Exhibit 99.b(i)
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TERM LOAN AGREEMENT
dated as of December 28, 2001
between
FLEET NATIONAL BANK
("Lender")
Address of Lender: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
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and
RD BRANCH ASSOCIATES, L.P. ("Branch Borrower"),
RD ABINGTON ASSOCIATES LIMITED PARTNERSHIP ("Abington Borrower"),
and
RD METHUEN ASSOCIATES LIMITED PARTNERSHIP ("Methuen Borrower")
(Branch Borrower, Abington Borrower and Methuen Borrower, individually and
collectively, as the context requires, "Borrower")
Address of Borrower: c/o Acadia Realty Trust
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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LOCATION OF MORTGAGED PROPERTY:
The Branch Plaza Property located on ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇; the
Methuen Shopping Center Property located at the intersection of Rte. 113 and
Interstate 495 in Methuen, Massachusetts; and the Abington Towne Center Property
located on Old York Road in Abington, Pennsylvania
THIS LOAN AGREEMENT ("this Agreement") dated as of December 28, 2001 by
and among RD BRANCH ASSOCIATES, L.P., RD ABINGTON ASSOCIATES LIMITED
PARTNERSHIP, and RD METHUEN ASSOCIATES LIMITED PARTNERSHIP (collectively and
individually, as the context requires, "Borrower") and FLEET NATIONAL BANK
("Lender").
Borrower desires that Lender extend credit as provided herein, and
Lender is prepared to extend such credit on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, Borrower and Lender hereby agree as follows:
Article I
DEFINITIONS AND RULES OF CONSTRUCTION
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Section 1.01. Definitions. The following terms, as used in this
Agreement, shall have the following meanings:
"Abington Towne Center Property" -- The fee interest in real property located on
Old York Road in Abington, Pennsylvania owned by Abington Borrower.
"Additional Interest" -- Any and all sums that shall become due and payable by
Borrower under the Hedging Agreement.
"Additional Advance" -- Shall have the meaning set forth in Section 3.02 of this
Agreement.
"Anchors" -- Shall mean, with respect to each Property, (i) Pathmark, with
respect to the Branch Plaza Property; (ii) Wal-Mart, with respect to the
Methuen Shopping Center Property; and (iii) T.J. Maxx, with respect to
the Abington Towne Center Property.
"Branch Plaza Property" -- The leasehold interest in real property located on
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ owned by Branch Borrower.
"Code" -- The Internal Revenue Code of 1986.
"Counterparty" -- Fleet National Bank, in its capacity as a party to the Hedging
Agreement, and its successors and assigns in such capacity.
"Default" -- Any event or circumstance which, with the giving of notice or the
passage of time, or both, would become an Event of Default.
"DSC Test" -- Shall have the meaning set forth in Section 2.03 of this
Agreement.
"Dollars" and "$" -- Lawful money of the United States of America.
"Employee Benefit Plan" -- Any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower or
Guarantor.
"ERISA" -- The Employee Retirement Income Security Act of 1974, including the
rules and regulations promulgated thereunder.
"ERISA Affiliate" -- Any corporation which is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code)
as Borrower and/or Guarantor, or any trade or business which is under
common control (within the meaning of Section 414(c) of the Code) with
Borrower and/or Guarantor, or any organization which is required to be
treated as a single employer with Borrower and/or Guarantor under
Section 414(m) or 414(o) of the Code.
"Event of Default" -- Has the meaning given to such term in the Mortgage.
"Financial Statements" -- Statements of the assets, liabilities (direct or
contingent), income, expenses and cash flow of Borrower and Guarantor,
prepared in accordance with generally accepted accounting principles in
the United States as in effect from time to time and consistently
applied.
"Governmental Authorities" -- The United States, the state in which the Property
is located and any political subdivision, agency, department,
commission, board, bureau or instrumentality of either of them,
including any local authorities, which exercises jurisdiction over
Borrower, Guarantor, the Property or the Improvements.
"Guarantor" -- Jointly and severally, Acadia Realty Limited Partnership, a
Delaware limited partnership and any other person(s) or entity(ies) who
may hereafter become a guarantor of any or all of Borrower's obligations
in respect of the Loan.
"Guaranty" -- The guaranty(ies) of all or part of Borrower's obligations, to be
executed by Guarantor.
"Hazardous Materials" -- Has the meaning given to such term in the Mortgage.
"Hedging Agreement" -- The ISDA Master Agreement or other documentation with
respect to the interest rate hedging transaction in the amount of
$20,000,000 entered into by and between Guarantor and Counterparty dated
as of August 23, 2001, as assigned to Borrower by Guarantor, as any of
the same may be amended, modified or supplemented from time to time,
including any and all "confirmations" under any thereof.
"Improvements" -- Shall mean, with respect to the indicated Property: (i) a one
story neighborhood shopping center containing 125,840 square feet with
respect to the Branch Plaza Property, (ii) a one story neighborhood
shopping center containing 129,494 square feet with respect to the
Methuen Shopping Center Property, and, (iii) a multi-level shopping
center containing 63,889 square feet with respect to the Abington Towne
Center Property.
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"Indemnity" -- An agreement from Borrower and Guarantor or, if there is no
Guarantor, such other persons or entities as shall be satisfactory to
Lender, whereby, among other things, Lender is indemnified regarding
Hazardous Materials.
"Initial Advance" -- The first advance of Loan proceeds to be made hereunder.
"Law" -- Any federal, state or local law, statute, rule, regulation,
ordinance, order, decree, directive, requirement, code, notice of
violation or rule of common law, now or hereafter in effect, and in each
case as amended, and any judicial or administrative interpretation
thereof by a Governmental Authority or otherwise, including any judicial
or administrative order, determination, consent decree or judgment.
"Lender's Counsel" -- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Loan" -- The loan in the Loan Amount made by Lender to Borrower under this
Agreement.
"Loan Allocation" -- Shall mean, with respect to the indicated Property: (i)
$12,350,000 for the Branch Plaza Property, (ii) $5,515,000 for the
Methuen Shopping Center Property, and, (iii) $5,135,000 for the Abington
Towne Center Property.
"Loan Amount" -- $23,000,000, or so much thereof as shall be advanced by
Lender pursuant to this Agreement and the Note and outstanding from
time.
"Loan Documents" -- This Agreement, the Note, the Mortgage, the Indemnity,
Uniform Commercial Code financing statements in respect of the Mortgaged
Property and any other collateral given to Lender as security for the
Loan, and any other documents which evidence or secure the Loan.
"Loan to Value Test" -- Shall have the meaning set forth in Section 2.03 of this
Agreement.
"Major Lease" -- Any lease for space in excess of 5,000 square feet of the
rentable area of the Improvements.
"Material Adverse Change" means either (1) a material adverse change in the
status of the business, results of operations, financial condition,
property or prospects of Borrower or (2) any event or occurrence of
whatever nature which is likely to (x) have a material adverse effect on
the ability of Borrower to perform its obligations under the Loan
Documents or (y) create, in the sole and absolute judgment (reasonably
exercised) of Lender, a material risk of sale or forfeiture of any of
the Mortgaged Property (other than an immaterial portion thereof) under
any Mortgage or otherwise materially impair any of the Mortgaged
Property under any Mortgage or Lenders' rights therein.
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"Methuen Shopping Center Property" -- The fee and leasehold interest in real
property located at the intersection of Rte. 113 and Interstate 495 in
Methuen, Massachusetts owned by Methuen Borrower.
"Mortgage" -- Those certain mortgages, assignments of leases and rents and
security agreements, dated the date hereof, made to Lender to secure the
payment and performance of Borrower's obligations hereunder, under the
Note and otherwise in respect of the Loan.
"Mortgaged Property" means, for each Property, the Property, the Improvements
thereon and all other property constituting the "Mortgaged Property", as
said quoted term is defined in the applicable Mortgage.
"Multiemployer Plan" -- Any plan defined as such in Section 3(37) of ERISA.
"Net Operating Income"
(a) all revenues from the ownership, use, occupancy, leasing and
operation of the Property during the period in question, determined in
accordance with GAAP (but adjusted to eliminate the effects of
straight-lining of rents and further adjusted to exclude extraordinary
and non-recurring sources of income), including all rental and other
payments, including, without limitation, base rent, additional rent,
promotional revenues, percentage rent and payments for common area
maintenance, taxes, insurance and operating expenses and proceeds of
rental loss or business interruption service, excluding tenant security
deposits collected but not applied to tenants' obligations, and interest
on such deposits;
minus
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(b) all expenses in connection with the Property during such
period, determined in accordance with GAAP, including insurance
premiums, real estate taxes, promotional expenses, maintenance and
repair expenses, management fees and any other operational expenses, all
as determined in accordance with GAAP, but not including debt service
payable under the Loan.
"Note" -- The note, dated the date hereof, for a principal sum equal to the
Loan Amount made by Borrower to Lender to evidence the Loan.
"Pension Plan" -- Any employee pension benefit plan within the meaning of
Section 3(2) of ERISA with respect to which Borrower, Guarantor or any
ERISA Affiliate at any relevant time has liability or an obligation to
contribute.
"Premises Documents" -- Has the meaning given to such term in the Mortgage.
"Property" means, individually and collectively, as the context requires, each
of Abington Towne Center Property, Branch Plaza Property and Methuen
Shopping Center Property.
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"Release Price" -- Shall mean, with respect to the indicated Property: (i)
$13,585,000 for the Branch Plaza Property, (ii) $6,066,500 for the
Methuen Shopping Center Property, and, (iii) $5,648,500 for the Abington
Towne Center Property.
"Requisition" -- A written statement by or on behalf of Borrower, in form and
substance satisfactory to Lender, setting forth the amount of the Loan
advance requested in each instance and instructions for the payment of
the same, and certifying the purpose for which such advance is to be
used.
"Title Insurer" -- The issuer(s), approved by Lender, of the title insurance
policy or policies insuring the Mortgage.
"Treasury Rate" -- The yield rate (i) on the 10 year U.S. Treasury Security due
on or closest to the Maturity Date (as defined in the Note), as such
yield rate is reported in the Wall Street Journal on the second Business
Day preceding the date of calculation.
Section 1.02. Rules of Construction. Except as expressly provided
otherwise, when used in this Agreement (i) "or" is not exclusive, (ii)
"hereunder", "herein", "hereof" and the like refer to this Agreement as a whole,
(iii) "Article", "Section", "Schedule" and "Exhibit" refer to Articles,
Sections, Schedules and Exhibits of this Agreement, (iv) terms defined in the
singular shall have a correlative meaning when used in the plural and vice
versa, (v) a reference to a Law includes any amendment, modification or
supplement to, or replacement of, such Law and (vi) a reference to a document
shall mean such document as the same may be amended, modified or supplemented
from time to time in accordance with its terms. The cover page and the Exhibits
and Schedules, if any, annexed hereto are incorporated as a part of this
Agreement with the same effect as if set forth in the body hereof. Any table of
contents and all captions and headings herein are for convenience only and shall
not affect the interpretation or construction hereof.
Article II
THE LOAN
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Section 2.01. Generally. Subject to the provisions of this Agreement,
and on the basis of the representations, warranties and covenants made herein
and in the other Loan Documents, Lender will advance and Borrower will accept
the Loan Amount in periodic disbursements as hereinafter set forth and upon the
satisfaction of the conditions set forth in Article III hereof. The Loan shall
be made at Lender's principal office or at such other place as Lender may
designate, by wire transfer to an account of Borrower designated by it.
Section 2.02. Purpose. The Loan shall be made for the business purpose
of financing the Mortgaged Property. Borrower covenants and agrees that in no
event shall proceeds of the Loan, or any part thereof, be used, directly or
indirectly, for any other purpose, for any illegal purpose or for the purpose,
whether immediate, incidental or ultimate, of buying or carrying "margin stock"
within the meaning of Regulation U of the
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Board of Governors of the Federal Reserve System, or in connection with any
hostile acquisition or for any illegal purpose.
Section 2.03. Advances. The Initial Advance shall be in the amount of
$12,350,000 and shall be made upon satisfaction of the conditions set forth in
Section 3.01. Subsequent advances shall be made no more frequently than once a
month thereafter, upon satisfaction of the conditions set forth in Section 3.02.
In no event shall Lender be obligated to make an advance hereunder if (i) the
aggregate outstanding principal amount of the Loan following such advance (the
"Post Advance Amount") would exceed 65% of the appraised value of the Mortgaged
Property (the "Loan to Value Test") as determined by an independent appraisal
conducted at Borrower's expense by an appraiser selected by Lender, which
appraisal shall be conclusive as to value absent manifest error, provided,
however, that Borrower shall not be obligated to pay for more than one (1)
appraisal per any twelve (12) consecutive month period so long as no Event of
Default exists or (ii) if Net Operating Income is not 140% or more of debt
service on the Initial Advance or the Post Advance Amount, as the case may be
(the "DSC Test"). For purposes of determining compliance with the DSC Test, Net
Operating Income shall be calculated on a semi-annual basis using six months'
actual figures and the projected figures for the next succeeding six months and
debt service shall be calculated using an interest rate equal to the greater of
(a) the actual interest rate; (b) the Treasury Rate plus 200 basis points or (c)
an interest rate equal to 8.5% and a (25) year equal payment self liquidating
amortization schedule; provided, however, that any calculation of debt service
hereunder with respect to the Initial Advance and any Subsequent Initial Advance
(as hereinafter defined) shall be calculated using an interest rate equal to the
greater of (a) or (b) above only. For purposes of determining compliance with
the Loan to Value Test, a new appraisal shall not be required for each advance
provided the appraisal required in connection therewith shall not be more than
twelve (12) months old and any required reappraisals shall be made at Borrower's
expense, subject to the limitation set forth in clause (i) above.
Notwithstanding the foregoing, the maximum amount available to be advanced
hereunder shall be limited to an aggregate amount of $22,850,000 (such $150,000
hold back from the aggregate amount of Loan proceeds available to Borrower,
subject to Article III hereof, the "Environmental Holdback Amount") until the
environmental condition at the Branch Plaza Property referred to in the Fleet
Boston Financial Environmental Due Diligence Report Review dated December 21,
2001 has been remediated so that no further action is required by applicable
Governmental Authorities (the remediation of such condition such that no further
action is required, the "No Further Action Condition"). Notwithstanding anything
to the contrary set forth in Section 3.02(a) hereof, upon satisfaction of the No
Further Action Condition, Borrower may requisition advances of the Environmental
Holdback Amount at any time during the term of the Loan, subject to the
satisfaction of all other conditions to advances set forth in Section 3.02
hereof.
Section 2.04. Procedures for Advances. All advances of Loan proceeds
are to be made at Lender's principal office, or at such other place as Lender
may designate, by wire transfer to an account of Borrower designated in the
applicable Requisition. Borrower shall submit Requisitions to Lender no later
than 10:00 a.m. (New York time) on the date which is ten (10) business days
prior to the date the advance is to be made
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and, in the case of advances after the first advance, shall, if requested by
Lender, be conditioned upon a title continuation obtained at Borrower's expense
showing that there has been no change in the state of title since the date of
the last advance.
Article III
CONDITIONS PRECEDENT
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Section 3.01. Conditions Precedent to Loan. Lender shall not be
obligated to make the Initial Advance until the following conditions shall have
been satisfied:
(a) There shall exist no Default or Event of Default, and no
Default or Event of Default would result from the making of the Loan;
(b) The representations and warranties made to Lender herein, in
the other Loan Documents and in any other document, certificate or
statement executed or delivered to Lender in connection with the Loan
shall be true and correct on and as of the date of the advance with the
same effect as if made on such date;
(c) The Improvements shall not have been materially injured or
damaged by fire or other casualty; and
(d) Lender shall have received and approved each of the
following:
(1) Loan Fees. A non-refundable facility fee in the amount
of $230,000, to be retained by Lender whether or not any advances
are made hereunder;
(2) Loan Documents. This Agreement and each of the other
Loan Documents, duly executed by the parties thereto, and, where
applicable, duly acknowledged and in proper form for recording or
filing, as the case may be, and all necessary or desirable
recordings and filings shall have been duly made;
(3) Financial Statements. Current Financial Statements and
such other financial data (including, without limitation, current
financial statements of tenants under leases in respect of the
Mortgaged Property and of parties to any of the Premises
Documents, and of the guarantor(s), if any, of any such tenants
or parties) as Lender shall require;
(4) Appraisal. An independent M.A.I. appraisal of the
Property and Improvements complying in all respects with the
standards for real estate appraisals established pursuant to the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989;
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(5) Insurance Policies. The policies of insurance required
by the Mortgage, together with evidence of the payment of the
premiums therefor;
(6) Hazardous Materials Report/Reliance Letter. A detailed
report by a properly qualified engineer, which shall include,
inter alia, a certification that such engineer has obtained and
examined a list of prior owners, tenants and other users of all
or any portion of the Property or any improvements thereon, and
has made an on-site physical examination of the Property, and a
visual observation of the surrounding areas, and has found no
evidence of past or present Hazardous Materials activities or the
presence of Hazardous Materials, together with, if required by
Lender, a "reliance letter" addressed to Lender with respect to
such report;
(7) Environmental Plan. If requested by Lender, Borrower has
submitted a plan with respect to the remediation of any
environmental conditions relating to the Branch Plaza Property
reasonably acceptable to Lender;
(8) Title Policy. A paid title insurance policy, in the
amount of (i) $10,000,000 with respect to the Methuen Shopping
Center Property; (ii) $15,000,000 with respect to the Branch
Plaza Property; and (iii) $5,648,500 with respect to the Abington
Towne Center Property, in ALTA 10-17-92 or other form approved by
Lender's Counsel with such endorsements as shall be reasonably
requested by Lender's Counsel, issued by the Title Insurer which
shall insure the Mortgage to be a valid lien on Borrower's
interest in the premises free and clear of all defects and
encumbrances except those previously received and approved by
Lender's Counsel, and shall contain (i) full coverage against
mechanics' liens (filed and inchoate), (ii) a reference to the
survey but no survey exceptions except those theretofore approved
by Lender's Counsel, (iii) such affirmative insurance and
endorsements as Lender's Counsel may require, and (iv) if any
such policy is dated earlier than the date of the disbursement of
the Loan, an endorsement to such policy, in form approved by
Lender's Counsel, redating the policy and setting forth no
additional exceptions except those approved by Lender's Counsel;
and shall be accompanied by such reinsurance agreements between
the Title Insurer and title companies approved by Lender, in ALTA
1994 facultative form, as Lender may require;
(9) Survey. A current, as-built survey of the Property,
certified to Lender and the Title Insurer showing (i) the
location of the perimeter of the Property by courses and
distances, (ii) all easements, rights-of-way, and utility lines
referred to in the title policy required by this Agreement or
which actually service or cross the Property, (iii) the lines of
the streets abutting the Property and the width thereof, and any
established building and setback lines, (iv) encroachments and
the extent thereof upon the
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Property, (v) the Improvements and the relationship thereof by
distances to the perimeter of the Property, established building,
setback and street lines and (vi) if the Property is described as
being on a filed map, a legend relating the survey to said map;
(10) Leases and Premises Documents. Certified copies of all
leases in respect of the Mortgaged Property, accompanied by, in
the case of Major Leases and any other leases specified by
Lender, estoppel certificates from the tenants thereunder and
executed notice-of-assignment letters in the form of EXHIBIT A in
respect thereof; executed subordination and attornment
agreements, in Lender's usual form, in respect of such leases as
Lender may require; a certified copy of the standard form of
lease or contract of sale, as the case may be, Borrower will use
in connection with the leasing of space in the Improvements or
the sale of portions of the Property; and certified copies of all
Premises Documents, together with estoppel certificates from the
parties thereto;
(11) Requisition. A Requisition for the Initial Advance;
(12) Counsel Opinions. Opinions of Borrower's counsel and
local counsel (and, if required by Lender, of a local counsel
selected by Lender or Lender's Counsel) to the effects set forth
on EXHIBIT B;
(13) Organizational Documents. If Borrower, the mortgagor or
grantor under the Mortgage (if different from Borrower),
Guarantor or any general partner or member of any of them is a
corporation, current copies of the following documents with
respect to each (unless otherwise indicated):
(i) a good-standing certificate from the jurisdiction
of its incorporation and, as to Borrower and the mortgagor
or grantor under the Mortgage only, from the jurisdiction in
which the Property is located,
(ii) a resolution, certified by the corporate
secretary, of the shareholders or directors of the
corporation authorizing the consummation of the transactions
contemplated hereby and the execution, delivery and
performance of the Loan Documents and any other documents to
be executed, delivered or performed by said corporation, and
(iii) a certificate of the corporate secretary as to
the incumbency of the officers executing any of the
documents required hereby,
and, if Borrower, the mortgagor or grantor under the Mortgage (if
different from Borrower), Guarantor or any general partner or
member of any of them is a partnership, venture, limited
liability company or trust:
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(iv) the entity's organizational agreement and all
amendments and attachments thereto, certified by a general
partner, venturer, member or trustee to be true and
complete,
(v) any certificates filed or required to be filed by
the entity in the jurisdictions of its formation and where
the Property is located in order for it to do business in
those jurisdictions, and
(vi) evidence of the authorization of the consummation
of the transactions contemplated hereby and the execution,
delivery and performance of the Loan Documents to be
executed, delivered or performed by said entity, and
including any required consents by partners, venturers,
members, trustees or beneficiaries;
(14) Intentionally Omitted;
(15) Permits and Approvals. Copies of the certificate(s) of
occupancy for the Improvements and of any and all other
authorizations (including plot plan and subdivision approvals,
zoning variances, water, sewer, building and other permits)
required by Governmental Authorities or otherwise necessary for
the use, occupancy and operation of the Property and/or
Improvements for their intended purposes in accordance with all
applicable Laws;
(16) Intentionally Omitted;
(17) Chattel Searches. UCC searches against Borrower or
other owner of the Mortgaged Property and advice from the Title
Insurer to the effect that searches of proper public records
disclose no leases of personalty or financing statements filed or
recorded against the Mortgaged Property, Borrower or other owner
of any Mortgaged Property;
(18) Intentionally Omitted; and
(19) Additional Documentation. Such other approvals,
opinions or documents as Lender may reasonably request including,
but not limited to, (i) a current certified rent roll for the
Mortgaged Property and tenant estoppel letters for all Anchors
and tenants representing not less than 75% of the leaseable space
in the Mortgaged Property, (ii) evidence that all Anchors remain
in occupancy and a minimum Net Operating Income derived from such
anchor tenants and all other tenants leasing space in the
Mortgaged Property of not less than $2,700,000, (iii) ground
lessor estoppel certificates from the ground lessor with respect
to the Branch Plaza Property and the Methuen Shopping Center
Property and (iv) current financial statements of Guarantor
showing a minimum net worth of $100,000,000 (the "Net Worth
Requirement") and a minimum unrestricted, unencumbered liquidity
of $5,000,000 (the "Liquidity Requirement").
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Section 3.02. Conditions to Advances After the Initial Advance. In
addition to the Initial Advance, an additional amount of up to $7,650,000 of
Loan proceeds (each such advance of amounts aggregating up to $7,650,000, a
"Subsequent Initial Advance") shall be made available to Borrower upon the
satisfaction of conditions (a) through and including (i) below and a further
additional amount of up to $3,000,000 of Loan proceeds (each such advance of
amounts aggregating up to $3,000,000, an "Additional Advance") shall be made
available to Borrower subject to the satisfaction of the following conditions:
(a) Such Subsequent Initial Advance is requisitioned to be
advanced within six (6) months from the date hereof and such Additional
Advance, if applicable, is requisitioned to be advanced within twelve
(12) months from the date hereof;
(b) Subject to the limitations set forth in Section 2.03 and
Section 3.02(i) (and Section 3.02(j) with respect to any Additional
Advance), the amount of each Additional Advance subsequent to the
Initial Advance shall be in the minimum amount of $100,000 (unless less
than said amount is available for disbursement pursuant to the terms
hereof at the time of such Additional Advance, in which case the amount
of such subsequent advance shall be equal to such remaining
availability);
(c) All conditions of Section 3.01 shall have been and remain
satisfied as of the date of such advances;
(d) There shall exist no Default or Event of Default;
(e) The representations and warranties made to Lender herein, in
the other Loan Documents and in any other document, certificate or
statement executed or delivered to Lender in connection with the Loan
shall be true and correct on and as of the date of the advance with the
same effect as if made on such date (except for the updated rent roll);
(f) Lender shall have received a Requisition, and, if required, a
title continuation report;
(g) There shall have occurred no material adverse change in the
condition or value of the "Mortgaged Property", as defined in the
Mortgage;
(h) Mortgagor shall furnish Lender with a statement, duly
acknowledged, of the amount due whether for principal or interest, on
the Loan and whether any offsets, counterclaims or defenses exist
against the indebtedness secured hereby;
(i) The aggregate outstanding proceeds of the Loan, including the
amount of the advance being requested, shall not exceed the amount
necessary to satisfy the Loan to Value Test and the DSC Test for
Additional Advances; and
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(j) A copy of a new, executed lease on commercially reasonable
terms providing for a current market rental for space in the Mortgaged
Property (each, a "New Lease"), which New Lease is in full force and
effect and the new tenant under such New Lease is in possession of the
premises demised thereunder and paying rent has been delivered to
Lender, and, if requested by Lender, a Subordination, Non-Disturbance
and Attornment Agreement with respect to such New Lease has been
executed and a copy thereof delivered to Lender. Notwithstanding
anything to the contrary contained herein, the maximum amount of any
advance in respect of a New Lease shall be limited to 65% of the overall
value added by such New Lease. For purposes of this Section 3.02(h),
such additional incremental value shall be measured based upon the gross
rent payable under said New Lease for the twelve month period following
the commencement date under such New Lease (the "Annual Gross Rent")
less an imputed management fee equal to 4% of such Annual Gross Rent,
such amount capitalized at 9.5%.
Article IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower and Guarantor represent and warrant to Lender that:
Section 4.01. Due Formation, Power and Authority. If it, the mortgagor
or grantor under the Mortgage (if different from Borrower), Guarantor or any
general partner or member of any of them is a corporation, partnership, venture,
limited liability company or trust, each such entity is duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
formation, is qualified to do business (if required) and is in good standing in
the jurisdiction in which the Property is located, and has full power and
authority to consummate the transactions contemplated hereby and to execute,
deliver and perform this Agreement and any other Loan Document to which it is a
party.
Section 4.02. Legally Enforceable Agreements. Each Loan Document to
which Borrower or Guarantor is a party is a legal, valid and binding obligation
of such party, enforceable against Borrower or Guarantor, as the case may be, in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar Laws affecting
creditors' rights generally.
Section 4.03. Financial Statements. Financial Statements have been
heretofore delivered to Lender which are true, correct and current in all
respects and which fairly present the respective financial conditions of the
subjects thereof as of the respective dates thereof; no material adverse change
has occurred in the financial conditions reflected therein since the respective
dates thereof and no borrowings (other than the Loan) which might give rise to a
lien or claim against the Mortgaged Property or proceeds of the Loan have been
made by Borrower or others since the dates thereof.
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Section 4.04. Compliance With Laws; Payment of Taxes. Borrower and
Guarantor are in compliance with, and the transactions contemplated hereby and
by the other Loan Documents do not and will not violate any provision of, or
require any filing, registration, consent or approval under, any Law presently
in effect having applicability to Borrower or Guarantor; Borrower has filed all
tax returns (federal, state and local) required to be filed and has paid all
taxes, assessments and governmental charges and levies due and payable
(including those in respect of the Mortgaged Property), including interest and
penalties.
Section 4.05. Litigation. There are no actions, suits or proceedings
pending or threatened against or affecting it, Guarantor, the Mortgaged
Property, the validity or enforceability of the Mortgage or the priority of the
lien thereof at law, in equity or before or by any Governmental Authorities
except actions, suits or proceedings which have been disclosed to Lender in
writing and which are fully covered by insurance or would, if adversely
determined, not substantially impair the ability of Borrower or Guarantor to pay
when due any amounts which may become payable under the Note or Guaranty or to
otherwise pay and perform their respective obligations in connection with the
Loan; to Borrower's knowledge, neither it nor Guarantor is in default with
respect to any order, writ, injunction, decree or demand of any court or
Governmental Authorities.
Section 4.06. No Conflicts or Defaults. The consummation of the
transactions contemplated hereby and the performance hereof and of the other
Loan Documents have not resulted and will not result in any breach of, or
constitute a default under, any mortgage, deed of trust, lease, bank loan or
credit agreement, corporate charter, by-laws, partnership agreement or other
instrument to which Borrower or Guarantor is a party or by which either of them
may be bound or affected.
Section 4.07. Solvency. Borrower and Guarantor are, and upon
consummation of the transactions contemplated by this Agreement, the other Loan
Documents and any other related documents, will be, solvent.
Section 4.08. Governmental Regulation. Borrower is not subject to
regulation under the Investment Company Act of 1940 or any Law limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.
Section 4.09. Insurance. Borrower has in force, and has paid the
premiums in respect of, all of the insurance required by the Mortgage.
Section 4.10. ERISA. Neither Borrower nor Guarantor nor any other
person or entity, including any fiduciary, has engaged in any prohibited
transaction (as defined in Section 4975 of the Code or Section 406 of ERISA)
which could subject Borrower or Guarantor or any person or entity which they
have an obligation to indemnify to any tax or penalty imposed under Section 4975
of the Code or Section 502 of ERISA; neither Borrower nor Guarantor nor any
ERISA Affiliate maintains, contributes to or has any liability with respect to a
Multiemployer Plan or any other plan subject to Title IV of ERISA; each Employee
Benefit Plan is administered in accordance with its terms and in compliance with
all applicable Laws, including any reporting requirements; each Pension
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Plan intending to qualify under Section 401(a) or 401(k) of the Code does so
qualify; there is no lien outstanding or security interest given in connection
with a Pension Plan; neither Borrower nor Guarantor nor any ERISA Affiliate has
any liability with respect to an accumulated funding deficiency (whether or not
waived) under Section 412 of the Code or Section 302 of ERISA; neither Borrower
nor Guarantor has any liability for retiree medical or death benefits
(contingent or otherwise) other than as required by Section 4980B of the Code;
and no part of the funds to be used by Borrower or Guarantor in satisfaction of
their respective obligations under this Agreement and the other Loan Documents
constitute "plan assets" of any "employee benefit plan" within the meaning of
ERISA or of any "plan" within the meaning of Section 4975(e)(1) of the Code, as
interpreted by the Internal Revenue Service and the United States Department of
Labor in rules, regulations, releases or bulletins or as interpreted under
applicable case law.
Section 4.11. Other Documents. The Major Leases and Premises Documents
are unmodified and in full force and effect, there are no defaults (or events
which with notice or the passage of time, or both, would constitute such a
default) under any thereof and all conditions to the effectiveness and
continuing effectiveness thereof required to be satisfied as of the date hereof
have been satisfied.
Section 4.12. No Defaults. There exists no Default or Event of
Default.
Section 4.13. Accuracy of Information; Full Disclosure. Neither this
Agreement nor any documents, financial statements, reports, notices, schedules,
certificates, statements or other writings furnished by or on behalf of Borrower
or Guarantor to Lender in connection with the negotiation of this Agreement or
the other Loan Documents or the consummation of the transactions contemplated
hereby, or required herein or by the other Loan Documents to be furnished by or
on behalf of Borrower or Guarantor, contains any untrue or misleading statement
of a material fact or omits a material fact necessary to make the statements
herein or therein not misleading; there is no fact which Borrower has not
disclosed to Lender in writing which materially affects adversely or, so far as
Borrower can now foresee, will materially affect adversely any of the Mortgaged
Property or the business affairs or financial condition of Borrower or
Guarantor, or the ability of Borrower or Guarantor to perform this Agreement and
the other Loan Documents.
Section 4.14. Separate Tax and Zoning Lot. The Mortgaged Property
constitutes a distinct parcel for purposes of zoning and of taxes, assessments
and impositions (public or private) and are not otherwise considered as part of
a larger single lot for purposes of zoning or of taxes, assessments or
impositions (public or private).
Section 4.15. The Improvements. There are no structural defects in the
Improvements or violations of any requirement of any Governmental Authorities
with respect thereto; the use, occupancy and operation of the Improvements
comply with all applicable permits and restrictive covenants affecting the
Mortgaged Property, as well as with the Premises Documents and with all zoning,
building, environmental, ecological, landmark, subdivision and other Laws, and
all requirements for such use, occupancy and operation have been satisfied;
there exist a sufficient number of parking spaces necessary
14
to satisfy the requirements of the Premises Documents and any leases and all
zoning and other applicable legal requirements with respect to the Mortgaged
Property, and all required landscaping, sidewalks and other amenities, and all
off-site improvements, related to the Improvements have been completed.
Section 4.16. Utility Services. All utility services necessary for the
use and operation of the Improvements for their intended purposes are available
and servicing the Property, including water supply, storm and sanitary sewer,
gas, electric power and telephone facilities.
Section 4.17. Creation of Liens. It has entered into no contract or
arrangement of any kind the performance of which by the other party thereto
would give rise to a lien on the Mortgaged Property or any part thereof.
Section 4.18. Roads. All roads necessary for the full utilization of
the Improvements for their intended purposes have been completed and dedicated
to public use and accepted by all appropriate Governmental Authorities.
Section 4.19. Requisition as Reaffirmation. Each Requisition submitted
to Lender, and the receipt of the funds requested thereby, shall constitute an
affirmation by Borrower that the representations and warranties contained herein
and in the other Loan Documents remain true and correct as of the respective
dates of such Requisitions.
Article V
COVENANTS OF BORROWER
---------------------
Borrower covenants and agrees with Lender that it will promptly:
Section 5.01. Compliance with Laws; Payment of Taxes. Comply with all
Laws applicable to it or the Mortgaged Property, or any part thereof, such
compliance to include, without limitation, paying before the same become
delinquent all taxes, assessments and governmental charges imposed on it or the
Mortgaged Property, or any part thereof, and promptly furnish Lender with
reports of any official searches made by Governmental Authorities and any claims
of violations thereof.
Section 5.02. Leases and Premises Documents. Deliver to Lender
certified copies of all leases in respect of the Mortgaged Property and all
Premises Documents and all amendments to any thereof (in any case, whether
executed before or after the date hereof) together with (i) if requested by
Lender, current financial statements of the tenants thereunder or parties
thereto as the case may be, and of the guarantor(s), if any, of such tenants or
parties and (ii) in the case of all Major Leases, a notice-of-assignment letter
in the form of EXHIBIT A; and keep all Premises Documents and, except as may be
permitted by the Mortgage, all leases in full force and effect.
Section 5.03. Inspection Fee. Commencing on the first anniversary of
the date hereof and on each anniversary thereafter during the term of the Loan,
deliver to Lender a
15
non-refundable administrative inspection fee in the amount of $1,000.00 (the
"Inspection Fee") with respect to the costs associated with Lender's annual
inspection of the Property.
Section 5.04. Continuing Accuracy of Representations and Warranties.
Cause all of the representations and warranties made to Lender herein and in the
other Loan Documents to be continuously true and correct.
Section 5.05. Covenants, Restrictions and Easements. Comply with all
restrictions, covenants and easements affecting the Mortgaged Property or the
Improvements and cause the satisfaction of all conditions hereof.
Section 5.06. DSC Test and Loan to Value Test. Comply at all times
with the DSC Test and the Loan to Value Test, as calculated in accordance with
Section 2.03 hereof, provided, however, that such non-compliance shall not
constitute an Event of Default under the Mortgage and hereunder if, within
forty-five (45) days of the date upon which Mortgagor receives written notice
from Lender of Borrower's non-compliance thereof (the "Notice Date"), Mortgagor
complies with the provisions of this Section 5.06, by either (i) partially
prepaying the Note and the Hedging Agreement and all applicable prepayment or
other charges, if any, provided for in the Note so that Borrower is in
compliance herewith or (ii) delivering to Lender cash, a letter of credit from a
financial institution acceptable to Lender, or such other collateral as may be
acceptable to Lender in its sole discretion in an amount equal to the amount
that would have been required to have been prepaid pursuant to (i) above in
order to cure such default.
Section 5.07. Payment of Costs. Pay all costs and expenses required
for the satisfaction of the conditions hereof, including, without limitation (i)
all document and stamp taxes, recording and filing expenses and fees and
commissions lawfully due to brokers in connection with the transactions
contemplated hereby, (ii) any taxes, insurance premiums, liens, security
interests or other claims or charges against the Property or Improvements and
(iii) all costs of completion of the work to be performed by Borrower in space
to be occupied in the Improvements (including public space) to permit the lawful
occupancy thereof for the purposes contemplated by actual or prospective lessees
or owners of such space as set forth in the individual leases, subleases or
purchase contracts thereof or in detailed work letters or other agreements or
letters of intent with respect thereto, or, in cases where there are no such
leases, subleases, contracts, work letters or other documents as aforesaid, as
set forth in Borrower's standard work letter or the standard form of lease or
contract, if any, required by paragraph (9) of Section 3.01(d), or, in cases
where none of the foregoing exists, to the level of building standard in
accordance with industry practices, as conclusively determined by the
Engineering Consultant.
Section 5.08. Brokers. Indemnify Lender against claims of brokers
arising by reason of the execution hereof or the consummation of the
transactions contemplated hereby.
Section 5.09. Correction of Defects. Upon demand of Lender or the
Engineering Consultant, correct any defects (including structural) in the
Improvements.
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Section 5.10. Reporting and Miscellaneous Document Requirements.
Furnish directly to each Lender:
(1) Semi-Annual Financial Statements of Borrower. On a
semi-annual basis, as soon as available and in any event within
ninety (90) days after the end of each applicable semi-annual
period, Financial Statements of Borrower, in reasonable detail
(including detailed balance sheet, income statement, cash flow
statement and one-year projections) and stating in comparative
form the respective figures for the corresponding date and period
in the prior semi-annual period;
(2) Annual Financial Statements of Guarantor. As soon as
available and in any event within one hundred (100) days after
the end of each Fiscal Year, Financial Statements of Guarantor as
of the end of and for such Fiscal Year, in reasonable detail
(including detailed balance sheet, income statement, cash flow
statement, and contingent liability schedule) and stating in
comparative form the respective figures for the corresponding
date and period in the prior Fiscal Year, audited by its
Accountants;
(3) Covenant Compliance Certificates. Within thirty (30)
days after the end of each fiscal quarter, Guarantor shall submit
to Lender a Covenant Compliance Certificate certified by a
principal financial or accounting officer or general partner, as
the case may be, in the Form of Exhibit C-1 hereto certifying, on
the basis of Guarantor's unaudited financial statements, that
Guarantor has met the Liquidity Requirement for the applicable
period. As soon as available and in any event within one hundred
(100) days after the end of each Fiscal Year, Guarantor shall
submit to Lender a Covenant Compliance Certificate certified by a
principal financial or accounting officer or general partner, as
the case may be, in the Form of Exhibit C-2 hereto certifying, on
the basis of Guarantor's audited Financial Statements as of the
end of and for such Fiscal Year, that Guarantor has met the Net
Worth Requirement and the Liquidity Requirement;
(4) Notice of Litigation. Promptly after the commencement
and knowledge thereof, notice of all actions, suits, and
proceedings before any court or arbitrator or any Governmental
Authority, affecting (i) Borrower which, if determined adversely
to Borrower are likely to result in a Material Adverse Change or
(ii) all or any portion of the Mortgaged Property under any
Mortgage;
(5) Notices of Defaults and Events of Default. As soon as
possible and in any event within ten (10) days after Borrower
becomes aware of the occurrence of a Default or any Event of
Default, a written notice setting forth the details of such
Default or Event of Default and the action which is proposed to
be taken with respect thereto;
17
(6) Material Adverse Change. As soon as is practicable and
in any event within five (5) days after knowledge of the
occurrence of any event or circumstance which is likely to result
in or has resulted in a Material Adverse Change, written notice
thereof;
(7) Offices. Thirty (30) days' prior written notice of any
change in the chief executive office or principal place of
business of Borrower;
(8) Environmental and Other Notices. As soon as possible and
in any event within ten (10) days after receipt, copies of (i)
all Environmental Notices received by Borrower which are not
received in the ordinary course of business and which relate to
any Property or a situation which is likely to result in a
Material Adverse Change and (ii) all reports of any official
searches made by any Governmental Authority having jurisdiction
over any Property or the Improvements thereon, and of any claims
of violations thereof;
(9) Insurance Coverage. Promptly, such information
concerning Borrower's insurance coverage as Lender may reasonably
request;
(10) Bankruptcy of Tenants. Promptly after becoming aware of
the same, written notice of the bankruptcy, insolvency or
cessation of operations of any tenant in the Improvements on any
Property to which 5% or more of the aggregate minimum rent from
such Improvements is attributable;
(11) Leasing Reports and Property Information. (i) Upon
request by Lender, but no more often than quarterly, an updated
rent roll, leasing report, and operating and cash statements for
each Property and (ii) (ii) as soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, tenant
sales report for each Property, to the extent Borrower is
entitled to receive same pursuant to the terms of the respective
leases; and
(12) General Information. Promptly, such other information
respecting the condition or operations, financial or otherwise,
of Borrower, Guarantor or any Properties of Borrower as Lender
may from time to time reasonably request.
Article VI
GENERAL CONDITIONS AND PROVISIONS
---------------------------------
Section 6.01. Disbursement Not Waiver. The disbursement by Lender of
the Loan made prior to or without the fulfillment by Borrower of all of the
conditions
18
precedent thereto, whether or not known to Lender, shall not constitute a waiver
by Lender of the requirement that all conditions, including the non-performed
conditions, shall be satisfied.
Section 6.02. No Third-Party Beneficiaries. This Agreement is solely
for the benefit of Lender and Borrower. All conditions of the obligations of
Lender hereunder are imposed solely and exclusively for the benefit of Lender
and may be freely waived or modified in whole or in part by Lender at any time
if in its sole discretion it deems it advisable to do so, and no person other
than Borrower (provided, however, that all conditions have been satisfied) shall
have standing to require Lender to disburse the Loan or to be a beneficiary of
this Agreement.
Section 6.03. Documentation Etc. Satisfactory. All documentation and
proceedings deemed by Lender or Lender's Counsel to be necessary or required in
connection herewith and the documents relating hereto shall be subject to the
prior approval of, and satisfactory to, both of them as to form and substance.
In addition, the persons or parties responsible for the execution and delivery
of, and signatories to, all of such documentation, shall be acceptable to, and
subject to the approval of, Lender and Lender's Counsel. Lender or Lender's
Counsel shall receive copies, certified if requested by either of them, of all
documents which they may require in connection with the transactions
contemplated hereby.
Section 6.04. Lender's Determination Conclusive. Lender shall, at all
times, be free to independently establish to its satisfaction and in its
absolute discretion the existence or nonexistence of any fact or facts the
existence or nonexistence of which is a condition hereof.
Section 6.05. Notices. Except as expressly provided otherwise, all
notices, demands, consents, approvals and statements required or permitted
hereunder shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes when presented personally, three (3) days after
mailing by registered or certified mail, postage prepaid, or one (1) day after
delivery to a nationally recognized overnight courier service providing evidence
of the date of delivery, if to Borrower at its address stated on the cover page
hereof, and if to Lender, at its address stated on the cover page hereof to the
attention of its Real Estate Finance office, or at such other address of which a
party shall have notified the party giving such notice in writing in accordance
with the foregoing requirements.
Section 6.06. Entire Agreement; Amendments and Waivers. This Agreement
and the other Loan Documents contain the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior oral or written
agreements or statements relating to such subject matter. None of the terms and
provisions hereof or of the other Loan Documents may be changed, waived,
discharged or terminated, nor may any material departure from the provisions
hereof or thereof be consented to, except by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge, termination
or consent is sought. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
19
Without limiting the foregoing, acceptance by Lender of any sum required to be
paid pursuant hereto or any other Loan Document, after its due date, or in an
amount less than the sum then due, shall not constitute a waiver by Lender of
its right to require prompt payment when due of all other such sums or to
declare a default or to exercise such other rights provided herein or in the
other Loan Documents for such late or reduced payment.
Section 6.07. Setoff. In addition to (and without limitation of) any
right of setoff, bankers' lien or counterclaim Lender may otherwise have, Lender
shall be entitled, at its option, to offset balances (general or special, time
or demand, provisional or final) held by it for the account of Borrower at any
of Lender's offices against any amount payable by Borrower to Lender hereunder
or under any other Loan Document which is not paid when due (regardless of
whether such balances are then due to Borrower), in which case it shall promptly
notify Borrower thereof; provided, however, that Lender's failure to give such
notice shall not affect the validity thereof. Payments by Borrower hereunder or
under the other Loan Documents shall be made without setoff or counterclaim.
Section 6.08. Successors and Assigns. Except as herein provided, this
Agreement shall be binding upon and inure to the benefit of Borrower and Lender
and their respective heirs, personal representatives, successors and assigns.
Notwithstanding the foregoing, Borrower, without the prior written consent of
Lender in each instance, may not assign, transfer or set over to another, in
whole or in part, all or any part of its benefits, rights, duties and
obligations hereunder, including, but not limited to, performance of and
compliance with conditions hereof and the right to receive the proceeds of the
Loan.
Section 6.09. Severability. The provisions hereof are intended to be
severable. Any provisions hereof, or the application thereof to any person,
entity or circumstance, which, for any reason, in whole or in part, is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof (or the remaining portions of such
provision) or the application thereof to any other person, entity or
circumstance, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision (or portion thereof)
or the application thereof to any person, entity or circumstance in any other
jurisdiction.
Section 6.10. Non-Waiver; Remedies Cumulative. No failure or delay on
Lender's part in exercising any right, remedy, power or privilege (hereinafter
in this Section, each a "Remedy") hereunder or under any of the other Loan
Documents shall operate as a waiver of any such Remedy or shall be deemed to
constitute Lender's acquiescence in any default by Borrower or Guarantor under
any of said documents. A waiver by Lender of any Remedy hereunder or under any
of the other Loan Documents on any one occasion shall not be construed as a bar
to any other or future exercise thereof or of any other Remedy. The Remedies
provided in said documents are cumulative, may be exercised singly or
concurrently and are not exclusive of any Remedies provided therein or by Law.
20
Section 6.11. Certain Waivers. Borrower hereby irrevocably and
unconditionally waives (i) promptness and diligence, (ii) notice of any actions
taken by Lender hereunder or under any other Loan Document or any other
agreement or instrument relating hereto or thereto except to the extent
otherwise provided herein, (iii) all other notices, demands and protests, and
all other formalities of every kind in connection with the enforcement of
Borrower's obligations hereunder and under the other Loan Documents, the
omission of or delay in which, but for the provisions of this Section, might
constitute grounds for relieving Borrower of any of its obligations hereunder or
under the other Loan Documents, (iv) any requirement that Lender protect,
secure, perfect or insure any lien on any collateral for the Loan or exhaust any
right or take any action against Borrower, Guarantor or any other person or
entity or against any collateral for the Loan, (v) any right or claim of right
to cause a marshalling of Borrower's assets and (vi) all rights of subrogation
or contribution, whether arising by contract or operation of law or otherwise by
reason of payment by Borrower pursuant hereto or to any other Loan Document.
BORROWER FURTHER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, IN CONNECTION
WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF LENDER WITH
RESPECT TO THIS AGREEMENT, THE NOTE OR OTHERWISE IN RESPECT OF THE LOAN, ANY AND
EVERY RIGHT BORROWER MAY HAVE TO (W) INJUNCTIVE RELIEF, (X) A TRIAL BY JURY, (Y)
INTERPOSE ANY COUNTERCLAIM THEREIN, OTHER THAN A COMPULSORY COUNTERCLAIM AND (Z)
HAVE THE SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR
PROCEEDING. NOTHING CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL
PREVENT OR PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION
AGAINST LENDER WITH RESPECT TO ANY ASSERTED CLAIM.
Section 6.12. Expenses; Indemnification. The Loan shall be made
without cost to Lender. Borrower covenants and agrees to pay all costs, expenses
and charges (including, without limitation, all fees and charges of engineers,
appraisers, the Engineering Consultant and Lender's Counsel) incurred by Lender
in connection with (i) the preparation for and consummation of the transactions
contemplated hereby or for the performance hereof and of the other Loan
Documents, and for any services which may be required in addition to those
normally and reasonably contemplated hereby and (ii) the enforcement hereof or
of any or all of the other Loan Documents. If Borrower fails to pay promptly any
costs, charges or expense required to be paid by it as aforesaid, and Lender
pays such costs, charges or expenses, Borrower shall reimburse Lender on demand
for the amounts so paid, together with interest thereon at the "Default Rate"
(as said quoted term is defined in the Mortgage). Borrower further agrees to
indemnify Lender and its directors, officers, employees and agents from, and
hold each of them harmless against, (x) any and all losses arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to any
actual or proposed use by Borrower of the proceeds of the Loan, including,
without limitation, the fees and disbursements of counsel incurred in connection
with any such investigation, litigation or other proceedings and (y) any and all
claims, actions, suits, proceedings, costs, expenses, losses, damages and
liabilities of any kind, including in tort, penalties and interest, arising out
or by reason of any matter
21
relating, directly or indirectly, to the Mortgage or the ownership, condition,
development, construction, sale, rental or financing of the Property or
Improvements or any part thereof (but excluding any such losses, liabilities,
claims, damages or expenses incurred solely by reason of the gross negligence or
willful misconduct of the party to be indemnified). The obligations of Borrower
under this Section shall survive the repayment of all amounts due under or in
connection with any of the Loan Documents and the termination of the Loan.
Section 6.13. Gross-Up For Taxes. All payments made by Borrower under
the Note and other Loan Documents shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding income taxes and franchise or other taxes
(imposed in lieu of income taxes) imposed on Lender as a result of a present or
former connection between Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from Lender's
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the Note). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") is required to be withheld from any amounts payable to
Lender under the Note or other Loan Documents, the amounts so payable to Lender
shall be increased to the extent necessary to yield to Lender (after payment of
all Non-Excluded Taxes) interest or any such other amounts payable with respect
to the Loan at the rates or in the amounts specified in the Note or other Loan
Documents. Whenever any Non-Excluded Taxes are payable by Borrower, as promptly
as possible thereafter Borrower shall send to Lender a certified copy of an
original official receipt received by Borrower showing payment thereof. If
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to Lender the required receipts or other required
documentary evidence, Borrower shall indemnify Lender for any incremental taxes,
interest or penalties that may become payable by Lender as a result of any such
failure. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Note and all other amounts payable in respect
of the Loan.
Section 6.14. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 6.15. Transfers of Interests in Loan. Borrower recognizes that
Lender may sell and transfer interests in the Loan, this Agreement and the other
Loan Documents to one or more participants or assignees and that all
documentation, Financial Statements, appraisals and other data, or copies
thereof, relevant to Borrower, Guarantor or the Loan may be exhibited to and
retained by any such participant or assignee or prospective participant or
assignee for its files.
Section 6.16. Lender's Right to Terminate. In the event Borrower shall
not have satisfied the conditions precedent to its entitlement to the
disbursement of the Loan
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proceeds hereunder within sixty (60) days of the date hereof, Lender shall have
the absolute right, at its option, to terminate its obligations under this
Agreement and the loan commitment represented hereby by notice to Borrower.
Section 6.17. Governing Law; Jurisdiction. This Agreement and the
rights and obligations of the parties hereunder shall in all respects be
governed by, and construed and enforced in accordance with, the Laws of the
State of New York (without giving effect to New York's principles of conflicts
of law). Borrower hereby irrevocably submits to the non-exclusive jurisdiction
of any New York State or Federal court sitting in The City of New York (or any
county in New York State where any portion of the Property is located) over any
suit, action or proceeding arising out of or relating to this Agreement, and
Borrower hereby agrees and consents that, in addition to any methods of service
of process provided for under applicable Law, all service of process in any such
suit, action or proceeding in any New York State or Federal court sitting in The
City of New York (or such other county in New York State) may be made by
certified or registered mail, return receipt requested, directed to Borrower at
the address indicated on the cover page hereof, and service so made shall be
complete five (5) days after the same shall have been so mailed.
Section 6.18. Releases. Provided no Default or Event of Default
exists, Borrower shall have the right to obtain the release of any of the
Properties from the Mortgage encumbering the same, at Borrower's expense, so
long as (i) Borrower pays to Lender an amount equal to the lesser of (x) the
greater of (A) the Release Price for the Property that is the subject of such
release and (B) the amount necessary to reduce the Loan to an amount which
satisfies the DSC Test on the basis of Net Operating Income from the parcels not
being released or (y) the then outstanding principal amount of the Loan, which
amount shall be applied to the reduction of outstanding principal under the
Loan, (ii) Lender receives such reasonable documentation as Lender shall request
confirming that the amount of any Additional Interest secured by the Mortgage
encumbering the Property which is being released shall be secured by the credit
of Guarantor, and (iii) Lender receives such other documents, opinions and
assurances as Lender may reasonably request. Upon any such release of a
Property, such Property shall no longer constitute a "Property" hereunder.
Section 6.19. Exculpation. Neither Borrower nor any Guarantor shall be
personally liable for payment of the principal of the Note or interest thereon,
and in the event of any failure by Borrower to pay any portion of such principal
or interest, Lender will look, with respect to the then outstanding balance of
such principal and interest, solely to the Mortgaged Property and such other
collateral as has been, or hereafter shall be, given to secure payment of the
Note. The foregoing limitation on liability shall not impair or otherwise affect
the validity or enforceability of (a) the debt evidenced by the Note or the Loan
Agreement or of any other obligations evidenced by the Note, the Loan Agreement,
the Mortgage or any of the Loan Documents or (b) Lender's liens, security
interests, rights and remedies (including, without limitation, the remedies of
foreclosure and/or sale) with respect to the Mortgaged Property or any other
property, security, collateral and/or assets (including the proceeds thereof)
encumbered, pledged or assigned by the Mortgages or any other security for the
Loan. In addition, the foregoing limitation
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on liability shall not limit anyone's obligations or be applicable with respect
to: (i) liability under any guaranty(ies) or indemnity(ies) delivered or
afforded to Lender; (ii) any fraud or material misrepresentation; (iii) taxes of
any kind (whether characterized as transfer, gains or other taxes) payable in
connection with the foreclosure sale of the Mortgaged Property, irrespective of
who pays such taxes; (iv) application of any proceeds of the Loan to any purpose
other than as provided in the Loan Documents; (v) the application of any
insurance or condemnation proceeds or other funds or payments other than
strictly in accordance with the Loan Documents; (vi) the misapplication of any
security deposits; (vii) rents, sales proceeds, or other sums received after
default under the Loan Documents which are not applied to expenses of operating
the Mortgaged Property or paid to Lender or a duly appointed receiver of the
Premises; (viii) any failure to deliver to Lender, after demand therefor, any
agreements relating to the operation, management, leasing, use, occupancy or
construction of the Mortgaged Property; (ix) any intentional physical waste in
respect of the Mortgaged Property; (x) any failure to pay or discharge any real
estate tax, other tax, assessment, fine, penalty or lien against the Mortgaged
Property to the extent revenue from leases of the Mortgaged Property was
available to pay same; (xi) liability as landlord under any lease(s) relating to
the Mortgaged Property which liability accrued prior to Lender's succeeding to
such interest of Borrower, which Lender is or becomes obligated for by virtue of
Lender succeeding to the interests of Borrower, provided, however, that such
liability shall only apply with respect to any liability of Borrower under such
leases which Lender assumes pursuant to subordination, non-disturbance and
attornment agreements required pursuant to the terms of such leases; (xii)
liability under any agreement relating to the operation or maintenance of the
Mortgaged Property which liability accrued prior to Lender's succeeding to such
interest of Borrower which Lender is or becomes obligated for by virtue of
Lender succeeding to the interests of Borrower, provided, however, that such
liability shall only apply with respect to agreements which are not terminable
by their terms upon thirty (30) days' written notice; (xiii) liability to pay
for the premiums on and keep in full force and effect insurance in respect of
the Mortgaged Property in accordance with the Loan Documents to the extent
revenue from leases of the Mortgaged Property was available to pay same; or
(xiv) liability for Hazardous Substances that may exist upon or be discharged
from the Mortgaged Property. Borrower and any Guarantor shall in any event be
and shall remain personally liable for each of the matters to which reference is
made in the preceding sentence and Lender may seek, obtain and enforce one or
more money judgments in any appropriate proceeding(s) with respect thereto. The
limitation on personal liability contained in this paragraph shall become
automatically null and void and shall be of no further force or effect, and
Borrower and each Guarantor shall be and remain personally liable for payment of
the principal of the Note and interest thereon, in accordance with the terms and
provisions of this Loan Agreement, in the event that Borrower, or anyone acting
on behalf of Borrower, shall (A) file a petition or answer seeking any relief of
any kind under the bankruptcy laws of the United States (or if an Insolvency
Event shall otherwise occur), (B) assert in writing or in any legal proceedings
of any kind that any provisions of any of the Loan Documents are in whole or in
part unenforceable, invalid or not legally binding, or (C) fail fully to
cooperate with Lender or a receiver in Lender's or such receiver's efforts to
collect Rents directly from tenants after a default under the Loan Documents.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written, the execution hereof by
Borrower constituting a certification by the party or parties executing on its
behalf that the representations and warranties made in Article IV are true and
correct as of the date hereof and that each of them duly holds and is incumbent
in the position indicated under his or her name.
FLEET NATIONAL BANK
By_______________________________________
Name:
Title:
RD BRANCH ASSOCIATES, L.P., a New
York limited partnership
By: Acadia Property Holdings, LLC,
its general partner
By: Acadia Realty Limited Partnership,
its sole member
By: Acadia Realty Trust, its general
partner
By:___________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
25
RD ABINGTON ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Acadia Property Holdings, LLC,
its general partner
By: Acadia Realty Limited Partnership,
its sole member
By: Acadia Realty Trust, its general
partner
By:___________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
RD METHUEN ASSOCIATES LIMITED
PARTNERSHIP, a Massachusetts limited
partnership
By: Acadia Property Holdings, LLC,
its general partner
By: Acadia Realty Limited Partnership,
its sole member
By: Acadia Realty Trust, its general
partner
By:___________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
26
The undersigned joins in the execution and authorizes the
delivery of this Loan Agreement for the purpose of accepting and agreeing to the
provisions of Section 5.10(3) and Section 7.11 hereof.
ACADIA REALTY LIMITED PARTNERSHIP
By: Acadia Realty Trust, its general
partner
By:___________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
27