EXHIBIT 10.50
LOAN AGREEMENT
Dated as of January ___, 2000
Between
1350 LLC,
as Borrower
and
▇▇▇▇▇▇ FINANCIAL CORPORATION,
as Lender
TABLE OF CONTENTS
PAGE
W I T N E S S E T H :.............................................................................................1
I DEFINITIONS; PRINCIPLES OF CONSTRUCTION..................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Principles of Construction............................................................19
II THE LOAN................................................................................................19
Section 2.1 The Loan..............................................................................19
Section 2.2 Interest Rate.........................................................................20
Section 2.3 Loan Payments.........................................................................23
Section 2.4 Prepayments...........................................................................24
Section 2.5 Exit Fee..............................................................................25
Section 2.6 Extension of Maturity Date............................................................25
III REPRESENTATIONS AND WARRANTIES..........................................................................26
Section 3.1 Borrower Representations..............................................................26
Section 3.2 Survival of Representations...........................................................34
IV BORROWER COVENANTS......................................................................................34
Section 4.1 Borrower Affirmative Covenants........................................................34
Section 4.2 Borrower Negative Covenants...........................................................39
V INSURANCE, CASUALTY AND CONDEMNATION....................................................................41
Section 5.1 Insurance.............................................................................41
Section 5.2 Casualty and Condemnation.............................................................44
Section 5.3 Delivery of Net Proceeds..............................................................45
VI RESERVE FUNDS...........................................................................................48
Section 6.1 Tax Funds.............................................................................48
Section 6.2 Insurance Premium Funds...............................................................49
Section 6.3 Capital Expenditures Funds............................................................50
Section 6.4 Security Interest in Funds............................................................51
Section 6.5 The Accounts; Permitted Investments; Earnings.........................................52
Section 6.6 Cash Management.......................................................................53
VII PROPERTY MANAGEMENT.....................................................................................54
Section 7.1 The Management Agreement..............................................................54
Section 7.2 Prohibition Against Termination or Modification.......................................54
Section 7.3 Replacement of Manager................................................................54
VIII PERMITTED TRANSFERS.....................................................................................54
Section 8.1 Permitted Transfers of Interest in Borrower...........................................54
IX SALE AND SECURITIZATION OF MORTGAGE.....................................................................55
Section 9.1 Sale of Mortgage and Securitization...................................................55
Section 9.2 Securitization Indemnification........................................................56
X DEFAULTS................................................................................................59
Section 10.1 Event of Default.............................................................59
Section 10.2 Remedies.....................................................................60
Section 10.3 Remedies Cumulative..........................................................62
XI MISCELLANEOUS...........................................................................................62
Section 11.1 Successors and Assigns.......................................................62
Section 11.2 Lender's Discretion..........................................................62
Section 11.3 Governing Law................................................................62
Section 11.4 Modification, Waiver in Writing..............................................63
Section 11.5 Delay Not a Waiver...........................................................63
ii
Section 11.6 Notices......................................................................63
Section 11.7 Trial by Jury................................................................64
Section 11.8 Headings.....................................................................65
Section 11.9 Severability.................................................................65
Section 11.10 Preferences..................................................................65
Section 11.11 Waiver of Notice.............................................................65
Section 11.12 Remedies of Borrower.........................................................65
Section 11.13 Expenses; Indemnity..........................................................66
Section 11.14 Schedules Incorporated.......................................................67
Section 11.15 Offsets, Counterclaims and Defenses..........................................67
Section 11.16 No Joint Venture or Partnership; No Third Party Beneficiaries................67
Section 11.17 Publicity....................................................................68
Section 11.18 Waiver of Marshalling of Assets..............................................68
Section 11.19 Waiver of Counterclaim.......................................................68
Section 11.20 Conflict; Construction of Documents; Reliance................................68
Section 11.21 Brokers and Financial Advisors...............................................69
Section 11.22 Exculpation..................................................................69
Section 11.23 Prior Agreements.............................................................71
Section 11.24 Servicer.....................................................................71
Section 11.25 Assignment to Successor Lender...............................................71
iii
SCHEDULES
Schedule 1 - Annual Budget
Schedule 2 - Capital Expenditures Budget
Schedule 3 - Non-Compliance
Schedule 4 - Leases
Schedule 4A - Defaulted Leases
EXHIBITS
Exhibit A - Form of Financial Statements
Exhibit B - Form of Cash Management Agreement
Exhibit C - Form of Letter of Instruction
Exhibit D - Form of Subordination Agreement
iv
LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of January ___, 2000 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
"Agreement"), between ▇▇▇▇▇▇ FINANCIAL CORPORATION, a Pennsylvania corporation,
having an address at ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (together with its successors and assigns, "Lender") and 1350 LLC, a
Delaware limited liability company, having an address at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower").
All capitalized terms used herein shall have the respective
meanings set forth in Article I hereof.
W I T N E S S E T H :
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower,
subject to and in accordance with the conditions and terms of this Agreement and
the other Loan Documents.
NOW, THEREFORE, in consideration of the covenants set forth in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree,
represent and warrant as follows:
I DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided:
"Accounts" shall mean, collectively, the Lockbox Account, the
Cash Management Account, the Tax Account, the Insurance Premium Account
and the Capital Expenditures Account.
"Act" shall mean the Delaware Limited Liability Company Act, 6
Del. C. Section 18-101 et seq., as amended from time to time.
"Affiliate" shall mean, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by or is
under common control with such Person or is a director or officer of
such Person or of an Affiliate of such Person.
"Affiliate Creditor" shall mean, with respect to any Affiliate
Loan, the Affiliate of Borrower that made such Affiliate Loan.
"Affiliate Loan" shall mean an unsecured loan made by an
Affiliate of Borrower to Borrower.
"Affiliate Obligations" shall mean, with respect to any
Affiliate Loan, (a) the principal amount of, and accrued interest on
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of Borrower), such Affiliate
Loan and (b) all other indebtedness, obligations and liabilities of
Borrower to the Affiliate Creditor that made such Affiliate Loan now
existing or hereafter incurred or created under or with respect to or
in connection with such Affiliate Loan.
"Agent" shall mean the bank that is party to the Cash
Management Agreement, its permitted successors and assigns.
"ALTA" shall mean American Land Title Association, or any
successor thereto.
"Alteration Threshold" shall mean $3,500,000, excluding the
cost of any alterations set forth in the Annual Budget attached as
Schedule 1 hereto.
"Annual Budget" shall mean the operating and capital budget
for the Property setting forth Borrower's good faith estimate of Gross
Revenue, Operating Expenses, and Capital Expenditures for the
applicable Fiscal Year.
"Applicable Interest Rate" shall mean (i) LIBOR plus the
Spread with respect to any period when the Loan is a LIBOR Loan and
(ii) the Substitute Rate plus the Substitute Spread with respect to any
period when the Loan is a Substitute Rate Loan.
"Approved Annual Budget" shall have the meaning set forth in
Section 4.1.6(e).
"Assignment of Leases" shall mean that certain first priority
Assignment of Leases and Rents dated as of the date hereof from
Borrower, as assignor, to Lender, as assignee, as the same may be
amended, restated, replaced, supplemented or otherwise modified from
time to time.
"Assignment of Management Agreement" shall mean that certain
Assignment of Management Agreement and Subordination of Management Fees
dated the date hereof among Borrower, Manager and Lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
"Award" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any
part of the Property.
"Bankruptcy Code" shall mean Title 11 of the United States
Code 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 foreign laws
relating to bankruptcy, insolvency or creditors' rights.
2
"Borrower" shall have the meaning set forth in the first
paragraph of this Agreement, together with its permitted successors and
permitted assigns.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which national banks in New York, New York are not
open for business.
"Capital Expenditures" for any period shall mean amounts
expended for replacements and alterations to the Property and required
to be capitalized according to GAAP.
"Capital Expenditures Account" shall have the meaning set
forth in Section 6.5.1.
"Capital Expenditures Budget" shall mean the budget annexed
hereto as Schedule 2.
"Capital Expenditures Deposit" shall have the meaning set
forth in Section 2.6(e).
"Capital Expenditures Funds" shall have the meaning set forth
in Section 6.3.1.
"Capital Expenditures Work" shall mean any labor performed or
materials installed in connection with any Capital Expenditure.
"Cash Management Account" shall have the meaning set forth in
Section 6.6.3.
"Cash Management Agreement" shall mean that certain cash
management agreement among Lender, Borrower and Agent relating to funds
deposited in the Lockbox Account.
"Casualty" shall mean the occurrence of any casualty, damage
or injury, by fire or otherwise, to the Property or any part thereof.
"Casualty Consultant" shall have the meaning set forth in
Section 5.3.2(c).
"Casualty Retainage" shall have the meaning set forth in
Section 5.3.2(d).
"Closing Date" shall mean the date of funding the Loan.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.
"Condemnation" shall mean a temporary or permanent taking by
any Governmental Authority as the result or in lieu or in anticipation
of the exercise of the right of condemnation or eminent domain, of all
or any part of the Property, or any interest therein or right accruing
thereto, including any right of access thereto or any change of grade
affecting the Property or any part thereof.
3
"Crescent" shall mean Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership.
"Debt" shall mean the outstanding principal amount of the Loan
together with all interest accrued and unpaid thereon and all other
sums (including the Exit Fee) due to Lender in respect of the Loan
under the Note, this Agreement, the Mortgage, the Environmental
Indemnity or any other Loan Document.
"Default" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or
passage of time, or both, would be an Event of Default.
"Default Rate" shall mean, with respect to the Loan, a rate
per annum equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) three percent (3%) above the Applicable Interest
Rate.
"Determination Date" shall mean, with respect to any Interest
Period, the date that is two (2) London Business Days prior to the
beginning of such Interest Period.
"Disclosure Document" shall have the meaning set forth in
Section 9.2(a).
"Disclosure Document Date" shall have the meaning set forth in
Section 9.1(c)(iv).
"Eligible Account" shall mean a separate and identifiable
account from all other funds held by the holding institution that is
either (i) an account or accounts maintained with a federal or
state-chartered depository institution or trust company which complies
with the definition of Eligible Institution or (ii) a segregated trust
account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution
or trust company is subject to regulations substantially similar to 12
C.F.R. ss.9.10(b), having in either case a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by
federal and state authority. An Eligible Account will not be evidenced
by a certificate of deposit, passbook or other instrument.
"Eligible Institution" shall mean a depository institution or
trust company insured by the Federal Deposit Insurance Corporation the
short term unsecured debt obligations or commercial paper of which are
rated at least A-1 by Standard & Poor's Ratings Group, P-1 by ▇▇▇▇▇'▇
Investors Service, Inc., D-1 by Duff & ▇▇▇▇▇▇ Credit Rating Co. and
F-1+ by Fitch IBCA, Inc. in the case of accounts in which funds are
held for thirty (30) days or less or, in the case of accounts in which
funds are held for more than thirty (30) days, the long term unsecured
debt obligations of which are rated at least "AA" by Fitch, Duff and
S&P and "Aa2" by Moody's.
4
"Environmental Indemnity" shall mean that certain
Environmental Indemnity Agreement dated as of the date hereof executed
by Borrower in connection with the Loan for the benefit of Lender.
"Equipment" shall have the meaning set forth in the granting
clause of the Mortgage.
"ERISA" shall have the meaning set forth in Section 4.2.11.
"Event of Default" shall have the meaning set forth in Section
10.1.
"Exchange Act" shall have the meaning set forth in Section
9.2(a).
"Exit Fee" shall mean a non-refundable fee to be paid to
Lender as additional interest in the amount of $350,000.
"Extension Period" shall mean the First Extension Period or
the Second Extension Period.
"Extraordinary Expense" shall mean any operating expense or
capital expenditure not set forth in the Annual Budget.
"First Extended Maturity Date" shall mean May 1, 2001.
"First Extension Period" shall mean the period commencing the
Initial Maturity Date and ending the First Extended Maturity Date.
"Fiscal Year" shall mean each twelve month period commencing
on January 1 and ending on December 31 during each year of the term of
the Loan.
"Funds" shall mean, collectively, the Tax Funds, the Insurance
Premium Funds and the Capital Expenditures Funds.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), or in such other
statements by such entity as may be in general use by significant
segments of the U.S. accounting profession.
"Governmental Authority" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever or any
governmental ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or
otherwise) whether now or hereafter in existence.
5
"Gross Revenue" shall mean all revenue, derived from the
ownership and operation of the Property from whatever source,
including, but not limited to, Rents, but excluding sales, use and
occupancy or other taxes on receipts required to be accounted for by
Borrower to any Governmental Authority, non-recurring revenues as
determined by Lender, refunds and uncollectible accounts, proceeds of
casualty insurance and Awards (other than business interruption or
other loss of income insurance), and any disbursements to Borrower of
any Funds or any other fund established by the Loan Documents. If any
Lease has been terminated by Borrower in accordance with the terms of
this Agreement and (i) a replacement Lease has not been executed by
Borrower with respect to the space demised by such terminated Lease or
(ii) a replacement Lease has been executed by Borrower with respect to
the space demised by such terminated Lease but rents are not yet
payable under such replacement Lease, the rents that would otherwise be
payable under such terminated or replacement Lease, respectively, shall
be included in the calculation of "Gross Revenue".
"Guaranty" shall mean that certain Partial Guaranty dated as
of the date hereof executed by Metropolitan in favor of Lender.
"Improvements" shall have the meaning set forth in the
granting clause of the Mortgage.
"Indebtedness" shall mean, for any Person, without
duplication: (i) all indebtedness of such Person for borrowed money,
for amounts drawn under a letter of credit, or for the deferred
purchase price of property for which such Person or its assets is
liable, (ii) all unfunded amounts under a loan agreement, letter of
credit, or other credit facility for which such Person would be liable
if such amounts were advanced thereunder, (iii) all amounts required to
be paid by such Person as a guaranteed payment to partners or a
preferred or special dividend, including any mandatory redemption of
shares or interests, (iv) all indebtedness guaranteed by such Person,
directly or indirectly, (v) all obligations under leases that
constitute capital leases for which such Person is liable, and (vi) all
obligations of such Person under interest rate swaps, caps, floors,
collars and other interest hedge agreements, in each case whether such
Person is liable contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise
assures a creditor against loss.
"Independent Director" shall have the meaning set forth in
Section 3.1.24(p).
"Independent Manager" shall have the meaning set forth in
Section 3.1.24(o).
"Initial Maturity Date" shall mean February 1, 2001.
"Insolvency Opinion" shall have the meaning set forth in
Section 4.1.11.
"Insurance Premium Account" shall have the meaning set forth
in Section 6.5.1.
6
"Insurance Premium Funds" shall have the meaning set forth in
Section 6.2.1.
"Insurance Premiums" shall have the meaning set forth in
Section 5.1.1.
"Interest Period" shall mean (a) initially, the period
commencing on the Closing Date and ending on the last day of January,
2000 and (b) for each period thereafter, the period commencing on the
first (1st) day of each calendar month and ending on the last day of
such calendar month.
"Lease" shall mean any lease, sublease or subsublease,
letting, license, concession or other agreement (whether written or
oral and whether now or hereafter in effect) to which Borrower or any
predecessor-in-interest of Borrower is a party pursuant to which any
Person is granted a possessory interest in, or right to use or occupy
all or any portion of any space in the Property, and every
modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection
with such lease, sublease, subsublease, or other agreement and every
guarantee of the performance and observance of the covenants,
conditions and agreements to be performed and observed by the other
party thereto.
"Legal Requirements" shall mean, with respect to Borrower and
the Property, all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities
affecting Borrower or the Property or any part thereof or the
construction, use, alteration or operation thereof, or any part
thereof, whether now or hereafter enacted and in force, including,
without limitation, the Americans with Disabilities Act of 1990, and
all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances
contained in any instruments, either of record or known to Borrower, at
any time in force affecting the Property or any part thereof,
including, without limitation, any which may (i) require repairs,
modifications or alterations in or to the Property or any part thereof,
or (ii) in any way limit the use and enjoyment thereof.
"Lender" shall have the meaning set forth in the first
paragraph of this Agreement, together with its successors and assigns.
"Liabilities" shall have the meaning set forth in Section
9.2(b).
"LIBOR" shall mean, with respect to each Interest Period, the
rate (expressed as a percentage per annum and rounded upward, if
necessary, to the next nearest 1/1000 of 1%) for deposits in U.S.
dollars, for a one-month period, that appears on Telerate Page 3750 (or
the successor thereto) as of 11:00 a.m., London time, on the related
Determination Date. If such rate does not appear on Telerate Page 3750
as of 11:00 a.m., London
7
time, on such Determination Date, LIBOR shall be the arithmetic mean
of the offered rates (expressed as a percentage per annum) for
deposits in U.S. dollars for a one-month period that appear on the
Reuters Screen Libor Page as of 11:00 a.m., London time, on such
Determination Date, if at least two such offered rates so appear. If
fewer than two such offered rates appear on the Reuters Screen Libor
Page as of 11:00 a.m., London time, on such Determination Date, Lender
shall request the principal London Office of any four major reference
banks in the London interbank market reasonably selected by Lender, to
provide such bank's offered quotation (expressed as a percentage per
annum) to prime banks in the London interbank market for deposits in
U.S. dollars for a one-month period as of 11:00 a.m., London time, on
such Determination Date for the then outstanding principal amount of
the Loan. If at least two such offered quotations are so provided,
LIBOR shall be the arithmetic mean of such quotations. If fewer than
two such quotations are so provided, Lender shall request any three
major banks in New York City reasonably selected by Lender, to provide
such bank's rate (expressed as a percentage per annum) for loans in
U.S. dollars to leading European banks for a one-month period as of
approximately 11:00 a.m., New York City time on the applicable
Determination Date for the then outstanding principal amount of the
Loan. If at least two such rates are so provided, LIBOR shall be the
arithmetic mean of such rates. LIBOR shall be determined by Lender or
its agent.
"LIBOR Loan" shall mean the Loan at any time in which the
Applicable Interest Rate is calculated at LIBOR plus the Spread in
accordance with the provisions of Article II hereof.
"Lien" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance,
charge or transfer of, on or affecting the Property or any portion
thereof or Borrower, or any interest therein, including, without
limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and
mechanic's, materialmen's and other similar liens and encumbrances.
"Loan" shall mean the loan made by Lender to Borrower pursuant
to this Agreement.
"Loan Documents" shall mean, collectively, this Agreement, the
Note, the Mortgage, the Assignment of Leases, the Cash Management
Agreement, the Environmental Indemnity, the Assignment of Management
Agreement, the Guaranty and any other document now or hereafter
executed and/or delivered in connection with the Loan.
"Lockbox Account" shall have the meaning set forth in Section
6.6.1.
"Lockbox Trigger Date" shall have the meaning set forth in
Section 6.6.1.
"Major Lease" shall mean any Lease covering more than 20,000
square feet at the Property.
8
"Management Agreement" shall mean, with respect to the
Property, that certain management agreement dated as of the date hereof
by and between Borrower and Manager, pursuant to which Manager is to
provide management and other services with respect to the Property.
"Manager" shall mean Rany Management Group, Inc. or any other
manager approved by Lender.
"Maturity Date" shall mean the Initial Maturity Date, the
First Extended Maturity Date or the Second Extended Maturity Date, as
applicable, or such other date on which the final payment of principal
of the Note becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration,
or otherwise.
"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.
"Metropolitan" shall mean Metropolitan Partners LLC, a
Delaware limited liability company.
"Metropolitan Operating Partnership" shall mean Metropolitan
Operating Partnership, L.P., a Delaware limited partnership.
"Monthly Insurance Premium Deposit" shall have the meaning set
forth in Section 6.2.1.
"Monthly Payment Date" shall mean the first (1st) Business Day
of every calendar month occurring during the term of the Loan.
"Monthly Tax Deposit" shall have the meaning set forth in
Section 6.1.1.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" shall have the meaning set forth in Section
9.2(b).
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group" shall have the meaning set forth in
Section 9.2(b).
"Mortgage" shall mean that certain first priority
Consolidated, Amended and Restated Mortgage, Security Agreement and
Fixture Filing dated as of the date hereof, executed and delivered by
Borrower as security for the Loan made to Borrower and encumbering the
Property, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
9
"Net Proceeds" shall mean: (i) the net amount of all insurance
proceeds payable as a result of a Casualty to the Property, after
deduction of reasonable costs and expenses (including, but not limited
to, reasonable attorneys' fees), if any, in collecting such insurance
proceeds, or (ii) the net amount of the Award, after deduction of
reasonable costs and expenses (including, but not limited to,
reasonable attorneys' fees), if any, in collecting such Award.
"Net Proceeds Deficiency" shall have the meaning set forth in
Section 5.3.2(f).
"Note" shall have the meaning set forth in Section 2.1.3.
"Notice" shall have the meaning set forth in Section 11.6.
"Officer's Certificate" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized officer of
Borrower.
"Operating Expenses" shall mean all costs and expenses
relating to the operation, maintenance and management of the Property,
including, without limitation, utilities, repairs and maintenance,
insurance, property taxes and assessments, advertising expenses,
payroll and related taxes, equipment lease payments, a management fee
equal to the greater of 3.5% of annual rents or the actual management
fee and deposits required to be made as Funds, but excluding
depreciation, amortization and Extraordinary Expenses; provided,
however, such costs and expenses shall be subject to adjustment by
Lender to normalize such costs and expenses.
"Operating Partnership" shall mean Reckson Operating
Partnership L.P., a Delaware limited partnership.
"Other Charges" shall mean all ground rents, maintenance
charges, impositions other than Taxes, and any other charges,
including, without limitation, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Property, now or
hereafter levied or assessed or imposed against the Property or any
part thereof.
"Permanent Financing" shall mean any financing or loan secured
in whole or in part by an interest in the Property, the proceeds of
which will be used by Borrower to repay the Debt in full.
"Permitted Encumbrances" shall mean, with respect to the
Property, collectively, (i) the Liens and security interests created by
the Loan Documents, (ii) all Liens, encumbrances and other matters
disclosed in the Title Insurance Policy relating to the Property or any
part thereof, (iii) Liens, if any, for Taxes imposed by any
Governmental Authority not yet due or delinquent, (iv) to the extent
that any leases are either approved by Lender or do not require the
approval of Lender pursuant to the terms of this Agreement, rights of
tenants under such leases as tenants only and (v) such other title and
survey exceptions as Lender has approved or may approve in writing in
Lender's sole discretion, which in the aggregate do not materially
adversely affect the value or use of the Property or Borrower's ability
to repay the Loan.
10
"Permitted Investments" shall have the meaning set forth in
the Cash Management Agreement.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, estate, trust, unincorporated
association, any other entity, any federal, state, county or municipal
government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.
"Policies" shall have the meaning specified in Section
5.1.1(b).
"Prepayment Date" shall mean the date on which the Loan is
prepaid in accordance with the terms hereof.
"Property" shall mean each parcel of real property, the
improvements thereon and all personal property owned by Borrower and
encumbered by the Mortgage, together with all rights pertaining to such
property and improvements, as more particularly described in the
Granting Clauses of the Mortgage.
"Qualified Transferee" shall mean an institutional quality
investor with appropriate financial wherewithal and of good moral
character and good standing, each as determined by Lender in its sole
discretion.
"Rating Agencies" shall mean each of Standard & Poor's Ratings
Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., ▇▇▇▇▇'▇ Investors Service,
Inc., Duff & ▇▇▇▇▇▇ Credit Rating Co. and Fitch IBCA, Inc., or any
other nationally-recognized statistical rating agency which has been
approved by Lender.
"Reckson" shall mean Reckson Associates Realty Corp., a
Maryland corporation.
"Registration Statement" shall have the meaning set forth in
Section 9.2(b).
"Rents" shall mean, with respect to the Property, all rents,
moneys payable as damages or in lieu of rent, revenues, deposits
(including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to
or for the account of or benefit of Borrower or its agents or employees
from any and all sources arising from or attributable to the Property.
"Restoration" shall have the meaning set forth in Section
5.2.1.
"Restoration Threshold" shall mean $3,500,000.
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"Secondary Market Transaction" shall have the meaning set
forth in Section 9.1(a).
"Second Extended Maturity Date" shall mean August 1, 2001.
"Second Extension Period" shall mean the period commencing the
First Extended Maturity Date and ending the Second Extended Maturity
Date.
"Securities" shall have the meaning set forth in Section
9.1(a).
"Securities Act" shall have the meaning set forth in Section
9.2(a).
"Securitization" shall have the meaning set forth in Section
9.1(a).
"Securitization Date" shall mean that date which is the later
of (a) thirty (30) days after Lender gives Borrower written notice of
its intent to complete a Securitization and (b) the date upon which a
preliminary prospectus or offering memorandum is distributed to
investors in connection with a proposed Securitization.
"Servicer" shall have the meaning set forth in Section 11.24.
"Servicing Agreement" shall have the meaning set forth in
Section 11.24.
"Severed Loan Documents" shall have the meaning set forth in
Section 10.2(c).
"SPC Member" shall have the meaning set forth in Section
3.1.24(o).
"Spread" shall mean 1.65%.
"Springing Event" shall have the meaning set forth in Section
3.1.24(v).
"Springing Member" shall have the meaning set forth in Section
3.1.24(v)
"Standard Statement" shall have the meaning set forth in
Section 9.1(c).
"State" shall mean the State of New York.
"Subordinate and Junior in Right of Payment", with respect to
any Affiliate Loan, shall mean that:
(i) no part of the Affiliate Obligations shall have any claim
to the assets of Borrower on a parity with or prior to the claim of the
Debt. Unless and until the Debt shall have been fully paid and
satisfied by payment in full in cash, no Affiliate Creditor will (A)
take, demand or receive from Borrower, and Borrower will not make, give
or permit, directly or indirectly, by set-off, redemption, purchase or
in any other manner, any payment, prepayment,
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collateral or security, or permit any payment, prepayment, collateral,
security or guarantee, for the whole or any part of the Affiliate
Obligations, provided, however, that if (x) no Default or Event of
Default has occurred under this Agreement or any other Loan Document
and (y) the cash flow from the operation of the Property is sufficient
to make such payments, then Borrower shall be permitted to make
payments on account of the Affiliate Obligations in an aggregate amount
not to exceed $3,500,000, (B) accelerate for any reason the scheduled
maturities of any of the Affiliate Obligations, (C) institute or
maintain any action to enforce the loan documents and other instruments
evidencing, representing, securing and/or guaranteeing the Affiliate
Loan, as any of the same may be amended, supplements, extended,
renewed, restated, replaced, substituted or otherwise modified from
time to time with the prior written consent of Lender (collectively,
the "Subordinated Loan Documents"), including, without limitation, any
action to foreclose the Subordinated Loan Documents by judicial
procedure or otherwise, (D) commence any case, proceeding or other
action under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with
respect to Borrower, or seeking to adjudicate Borrower a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to Borrower or its debts, (E) apply to any court or other
public body for the appointment of a receiver, trustee, agent or
similar official for the Project, (F) exercise any of the other
remedies provided in the Subordinated Loan Documents, including,
without limitation, the right to collect and retain rents and revenues
from the Project and the right to enter upon, take possession of and
manage the Project or (G) demand or take any security for all or part
of the Affiliate Obligations.
(ii) (A) In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any substantial part of the
property, assets or business of Borrower or the proceeds thereof to any
creditor or creditors of Borrower or (B) upon any indebtedness of
Borrower becoming due and payable by reason of any liquidation,
dissolution or other winding-up of Borrower or its business or by
reason of any sale, receivership, insolvency, reorganization or
bankruptcy proceedings, assignment for the benefit of creditors,
arrangement or any proceeding by or against Borrower for any relief
under any bankruptcy, reorganization or insolvency law or laws, Federal
or state, or any law, Federal or state, relating to the relief of
debtors, readjustment of indebtedness, reorganization, composition, or
extension, or (C) in the event that any of the Affiliate Obligations is
declared due and payable prior to its stated maturity (under
circumstances when the preceding clause (A) or (B) shall not be
applicable), or (D) in the event that any of the Debt have become, or
have been declared to be, due and payable (and have not been paid in
accordance with their terms), then and in any such event, any payment
or distribution of any kind or character, whether in cash, property or
securities which, but for the subordination provisions contained
herein, would otherwise be payable or deliverable to the Affiliate
Creditor upon or in respect of the Affiliate Obligations, shall instead
be paid over or delivered to, and for the account of, Lender, and the
Affiliate Creditor shall not receive any such payment or distribution
or any benefit therefrom unless and until the Debt shall have been
fully paid and satisfied in cash.
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"Subordination Agreement" shall have the meaning set forth in
Section 3.1.24(d).
"Substitute Rate" shall have the meaning set forth in Section
2.2.3(c).
"Substitute Rate Loan" shall mean the Loan at any time in
which the Applicable Interest Rate is calculated at the Substitute Rate
plus the Substitute Spread in accordance with the provisions of Article
II hereof.
"Substitute Spread" shall have the meaning set forth in
Section 2.2.3(c).
"Survey" shall mean a survey of the Property in question
prepared by a surveyor licensed in the State and satisfactory to Lender
and the company or companies issuing the Title Insurance Policies, and
containing a certification of such surveyor satisfactory to Lender.
"Tax Account" shall have the meaning set forth in Section
6.5.1.
"Tax Funds" shall have the meaning set forth in Section 6.1.1.
"Taxes" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rents, now or hereafter levied
or assessed or imposed against the Property or any part thereof.
"Tenant" shall mean any Person obligated under any Lease now
or hereafter affecting all or any part of the Property.
"Title Insurance Policy" shall mean an ALTA mortgagee title
insurance policy in the form (acceptable to Lender) issued with respect
to the Property and insuring the lien of the Mortgage encumbering the
Property.
"UCC" or "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in the applicable State or Commonwealth in
which the Property is located.
"Underwritable Net Operating Income" shall mean the excess of
Gross Revenue over Operating Expenses. Lender's calculation of
Underwritable Net Operating Income (including determination of items
that do not qualify as Gross Revenue or Operating Expenses) shall be
final absent manifest error.
"Underwriter Group" shall have the meaning set forth in
Section 9.2(b).
"Updated Information" shall have the meaning set forth in
Section 9.1(b).
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"U.S. Obligations" shall mean direct full faith and credit
obligations of the United States of America that are not subject to
prepayment, call or early redemption.
Section 1.2 Principles of Construction. All references to
sections and schedules are to sections and schedules in or to this Agreement
unless otherwise specified. Unless otherwise specified, the words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.
II THE LOAN
Section 2.1 The Loan.
2.1.1 Agreement to Lend and Borrow. Subject to and upon the
terms and conditions set forth herein, Lender shall make the Loan to Borrower
and Borrower shall accept the Loan from Lender on the Closing Date in the
original principal amount of $70,000,000.00.
2.1.2 Single Disbursement to Borrower. Borrower shall receive
only one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed.
2.1.3 The Note. The Loan shall be evidenced by that certain
Consolidated, Amended and Restated Note dated as of the date hereof made by
Borrower in favor of Lender in the original principal amount of $70,000,000.00
(as the same may be amended, supplemented, restated, increased, extended and
consolidated, the "Note").
2.1.4 Use of Proceeds. Borrower shall use proceeds of the Loan
to (i) pay a portion of the acquisition costs relating to the Property and (ii)
pay costs and expenses incurred in connection with the closing of the Loan, as
approved by Lender.
Section 2.2 Interest Rate
2.2.1 Applicable Interest Rate. Interest on the outstanding
principal balance of the Loan shall accrue from the Closing Date up to and
including the Maturity Date, at the Applicable Interest Rate.
2.2.2 Interest Calculation. Interest on the outstanding
principal balance of the Loan shall be calculated by multiplying (a) the actual
number of days elapsed in the period for which the calculation is being made by
(b) a daily rate based on the Applicable Interest Rate and a three hundred sixty
(360) day year by (c) the outstanding principal balance of the Loan.
2.2.3 Determination of Interest Rate.
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(a) Subject to the terms and conditions of this Section 2.2.3,
the Loan shall be a LIBOR Loan and Borrower shall pay interest on the
outstanding principal amount of the Loan at 7.43% per annum for the initial
Interest Period ending on January 31, 2000 and LIBOR plus the Spread for each
Interest Period thereafter. Any change in the rate of interest hereunder due to
a change in the Applicable Interest Rate shall become effective as of the
opening of business on the first Business Day on which such change in the
Applicable Interest Rate shall become effective. Each determination by Lender of
the Applicable Interest Rate shall be conclusive and binding for all purposes,
absent manifest error.
(b) In the event that Lender shall have determined (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that by reason of circumstances affecting the interbank eurodollar
market, adequate and reasonable means do not exist for ascertaining LIBOR, then
Lender shall, by notice to Borrower ("Lender's Notice"), establish the
Applicable Interest Rate at Lender's then customary spread (the "Substitute
Spread"), taking into account the size of the Loan and the creditworthiness of
Borrower, above a published index used for variable rate loans as reasonably
determined by Lender (the "Substitute Rate").
(c) If, pursuant to the terms of this Agreement, the Loan has
been converted to a Substitute Rate Loan and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice thereof to Borrower, and
the Substitute Rate Loan shall automatically convert to a LIBOR Loan on the
effective date set forth in such notice. Notwithstanding any provision of this
Agreement to the contrary, in no event shall Borrower have the right to elect to
convert a LIBOR Loan to a Substitute Rate Loan.
(d) All payments made by Borrower hereunder with respect to
the Loan shall be made free and clear of, and without reduction for or on
account of, income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions, reserves or withholdings imposed, levied, collected, withheld
or assessed by any Governmental Authority, which are imposed, enacted or become
effective after the date hereof (such non-excluded taxes being referred to
collectively as "Foreign Taxes"), excluding income and franchise taxes of the
United States of America or any political subdivision or taxing authority
thereof or therein (including Puerto Rico). If any Foreign Taxes are required to
be withheld from any amounts payable to Lender hereunder, the amounts so payable
to Lender shall be increased to the extent necessary to yield to Lender (after
payment of all Foreign Taxes) interest or any such other amounts payable
hereunder at the rate or in the amounts specified hereunder. Whenever any
Foreign Tax is payable pursuant to applicable law by Borrower, as promptly as
possible thereafter, Borrower shall send to Lender an original official receipt,
if available, or certified copy thereof showing payment of such Foreign Tax.
Borrower hereby indemnifies Lender for any incremental taxes, interest or
penalties that may become payable by Lender which may result from any failure by
Borrower to pay any such Foreign Tax when due to the appropriate taxing
authority or any failure by Borrower to remit to Lender the required receipts or
other required documentary evidence.
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(e) If any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender to make or maintain a LIBOR Loan as contemplated hereunder, (i) the
obligation of Lender hereunder to make a LIBOR Loan shall be cancelled forthwith
and (ii) Lender may give Borrower a Lender's Notice, declaring the Applicable
Interest Rate based upon the Substitute Rate in effect from time to time plus
the Substitute Spread. Borrower hereby agrees promptly to pay Lender, upon
demand, any additional amounts necessary to compensate Lender for any
out-of-pocket costs incurred by Lender in making any conversion in accordance
with this Agreement, including, without limitation, any interest or fees payable
by Lender to lenders of funds obtained by it in order to make or maintain the
LIBOR Loan hereunder. Lender's notice of such costs, as certified to Borrower,
shall be conclusive absent manifest error.
(f) In the event that any change in any requirement of law or
in the interpretation or application thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) hereafter issued
from any central bank or other Governmental Authority:
(i) shall hereafter impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of Lender which is not
otherwise included in the determination of LIBOR hereunder;
(ii) shall hereafter have the effect of reducing the rate of
return on Lender's capital as a consequence of its obligations
hereunder to a level below that which Lender could have achieved but
for such adoption, change or compliance (taking into consideration
Lender's policies with respect to capital adequacy) by any amount
deemed by Lender to be material; or
(iii) shall hereafter impose on Lender any other condition and
the result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining loans or extensions of credit or to
reduce any amount receivable hereunder;
then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material as determined by
Lender. If Lender becomes entitled to claim any additional amounts pursuant to
this Section 2.2.3(f), Lender shall provide Borrower with not less than thirty
(30) days written notice specifying in reasonable detail the event by reason of
which it has become so entitled and the additional amount required to fully
compensate Lender for such additional cost or reduced amount. A certificate as
to any additional costs or amounts payable pursuant to the foregoing sentence,
executed by an authorized signatory of Lender and submitted by Lender to
Borrower shall be conclusive in the absence of manifest error. This provision
shall survive payment of the Note and the satisfaction of all other obligations
of Borrower under this Agreement and the Loan Documents.
17
(g) Borrower agrees to indemnify Lender and to hold Lender
harmless from any loss or expense (other than consequential or punitive damages)
which Lender sustains or incurs as a consequence of (i) any default by Borrower
in payment of the principal of or interest on a LIBOR Loan, including, without
limitation, any such loss or expense arising from interest or fees actually
payable by Lender to lenders of funds obtained by it in order to maintain a
LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or mandatory) of
the LIBOR Loan on a day that (A) is not the Monthly Payment Date or (B) is the
Monthly Payment Date immediately following the last day of an Interest Period
with respect thereto if Borrower did not give the prior written notice of such
prepayment required pursuant to the terms of this Agreement, including, without
limitation, such loss or expense arising from interest or fees actually payable
by Lender to lenders of funds obtained by it in order to maintain the LIBOR Loan
hereunder and (iii) the conversion (for any reasons set forth in this Section
2.2.3) of the Applicable Interest Rate to the Substitute Rate plus the
Substitute Spread with respect to any portion of the outstanding principal
amount of the Loan then bearing interest at a rate other than the Substitute
Rate plus the Substitute Spread on a date other than the Monthly Payment Date
immediately following the last day of an Interest Period, including, without
limitation, such loss or expenses arising from interest or fees actually payable
by Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan
hereunder (the amounts referred to in clauses (i), (ii) and (iii) are herein
referred to collectively as the "Breakage Costs"). Whenever in this paragraph
the term "interest or fees payable by Lender to lenders of funds obtained by it"
is used and no such funds were actually obtained from such lenders, it shall
include interest or fees which would have been payable by Lender if it had
obtained funds from lenders in order to maintain a LIBOR Loan hereunder. Lender
will provide to Borrower a statement detailing such Breakage Costs and the
calculation thereof. This provision shall survive payment of the Note in full
and the satisfaction of all other obligations of Borrower under this Agreement
and the other Loan Documents.
2.2.4 Additional Costs. Lender will use commercially
reasonable efforts (consistent with legal and regulatory restrictions) to
maintain the availability of the LIBOR Loan and to avoid or reduce any increased
or additional costs payable by Borrower under Section 2.2.3 above, including, if
requested by Borrower and available, a transfer or assignment of the Loan to a
branch, office or Affiliate of Lender in another jurisdiction, or a
redesignation of its lending office with respect to the Loan, in order to
maintain the availability of the LIBOR Loan or to avoid or reduce such increased
or additional costs; provided, however, that such transfer, assignment or
redesignation would not (a) result in any additional costs, expenses or risk to
Lender and (b) be disadvantageous in any other material respect to Lender, as
determined by Lender in its sole discretion.
2.2.5 Usury Savings. This Agreement and the other Loan
Documents are subject to the express condition that at no time shall Borrower be
required to pay interest on the principal balance of the Loan at a rate which
could subject 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
other Loan Documents, Borrower 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 Applicable
18
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 and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender 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 from time to time in
effect and applicable to the Loan for so long as the Loan is outstanding.
Section 2.3 Loan Payments.
2.3.1 Payment Before Maturity Date. Borrower shall make a
payment to Lender of interest only on the date hereof for the period from the
Closing Date to and including January 31, 2000. Borrower shall make a payment to
Lender of interest only calculated in the manner set forth herein on March 1,
2000 and on each Monthly Payment Date thereafter to and including the Maturity
Date.
2.3.2 Payments On Maturity Date. Borrower shall pay to Lender
on the Maturity Date the outstanding principal balance of the Loan, all accrued
and unpaid interest and the Exit Fee, and all other amounts then due hereunder
and under the Note, the Mortgage and the other Loan Documents.
2.3.3 Payment After Default. In the event that, and for so
long as, any Event of Default shall have occurred and be continuing, the
outstanding principal balance of the Loan shall accrue interest at the Default
Rate, calculated from the date the Default which gave rise to such Event of
Default occurred without regard to any grace or cure periods contained herein.
2.3.4 Late Payment Charge. If any principal, interest or any
other sum due under the Loan Documents is not paid by Borrower on the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of three percent (3%) of such unpaid sum or the maximum amount permitted
by applicable law in order to defray the expense incurred by Lender in handling
and processing such delinquent payment and to compensate Lender for the loss of
the use of such delinquent payment. Any such amount shall be secured by the
Mortgage and the other Loan Documents.
2.3.5 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 Lender not later than 1:00 P.M., New York City
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at Lender's office, and any
funds received by Lender after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day.
(b) Whenever any payment to be made hereunder or under any
other Loan Document 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 Interest Rate or the Default Rate, as the case may be, during such
extension.
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Section 2.4 Prepayments.
2.4.1 Voluntary Prepayments. Borrower shall have the right, at
its option and upon not less than both (i) thirty (30) days prior revocable
written notice to Lender and (ii) fifteen (15) days prior irrevocable written
notice to Lender, to prepay the Debt at any time, in whole or in part, on any
Monthly Payment Date; provided, however, that each prepayment shall be in an
amount equal to not less than $1,000,000.
2.4.2 Mandatory Prepayments. If Lender actually receives a
distribution of Net Proceeds, and if Lender is not required to and does not
actually make such Net Proceeds available to Borrower for a Restoration,
Borrower shall, at Lender's option, as of the Monthly Payment Date next
succeeding the receipt of such Net Proceeds, prepay the outstanding principal
balance of the Note in an amount equal to one hundred percent (100%) of such Net
Proceeds.
2.4.3 Prepayments After Securitization. In the event that any
prepayment of the Debt is made after the Securitization Date on a date that is
not a Monthly Payment Date, Borrower shall also pay to Lender, in addition to
any applicable Breakage Costs, all interest that would have otherwise accrued on
the Debt through the last day of the Interest Period in which such prepayment
occurs.
Section 2.5 Exit Fee.
The Exit Fee shall be payable in full upon the Maturity Date
or such other date on which all of the principal of the Note becomes due and
payable as set forth in the Note or this Agreement, whether at such stated
maturity date, by declaration of acceleration or otherwise. The Exit Fee paid by
Borrower to Lender shall be credited against a portion of (a) any origination
fee otherwise payable to Lender if Lender provides Permanent Financing and (b)
any advisory fee otherwise payable to Lender in conjunction with Lender's
arrangement of a Permanent Financing.
Section 2.6 Extension of Maturity Date.
Upon and subject to fulfillment of the following conditions to
the satisfaction of Lender, Borrower shall have the right to extend the Maturity
Date of the Loan to the First Extended Maturity Date (the "First Extension") and
in the event that the First Extension has been effected, Borrower shall have the
right to extend the First Extended Maturity Date to the Second Extended Maturity
Date (the "Second Extension"):
(a) Prior to such extension, Borrower shall have delivered to
Lender a written notice (the "Extension Notice") of the proposed extension on or
before a date which is between 30 and 60 days prior to: (i) with respect to the
First Extension, the Maturity Date and (ii) with respect to the Second
Extension, the First Extended Maturity Date;
20
(b) Not later than the commencement of the relevant renewal
period, Borrower shall have paid an extension fee to Lender in an amount equal
to $105,000 (the "Extension Fee");
(c) The Underwritable Net Operating Income for the
twelve-month period immediately preceding the date the applicable Extension
Notice is received by Lender shall be at least equal to $7,800,000;
(d) Any reserves which are required to be funded pursuant to
this Agreement shall have been fully funded;
(e) To the extent Borrower has not previously delivered to
Lender satisfactory evidence that Borrower has made Capital Expenditures in
accordance with the Capital Expenditures Budget (the "Actual Capital
Expenditures") equal to at least $3,500,000, Borrower shall either deliver such
evidence of the Actual Capital Expenditures to Lender in such amount or Borrower
shall have funded the difference between $3,500,000 and the Actual Capital
Expenditures that were made by Borrower (such difference, the "Capital
Expenditures Deposit") into the Capital Expenditures Account; and
(f) No Event of Default shall have occurred and be continuing,
either as of (i) the date the Extension Notice is delivered or (ii) the date
upon which the Extension Period is to otherwise commence.
Each Extension Notice shall be accompanied by an Officer's
Certificate of Borrower (A) stating that, as of the date of such request, to the
best of Borrower's knowledge, no Default has occurred and is continuing and (B)
specifying the Underwritable Net Operating Income for the immediately preceding
twelve-month period. Lender shall calculate the Underwritable Net Operating
Income within thirty (30) days after Lender's receipt from Borrower of the
Extension Notice, and shall notify Borrower thereof. If Borrower does not
properly exercise its extension options as set forth in this Section 2.6, the
Debt shall be due and payable in full on the Initial Maturity Date or the First
Extended Maturity Date, as applicable. Notwithstanding anything herein to the
contrary, if Borrower notifies Lender in writing that it intends to repay the
Loan as of any Maturity Date, no Extension Fee shall be due and payable by
Borrower so long as Borrower actually pays the Debt in full within 15 days of
such specified Maturity Date.
III REPRESENTATIONS AND WARRANTIES
Section 3.1 Borrower Representations.
Borrower represents and warrants that:
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3.1.1 Organization. Borrower is duly organized, validly
existing and in good standing with full power and authority to own its assets
and conduct its business, is duly qualified in all jurisdictions in which the
ownership or lease of its property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on its ability to perform its obligations hereunder, and
Borrower has taken all necessary action to authorize the execution, delivery and
performance of this Agreement by it, and has the power and authority to execute,
deliver and perform under this Agreement and all the transactions contemplated
hereby.
3.1.2 Organization. This Agreement and the other Loan
Documents have been duly authorized, executed and delivered by Borrower and
constitute a legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally,
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
3.1.3 No Conflicts. The execution and delivery of this
Agreement and the other Loan Documents by Borrower and the performance of its
obligations hereunder and thereunder will not conflict with any provision of any
law or regulation to which Borrower is subject, or conflict with, result in a
breach of, or constitute a default under, any of the terms, conditions or
provisions of any of Borrower's organizational documents or any agreement or
instrument to which Borrower is a party or by which it is bound, or any order or
decree applicable to Borrower, or result in the creation or imposition of any
lien on any of Borrower's assets or property (other than the Property), in each
case which would materially and adversely affect the ability of Borrower to
carry out the transactions contemplated by this Agreement.
3.1.4 Litigation. There is no action, suit, proceeding or
investigation pending or, to Borrower's knowledge, threatened against Borrower
in any court or by or before any other Governmental Authority which would
materially and adversely affect the ability of Borrower to carry out the
transactions contemplated by this Agreement.
3.1.5 Agreements. Borrower is not in default with respect to
any order or decree of any court or any order, regulation or demand of any
Governmental Authority, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of Borrower or its properties or might have consequences that would materially
and adversely affect its performance hereunder.
3.1.6 Consents. No consent, approval, authorization or order
of any court or Governmental Authority is required for the execution, delivery
and performance by Borrower of, or compliance by Borrower with, this Agreement
or the consummation of the transactions contemplated hereby, other than those
which have been obtained by Borrower.
22
3.1.7 Title. Borrower has good, marketable and insurable title
in fee simple to the real property comprising part of the Property and good
title to the balance of the Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances. The Mortgage, when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (i) a
valid, first priority, perfected lien on the Property, subject only to Permitted
Encumbrances and (ii) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any Permitted
Encumbrances.
3.1.8 No Plan Assets. Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Borrower constitutes or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (i) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (ii) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans.
3.1.9 Compliance. Except as set forth on Schedule 3 attached
hereto, to Borrower's knowledge, Borrower and the Property and the use thereof
comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes. Except
as set forth on Schedule 3 attached hereto, to Borrower's knowledge, Borrower is
not in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority, the violation of which might materially adversely
affect the condition (financial or otherwise) or business of Borrower. Borrower
has not committed any act which may give any Governmental Authority the right to
cause Borrower to forfeit the Property or any part thereof or any monies paid in
performance of Borrower's obligations under any of the Loan Documents.
3.1.10 Financial Information. All financial data, including,
without limitation, the statements of cash flow and income and operating
expense, that have been delivered to Lender in respect of the Property (i) is
fairly stated in all material respects, (ii) accurately represents the financial
condition of the Property as of the date of such reports, and (iii) have been
prepared in accordance with GAAP throughout the periods covered.
3.1.11 Condemnation. To Borrower's knowledge, no Condemnation
or other proceeding has been commenced or is contemplated with respect to all or
any portion of the Property or for the relocation of roadways providing access
to the Property.
3.1.12 Utilities and Public Access. The Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service the Property for its intended uses.
23
3.1.13 Separate Lots. The Property is comprised of one (1) or
more parcels which constitutes a separate tax lot and does not constitute a
portion of any other tax lot not a part of the Property.
3.1.14 Assessments. To Borrower's knowledge, there are no
pending or proposed special or other assessments for public improvements or
otherwise affecting the Property, nor are there any contemplated improvements to
the Property that may result in such special or other assessments.
3.1.15 Enforceability. The Loan Documents are not subject to
any right of rescission, setoff, counterclaim or defense by Borrower, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission, setoff,
counterclaim or defense with respect thereto.
3.1.16 Assignment of Leases. The Assignment of Leases creates
a valid assignment of, or a valid security interest in, certain rights under the
Leases, subject only to a license granted to Borrower to exercise certain rights
and to perform certain obligations of the lessor under such Leases, including
the right to operate the Property. No Person other than Lender has any interest
in or assignment of Borrower's interest in the Leases or any portion of the
Rents due and payable or to become due and payable thereunder.
3.1.17 Insurance. Each building or other improvement located
on the Property is insured by a fire and extended perils insurance policy, in an
amount not less than the replacement cost thereof; the Property is also covered
by business interruption insurance and comprehensive general liability insurance
in amounts generally required by institutional lenders for similar properties;
all premiums on such insurance policies required to be paid as of the date
hereof have been paid; such insurance policies require prior notice to the
insured of termination or cancellation, and no such notice has been received.
3.1.18 Licenses. All permits and approvals, including without
limitation, certificates of occupancy required by any Governmental Authority for
the use, occupancy and operation of the Property in the manner in which the
Property is currently being used, occupied and operated have been obtained and
are in full force and effect.
3.1.19 Flood Zone. None of the Improvements on the Property
are located in an area identified by the Federal Emergency Management Agency as
a special flood hazard area.
3.1.20 Physical Condition. To the best of Borrower's
knowledge, the Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, is in good condition, order and repair in
all material respects; there exists no structural or other material defects or
damages in the Property, whether latent or otherwise, and Borrower has not
received notice from any insurance company or bonding company of any defects or
inadequacies in the Property, or any part thereof, which would materially
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
24
3.1.21 Boundaries. Except as set forth on the Survey, to
Borrower's knowledge, all of the Improvements lie wholly within the boundaries
and building restriction lines of the Property, and no improvements on adjoining
properties encroach upon the Property, and no easements or other encumbrances
affecting the Property encroach upon any of the Improvements, so as to affect
the value or marketability of the Property except those which are insured
against by title insurance.
3.1.22 Leases. To Borrower's knowledge, the Property is not
subject to any Leases other than the Leases described in Schedule 4 attached
hereto and made a part hereof. To Borrower's knowledge, except as set forth on
Schedule 4A attached hereto, the Leases identified on Schedule 4 are in full
force and effect and there are no defaults thereunder by either party. No Rent
(including security deposits) has been paid more than one (1) month in advance
of its due date. All work to be performed by Borrower under each Lease has been
performed as required and has been accepted by the applicable tenant, and any
payments, free rent, partial rent, rebate of rent or other payments, credits,
allowances or abatements required to be given by Borrower to any tenant has
already been received by such tenant.
3.1.23 Taxes. All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to have been
paid under applicable Legal Requirements in connection with the transfer of the
Property to Borrower have been paid. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to have been paid under applicable
Legal Requirements in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgage, have been paid. All taxes and
governmental assessments due and owing in respect of Property have been paid, or
an escrow of funds in an amount sufficient to cover such payments has been
established hereunder or are insured against by the title insurance policy to be
issued in connection with the Mortgage.
3.1.24 Single Purpose. Borrower hereby represents and warrants
to, and covenants with, Lender that as of the date hereof and until such time as
the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or
property other than (i) the Property, and (ii) incidental personal property
necessary for the ownership or operation of the Property.
(b) Borrower will not engage in any business other than the
ownership, management and operation of the Property and Borrower will conduct
and operate its business as presently conducted and operated.
25
(c) Borrower will not enter into any contract or agreement
with any Affiliate of Borrower, any constituent party of Borrower or any
Affiliate of any constituent party, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arms-length basis with third parties other than any such party; provided,
however, that that certain Management Agreement dated as of the date hereof
between Borrower and Manager is hereby approved by Lender.
(d) Borrower has not incurred and will not incur any
Indebtedness, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation) other than (i) the Debt, (ii) unsecured
trade payables not more than sixty (60) days past due incurred in the ordinary
course of business in an aggregate amount not exceeding $1,000,000 exclusive of
any amount that Borrower is disputing in good faith and (iii) Affiliate Loans,
provided, however, notwithstanding the foregoing, that (x) all such Affiliate
Loans shall at all times be Subordinate and Junior in Right of Payment and the
Affiliate Creditor which makes such Affiliate Loan executes and delivers a
subordination agreement to Lender in substantially the form attached as Exhibit
D hereto (the "Subordination Agreement"), (y) outside counsel to the Affiliate
Creditor which makes such Affiliate Loan executes and delivers to Lender an
opinion letter satisfactory to Lender regarding the due authorization,
execution, delivery and enforceability of such Subordination Agreement and (z)
the sum of all amounts referenced in clauses (i), (ii) and (iii) above shall not
exceed 75% of the Borrower's actual cash cost of acquiring the Property. No
Indebtedness other than the Debt may be secured (subordinate or pari passu) by
the Property.
(e) Borrower has not made and will not make any loans or
advances to any third party (including any Affiliate or constituent party), and
shall not acquire obligations or securities of any third party (including any
Affiliate or constituent party).
(f) Borrower is and will remain solvent and Borrower will pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(g) Each of Borrower and SPC Member has done or caused to be
done and will do all things necessary to observe limited liability company and
other organizational formalities and preserve its existence, and Borrower and
SPC Member will not, nor will Borrower or SPC Member permit any constituent
party to, amend, modify or otherwise change the partnership certificate,
partnership agreement, articles of incorporation and bylaws, operating
agreement, trust or other organizational documents of Borrower, SPC Member or
such constituent party without the prior written consent of Lender.
(h) Borrower will maintain all of its books, records,
financial statements and bank accounts separate from those of its Affiliates and
any constituent party and Borrower will file its own tax returns. Borrower shall
maintain its books, records, resolutions and agreements as official records.
26
(i) Borrower will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower or any constituent party of Borrower),
shall correct any known misunderstanding regarding its status as a separate
entity, shall conduct business in its own name, shall not identify itself or any
of its Affiliates as a division or part of the other and shall maintain and
utilize a separate telephone number and separate stationery, invoices and
checks.
(j) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(k) None of Borrower, SPC Member or any constituent party will
seek or effect the liquidation, dissolution, winding up, liquidation,
consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of
Borrower with those of any Affiliate or constituent party or any other Person,
and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person.
(n) Borrower does not and will not hold itself out to be
responsible for or have its credit available to satisfy the debts or obligations
of any other Person.
(o) Borrower shall have as its sole member a Delaware limited
liability company (the "SPC Member") which is a single purpose entity whose sole
asset is its interest in Borrower (which interest shall not be less than
one-hundred percent (100%) of the ownership interest in Borrower). Borrower and
SPC Member shall each have as an independent manager (each an "Independent
Manager") a Delaware corporation which is a single purpose entity whose sole
asset is its interest in the Borrower; each of such Independent Managers shall
be different corporate entities. Each Independent Manager will at all times
comply, and will cause Borrower and SPC Member to comply, with each of the
representations, warranties and covenants contained in this Section 3.1.24 as if
such representation, warranty or covenant was made directly by the Independent
Managers and the SPC Member. As used in this subsection 3.1.24, the term "single
purpose entity" shall mean an entity whose organizational documents contain
restrictions on its activities and impose requirements intended to preserve
separateness that are substantially similar to those of Borrower and provide,
inter alia, that it: (a) is organized for a limited purpose; (b) has
restrictions on its ability to incur indebtedness, dissolve, liquidate,
consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy
petition without the consent of independent managers or independent directors
and (d) shall conduct itself in accordance with certain "separateness
covenants", including, but not limited to, the maintenance of its books,
records, bank accounts, and assets separate from those of any other Person.
27
(p) Borrower and SPC Member shall at all times cause there to
be at least two duly appointed members of the board of directors (each an
"Independent Director") of the Independent Managers of Borrower and SPC Member,
respectively, reasonably satisfactory to Lender who shall not have been at the
time of such individual's appointment, will not be while serving and may not
have been at any time during the preceding five years (i) a stockholder,
director (other than an Independent Director), manager, member, officer,
employee, partner, attorney or counsel of such corporation, Borrower, the SPC
Member, or any Affiliate of any of them, (ii) a customer, supplier or other
Person who derives any of its purchases or revenues from its activities with
such corporation, Borrower, the SPC Member or any Affiliate of any of them,
other than fees received in its capacity as an Independent Director, (iii) a
Person or other entity controlling or under common control with any such
stockholder, partner, customer, supplier or other Person, or (iv) a member of
the immediate family of any such stockholder, director, officer, employee,
partner, customer, supplier or other Person; provided, however, that this
paragraph (p) shall apply only from and after the Securitization Date. As used
in this definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management,
policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise.
(q) Borrower and SPC Member shall not cause or permit the
board of directors of the Independent Manager of Borrower or SPC Member,
respectively, to take any action which, under the terms of any certificate of
incorporation, by-laws or any voting trust agreement with respect to any common
stock, requires a vote of the board of directors of the Independent Manager of
Borrower or SPC Member, as the case may be, unless at the time of such action
there shall be at least two members who are Independent Directors; provided,
however, that this paragraph (q) shall apply only after the Securitization Date.
(r) Borrower and its Independent Manager shall conduct its
business so that the assumptions made with respect to Borrower in any Insolvency
Opinion delivered in connection with any Securitization of the Loan shall be
true and correct in all respects; provided, however, that this paragraph (r)
shall only apply after the Securitization Date.
(s) Borrower will permit only duly authorized officers of
Borrower to have access to its bank accounts.
(t) Borrower shall pay the salaries of its own employees and
maintain a sufficient number of employees in light of its contemplated business
operations.
(u) Borrower shall compensate each of its consultants and
agents from its funds for services provided to it and pay from its own assets
all obligations of any kind incurred. Upon the withdrawal or the disassociation
of the Independent Manager of either Borrower or SPC Member, Borrower and SPC
Member, as the case may be, shall immediately appoint a new member whose
articles of incorporation are substantially similar to those of the Independent
Manager and, in the event a non-consolidation opinion has been provided to
Lender, Borrower shall deliver a new non-consolidation opinion to the Rating
Agency or Rating Agencies, as applicable, with respect to the new single purpose
entity and its equity owners.
28
(v) Borrower and SPC Member shall each have at all times at
least two persons who shall automatically become members having a 0% economic
interest in Borrower and SPC Member, respectively (each, a "Springing Member"),
simultaneously upon the occurrence of any event which would cause the sole
member of Borrower or SPC Member to cease to be a member of Borrower or SPC
Member, as the case may be (a "Springing Event"); provided that if a single
purpose entity serves as a Springing Member, only one Springing Member shall be
required. Upon the occurrence of a Springing Event, Borrower and SPC Member
shall be continued without dissolution and each Springing Member shall, without
any action of any person or entity, automatically become a member of Borrower or
SPC Member, as the case may be, having a 0% economic interest in Borrower or SPC
Member, as the case may be, and the personal representative(s) (as defined in
the Act) of each member shall automatically become an unadmitted assignee of
each member respectively, being entitled thereby only to the distributions to
which such member was entitled pursuant to the operating agreement of Borrower
or SPC Member, as the case may be, and any other right conferred thereupon by
the Act. Pursuant to Section 18-301 of the Act, each Springing Member shall not
be required to make any capital contributions to Borrower or SPC Member, as the
case may be, and shall not receive any limited liability company interest in
Borrower or SPC Member, as the case may be. Prior to its admission to Borrower
or SPC Member, as the case may be, as a member of Borrower or SPC Member, as the
case may be, pursuant to this subparagraph (v), each Springing Member shall have
no interest (economic or otherwise) and is not a member of Borrower or SPC
Member. 1350 Corp., a Delaware corporation, shall be the initial Springing
Member of Borrower, and 1350 Mezzanine Corp., a Delaware corporation, shall be
the initial Springing Member of SPC Member; provided however, that such initial
Springing Members shall not be admitted as a member of Borrower or SPC Member,
as the case may be, until a Springing Event shall have occurred. Upon the death,
resignation, dissolution or other event that causes a Springing Member to be
unable to fulfill its obligations under the operating agreement of Borrower or
SPC Member, as the case may be, or, if admitted as a member of Borrower or SPC
Member, it shall cease to be a member of Borrower or SPC Member, as the case may
be, a new Springing Member shall be appointed and sign an amendment to the
operating agreement of Borrower or SPC Member, as the case may be, acknowledging
such an appointment. The Bankruptcy (as defined in Sections 18-101(1) and 18-304
of the Act) of any member or Springing Member shall not cause such member or
Springing Member to cease to be a member of Borrower or SPC Member, as the case
may be, and upon the occurrence of such an event, the business of Borrower or
SPC Member, as the case may be, shall continue without dissolution.
3.1.25 Capitalization. At Closing, members of Borrower shall
have contributed to Borrower not less than $55,000,000 in capital contributions.
29
Section 3.2 Survival of Representations.
The representations and warranties set forth in Section 3.1
shall survive for so long as any amount remains payable to Lender under this
Agreement or any of the other Loan Documents.
IV BORROWER COVENANTS
Section 4.1 Borrower Affirmative Covenants.
Borrower hereby covenants and agrees with Lender that:
4.1.1 Existence; Compliance with Legal Requirements. Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
and comply with all Legal Requirements applicable to it and the Property.
4.1.2 Taxes and Other Charges. Borrower shall pay all Taxes
and Other Charges now or hereafter levied or assessed or imposed against the
Property or any part thereof as the same become due and payable. Borrower shall
furnish to Lender receipts for the payment of the Taxes and the Other Charges
prior to the date the same shall become delinquent; provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 6.2 hereof.
Borrower shall not permit or suffer and shall promptly discharge any lien or
charge against the Property other than the Permitted Encumbrances. After prior
notice to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding, conducted in good faith and with due diligence, the amount or
validity of any Taxes or Other Charges, provided that either (a) such contested
Taxes or Other Charges have been paid in full or (b) (i) no Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted under and
be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) the Property or any part thereof or interest therein will not be in danger
of being sold, forfeited, terminated, canceled or lost; (iv) Borrower shall
promptly upon final determination thereof pay the amount of any such Taxes or
Other Charges, together with all costs, interest and penalties which may be
payable in connection therewith; (v) such proceeding shall suspend the
collection of Taxes or Other Charges from the Property; and (vi) Borrower shall
deposit with Lender cash, or other security as may be reasonably approved by
Lender, in an amount equal to one hundred twenty-five percent (125%) of the
unpaid contested amount, to insure the payment of any such Taxes or Other
Charges, together with all interest and penalties thereon. Lender may pay over
any such cash or other security held by Lender to the claimant entitled thereto
at any time when, in the judgment of Lender, the entitlement of such claimant is
established.
4.1.3 Litigation. Borrower shall give prompt notice to Lender
of any litigation or governmental proceedings pending or threatened in writing
against Borrower which, if adversely determined, would materially adversely
affect the Property or Borrower's ability to perform its obligations hereunder
or under the other Loan Documents.
30
4.1.4 Access to Property. Subject to the rights of the tenants
under the Leases, Borrower shall permit agents, representatives and employees of
Lender to inspect the Property or any part thereof at reasonable hours upon
reasonable advance notice.
4.1.5 Further Assurances; Supplemental Mortgage Affidavits.
Borrower shall, at Borrower's sole cost and expense:
(a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
(b) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective carrying out
of the intents and purposes of this Agreement and the other Loan Documents, as
Lender shall reasonably require from time to time.
4.1.6 Financial Reporting. (a) Borrower shall keep and
maintain or will cause to be kept and maintained proper and accurate books and
records, in accordance with GAAP, reflecting the financial affairs of Borrower.
Lender shall have the right from time to time during normal business hours upon
reasonable notice to Borrower to examine such books and records at the office of
Borrower or other Person maintaining such books and records and to make such
copies or extracts thereof as Lender shall desire.
(b) Borrower shall furnish Lender annually, within ninety (90)
days following the end of each Fiscal Year of Borrower, a complete copy of
Borrower's annual financial statements audited by a "Big Five" accounting firm
or other independent certified public accountant acceptable to Lender prepared
in accordance with GAAP covering the Property for such financial statements to
include statements of income and expense and cash flow for Borrower and the
Property and a balance sheet for Borrower. Such statements shall set forth
Underwritable Net Operating Income, Gross Revenue and Operating Expenses for the
Property. Borrower's annual financial statements shall be accompanied by a
certificate executed by an officer of Borrower (without personal recourse to
such officer) stating that such annual financial statement fairly states the
financial condition and the results of operations of Borrower and the Property.
Together with Borrower's annual financial statements, Borrower shall furnish to
Lender an Officer's Certificate certifying as of the date thereof whether to the
best of Borrower's knowledge there exists an event or circumstance which
constitutes a Default or Event of Default by Borrower under the Loan Documents
and if such Default or Event of Default exists, the nature thereof, the period
of time it has existed and the action then being taken to remedy the same.
(c) So long as the Loan is outstanding, Borrower will furnish
Lender on or before the forty-fifth (45th) day after the end of each fiscal
quarter (based on Borrower's Fiscal Year), the following items, accompanied by
certificate from an officer of Borrower (without personal recourse to such
officer), certifying that such items are fairly stated and fairly present the
financial condition and results of the operations of Borrower and the Property
in accordance with GAAP as applicable:
31
(i) quarterly and year-to-date statements of income and
expense and cash flow prepared for such quarter with respect to the
Property, with a balance sheet for such quarter for Borrower; and
(ii) a current rent roll for the Property.
(d) Borrower will furnish Lender on or before the thirty-fifth
(35th) day after the end of each calendar month, statements substantially in the
form of those attached as Exhibit A hereto, accompanied by a certificate from an
officer of Borrower (without personal recourse to such officer), certifying that
such items fairly state the financial condition and results of the operations of
Borrower and the Property in a manner consistent with GAAP, as applicable.
(e) Borrower will promptly furnish Lender copies of any notice
received from a tenant under a Lease threatening non-payment of rent or other
default, alleging or acknowledging a default by landlord, requesting a
termination of a Lease or a material modification of any Lease or notifying
Borrower of the exercise or non-exercise of any option provided for in such
tenant's Lease, or any other similar material correspondence received by
Borrower from tenants during the subject month.
(f) Borrower shall submit the Annual Budget to Lender not
later than thirty (30) days prior to the commencement of each Fiscal Year.
Lender shall have no right to approve the Annual Budget.
(g) Borrower shall furnish to Lender, within ten (10) Business
Days after request (or as soon thereafter as may be reasonably possible), such
further detailed information with respect to the operation of the Property and
the financial affairs of Borrower as may be reasonably requested by Lender.
4.1.7 Title to the Property. Borrower will warrant and defend
the validity and priority of the Lien of the Mortgage and the Assignment of
Leases on the Property against the claims of all Persons whomsoever, subject
only to Permitted Encumbrances.
4.1.8 Estoppel Statement. (a) After request by Lender,
Borrower shall within five (5) Business Days furnish Lender with a statement,
duly acknowledged and certified, stating (i) the unpaid principal amount of the
Note, (ii) the Applicable Interest Rate of the Note, (iii) the date installments
of interest and/or principal were last paid, (iv) any offsets or defenses to the
payment of the Debt, if any, and (v) that this Agreement and the other Loan
Documents have not been modified or if modified, giving particulars of such
modification. After request by Borrower, Lender shall within five (5) Business
Days furnish Borrower with a statement, duly acknowledged and certified, stating
(i) the unpaid principal amount of the Note; (ii) the date installments of
interest and/or principal were last paid; (iii) the Applicable Interest Rate of
the Note; and (iv) that this Agreement and the other Loan Documents have not
been modified or if modified, giving particulars of such modification.
32
(b) Borrower shall use reasonable efforts to deliver to
Lender, upon request, an estoppel certificate from each tenant under any Lease
which requires tenant to provide such certificate to Borrower; provided that
such certificate shall be in the form required under such Lease; provided
further that Borrower shall not be required to deliver such certificates more
than one (1) time hereunder.
4.1.9 Leases. (a) All Major Leases and all renewals,
amendments and modifications thereof executed after the date hereof shall be
subject to Lender's prior approval, not to be unreasonably withheld, to the
extent such Major Leases or renewals, amendments or modifications thereof are
not at market rates and on market terms.
(b) Borrower may terminate or accept a surrender of one or
more Leases demising up to 100,000 square feet on an aggregate basis without
Lender's approval. Borrower shall not terminate or accept a surrender of Leases
demising more than 100,000 square feet on an aggregate basis without Lender's
prior approval, not to be unreasonably withheld; provided, however, that the
termination or surrender of any Lease demising space to The Hearst Corporation
shall neither require Lender's approval nor be included in such 100,000 square
foot aggregate amount so long as Borrower has executed a replacement Lease with
another tenant with respect to such terminated or surrendered space in
accordance with subparagraph (a) above. Each request by Borrower for approval of
any termination or surrender of any Lease shall be made by written notice to
Lender and must include a statement in bold face type that if Lender shall fail
to approve or disapprove such termination or surrender within ten (10) Business
Days after receipt by Lender of such request, such termination or surrender
shall be deemed to have been approved. If Lender fails to respond to such notice
within such ten (10) day period, Borrower shall deliver a second copy of the
original notice to Lender via overnight courier which copy shall be marked
"Second Notice." Lender shall approve or disapprove any such termination or
surrender within five (5) Business Days after receipt by Lender of such Second
Notice. If Lender shall fail to disapprove of any such termination or surrender
within such five (5) day period, time being of the essence, Lender shall be
conclusively deemed to have approved such termination or surrender.
(c) Borrower (i) shall observe and perform the obligations
imposed upon the lessor under the Leases in a commercially reasonable manner;
(ii) shall enforce the terms, covenants and conditions contained in the Leases
upon the part of the lessee thereunder to be observed or performed in a
commercially reasonable manner, provided, however, that Borrower shall comply
with the provisions of paragraph (b) above; (iii) shall not collect any of the
rents more than one (1) month in advance (other than security deposits); and
(iv) shall not execute any assignment of lessor's interest in the Leases or the
Rents (except as contemplated by the Loan Documents).
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(d) Upon request, Borrower shall furnish Lender with executed
copies of all Leases.
(e) Upon request from Borrower, Lender shall provide (i) a
subordination, nondisturbance and attornment agreement on Lender's standard form
to each lessee under any Lease executed in accordance with the terms of this
Agreement after the date hereof and which demises at least 12,500 rentable
square feet of space in the Property and (ii) a subordination, nondisturbance
and attornment agreement to each lessee under any Lease existing as of the date
hereof to the extent such Lease requires the delivery of such an agreement.
4.1.10 Alterations. Lender's prior approval (not to be
unreasonably withheld) shall be required in connection with any alterations to
any Improvements on the Property (a) that may have a material adverse effect on
Borrower's financial condition, the value of the Property or the Underwritable
Net Operating Income or (b) the cost of which (including any related alteration,
improvement or replacement) is reasonably anticipated to exceed the Alteration
Threshold; provided, however, that no consent shall be required in respect of
any tenant improvement work required to be performed by Borrower under any Major
Lease approved by Lender or under any other Lease not requiring the consent of
Lender pursuant to the terms of this Loan Agreement. If the total unpaid amounts
with respect to alterations to the Improvements shall at any time exceed the
Alteration Threshold, Borrower shall promptly deliver to Lender as security for
the payment of such amounts and as additional security for Borrower's
obligations under the Loan Documents any of the following: (i) cash, (ii) U.S.
Obligations, (iii) other securities acceptable to Lender, provided that the
applicable Rating Agencies have confirmed in writing that the form and issuer of
same will not, in and of itself, result in a downgrade, withdrawal or
qualification of the then current ratings assigned in connection with any
Securitization, or (iv) a completion bond, the form and issuer of which the
Rating Agencies have confirmed in writing will not, in and of itself, result in
a downgrade, withdrawal or qualification of the then current ratings assigned in
connection with any Securitization. Such security shall be in an amount equal to
the excess of the total unpaid amounts with respect to alterations to the
Improvements on the Property (other than such amounts to be paid or reimbursed
by tenants under the Leases) over the Alteration Threshold.
4.1.11 Securitization Date Deliveries. On or before the
Securitization Date, Borrower shall deliver to Lender (i) a non-consolidation
opinion letter in form and substance satisfactory to Lender in its sole
discretion (the "Insolvency Opinion") and (ii) evidence satisfactory to Lender
that the Accounts have been opened and the required deposits have been made
therein in accordance with the provisions of Section VI of this Agreement.
Borrower shall cooperate with Lender to obtain a FIRREA appraisal of the
Property on or before the Securitization Date; provided, however, that Borrower
shall not be required to pay for any such appraisal.
Section 4.2 Borrower Negative Covenants.
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Borrower covenants and agrees with Lender that:
4.2.1 Operation of the Property. Borrower shall not terminate
the Management Agreement or otherwise replace the Manager or enter into any
other management agreement with respect to the Property; provided, however, that
the Manager may assign the Management Agreement without modification to an
Affiliate of Manager or Borrower so long as such Affiliate (i) assumes all of
Manager's rights and obligations under the Management Agreement in writing and
(ii) executes and delivers to Lender a Replacement Assignment (as defined in the
Assignment of Management Agreement).
4.2.2 Liens. Borrower shall not create, incur, assume or
suffer to exist any Lien on any portion of the Property except for Permitted
Encumbrances.
4.2.3 Dissolution. Borrower shall not (i) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (ii) engage in any business activity not related to the
ownership and operation of the Property, (iii) transfer, lease or sell, in one
transaction or any combination of transactions, all or substantially all of the
properties or assets of Borrower except to the extent expressly permitted by the
Loan Documents, or (iv) cause, permit or suffer the SPC Member to (A) dissolve,
wind up or liquidate or take any action, or omit to take an action, as a result
of which the SPC Member would be dissolved, wound up or liquidated in whole or
in part, or (B) amend, modify, waive or terminate the certificate of
incorporation or bylaws of the SPC Member, in each case, without obtaining the
prior written consent of Lender or Lender's designee, which consent shall not be
unreasonably withheld so long as such action or inaction does not cause Borrower
or the SPC Member, as applicable, to violate the terms of Section 3.1.24 of this
Agreement.
4.2.4 Change in Business. Borrower shall not enter into any
line of business other than the ownership and operation of the Property.
4.2.5 Debt Cancellation. Borrower shall not cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.
4.2.6 Affiliate Transactions. Borrower shall not enter into,
or be a party to, any transaction with an Affiliate of Borrower or any of the
members of Borrower except (i) in the ordinary course of business and on terms
which are no less favorable to Borrower or such Affiliate than would be obtained
in a comparable arm's-length transaction with an unrelated third party or (ii)
as otherwise approved by Lender.
4.2.7 Zoning. Borrower shall not initiate or consent to any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a
nonconforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender, not to be
unreasonably withheld.
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4.2.8 Assets. Borrower shall not purchase or own any
properties other than the Property.
4.2.9 No Joint Assessment. Borrower shall not suffer, permit
or initiate the joint assessment of the Property (i) with any other real
property constituting a tax lot separate from the Property, and (ii) with any
portion of the Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.
4.2.10 Principal Place of Business. Borrower shall not change
its principal place of business set forth on the first page of this Agreement
without first giving Lender ten (10) Business Days prior notice.
4.2.11 ERISA. Borrower shall not engage in any transaction
which would cause any obligation, or action taken or to be taken, hereunder (or
the exercise by Lender of any of its rights under the Note, this Agreement or
the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(a) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term of
the Loan, as requested by Lender in its sole discretion, that (A) Borrower is
not and does not maintain an "employee benefit plan" as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a "governmental plan" within
the meaning of Section 3(3) of ERISA; (B) Borrower is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (C) one or more of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R.ss.2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R.ss.2510.3-101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R.
ss.2510.3-101(c) or (e).
V INSURANCE, CASUALTY AND CONDEMNATION
Section 5.1 Insurance.
5.1.1 Insurance Policies. (a) Borrower shall obtain and
maintain, or cause to be maintained, insurance for Borrower and the
Property providing at least the following coverages:
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(i) comprehensive all risk insurance on the Improvements and
the personal property at the Property, 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 one
hundred percent (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 Loan; (B)
containing an agreed amount endorsement with respect to the
Improvements and personal property at the Property waiving all
co-insurance provisions; (C) providing for no deductible in excess of
Ten Thousand and No/100 Dollars ($10,000) for all such insurance
coverage; and (D) containing an "Ordinance or Law Coverage" or
"Enforcement" endorsement if any of the Improvements or the use of the
Property shall at any time constitute legal non-conforming structures
or uses; provided, however, Borrower shall be permitted a deductible of
$50,000 for insurance covering damage to boilers and machinery. In
addition, Borrower shall obtain: (y) if any portion of the Improvements
is currently or at any time in the future located in a federally
designated "special flood hazard area", flood hazard insurance in an
amount equal to the lesser of (1) the outstanding principal balance of
the Note or (2) the maximum amount of such insurance available under
the National Flood Insurance Act of 1968, the Flood Disaster Protection
Act of 1973 or the National Flood Insurance Reform Act of 1994, as each
may be amended or such greater amount as Lender shall require; and (z)
earthquake insurance in amounts and in form and substance satisfactory
to Lender in the event the Property is located in an area with a high
degree of seismic activity, 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 subsection
(i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, such insurance (A) to be on the
so-called "occurrence" form with a combined limit of not less than One
Million and No/100 Dollars ($1,000,000); (B) to continue at not less
than the aforesaid limit until required to be changed by Lender in
writing by reason of changed economic conditions making such protection
inadequate; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations on an
"if any" basis; (3) independent contractors; (4) blanket contractual
liability for all legal contracts; and (5) contractual liability
covering all insured contracts contained in Section 32 of the Mortgage
to the extent the same is available;
(iii) business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above; and (C) in an amount sufficient
to satisfactorily address the recovery period identified below, until
the earlier of (x) the date that such income returns to the level it
was at prior to the loss and (y) the expiration of twelve (12) months
from the date of loss, plus an extended period of indemnity of not less
than 180 days, which extended period of indemnity shall not commence
until the property is fully repaired and/or replaced, notwithstanding
that
37
the policy may expire prior to the end of such period. The amount
of such business income insurance shall be determined prior to the date
hereof and at least once each year thereafter based on Borrower's
reasonable estimate of the gross income from the Property for the
succeeding twenty-four (24) month period. All proceeds payable to
Lender pursuant to this subsection shall be held by Lender and shall be
applied to the obligations secured by the Loan Documents from time to
time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of
its obligations to pay the obligations secured by the Loan Documents on
the respective dates of payment provided for in the Note and the other
Loan Documents except to the extent such amounts are actually paid out
of the proceeds of such business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements,
and only if the Property coverage form does not otherwise apply, (A)
owner's contingent or protective liability insurance covering claims
not covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the insurance
provided for in subsection (i) above written in a so-called builder's
risk completed value form (1) on a non-reporting basis, (2) against all
risks insured against pursuant to subsection (i) above, (3) including
permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of
the state in which the Property is located, and employer's liability
insurance with a limit of at least Five Hundred Thousand and No/100
Dollars ($500,000) per accident and per disease per employee, and Five
Hundred Thousand and No/100 Dollars ($500,000) for disease aggregate in
respect of any work or operations on or about the Property, or in
connection with the Property or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on
terms consistent with the commercial property insurance policy required
under subsection (i) above;
(vii) umbrella liability insurance in addition to primary
coverage in an amount not less than Fifty Million and No/100 Dollars
($50,000,000) per occurrence on terms consistent with the commercial
general liability insurance policy required under subsection (ii)
above;
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence, including umbrella coverage, of Fifty
Million and No/100 Dollars ($50,000,000); and
(ix) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time
to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to
the Property located in or around the region in which the Property is
located.
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(b) insurance provided for in Section 5.1.1(a) shall be
obtained under valid and enforceable policies (collectively, the "Policies" or
in the singular, the "Policy"), and shall be subject to the reasonable approval
of Lender as to deductibles, loss payees and insureds. Not less than ten (10)
days prior to the expiration dates of the Policies theretofore furnished to
Lender, certificates of insurance evidencing the Policies accompanied by
evidence satisfactory to Lender of payment of the premiums due thereunder (the
"Insurance Premiums"), shall be delivered by Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate
to the Property the amount of coverage from time to time 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 5.1.1(a).
(d) All Policies of insurance provided for or contemplated by
Section 5.1.1(a), except for the Policy referenced in Section 5.1.1(a)(v), shall
name Borrower as the insured and Lender and its successors and/or assigns as the
additional insured, as its interests may appear, and in the case of property
damage, boiler and machinery, flood and earthquake insurance, shall contain a
so-called New York standard non-contributing mortgagee clause in favor of Lender
providing that the loss thereunder shall be payable to Lender.
(e) All Policies of insurance provided for in Section 5.1.1(a)
shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for
Borrower, or of any tenant or other occupant, or failure to comply with
the provisions of any Policy, which might otherwise result in a
forfeiture of the insurance or any part thereof, shall in any way
affect the validity or enforceability of the insurance insofar as
Lender is concerned;
(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least
thirty (30) days' prior written notice to Lender and any other party
named therein as an additional insured; provided, however, that with
respect to non-payment of premium by Borrower, Lender and any other
party named therein as an additional insured shall receive no less than
ten (10) days' prior written notice; and
(iii) Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Lender shall have the right, with notice to Borrower, to take such action as
Lender deems necessary to protect its interest in the Property, including,
without limitation, the obtaining of such insurance coverage as Lender in its
sole
39
discretion deems appropriate and all premiums incurred by Lender in connection
with such action or in obtaining such insurance and keeping it in effect shall
be paid by Borrower to Lender upon demand and until paid shall be secured by the
Mortgage and shall bear interest at the Default Rate.
(g) In the event of foreclosure of the Mortgage, or other
transfer of title to the Property in extinguishment in whole or in part of the
Debt all right, title and interest of Borrower in and to the Policies that are
not blanket Policies then in force concerning the Property and all proceeds
payable thereunder shall thereupon vest in the purchaser at such foreclosure or
Lender or other transferee in the event of such other transfer of title.
5.1.2 Insurance Company. The Policies shall be issued by
financially sound and responsible insurance companies authorized to do business
in the state in which the Property is located and having a claims paying ability
rating of "AA" or better by the Rating Agencies (each, an "AA Company").
Notwithstanding the foregoing, Borrower shall be permitted to maintain its
Policy with American Protection Insurance Company ("American") for so long as
American maintains its current claims paying ability rating. In the event
American is downgraded from its current claims paying ability rating, Borrower
shall replace American with an AA Company.
Section 5.2 Casualty and Condemnation.
5.2.1 Casualty. If the Property shall sustain a Casualty,
Borrower shall give prompt notice of such Casualty to Lender and shall (or shall
cause the tenants to) promptly commence and diligently prosecute to completion
the repair and restoration of the Property as nearly as possible to the
condition the Property was in immediately prior to such Casualty (a
"Restoration") and otherwise in accordance with Section 5.3. Borrower shall pay
all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to, make proof of loss if not
made promptly by Borrower.
5.2.2 Condemnation. Borrower shall give Lender prompt notice
of any actual or threatened in writing Condemnation by any Governmental
Authority of all or any part of the Property and shall deliver to Lender a copy
of any and all papers served in connection with such proceedings. Lender may
participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by Lender to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any Condemnation or the payment of any Award by any Governmental
Authority, Borrower shall continue to pay the Debt at the time and in the manner
provided for its payment in the Note and in this Agreement. If the Property or
any portion thereof is taken by any Governmental Authority, Borrower shall (or
shall cause the tenants to) promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section
5.3. If the Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.
40
Section 5.3 Delivery of Net Proceeds.
5.3.1 Minor Casualty or Condemnation. If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds shall be less
than the Restoration Threshold and the costs of completing the Restoration shall
be less than the Restoration Threshold, and provided no Event of Default shall
have occurred and remain uncured, the Net Proceeds will be disbursed by Lender
to Borrower. Promptly after receipt of the Net Proceeds, Borrower shall commence
and satisfactorily complete with due diligence the Restoration in accordance
with the terms of this Agreement.
5.3.2 Major Casualty or Condemnation. (a) If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds are equal to or
greater than the Restoration Threshold or the costs of completing the
Restoration is equal to or greater than the Restoration Threshold, Lender shall
make the Net Proceeds available for the Restoration, provided that each of the
following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
(ii) (A) in the event the Net Proceeds are insurance proceeds,
less than twenty-five percent (25%) of the total floor area of the
Improvements at the Property has been materially damaged, destroyed or
rendered unusable as a result of such Casualty or (B) in the event the
Net Proceeds are an Award, less than twenty-five percent (25%) of the
land constituting the Property is taken, and such land is located along
the perimeter or periphery of the Property, and no portion of the
Improvements is the subject of the Condemnation;
(iii) Leases requiring payment of annual rent equal to
seventy-five percent (75%) of the Gross Revenue received by Borrower
during the twelve (12) month period immediately preceding the Casualty
or Condemnation and all Major Leases shall remain in full force and
effect during and after the completion of the Restoration without
abatement of rent beyond the time required for Restoration,
notwithstanding the occurrence of such Casualty or Condemnation.
(iv) Borrower shall commence the Restoration as soon as
reasonably practicable and shall diligently pursue the same to
satisfactory completion;
(v) Lender shall be reasonably satisfied that any operating
deficits and all payments of principal and interest under the Note will
be paid during the period required for Restoration from (A) the Net
Proceeds, or (B) other funds of Borrower (which funds may include funds
available to Borrower under any line of credit to the extent that
Lender is provided with a written agreement in form and substance
satisfactory to Lender from parties approved by Lender that such funds
will be reserved for Borrower and made available to Borrower for such
purpose);
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(vi) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (A) the Maturity Date,
(B) such time as may be required under applicable Legal Requirements in
order to repair and restore the Property to the condition it was in
immediately prior to such Casualty or to as nearly as possible the
condition it was in immediately prior to such Condemnation, as
applicable or (C) the expiration of the insurance coverage referred to
in Section 5.1.1(a)(iii) (as such insurance coverage may be extended);
(vii) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable Legal
Requirements;
(viii) the Restoration shall be done and completed by Borrower
in an expeditious and diligent fashion and in compliance with all
applicable Legal Requirements; and
(ix) such Casualty or Condemnation, as applicable, does not
result in the loss of access to the Property or the related
Improvements.
(b) The Net Proceeds shall be paid directly to Lender and held
by Lender in an interest-bearing account and, until disbursed in accordance with
the provisions of this Section 5.3.2, shall constitute additional security for
the Debt. The Net Proceeds shall be disbursed by Lender to, or as directed by,
Borrower from time to time during the course of the Restoration, upon receipt of
(i) evidence satisfactory to Lender that all requirements set forth in Section
5.3.2(a) have been satisfied, (ii) a certificate from an officer of Borrower
certifying that all materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid in full and (iii) evidence
satisfactory to Lender that there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to file same, or any
other liens or encumbrances of any nature whatsoever on the Property arising out
of the Restoration which have not either been fully bonded to the satisfaction
of Lender and discharged of record or in the alternative fully insured to the
satisfaction of Lender by the title company issuing the Title Insurance Policy.
(c) All plans and specifications required in connection with
the Restoration shall be subject to prior approval by Lender and by an
independent architect selected by Borrower which shall be reasonably acceptable
to Lender (the "Casualty Consultant"). The identity of the contractors,
subcontractors and materialmen engaged in the Restoration, as well as the
contracts under which they have been engaged, shall be subject to approval by
Lender and the Casualty Consultant. All out-of-pocket costs and expenses
actually incurred by Lender in connection with recovering, holding and advancing
the Net Proceeds for the Restoration including, without limitation, reasonable
attorneys' fees and disbursements and the Casualty Consultant's fees and
disbursements, shall be paid by Borrower.
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(d) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, less the Casualty
Retainage. The term "Casualty Retainage" shall mean an amount equal to ten
percent (10%) of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until the Restoration has
been completed; provided, however, that upon completion of 50% of the work to be
performed by any contractor (as such percentage of completion is determined by
the Casualty Consultant), Lender shall, upon the written request of Borrower,
reduce the Casualty Retainage with respect to future advances allocable to such
contractor to five percent (5%). The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section
5.3.2(d), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 5.3.2(d) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
Governmental Authorities, and Lender receives evidence satisfactory to Lender
that the costs of the Restoration have been paid in full or will be paid in full
out of the Casualty Retainage; provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any contractor,
subcontractor or materialman engaged in the Restoration as of the date upon
which the Casualty Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company issuing the Title Insurance Policy,
and Lender receives an endorsement to the Title Insurance Policy insuring the
continued priority of the lien of the related Mortgage and evidence of payment
of any premium payable for such endorsement. If required by Lender, the release
of any such portion of the Casualty Retainage shall be approved by the surety
company, if any, which has issued a payment or performance bond with respect to
the contractor, subcontractor or materialman.
(e) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the "Net
Proceeds Deficiency") with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 5.3.2 shall constitute additional security for the Debt. Borrower shall
have the option of securing payment of the Net Proceeds Deficiency by delivering
to Lender a letter of credit (in lieu of cash) issued by a financial institution
and pursuant to a letter of credit acceptable to Lender in its sole discretion.
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(g) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender (including
all interest accrued thereon, if any) after the Casualty Consultant certifies to
Lender that the Restoration has been completed in accordance with the provisions
of this Section 5.3.2, and the receipt by Lender of evidence reasonably
satisfactory to Lender that all costs incurred in connection with the
Restoration have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be continuing under
any of the Loan Documents.
(h) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 5.3.2(g) may be retained and applied by Lender toward the
payment of the Debt whether or not then due and payable in such order, priority
and proportions as Lender in its sole discretion shall deem proper, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate.
VI RESERVE FUNDS
Section 6.1 Tax Funds.
6.1.1 Deposits of Tax Funds. Borrower shall deposit with
Lender an amount which, together with Monthly Tax Deposits (as defined below),
will be sufficient to pay Lender's reasonable estimate of Taxes at least ten
(10) days prior to the next due date (the "Initial Tax Deposit") on a date which
is no later than the Securitization Date. Thereafter, Borrower shall deposit
with Lender on the Monthly Payment Date an amount (the "Monthly Tax Deposit")
equal to one-twelfth of the Taxes that Lender reasonably estimates will be
payable during the next ensuing twelve (12) months in order to accumulate with
Lender sufficient funds to pay all such Taxes at least ten (10) days prior to
their respective due dates (the Initial Tax Deposit, together with such
additional Monthly Tax Deposits, shall hereinafter be referred to as the "Tax
Funds"). If at any time after the Securitization Date Lender reasonably
determines that the Tax Funds will not be sufficient to pay the Taxes, Lender
shall notify Borrower of such determination and Borrower shall increase its
monthly payments to Lender by the amount that Lender reasonably estimates is
sufficient to make up the deficiency at least ten (10) days prior to the
respective due dates for the Taxes; provided that if Borrower receives notice of
any deficiency after the date that is ten (10) days prior to the date that Taxes
are due, Borrower will deposit such amount within two (2) Business Days after
its receipt of such notice.
6.1.2 Release of Tax Funds. Lender shall timely apply the Tax
Funds to payments of Taxes. In making any payment relating to Taxes, Lender may
do so according to any ▇▇▇▇, statement or estimate procured from the appropriate
public office (with respect to Taxes) without inquiry into the accuracy of such
▇▇▇▇, statement or estimate or into the validity of
44
any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If
the amount of the Tax Funds shall exceed the amounts due for Taxes, Lender
shall, in its sole discretion, return any excess to Borrower or credit such
excess against future payments to be made to the Tax Funds. Any Tax Funds
(including all interest accrued thereon, if any) remaining after the Debt has
been paid in full shall be returned to Borrower. If (a) the Tax Funds are
available to Lender to make a payment of Taxes when due and (b) Borrower incurs
late fees due to Lender's failure to make such payment of Taxes when due, Lender
shall reimburse Borrower for any such late fees incurred by Borrower.
6.1.3 Application of Tax Funds. Upon the occurrence of an
Event of Default, Lender, at its option, may withdraw all the Tax Funds from the
Tax Account and may apply the Tax Funds either to the payment of Taxes or to
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender's right to withdraw and apply the Tax
Funds shall be in addition to all other rights and remedies provided to Lender
under the Loan Documents.
Section 6.2 Insurance Premium Funds.
6.2.1 Deposits of Insurance Premium Funds. Borrower shall
deposit with Lender an amount which, together with Monthly Insurance Premium
Deposits (as defined below), will be sufficient to pay Lender's reasonable
estimate of Insurance Premiums at least ten (10) days prior to the next due date
(the "Initial Insurance Premium Deposit") on a date which is no later than the
Securitization Date. Thereafter, Borrower shall deposit with Lender on each
Monthly Payment Date an amount (the "Monthly Insurance Premium Deposit") equal
to one-twelfth of the Insurance Premiums that Lender reasonably estimates will
be payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (the Initial Insurance Premium Deposit, together with such Monthly
Insurance Premium Deposits, shall hereinafter be referred to as the "Insurance
Premium Funds"). If at any time after the Securitization Date Lender reasonably
determines that the Insurance Premium Funds will not be sufficient to pay the
Insurance Premiums, Lender shall notify Borrower of such determination and
Borrower shall increase its monthly payments to Lender by the amount that Lender
reasonably estimates is sufficient to make up the deficiency at least thirty
(30) days prior to expiration of the Policies.
6.2.2 Release of Insurance Premium Funds. Lender shall timely
apply the Insurance Premium Funds to payment of Insurance Premiums. In making
any payment relating to Insurance Premiums, Lender may do so according to any
▇▇▇▇, statement or estimate procured from the insurer or its agent, without
inquiry into the accuracy of such ▇▇▇▇, statement or estimate. If the amount of
the Insurance Premium Funds shall exceed the amounts due for Insurance Premiums,
Lender shall, in its sole discretion, return any excess to Borrower or credit
such excess against future payments to be made to the Insurance Premium Funds.
Any Insurance Premium Funds (including all interest accrued thereon, if any)
remaining after the Debt has been paid in full shall be promptly returned to
Borrower. If (a) the Insurance Premium Funds are available to Lender to make a
payment of Insurance Premiums when due and (b) Borrower incurs late fees due to
Lender's failure to make such payment of Insurance Premiums when due, Lender
shall reimburse Borrower for any such late fees incurred by Borrower.
45
6.2.3 Application of Insurance Premium Funds. Upon the
occurrence of an Event of Default, Lender at its option may withdraw the
Insurance Premium Funds from the Insurance Premium Account and may apply the
Insurance Premium Funds to the payment of Insurance Premiums or to the payment
of the Debt in such order, proportion and priority as Lender shall determine in
its sole discretion. Lender's right to withdraw and apply the Insurance Premium
Funds shall be in addition to all other rights and remedies provided to Lender
under the Loan Documents.
Section 6.3 Capital Expenditures Funds.
6.3.1 Deposits of Capital Expenditures Funds. If required
pursuant to Section 2.6, Borrower shall deposit with Lender on the First
Extension Date an amount equal to the Capital Expenditures Deposit (such amount
so deposited shall hereinafter be referred to as the "Capital Expenditures
Funds").
6.3.2 Release of Capital Expenditure Funds. Lender shall
disburse Capital Expenditure Funds only for the costs of those items listed on
the Capital Expenditures Budget annexed hereto.
(a) Lender shall disburse to Borrower the Capital Expenditures
Funds upon satisfaction by Borrower of each of the following conditions: (i)
Borrower shall submit a written request for payment to Lender at least ten (10)
days prior to the date on which Borrower requests such payment be made and
specifies the Capital Expenditures to be paid, (ii) on the date such request is
received by Lender and on the date such payment is to be made, no Event of
Default shall exist and remain uncured, (iii) Lender shall have received a
certificate from Borrower (A) stating that the items to be funded by the
requested disbursement are Capital Expenditures set forth on the Capital
Expenditures Budget, (B) stating that all Capital Expenditures at the Property
which have been funded by all prior disbursements have been completed in good
and workmanlike manner and in accordance with all applicable Legal Requirements,
such certificate to be accompanied by a copy of any license, permit or other
approval required by any Governmental Authority in connection with such Capital
Expenditures and (C) stating that each Person that supplied materials or labor
in connection with the Capital Expenditures performed at the Property to be
funded by the requested disbursement has been or will be paid in full upon such
disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment reasonably satisfactory to Lender, (iv) at Lender's option,
a title search for the Property indicating that the Property is free from all
liens, claims and other encumbrances not previously approved by Lender, and (v)
at Lender's option, if the cost of the Capital Expenditures exceeds $100,000,
Lender shall have received a report satisfactory to Lender in its reasonable
discretion from an architect or engineer approved by Lender in respect of such
architect or engineer's inspection of the required repairs, and (vi) Lender
shall have received such other evidence as
46
Lender shall reasonably request that the Capital Expenditures at the Property to
be funded by the requested disbursement are paid for or will be paid upon such
disbursement to Borrower. Lender shall not be required to disburse Capital
Expenditure Funds more frequently than once each calendar month or with respect
to the Property unless such requested disbursement is in an amount greater than
$25,000 (or a lesser amount if the total amount of Capital Expenditure Funds is
less than $25,000, in which case only one disbursement of the amount remaining
in the account shall be made).
(b) Nothing in this Section 6.4.2 shall (i) make Lender
responsible for making or completing the Capital Expenditures Work; (ii) require
Lender to expend funds in addition to the Capital Expenditures Funds to complete
any Capital Expenditures Work; (iii) obligate Lender to proceed with the Capital
Expenditures Work; or (iv) obligate Lender to demand from Borrower additional
sums to complete any Capital Expenditures Work.
(c) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties to enter onto the Property during normal business
hours (subject to the rights of tenants under their Leases) to inspect the
progress of any Capital Expenditures Work and all materials being used in
connection therewith and to examine all plans and shop drawings relating to such
Capital Expenditures Work. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender's representatives or such
other Persons described above in connection with inspections described in this
Section 6.4.2(d).
(d) If a disbursement will exceed $100,000, Lender may require
an inspection of the Property at Borrower's expense prior to making a
disbursement of Capital Expenditure Funds in order to verify completion of the
Capital Expenditures Work for which reimbursement is sought. Lender may require
that such inspection be conducted by an appropriate independent qualified
professional selected by Lender and may require a certificate of completion by
an independent qualified professional architect acceptable to Lender prior to
the disbursement of Capital Expenditure Funds. Borrower shall pay the expense of
the inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional architect.
(e) In addition to any insurance required under the Loan
Documents, Borrower shall provide or cause to be provided workmen's compensation
insurance, builder's risk, and public liability insurance and other insurance to
the extent required under applicable law in connection with Capital Expenditures
Work. All such policies shall be in form and amount reasonably satisfactory to
Lender.
(f) Any Capital Expenditure Funds (including all interest
accrued thereon, if any) remaining after the Debt has been paid in full shall be
returned to Borrower.
6.3.3 Application of Capital Expenditure Funds. Upon the
occurrence of an Event of Default, Lender, at its option, may withdraw the
Capital Expenditure Funds from the
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Capital Expenditures Account and apply the Capital Expenditure Funds to
completion of the Capital Expenditures Work or to payment of the Debt in such
order, proportion and priority as Lender may determine in its sole discretion.
Lender's right to withdraw and apply the Capital Expenditure Funds shall be in
addition to all other rights and remedies provided to Lender under the Loan
Documents.
Section 6.4 Security Interest in Funds.
6.4.1 Grant of Security Interest. Borrower shall be the owner
of each of the Funds. Borrower hereby pledges, assigns and grants a security
interest to Lender, as security for payment of the Debt and the performance of
all other terms, conditions and covenants of the Loan Documents on Borrower's
part to be paid and performed, in all of Borrower's right, title and interest in
and to the Funds. Each of the Funds shall be under the sole dominion and control
of Lender.
6.4.2 Income Taxes. Borrower shall report on its federal,
state and local income tax returns all interest or income accrued on the Funds.
6.4.3 Prohibition Against Further Encumbrance. Borrower shall
not, without the prior consent of Lender, further pledge, assign or grant any
security interest in the Funds or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.
Section 6.5 The Accounts; Permitted Investments; Earnings.
6.5.1 The Accounts. Borrower shall open with Agent separate
accounts for each of the Tax Funds (the "Tax Account") and the Insurance Premium
Funds (the "Insurance Premium Account") and, simultaneously with the
commencement of the First Extension Period, if applicable, for the Capital
Expenditure Funds (the "Capital Expenditures Account"), each on a date which is
no later than the Securitization Date. The Tax Funds shall be held in the Tax
Account. The Insurance Premium Funds shall be held in the Insurance Premium
Account. The Capital Expenditures Funds shall be held in the Capital
Expenditures Account. At Lender's option, each of the Accounts shall be opened
in Lender's name or in Servicer's name. Each of the Accounts shall (i) be under
the sole dominion and control of Lender and (ii) be opened and maintained as an
Eligible Account.
6.5.2 Permitted Investments. Lender shall invest any balances
in the Accounts in Permitted Investments as instructed by Borrower, provided
that (i) if Borrower fails to so instruct Lender, or upon the occurrence and
continuation of an Event of Default, Lender may invest and reinvest such
balances in Permitted Investments as Lender shall determine in its sole
discretion, (ii) the maturities of the Permitted Investments on deposit in the
Accounts shall be selected and coordinated to become due not later than one day
before any disbursements from the Accounts must be made, (iii) all such
Permitted Investments shall be held in the name of and be under the sole
dominion and control of Lender and subject at all times to the terms hereof, and
48
(iv) no Permitted Investment shall be made unless Lender shall have and continue
to have a perfected first priority Lien in such Permitted Investment securing
the obligations of Borrower hereunder and under the other Loan Documents and all
filings and other actions necessary to ensure the validity, perfection, and
first priority of such Lien shall have been taken. Lender shall have no
liability for any loss investments of funds in the Accounts that are invested in
Permitted Investments and no such loss shall affect Borrower's obligations to
make the deposits required under Sections 6.1, 6.2, 6.3, 6.4 and 6.5 hereof.
Borrower shall report on its federal, state and local income tax reports any
interest or income accrued on funds in the Accounts.
6.5.3 Earnings on Account Collateral; Monthly Statements. All
interest or other income (whether by virtue of Permitted Investments or
otherwise) accruing on funds in the Accounts shall, in each case, be held
therein as part of such Account. All risk of loss in respect of the Accounts
shall be borne by Borrower. Lender shall provide to Borrower a monthly statement
of account showing deposits into and disbursements (or transfers or
reallocations, as the case may be) from each of the Accounts.
Section 6.6 Cash Management.
6.6.1 Lockbox Account. Within thirty (30) days after receiving
written notice of the occurrence of an Event of Default (the "Lockbox Trigger
Date"), Borrower shall open an account (the "Lockbox Account") with Agent. The
Lockbox Account shall be in Lender's name, or at Lender's option, in the
Servicer's name. The Lockbox Account shall be under the sole dominion and
control of Lender. The Lockbox Account will be opened and maintained as an
Eligible Account. Borrower shall pledge, assign and grant a first-priority
security interest in all of Borrower's right, title and interest in and to the
Lockbox Account to Lender, as security for payment of the Debt and the
performance of all other terms, conditions and covenants of the Loan Documents
on Borrower's part to be paid and performed, on a date which is no later than
the Lockbox Trigger Date. Each of the Funds shall be under the sole dominion and
control of Lender.
6.6.2 Cash Management Agreement. Borrower shall provide Lender
with an original copy of the Cash Management Agreement, substantially in the
form attached as Exhibit B hereto and otherwise satisfactory to Lender in its
sole discretion, executed by Borrower and Agent, on a date which is no later
than the Lockbox Trigger Date.
6.6.3 Deposits into Lockbox Account. From and after the
Lockbox Trigger Date, Borrower shall cause all Tenants at the Property to pay
Rent directly into the Lockbox Account on or before the date such Rent is due
under the terms of the applicable Lease. Borrower shall send a notice,
substantially in the form of Exhibit C hereto, on a date which is no later than
the Lockbox Trigger Date to all Tenants at the Property directing them to pay
all Rent into the Lockbox Account. All sums deposited into the Lockbox Account
shall be swept daily into the Cash Management Account established by Borrower
with Agent on a date which is no later than the Lockbox Trigger Date (the "Cash
Management Account"), to be held and administered in accordance with the Cash
Management Agreement. The Cash Management
49
Account shall be in Lender's name, or at Lender's option, in the Servicer's
name. The Cash Management Account shall be under the sole dominion and control
of Lender. The Cash Management Account will be opened and maintained as an
Eligible Account. Borrower shall pledge, assign and grant a first-priority
security interest in all of Borrower's right, title and interest in and to the
Cash Management Account to Lender, as security for payment of the Debt and the
performance of all other terms, conditions and covenants of the Loan Documents
on Borrower's part to be paid and performed, on a date which is no later than
the Lockbox Trigger Date. None of the Lockbox Account, the Cash Management
Account or the Cash Management Agreement shall alter or diminish in any way
Borrower's obligation to make timely payment and deposits to all sums required
to be paid or deposited under any Loan Document.
VII PROPERTY MANAGEMENT
Section 7.1 The Management Agreement.
Borrower shall cause Manager to manage the Property in
accordance with the Management Agreement. Borrower shall (i) diligently perform
and observe all of the terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed and observed (ii) promptly
notify Lender of any notice to Borrower of any default by Borrower in the
performance or observance of any of the terms, covenants or conditions of the
Management Agreement on the part of Borrower to be performed and observed. If
Borrower shall default in the performance or observance of any material term,
covenant or condition of the Management Agreement on the part of Borrower to be
performed or observed, then, without limiting Lender's other rights or remedies
under this Agreement or the other Loan Documents, and without waiving or
releasing Borrower from any of its obligations hereunder or under the Management
Agreement, Lender shall have the right, but shall be under no obligation, to pay
any sums and to perform any act as may be appropriate to cause all the material
terms, covenants and conditions of the Management Agreement on the part of
Borrower to be performed or observed.
Section 7.2 Prohibition Against Termination or Modification.
Subject to the Assignment of Management Agreement, Borrower
shall not (a) surrender the Management Agreement, (b) consent to the assignment
by the Manager of its interest under the Management Agreement, (c) terminate or
cancel the Management Agreement, (d) materially modify, change, supplement,
alter or amend the Management Agreement, (e) change, replace or terminate the
Manager or (f) enter into a new management agreement; provided, however, that
the Management Agreement may be assigned without material modification by the
Manager to an Affiliate of Manager or Borrower so long as such Affiliate (i)
assumes all of Manager's rights and obligations under the Management Agreement
in writing and (ii) executes and delivers to Lender a Replacement Assignment (as
defined in the Assignment of Management Agreement).
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Section 7.3 Replacement of Manager.
Lender shall have the right to require Borrower to replace the
Manager with a Person chosen by Borrower and approved by Lender upon the
occurrence of any one or more of the following events: (i) at any time following
the occurrence of an Event of Default and/or (ii) at any time that the Manager
has engaged in (x) gross negligence, (y) fraud or (z) willful misconduct.
VIII PERMITTED TRANSFERS
Section 8.1 Permitted Transfers of Interest in Borrower.
(a) Notwithstanding anything to the contrary contained in this
Agreement or in Section 7 of the Mortgage, but subject to Section 8.1(b) below,
without the consent of Lender:
(i) up to an aggregate of 70% of the membership interests in
Metropolitan may be transferred upon not less than ten (10) days prior
notice to Lender, provided that (i) each transferee is a Qualified
Transferee, (ii) after giving effect to such transfer, the Operating
Partnership shall continue to control the day-to-day and overall
management and operation of Metropolitan and Metropolitan Operating
Partnership and (iii) Lender shall promptly be provided with copies of
all documents and instruments evidencing such transfer;
(ii) up to an aggregate of 70% of the membership interests in
the SPC Member may be transferred upon not less than ten (10) days
prior notice to Lender, provided that (i) each transferee is a
Qualified Transferee, (ii) after giving effect to such transfer,
Metropolitan shall continue to control the day-to-day and overall
management and operation of the SPC Member and Borrower and (iii)
Lender shall promptly be provided with copies of all documents and
instruments evidencing such transfer;
(iii) shares of common or preferred stock of Reckson shall be
freely transferable;
(iv) limited partnership interests in the Operating
Partnership shall be freely transferable; and
(v) Crescent's preferred equity interest in Metropolitan shall
be freely transferable.
(b) In addition to the foregoing, with respect to any transfer
otherwise permitted by Section 8.1(a) above, if, after giving effect to such
transfer and all prior transfers, more than 49% in the aggregate of the direct
and indirect interests in Borrower are owned by any Person that owned less than
a 49% direct or indirect interest in Borrower as of the Securitization Date, the
confirmation in writing by the applicable Rating Agencies that the proposed
transfer will not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned in
connection with any Securitization shall be a condition precedent to the
implementation of such transfer.
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IX SALE AND SECURITIZATION OF MORTGAGE
Section 9.1 Sale of Mortgage and Securitization.
(a) Lender shall have the right (i) to sell or otherwise
transfer the Loan as a whole loan, (ii) to sell participation interests in the
Loan to any entity other than to a publicly traded real estate investment trust
of which the majority of its assets are office properties or (iii) to securitize
the Loan in a single asset securitization or a pooled loan securitization. (The
transaction referred to in clauses (i), (ii) and (iii) shall hereinafter be
referred to collectively as "Secondary Market Transactions" and the transactions
referred to in clause (iii) shall hereinafter be referred to as a
"Securitization". Any certificates, notes or other securities issued in
connection with a Securitization are hereinafter referred to as "Securities").
(b) If requested by Lender, Borrower shall assist Lender in
satisfying the market standards to which Lender customarily adheres or which may
be reasonably required in the marketplace or by the Rating Agencies in
connection with any Securitization, including, without limitation, to:
(i) (A) provide updated financial and other information with
respect to the Property, the business operated at the Property,
Borrower and the Manager and (B) provide updated budgets relating to
the Property (the "Updated Information"), together, if customary, with
appropriate verification of the Updated Information through letters of
auditors acceptable to Lender and the Rating Agencies;
(ii) (A) provide the Insolvency Opinion and (B) cooperate (at
de minimis cost and expense to Borrower) with Lender in obtaining any
other opinions of counsel, which may be relied upon by Lender, the
Rating Agencies and their respective counsel, agents and
representatives, as to fraudulent conveyance, true sale or any other
opinion customary in Securitizations or required by the Rating Agencies
with respect to the Property, Borrower and/or its Affiliates;
(iii) provide updated, as of the closing date of the
Securitization, representations and warranties made in the Loan
Documents and such additional representations and warranties as the
Rating Agencies may require; and
(iv) execute amendments to the Loan Documents and Borrower's
organizational documents reasonably requested by Lender; provided,
however, that Borrower shall not be required to modify or amend any
Loan Document if such modification or amendment would (A) change the
interest rate, the stated maturity or the amortization of principal as
set forth herein or in the Note, or (B) modify or amend any other
material term of the Loan (including, without limitation, the
provisions of Article VIII above.
(c) If requested by Lender, Borrower shall cooperate with
Lender in obtaining a FIRREA appraisal of the Property in connection with any
Secondary Market Transaction, provided that Borrower is not required to pay for
any such appraisal.
52
Section 9.2 Securitization Indemnification.
(a) Borrower understands that information provided to Lender
by Borrower and its agents, counsel and representatives may be included in
disclosure documents in connection with the Securitization, including, without
limitation, an offering circular, a prospectus, prospectus supplement, private
placement memorandum or other offering document (each, a "Disclosure Document")
and may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and
may be made available to investors or prospective investors in the Securities,
the Rating Agencies, and service providers relating to the Securitization.
(b) Borrower agrees to provide in connection with each of (i)
a preliminary and a final private placement memorandum or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, an agreement (A)
certifying that Borrower has examined such Disclosure Documents specified by
Lender and that each such Disclosure Document, as it relates to Borrower,
Borrower Affiliates, the Property, Manager and all other aspects of the Loan,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 9.2, Lender hereunder shall include its
officers and directors), the Affiliate of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co.
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") that has filed the registration statement relating to the
Securitization (the "Registration Statement"), each of its directors, each of
its officers who have signed the Registration Statement and each Person that
controls the Affiliate within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group"), and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, each of its directors and each Person who controls ▇▇▇▇▇▇
▇▇▇▇▇▇▇ within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act (collectively, the "Underwriter Group") for any losses, claims,
damages or liabilities (collectively, the "Liabilities") to which Lender, the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such sections or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated in such sections or necessary in order to make the
statements in such sections, in light of the circumstances under which they were
made, not misleading and (C) agreeing to reimburse Lender, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Group and/or the Underwriter Group for any legal or other expenses reasonably
incurred by Lender, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group and the Underwriter Group in
connection with investigating or defending the Liabilities; provided, however,
that Borrower will be liable in any such case under clauses (B) or (C) above
only to the extent that any such loss claim, damage or liability arises out of
or is based upon any such untrue statement or omission made therein in reliance
upon and in conformity with information furnished to Lender by or on behalf of
Borrower in connection with the preparation of the Disclosure Document or in
connection with the underwriting or closing of the Loan, including, without
limitation, financial statements of Borrower, operating statements, rent rolls,
appraisals, market studies, environmental site assessment reports and property
condition reports with respect to the Property. This indemnity agreement will be
in addition to any liability which Borrower may otherwise have.
53
(c) In connection with any filing under or pursuant to the
Exchange Act in connection with or relating to a Securitization, Borrower shall
(i) indemnify Lender, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group and the Underwriter Group for
Liabilities to which Lender, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group or the Underwriter Group
may become subject insofar as the Liabilities arise out of or are based upon the
omission or alleged omission to state in the Disclosure Document a material fact
required to be stated in the Disclosure Document in order to make the statements
in the Disclosure Document, in light of the circumstances under which they were
made, not misleading and (ii) reimburse Lender, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group or the Underwriter Group in connection with defending
or investigating the Liabilities.
(d) Promptly after receipt by an indemnified party under this
Section 9.2 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9.2, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party under this Section 9.2, such indemnified party shall pay for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party at the cost of the indemnifying party. The indemnifying party
shall not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.2(b) or
(c) is for any reason held to be unenforceable as to an indemnified party in
respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein which would otherwise be indemnifiable under
Section 9.2(b) or (c), the indemnifying party shall contribute to the amount
paid or payable by
54
the indemnified party as a result of such losses, claims, damages or liabilities
(or action in respect thereof); provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, the following factors
shall be considered: (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ and Borrower's relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted; (ii) the opportunity to correct and prevent any statement or omission;
and (iii) any other equitable considerations appropriate in the circumstances.
Lender and Borrower hereby agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation.
(f) The liabilities and obligations of both Borrower and
Lender under this Section 9.2 shall survive the termination of this Agreement
and the satisfaction and discharge of the Debt.
X DEFAULTS
Section 10.1 Event of Default.
(a) Each of the following events shall constitute an event of
default hereunder (an "Event of Default"):
(i) if any portion of the Debt is not paid when due; provided,
however, that until the Securitization Date has occurred, failure to
pay interest with respect to the Loan on any Monthly Payment Date shall
not constitute an Event of Default unless such failure shall continue
for two (2) Business Days after written notice to Borrower of such
failure;
(ii) if any of the Taxes or Other Charges are not paid when
due; provided, however, that it shall not be an Event of Default if (A)
Borrower is depositing Tax Funds with Lender in accordance with the
terms of this Agreement, (B) such Tax Funds are available to Lender to
make any payment of Taxes when due and (C) Lender fails to make any
payment of Taxes when due;
(iii) if the Policies are not kept in full force and effect;
(iv) if Borrower or SPC Member breaches or permits or suffers
a breach of Section 3.1.24 hereof or Section 7 of the Mortgage;
(v) if any representation or warranty made by Borrower herein
or in any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to
Lender shall have been false or misleading in any material respect as
of the date the representation or warranty was made;
(vi) if Borrower or SPC Member shall make an assignment for
the benefit of creditors;
55
(vii) if a receiver, liquidator or trustee shall be appointed
for Borrower or Metropolitan or if Borrower or Metropolitan shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against,
consented to, or acquiesced in by, Borrower or Metropolitan, or if any
proceeding for the dissolution or liquidation of Borrower or
Metropolitan shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and
not consented to by Borrower or Metropolitan, as applicable, upon the
same not being discharged, stayed or dismissed within thirty (30) days;
(viii) if Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;
(ix) if any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Lender
in connection with the Loan, or in any other non-consolidation
delivered subsequent to the closing of the Loan, is or shall become
untrue in any material respect;
(x) if Borrower shall continue to be in Default under any of
the other terms, covenants or conditions of this Agreement not
specified in subsections (i) to (ix) above, for seven (7) Business Days
after notice to Borrower from Lender, in the case of any Default which
can be cured by the payment of a sum of money, or for thirty (30) days
after notice from Lender in the case of any other Default; provided,
however, that if such nonmonetary Default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided
further that Borrower shall have commenced to cure such Default within
such 30-day period and thereafter diligently and expeditiously proceeds
to cure the same, such 30-day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence
to cure such Default, such additional period not to exceed 180 days; or
(xi) if there shall be a default under any of the other Loan
Documents beyond any applicable cure periods contained in such
documents, whether as to Borrower or the Property, or if any other such
event shall occur or condition shall exist, if the effect of such event
or condition is to accelerate the maturity of any portion of the Debt
or to permit Lender to accelerate the maturity of all or any portion of
the Debt.
(b) Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (vi), (vii) or (viii) above) and at any
time thereafter Lender may, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or at
law or in equity, take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in and to all
or any portion of the Property, including, without limitation, declaring the
Debt to be immediately due and payable, and Lender may enforce or avail itself
of any or all rights or remedies provided in
56
the Loan Documents against Borrower and any portion of the Property, including,
without limitation, all rights or remedies available at law or in equity; and
upon any Event of Default described in clauses (vi), (vii) or (viii) above, the
Debt and all other obligations of Borrower hereunder and under the other Loan
Documents shall immediately and automatically become due and payable, without
notice or demand, and Borrower hereby expressly waives any such notice or
demand, anything contained herein or in any other Loan Document to the contrary
notwithstanding.
Section 10.2 Remedies.
(a) Upon the occurrence of an Event of Default, all or any one
or more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing, Borrower agrees that if an
Event of Default is continuing (i) Lender is not subject to any "one action" or
"election of remedies" law or rule, and (ii) all liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect
until Lender has exhausted all of its remedies against the Property and the
Mortgage has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.
(b) With respect to Borrower and the Property, Lender may seek
satisfaction out of the Property or any part thereof, in its absolute
discretion, in respect of the Debt. In addition, Lender shall have the right
from time to time to partially foreclose the Mortgage in any manner and for any
amounts secured by the Mortgage then due and payable as determined by Lender in
its sole discretion including, without limitation, the following circumstances:
(i) in the event Borrower defaults beyond any applicable grace period in the
payment of one or more scheduled payments of interest, Lender may foreclose the
Mortgage to recover such delinquent payments, or (ii) in the event Lender elects
to accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose the Mortgage to recover so much of the principal balance of
the Loan as Lender may accelerate and such other sums secured by the Mortgage as
Lender may elect. Notwithstanding one or more partial foreclosures, the Property
shall remain subject to the Mortgage to secure payment of sums secured by the
Mortgage and not previously recovered.
(c) Lender shall have the right from time to time to sever the
Note and the other Loan Documents into one or more separate notes, mortgages and
other security documents
57
(the "Severed Loan Documents") in such denominations as Lender shall determine
in its sole discretion for purposes of evidencing and enforcing its rights and
remedies provided hereunder. Borrower shall execute and deliver to Lender from
time to time, promptly after the request of Lender, a severance agreement and
such other documents as Lender shall request in order to effect the severance
described in the preceding sentence, all in form and substance reasonably
satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints
Lender as its true and lawful attorney, coupled with an interest, in its name
and stead to make and execute all documents necessary or desirable to effect the
aforesaid severance, Borrower ratifying all that its said attorney shall do by
virtue thereof; provided, however, Lender shall not make or execute any such
documents under such power until three (3) days after notice has been given to
Borrower by Lender of Lender's intent to exercise its rights under such power.
Except as may be required in connection with a securitization pursuant to
Section 9.1 hereof, (i) Borrower shall not be obligated to pay any costs or
expenses incurred in connection with the preparation, execution, recording or
filing of the Severed Loan Documents, and (ii) the Severed Loan Documents shall
not contain any representations, warranties or covenants not contained in the
Loan Documents and any such representations and warranties contained in the
Severed Loan Documents will be given by Borrower only as of the Closing Date.
(d) Any amounts recovered from the Property or any other
collateral for the Loan after an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any other
amounts due under the Loan Documents in such order, priority and proportions as
Lender in its sole discretion shall determine.
Section 10.3 Remedies Cumulative.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.
XI MISCELLANEOUS
Section 11.1 Successors and Assigns.
All covenants, promises and agreements in this Agreement, by
or on behalf of Borrower, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.
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Section 11.2 Lender's Discretion.
Whenever pursuant to this Agreement Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive. Prior to a Securitization, whenever
pursuant to this Agreement the Rating Agencies are given any right to approve or
disapprove, or any arrangement or term is to be satisfactory to the Rating
Agencies, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory, based upon Lender's
determination of Rating Agency criteria, shall be substituted therefore.
Section 11.3 Governing Law.
THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING,
TO THE EXTENT PERMITTED BY LAW, ALL OTHER CHOICE OF LAW AND CONFLICT OF LAW
RULES. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE. ANY LEGAL SUIT, ACTION OR
PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, PURSUANT TO SECTION 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW
OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
Section 11.4 Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination
or waiver of any provision of this Agreement or of any other Loan Document, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.
59
Section 11.5 Delay Not a Waiver.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under any
other Loan Document, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of all
other amounts due under this Agreement or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
Section 11.6 Notices.
All notices, demands, requests, consents, approvals or other
communications (any of the foregoing, a "Notice") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with answer
back acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address hereinafter set forth, or to such
other address as such party may hereafter specify in accordance with the
provisions of this Section 11.6. Any Notice shall be deemed to have been
received three (3) days after the date such Notice is mailed or on the date of
sending by telefax or delivery by hand or the next Business Day if sent by an
overnight commercial courier addressed to the parties as follows:
If to Lender: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: Reckson Associates Realty Corp.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - 27th Floor
New York, New York 10022
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III and ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
60
Section 11.7 Trial by Jury.
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
Section 11.8 Headings.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
Section 11.9 Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
Section 11.10 Preferences.
Except as otherwise explicitly set forth in this Agreement,
Lender shall have the continuing and exclusive right to apply or reverse and
reapply any and all payments by Borrower to any portion of the obligations of
Borrower hereunder. To the extent Borrower makes a payment or payments to
Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.
61
Section 11.11 Waiver of Notice.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
Section 11.12 Remedies of Borrower.
In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Lender or
such agent, as the case may be, has an obligation to act reasonably or promptly,
Borrower agrees that neither Lender nor its agents shall be liable for any
monetary damages, and Borrower's sole remedy shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
Section 11.13 Expenses; Indemnity.
(a) Borrower covenants and agrees to pay or, if Borrower fails
to pay, to reimburse Lender upon receipt of written notice from Lender, for all
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Lender in connection with (i) Borrower's ongoing
performance of and compliance with Borrower's agreements and covenants contained
in this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (ii) Lender's ongoing
performance of and compliance with all agreements and covenants contained in
this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower; (iv) the filing and recording fees
and expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred, in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (v) enforcing or preserving any
rights, in response to third party claims (as to third party claims, to the
extent that Borrower has not promptly undertaken to defend such claims and
diligently prosecuted such defense in a manner and with counsel reasonably
satisfactory to Lender) or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; and (vi) enforcing any obligations of or collecting
any payments due from Borrower under this Agreement, the other Loan Documents or
with respect to the Property or in
62
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "workout" or of any insolvency
or bankruptcy proceedings; provided, however, that Borrower shall not be liable
for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of
Lender. Any costs due and payable to Lender may be paid from the Lockbox
Account.
(b) Borrower shall indemnify, defend and hold harmless Lender
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for Lender in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not Lender shall be designated a party thereto), that may be imposed
on, incurred by, or asserted against Lender in any manner relating to or arising
out of (i) any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "Indemnified Liabilities"); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.
Section 11.14 Schedules Incorporated.
The Schedules annexed hereto are hereby incorporated herein as
a part of this Agreement with the same effect as if set forth in the body
hereof.
Section 11.15 Offsets, Counterclaims and Defenses.
Any assignee of Lender's interest in and to this Agreement and
the other Loan Documents which is not an Affiliate of Lender shall take the same
free and clear of all offsets, counterclaims or defenses which are unrelated to
such documents which Borrower may otherwise have against any assignor of such
documents, and no such unrelated counterclaim or defense shall be interposed or
asserted by Borrower in any action or proceeding brought by any such assignee
upon such documents and any such right to interpose or assert any such unrelated
offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower; provided, however, that an Affiliate of Lender
shall not be deemed to include any transferee of Lender's interest in and to
this Agreement and the other Loan Documents in connection with a Securitization.
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Section 11.16 No Joint Venture or Partnership; No Third Party
Beneficiaries.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy in common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender any right to
insist upon or to enforce the performance or observance of any of the
obligations contained herein or therein. All conditions to the obligations of
Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
Section 11.17 Publicity.
Except as required by law, all news releases, publicity or
advertising, in each case, initiated by Borrower or its Affiliates, through any
media intended to reach the general public which refers to the Loan Documents or
the financing evidenced by the Loan Documents, to Lender, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., or any of their Affiliates shall be subject to the prior
approval of Lender, not to be unreasonably withheld or delayed. If Lender shall
fail to disapprove any written request regarding a news release, publicity or
advertising within three (3) Business Days of Lender's receipt of such request,
Lender shall be conclusively deemed to have approved such news release,
publicity or advertising.
Section 11.18 Waiver of Marshalling of Assets.
To the fullest extent permitted by law, Borrower, for itself
and its successors and assigns, waives all rights to a marshalling of the assets
of Borrower, Borrower's partners and others with interests in Borrower, and of
the Property, or to a sale in inverse order of alienation in the event of
foreclosure of the Mortgage, and agrees not to assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or
any other matters whatsoever to defeat, reduce or affect the right of Lender
under the Loan Documents to a sale of the Property for the collection of the
Debt without any prior or different resort for collection or of the right of
Lender to the payment of the Debt out of the net proceeds of the Property in
preference to every other claimant whatsoever.
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Section 11.19 Waiver of Counterclaim.
Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents.
Section 11.20 Conflict; Construction of Documents; Reliance.
In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of
the Loan Documents and that such Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely
on its own judgment and advisors in entering into the Loan without relying in
any manner on any statements, representations or recommendations of Lender or
any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available to
it under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
Section 11.21 Brokers and Financial Advisors.
Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Lender hereby
represents that it has dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement. Borrower hereby agrees to indemnify, defend and
hold Lender harmless from and against any and all claims, liabilities, costs and
expenses of any kind (including Lender's attorneys' fees and expenses) in any
way relating to or arising from a claim by any Person that such Person acted on
behalf of Borrower in connection with the transactions contemplated herein. The
provisions of this Section 11.21 shall survive the expiration and termination of
this Agreement and the payment of the Debt.
Section 11.22 Exculpation.
Subject to the qualifications below, (i) Lender shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Note, this Agreement, the Mortgage or the other
Loan Documents by any action or proceeding wherein a money judgment shall be
sought against any of the members of Borrower or any direct or indirect partner,
shareholder, member, manager, owner, officer, director, trustee or employee in
or of Borrower (collectively, the "Exculpated Parties") or Borrower, except that
Lender may
65
bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Mortgage and the other Loan
Documents, or in the Property, the Rents, or any other collateral given to
Lender pursuant to the Loan Documents, (ii) except as specifically provided
herein, any judgment in any such action or proceeding shall be enforceable
against Borrower only to the extent of Borrower's interest in the Property, in
the Rents and in any other collateral given to Lender, and Lender, by accepting
the Note, this Agreement, the Mortgage and the other Loan Documents, agrees that
it shall not ▇▇▇ for, seek or demand any deficiency judgment against Borrower or
any Exculpated Parties in any such action or proceeding under or by reason of or
under or in connection with the Note, this Agreement, the Mortgage or the other
Loan Documents and (iii) none of the Exculpated Parties shall have any personal
liability in any respect for the Loan or the obligations of Borrower contained
in the Loan Documents. The provisions of this Section shall not, however, (a)
constitute a waiver, release or impairment of any obligation evidenced or
secured by any of the Loan Documents; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under the Mortgage; (c) affect the validity or enforceability of or any guaranty
made in connection with the Loan (including, without limitation, the Guaranty)
or any of the rights and remedies of Lender thereunder, or be taken to prevent
recourse against any guarantor (including, without limitation, Metropolitan)
under any guaranty made in connection with the Loan (including, without
limitation, the Guaranty); (d) impair the right of Lender to obtain the
appointment of a receiver; (e) impair the enforcement of the Assignment of
Leases; (f) constitute a prohibition against Lender to seek a deficiency
judgment against Borrower in order to fully realize the security granted by the
Mortgage or to commence any other appropriate action or proceeding in order for
Lender to exercise its remedies against the Property; or (g) constitute a waiver
of the right of Lender to enforce the liability and obligation of Borrower, by
money judgment or otherwise, to the extent of any loss, damage, cost, expense,
liability, claim or other obligation incurred by Lender (including attorneys'
fees and costs reasonably incurred) arising out of or in connection with any of
the following:
(i) fraud or intentional misrepresentation by Borrower or any
guarantor in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower;
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the
Mortgage concerning environmental laws, hazardous substances and
asbestos and any indemnification of Lender with respect thereto in
either document;
(iv) the removal or disposal of any portion of the Property
after an Event of Default without replacing the same with an item or
items of comparable value;
(v) the misapplication or conversion by Borrower of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (B) any Awards or other amounts received in connection
with the Condemnation of all or a portion of the Property, or (C) any
Rents following an Event of Default;
66
(vi) failure to pay charges for labor or materials or other
charges that can create liens on any portion of the Property;
(vii) any security deposits, advance deposits or any other
deposits collected with respect to the Property which are not delivered
to Lender upon a foreclosure of the Property or action in lieu thereof,
except to the extent any such security deposits were applied in
accordance with the terms and conditions of any of the Leases prior to
the occurrence of the Event of Default that gave rise to such
foreclosure or action in lieu thereof;
(viii) Borrower's indemnification of Lender set forth in
Section 9.2 hereof;
(ix) failure to maintain Borrower's status as a single purpose
entity; and
(x) failure to permit on-site inspections of the Property,
failure to provide financial information or failure to appoint a new
property manager upon the request of Lender after an Event of Default,
each as required by, and in accordance with, the terms and provisions
of, this Agreement and the Mortgage, if such condition shall continue
for five (5) Business Days after notice thereof.
Notwithstanding anything to the contrary in this Agreement,
the Note or any of the Loan Documents, (A) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the Bankruptcy Code to file a claim for the full amount
of the Debt or to require that all collateral shall continue to secure all of
the Debt owing to Lender in accordance with the Loan Documents, and (B) the Debt
shall be fully recourse to Borrower in the event: (i) Borrower fails to obtain
Lender's prior written consent to any subordinate financing or other voluntary
lien encumbering the Property; or (ii) Borrower fails to obtain Lender's prior
written consent to any assignment, transfer, or conveyance of the Property or
any interest therein as required by the Mortgage or this Agreement.
Section 11.23 Prior Agreements.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, including, without limitation, the Letter
dated October 26, 1999 (as amended) between Borrower and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, are
superseded by the terms of this Agreement and the other Loan Documents.
67
Section 11.24 Servicer.
At the option of Lender, the Loan may be serviced by a
servicer (the "Servicer") selected by Lender and Lender may delegate all or any
portion of its responsibilities under this Agreement and the other Loan
Documents to the Servicer pursuant to a servicing agreement (the "Servicing
Agreement") between Lender and Servicer.
Section 11.25 Assignment to Successor Lender.
Lender shall, upon (i) payment in full of the Debt and (ii)
the written request of Borrower, assign the Mortgage and the Note without
recourse, representation or warranty of any kind to an assignee designated by
Borrower; provided, however, that Borrower shall pay all third party,
out-of-pocket costs or expenses incurred by Lender (including reasonable
attorney's fees of outside counsel) in connection with such assignment.
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IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
LENDER:
▇▇▇▇▇▇ FINANCIAL CORPORATION, a
Pennsylvania corporation
By:
--------------------------------
Name:
Title:
BORROWER:
1350 LLC, a Delaware limited liability company
By: 1350 Mezzanine LLC, a Delaware limited
liability company
By: Metropolitan Operating Partnership,
L.P., a Delaware limited partnership
By: Metropolitan Partners LLC, a
Delaware limited liability
company
By:
-----------------------------
Name:
Title:
69
SCHEDULE 1
ANNUAL BUDGET
Loan Year Item Estimated Cost Total Annual Amount
--------- ---- -------------- -------------------
SCHEDULE 2
CAPITAL EXPENDITURES BUDGET
Loan Year Item Estimated Cost Total Annual Amount
--------- ---- -------------- -------------------
SCHEDULE 3
NON-COMPLIANCE
NONE
SCHEDULE 4
LEASES
SCHEDULE 4A
DEFAULTED LEASES
EXHIBIT A
FORM OF FINANCIAL STATEMENTS
EXHIBIT B
FORM OF CASH MANAGEMENT AGREEMENT
EXHIBIT C
LETTER OF INSTRUCTION
------------ ---, -----
[Tenants under Leases]
Re: Lease dated ________ between _______________,
as Landlord, and _______________, as Tenant,
concerning premises known as ________________
Ladies and Gentlemen:
This letter shall constitute notice to you that the
undersigned has granted a security interest in the captioned lease and all
rents, additional rent and all other monetary obligations to landlord thereunder
(collectively, "Rent") in favor of ▇▇▇▇▇▇ Financial Corporation, as lender
("Lender"), to secure certain of the undersigned's obligations to Lender. The
undersigned hereby irrevocably instructs and authorizes you to disregard any and
all previous notices sent to you in connection with Rent and hereafter to
deliver by wire transfer of immediately available funds all Rent as follows:
Account No. ______________
[Bank with Operating Account]
[Bank's Address]
Attention: _________________
ABA# ____________________
You hereby agree that you have no right of offset against the
Rent and shall not exercise or attempt to exercise any such right against the
Rent.
The instructions set forth herein are irrevocable and are not
subject to modification in any manner, except that ▇▇▇▇▇▇ Financial Corporation,
under that certain Consolidated, Amended and Restated Mortgage, Security
Agreement and Fixture Filing, dated as of the date hereof, from the undersigned
in favor of Lender, or any successor lender so identified by Lender, may by
written notice to you rescind the instructions contained herein.
Sincerely,
1350 LLC
By:
-----------------------------
Name:
Title:
ACKNOWLEDGMENT AND AGREEMENT
The undersigned acknowledges notice of the security interest
of Lender and hereby confirms that the undersigned has received no notice of any
other pledge or assignment of the Rent and will honor the above instructions.
All payments made by the undersigned to Lender shall be made irrespective of,
and without deduction for, any counterclaim, defense, recoupment or setoff.
[Tenant]
By:
-----------------------------
Name:
Title:
Dated as of: __________ ___, _____