i) neither Borrower nor any other Loan Party is an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject
to Title I of ERISA, or a "governmental plan" within the meaning of Section
3(3) of ERISA; (ii) neither Borrower nor any other Loan Party is subject to
state statutes applicable to Borrower or any Loan Party regulating
investments and fiduciary obligations of Borrower or any Loan Party with
respect to governmental plans; and (iii) with respect to each Loan Party and
Borrower, at least one of the following circumstances is true:
(i) Equity interests in Borrower or such Loan Party are
publicly offered securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(ii) Less than 25 percent of each outstanding class of equity
interests in Borrower or such Loan Party are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower or such Loan Party qualifies as an "operating
company" or a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e) or an investment company registered
under The Investment Company Act of 1940.
Section 5.12 Settlement/Judgment Notice. Borrower agrees that
--------------------------
it shall, within ten (10) days after it effects a settlement of any
obligation in excess of $1,000,000.00 provide written notice to Agent of such
settlement together with a certification signed by the REIT for itself and as
general partner of Borrower certifying based upon the most recent quarterly
consolidated financial statements of Borrower, the REIT and their
Consolidated Subsidiaries, such settlement will not cause Borrower or the
REIT to violate the financial covenants set forth in Sections 5.16, 5.17 and
5.18 hereof. Borrower further agrees that it shall, within ten (10) days
after entry against it of a final judgment in excess of $1,000,000.00 or
final judgments in excess of $1,000,000.00 in the aggregate (to the extent
not covered by insurance) during the immediately preceding twelve (12) month
period, provide written notice to Agent of such judgment together with a
certification signed by the REIT for itself and a general partner of Borrower
certifying based upon the most recent quarterly consolidated financial
statements of Borrower, the REIT and their Consolidated Subsidiaries, that
such judgment will not cause Borrower or the REIT to violate the financial
covenants set forth in Sections 5.16 and 5.17 hereof.
Section 5.13 Acceleration Notice. Borrower agrees that it shall,
-------------------
within ten (10) days after receipt of written notice that any Indebtedness of
Borrower or any Loan Party in a principal amount not to exceed $1,000,000.00
has been accelerated, provide written notice to Agent of such acceleration.
Section 5.14 Intentionally Deleted.
---------------------
Section 5.15 Intentionally Deleted.
---------------------
Section 5.16 Minimum Net Worth. The consolidated minimum Net
-----------------
Worth of Borrower, calculated as the sum of shareholder's equity pursuant to
the REIT's consolidated balance sheet and minority interests, shall not, at
any time, be less than $140,000,000.00 plus 75% of the net proceeds (after
payment of underwriter and placement fees and other expenses directly related
to such equity offering) received by Borrower from equity offerings by the
REIT subsequent to the date hereof, calculated on a GAAP basis.
Section 5.17 Total Indebtedness.
------------------
(a) The maximum consolidated Total Debt of Borrower, the REIT and
their Consolidated Subsidiaries, without duplication, shall not exceed at any
time 50% the combined Total Value of all Assets of the Borrower and its
Consolidated Subsidiaries.
(b) The maximum consolidated aggregate Unsecured Debt of Borrower,
the REIT and their Consolidated Subsidiaries, without duplication, shall not
exceed at any time 50% of the Total Unencumbered Asset Value.
Section 5.18 Coverage Ratios.
---------------
(a) The ratio of (x) actual Adjusted EBITDA of Borrower and its
Consolidated Subsidiaries for any period of three consecutive months (the
"Base Period"), to (y) the Debt Service and Fixed Charges of the Borrower,
the REIT and their Consolidated Subsidiaries, without duplication, for such
Base Period shall not at any time be less than 1.80 to 1.
(b) The ratio of (x) actual Adjusted NOI from the Unencumbered
Assets less Minimum Tenant Improvement Reserves and Minimum Leasing
Commission Reserves with respect to such Unencumbered Assets for the
applicable Base Period to (y) Assumed Debt Service with respect to all
Unsecured Debt of Borrower, the REIT and their Consolidated Subsidiaries
(including, without duplication, the Loan), without duplication, outstanding
at the end of the Base Period shall not at any time be less than 1.70 to 1.
(c) The Coverage Ratios required to be maintained pursuant to this
Section 5.18 shall be calculated by Borrower on a monthly basis at the end of
each calendar month.
Section 5.19 Replacement Reserve. Borrower shall maintain or
-------------------
cause to be maintained, at all times a minimum reserve of $0.40 per square
foot for all Real Property Assets in the form of (a) readily available and
unrestricted cash and Cash Equivalents or (b) borrowing capacity under this
Agreement, as measured by the unfunded portion of the Facility Amount.
Section 5.20 Intentionally Deleted.
---------------------
Section 5.21 Manager. The Real Property Assets shall at all
-------
times be managed by the Manager or the Borrower or a wholly owned Subsidiary
of Borrower pursuant to a management agreement reasonably satisfactory to the
Majority Co-Lenders. If (i) any manager of an Unencumbered Asset shall
become insolvent or (ii) an Event of Default shall occur and be continuing,
then the Majority Co-Lenders, at their option, may require Borrower to engage
a bona-fide, independent third party management agent approved by the
Majority Co-Lenders, in their reasonable discretion (the "New Manager") to
manage such Real Property Asset. The New Manager shall be engaged by
Borrower pursuant to a written management agreement that complies with the
terms hereof and is otherwise reasonably satisfactory to the Majority Co-
Lenders in all respects and the New Manager shall execute and deliver to
Agent a Subordination of Management Agreement.
Section 5.22 Further Assurances. Borrower will, at Borrower's
------------------
sole cost and expense, at any time and from time to time upon request of
Agent take or cause to be taken any action and execute, acknowledge, deliver
or record any further documents, opinions, negative pledge agreements or
other instruments which Agent or any Co-Lender in its reasonable discretion
deems necessary or appropriate to carry out the purposes of this Agreement
and the other Loan Documents including to consummate the transfer or sale of
the Loan or any portion thereof, provided that Borrower shall not be required
to amend or modify this Agreement or any other Loan Documents in a material
manner.
Section 5.23 REIT Status. The REIT shall at all times maintain
-----------
its status as a "qualified real estate investment trust" under Section 856 of
the Code.
Section 5.24 Additional Covenants. (a) Borrower and the REIT
--------------------
shall give prompt notice to Agent of the receipt by Borrower, the REIT or any
Loan Party of (i) any notice related to a violation of any Applicable Laws
and (ii) the commencement of any proceedings or investigations which relate
to compliance with Applicable Laws which in any instance could be reasonably
expected to have a Material Adverse Effect.
(b) Borrower and the REIT will take appropriate measures to
prevent and will not engage in or knowingly permit any illegal activities at
any Real Property Asset.
Section 5.25 Minimum Unencumbered Assets. The Total Unencumbered
---------------------------
Asset Value shall not, at any time, be less than $50,000,000.00. The number
of Unencumbered Assets shall not, at any time, be less than three (3).
Section 5.26 Keep Well Covenants. The Borrower and the REIT
-------------------
shall (a) cause each Guarantor to be operated and managed in such a manner
that it will fulfill its obligations under the Guaranty; (b) not file any
petition for relief under the United States Bankruptcy Code or under any
similar federal or state law against any such Guarantors; and (c) provide
funding to each Guarantor to the extent necessary to enable each Guarantor to
fulfill its obligations under the Guaranty and to remain Solvent.
Section 5.27 Existing Environmental Conditions, Required Repairs
---------------------------------------------------
and Preparation of Environmental Reports. (a) At the request of Agent, at
----------------------------------------
any time that Agent has a reason to believe that there may be Hazardous
Substances present on any Real Property Asset or any violation of
Environmental Law with respect to any Real Property Asset, Borrower shall
provide to Agent, within sixty (60) days after such request, at the expense
of Borrower and the REIT, an Environmental Report for all Real Property
Assets that have been acquired after the date hereof, or with respect to the
Real Property Assets owned as of the date hereof, any Real Property Asset for
which Agent has a reasonable basis for requiring such an Environmental Report
(including, without limitation, the fact that an environmental report was not
delivered at or prior to the Closing Date or there is a basis to believe that
there may be Hazardous Materials or a threat of a Release with respect to
such Real Property Asset) as described in such request. Without limiting the
generality of the foregoing, if Agent or the Majority Co-Lenders determine at
any time that a material risk exists that any such Environmental Report will
not be provided within the time referred to above, Agent may retain an
environmental consulting firm to prepare such Environmental Report at the
expense of Borrower and the REIT, and Borrower hereby grants and agrees to
cause any Loan Party which owns any Real Property Asset described in such
request to grant at the time of such request, to Agent, such firm and any
agents of representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto their respective Real
Property Assets to undertake such an assessment.
(b) Borrower shall, within twelve (12) months of the Closing Date
cause the environmental conditions and maintenance/repairs (the "Post-Closing
Repairs") set forth on Schedule 16 attached hereto for each of the
Unencumbered Assets set forth therein to be remediated or completed.
Borrower further agrees to deliver evidence reasonably satisfactory to the
Lender and each Co-Lender that the Post-Closing Repairs have been fully
completed and paid for within such twelve (12) month period in a manner not
inconsistent with the terms of this Agreement.
Section 5.28 Unused Borrowing Capacity. Borrower shall at all
-------------------------
times maintain borrowing capacity under the Facility, as measured by the then
unfunded portion of the Facility Amount then available, equal to the
aggregate of all costs that would have to be paid to release the deed to the
Bar Building from escrow, record it in the appropriate real estate records,
and transfer full fee and leasehold title to the Bar Building to Borrower or
Lender, as applicable, including without limitation, the payment of any
required purchase price, all transfer taxes and recording charges, the costs
to purchase an owner's title insurance policy in the amount of the fair
market value of the Bar Building, and all reasonable legal fees and expenses
in connection therewith, which amount is approximately equal to
$1,000,000.00.
Section 5.29 Compliance with Terms of Leaseholds. Borrower, the
-----------------------------------
REIT and the applicable Loan Party shall, subject to good faith disputes with
tenants thereunder, make all payments and otherwise perform all obligations
in respect of Leases of real property, keep such Leases in full force and
effect and not allow such Leases to lapse or be terminated or any rights to
renew such Leases to be forfeited or canceled, notify the Agent of any
default by any party with respect to such Leases (to the extent known to
Borrower) and cooperate with the Agent in all respects to cure any such
default and cause each Loan Party to do so.
Section 5.30 Equity or Debt Offerings. All net proceeds (after
------------------------
payment of underwriter and placement fees and other expenses directly related
to such equity or debt offering) from any equity or debt offering by the REIT
shall be promptly distributed to Borrower.
Section 5.31 Notice of Certain Events. Borrower shall, within
------------------------
ten (10) days of obtaining actual knowledge thereof, notify Agent of (i) any
execution of, or material modification to, cancellation, surrender or
termination of any lease or sublease relating to the Bar Building, (ii) any
change in the identity of any lessee or sublessee of the Bar Building or
(iii) any lapse in insurance coverage or any tax delinquency relating to the
Bar Building or (iv) any casualty to or condemnation of all or any part of
the Bar Building or (v) any material environmental condition with respect to
the Bar Building or (vi) the occurrence of any Bar Building Event of Default
or (vii) the occurrence of any default that continues beyond the expiration
of any applicable notice or cure period under the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Transaction Documents.
Section 5.32 ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Condominium. Borrower and SLG 17
----------------------------
Battery LLC shall diligently take all actions required to convert ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ into a condominium pursuant to the terms and provisions of, and within
the time frame contemplated in, the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Transaction Documents.
SECTION 6. NEGATIVE COVENANTS.
Borrower and the REIT covenant and agree that on and after the
Closing Date until the Obligations (other than inchoate indemnity and expense
reimbursement Obligations) are paid in full:
Section 6.01 Bar Building and ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇. Neither Borrower
---------------------------------
nor SLG 17 Battery LLC shall not amend, waive or modify any of its rights or
any defaults with respect to any Bar Building Loan Document or the ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Transaction Documents. Other than immaterial or ministered changes,
neither Borrower, nor SLG 17 Battery LLC shall amend or modify any of the
terms or conditions of any Bar Building Loan Document or the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Transaction Documents without the prior written consent of the Majority Co-
Lenders.
Section 6.02 Intentionally Deleted.
---------------------
Section 6.03 Liens. Borrower and the other Loan Parties shall
-----
not, create, incur, assume or suffer to exist, directly or indirectly, any
Lien on any Unencumbered Asset other than the following (collectively, the
"Permitted Liens"):
(a) The Liens forth on Schedule 7 which exist as of the Closing
Date;
(b) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by Law (other than any Lien imposed by
ERISA) created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings diligently
conducted, and with respect to which adequate bonds have been posted if
required to do so by Applicable Law;
(d) Sidewalk violations or other municipal violations that are not
material and are not a Lien on the related Real Property Asset; and
(e) Easements, rights-of-way, covenants, restrictions, zoning and
similar restrictions and other similar charges or encumbrances not
interfering with the ordinary conduct of the business of Borrower and which
do not detract materially from the value of any of the Real Property Assets
to which they attach or impair materially the use thereof by Borrower.
Section 6.04 Restriction on Fundamental Changes. (a) Without
----------------------------------
the prior written consent of the Majority Co-Lenders, which consent may be
withheld in the sole and absolute discretion of the Majority Co-Lenders, (i)
Borrower, the REIT and the other Loan Parties shall not enter into any merger
or consolidation with, or sell, lease, transfer or otherwise dispose of any
Substantial Assets within any one calendar year to, any Person other than
Borrower or a wholly owned Subsidiary of Borrower and (ii) the REIT shall not
sell, transfer, pledge, assign or encumber its general partnership interest
in the Borrower and (iii) the Borrower shall not sell, transfer, pledge,
assign or encumber its membership interest in any Guarantor. Notwithstanding
the foregoing, neither Borrower, the REIT nor any Loan Party shall enter into
any arrangement, directly or indirectly, whereby Borrower, the REIT or any
Loan Party shall sell or transfer any Real Property Asset (in a single or
multiple transaction) owned by any of them in order then or thereafter to
lease such property or lease other Real Property Asset that it intends to use
for substantially the same purpose as the Real Property Asset being sold or
transferred.
(b) Notwithstanding the foregoing, Borrower and the Loan Parties
may enter into a merger or consolidation, provided that following such merger
or consolidation, Borrower is the surviving entity of such merger or
consolidation and the REIT or an entity wholly owned and controlled by the
REIT (i) is the sole general partner of Borrower, and (ii) owns at least a
60% economic ownership interest in Borrower.
Section 6.05 Transactions with Affiliates. Borrower and the
----------------------------
other Loan Parties shall not enter into any material transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Borrower, other than on terms and conditions substantially
as favorable as would be obtainable at the time in a comparable arm's-length
transaction with a Person other than an Affiliate of Borrower.
Section 6.06 Plans. Borrower and the other Loan Parties shall
-----
not, nor shall they permit any member of their respective ERISA Controlled
Group to, (i) establish, become liable for, or amend any Plan or fail to make
contributions when due under any Plan or take or omit to take any other
action which would (A) increase the aggregate present value of the Unfunded
Benefit Liabilities under all Plans or withdrawal liability under a
Multiemployer Plan for which Borrower or any Loan Party or any member of
their respective ERISA Controlled Groups (determined without reference to
Section 414(m) or (o) of the Code, if liabilities of entities in Borrower or
the Loan Parties' ERISA Controlled Group solely by reason of Section 414(m)
or (o) of the Code could not result in liability to Borrower or any Loan
Party) to an amount in excess of $500,000 or (B) result in liability or
Contingent Obligation for any post-retirement benefit under any "welfare
plan" (as defined in Section 3(1) of ERISA), or any withdrawal liability or
exit fee or charge with respect to any "welfare plan" (as defined in Section
3(1) of ERISA), other than liability for continuation coverage under Part 6
of Title I of ERISA, or state or local laws which require similar
continuation coverage for which the employee pays approximately the full cost
of coverage, or (ii) engage in any transaction prohibited by Section 406 of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption was not available and which would result in a material liability
being imposed on such Person or could be reasonably expected to have a
Material Adverse Effect.
Section 6.07 Distributions. The REIT and Borrower (without
-------------
duplication) shall not pay or declare Distributions (a) if an Event of
Default has occurred and is continuing or (b) that in the aggregate exceeds
95% during the first year after the Closing and 90% thereafter, of the Funds
From Operations of Borrower, both individually and combined with the REIT
(without duplication), in any four consecutive calendar quarters (or if four
consecutive calendar quarters have not passed since the date hereof, the
quarterly periods from the date hereof); provided that notwithstanding the
foregoing, so long as no Event of Default has occurred and is continuing, the
REIT may pay or declare Distributions without violating this covenant in (i)
the amount necessary to maintain the REIT's status as a real estate
investment trust under Section 856 of the Code and applicable state tax law,
or (ii) the amount necessary for the REIT to avoid the payment of any federal
income or excise tax. For purposes of the calculation only, Funds From
Operations shall be determined without taking into account the effect of
Distributions on either Preferred or Common OP Units, and Distributions shall
include all distributions on Preferred and Common OP Units.
Section 6.08 Tenant Concentration. No single tenant or
--------------------
Affiliates of such tenant pursuant to one or more Leases shall, in the
aggregate, lease space in Real Property Assets of Borrower, the REIT or any
Loan Party which provides for Rent (including without limitation, percentage
rent) in excess of 5%, if such tenant is not an Investment Grade Tenant, or
10%, if such tenant is an Investment Grade Tenant, of the aggregate Rents
derived from all Leases of such Real Property Assets.
Section 6.09 Restriction on Prepayment of Unsecured Debt.
-------------------------------------------
Neither Borrower nor the REIT shall prepay the principal amount, in whole or
in part, of any Unsecured Debt (other than the Obligations) after the
occurrence of any Event of Default.
Section 6.10 Real Property Assets. Neither the Borrower, the
--------------------
REIT nor any other Loan Party shall acquire any Real Property Asset unless an
Environmental Report for such Real Property Asset dated within six (6) months
of the proposed acquisition date has been prepared and if requested,
delivered to Agent showing that there are no Hazardous Substances or other
environmental conditions on such Real Property Asset not in compliance with
Environmental Laws.
Section 6.11 Maximum Secured Recourse Indebtedness. (a) Neither
-------------------------------------
Borrower, the REIT nor any other Loan Party shall at any time have any
liability, contingent or otherwise, to any other Person under any Secured
Recourse Indebtedness which in the aggregate exceeds ten percent (10%) of the
Total Value of the Assets of the Borrower and its Consolidated Subsidiaries.
No such Secured Recourse Indebtedness shall exceed 75% of the value of the
Asset (calculated in a manner consistent with the calculations for
determining Total Value) encumbered thereby.
(b) Neither Borrower, the REIT nor any other Loan Party shall at
any time have any liability, contingent or otherwise, to any other Person
(other than under this Agreement) under any Secured Indebtedness which in the
aggregate exceeds 35% of the Total Value of the Assets of Borrower and its
Consolidated Subsidiaries.
Section 6.12 Organizational Documents. Other than immaterial or
------------------------
ministerial changes, neither Borrower, the REIT nor any other Loan Party
shall make any amendments or modifications to their partnership agreements,
corporate charters, by-laws, certificates of incorporation, articles of
organization or other organizational documents without the prior approval of
the Majority Co-Lenders.
Section 6.13 Negative Pledge Covenant. Neither Borrower, the
------------------------
REIT or any other Loan Party shall enter into or suffer to exist, or permit
any of its Subsidiaries or Affiliates to enter into or suffer to exist, any
mortgage, deed of trust, deed to secure debt or other security instrument or
any other Lien, or any agreement permitting or conditioning the creation or
assumption of any Lien upon any Unencumbered Asset other than (i) in favor of
Agent and the Co-Lenders or (ii) Permitted Liens.
Section 6.14 Unsecured Debt of Guarantors. No Guarantor shall
----------------------------
have any liability, contingent or otherwise, to any other Person (other than
under its Guaranty) under any Unsecured Debt.
Section 6.15 Restrictions on Investments. In addition to the
---------------------------
provisions of Section 2.20, neither Borrower, the REIT or any Loan Party
shall make or permit to exist or remain outstanding any investment other than
investments in:
(a) marketable direct or guaranteed obligations of the United States of
America that mature within one (1) year from the date of purchase by the
Borrower, the REIT or any Loan Party;
(b) marketable direct obligations of any of the following: Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal
Home Loan banks, Federal National Mortgage Association, Government National
Mortgage association, Bank for Cooperatives, Federal Intermediate Credit
Banks, Federal Financing Banks, Export-Import Bank of the United States,
Federal Land Bank, or any other agency or instrumentality of the United
States of America;
(c) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$100,000,000.00; provided, however, that the aggregate amount at any time so
invested with any single bank having total assets of less than
$1,000,000,000.00 will not exceed $200,000.00;
(d) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any State which at the times of purchase are rate by ▇▇▇▇▇'▇ or by
S&P at not less than "P 2" if then rated by ▇▇▇▇▇'▇, and not less than "A 2",
if then rated by S&P;
(e) mortgage-backed securities guaranteed by the Government National
Mortgage Association, the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation and other mortgage-backed bonds which
at the time of purchase are rated by ▇▇▇▇▇'▇ or by S&P at not less than "Aa"
if then rated by ▇▇▇▇▇'▇ and not less than "AA" if then rated by S&P;
(f) repurchase agreements having a term not greater than 90 days and
fully secured by securities described in the foregoing subsection (a), (b) or
(e) with banks described in the foregoing subsection (c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000.00;
(g) shares of so-called "money market funds" registered with the SEC
under the Investment Company Act of 1940 which maintain a level per-share
value, invest principally in investments described in the foregoing
subsections (a) through (f) and have total assets in excess of
$50,000,000.00;
(h) Permitted Investments.
SECTION 7. EVENTS OF DEFAULT
Section 7.01 Events of Default. The occurrence and continuance
------------------
of any of the following events, acts, occurrences or conditions shall
constitute an Event of Default under this Agreement, regardless of whether
such event, act, occurrence or condition is voluntary or involuntary or
results from the operation of law or pursuant to or as a result of compli-
ance by any Person with any judgment, decree, order, rule or regulation of
any court or administrative or governmental body:
(a) Failure to Make Payments. Borrower and the REIT shall (i)
-------------------------
default in the payment when due of any principal of the Loan, or (ii) default
in the payment within five (5) days after the due date of (x) any interest on
the Loan or (y) any Fees, Transaction Costs or any other amounts owing
hereunder; provided, however, that any interest payable with respect to any
delinquent payment shall be calculated at the Default Rate from the date such
payment was actually due as if there were no grace period.
(b) Breach of Representation or Warranty. Any representation or
------------------------------------
warranty made by Borrower, the REIT or any other Loan Party herein or in any
other Loan Document or in any certificate or statement delivered pursuant
hereto or thereto shall prove to be false or misleading in any material
respect on the date as of which made or deemed made: provided, however, that
-------- -------
if such breach is capable of being cured, then Borrower shall have a period
of thirty (30) days after delivery of notice from Agent to cure any such
breach.
(c) Breach of Covenants.
-------------------
(i) Borrower, the REIT or any other Loan Party shall fail to
perform or observe any agreement, covenant or obligation arising under
Sections 5.01, 5.03, 5.12, 5.13, 5.16, 5.17, 5.18, 5.25, 5.27(b), 5.28,
6.03, 6.04, 6.07, 6.08, 6.09, 6.10, 6.11, 6.13, 6.14 and 6.15.
(ii) Borrower, the REIT or any of the Loan Parties shall fail
to perform or observe any agreement, covenant or obligation arising
under (a) Section 5.19 and such failure shall continue uncured for more
than five (5) days after delivery or notice thereof or (b) this
Agreement (except those described in subsections (a), (b) and (c)(i)
above and the preceding clause (a)), and such failure shall continue
uncured for thirty (30) days after delivery of notice thereof, or such
longer period of time as is reasonably necessary to cure such Default,
provided that Borrower has commenced and is diligently prosecuting the
cure of such Default and cures it within ninety (90) days.
(iii) Borrower, the REIT or any other Loan Party shall fail
to perform or observe any agreement, covenant or obligation arising
under any provision of the Loan Documents other than this Agreement,
which failure shall continue after the end of any applicable grace
period provided therein.
(d) Default Under Other Agreements. Borrower, the REIT or any
------------------------------
other Loan Party shall default beyond any applicable grace period in the
payment, performance or observance of any obligation or condition with
respect to the Term Loan or any other Indebtedness in excess of $1,000,000.00
or any other event shall occur or condition exist, if the effect of such
default, event or condition is to accelerate the maturity of any Indebtedness
in excess of $1,000,000.00 or to permit (without regard to any required
notice or lapse of time) the holder or holders thereof, or any trustee or
agent for such holders, to accelerate the maturity of any such Indebtedness
in excess of $1,000,000.00, or any such Indebtedness shall become or be
declared to be due and payable prior to its stated maturity and the forgoing
conditions are not cured within thirty (30) days after the condition occurs.
(e) Bankruptcy, etc. (i) Borrower or any other Loan Party shall
---------------
commence a voluntary case concerning itself under the Bankruptcy Code; or
(ii) an involuntary case is commencedagainst Borrower or any other LoanParty-
and the petition is not controverted within thirty (30) days, or is not
dismissed within ninety (90) days, after commencement of the case or (iii) a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Borrower, any other
Loan Party or Borrower or any other Loan Party commences any other
proceedings under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower, any
other Loan Party or there is commenced against Borrower or any other Loan
Party any such proceeding which remains undismissed for a period of ninety
(90) days; or (iv) any order of relief or other order approving any such case
or proceeding is entered; or (v) Borrower or any other Loan Party is
adjudicated insolvent or bankrupt; or (vi) Borrower or any other Loan Party
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of ninety (90) days; or (vii) Borrower or any other Loan Party makes
a general assignment for the benefit of creditors; or (viii) Borrower, any
other Loan Party shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or (ix)
Borrower or any other Loan Party shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debt; or (x) Borrower or
any other Loan Party shall by any act or failure to act consent to, approve
of or acquiesce in any of the foregoing; or (xi) any corporate or partnership
action is taken by Borrower or any other Loan Party for the purpose of
effecting any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii) any Plan
-----
shall incur an accumulated funding deficiency (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived, or fail to make a
required installment payment on or before the due date under Section 412 of
the Code or Section 302 of ERISA, or (iii) Borrower or any of the Loan
Parties or a member of their respective ERISA Controlled Group shall have
engaged in a transaction which is prohibited under Section 4975 of the Code
or Section 406 of ERISA which could result in the imposition of liability in
excess of $1,000,000.00 on any of Borrower or any other Loan Party or any
member of their respective ERISA Controlled Group and an exemption shall not
be applicable or have been obtained under Section 408 of ERISA or Section
4975 of the Code, or (iv) Borrower or any of the other Loan Parties or any
member of their respective ERISA Controlled Group shall fail to pay when due
an amount which it shall have become liable to pay to the PBGC, any Plan, any
Multiemployer Plan or a trust established under Section 4049 of ERISA, or (v)
Borrower shall have received a notice from the PBGC of its intention to
terminate a Plan or to appoint a trustee to administer such Plan or
Multiemployer Plan, which notice shall not have been withdrawn within
fourteen (14) days after the date thereof, or (vi) a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating
that an ERISA Plan must be terminated or have a trustee appointed to
administer any ERISA Plan, or (vii) Borrower or any of the other Loan Parties
or a member of their respective ERISA Controlled Group suffers a partial or
complete withdrawal from a Multiemployer Plan or is in default (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan, or (viii) a proceeding shall be instituted against any of Borrower or
any of the other Loan Parties or any member of their respective ERISA
Controlled Group to enforce Section 515 of ERISA, or (ix) any other event or
condition shall occur or exist with respect to any Employee Benefit Plan,
Plan or Multiemployer Plan which could subject Borrower or any of the other
Loan Parties or any member of their respective ERISA Controlled Group to any
tax, penalty or other liability in excess of $1,000,000.00 or the imposition
of any lien or security interest on Borrower or any of the other Loan Parties
or any member of their respective ERISA Controlled Group, or (x) with respect
to any Multiemployer Plan, the institution of a proceeding to enforce Section
515 of ERISA, to terminate such Plan, the receipt of a notice of
reorganization or insolvency under Sections 4241 or 4245 of ERISA, in any
event which could result in liability in excess of $1,000,000.00 to Borrower,
any other Loan Party or any member of any of their ERISA Controlled Group, or
(xi) the assets of Borrower or any other Loan Party become or are deemed to
be assets of an Employee Benefit Plan. No Event of Default under this
Section 7.01(f) shall be deemed to be, or have been, waived or corrected
because of any disclosure by Borrower or any Loan Party. The occurrence of
any of the events Set forth in (iv), (v), (vi), (vii) or (viii) above, shall
not be an Event of Default if the potential liability to the ERISA Controlled
Group as a result of such occurrence, assuming that the Plan terminated
immediately thereon or the ERISA controlled Group immediately withdrew from
the Multiemployer Plan, would not exceed $1,000,000.00, either individually
or in the aggregate for all occurrences.
(g) Judgments. One or more judgments or decrees (i) in an
---------
aggregate amount of $1,000,000.00 or more are entered against Borrower, the
REIT or any other Loan Parties in any consecutive twelve (12) month period or
(ii) which, with respect to Borrower and the other Loan Parties, could result
in a Material Adverse Effect, shall be entered by a court or courts of
competent jurisdiction against any of such Persons (other than any judgment
as to which, and only to the extent, a reputable insurance company has
acknowledged coverage of such claim in writing or has actually reimbursed
such judgment creditor) and (x) any such judgments or decrees shall not be
stayed (by appeal or otherwise), discharged, paid, bonded or vacated within
thirty (30) days or (y) enforcement proceedings shall be commenced by any
creditor on any such judgments or decrees.
(h) REIT. The REIT fails to remain a publicly-traded real estate
----
investment trust in good standing with the New York Stock Exchange and with
the Securities and Exchange Commission.
(i) Material Adverse Effect. If any Material Adverse Effect shall
-----------------------
occur.
Section 7.02 Rights and Remedies. (a) Upon the occurrence of any
-------------------
Event of Default described in Section 7.01(e), the Facility Amount shall
automatically and immediately terminate and the unpaid principal amount of
and any and all accrued interest on the Loan and any and all accrued Fees and
other Obligations shall automatically become immediately due and payable,
with all additional interest thereon calculated at the Default Rate from the
occurrence of the Default until the Loan is paid in full and without
presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by Borrower and the
other Loan Parties, and the obligation of Lender and all Co-Lenders to make
any Advances hereunder shall thereupon terminate; and upon the occurrence and
during the continuance of any other Event of Default, Agent, upon approval by
the Majority Co-Lenders, may, by written notice to Borrower, (i) declare that
the Facility Amount is terminated, whereupon the Facility Amount and the
obligation of Lender and all Co-Lenders to make any Advances (or their pro
rata share thereof) hereunder shall immediately terminate, and (ii) declare
the unpaid principal amount of and any and all accrued and unpaid interest on
the Loan and any and all accrued Fees and other Obligations to be, and the
same shall thereupon be, immediately due and payable with all additional
interest thereon calculated at the Default Rate from the occurrence of the
Default until the Loan is paid in full and without presentation, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to
demand or accelerate and notice of acceleration), all of which are hereby
expressly waived by Borrower and the other Loan Parties.
(b) If an Event of Default has occurred and is continuing, Agent
and any Co-Lender may offset any indebtedness, obligations or liabilities
owed to Borrower against any indebtedness, obligations or liabilities of
Borrower or the REIT to it.
(c) If an Event of Default has occurred and is continuing, Agent
and any Co-Lender may avail itself of any remedies available to it under the
Loan Documents or at law or equity.
SECTION 8. INTENTIONALLY DELETED.
---------------------
SECTION 9. MISCELLANEOUS.
Section 9.01 Payment of Agent's and Syndication Agent's Expenses,
----------------------------------------------------
Indemnity, etc. Borrower and the REIT shall:
--------------
(a) whether or not the Transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of Agent and
the Syndication Agent in connection with Agent's and the Syndication Agent's
due diligence review of the Unencumbered Assets, the negotiation,
preparation, execution and delivery of the Loan Documents and the documents
and instruments referred to therein, and all out-of-pocket expenses of Agent
and the Syndication Agent in connection with the administration of the Loan
and any amendment, waiver or consent relating to any of the Loan Documents
and of Agent and the Syndication Agent in connection with the preservation of
rights under, any amendment, waiver or consent relating to, and enforcement
of, the Loan Documents and the documents and instruments referred to therein
or in connection with any restructuring or rescheduling of the Obligations
(including, without limitation, the reasonable fees and disbursements of
counsel for Agent and the Syndication Agent);
(b) pay, and hold Agent, the Syndication Agent, and each Co-Lender
harmless from and against, any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and hold Agent, the
Syndication Agent, and each Co-Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to Agent, the Syndication Agent or such Co-
Lender) to pay such taxes; and
(c) indemnify Agent, (in its capacity as Lender and as Agent), the
Syndication Agent (in its capacity as Syndication Agent and as a Co-Lender)
and each Co-Lender, its officers, directors, employees, representatives and
agents and any persons or entities owned or Controlled by, owning or
Controlling, or under common Control or Affiliated with Agent, the
Syndication Agent, or each Co-Lender (each an "Indemnitee") from, and hold
each of them harmless against, any and all losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs
or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitee in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto) that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed
on, asserted against or incurred by any Indemnitee as a result of, or arising
in any manner out of, or in any way related to or by reason of, (i) the
breach of any of Borrower's, the REIT's or other Loan Party's representations
and warranties or of any of Borrower's, REIT's or other Loan Party's
Obligations, (ii) a default under Sections 4.12 or 5.11, including, without
limitation, reasonable attorneys' fees and costs incurred in the
investigation, defense, and settlement of losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining
any individual prohibited transaction exemption under ERISA that may be
required, and (iii) the exercise by Agent, the Syndication Agent and the Co-
Lenders of their rights and remedies (including, without limitation,
foreclosure) under any Loan Documents (but excluding, as to any Indemnitee,
any such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements incurred by
reason of the gross negligence or willful misconduct of such Indemnitee
(collectively, "Indemnified Liabilities"). Borrower and the REIT further
agree that, without Agent's, the Syndication Agent's or the Co-Lenders' prior
written consent, they will not enter into any settlement of a lawsuit, claim
or other proceeding arising or relating to any Indemnified Liability unless
such settlement includes an explicit and unconditional release from the party
bringing such lawsuit, claim or other proceeding of each Indemnitee.
Borrower's and the REIT's obligations under this Section shall survive the
termination of this Agreement and the payment of the Obligations.
Section 9.02 Notices. Except as otherwise by expressly provided
-------
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile, telex, or
cable communication), and shall be deemed to have been duly given or made
when delivered by hand, or five (5) days after being deposited in the United
States mail, certified or registered, postage prepaid, or, in the case of
telex notice, when sent, answerback received, or, in the case of facsimile
notice, when sent, answerback received, or, in the case of a nationally
recognized overnight courier service, one (1) Business Day after delivery to
such courier service, addressed, in the case of Borrower, Agent and the
Syndication Agent, at the addresses specified below, or to such other
addresses as may be designated by any party in a written notice to the other
parties hereto, Syndication Agent, as follows:
If to Agent or Syndication Agent as follows:
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a Lehman Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial Center, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
and to
▇▇▇▇▇▇▇▇ Philips Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Marquis ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with copies thereof, with respect to all notices delivered in
accordance with Section 2, to:
▇▇▇▇▇▇ Brothers, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
If to Borrower or the REIT, as follows:
▇▇ ▇▇▇▇▇ Operating Partnership, L.P.
▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Greenberg, Traurig, Hoffman, Lipoff, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Ivanhoe, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.03 Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of Borrower, the REIT, Agent, the
Syndication Agent, the Co-Lenders, all future holders of the Note and their
respective successors and assigns.
Section 9.04 Amendments and Waivers. (a) Neither this Agreement,
----------------------
the Note, any other Loan Document to which Borrower, the REIT or any other
Loan Party is a party nor any terms hereof or thereof may be amended,
supplemented, modified or waived other than in a writing executed by
Borrower, the REIT, any other applicable Loan Party and Agent. If all or a
portion of the Loan and the Facility Amount is sold to a Co-Lender pursuant
to Section 9.09, the Borrower and the REIT acknowledge and agree that any
amendment, modification approval, waiver or request to be granted regarding
the terms of this Agreement shall be given in accordance with the terms,
provisions and conditions of this Agreement and the intercreditor agreement
to be entered into between Lender, as Agent, and each Co-Lender (the
"Intercreditor Agreement"), provided that such terms, provisions and
conditions shall have been disclosed to Borrower and the REIT; Lender agrees
that the terms of such Intercreditor Agreement shall not be inconsistent with
this Agreement, the other Loan Documents or the Assignment and Assumption and
in the event of any such inconsistency the terms of this Agreement shall
control. The parties hereto acknowledge and agree that after the occurrence
of a Syndication, any amendment, modification, approval, waiver or request to
be granted regarding the terms of this Agreement shall be given in accordance
with the terms, provisions and conditions of the Intercreditor Agreement.
The authority of Agent to act as Agent hereunder arises pursuant to and is
governed by the Intercreditor Agreement and this Agreement.
(b) In the case of any waiver, Borrower, the REIT, Agent and all
Co-Lenders shall be restored to their former position and rights hereunder
and under the outstanding Note and any other Loan Documents, and any Default
or Event of Default waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or Event
of Default, or impair any right consequent thereon.
Section 9.05 No Waiver; Remedies Cumulative. No failure or delay
------------------------------
on the part of Agent or any Co-Lender in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between Borrower or any other Loan Party and Agent or any Co-Lender shall
operate as a waiver thereof nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Loan Document preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which Agent or any Co-Lender would otherwise have, absent a requirement or
provision therefor in any Loan Documents. No notice to or demand on Borrower
or any other Loan Party shall in any case entitle Borrower or any other Loan
Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Agent or any Co-Lender,
to any other or further action in any circumstances without notice or demand.
Section 9.06 Governing Law; Submission to Jurisdiction. (a) This
-----------------------------------------
Agreement shall be deemed to be a contract entered into pursuant to the laws
of the State of New York and shall in all respects be governed, construed,
applied and enforced in accordance with the laws of the State of New York,
provided however, that with respect to the creation, perfection, priority and
enforcement of the lien of the Security Instruments, and the determination of
deficiency judgments, the laws of the State where the Real Property Asset is
located shall apply.
(b) Any legal action or proceeding with respect to this Agreement
or any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, Borrower and the REIT hereby accept
for themselves and in respect of their property, generally and uncondi-
tionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. Borrower and the REIT irrevocably consent
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to Borrower and the REIT at their addresses
set forth in Section 9.02. Borrower and REIT hereby irrevocably waive any
objection which they may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection with
this Agreement or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waive and agree not to plead or claim in
any such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum. Nothing herein shall affect the
right of Agent or any Co-Lender, to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against Borrower or the REIT in any other jurisdiction.
Section 9.07 Confidentiality Disclosure of Information. Each
-----------------------------------------
party hereto shall treat the transactions contemplated hereby and all
financial and other information furnished to it about Borrower, the other
Loan Parties and the Real Property Assets, as confidential; provided,
however, that such confidential information may be disclosed (a) as required
by law or pursuant to generally accepted accounting procedures, (b) to
officers, directors, employees, agents, partners, investors, attorneys,
accountants, engineers and other consultants of the parties hereto who need
to know such information, provided such Persons are instructed to treat such
information confidentially, (c) by Agent or the Syndication Agent on a
similar confidential basis to any Participant, Co-Lender, servicer, or
assignee ("Transferee"), which disclosure to Transferees and prospective
Transferees may include any and all information which has been delivered to
Agent or the Syndication Agent by Borrower or any other Loan Party pursuant
to this Agreement or the other Loan Documents or which has been delivered to
Agent or the Syndication Agent in connection with Agent's or the Syndication
Agent's or the Co-Lenders' credit evaluation of Borrower and the REIT prior
to entering into this Agreement, or (d) upon the written consent of the party
whose otherwise confidential information would be disclosed.
Borrower and the REIT acknowledge and agree that Agent and the
Syndication Agent may provide to the Co-Lenders, and that Agent, the
Syndication Agent and each of the Co-Lenders may provide to any Participant,
originals or copies of this Agreement, all Loan Documents and all other
documents, instruments, certificates, opinions, insurance policies, letters
of credit, reports, requisitions and other materials and information of every
nature or description, and may communicate all oral information, at any time
submitted by or on behalf of Borrower, the REIT or any other Loan Party or
received by Agent or the Syndication Agent in connection with the Loan or
Borrower or any other loan Party.
Section 9.08. Recourse. The Loan and the Obligations shall be full
--------
recourse to Borrower and the REIT.
Section 9.09. Sale of Loan, Co-Lenders, Participations and
--------------------------------------------
Servicing.
---------
(a) Lender and any Co-Lender may, at their option, sell with
novation all or any part of their right, title and interest in, and to, and
under the Loan, including, without limitation, all or a portion of their
obligation to make Advances, and its interest in the outstanding principal
balance of the Loan, to one or more additional Co-Lenders; if no Event of
Default has occurred and is continuing, each Co-Lender shall be subject to
the prior written approval of Borrower, which approval shall not be
unreasonably withheld or delayed. Each additional Co-Lender shall enter into
an assignment and assumption agreement (the "Assignment and Assumption")
assigning a portion of Lender's or Co-Lender's rights and obligations under
the Loan, and pursuant to which the additional Co-Lender accepts such
assignment and assumes the assigned obligations. From and after the
effective date specified in the Assignment and Assumption (i) each Co-Lender
shall be a party hereto and to each Loan Document to the extent of the
applicable percentage or percentages set forth in the Assignment and
Assumption and, except as specified otherwise herein, shall succeed to the
rights and obligations of Lender and the Co-Lenders hereunder and thereunder
in respect of the Loan (including, without limitation, its pro rata share of
Lender's and each Co-Lenders' obligations to make Advances hereunder), and
(ii) Lender, as lender and each Co-Lender, as applicable, shall, to the
extent such rights and obligations have been assigned and assumed by it
pursuant to such Assignment and Assumption, relinquish its rights and be
released from its obligations hereunder and under the Loan Documents.
(b) The liabilities of Lender and each of the Co-Lenders shall be
several and not joint, and Lender's and each Co-Lenders' obligations to
Borrower and the REIT under this Agreement shall be reduced by the amount of
each such Assignment and Assumption. Neither Lender nor any Co-Lender shall
be responsible for the obligations of any other Co-Lender. Lender and each
Co-Lender shall be liable to Borrower only for their respective proportionate
shares of the Loan. If for any reason any of the Co-Lenders shall fail or
refuse to abide by their obligations under this Agreement, Lender and the
other Co-Lenders shall not be relieved of their obligations, if any,
hereunder, including their obligations to make their pro rata share of any
Advance on the date set forth for such Advance in the Notice of Borrowing;
notwithstanding the foregoing, Lender and the Co-Lenders shall have the
right, but not the obligation, at their sole option, to make the defaulting
Co-Lender's pro rata share of such Advance pursuant to the terms of the
Intercreditor Agreement.
(c) Borrower agrees that it shall, in connection with any sale of
all or any portion of the Loan, whether in whole or to an additional Co-
Lender or Participant (a "Syndication"), within ten (10) business days after
requested by Agent or the Syndication Agent, furnish Agent or the Syndication
Agent with the certificates required under Section 9.22(a) and (b) and such
other information as reasonably requested by any additional Co-Lender or
Participant in performing its due diligence in connection with its purchase
of an interest in the Loan and the Facility Amount.
(d) If for any reason the Lender or any of the Co-Lenders shall
fail or refuse to abide by its obligations under the Loan Agreement, this
Agreement or the other Loan Documents (each a "Defaulting Co-Lender"), then,
in addition to the rights and remedies that may be available to the Agent and
the other Co-Lenders at law and in equity, such Defaulting Co-Lender's right
to participate in the administration of the Loan and the Loan Documents,
including without limitation, any rights to consent to or direct any action
or inaction of the Agent or to be taken into account in the calculation of
Majority Co-Lenders, shall be suspended during the pendency of such failure
or refusal.
(e) Lender (or an Affiliate of Lender) shall act as administrative
agent for itself and the Co-Lenders (together with any successor
administrative agent, the "Agent") pursuant to this Section 9.09(e).
Borrower acknowledges that Lender, as Agent shall have the sole and exclusive
authority to execute and perform this Agreement and each Loan Document on
behalf of itself, as Lender and as agent for itself and the Co-Lenders
subject to the terms of the Intercreditor Agreement. Except as otherwise
provided herein, Borrower shall have no obligation to recognize or deal
directly with any Co-Lender, and no Co-Lender shall have any right to deal
directly with Borrower with respect to the rights, benefits and obligations
of Borrower under this Agreement, the Loan Documents or any one or more
documents or instruments in respect thereof. Borrower may rely conclusively
on the actions of Lender as Agent to bind Lender and the Co-Lenders, notwith-
standing that the particular action in question may, pursuant to this
Agreement or any Intercreditor Agreement among Agent and the Co-Lenders, be
subject to the consent or direction of the Co-Lenders. Lender may resign as
Agent of the Co-Lenders, in its sole discretion, without the consent of
Borrower. Upon any such resignation, a successor Agent shall be determined
pursuant to the terms of the Intercreditor Agreement. The Borrower and the
REIT agree to execute an Administrative Fee Letter with each successor Agent,
which shall provide for the amount and payment of the Administrative Fee to
such successor Agent. The term Agent shall mean any successor Agent.
Notwithstanding any provision to the contrary in this Agreement,
neither the Agent nor the Syndication Agent shall have any duties or
responsibilities except those expressly set forth herein and in the
Intercreditor Agreement and no covenants, functions, responsibilities,
duties, obligations or liabilities of Agent or the Syndication Agent shall be
implied by or inferred from this Agreement, the Intercreditor Agreement, or
any other Loan Document, or otherwise exist against Agent or the Syndication
Agent.
(f) Except to the extent its obligations hereunder and its
interest in the Loan have been assigned pursuant to one or more Assignments
and Assumption, ▇▇▇▇▇▇, as Syndication Agent and Agent, shall have the same
rights and powers under this Agreement as any other Co-Lender and may
exercise the same as though it were not the Syndication Agent or Agent,
respectively. The term "Co-Lender" or "Co-Lenders" shall, unless otherwise
expressly indicated, include ▇▇▇▇▇▇ in its individual capacity. ▇▇▇▇▇▇ and
the other Co-Lenders and their respective affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage
in any kind of business with, Borrower, any Loan Party or any Affiliate of
Borrower or any Loan Party and any Person or entity who may do business with
or own securities of Borrower or any Loan Party or any Affiliate of Borrower
or any Loan Party or any Affiliate thereof, all as if they were not serving
in such capacities hereunder and without any duty to account therefor to each
other.
(g) Intentionally Deleted.
(h) Lender, as Agent, shall maintain at its domestic lending
office or at such other location as Lender, as Agent, shall designate in
writing to each Co-Lender and Borrower a copy of each Assignment and
Assumption delivered to and accepted by it and a register for the recordation
of the names and addresses of the Co-Lenders, the amount of each Co-Lender's
proportionate share of the Facility Amount and the Loan and the name and
address of each Co-Lender's agent for service of process (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Lender, as Agent, and the Co-Lenders may
treat each person or entity whose name is recorded in the Register as a Co-
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by Borrower or any Co-Lender during
normal business hours upon reasonable prior notice to the Agent. A Co-Lender
may change its address and its agent for service of process upon written
notice to Lender, as Agent, which notice shall only be effective upon actual
receipt by Lender, as Agent, which receipt will be acknowledged by Lender, as
Agent, upon request.
(i) Notwithstanding anything herein to the contrary, any financial
institution or other entity may be sold a participation interest in the Loan
by Lender or any Co-Lender without Borrower's consent (such financial
institution or entity, a "Participant") (x) if such sale is without novation
and (y) if the other conditions set forth in this paragraph are met. No
Participant shall be considered a Co-Lender hereunder or under the Note or
the Loan Documents. No Participant shall have any rights under this
Agreement, the Note or any of the Loan Documents and the Participant's rights
in respect of such participation shall be solely against Lender or Co-Lender,
as the case may be, as set forth in the participation agreement executed by
and between Lender or Co-Lender, as the case may be, and such Participant.
The terms of any participation agreement between Lender or Co-Lender, as the
case may be, and its Participant shall not grant the Participant any consent
rights except for consent to (i) changes in the interest rate and term of the
Loan, (ii) increase in the principal amount of the Loan (except for
protective advances), (iii) release of any party liable for repayment of the
Loan, (iv) forbearance, (v) consents to Liens other than Permitted Liens on
the Real Property Asset(s) Unencumbered Assets or the Rents related thereto,
(vi) the acceleration of the Loan or the taking of any enforcement action
with respect to the Loan. No participation shall relieve Lender or Co-
Lender, as the case may be, from its obligations hereunder or under the Note
or the Loan Documents and Lender or Co-Lender, as the case may be, shall
remain solely responsible for the performance of its obligations hereunder.
(j) Notwithstanding any other provision set forth in this
Agreement, the Lender or any Co-Lender may at any time create a security
interest in all or any portion of its rights under this Agreement (including,
without limitation, amounts owing to it in favor of any Federal Reserve Bank
in accordance with Regulation A of the Board of Governors of the Federal
Reserve System), provided that no such security interest or the exercise by
the secured party of any of its rights thereunder shall release Lender or Co-
Lender from its funding obligations hereunder.
Section 9.10 Borrower's and the REIT's Assignment. Neither
------------------------------------
Borrower nor the REIT may assign its rights or obligations hereunder without
the prior written consent of Agent and all of the Co-Lenders.
Section 9.11 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an orig-
inal, but all of which shall together constitute one and the same instrument.
Section 9.12 Effectiveness. This Agreement shall become
-------------
effective on the date on which all of the parties hereto shall have signed a
counterpart hereof and shall have delivered the same to the Syndication
Agent.
Section 9.13 Headings Descriptive. The heading of the several
--------------------
Sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision
of this Agreement.
Section 9.14 Marshaling; Recapture. Agent shall be under no
---------------------
obligation to marshal any assets in favor of Borrower, any other Loan Party
or any other party or against or in payment of any or all of the Obligations.
To the extent Agent receives any payment by or on behalf of Borrower or any
other Loan Party, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to Borrower or such other Loan Party or its estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof which has been paid, re-
duced or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included (other than for interest calculations) within
the liabilities of Borrower or such other Loan Party to Agent and the Co-
Lenders as of the date such initial payment, reduction or satisfaction
occurred.
Section 9.15 Severability. In case any provision in or obligation
------------
under this Agreement or the Note or the other Loan Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 9.16 Survival. Except as expressly provided to the
--------
contrary herein, all indemnities set forth herein including, without
limitation, in Sections 2.16, 2.17, 2.18, 2.19 and 9.01 shall survive the
execution and delivery of this Agreement, the Note and the Loan Documents and
the making and repayment of the Loan hereunder.
Section 9.17 Domicile of Loan Portions. Lender and the Co
-------------------------
Lenders may transfer and carry any Loan Portion at, to or for the account of
any domestic or foreign branch office, subsidiary or affiliate, subject to
Section 2.19.
Section 9.18 Intentionally Deleted.
---------------------
Section 9.19 Calculations; Computations. Except as otherwise
--------------------------
expressly provided herein, the financial statements to be furnished to Agent
or the Syndication Agent pursuant hereto shall be made and prepared in ac-
cordance with GAAP consistently applied throughout the periods involved and
consistent with GAAP as used in the preparation of the financial statements
referred to in Section 4.05.
SECTION 9.20 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED
-----------------------
BY APPLICABLE LAW, BORROWER, AGENT AND ALL CO-LENDERS EACH HEREBY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 9.21 No Joint Venture. Notwithstanding anything to the
----------------
contrary herein contained, neither Agent, the Syndication Agent nor any Co-
Lender by entering into this Agreement or by taking any action pursuant
hereto, will not be deemed a partner or joint venturer with Borrower or the
REIT or any Loan Party and Borrower and the REIT agree to hold Agent, the
Syndication Agent and each Co-Lender harmless from any damages and expenses
resulting from such a construction of the relationship of the parties hereto
or any assertion thereof.
Section 9.22 Estoppel Certificates. (a) Borrower, the REIT and
---------------------
Agent, each hereby agree at any time and from time to time upon not less than
ten (10) days prior written notice by Borrower, the REIT or Agent, to
execute, acknowledge and deliver to the party specified in such notice, a
statement, in writing, certifying whether this Agreement is unmodified (or if
there have been modifications stating the modifications hereto), and stating
whether or not, to the best knowledge of such certifying party, any Default
or Event of Default has occurred and is then continuing, and, if so,
specifying each such Default or Event of Default; provided, however, that it
-------- -------
shall be a condition precedent to Lender's obligation, as Agent, to deliver
the statement pursuant to this Section, that Agent shall receive, together
with Borrower's request for such statement, a certificate of a general
partner or senior executive officer of Borrower and the REIT, stating that to
the best knowledge of such certifying party, no Default or Event of Default
exists as of the date of such certificate (or specifying such Default or
Event of Default).
(b) Within five (5) Business Days of Agent's request, Borrower
shall execute and deliver a certificate of the general partner of Borrower
and the REIT or senior executive officer of Borrower and the REIT confirming
the then aggregate outstanding principal balance of the Loan, the outstanding
principal balance of each Eurodollar Portion and the Base Rate Portion, the
Contract Rate for each Loan Portion, the dates to which all interest has been
paid, and the Interest Period for each Eurodollar Portion. Such statement
shall be binding and conclusive on Borrower and the REIT absent manifest
error.
(c) Agent on behalf of the Co-Lenders agrees at any time and
from time to time upon not less than ten (10) days prior written notice by
Borrower, to execute, acknowledge and deliver to the party specified in such
notice, a statement, in writing, stating (i) the then current outstanding
principal balance under this Agreement, (ii) the Contract Rate and the
interest rate of each outstanding Loan Portion, (iii) whether it has
delivered any notices of default under this Agreement and (iv) whether this
Agreement is unmodified, and if there have been modifications, stating the
modifications hereto).
Section 9.23 No Other Agreements. The Loan Documents constitute
-------------------
the entire understanding of the parties with respect to the transactions
contemplated hereby, and all prior understandings with respect thereto,
whether written or oral, shall be of no force and effect.
Section 9.24 Controlling Document. In the event of a conflict
--------------------
between the provisions of this Agreement and the other Loan Documents, the
provisions of this Agreement shall control and govern the conflicting
provisions of the other Loan Documents.
Section 9.25 No Benefit to Third Parties. This Agreement is for
---------------------------
the sole and exclusive benefit of Borrower, the REIT, and Agent, the
Syndication Agent and the Co-Lenders and all conditions of the obligation of
Lender and the Co-Lenders to make Advances hereunder are imposed solely and
exclusively for the benefit of Lender and the Co-Lenders and their assigns
and no other person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that
Lender and the Co-Lenders will refuse to make Advances in the absence of
strict compliance with any and all thereof and no other person shall under
any circumstances be deemed to be a beneficiary of such conditions, any or
all of which may be freely waived in whole or in part by Agent and the Co-
Lenders at any time if they in their sole discretion deem it advisable to do
so. Without limiting the generality of the foregoing, neither Agent nor the
Co-Lenders shall have any duty or obligation to anyone to ascertain that
funds advanced hereunder are used as required by the terms hereof or to pay
the cost of constructing the improvements on any of the Real Property Assets
or to acquire materials and supplies to be used in connection therewith or to
pay costs of owning, operating and maintaining same.
Section 9.26 Joint and Several. Borrower and the REIT are each
-----------------
jointly and severally liable for the payment in full of the Loan and all
other sums owing under this Agreement, the Note, and any other Loan Documents
and the performance of all of the Obligations.
(NO FURTHER TEXT ON THIS PAGE)
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
▇▇ ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: ▇▇ ▇▇▇▇▇ REALTY CORP., a Maryland
corporation, its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
▇▇ ▇▇▇▇▇ REALTY CORP.,
a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇▇ BROTHERS HOLDINGS INC. D/B/A
▇▇▇▇▇▇ CAPITAL, A DIVISION OF ▇▇▇▇▇▇
BROTHERS HOLDINGS INC., a Delaware
corporation, individually as a Co-Lender
and as Syndication Agent
By: /s/
____________________________________
Name:
Title: