Exhibit 99.3
LOAN AGREEMENT BETWEEN CAMEZZ LLC AS BORROWER AND ▇▇▇▇▇▇ FINANCIAL CORPORATION
AS MEZZANINE LENDER
EXECUTION COPY
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CAMEZZ LLC
BORROWER
LOAN AGREEMENT
DATED AS OF APRIL 14, 2000
▇▇▇▇▇▇ FINANCIAL CORPORATION
MEZZANINE LENDER
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
1.1 Defined Terms......................................................................2
1.2 Other Definitional Provisions.....................................................13
ARTICLE 2
AMOUNT AND TERMS OF MEZZANINE LOAN
2.1 Mezzanine Loan; Maturity Date.....................................................14
2.2 Mezzanine Note....................................................................14
2.3 Prepayments.......................................................................15
2.4 Interest Rate; Repayment; Payment Dates...........................................17
2.5 Computation of Interest...........................................................20
2.6 Interest Rate Cap Agreement.......................................................20
2.7 Payments upon Liquidation Event...................................................21
2.8 Payment of Principal and Interest.................................................21
2.9 Usury Savings.....................................................................22
2.10 Late Payment Charge...............................................................22
2.11 Servicer..........................................................................22
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Single Purpose....................................................................23
3.2 Limited Assets and Liabilities....................................................23
3.3 Existence; Compliance with Law....................................................23
3.4 Power; Authorization; Enforceable Obligations.....................................23
3.5 No Legal Bar......................................................................23
3.6 No Material Litigation............................................................24
3.7 No Contractual Obligations........................................................24
3.8 No Burdensome Restrictions........................................................24
3.9 Investment Company Act and Other Statutes.........................................24
3.10 Subsidiaries......................................................................24
3.11 Accuracy and Completeness of Information..........................................24
3.12 No Default........................................................................25
3.13 Organizational Chart..............................................................25
3.14 Financial Statements..............................................................25
3.15 Tax Filings.......................................................................25
3.16 Solvency..........................................................................25
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ARTICLE 4
CONDITIONS PRECEDENT
4.1 Conditions Precedent to Mezzanine Loan............................................26
ARTICLE 5
ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS
5.1 Single Purpose Entity/Separateness................................................27
5.2 Operational Matters...............................................................29
5.3 Amendments........................................................................31
5.4 Manager...........................................................................31
5.5 Independent Directors; Bankruptcy Action..........................................31
5.6 Interest Rate Cap.................................................................31
5.7 Conduct of Business and Maintenance of Existence..................................31
5.8 Inspection of Mortgaged Property; Books and Records; Discussions; Consents........32
5.9 Notices...........................................................................32
5.10 Special Distributions.............................................................33
5.11 Reports, etc......................................................................33
5.12 Financial Statements..............................................................33
5.13 Curing............................................................................33
5.14 Further Assurances................................................................33
5.15 Indemnification...................................................................34
ARTICLE 6
NEGATIVE COVENANTS
6.1 Single Purpose Existence and Separateness of Entities.............................34
6.2 Limitation on Securities Issuances................................................34
6.3 Limitations on Distributions......................................................34
6.4 Liens.............................................................................35
6.5 Other Limitations.................................................................35
6.6 Contractual Obligations...........................................................36
6.7 Major Leases......................................................................36
ARTICLE 7
EVENTS OF DEFAULT
7.1 Events of Default.................................................................36
7.2 Remedies for Events of Default....................................................38
7.3 Power of Attorney.................................................................39
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ARTICLE 8
OTHER AGREEMENTS
8.1 Permitted Transactions............................................................39
8.2 Termination of Manager; Management................................................42
8.3 Borrower Transfer Restrictions....................................................42
8.4 Budgets...........................................................................43
ARTICLE 9
MISCELLANEOUS
9.1 Amendments and Waivers............................................................44
9.2 Notices...........................................................................44
9.3 No Waiver; Cumulative Remedies....................................................45
9.4 Survival of Representations and Warranties........................................46
9.5 Payment of Expenses and Taxes.....................................................46
9.6 Successors and Assigns............................................................47
9.7 Set-off...........................................................................47
9.8 Counterparts......................................................................48
9.9 GOVERNING LAW.....................................................................48
9.10 Severability......................................................................48
9.11 Integration.......................................................................48
9.12 Submission To Jurisdiction; Waivers...............................................48
9.13 Acknowledgments...................................................................49
9.14 Exculpation.......................................................................49
9.15 Reinstatement.....................................................................50
9.16 WAIVER OF JURY TRIAL, DAMAGES, JURISDICTION.......................................51
9.17 Cooperation.......................................................................52
SCHEDULES
Schedule 1 ORGANIZATIONAL CHART
Schedule 2 MEZZANINE RELEASE AMOUNTS
Schedule 3 MATERIAL LITIGATION
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LOAN AGREEMENT, dated as of April 14, 2000, between CAMEZZ
LLC, a Delaware limited liability company, as borrower (the "BORROWER"), and
▇▇▇▇▇▇ Financial Corporation, a Pennsylvania corporation, as mezzanine lender
(collectively, with its permitted successors and assigns, "MEZZANINE LENDER").
WHEREAS, ▇▇▇▇▇▇ Financial Corporation, a Pennsylvania
corporation, as mortgage lender ("MORTGAGE LENDER"), is making a loan in the
principal amount of $140,000,000 (the "MORTGAGE LOAN") to One ▇▇▇▇▇▇▇ LLC, a
Delaware limited liability company ("MORTGAGOR I"), and Cambridge Athenaeum LLC,
a Delaware limited liability company ("MORTGAGOR II" and, collectively with
Mortgagor I, the "MORTGAGORS") pursuant to a Loan Agreement dated April 14, 2000
(as amended, supplemented or otherwise modified from time to time, the "MORTGAGE
LOAN AGREEMENT"), which Mortgage Loan is evidenced by a Promissory Note dated as
of April 14, 2000 (the "MORTGAGE NOTE") made by Mortgagors to Mortgage Lender
and secured by a certain Mortgage and Security Agreement dated April 14, 2000
(the "MORTGAGE") by the Mortgagors in favor of Mortgage Lender pursuant to which
the Mortgagors have granted the Mortgage Lender a first priority mortgage on,
among other things, the real property as more fully described in the Mortgage
(collectively, the "MORTGAGED PROPERTY");
WHEREAS, Borrower is the legal and beneficial owner of all of
the membership interests in Mortgagor I, consisting of a 100% membership
interest therein, and all of the membership interests in Mortgagor II,
consisting of a 100% membership interest therein (collectively, the "PLEDGED
COMPANY INTERESTS");
WHEREAS, CAOK Managers, Inc., a Delaware corporation (the
"MORTGAGOR MANAGING ENTITY"), is the non-member special manager of each of
Mortgagor I and Mortgagor II;
WHEREAS, Beacon Capital Partners, Inc., a Maryland corporation
(the "STOCK OWNER"), is the legal and beneficial owner of 100% of the stock of
Mortgagor Managing Entity (the "PLEDGED MANAGING ENTITY INTERESTS");
WHEREAS, the Borrower has requested Mezzanine Lender to make a
loan to it in the aggregate principal amount of $35,000,000 (the "MEZZANINE
LOAN"); and
WHEREAS, as a condition precedent to the obligation of
Mezzanine Lender to make the Mezzanine Loan to the Borrower, Borrower has agreed
to enter into a Pledge and Security Agreement, dated as of the date hereof, in
favor of Mezzanine Lender (as amended, supplemented or otherwise modified from
time to time, the "PLEDGE AGREEMENT"), pursuant to which Borrower shall grant to
Mezzanine Lender a first priority security interest in the Pledged Company
Interests and the Stock Owner shall grant to Mezzanine Lender a first priority
security interest in the Pledged Managing Entity Interests and all proceeds of
each thereof (collectively, the "COLLATERAL") as collateral security for the
Mezzanine Obligations (as defined below);
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the meanings ascribed to them below:
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, owns more than forty percent (40%) of, is in
control of, is controlled by or is under common ownership or control with such
Person or is a director or officer of such Person or of an Affiliate of such
Person. 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.
"AGREEMENT": this Loan Agreement, as amended, supplemented or
modified from time to time.
"ANNUAL BUDGET" shall mean the operating and capital budget
for the Mortgaged Property setting forth Mortgagors' good faith estimate of
Gross Revenue, Operating Expenses, and Capital Expenditures for the applicable
Fiscal Year.
"APPLICABLE INTEREST RATE" shall mean 13.08% per annum for the
initial Interest Period and thereafter either (i) LIBOR plus the Spread with
respect to any period when the Mezzanine Loan is a LIBOR Loan or (ii) the
Substitute Rate plus the Substitute Spread with respect to any period when the
Mezzanine Loan is a Substitute Rate Loan.
"APPROVED ANNUAL BUDGET": as defined in Section 8.4.
"ASSIGNMENT OF CAP AGREEMENT" shall mean that certain
Collateral Assignment of Interest Rate Cap Agreement between Borrower and
Mezzanine Lender and acknowledged by the counterparty, and any other collateral
assignment of the Interest Rate Cap Agreement hereafter delivered.
"BANKRUPTCY ACTION": Any of the following:
(A) taking any action that is intended to cause any
of the Borrower or any of its Subsidiaries to become insolvent; or
(B) (i) commencing any case, proceeding or other
action with respect to the Borrower or any of its Subsidiaries under
any existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors;
(ii) instituting proceedings to have the
Borrower or any of its Subsidiaries adjudicated as bankrupt or
insolvent;
(iii) consenting to the institution of
bankruptcy or insolvency proceedings against the Borrower or
any of its Subsidiaries;
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(iv) filing a petition or consent to a
petition seeking reorganization, arrangement, adjustment,
winding-up, dissolution, composition, liquidation or other
relief on behalf of any of the Subsidiaries of such
Subsidiary's debt or on behalf of the Borrower of its debts
under any federal or state law relating to bankruptcy;
(v) seeking or consenting to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for the Borrower or any of
its Subsidiaries or a substantial portion of any of their
respective properties;
(vi) making any assignment for the benefit
of creditors of any of the Borrower or any of its
Subsidiaries; or
(vii) taking any action or causing any of
the Borrower or any of its Subsidiaries to take any action in
furtherance of any of the foregoing.
"BCI" shall mean Beacon Capital Partners, Inc., a Maryland
corporation, and any successor to all or substantially all of its assets,
whether by merger, sale of assets or otherwise.
"BCLP" shall mean Beacon Capital Partners, L.P., a Delaware
limited partnership, and any successor to all or substantially all of its
assets, whether by merger, sale of assets or otherwise.
"BEACON" shall mean (i) BCI, and (ii) BCLP. The term "Beacon"
shall also include the ownership interests of the officers and/or directors of
BCI, PROVIDED that the aggregate of such ownership interests does not exceed
five percent (5%) of the ownership interests of Beacon, direct or indirect, in
Borrower.
"BORROWER": as defined in the introductory paragraph to this
Agreement.
"BORROWER OPERATING AGREEMENT": the Limited Liability Company
Agreement of Borrower, dated of even date herewith.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a legal holiday on which national banks are not open for general
business in (i) the State of New York, (ii) the state where the corporate trust
office of the Trustee (as defined in the Mortgage Loan Agreement) is located, or
(iii) the state where the servicing offices of the Servicer (as defined in the
Mortgage Loan Agreement) are located.
"CAPITAL EXPENDITURES": for any period shall mean amounts
expended for replacements and alterations to the Mortgaged Property and required
to be capitalized according to GAAP.
"CASH MANAGEMENT AGREEMENT": the Cash Management Agreement,
dated the date hereof, among Mortgagors, Mortgage Lender, Manager and LaSalle
Bank National Association, as agent, and any extensions, renewals or
modifications thereof.
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"CASUALTY EVENT": as defined in Section 2.7(a).
"CLOSING DATE": shall mean the date of funding of the
Mezzanine Loan.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": as defined in the recitals to this Agreement.
"CONSUMER PRICE INDEX (CPI)": shall mean the "Consumer Price
Index" or "CPI," for Boston-Lawrence-Salem, MA-NH for Urban Consumers, All
Items, of the United States Bureau of Labor Statistics, 1982-84 = 100. If the
Bureau of Labor Statistics substantially revises the manner in which the CPI is
determined, an adjustment shall be made in the revised index which would produce
results equivalent, as nearly as possible, to those which would be obtained if
the CPI had not been so revised. If the 1982-84 average shall no longer be used
as an index of 100, such change shall constitute a substantial revision. If the
CPI becomes unavailable to the public because publication is discontinued, or
otherwise, the Mezzanine Lender shall substitute therefor a comparable index
based upon changes in the cost of living or purchasing power of the consumer
dollar published by any other governmental agency reasonably acceptable to
Borrower or, if no such index is available, then, subject to reasonable approval
of Borrower, a comparable index published by a major bank, other financial
institution, university or recognized financial publication shall be
substituted.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound, or any provision of the foregoing.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled principal and interest payments under the Mezzanine
Note.
"DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (i)
Underwritable Cash Flow for the twelve (12) full calendar month period
immediately preceding the date of calculation to (ii) $17,500,000, PROVIDED that
such amount of $17,500,000 shall be reduced by ten percent (10%) of any
prepayments of principal made with respect to the Mortgage Loan or the Mezzanine
Loan.
"DEFAULT": any of the events specified in Article 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition has been satisfied.
"DEFAULT RATE": the Applicable Interest Rate plus five percent
(5%) per annum. In the event the Default Rate is greater than the maximum rate
permitted by applicable law, the Default Rate shall be the maximum rate
permitted by applicable law.
"DETERMINATION DATE" shall mean, with respect to any Interest
Period, the date that is two (2) London Business Days prior to the beginning of
such Interest Period.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
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"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 Rating 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 IBCA,
Inc., Duff & ▇▇▇▇▇▇ Credit Rating Co. and Standard & Poor's Rating Group and
"Aa2" by ▇▇▇▇▇'▇ Investors Services, Inc. Any depository institution or trust
company insured by the Federal Deposit Insurance Corporation which in not rated
by all of the Rating Agencies may nonetheless qualify as an Eligible Institution
if it has the requisite ratings by at least two of the Rating Agencies (at least
one of which must be Standard & Poor's Rating Group).
"EVENT OF DEFAULT": as defined in Article 7.
"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
Mezzanine Loan.
"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.
"GROSS REVENUE" shall mean all revenue computed on an accrual
basis in accordance with GAAP (but without the so-called straightlining of
Rents, as defined in the Mortgage Loan Agreement), derived from the ownership
and operation of the Mortgaged 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 Mortgagors to any Governmental
Authority, non-recurring revenues as reasonably determined by Mezzanine Lender,
security deposits (except to the extent properly utilized to offset a loss of
Rent), refunds and uncollectible accounts, proceeds of casualty insurance and
Awards (as defined in the Mortgage Loan Agreement) (other than business
interruption or other loss of income insurance related to business interruption
or loss of income for the period in question), and any disbursements to
Mortgagors from the Reserve Funds (as defined in the Mortgage Loan Agreement) or
any other fund established by the Mortgage Loan Documents.
"GUARANTOR" shall mean, collectively, Beacon Capital Partners,
L.P., a Delaware limited partnership, and PW Realty Partners, LLC, a Delaware
limited liability company.
"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
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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 and to the
extent that 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 of another Person 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.
"INDEMNIFIED LIABILITIES": as defined in Section 9.5.
"INDEPENDENT DIRECTOR": with respect to any SPC Party which is
a corporation, a duly appointed member of the Board of Directors of such SPC
Party reasonably satisfactory to Mezzanine Lender who shall not have been at the
time of such individual's appointment, and may not have been at any time during
the preceding five years, (i) a stockholder, director, officer, employee,
partner, attorney or counsel of such corporation, Borrower, either of the
Mortgagors 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 or any Affiliate of either of them, (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. As used herein, 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.
"INTERCREDITOR AGREEMENT": the Intercreditor Agreement, dated
April 14, 2000, between Mezzanine Lender and Mortgage Lender.
"INTEREST PERIOD" shall mean (a) for the first period
hereunder, the period commencing on the Closing Date and ending on the last day
of the calendar month in which the Closing Date occurs, 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.
"INSOLVENCY OPINION" shall mean that certain bankruptcy
nonconsolidation opinion letter dated the date hereof delivered by Goulston &
Storrs, P.C. in connection with the Mezzanine Loan.
"INTEREST RATE CAP AGREEMENT" means an Interest Rate Cap
Agreement (together with the confirmation and schedules relating thereto) in
form and substance reasonably satisfactory to Mezzanine Lender between Borrower
and a counterparty reasonably acceptable to Mezzanine Lender with a rating by
Standard & Poor's of at least "AA".
"LEGAL REQUIREMENTS" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgements, decrees and
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injunctions of Governmental Authorities affecting Borrower, either of the
Mortgagors or the Mortgaged 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
or either of the Mortgagors, at any time in force affecting the Mortgaged
Property or any part thereof, including, without limitation, any which may (i)
require repairs, modifications or alterations in or to the Mortgaged Property or
any part thereof, or (ii) in any way limit the use and enjoyment thereof.
"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 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, Mezzanine Lender
shall request the principal London office of any four major reference banks in
the London interbank market reasonably selected by Mezzanine 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 Mezzanine 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 Mezzanine
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 Mezzanine Loan. If at
least two such rates are so provided, LIBOR shall be the arithmetic mean of such
rates. LIBOR shall be determined by Mezzanine Lender or its agent, acting in
good faith, and, at Borrower's request, Mezzanine Lender shall provide Borrower
with the basis for its determination.
"LIBOR LOAN" shall mean the Mezzanine Loan at any time when
the Applicable Interest Rate is calculated at LIBOR plus the Spread in
accordance with the provisions of Article 2 hereof.
"LIEN": any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), or
preference, priority or other pledge agreement or preferential arrangement of
any kind or nature whatsoever, 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 under the Uniform Commercial Code or comparable law of
any jurisdiction in respect of any of the foregoing.
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"LIMITED GUARANTY" shall mean that certain Guaranty of
Recourse Obligations of even date herewith from Guarantor for the benefit of
Mezzanine Lender.
"LIQUIDATION EVENT": as defined in Section 2.7.
"LOAN TRANSFER": as defined in section 9.17.
"LOAN TRANSFEREE": as defined in Section 9.6.
"LONDON BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or any other day on which commercial banks in London, England
are not open for business.
"MAJOR LEASE" shall mean any lease (i) covering more than
25,000 square feet at the Mortgaged Property or (ii) made with a tenant that is
a tenant under another lease at the Mortgaged Property or that is an Affiliate
of any other tenant under a lease at the Mortgaged Property, if the leases
together cover more than 25,000 square feet.
"MANAGEMENT AGREEMENT": any property management agreement or
agreements entered into with the Manager, pursuant to which the Manager is to
provide management and other services with respect to the Mortgaged Property.
"MANAGEMENT FEES": any property management fees payable in
respect of the Mortgaged Property.
"MANAGER" shall mean Beacon Capital Partners Management, LLC
and ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ Services Limited Partnership, or any other manager
approved in accordance with the terms and conditions of the Mezzanine Loan
Documents.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (i)
the business, operations, property or condition (financial or otherwise) of
Borrower, any of its Subsidiaries or the Guarantor, (ii) the ability of
Borrower, any of its Subsidiaries or Guarantor to pay or perform its respective
obligations, liabilities and indebtedness under this Agreement or any of the
other Mezzanine Loan Documents to which it is a party as such payment or
performance becomes due in accordance with the terms hereof or thereof, or (iii)
the rights, powers and remedies of the Mezzanine Lender under this Agreement or
any of the other Mezzanine Loan Documents or the validity, legality or
enforceability of this Agreement or any of the other Mezzanine Loan Documents.
"MATURITY DATE" shall mean May 1, 2002, as the same may be
extended pursuant to 2.1(b) hereof, or such other date on which the final
payment of principal of the Mezzanine 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
Mezzanine Note and as provided for herein or the other Mezzanine 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 Mezzanine
Loan.
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"MEZZANINE CASH COLLATERAL AGREEMENT": the Mezzanine Cash
Collateral Account Security, Pledge, Assignment and Control Agreement, dated the
date of this Agreement, among Borrower, Mortgagors, Mezzanine Lender and LaSalle
Bank National Association, as agent, and any extensions, renewals, amendments or
modifications thereof.
"MEZZANINE DEBT SERVICE ACCOUNT": as defined in the Mezzanine
Cash Collateral Agreement.
"MEZZANINE LENDER": as defined in the introductory paragraph
to this Agreement.
"MEZZANINE LOAN": as defined in the recitals to this
Agreement.
"MEZZANINE LOAN DOCUMENTS": the collective reference to this
Agreement, the Mezzanine Note, the Pledge Agreement, the Mezzanine Cash
Collateral Agreement, the Interest Rate Cap Agreement, the Limited Guaranty and
any and all other agreements executed in connection herewith or therewith.
"MEZZANINE NET PROCEEDS" shall mean 20% of all "Net Proceeds"
(as defined in the Mortgage Loan Agreement).
"MEZZANINE NOTE": as defined in Section 2.2.
"MEZZANINE OBLIGATIONS": all obligations of the Borrower now
or hereafter existing with respect to the Mezzanine Loan, whether for principal,
interest, fees, expenses or otherwise, and all obligations of the Borrower now
or hereafter existing under this Agreement, the Mezzanine Note and all other
Mezzanine Loan Documents.
"MEZZANINE RELEASE AMOUNT": with respect to the Release
Parcels, the amount specified on Schedule 2 hereto.
"MONTHLY PAYMENT DATE" shall mean the first (1st) day of every
calendar month occurring during the term of the Mezzanine Loan commencing on
June 1, 2000.
"MORTGAGE": as defined in the recitals to this Agreement.
"MORTGAGE LENDER": as defined in the recitals to this
Agreement.
"MORTGAGE LOAN": as defined in the recitals to this Agreement.
"MORTGAGE LOAN AGREEMENT": as defined in the recitals to this
Agreement.
"MORTGAGE LOAN DOCUMENTS": the collective reference to the
Mortgage Loan Agreement, the Mortgage Note, the Mortgage, the Cash Management
Agreement, and any and all other documents executed in connection therewith.
"MORTGAGE NOTE": as defined in the recitals to this Agreement.
"MORTGAGED PROPERTY" as defined in the recitals to this
Agreement.
9
"MORTGAGOR COMPANY AGREEMENT I": the First Amended and
Restated Limited Liability Company Agreement of Mortgagor I, dated the date
hereof, among Borrower, as member, Mortgagor I and Mortgagor Managing Entity.
"MORTGAGOR COMPANY AGREEMENT II": the First Amended and
Restated Limited Liability Company Agreement of Mortgagor II, dated the date
hereof, among Borrower, as member, Mortgagor II and Mortgagor Managing Entity.
"MORTGAGOR COMPANY AGREEMENTS": collectively, Mortgagor
Company Agreement I and Mortgagor Company Agreement II.
"MORTGAGOR I": as defined in the recitals to this Agreement.
"MORTGAGOR II": as defined in the recitals to this Agreement.
"MORTGAGOR MANAGING ENTITY": as defined in the recitals to
this Agreement.
"NET LIQUIDATION PROCEEDS": with respect to any Liquidation
Event, all amounts paid to or received by or on behalf of the Mortgagors in
connection with such Liquidation Event, less amounts required or permitted to be
deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to
Mortgage Lender, including, without limitation, proceeds of any sale,
refinancing or other disposition or liquidation, and less (i) in the case of a
foreclosure sale or Transfer of the Mortgaged Property in connection with
realization thereon following an Event of Default under the Mortgage Loan, or
other disposition, such reasonable and customary costs and expenses of sale or
other disposition (including attorneys' fees and brokerage commissions), (ii) in
the case of a foreclosure sale, such costs and expenses incurred by Mortgage
Lender under the Mortgage Loan Documents as Mortgage Lender shall be entitled to
receive reimbursement for under the terms of the Mortgage Loan Documents and
(iii) in the case of a refinancing of the Mortgage Loan or the Mortgaged
Properties, such costs and expenses (including attorneys' fees) of such
refinancing as shall be reasonably approved by Mezzanine Lender.
"OPERATING EXPENSES" shall mean all costs and expenses
incurred by Mortgagors and computed on an accrual basis in accordance with GAAP
relating to the operation, maintenance and management of the Mortgaged 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 three percent
(3%) of annual rents or the actual management fee, $0.40 per rentable square
foot of the Improvements (as defined in the Mortgage Loan Agreement) per annum
with respect to capital costs, and $1.00 per rentable square foot of the
Improvements per annum with respect to tenant rollover expenses, but excluding
actual Rollover Expenditures (as defined in the Mortgage Loan Agreement), actual
Capital Expenditures, Debt Service (as defined in the Mortgage Loan Agreement),
depreciation, amortization and deposits required to be made to the Reserve
Funds; provided, however such costs and expenses shall be subject to reasonable
adjustment by Mezzanine Lender to normalize such costs and expenses.
"ORGANIZATIONAL DOCUMENTS" means, as to any Person, the
certificate of incorporation and by-laws with respect to a corporation; the
certificate of organization or formation and operating agreement with respect to
a limited liability company; the certificate of
10
limited partnership and partnership agreement with respect to a limited
partnership; or any other organizational or governing documents of such Person.
"PAINEWEBBER" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Securities
Inc., a Delaware corporation.
"PERMITTED PREPAYMENT DATE": May 1, 2001.
"PERMITTED TRANSFEREE" shall mean a corporation, partnership,
limited liability company or other entity (i) acceptable to Mezzanine Lender in
its sole discretion, (ii) that qualifies as a single purpose, bankruptcy remote
entity under criteria established by the Rating Agencies and (iii) whose counsel
has delivered to Mezzanine Lender a non-consolidation opinion acceptable to
Mezzanine Lender in its reasonable discretion.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLEDGE AGREEMENT": as defined in the recitals to this
Agreement.
"PLEDGED COMPANY INTERESTS": as defined in the recitals to
this Agreement.
"PLEDGED MANAGING ENTITY INTERESTS": as defined in the
recitals to this Agreement.
"RATING AGENCIES": shall mean each of Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇▇▇▇'▇
Investors Service, Inc., Duff & ▇▇▇▇▇▇ Credit Rating Co. and Fitch IBCA, Inc.,
or any other nationally-recognized statistical rating agency which has been
designated by Mortgage Lender and, after the final Securitization (as defined in
the Mortgage Loan Agreement) of the Mortgage Loan, shall mean any of the
foregoing that have rated and continue to rate any of the Securities (as defined
in the Mortgage Loan Agreement). Notwithstanding the foregoing, if there has
been a securitization of the Mezzanine Loan, the term "Rating Agencies" shall
mean any of the rating agencies named above that have rated and continue to rate
any of the certificates, notes or other securities issued in connection with
such securitization.
"RELEASE PARCELS": the portions of the Mortgaged Property
described on Schedule 2.
"REQUIREMENT OF LAW": as to any Person, the certificate of
incorporation and by-laws with respect to a corporation; the certificate of
organization and operating agreement with respect to a limited liability
company; the certificate of limited partnership and partnership agreement with
respect to a limited partnership, or any other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief financial officer or
treasurer of the Borrower.
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"SECONDARY MARKET TRANSACTION" means the sale of the Mortgage
Note or the first successful public or private securitization of rated single or
multi-class securities secured by or evidencing ownership interests in the
Mortgage Note.
"SINGLE PURPOSE ENTITY": a Person whose organizational
documents contain, and who covenants that it shall comply, or cause compliance
with, the provisions of Sections 5.1, 5.2, 5.3 and 5.5.
"SPC PARTY" shall mean: (i) in the case of Mortgagors,
Mortgagor Managing Entity; (ii) in the case of Borrower, ▇▇▇▇▇▇▇ Athenaeum LLC;
(iii) in the case of ▇▇▇▇▇▇▇ Athenaeum LLC, Cambridge ▇▇▇▇▇▇▇ SPC, Inc; and (iv)
any successor to any of the aforesaid entities provided that it will at all
times comply with each of the representations, warranties and covenants
contained in Section 5.2 hereof as if such representations, warranties and
covenants were made directly by such SPC Party.
"SPREAD" shall mean 695 basis points.
"SPREAD MAINTENANCE PREMIUM" shall mean, in connection with a
prepayment of all or any portion of the outstanding principal balance of the
Mezzanine Loan pursuant to Section 2.4(b) or 2.3(g) hereof, an amount equal to
the present value, discounted at LIBOR on the Closing Date, of all future
installments of interest which would have been due under the Mezzanine Note
through and including the Permitted Prepayment Date on the portion of the
outstanding principal balance of the Mezzanine Loan being prepaid as if interest
accrued on such portion of the principal balance being prepaid at an interest
rate per annum equal to the 6.92%. The Spread Maintenance Premium shall be
calculated by Mezzanine Lender and shall be final absent manifest error.
"SUBSIDIARY": as to any Person, any corporation, partnership,
limited liability company or other entity in which such Person holds an equity
interest which is more than 10% of the equity classes issued by such entity.
"SUBSTITUTE RATE" shall have the meaning set forth in Section
2.4(d).
"SUBSTITUTE RATE LOAN" shall mean the Mezzanine Loan at any
time when the Applicable Interest Rate is calculated at the Substitute Rate plus
the Substitute Spread in accordance with the provisions of Article 2 hereof.
"SUBSTITUTE SPREAD" shall have the meaning set forth in
Section 2.4(d).
"TRANSFER": to sell, assign, convey, transfer, pledge or
otherwise dispose of, or where used as a noun, a sale, assignment, conveyance,
transfer, pledge or other disposition.
"UNDERWRITABLE CASH FLOW" shall be as calculated by the
Mezzanine Lender pursuant to the definition of "Underwritable Cash Flow" set
forth in the Mortgage Loan Agreement.
"UNIFORM COMMERCIAL CODE": the Uniform Commercial Code as in
effect in the State of New York or comparable law of any jurisdiction as in
effect from time to time.
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1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified herein, all terms defined in
this Agreement shall have such defined meanings when used in the Mezzanine Note
or any certificate or other document made or delivered pursuant hereto.
(b) References to the plural include the singular, the plural,
the part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and the word "including" when used in this Agreement shall be deemed
to be followed by the words "but not limited to".
(c) References to "determination" of or by the Mezzanine
Lender shall be deemed to include reasonable good faith estimates by the
Mezzanine Lender (in the case of quantitative determinations) and reasonable
good faith beliefs by the Mezzanine Lender (in the case of qualitative
determinations) and such reasonable determination shall be conclusive absent
manifest error.
(d) Except as expressly set forth to the contrary in this
Agreement or any other Mezzanine Loan Document, whenever the Mezzanine Lender is
granted the right herein to act in its discretion or to grant or withhold
consent, such right shall be exercised in Mezzanine Lenders sole and absolute
discretion.
(e) 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, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
(f) The section and other headings contained in this Agreement
or any other Mezzanine Loan Document and the Table of Contents preceding this
Agreement or such other Mezzanine Loan Document are for reference purposes only
and shall not control or affect the construction of this Agreement or such other
Mezzanine Loan Document or the interpretation thereof in any respect.
(g) Reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement or other Mezzanine Loan Document, as the case may
be, and reference to a Person in a particular capacity excludes such Person in
any other capacity.
(h) Reference to any agreement (including this Agreement and
any other Mezzanine Loan Document together with the schedules and exhibits
hereto or thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated.
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ARTICLE 2
AMOUNT AND TERMS OF MEZZANINE LOAN
2.1 MEZZANINE LOAN; MATURITY DATE.
(a) Mezzanine Lender shall make the Mezzanine Loan to the
Borrower on the Closing Date in the principal amount of $35,000,000, on the
terms and subject to the conditions of this Agreement, including satisfaction of
the conditions contained in Section 4.1.
(b) The Mezzanine Loan is scheduled to mature on the Maturity
Date, PROVIDED, Borrower will have two (2) options to extend the Maturity Date
of the Mezzanine Loan for consecutive one (1) year periods. In order to exercise
the first such extension right, Borrower shall deliver to Mezzanine Lender
notice of such extension and all supporting financial data on or before January
1, 2002; and upon the giving of such notice of extension, and subject to the
satisfaction of the conditions set forth below in this Section 2.1(b) on or
before February 1, 2002, the Maturity Date as then in effect will be extended to
May 1, 2003. In order to exercise the second such extension right, Borrower
shall deliver to Mezzanine Lender notice of such extension and all supporting
financial data on or before January 1, 2003; and upon the giving of such notice
of second extension, and subject to the satisfaction of the conditions set forth
below in this Section 2.1(b) on or before February 1, 2003, the Maturity Date as
then in effect will be extended to May 1, 2004. The Maturity Date shall be
extended pursuant to Borrower's notice as aforesaid, PROVIDED that the following
conditions are satisfied: (i) no Event of Default shall be in existence either
at the time of Borrower's notice or at February 1, 2002 or February 1, 2003 (as
applicable), (ii) the Underwritable Cash Flow as determined by Mezzanine Lender,
acting in good faith, as of February 1, 2002 or February 1, 2003 (as the case
may be) shall be no less than $19,250,000 (less any Underwritable Cash Flow
attributable to portions of the Mortgaged Property that have been released in
accordance with Section 2.3(f) hereof or otherwise with Mezzanine Lender's
consent), (iii) Borrower shall have obtained an Interest Rate Cap Agreement for
the extended term with a 30-day LIBOR strike price of 8.35% based on a notional
amount equal to the then outstanding principal balance of the Mezzanine Loan
(PROVIDED that Borrower shall have the right to obtain an Interest Rate Cap
Agreement with a higher strike price if Mezzanine Lender, in its sole and
absolute discretion, has consented thereto) and such Interest Rate Cap Agreement
shall have been collaterally assigned to Mezzanine Lender pursuant to an
assignment in substantially the same form as the Assignment of Cap Agreement,
and (iv) with respect to the second extension option, the first extension option
shall have been properly exercised and Mezzanine Lender shall have received an
extension fee in an amount equal to one quarter of one percent (0.25%) of the
then outstanding principal balance of the Mezzanine Loan. If Borrower fails to
exercise either extension option strictly in accordance with the provisions
hereof, such extension option will automatically cease and terminate.
2.2 MEZZANINE NOTE. The Mezzanine Loan shall be evidenced by a
promissory note of the Borrower (the "Mezzanine Note"), payable to the order of
Mezzanine Lender and representing the obligation of the Borrower to pay the
amount of the Mezzanine Loan, interest thereon as prescribed in Section 2.4, and
all other amounts due hereunder. The Mezzanine Note shall (a) be dated the
Closing Date, (b) be stated to mature on the Maturity Date, (c) bear interest
for the period from the date hereof on the unpaid principal amount thereof
14
at the Applicable Interest Rate and (d) be subject to repayment as provided in
this Agreement unless otherwise earlier prepaid or accelerated in accordance
with the terms hereof.
2.3 PREPAYMENTS.
(a) Borrower shall not have the right to prepay the Mezzanine
Loan (in whole or in part) prior to the Permitted Prepayment Date except (i)
pursuant to Section 2.3(f) in connection with a permitted release, (ii) pursuant
to Section 2.3(b) in connection with the conversion of the Mezzanine Loan to a
Substitute Rate Loan or a discrepancy in the calculation of Underwritable Cash
Flow, (iii) pursuant to Section 2.3(c) or 2.3(e) hereof in connection with a
Casualty of Condemnation (as defined in the Mortgage Loan Agreement), or (iv)
pursuant to Section 2.3(g) hereof in connection with certain environmental
investigations or assessments requested by Mortgage Lender. Borrower shall have
the right, at its option, upon thirty (30) days prior written notice to
Mezzanine Lender, to prepay the Mezzanine Loan in whole or in part at any time
on or after the Permitted Prepayment Date, subject to the conditions set forth
in this Section 2.3(a) and in Section 2.3(d). Additionally, Borrower shall have
the right, at any time and from time to time, to prepay the Mezzanine Loan in
part in connection with one or more permitted releases in accordance with
Section 2.3(f) hereof, PROVIDED that prior to the Permitted Prepayment Date any
such prepayment shall be in an amount not to exceed the Mezzanine Release Amount
for each related Release Parcel, plus any additional prepayment as may be
required in order to satisfy the Debt Service Coverage Ratio test set forth in
Section 2.3(f) hereof. Any prepayment made in connection with a permitted
release pursuant to Section 2.3(f) hereof shall be subject to a prepayment fee
of one percent (1%) of the amount prepaid if made prior to the Permitted
Prepayment Date. Subject to the provisions of Section 2.3(b), (c) and (e) below,
any prepayment (including a prepayment made in connection with a permitted
release) made during the period commencing on the Permitted Prepayment Date
through and including October 31, 2001 shall be subject to a prepayment fee of
one-half of one percent (0.5%) of the amount prepaid. Mezzanine Lender shall not
be obligated to accept any prepayment unless it is accompanied by the prepayment
fee, if any, due in connection therewith. Prepayments made after October 31,
2001 shall not be subject to any prepayment fee or penalty.
(b) If the Mezzanine Loan has been converted to a Substitute
Rate Loan pursuant to Section 2.4(d) hereof for three (3) or more consecutive
Interest Periods, Borrower shall have the right, upon thirty (30) days' prior
written notice to Mezzanine Lender, to prepay the Mezzanine Loan in whole (but
not in part) without prepayment fee or penalty. If the Mezzanine Lender does not
consent to an extension of the Mezzanine Loan pursuant to Section 2.1(b) due to
its determination that the Underwritable Cash Flow test under clause (ii) of
said Section 2.1(b) has not been met, when the Mortgage Lender has agreed to
such extension, the Borrower shall have the right, upon 10 days' prior written
notice to Mezzanine Lender, to prepay the Mezzanine Loan in whole (but not in
part) without prepayment fee or penalty.
(c) If a prepayment under Section 2.4.1(e) of the Mortgage
Loan Agreement is made, Borrower shall have the right, upon thirty (30) days'
prior written notice to Mezzanine Lender, to prepay the Mezzanine Loan in whole
(but not in part) without prepayment fee or penalty.
15
(d) Any prepayment received by Mezzanine Lender pursuant to
this Section 2.3 on a date other than a Monthly Payment Date shall include
interest which would have accrued thereon to the next Monthly Payment Date and
such amounts (i.e., principal and interest prepaid by Borrower) shall be held by
Mezzanine Lender as collateral security for the Mezzanine Loan in an interest
bearing account at an Eligible Institution, with interest accruing on such
amounts to the benefit of Borrower, and shall be applied by Mezzanine Lender on
the next Monthly Payment Date, with any interest on such funds paid to Borrower
on such date provided no Event of Default then exists.
(e) On each date on which Mezzanine Lender actually receives a
distribution of Mezzanine Net Proceeds, Borrower (a) shall, at Mezzanine
Lender's option (and provided Mezzanine Lender makes such Mezzanine Net Proceeds
available therefor) or (b) may, at its option (in which event Mezzanine Lender
shall make such Mezzanine Net Proceeds available therefor), prepay the
outstanding principal balance of the Mezzanine Note in an amount equal to the
amount of such Mezzanine Net Proceeds, together with interest that would have
accrued on such amount through the next Monthly Payment Date. Any prepayment
(i.e., principal and interest) received by Mezzanine Lender pursuant to this
Section 2.3 on a date other than a Monthly Payment Date shall be held by
Mezzanine Lender as collateral security for the Mezzanine Loan in an interest
bearing account, with such interest accruing to the benefit of Borrower, and
shall be applied by Mezzanine Lender on the next Monthly Payment Date. Any
prepayment pursuant to this Section 2.3(e) shall not be subject to any
prepayment fee or penalty.
(f) In the event of a partial prepayment of the Mortgage Loan
incident to a release of a Release Parcel in accordance with Section 11.25 of
the Mortgage Loan Agreement, the Borrower shall, on the date of such release,
prepay the Mezzanine Loan in an amount equal to the Mezzanine Release Amount for
the Release Parcel being released, plus any additional prepayment as may be
required in order to satisfy the Debt Service Coverage Ratio test set forth in
the second to last sentence of this Section 2.3(f), and the Borrower shall
deposit such amounts directly into the Mezzanine Debt Service Account to be
applied in accordance with the terms of the Mezzanine Cash Collateral Agreement.
Borrower hereby agrees to (i) the payment of any reasonable expenses incurred by
Mezzanine Lender in connection with such release (including, without limitation,
reasonable attorneys' fees) and any other amounts then due and owing to
Mezzanine Lender pursuant to this Agreement and the other Mezzanine Loan
Documents, and (ii) a prepayment fee (if any) in the amount required pursuant to
Section 2.3(a). All amounts paid to Mezzanine Lender in connection with a
partial release shall either be paid on a Monthly Payment Date or shall include
interest thereon through the next Monthly Payment Date. Borrower hereby agrees
that it will not consent to a release pursuant to Section 11.25 of the Mortgage
Loan Agreement unless it has provided the Mezzanine Lender evidence satisfactory
to Mezzanine Lender that the Debt Service Coverage Ratio after giving effect to
such release will equal or exceed the Debt Service Coverage Ratio immediately
prior to such release. Borrower shall notify Mezzanine Lender of any proposed
prepayment of the Mortgage Loan by Mortgagors under Section 11.25 of the
Mortgage Loan Agreement not later than thirty (30) days prior to the date of
such release. If a conveyance is made under Section 11.25(f) of the Mortgage
Loan Agreement which is stated to be made for nominal consideration or if a
lease is made under said Section 11.25(f) for nominal rent, the same will not be
considered a breach of Section 5.1(d) hereof provided it is in effect a
distribution of an asset to the indirect owner of either Mortgagor
16
above the level of Borrower and a contribution of capital to the transferee of
such deed or lessee under such lease, as the case may be.
(g) If a prepayment under Section 2.4.1(f) of the Mortgage
Loan Agreement is made, Borrower shall prepay the Mezzanine Loan in whole (but
not in part) simultaneously with the prepayment of the Mortgage Loan pursuant to
said Section 2.4.1(f). Any prepayment of the entire Mezzanine Loan pursuant to
this Section 2.3(g) shall be subject to payment of the Spread Maintenance
Premium if such prepayment is made prior to the Permitted Prepayment Date, and
shall be subject to the applicable prepayment fee, if any, provided for in
Section 2.3(a) if such prepayment is made on or after the Permitted Prepayment
Date. Borrower's right to prepay the Mezzanine Loan in whole (but not in part)
pursuant to this Section 2.3(g) shall be in addition to Borrower's rights to
prepay the Mezzanine Loan in part pursuant to the third sentence of Section
2.3(a) and Section 2.3(f) hereof (subject to the applicable prepayment fee, if
any, provided for in Section 2.3(a)), whether prior to the Permitted Prepayment
Date or thereafter, including (without limitation) under circumstances where the
assessment or investigation requested by Mortgage Lender relates solely to the
portion of the Mortgaged Property to be released pursuant to Section 11.25 of
the Mortgage Loan Agreement.
2.4 INTEREST RATE; REPAYMENT; PAYMENT DATES.
(a) Interest on the principal balance of the Mezzanine Loan
outstanding from time to time shall accrue from the Closing Date up to and
including the Maturity Date at the Applicable Interest Rate.
(b) 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 Mezzanine Loan shall accrue interest at the Default Rate, calculated from
the date the Default occurred which led to such an Event of Default without
regard to any grace or cure periods contained herein. If all or any part of the
principal amount of the Mezzanine Loan is prepaid upon acceleration of the
Mezzanine Loan following the occurrence of an Event of Default prior to the
Permitted Prepayment Date, Borrower shall be required to pay Mezzanine Lender,
in addition to all other amounts then payable hereunder, a prepayment fee equal
to one percent (1%) of the amount of principal being repaid together with a
Spread Maintenance Premium calculated with respect to the amount of principal
being repaid.
(c) Any change in the rate of interest hereunder due to a
change in the Applicable Interest Rate shall become effective as of the first
day on which such change in the Applicable Interest Rate shall become effective.
Each determination by Mezzanine Lender of the Applicable Interest Rate, acting
in good faith, shall be conclusive and binding for all purposes, absent manifest
error.
(d) In the event that Mezzanine Lender shall have determined,
acting in good faith (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 Mezzanine Lender shall, by notice to Borrower
("MEZZANINE LENDER'S NOTICE"), which notice shall set forth in reasonable detail
such circumstances, establish the Applicable Interest Rate at Mezzanine Lender's
then customary
17
spread (the "SUBSTITUTE SPREAD"), taking into account the size of the Mezzanine
Loan and the creditworthiness of Borrower, above a published index used for
variable rate loans as reasonably determined by Mezzanine Lender (the
"SUBSTITUTE RATE"), such change to become effective as of the first day of the
next Interest Period. Mezzanine Lender's determination of the Substitute Rate
and the Substitute Spread shall be made in a manner consistent with the manner
in which Mezzanine Lender makes such determinations generally for its other
similarly situated borrowers.
(e) If, pursuant to the terms of this Agreement, the Mezzanine
Loan has been converted to a Substitute Rate Loan and Mezzanine Lender shall
determine, acting in good faith (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,
Mezzanine 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.
(f) Intentionally Omitted.
(g) If any change in law, or any change in the interpretation
of any existing or future law or the application thereof, shall hereafter make
it unlawful for Mezzanine Lender to make or maintain a LIBOR Loan as
contemplated hereunder, (i) the obligation of Mezzanine Lender hereunder to make
a LIBOR Loan shall be cancelled forthwith and (ii) Mezzanine Lender may give
Borrower a Mezzanine Lender's Notice, establishing the Applicable Interest Rate
at the Substitute Rate plus the Substitute Spread, in which case the Applicable
Interest Rate shall be a rate equal to the Substitute Rate in effect from time
to time plus the Substitute Spread. If permitted by law, such change shall not
become effective until the expiration of the then current Interest Period. In
the event the condition necessitating the cancellation of Mezzanine Lender's
obligation to make or maintain a LIBOR Loan hereunder shall cease, Mezzanine
Lender shall promptly notify Borrower of such cessation and the Mezzanine Loan
shall resume its characteristics as a LIBOR Loan in accordance with the terms
herein from and after the first day of the calendar month next following such
cessation. Borrower hereby agrees promptly to pay Mezzanine Lender, upon demand,
any additional amounts necessary to compensate Mezzanine Lender for any
out-of-pocket costs incurred by Mezzanine Lender in making any conversion in
accordance with this Agreement, including, without limitation, any interest or
fees payable by Mezzanine Lender to lenders of funds obtained by it in order to
make or maintain the LIBOR Loan hereunder. Mezzanine Lender's notice of such
costs, as certified to Borrower, shall be set forth in reasonable detail and
Mezzanine Lender's calculation, made in good faith, shall be conclusive absent
manifest error.
(h) In the event that any change in any requirement of law or
in the interpretation or application thereof, or compliance by Mezzanine 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 have the effect of reducing the rate of
return on Mezzanine Lender's capital as a consequence of its
obligations hereunder to a level below that which
18
Mezzanine Lender could have achieved but for such adoption, change or
compliance (taking into consideration Mezzanine Lender's policies with
respect to capital adequacy) by any amount deemed by Mezzanine Lender
to be material; or
(ii) shall hereafter impose on Mezzanine Lender any other
condition the result of which is to increase the cost to Mezzanine
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 Mezzanine Lender, upon
demand, any additional amounts necessary to compensate Mezzanine Lender for such
additional cost or reduced amount receivable which Mezzanine Lender deems to be
material as reasonably determined by Mezzanine Lender. If Mezzanine Lender
becomes entitled to claim any additional amounts pursuant to this Section
2.4(h), Mezzanine 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
Mezzanine 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 Mezzanine Lender and submitted by
Mezzanine Lender, acting in good faith, to Borrower, shall be conclusive in the
absence of manifest error. This provision shall survive payment of the Mezzanine
Note and the satisfaction of all other obligations of Borrower under this
Agreement and the Mezzanine Loan Documents; provided that any request by
Mezzanine Lender for payment of amounts owed by Borrower pursuant to this
Section 2.4(h) shall be made within thirty (30) days thereafter. Borrower shall
not be obligated to pay any amounts which are due under this Section 2.4(h)
which relate to periods more than ninety (90) days prior to the date Mezzanine
Lender first gives Borrower notice of the factors which may cause Borrower to
owe amounts under this Section 2.4(h). Prior to a securitization of the
Mezzanine Loan, Mezzanine Lender shall only charge Borrower for amounts payable
pursuant to this Section 2.4(h) if Mezzanine Lender is generally imposing such
charges on its other similarly situated borrowers.
(i) Borrower agrees to indemnify Mezzanine Lender and to
hold Mezzanine Lender harmless from any loss or expense (other than
consequential and punitive damages) which Mezzanine Lender sustains or incurs
as a consequence of (i) interest or fees, if any, payable by Mezzanine Lender
to lenders of funds obtained by it in order to maintain a LIBOR Loan
hereunder by reason of any default by Borrower in payment of the principal of
or interest on a LIBOR Loan, (ii) any prepayment (whether voluntary or
mandatory) of the LIBOR Loan on a day that (A) is not the Monthly Payment
Date immediately following the last day of an Interest Period with respect
thereto 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, if any, payable by Mezzanine Lender to lenders of funds
obtained by it in order to maintain the LIBOR Loan hereunder, and (iii) the
conversion (for any reason whatsoever, whether voluntary or involuntary) 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
Mezzanine 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, if any,
payable by Mezzanine Lender to lenders of
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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 section the term
"interest or fees payable by Mezzanine 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 Mezzanine
Lender if it had obtained funds from lenders in order to maintain a LIBOR
Loan hereunder. Mezzanine Lender will provide to Borrower a statement
detailing such Breakage Costs and the calculation thereof. This provision
shall survive payment of the Mezzanine Note in full and the satisfaction of
all other obligations of Borrower under this Agreement and the other
Mezzanine Loan Documents; PROVIDED that any request by Mezzanine Lender for
payment of amounts due pursuant to this Section 2.4(i) shall be made within
thirty (30) days thereafter.
(j) Borrower shall pay to Mezzanine Lender on the Maturity
Date the outstanding principal balance of the Mezzanine Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Mezzanine Note
and the other Mezzanine Loan Documents.
(k) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Mezzanine Note shall be
made to Mezzanine Lender not later than 2:00 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 Mezzanine Lender's office, and any funds
received by Mezzanine Lender after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day.
(l) Whenever any payment to be made hereunder or under any
other Mezzanine 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.
(m) All payments required to be made by Borrower hereunder or
under the Mezzanine Note or the other Mezzanine Loan Documents shall be made
irrespective of, and without deduction for, any set-off, claim or counterclaim
and shall be made irrespective of any defense thereto.
2.5 COMPUTATION OF INTEREST. Interest on the outstanding
principal balance of the Mezzanine 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) the Applicable Interest Rate or the Default Rate, as then
applicable, expressed as an annual rate divided by 360 by (c) the outstanding
principal balance.
2.6 INTEREST RATE CAP AGREEMENT. The Borrower shall maintain
the Interest Rate Cap Agreement, at its sole cost and expense, at all times from
the date hereof to (and including) the Maturity Date.
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2.7 PAYMENTS UPON LIQUIDATION EVENT.
(a) In the event of (i) a Transfer of any Mortgaged Property
in connection with realization thereon following an Event of Default under the
Mortgage Loan, including without limitation a foreclosure sale, or (ii) any
refinancing of the Mortgaged Properties or the Mortgage Loan (each, a
"LIQUIDATION EVENT"), the Borrower shall cause any related Net Liquidation
Proceeds received by Borrower to be deposited directly into the Mezzanine Debt
Service Account and to be applied to prepayment of the Mezzanine Loan. In the
event of (x) any casualty to the Mortgaged Property or any material portion
thereof, or (y) any condemnation of the Mortgaged Property or any material
portion thereof (each, a "CASUALTY EVENT), the Borrower shall cause any
Mezzanine Net Proceeds received by Borrower to be deposited directly into the
Mezzanine Debt Service Account and to be applied to prepayment of the Mezzanine
Loan. The preceding sentence shall not, however, apply (A) if there is a
Casualty Event and Mortgage Lender makes the Net Proceeds thereof available to
the Mortgagors for Restoration (as defined in the Mortgage Loan Agreement), or
(B) with respect to any sums remitted to the Mortgagors pursuant to Section
5.3.2(g) of the Mortgage Loan Agreement.
(b) Borrower shall notify Mezzanine Lender of any Liquidation
Event or Casualty Event not later than one Business Day following the first date
on which Borrower has knowledge of such event. Borrower shall be deemed to have
knowledge of (i) a sale (other than a foreclosure sale) of the Mortgaged
Properties on the date on which a contract of sale for such sale is entered
into, and as to a foreclosure sale, on the date notice of such foreclosure sale
is given to Borrower or a Mortgagor, and (ii) a refinancing of the Mortgaged
Properties, on the date on which a commitment for such refinancing has been
entered into.
(c) The provisions of this Section 2.7 shall not be construed
to contravene in any manner the restrictions and other provisions regarding
refinancing of the Mortgage Loan or Transfer of the Mortgaged Property or
otherwise set forth in Section 6.5 or otherwise in this Agreement.
2.8 PAYMENT OF PRINCIPAL AND INTEREST.
(a) Borrower shall make a payment to Mezzanine Lender of
interest only on the Closing Date for the initial Interest Period. Borrower
shall make a payment to Mezzanine Lender of interest calculated in the manner
set forth herein and a payment of principal as set forth in the amortization
schedule for the entire Mezzanine Loan attached to the Mezzanine Note as
Schedule A on each Monthly Payment Date to and including the Maturity Date. In
the event that any prepayments of principal are made in connection with a
partial release pursuant to Section 2.3(f) of this Agreement, however, the
monthly payments of principal shall be reduced by the amount of the amortization
attributable to the related Release Parcel as set forth on said Schedule A; no
other prepayment of principal shall reduce the monthly payments of principal set
forth on said Schedule A. Each payment shall be applied first to accrued and
unpaid interest and the balance to principal.
(b) If an Event of Default shall have occurred and be
continuing, the Mezzanine Lender shall apply amounts collected with respect to
the Mezzanine Obligations in its own discretion.
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2.9 USURY SAVINGS. This Agreement and the other Mezzanine 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 Mezzanine 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 Mezzanine 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 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
Mezzanine Lender for the use, forbearance, or detention of the sums due under
the Mezzanine Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Mezzanine Loan until payment in full so that the rate or amount of interest
on account of the Mezzanine Loan does not exceed the Maximum Legal Rate from
time to time in effect and applicable to the Mezzanine Loan for so long as the
Mezzanine Loan is outstanding.
2.10 LATE PAYMENT CHARGE. If any principal (other than
principal due at maturity) or interest is not paid by Borrower on the date on
which it is due, Borrower shall pay to Mezzanine Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid sum or the maximum
amount permitted by applicable law in order to defray the expense incurred by
Mezzanine Lender in handling and processing such delinquent payment and to
compensate Mezzanine Lender for the loss of the use of such delinquent payment;
PROVIDED, HOWEVER, that Borrower shall not be required to pay such amount in
connection with the failure to pay a monthly installment of Debt Service on the
date due if sufficient funds were on deposit in the Mezzanine Debt Service
Account on such date and Mezzanine Lender failed to apply same to the payment of
Debt Service.
2.11 SERVICER. At the option of Mezzanine Lender, the
Mezzanine Loan may be serviced by a servicer (the "SERVICER") selected by
Mezzanine Lender and Mezzanine Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Mezzanine Loan Documents to
the Servicer pursuant to a servicing agreement (the "SERVICING AGREEMENT")
between Mezzanine Lender and Servicer. Borrower shall not be responsible for any
set-up fees or any other initial costs relating to or arising under the
Servicing Agreement. Borrower shall not be responsible for payment of the
monthly servicing fee or any other fee due to the Servicer under the Servicing
Agreement; Servicer shall, however, be entitled to reimbursement of costs and
expenses as and to the same extent (but without duplication) as Mezzanine Lender
is entitled thereto under the applicable provisions of this Agreement and the
other Mezzanine Loan Documents.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
All of the representations and warranties contained in the
Mortgage Loan Documents are hereby incorporated into this Agreement and deemed
made hereunder as and when made thereunder and shall remain incorporated without
regard to any waiver, amendment
22
or other modification thereof by the Mortgage Lender or to whether the related
Mortgage Loan Document has been repaid, defeased or otherwise terminated, unless
otherwise consented to in writing by Mezzanine Lender.
In addition, in order to induce Mezzanine Lender to enter into
this Agreement and to make the Mezzanine Loan provided for under this Agreement,
Borrower hereby represents and warrants to Mezzanine Lender as follows:
3.1 SINGLE PURPOSE. Borrower and each of Borrower's
Subsidiaries is a Single Purpose Entity.
3.2 LIMITED ASSETS AND LIABILITIES. Except for assets and
liabilities, not material in the aggregate, that are incidental to its
activities as member of Mortgagor I and/or as member of Mortgagor II, the assets
of Borrower consist solely of the related Pledged Company Interests, and the
liabilities of Borrower are limited to those created under this Agreement and
the other Mezzanine Loan Documents.
3.3 EXISTENCE; COMPLIANCE WITH LAW. The Borrower and each of
Borrower's Subsidiaries (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified as a foreign limited liability company and in good standing under the
laws of each jurisdiction where the conduct of its business or ownership of its
properties requires such qualification, (iii) has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Mezzanine Loan Documents by it, and (iv) is in compliance with all
Requirements of Law in all material respects.
3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower has the power and authority to make, deliver and perform its
obligations under the Mezzanine Loan Documents and to borrow hereunder and has
taken all necessary action to authorize such borrowing and to authorize the
execution, delivery and performance of each of the Mezzanine Loan Documents. No
consent or authorization of, filing with or other act by or in respect of, any
arbitrator or Governmental Authority or any other Person is required in
connection with the borrowing hereunder or with the execution, delivery,
performance, validity or enforceability of the Mezzanine Loan Documents, except
for filings of financing statements in connection with Liens created pursuant to
the Mezzanine Loan Documents. This Agreement has been, and each other Mezzanine
Loan Document to which it is a party will be, duly executed and delivered on
behalf of the Borrower. This Agreement constitutes, and each other Mezzanine
Loan Document when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
3.5 NO LEGAL BAR. To the best of Borrower's knowledge, the
execution, delivery and performance of the Mezzanine Loan Documents, the
borrowing hereunder and the use of the proceeds thereof will not violate any
Requirement of Law, and will not result in, or require, the creation or
imposition of any Lien (other than pursuant to the Pledge Agreement and
23
Mezzanine Cash Collateral Agreement) on any of the Borrower's assets pursuant to
any Requirement of Law.
3.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower, any
Subsidiary of the Borrower or Guarantor or against any of their respective
assets, properties or revenues (a) with respect to any of the Mezzanine Loan
Documents or any of the transactions contemplated hereby, or (b) which could
reasonably be expected to have a Material Adverse Effect, subject, however, to
those matters set forth in Schedule 3 hereto.
3.7 NO CONTRACTUAL OBLIGATIONS. Other than the Mezzanine Loan
Documents, the Borrower Operating Agreement and the Mortgagor Company
Agreements, as of the date of this Agreement, the Borrower is not subject to any
Contractual Obligations and has not entered into any agreement, instrument or
undertaking by which it or its assets are bound, and has not incurred any
Indebtedness, and prior to the date of this Agreement Borrower has not entered
into any Contractual Obligation or any agreement, instrument or undertaking by
which it or its assets are bound or incurred any Indebtedness.
3.8 NO BURDENSOME RESTRICTIONS. To the best of Borrower's
knowledge, no Requirement of Law applicable to Borrower could reasonably be
expected to have a Material Adverse Effect.
3.9 INVESTMENT COMPANY ACT AND OTHER STATUTES. The Borrower is
not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to any regulation under any federal or state statute
or regulation (other than Resolutions of the Board of Governors of the Federal
Reserve System) which limits its ability to incur indebtedness.
3.10 SUBSIDIARIES.
(a) Effective as of the consummation of the transactions
contemplated by this Agreement, Beacon/▇▇ ▇▇▇▇▇▇▇ LLC, a Delaware limited
liability company, is a member-manager of the Borrower and owns a 99.3849%
membership interest in the Borrower; and ▇▇▇▇▇▇▇ Athenaeum LLC, a Delaware
limited liability company, is the other member-manager of the Borrower and owns
a 0.6151% membership interest in the Borrower. The Borrower does not have any
Subsidiaries other than the Mortgagors.
(b) The Borrower does not own any equity interests other than
the related Pledged Company Interests.
3.11 ACCURACY AND COMPLETENESS OF INFORMATION. All
information, reports and other papers and data with respect to the Borrower or
any Mortgagor prepared by or for the Borrower or either Mortgagor and furnished
to Mezzanine Lender were, at the time the materials were so furnished, and as of
the date hereof are, complete and correct in all material respects, to the
extent necessary to give Mezzanine Lender a true and accurate knowledge of the
subject matter thereof in all material respects. No document furnished or
statement made in writing to
24
Mezzanine Lender by the Borrower or either Mortgagor in connection with the
negotiation, preparation or execution of this Agreement contains any untrue
statement of a material fact or omits to state any such material fact necessary
in order to make the statements contained therein not misleading, in light of
the circumstances in which the same were made.
3.12 NO DEFAULT. As of the date hereof, no Default and no
event that with the giving of notice and/or the lapse of time would constitute a
Default exists.
3.13 ORGANIZATIONAL CHART. The organizational chart attached
as Schedule 1 hereto, relating to the Borrower and certain Affiliates and other
parties, is true, complete and correct on and as of the date hereof.
3.14 FINANCIAL STATEMENTS. All financial data, including,
without limitation, the statements of cash flow and income and operating
expense, that have been prepared by or for Borrower or either Mortgagor and
delivered to Mezzanine Lender which cover the period since May 1, 1998 (i) are
true, complete and correct in all material respects, (ii) accurately represent
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,
except as disclosed therein. Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Borrower,
except as referred to or reflected in said financial statements. Since the date
of the financial statements, there has been no material adverse change in the
financial condition, operations or business of Borrower from that set forth in
said financial statements.
3.15 TAX FILINGS. Each Mortgagor has filed (or has obtained
effective extensions for filing) all material federal, state and local tax
returns required to be filed as of the date hereof and has paid or made adequate
provision for the payment of all material federal, state and local taxes,
charges and assessments before the date they would be delinquent from such
Mortgagor (other than taxes being contested in good faith as permitted by the
Mortgage Loan Documents).
3.16 SOLVENCY. The fair saleable value of Borrower's assets
exceeds and will, immediately following the issuance and sale of the Mezzanine
Note and the consummation of the other transactions contemplated to take place
simultaneously therewith, exceed Borrower's liabilities, including subordinated,
unliquidated, disputed and contingent liabilities. Borrower's assets do not and,
immediately following the issuance and sale of the Mezzanine Note and the
consummation of the other transactions contemplated to take place simultaneously
therewith, will not constitute unreasonably insufficient capital to carry out
its business as conducted or as proposed to be conducted. The Borrower does not
intend to, and Borrower does not believe that it will, incur debts and
liabilities (including, without limitation, contingent liabilities) beyond its
ability to pay such debts and liabilities as they mature.
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ARTICLE 4
CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO MEZZANINE LOAN. The obligation of
Mezzanine Lender to make the Mezzanine Loan hereunder is subject to the
satisfaction of the following conditions precedent:
(a) MEZZANINE LOAN DOCUMENTS. Mezzanine Lender shall have
received, in form and substance satisfactory to Mezzanine Lender, duly executed
copies of (i) this Agreement, (ii) the Mezzanine Note, (iii) the Pledge
Agreement, (iv) the Mezzanine Cash Collateral Agreement, (v) the Intercreditor
Agreement, (vi) the Interest Rate Cap Agreement, (vii) the Limited Guaranty, and
(viii) the other Mezzanine Loan Documents.
(b) LEGAL OPINION. Mezzanine Lender shall have received from
counsel to Borrower reasonably satisfactory to Mezzanine Lender (i) an opinion
letter as to enforceability and other matters in form and substance reasonably
satisfactory to Mezzanine Lender, and (ii) an opinion letter as to certain
bankruptcy related matters in form and substance reasonably satisfactory to
Mezzanine Lender.
(c) CORPORATE PROCEEDINGS. Mezzanine Lender shall have
received a copy of authorizations, in form and substance reasonably satisfactory
to Mezzanine Lender, of BEACON/▇▇ ▇▇▇▇▇▇▇ LLC authorizing the execution,
delivery and performance of the Mezzanine Loan Documents to which Borrower is a
party and the granting of Liens thereunder, and the borrowing contemplated
hereunder, in each case certified by the Secretary of Beacon Capital Partners,
Inc., which certificate shall state that the authorizations thereby certified
have not been amended, modified, revoked or rescinded and shall be in form and
substance reasonably satisfactory to Mezzanine Lender.
(d) ORGANIZATIONAL DOCUMENTATION. Mezzanine Lender shall have
received true and complete copies of (i) the Borrower Operating Agreement,
certified as a complete and correct copy thereof by Beacon/▇▇ ▇▇▇▇▇▇▇ LLC, and
(ii) the Mortgagor Company Agreements, certified as a complete and correct copy
thereof by Borrower, and (iii) the Articles of Incorporation of the Mortgagor
Managing Entity, certified as a complete and correct copy thereof by an
authorized officer of the Mortgagor Managing Entity or by the Mortgagors, and
Mezzanine Lender shall have approved each of the foregoing documents.
(e) NO VIOLATION. The consummation of the transactions
contemplated hereby shall not contravene, violate or conflict with, nor cause
Borrower, any Mortgagor or Mezzanine Lender to be in any violation of, any
Requirement of Law.
(f) INCUMBENCY CERTIFICATES. Mezzanine Lender shall have
received a certificate as to the signature of the officers of or on behalf of
the Borrower executing each Mezzanine Loan Document to which Borrower is a party
and any certificate or other document to be delivered by it pursuant hereto and
thereto, together with evidence of the incumbency of such officers.
26
(g) FEES AND EXPENSES. Mezzanine Lender shall have received
payment of all reasonable out-of-pocket costs and expenses of Mezzanine Lender
that shall have been invoiced to the Borrower and are required to be paid by the
Borrower under this Agreement.
(h) GOOD STANDING CERTIFICATES. Mezzanine Lender shall have
received copies of certificates dated as of a recent date from the Secretary of
State or other appropriate authority of such jurisdiction, evidencing the good
standing and, if applicable, qualification to do business of Borrower, the
Mortgagor Managing Entity and each Mortgagor from their respective states of
organization and each state in which the conduct of their business or ownership
of their properties requires them to be qualified to do business.
(i) INITIAL BUDGET. Mezzanine Lender shall have received an
Annual Budget for the Mortgaged Property for the period commencing on January 1,
2000 and ending on December 31, 2000 (the "INITIAL BUDGET").
(j) ADDITIONAL MATTERS. The Borrower shall have executed and
delivered such other documents, instruments, certificates and/or opinions as the
Mezzanine Lender may reasonably request on or prior to funding of the Mezzanine
Loan. All other documents and legal matters in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to Mezzanine Lender and its counsel.
(k) MORTGAGE LOAN. The Mortgage Loan shall have closed.
ARTICLE 5
ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS
5.1 SINGLE PURPOSE ENTITY/SEPARATENESS. Borrower hereby
represents and warrants to Mezzanine Lender as of the date hereof and (unless
otherwise consented to by Mezzanine Lender) covenants and/or agrees (as the case
may be) as follows:
(a) Each of the Borrower and Mortgagors and the Mortgagor
Managing Entity shall engage solely in the following business and shall not
conduct its business in any manner inconsistent with the following: (i) in the
case of Borrower, owning a 100% membership interest in Mortgagor I and a 100%
membership interest in Mortgagor II, borrowing and giving security for the
Mezzanine Loan pursuant to the terms of the Mezzanine Loan Documents and
performing all acts required or permitted under the Mezzanine Loan, and
transacting any and all lawful business for which a limited liability company
may be organized under the Delaware Limited Liability Act that is incident,
necessary and appropriate to the foregoing; (ii) in the case of each Mortgagor,
owning, holding, selling, leasing, developing, financing, refinancing,
transferring, exchanging, operating and managing the Mortgaged Property owned by
such Mortgagor, borrowing and giving security for the Mortgage Loan pursuant to
the terms of the Mortgage Loan Documents and performing all acts required or
permitted under the Mortgage Loan, and transacting any and all lawful business
for which a limited liability company may be organized under the laws regarding,
and engaging in such other lawful activities permitted to, limited liability
companies under the statute under which such Mortgagor is formed as are
necessary,
27
incidental or appropriate in connection therewith; and (iii) in the case of the
Mortgagor Managing Entity, acting as non-member manager of each Mortgagor and
engaging in such activities as are necessary, incidental or advisable in
connection therewith.
(b) The Borrower does not own or will not own any asset or
property other than (i) the Pledged Company Interests and (ii) incidental
personal property necessary for the ownership of such interests. The Mortgagor
Managing Entity does not own nor will it own any asset or property other than
(i) an ownership interest (if any) in the entity set forth in Schedule I and
(ii) incidental personal property necessary for the ownership of such interests.
None of the Mortgagors will engage in any business other than the ownership,
management and operation of the Mortgaged Property, and each Mortgagor will
conduct and operate its business as presently conducted and operated in all
material respects. The Borrower will not engage in any business other than the
ownership of the Pledged Company Interests, and will conduct and operate its
business as presently conducted and operated in all material respects.
(c) [Reserved].
(d) None of the Mortgagors or the Borrower will enter into any
contract or agreement with any Affiliate of such Mortgagor or Borrower or any
constituent party of such Mortgagor or 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 arm's length
basis with third parties other than any such party.
(e) Neither Borrower, either Mortgagor nor the Mortgagor
Managing Entity has any outstanding Indebtedness for borrowed money, and,
notwithstanding any other provision of this Agreement, and so long as any
obligations under the Mezzanine Note remain outstanding and have not been
discharged in full, neither Borrower, either Mortgagor nor the Mortgagor
Managing Entity will (and Borrower agrees that it will not permit either
Mortgagor to, and will cause each Mortgagor to cause the Mortgagor Managing
Entity not to) incur any Indebtedness, other than (x) in the case of Borrower
and Mortgagor Managing Entity, unsecured trade payables and operational debt not
evidenced by a note and in an aggregate amount (for each such entity) not
exceeding $100,000 at any one time, PROVIDED that such trade payables and
operational debt shall be not more than ninety (90) days past due and incurred
in the ordinary course of business, and (y) in the case of Mortgagors,
Indebtedness of the types described in clauses (ii) and (iii) of Section
3.1.24(d) of the Mortgage Loan Agreement (subject to the limitations contained
therein); PROVIDED, FURTHER, HOWEVER, each Mortgagor is authorized to execute,
deliver and perform the Mortgage Note, the Mortgage and the other Mortgage Loan
Documents and Borrower is authorized to execute, deliver and perform the
Mezzanine Loan Documents;
(f) None of the Mortgagors or the Borrower has made, and none
of the Mortgagors or the Borrower will make, any loans or advances in the nature
of loans to any third party (including any Affiliate or constituent party of the
Mortgagors or Borrower), and shall not acquire obligations or securities of its
Affiliates.
(g) Each Mortgagor and the Borrower is and will remain solvent
and the Borrower and each Mortgagor will pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from their
own assets as the same shall become due.
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(h) Each Mortgagor and the Borrower has done or caused to be
done and will do all things necessary to observe organizational formalities and
preserve its existence, and none of the Mortgagors or the Borrower will, nor
will any Mortgagor or the Borrower permit its respective SPC Party to, amend,
modify or otherwise change the certificate of formation, articles of
incorporation and bylaws, limited liability company agreement or other
organizational documents of such Mortgagor, Borrower or SPC Party in any manner
that (i) violates the single purpose covenants set forth in this Section 5.1, or
(ii) amends, modifies or otherwise changes any provision thereof that by its
terms cannot be modified at any time when the Mortgage Loan or the Mezzanine
Loan is outstanding or by its terms cannot be modified without Mezzanine
Lender's consent.
5.2 OPERATIONAL MATTERS. Notwithstanding any other provision
of this Agreement, and so long as any obligations secured by the Mortgage remain
outstanding and have not been discharged in full, Borrower and each Mortgagor
and the Mortgagor Managing Entity shall do all of the following (and Borrower
shall cause each Mortgagor, and shall cause each Mortgagor to cause the
Mortgagor Managing Entity, to do all of the following) unless otherwise
consented to by Mezzanine Lender:
(a) maintain all of its books, records, financial statements
and bank accounts separate from those of its Affiliates and any constituent
party; PROVIDED, HOWEVER, that each such Person's assets may be included in a
consolidated financial statement of each such Person's Affiliates if (i)
inclusion on such a consolidated financial statement is required to comply with
the requirements of GAAP, (ii) such consolidated financial statements shall
contain a footnote to the effect that each such Person's assets are owned by
such Person, and (iii) such assets shall be listed on such Person's own separate
balance sheet. Except as permitted under the preceding sentence, each such
Person's assets will not be listed as assets on the financial statement of any
other entity; PROVIDED, HOWEVER, that such restriction shall not preclude any
Person from listing its ownership interests in any such Person as an asset on
its financial statement. Each such Person will file its own tax returns and will
not file a consolidated federal income tax return with any other Person unless
specifically mandated by applicable law or unless such Person is treated as a
disregarded entity. Each such Person shall maintain its books, records,
resolutions and agreements as official records;
(b) hold itself out to the public as a legal entity separate
and distinct from any other entity (including any Affiliate or any constituent
party), correct any known misunderstanding regarding its status as a separate
entity, conduct business in its own name, not identify itself or any of its
Affiliates as a division or part of the other, and maintain and utilize separate
stationery, invoices and checks bearing its own name;
(c) 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;
(d) not seek or effect the liquidation, dissolution,
winding-up, liquidation, consolidation or merger, in whole or in part, of
Borrower;
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(e) not commingle its funds and other assets with those of any
Affiliate or constituent party or any other Person, and will hold all of its
assets in its own name;
(f) 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;
(g) not guarantee or become obligated for the debts of any
other Person and 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;
(h) Borrower and each Mortgagor will at all times have as its
managing member or non-member manager or special manager the applicable SPC
Party whose sole asset is its interest, if any, in such entity and each such SPC
Party will at all times comply, and will cause such entity to comply, with each
of the representations, warranties, and covenants contained in this Section 5.2
as if such representation, warranty or covenant was made directly by such SPC
Party. Upon the withdrawal or the disassociation of an SPC Party from such
entity, such entity shall immediately appoint a new SPC Party whose articles of
incorporation or limited liability company agreement are substantially similar
to those of such SPC Party and deliver a new non-consolidation opinion to the
Mezzanine Lender with respect to the new SPC Party and its equity owners;
(i) at all times cause there to be at least two Independent
Directors of each SPC Party that is a corporation reasonably satisfactory to
Mezzanine Lender;
(j) not cause or permit the board of directors of any SPC
Party that is a corporation 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 such SPC Party
unless at the time of such action there shall be at least two members who are
each an Independent Director;
(k) conduct its business so that the assumptions made with
respect to such entity in the Insolvency Opinion shall be true and correct in
all material respects. In connection with the foregoing, it hereby covenants and
agrees that it will comply with, or cause the compliance with, (i) all of the
facts and assumptions (whether regarding the Borrower or any other Person) set
forth in the Insolvency Opinion, (ii) all the representations, warranties and
covenants in this Section 5.2, and (iii) all the organizational documents of the
Borrower, the Mortgagors and any SPC Party;
(l) not permit any Affiliate or constituent party independent
access to its bank accounts;
(m) pay the salaries of its own employees (if any) from its
own funds and maintain a sufficient number of employees (if any) in light of its
contemplated business operations; and
(n) 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.
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5.3 AMENDMENTS. None of the Mortgagors or the Borrower will,
nor will any Mortgagor or the Borrower permit any SPC Party to, amend, modify or
waive or seek a waiver of any of the Organizational Documents of such Mortgagor,
Borrower or SPC Party without Mezzanine Lender's consent in any manner that (i)
violates the single purpose covenants set forth in Sections 5.1, 5.2 or 5.5, or
(ii) amends, modifies or otherwise changes any provision thereof that by its
terms cannot be modified at any time when the Mortgage Loan or the Mezzanine
Loan is outstanding or by its terms cannot be modified without Mezzanine
Lender's consent.
5.4 MANAGER. Borrower, as sole member and a manager of
Mortgagors, will at all times comply, and will cause each Mortgagor to comply,
with each of the representations, warranties and covenants contained in Sections
5.1 and 5.2. Borrower's SPC Party will at all times comply, and Borrower's
managing members will cause Borrower to comply, with each of the
representations, warranties and covenants contained in Sections 5.1 and 5.2 as
if such representation, warranty or covenant was made directly by the Borrower's
SPC Party.
5.5 INDEPENDENT DIRECTORS; BANKRUPTCY ACTION.
(a) Notwithstanding any other provision of this Agreement, and
so long as any obligations under the Mezzanine Loan Documents remain outstanding
and have not been discharged in full, each SPC Party that is a corporation at
all times shall have at least two Independent Directors. No resignation or
removal of an Independent Director shall be effective until such successor shall
have accepted his or her appointment as an Independent Director by a written
instrument. In the event of a vacancy in the position of Independent Director,
the Borrower or Mortgagor (as the case may be), subject to the approval of the
Mezzanine Lender, which approval shall not be unreasonably withheld or delayed,
shall, as soon as practicable, cause the SPC Party to appoint a successor
Independent Director. No Independent Director shall at any time serve as trustee
in bankruptcy for any Affiliates of the entity for which it is serving as
Independent Director.
(b) Notwithstanding any other provision of this Agreement, and
so long as any obligations secured by the Mortgage remain outstanding and have
not been discharged in full, no Borrower or any Mortgagor or SPC Party or any
other Person shall have any authority to take any Bankruptcy Action on behalf of
Borrower or any Mortgagor or such SPC Party, or cause or permit Borrower or any
Mortgagor or SPC Party to take any Bankruptcy Action, without in each case the
prior written consent of both Independent Directors.
5.6 INTEREST RATE CAP. The Borrower shall cause the Mortgagors
to maintain an interest rate cap agreement as required under the Mortgage Loan.
5.7 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Borrower and each of its Subsidiaries shall: (a) preserve, renew and keep in
full force and effect its existence, (b) engage in business of the same general
type as now conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
material rights, privileges and franchises necessary or desirable in the normal
conduct of its business and (c) comply in all material respects with all
Requirements of Law. Notwithstanding the foregoing, after prior notice to
Mezzanine Lender, Borrower and/or each of its Subsidiaries,
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at its own expense, may suspend such compliance and contest by appropriate legal
proceeding, conducted in good faith and with due diligence, the validity or
applicability of any Legal Requirements to Borrower, such Subsidiaries and/or
the Mortgaged Property, provided that (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) Borrower
or any of its Subsidiaries shall establish to Mezzanine Lender's reasonable
satisfaction that neither the Mortgaged Property nor any part thereof or
interest therein will be in imminent danger of being sold, forfeited, terminated
canceled or lost; (iv) Borrower or such Subsidiaries shall promptly upon final
determination thereof comply with such resulting Legal Requirements, and shall
pay all costs, interest and penalties which may be payable in connection
therewith; and (v) unless deposited with Mortgage Lender pursuant to the
Mortgage Loan Agreement, Borrower shall deposit with Mezzanine Lender cash, or
other security as may be approved by Mezzanine Lender, in an amount equal to
105% of the amount of all costs, interest and penalties that may be assessed
against Borrower or such Subsidiaries as a result of such non-compliance.
5.8 INSPECTION OF MORTGAGED PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS; CONSENTS.
(a) The Borrower and each of its Subsidiaries shall keep
proper books of records and account in which full, true and correct entries
shall be made of all dealings and transactions in relation to its business and
activities; and permit representatives of Mezzanine Lender upon reasonable prior
notice to such Person to examine and make abstracts from any of the books and
records of such Person, at any reasonable time during normal business hours and
as often as may reasonably be desired, and to discuss the business and financial
and other condition of such Person with officers of such Person and the
accountants and other representatives of such Person.
(b) Representatives of Mezzanine Lender shall be permitted
upon reasonable prior notice to Borrower at any reasonable time during normal
business hours and as often as may reasonably be desired to examine the
Mortgaged Property and to discuss the business and financial and other condition
of the Mortgagors with officers of such Mortgagors and the accountants and other
representatives of such Mortgagors.
5.9 NOTICES. Borrower shall give notice, or cause notice to be
given, to Mezzanine Lender promptly upon the occurrence of:
(a) any Default;
(b) any default or event of default under any Contractual
Obligation of Borrower or, to the knowledge of Borrower, of any of the
Mortgagors, Mortgagor Managing Entity or Guarantor that could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Borrower or, to the
knowledge of the Borrower, affecting any of the Mortgagors or Guarantor which,
if adversely determined, could reasonably be expected to have a Material Adverse
Effect;
(d) a change in the business, operations, property or
financial or other condition or prospects of Borrower or, to the knowledge of
Borrower, any of the Mortgagors, the
32
Mortgagor Managing Entity or Guarantor which could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action, if any, Borrower or, to the
knowledge of Borrower, the Mortgagors, the Mortgagor Managing Entity or
Guarantor proposes to take with respect thereto.
5.10 SPECIAL DISTRIBUTIONS. On each date on which amounts are
required to be disbursed to the Mezzanine Debt Service Account pursuant to the
terms of the Mezzanine Cash Collateral Agreement or are required to be paid to
Mezzanine Lender under any of the Mezzanine Loan Documents, the Borrower shall
exercise its rights under the related Mortgagor Company Agreement, the Cash
Management Agreement and/or the Mezzanine Cash Collateral Agreement to cause the
Mortgagors to make to Borrower a distribution in an aggregate amount such that
Mezzanine Lender shall receive the amount required to be disbursed to the
Mezzanine Debt Service Account or otherwise paid to Mezzanine Lender on such
date.
5.11 REPORTS, ETC. Borrower shall furnish, or cause to be
furnished, to Mezzanine Lender copies of all financial statements, reports,
budgets and summaries required to be delivered to Mortgage Lender under the
Mortgage Loan Documents (including, without limitation, those set forth in
Section 4.1.6 of the Mortgage Loan Agreement), to the extent the same are
provided to Borrower from the Mortgagors pursuant to the Mortgagor Company
Agreements, at the same time as each such document is furnished to the Mortgage
Lender. Any financial information which is required by the Mortgage Loan
Agreement to be certified to Mortgage Lender shall also be certified to
Mezzanine Lender.
5.12 FINANCIAL STATEMENTS. 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. Mezzanine
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 Mezzanine Lender shall desire.
5.13 CURING. Mezzanine Lender shall have the right, but shall
not have the obligation, to exercise the Borrower's rights, to the extent
Borrower shall have the same, under the applicable Mortgagor Company Agreement
(a) to cure a default by the related Mortgagor under the Mortgage Loan and (b)
to satisfy any Liens, claims or judgments against the Mortgaged Property (except
for Liens permitted by the Mortgage Loan Documents), unless, in the case of
either (a) or (b), Borrower or the related Mortgagor shall be diligently
pursuing remedies to cure to Mezzanine Lender's reasonable satisfaction. The
Borrower shall reimburse Mezzanine Lender on demand for any and all costs
incurred by Mezzanine Lender in connection with curing such a default by any of
the Mortgagors under the Mortgage Loan or satisfying any Liens, claims or
judgments against the Mortgaged Property.
5.14 FURTHER ASSURANCES. Borrower shall at any time and from
time to time, upon the reasonable request of Mezzanine Lender, and at the sole
expense of the Borrower, promptly and duly execute and deliver such further
instruments and documents and take such
33
further actions as Mezzanine Lender may reasonably request to carry out and
obtain and preserve the full benefits of this Agreement and the other Mezzanine
Loan Documents and of the rights and powers granted herein and therein.
5.15 INDEMNIFICATION. Borrower shall indemnify Mezzanine
Lender against any claims for brokerage fees or commissions asserted in
connection with the Mezzanine Loan and pay all expenses incurred by Mezzanine
Lender in connection with the defense of any action or proceeding brought to
collect any such brokerage fees or commissions.
ARTICLE 6
NEGATIVE COVENANTS
6.1 SINGLE PURPOSE EXISTENCE AND SEPARATENESS OF ENTITIES.
(a) None of the Borrower or its Subsidiaries shall: (i) take
any actions in violation of its organizational documents, or that would
otherwise adversely affect its existence as a Single Purpose Entity, (ii) amend,
modify, waive or terminate, without the prior written consent of Mezzanine
Lender, the Borrower Operating Agreement or the Articles of Incorporation of the
Mortgagor Managing Entity or any of their respective other organizational
documents in any manner that (x) violates the single purpose covenants as set
forth in Sections 5.1, 5.2, 5.3 or 5.5 or (y) amends, modifies or otherwise
changes any provision thereof that by its terms cannot be modified at any time
when the Mortgage Loan or the Mezzanine Loan is outstanding or by its terms
cannot be modified without Mezzanine Lender's consent, or (iii) consent to the
amendment, modification, waiver or termination, without the prior written
consent of Mezzanine Lender, which shall not be unreasonably withheld or
delayed, of any of the Mortgage Loan Documents.
(b) None of the Borrower or its Subsidiaries shall (i) cause
or permit the Collateral or other assets or property of Borrower to be subject
to any Lien other than as provided for or permitted in the Mezzanine Loan
Documents or cause or permit any assets or property of any Mortgagor to be
subject to any Lien other than as provided for or permitted by the Mortgage Loan
Documents, and subject to Mortgagors' contest rights set forth in the Mortgage
Loan Agreement, (ii) acquire the assets of any other Person, except those owned
as of the date hereof, (iii) make any material changes in Borrower's present
method of conducting business, or (iv) loan money to any Person.
6.2 LIMITATION ON SECURITIES ISSUANCES. None of the Borrower
or any of its Subsidiaries shall issue any membership interests or other
securities other than those that have been issued as of the date hereof.
6.3 LIMITATIONS ON DISTRIBUTIONS. Following the occurrence and
during the continuance of an Event of Default (and, in the case of an Event of
Default for which Borrower is not entitled to notice, after notice thereof), the
Borrower shall not make any distributions to its members.
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6.4 LIENS. None of the Borrower or its Subsidiaries shall take
any action that would impair the Lien created under this Agreement, the Pledge
Agreement, the Mezzanine Cash Collateral Agreement or any other Mezzanine Loan
Document.
6.5 OTHER LIMITATIONS. Prior to the payment in full of the
Mezzanine Obligations, none of the Borrower or its Subsidiaries shall, without
the prior written consent of Mezzanine Lender (which may be furnished or
withheld at its sole and absolute discretion, except in the case of clause (c)
below in which case Mezzanine Lender's consent shall not be unreasonably
withheld or delayed), give its consent or approval to any of the following
actions or items:
(a) except as permitted by the terms of Section 8.1, (i) any
refinance of the Mortgage Loan, (ii) any prepayment in full of the Mortgage
Loan, or (iii) any Transfer of the Mortgaged Property or any portion thereof,
(b) putting any additional voluntary Liens on the Mortgaged
Property;
(c) any modification, amendment, consolidation, spread,
restatement, waiver or termination of any of the Mortgage Loan Documents;
(d) for so long as an Event of Default continues to exist,
approve the terms of any Annual Budget;
(e) the distribution to the members of any Mortgagor of
property other than cash, cash equivalents or any Release Parcel;
(f) except (i) as set forth in an Approved Annual Budget, if
applicable, or (ii) except as permitted under the Mortgage Loan Documents
(including, without limitation, pursuant to any lease approved by Mortgage
Lender or entered into without such approval pursuant to the terms of the
Mortgage Loan Agreement; provided, however, that in the case of a Major Lease
which is not affirmatively approved by Mortgage Lender pursuant to the terms of
the Mortgage Loan Agreement, such Major Lease must be approved or deemed
approved by Mezzanine Lender pursuant to Section 6.7), any (A) improvement,
renovation or refurbishment of all or any part of the Mortgaged Property to a
materially higher standard or level than that of comparable properties in the
same market segment and in the same geographical area as the Mortgaged Property,
(B) removal, demolition or material alteration of the improvements or equipment
on the Mortgaged Property or (C) material increase in the square footage or
gross leasable area of the improvements on the Mortgaged Property if a material
portion of any of the expenses in connection therewith are paid or incurred by
the applicable Mortgagor;
(g) any material change in the method of conduct of the
business of the Borrower or any of its Subsidiaries (including the entering into
of an operating lease with respect to any hotel); or
(h) except as required or permitted by the Mortgage Loan
Documents, any determination to restore the Mortgaged Property after a casualty
or condemnation.
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6.6 CONTRACTUAL OBLIGATIONS. Other than the Mezzanine Loan
Documents, the Borrower Operating Agreement (and the initial membership
interests in Borrower issued pursuant thereto) and the Mortgagor Company
Agreements, none of the Borrower or its assets shall be subject to any
Contractual Obligations, and the Borrower shall not enter into any agreement,
instrument or undertaking by which it or its assets are bound, except for such
liabilities, not material in the aggregate, that are incidental to its
activities as a member of a Mortgagor.
6.7 MAJOR LEASES. The Borrower shall not without the prior
written consent of the Mezzanine Lender, which shall not be unreasonably
withheld, conditioned or delayed, give its consent or approval to a Mortgagor's
entering into any Major Lease or any amendment, modification or non-default
termination of any such Major Lease (other than amendments or modifications
entered into pursuant to or in implementation of options or rights contained in
such Major Lease and other than terminations entered into pursuant to or in
implementation of rights of a tenant contained therein); PROVIDED, HOWEVER, that
if Mezzanine Lender fails to respond to a request by Borrower for such approval
within ten (10) Business Days after its receipt of the final proposed Major
Lease (or amendment, modification or non-default termination) and all
information reasonably required by Mezzanine Lender in order to adequately
review such request, including, without limitation (in connection with the
approval of a Major Lease), blacklined copies of such Major Lease marked to show
the changes against the form of lease, Mezzanine Lender shall be conclusively
deemed to have approved such Major Lease (or amendment, modification or
non-default termination); provided that (in connection with the approval of a
Major Lease) blacklined copies of interim drafts of such Major Lease were
provided to Mezzanine Lender. If Mortgage Lender consents to or approves any
Major Lease (or amendment, modification or non-default termination thereof),
which has not been consented to or approved by Mezzanine Lender, Borrower may
nevertheless proceed with the transaction.
ARTICLE 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. The occurrence of any of the following
events shall be deemed the occurrence of an "EVENT OF DEFAULT":
(a) Borrower shall fail to pay any principal or any interest
on the Mezzanine Note when due in accordance with the terms thereof or hereof;
or
(b) Borrower shall fail to pay any amount payable (other than
pursuant to clause (a)) pursuant to this Agreement, the Mezzanine Note or any
other Mezzanine Loan Document when due and payable in accordance with the
provisions hereof or thereof, and such failure is not cured within a period of
five (5) Business Days after notice thereof; or
(c) If any representation or warranty made by Borrower herein
or in any other Mezzanine Loan Document or in any report, certificate, financial
statement or other instrument, agreement or document prepared by or on behalf of
Borrower and furnished to Mezzanine Lender shall have been false or misleading
in any material respect as of the date the representation or warranty was made;
provided that Borrower shall have twenty (20) days after
36
notice from Mezzanine Lender to cure in a manner satisfactory to Mezzanine
Lender any such breach of a representation or warranty that is susceptible to
cure, except that Borrower shall have no opportunity to cure any breach of a
representation or warranty (A) made to the best of Borrower's knowledge (i.e.,
which Borrower knew was false when made), (B) that was otherwise intentionally
misrepresented, or (C) made pursuant to Section 5.1 hereof;
(d) Any of the Borrower or Borrower's Subsidiaries (as
applicable) shall breach in any material respect any of the terms of:
(i) Section 2.7(a) (Payments upon Liquidation Event);
(ii) Take any Bankruptcy Action in violation of Section 5.5(b)
(Independent Directors);
(iii) Borrower takes any action to prevent Section 5.10
(Special Distributions) from being complied with;
(iv) Section 6.2 (Limitation on Securities Issuances);
(v) Section 6.3 (Limitations on Distributions);
(vi) Section 6.4 (Liens), if Borrower takes any action which
is intended to cause a violation of Section 6.4; or
(vii) Section 6.5 (a) or (b) (Limitations on Transfers and
additional Liens).
(e) if (A) there is a transfer of title to Borrower's
ownership interest in the Mortgagors or either of them, (B) there is a transfer
of title to any direct or indirect interest in Borrower in violation of Section
8.3 hereof, or (C) Borrower voluntarily breaches or permits any other breach of
Section 8.3 hereof.
(f) If any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Mezzanine Lender
in connection with the Mezzanine Loan, or in any other non-consolidation opinion
delivered subsequent to the closing of the Mezzanine Loan, is or shall become
untrue in any material respect;
(g) If a receiver, liquidator or trustee shall be appointed
for Borrower, any Mortgagor or the SPC Party or if Borrower, any Mortgagor or
the SPC Party 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, any Mortgagor or the SPC Party, or
if any proceeding for the dissolution or liquidation of Borrower or any
Mortgagor shall be instituted; PROVIDED, HOWEVER, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower, any Mortgagor or the SPC Party, upon the same not being discharged,
stayed or dismissed within sixty (60) days;
(h) Any Mezzanine Loan Document shall cease to be in full
force and effect, or any party thereto (other than the Mezzanine Lender) shall
so assert in writing, or the Liens
37
created pursuant to any Mezzanine Loan Document shall cease to be a fully
perfected enforceable first priority security interest; or any portion of the
Collateral is Transferred without Mezzanine Lender's prior written consent;
PROVIDED, HOWEVER, the Borrower shall have thirty (30) days after Borrower has
notice of such Default to cure such Default if, after giving effect to such
cure, the Mezzanine Lender's security interest in the Collateral will be
maintained as a perfected, first priority Lien; or
(i) One or more judgments or decrees shall be entered against
the Borrower or any one or more of the Mortgagors or the Mortgagor Managing
Entity, involving in the aggregate a liability (not paid or fully covered by
insurance, subject to customary deductibles, or fully indemnified against by a
party reasonably acceptable to Mezzanine Lender) of $1,000,000 or more (in the
case of the Borrower), $1,000,000 or more (in the case of the Mortgagor Managing
Entity), and $1,000,000 or more (in the case of the Mortgagors) and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
(j) Either (x) this Agreement, the Mezzanine Note or any other
Mezzanine Loan Document or any Lien granted hereunder or thereunder shall, in
whole or in any material part, terminate, cease to be effective or cease to be a
legally valid, binding and enforceable obligation of the Borrower, or any Lien
securing the Mezzanine Loan or any Mezzanine Loan Documents shall, in whole or
in part, cease to be a perfected first priority Lien (except in any of the
foregoing cases in accordance with the terms hereof or under any other Mezzanine
Loan Document); or (y) Borrower or any Subsidiary of Borrower shall take any
action in furtherance thereof; provided, however, the Borrower shall have thirty
(30) days after Borrower has notice of such Default to cure such Default if,
after giving effect to such cure, the Mezzanine Lender's security interest in
the Collateral will be maintained as a perfected, first priority Lien; or
(k) If Borrower shall continue to be in Default under any of
the other terms, covenants or conditions of this Agreement not specified in
subsections (a)-(j) above, or in any other Mezzanine Loan Document which does
not provide for a specific notice and cure period with respect to such Default,
for ten (10) days after notice to Borrower from Mezzanine 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 Mezzanine Lender in the case of any other Default;
PROVIDED, HOWEVER, that if such non-monetary 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 one hundred twenty (120) days; or
(l) An Event of Default under (and as defined in) the Mortgage
Loan Agreement or any of the other Mortgage Loan Documents shall occur.
7.2 REMEDIES FOR EVENTS OF DEFAULT.
(a) If an Event of Default shall have occurred and be
continuing, then, and in any such event, (i) if such event is an Event of
Default specified in Sections 7.1(e) or (f) above,
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the Mezzanine Loan hereunder shall immediately accelerate and the Mezzanine Loan
(with accrued interest thereon) and all other amounts owing under the Mezzanine
Note and the other Mezzanine Obligations shall immediately become due and
payable, and (ii) if such event is any other Event of Default, then Mezzanine
Lender may by notice of default to the Borrower, declare the Mezzanine Loan
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Mezzanine Note to be due and payable forthwith, whereupon the
same shall immediately become due and payable. Except as expressly provided
above in this Article 7 or elsewhere in this Agreement, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
(b) In addition to any other remedies set forth in this
Section 7.2, if an Event of Default shall have occurred and be continuing, the
Mezzanine Loan shall bear interest at the Default Rate. The Mezzanine Loan shall
continue to bear interest at the Default Rate until the earlier of: (i) the
Mezzanine Loan is paid in full or (ii) such Event of Default is otherwise cured
or waived in writing by the Mezzanine Lender. In addition, as provided in
Section 6.3, the Borrower shall not make any distributions to its members
following the occurrence and during the continuance of an Event of Default.
(c) If an Event of Default shall have occurred and be
continuing, Mezzanine Lender may exercise all rights and remedies which it has
under the Mezzanine Loan Documents, at law, in equity or otherwise. Without
limiting the foregoing, Mezzanine Lender may, subject to the terms of the Pledge
Agreement, foreclose on or otherwise enforce the Borrower's obligations against
the Collateral and may exercise all the rights and remedies of a secured party
under the Uniform Commercial Code, as adopted and enacted by the State or States
where any of the Collateral is located.
7.3 POWER OF ATTORNEY. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted in this
subsection, Borrower hereby irrevocably constitutes and appoints the Mezzanine
Lender its true and lawful attorney-in-fact to execute, acknowledge and deliver
any instruments and do and perform any acts such as are referred to in this
subsection in the name and on behalf of Borrower. This power of attorney is a
power coupled with an interest and cannot be revoked.
ARTICLE 8
OTHER AGREEMENTS
8.1 PERMITTED TRANSACTIONS. Borrower shall not be entitled to
give its consent or approval to a Transfer of any Mortgaged Property unless it
obtains the prior written consent of Mezzanine Lender (which may be furnished or
withheld at its sole discretion); PROVIDED, HOWEVER, that Borrower is not
required to obtain the consent of the Mezzanine Lender to a Transfer of a
Release Parcel in connection with any partial prepayment pursuant to Section
2.3(f) hereof; PROVIDED, FURTHER, HOWEVER, that, after a Secondary Market
Transaction, Mezzanine Lender shall permit a refinancing in full of the Mortgage
Loan ("Permitted Refinancing") or permit a conveyance of the Mortgaged
Properties to a Permitted Transferee ("Permitted Property Transfer") if, after
considering the following factors, it determines in its reasonable discretion
that such factors shall have been satisfied:
39
(a) PERMITTED REFINANCING:
(i) no Event of Default or Default of which Borrower has been
given notice shall have occurred and be continuing;
(ii) the new mortgage loan ("NEW MORTGAGE LOAN") shall have
(A) an interest rate that is no higher than the current interest rate
for the Mortgage Loan, as determined by the Mezzanine Lender in its
sole discretion (and shall provide for an interest rate cap
substantially identical to the interest rate cap agreement then in
existence with respect to the Mortgage Loan), (B) a principal balance
that is no more than the balance of the Mortgage Loan on the date of
the refinancing, and (C) an amortization schedule that provides for
repayment in monthly installments each of which is no greater than the
monthly payments then due under the Mortgage Note, and (D) a maturity
date that is the same as that provided for under the Mortgage Loan at
the time of the closing thereof;
(iii) the terms of the New Mortgage Loan shall permit the
Mezzanine Loan, shall provide the same express rights to the Mezzanine
Lender as the Mortgage Loan and shall not conflict with the terms of
the Mezzanine Loan and the new mortgage lender shall enter into an
intercreditor agreement with Mezzanine Lender no less favorable to
Mezzanine Lender than the intercreditor agreement entered into by the
Mortgage Lender and Mezzanine Lender on the date hereof;
(iv) the Mortgaged Properties may not be transferred in
connection with such refinancing except pursuant to a Permitted
Property Transfer;
(v) the Borrower shall pay all reasonable costs and expenses
of Mezzanine Lender incurred in connection with any such refinancing,
including, without limitation, reasonable fees and expenses of
Mezzanine Lender's counsel; and
(vi) Mezzanine Lender shall have received such settlement
statements, pay-off letters, opinions and other documentation as it
shall reasonably request in connection with such refinancing.
(b) PERMITTED PROPERTY TRANSFER:
(i) such Transfer has been approved or deemed approved under
the Mortgage Loan Documents;
(ii) no Event of Default or Default of which Borrower has been
given notice shall have occurred and be continuing;
(iii) each Rating Agency rating securities issued in a
Secondary Market Transaction shall have confirmed in writing that such
Transfer shall not result in the reduction, qualification or withdrawal
of the then current ratings of such securities;
(iv) the Permitted Transferee shall have been approved by the
Mezzanine Lender in its sole discretion;
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(v) the entity to which the Mortgaged Properties are
Transferred (the "NEW MORTGAGOR") (A) shall assume (1) the Mortgage
Loan and the Mortgage Loan Documents, subject to the limitations on
liability contained therein, and (2) all the agreements of the
Mortgagor under the Mortgage Loan Documents, subject to the limitations
on liability contained therein, (B) shall be a bankruptcy-remote Single
Purpose Entity, and (C) shall otherwise have a legal, financial and
ownership structure that is at least as favorable to Mezzanine Lender,
as determined by Mezzanine Lender in its reasonable discretion, as the
legal, financial and ownership structure of the Mortgagor;
(vi) all of the entities which own interests in the New
Mortgagor similar to the interests in the Mortgagor owned by the
Borrower (the "MEZZANINE ENTITIES") (A) shall assume the Mezzanine Loan
and all the agreements of the Borrower under the Mezzanine Loan
Documents, subject to the limitations on liability contained therein
(and without limiting the foregoing, all of the ownership interests in
the New Mortgagor, all payments thereon and all proceeds thereof shall
be pledged to Mezzanine Lender on terms no less favorable than the
pledge of the Collateral under the Pledge Agreement), (B) shall each be
a bankruptcy-remote Single Purpose Entity, and (C) shall otherwise have
a legal, financial and ownership structure that is at least as
favorable to Mezzanine Lender, as determined by Mezzanine Lender in its
reasonable discretion, as the legal, financial and ownership structure
of the Borrower and the Mortgagor Managing Entity;
(vii) there shall be delivered to Mezzanine Lender opinions of
counsel, in form, substance and from counsel reasonably satisfactory to
Mezzanine Lender as Mezzanine Lender requests on the following matters,
subject to exceptions, assumptions and conditions customarily contained
in such opinions: (A) a "nonconsolidation opinion" with respect to the
Mezzanine Entities and such of their Affiliates as shall be reasonably
requested by Mezzanine Lender, (B) such other bankruptcy related
opinions as shall be requested by Mezzanine Lender, including an
opinion that no fraudulent conveyance or preference results from the
transfer of the Mortgaged Properties and the assumption by the
Mezzanine Entities of the obligations of the Borrower under the
Mezzanine Loan Documents, and all related transactions, (C) such
corporate and securities opinions as shall be reasonably requested by
Mezzanine Lender, including without limitation any and all opinions as
shall have been delivered to Mezzanine Lender in connection with the
making of the Mezzanine Loan, and (iv) such other legal opinions as
shall be reasonably requested by Mezzanine Lender;
(viii) Borrower shall pay all reasonable costs and expenses of
Mezzanine Lender incurred in connection with any such Transfer,
including, without limitation, reasonable fees and expenses of
Mezzanine Lender's counsel;
(ix) Mezzanine Lender shall have been reimbursed for Mezzanine
Lender's administrative costs of processing the Transfer in an amount
not to exceed $20,000; and
(x) Mezzanine Lender shall have received such documents,
certificates and legal opinions as it may reasonably request.
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8.2 TERMINATION OF MANAGER; MANAGEMENT.
(a) Borrower shall not approve the surrender, termination
(except for termination by reason of a default by Manager thereunder which
remains uncured beyond applicable notice and grace periods under the Management
Agreement) material modification, renewal or extension of the Management
Agreement, or the entering into of any other agreement relating to the
management of the Mortgaged Property with Manager or any other Person, or
consent to the assignment by the Manager of its interest under the Management
Agreement, in each case without the express consent of Mezzanine Lender, which
consent shall not be unreasonably withheld or delayed. If at any time Mezzanine
Lender consents to the appointment of a new manager, such new manager and
Borrower shall, as a condition of Lender's consent, execute a subordination of
management agreement in a form substantially similar to the Subordination of
Management Agreement entered into as of the date hereof with respect to the
Mezzanine Loan.
(b) From and during the continuance of any one or more of the
following events: (i) at any time following the occurrence and during the
continuance of an Event of Default or (ii) if at any time when the Debt Service
Coverage Ratio falls below 1.05 to 1.0, as reasonably determined by Mezzanine
Lender on a quarterly basis, Manager is managing the Mortgaged Property in a
manner that is inconsistent with standards that are customary for comparable
properties, at the direction of Mezzanine Lender, Borrower shall direct
Mortgagors (i) to terminate the Manager, and (ii) to appoint a new Manager,
reasonably acceptable to the Mezzanine Lender, and enter into a new Management
Agreement with such replacement manager (the "REPLACEMENT MANAGER").
(c) The rights of Mezzanine Lender (i) to approve any
surrender, termination, cancellation, material modification, renewal or
extension of the Management Agreement, (ii) to cause the termination of the
existing Manager and (iii) to approve a Replacement Manager shall be subject to
the rights of the Mortgage Lender under the Mortgage Loan Documents to take such
actions, and any action so taken by Mortgage Lender shall be binding on
Mezzanine Lender. In the event both Mezzanine Lender and the Mortgage Lender
shall have such rights under the Mezzanine Loan Documents and Mortgage Loan
Documents, respectively, Mezzanine Lender may exercise such rights, but only to
the extent the Mortgage Lender shall not have previously exercised such rights,
and the Mortgage Lender shall not subsequently exercise such rights as to the
matter in question.
(d) Nothing in this Agreement shall be construed as limiting
Mortgagor's right to enforce its rights against a Manager under the related
Management Agreement.
8.3 BORROWER TRANSFER RESTRICTIONS.
(a) Borrower shall not permit or suffer the Transfer of any of
its ownership interest in the Mortgagors or either of them. Borrower shall not
permit or suffer the Transfer of any ownership interest in Borrower or in any
entity owning directly or indirectly any interest in Borrower. The preceding
sentence notwithstanding, Borrower may permit Transfers of indirect ownership
interests in Borrower or in any entity owning directly or indirectly any
interest in Borrower PROVIDED that (a) any such Transfer is a complete
conveyance of the related interest
42
and not a pledge, encumbrance or other Transfer of such interest, (b) either (i)
the transferee is approved by Mezzanine Lender in its sole discretion or (ii)
Beacon and/or PaineWebber own, directly or indirectly, 100% of the ownership
interests in Borrower after such Transfer, (c) if Beacon continues to own any
indirect interests in Borrower after such Transfer, BCI shall be the sole
general partner of BCLP and shall have the right and power to direct the
day-to-day management, business and affairs of BCLP, and (d) if, after giving
effect to any such Transfer and all prior Transfers, more than 49% of the direct
or indirect interests of Borrower are held by an affiliated group other than
Beacon or PaineWebber, Mezzanine Lender receives a non-consolidation opinion
acceptable to Mezzanine Lender in its reasonable discretion; PROVIDED that a
non-consolidation opinion shall be required to the extent that either Beacon or
PaineWebber drop their ownership interests in Borrower below 49% and
subsequently increase it back to 49% or more. Additionally, (i) pledges and
other encumbrances of the direct or indirect interests held by Beacon and/or
PaineWebber (and/or by their direct or indirect subsidiaries) in Beacon/▇▇
▇▇▇▇▇▇▇ LLC or in any entity that directly or indirectly owns Beacon/▇▇ ▇▇▇▇▇▇▇
LLC shall be permitted, provided that the foreclosure of any such interests
shall be an Event of Default unless permitted by the immediately preceding
sentence, and (ii) pledges, encumbrances and other Transfers of any direct or
indirect ownership interest in Beacon or PaineWebber or in any entity owning
directly or indirectly any interest in Beacon or PaineWebber shall not be
restricted hereby or by any other provision of the Mezzanine Loan Documents,
subject only to the provisions of clause (c) above with respect to Beacon.
Mezzanine Lender hereby consents to the pledge of the ownership interests in
Mortgagors by the Borrower and of the ownership interests in the Mortgagor
Managing Entity by the Stock Owner as security for the Mezzanine Loan. The
Mezzanine Lender agrees that it will consent to the Transfer of interests in the
Mortgagor Managing Entity to any entity owned, directly or indirectly, 100% by
Beacon and/or PaineWebber (the "NEW OWNER"), provided that it receives a pledge
agreement from the New Owner in a form substantially similar to the Pledge
Agreement.
8.4 BUDGETS.
(a) For each calendar year following the occurrence and during
the continuance of an Event of Default, Borrower shall submit to Mezzanine
Lender for Mezzanine Lender's written approval (which shall not be unreasonably
withheld or delayed) an Annual Budget for the Mortgaged Property not later than
thirty (30) days prior to the commencement of such calendar year, in form
satisfactory to Mezzanine Lender setting forth in reasonable detail budgeted
monthly operating income and monthly operating expenses and other cash expenses
for the Mortgaged Properties (including without limitation Management Fees,
which shall not exceed four percent (4%) of the gross revenues from the
Mortgaged Properties). In the event Mezzanine Lender objects to a proposed
Annual Budget, Mezzanine Lender shall advise the Borrower of such objections in
writing within ten (10) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections), and Borrower shall provide
for such Annual Budget to be revised within five (5) days after receipt of
notice and resubmit the same to Mezzanine Lender. Mezzanine Lender shall advise
Borrower in writing of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections), and Borrower shall provide for such Annual
Budget to be revised in accordance with the process described in this Section
until Mezzanine Lender approves an Annual Budget, PROVIDED that if in each case
the correspondence to Mezzanine Lender requesting approval of the Annual Budget
contains a bold-faced,
43
conspicuous legend at the top of the first page to the effect that "IF YOU FAIL
TO RESPOND TO THIS REQUEST FOR APPROVAL IN WRITING WITHIN __ DAYS, YOUR APPROVAL
SHALL BE DEEMED GIVEN," and if Mezzanine Lender does not advise Borrower in
writing of its objections to any proposed Annual Budget within the applicable
time period set forth in this Section, then such proposed Annual Budget shall be
deemed approved by Mezzanine Lender. Each such Annual Budget approved by
Mezzanine Lender in accordance with the terms hereof shall be referred to herein
as an "APPROVED ANNUAL BUDGET." Until such time that Mezzanine Lender approves a
proposed Annual Budget, the most recently Approved Annual Budget shall apply,
PROVIDED that such Approved Annual Budget shall be adjusted (i) to reflect
actual increases in rents, real estate taxes, insurance premiums and utilities
expenses and (ii) such that it shall increase by an amount equal to the greater
of (A) 2.5% of the amount of the next preceding Annual Budget and (B) the amount
of the next preceding Annual Budget multiplied by the increase in the Consumer
Price Index from the beginning to the end of the calendar year relating to such
next preceding Annual Budget.
(b) So long as an Event of Default continues to exist, without
the prior written consent of the Mezzanine Lender, the Borrower shall not
approve or consent to any of the Mortgagors entering into any contracts or other
agreements nor expending any funds not provided for in the Approved Annual
Budget, other than expenditures required to be made by reason of the occurrence
of any emergency (I.E., an unexpected event which threatens imminent harm to
persons or property at the Mortgaged Property) and with respect to which it
would be impracticable, under the circumstances, to obtain Mezzanine Lender's
prior consent thereto. Borrower shall notify Mezzanine Lender as promptly as
practicable with respect to any such emergency expenditures made with respect to
the Mortgaged Property.
ARTICLE 9
MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement, the
Mezzanine Note, or any other Mezzanine Loan Document nor any terms hereof or
thereof may be amended, modified or waived other than by a written agreement
executed by the party against which such amendment, modification or waiver is
sought to be enforced.
9.2 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 and a copy sent by hand or by reputable overnight
courier within one (1) Business Day thereafter) 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 9.2. Any
Notice shall be deemed to have been received: (a) three (3) days after the date
such Notice is mailed, (b) on the date of sending by telefax (and not the date
of sending the copy as required above) if sent during business hours on a
Business Day (otherwise on the next Business Day), (c) on the date of delivery
by hand if delivered during business hours on a Business Day (otherwise on the
next Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:
44
Borrower: CAMEZZ LLC
c/o Beacon Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
PaineWebber Incorporated
1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and: Goulston & Storrs, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and: Weil, Gotshal and ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Mezzanine Lender: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Mortgage
Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of Mezzanine Lender, any right, remedy,
power or privilege hereunder or under the Mezzanine Loan Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any
45
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
or provided in the Mezzanine Loan Documents are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement, in the other Mezzanine
Loan Documents and in any document, certificate or statement prepared by
Borrower and delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the other Mezzanine Loan Documents, and shall
continue in full force and effect until payment in full of the Mezzanine Loan
and any other amount owing to Mezzanine Lender under this Agreement or the other
Mezzanine Loan Documents.
9.5 PAYMENT OF EXPENSES AND TAXES. Borrower shall promptly (a)
pay or reimburse Mezzanine Lender for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement, the
Mezzanine Note and the other Mezzanine Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to Mezzanine Lender, (b) pay or
reimburse Mezzanine Lender for all its costs and expenses incurred in connection
with the enforcement, after an Event of Default or in the case of an imminent
Event of Default, of any rights under this Agreement, the Mezzanine Note and any
such other documents, including, without limitation, reasonable fees and
disbursements of counsel to Mezzanine Lender, (c) pay, indemnify, and hold
Mezzanine Lender harmless from any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes (specifically excluding, in any event, income
taxes and the like for which Mezzanine Lender is liable), if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the Mezzanine Note, the Mezzanine Loan Documents and
any such other documents, and (d) pay, indemnify, and hold Mezzanine Lender, and
all officers, directors, stockholders, partners, employees, agents, successors
and assigns thereof, harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel) incurred by Mezzanine Lender
arising out of the occurrence or existence of any of the following (it being
understood that in no event will the indemnified parties be required to actually
pay or incur any costs or expenses as a condition to the effectiveness of the
foregoing indemnity): (1) the Mezzanine Lender's interest in any of the
Collateral or any of the Mezzanine Collateral (as defined in the Mezzanine Cash
Collateral Agreement), or any interest therein, or receipt of any rents or other
sum therefrom, (2) any negligence or tortuous act or omission on the part of
Borrower or any of its agents, contractors, servants or employees, (3) the
execution, delivery, enforcement (after an Event of Default or in the case of an
imminent Event of Default) and performance of this Agreement, the Mezzanine
Note, the Mezzanine Loan Documents and any such other documents (all the
foregoing, collectively, the "Indemnified Liabilities") or (4) any claims
related to this Agreement; PROVIDED that the Borrower shall not have any
obligation hereunder to Mezzanine Lender or the other
46
indemnified parties with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of Mezzanine Lender or the other
indemnified parties; PROVIDED, FURTHER, that Mezzanine Lender may settle any
claims subject only to the Borrower's consent which shall not be unreasonably
withheld or delayed. Any indemnified party will give Borrower prompt notice
after such indemnified party obtains actual knowledge of any potential claim by
such indemnified party for indemnification hereunder. Nothing herein shall
compromise the right of the Mezzanine Lender (or any indemnified party) to
appoint its own counsel at the Borrower's expense for its defense with respect
to any action if and only if there is a conflict. The agreements in this Section
9.5 shall survive repayment of the Mezzanine Note and all other amounts payable
hereunder.
9.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of Borrower, Mezzanine Lender, all future holders
of the Mezzanine Note and their respective successors and assigns, EXCEPT that
the Borrower may not Transfer any of its rights under this Agreement, the
Mezzanine Note or any other Mezzanine Loan Document without the prior written
consent of Mezzanine Lender. Borrower acknowledges and agrees that Mezzanine
Lender may at any time, without consent of the Borrower or Mortgagors, Transfer
the Mezzanine Loan (including all or any of the rights under the Mezzanine Loan
Documents) or Transfer or grant participations in the Mezzanine Loan (including
all rights under the Mezzanine Loan Documents) to other Persons (each, a "Loan
Transferee"), and Borrower shall reasonably cooperate in all respects in order
to help effect such Transfer but shall not be required to incur any third-party
costs in connection therewith unless reimbursed by Mezzanine Lender. Subject to
the foregoing, Borrower acknowledges and agrees that upon its receipt of notice
of such Transfer, each Loan Transferee may exercise all rights of payment
(including without limitation rights of set-off) with respect to the Mezzanine
Loan as fully as if such Loan Transferee were the initial Mezzanine Lender or
the direct holder thereof, as applicable, EXCEPT THAT all participants in the
Mezzanine Loan may only take such actions through the Mezzanine Lender. In the
event any Loan Transferee shall be a non-U.S. Person, Borrower not shall be
responsible for any withholdings or filings that may need to be made as a result
of such Loan Transferee's status as a non-U.S. Person, and such non-U.S. Person
shall execute and deliver certificates or affidavits with respect thereto.
9.7 SET-OFF. In addition to any rights and remedies of
Mezzanine Lender provided by law, Mezzanine Lender shall have the right, without
prior notice to Borrower, any such notice being expressly waived by Borrower to
the extent permitted by applicable law, upon and during the continuance of any
Event of Default or upon the filing of a petition under any of the provisions of
the federal bankruptcy act or amendments thereto, by or against, the making of
an assignment for the benefit of creditors by, the application for the
appointment, or the appointment, of any receiver of, or of any of the property
of, the issuance of any execution against any of the property of, the issuance
of a subpoena or order, in supplementary proceedings, against or with respect to
any of the property of, or the issuance of a warrant of attachment against any
of the property of, Borrower, to set-off and apply against any indebtedness,
whether matured or unmatured, of Borrower to Mezzanine Lender, any amount owing
from Mezzanine Lender to Borrower, at or at any time after the happening of any
of the above mentioned events, and the aforesaid right of set-off may be
exercised by Mezzanine Lender against Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of Borrower, or
47
against anyone else claiming through or against Borrower or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Mezzanine
Lender prior to the making, filing or issuance, or service upon such Mezzanine
Lender of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant.
9.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
9.9 GOVERNING LAW. THIS AGREEMENT AND THE MEZZANINE NOTE AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE MEZZANINE
NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
9.10 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 INTEGRATION. This Agreement represents the agreement of
Borrower and Mezzanine Lender with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by Mezzanine
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Mezzanine Loan Documents.
9.12 SUBMISSION TO JURISDICTION; WAIVERS. To the extent
permitted by applicable law, Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Mezzanine Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York sitting in the City and County of New York, the courts of the
United States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same; and
(c) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
48
9.13 ACKNOWLEDGMENTS. Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Mezzanine Note and the other
Mezzanine Loan Documents;
(b) Mezzanine Lender does not have any fiduciary relationship
to the Borrower, and the relationship between Mezzanine Lender and the Borrower
is solely that of debtor and creditor; and
(c) no joint venture exists between Mezzanine Lender and the
Borrower.
9.14 EXCULPATION. Subject to the qualifications below,
Mezzanine Lender shall not enforce the liability and obligation of Borrower to
perform and observe the obligations contained in the Mezzanine Note, this
Agreement, the Pledge Agreement or the other Mezzanine Loan Documents by any
action or proceeding wherein a money judgment shall be sought against Borrower,
except that Mezzanine Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Mezzanine Lender to enforce and realize upon its interest under the Mezzanine
Note, this Agreement, the Pledge Agreement and the other Mezzanine Loan
Documents, or in the Collateral, or any other collateral given to Mezzanine
Lender pursuant to the Mezzanine Loan Documents; PROVIDED, HOWEVER, that, 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 Collateral and in any other collateral given to Mezzanine Lender, and
Mezzanine Lender, by accepting the Mezzanine Note, this Agreement, the Pledge
Agreement and the other Mezzanine Loan Documents, agrees that it shall not ▇▇▇
for, seek or demand any deficiency judgment against Borrower in any such action
or proceeding under or by reason of or under or in connection with the Mezzanine
Note, this Agreement, the Pledge Agreement or the other Mezzanine 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 Mezzanine Loan Documents; (b) impair the right of Mezzanine Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under the Pledge Agreement; (c) affect the validity or enforceability of any
guaranty made in connection with the Mezzanine Loan or any of the rights and
remedies of Mezzanine Lender thereunder; (d) impair the right of Mezzanine
Lender to obtain the appointment of a receiver; (e) constitute a prohibition
against Mezzanine Lender to seek a deficiency judgment against Borrower in order
to fully realize the security granted by the Pledge Agreement or to commence any
other appropriate action or proceeding in order for Mezzanine Lender to exercise
its remedies against all of the Collateral; or (f) constitute a waiver of the
right of Mezzanine 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 Mezzanine Lender
(including attorneys' fees and costs reasonably incurred) arising out of or in
connection with the following:
(i) fraud or intentional misrepresentation by Borrower or any
Guarantor in connection with the Mezzanine Loan;
(ii) the willful misconduct of Borrower (except that this
clause (ii) shall not apply to any failure to make payments with
respect to the Mezzanine Loan);
49
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity (as defined in
the Mortgage Loan Agreement);
(iv) the removal or disposal by Borrower or any Affiliate of
Borrower of any portion of the Mortgaged Property after notice to
Borrower of an Event of Default;
(v) the misapplication or conversion by Borrower of any
Mezzanine Net Proceeds;
(vi) Borrower's failure to cause either Mortgagor to pay
charges for labor or materials or other charges for work performed by
or on behalf of such Mortgagor that can create a mechanics' lien on any
portion of the Mortgaged Property (unless such Mortgagor is negotiating
such charges in good faith or is contesting such lien in accordance
with the Mortgage Loan Agreement) if the Mortgaged Property generates
sufficient funds to make such payments after payment of amounts due
under the Mortgage Loan and the Mezzanine Loan (including, without
limitation, payments of the Reserve Funds) and other Operating
Expenses;
(vii) the failure of Borrower to cause the Mortgagors to
appoint a new property manager upon the request of Mezzanine Lender
after notice to Borrower of an Event of Default as and to the extent
required pursuant to Section 8.2 of this Agreement; and
(viii) the failure of Borrower to cause the Mortgagors to
direct any Tenant (as defined in the Mortgage Loan Agreement) to pay
its Rent in accordance with the Cash Management Agreement.
Notwithstanding anything to the contrary in this Agreement,
the Mezzanine Note or any of the other Mezzanine Loan Documents, (A) Mezzanine
Lender shall not be deemed to have waived any right which it may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the Mezzanine Obligations or to
require that all Collateral shall continue to secure all of the Mezzanine
Obligations owing to Mezzanine Lender in accordance with the Mezzanine Loan
Documents, and (B) the Mezzanine Obligations shall be fully recourse to the
Borrower in the event that (i) the Borrower fails to obtain Mezzanine Lender's
prior written consent prior to consenting to any subordinate financing or
consenting to other voluntary Lien (other than a Permitted Encumbrance, as
defined in the Mortgage Loan Agreement) encumbering any Mortgagor's interest in
the Mortgaged Property; or (ii) Borrower fails to obtain Mezzanine Lender's
prior consent to any voluntary assignment, transfer, or conveyance of the
Collateral or Mortgaged Property or any interest therein or any interest, direct
or indirect, in Borrower or any Mortgagor, if such consent is required by this
Agreement.
9.15 REINSTATEMENT. This Agreement and each other Mezzanine
Loan Document shall continue to be effective or be reinstated, as the case may
be, if at any time payment and performance of the Mezzanine Obligations or any
part thereof is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned to the Borrower, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any
50
part thereof, is rescinded, reduced, restored or returned, the Mezzanine
Obligations shall be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
9.16 WAIVER OF JURY TRIAL, DAMAGES, JURISDICTION. BORROWER AND
MEZZANINE LENDER EACH HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL ON ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
OTHER MEZZANINE LOAN DOCUMENTS TO WHICH IT IS A PARTY, THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, OR ANY DEALINGS BETWEEN BORROWER AND THE
MEZZANINE LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. BORROWER AND MEZZANINE LENDER EACH ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTY TO ENTER INTO A BUSINESS
RELATIONSHIP WITH IT. BORROWER AND MEZZANINE LENDER EACH REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH WAIVER IS
KNOWINGLY AND VOLUNTARILY GIVEN FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED, EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
REPLACEMENTS, REAFFIRMATIONS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY OTHER MEZZANINE LOAN DOCUMENTS OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
WITH RESPECT TO ANY ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER MEZZANINE LOAN DOCUMENT, BORROWER SHALL AND HEREBY DOES
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE CITY AND COUNTY OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK SITTING IN THE CITY OF COUNTY
OF NEW YORK (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM). BORROWER HEREBY
WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER MEZZANINE LOAN
DOCUMENTS, (A) THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION,
SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR
THAT THIS AGREEMENT OR ANY OF THE OTHER MEZZANINE LOAN DOCUMENTS MAY NOT BE
ENFORCED IN OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION,
(B) THAT THE ACTION, SUIT OR PROCEEDING IS
51
BROUGHT IN AN INCONVENIENT FORUM OR (C) THAT THE VENUE OF THE ACTION, SUIT OR
PROCEEDING IS IMPROPER. IN THE EVENT ANY SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION IS COMMENCED, BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE,
AND PERSONAL JURISDICTION OVER BORROWER OBTAINED, BY SERVICE OF A COPY OF THE
SUMMONS, COMPLAINT AND OTHER PLEADINGS REQUIRED TO COMMENCE SUCH LITIGATION UPON
BORROWER AT THE ADDRESS OF BORROWER AND TO THE ATTENTION OF SUCH PERSON AS SET
FORTH IN SECTION 9.2.
9.17 COOPERATION. Borrower acknowledges that Mezzanine Lender
and its successors and assigns may (a) sell the Mezzanine Note, the Mezzanine
Loan and the other Mezzanine Loan Documents to one or more investors as a whole
loan, (b) participate the Mezzanine Loan evidenced by the Mezzanine Note to one
or more investors, (c) deposit the Mezzanine Note and the other Mezzanine Loan
Documents with a trust, which trust may sell certificates to investors
evidencing an ownership interest in the trust assets, or (d) otherwise sell the
Mezzanine Loan or any interest therein to investors (the transactions referred
to in clauses (a) through (d) are hereinafter each referred to as a "LOAN
TRANSFER"). Borrower shall, at Mezzanine Lender's cost and expense, cooperate
with Mezzanine Lender in effecting any such Loan Transfer and shall, at
Mezzanine Lender's cost and expense, cooperate to implement all requirements
imposed by any Rating Agency involved in any Loan Transfer. Borrower shall
provide such information and documents (other than confidential or proprietary
information) relating to Borrower and its managing members as Mezzanine Lender
may reasonably request in connection with any such Loan Transfer, in each case
at Mezzanine Lender's sole cost and expense. In addition, Borrower shall make
available to Mezzanine Lender all information concerning its business and
operations (other than confidential or proprietary information) that Mezzanine
Lender may reasonably request. Mezzanine Lender shall be permitted to share all
such information with the investment banking firms, Rating Agencies, accounting
firms, law firms and other third-party advisory firms involved with the
Mezzanine Loan and the Mezzanine Loan Documents or the applicable Loan Transfer.
It is understood that the information prepared and provided by Borrower to
Mezzanine Lender may ultimately be incorporated into the offering documents for
the Loan Transfer and, thus, various investors may also see some or all of the
information. Mezzanine Lender and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information prepared and
supplied by, or on behalf of, Borrower in the form as provided by Borrower.
Mezzanine Lender may publicize the existence of the Mezzanine Loan in connection
with its marketing for a Loan Transfer.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
52
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their proper and duly authorized officers as of
the date set forth above.
CAMEZZ LLC, a Delaware limited liability company
By: Beacon/▇▇ ▇▇▇▇▇▇▇ LLC, a Delaware limited
liability company, its Manager
By: Beacon Capital Partners, L.P., a
Delaware limited partnership, its
Manager
By: Beacon Capital Partners, Inc.,
a Maryland corporation, its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
and Treasurer
▇▇▇▇▇▇ FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Executive Vice President
NOTE
$35,000,000 _____ New York, New York
April 14, 2000
FOR VALUE RECEIVED, the undersigned, CAMEZZ LLC, a Delaware
limited liability company, (the "BORROWER"), hereby unconditionally promises to
pay to the order of ▇▇▇▇▇▇ FINANCIAL CORPORATION, a Pennsylvania corporation
(the "MEZZANINE LENDER"), located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to such account as Mezzanine Lender may direct by
written notice to Borrower, in lawful money of the United States of America and
by wire transfer of immediately available funds, the principal amount of
Thirty-Five Million Dollars ($35,000,000), or so much thereof as may be advanced
pursuant to the Loan Agreement (as defined below), in such amounts and at such
times as set forth in the Loan Agreement and Schedule A hereto, with a final
payment of the unpaid principal amount hereof, together with unpaid interest
accrued hereon and all other amounts due hereunder, on the Maturity Date.
The undersigned further agrees to pay interest in like money
to such account on the unpaid principal amount hereof from time to time from the
date hereof on the dates and at the applicable rate per annum as provided in
Section 2.4 of the Loan Agreement until paid in full. The "Interest Rate" on the
unpaid principal amount hereof shall be the Applicable Interest Rate. In the
event the Interest Rate is greater than the maximum rate permitted by applicable
law, the Interest Rate shall be the maximum rate permitted by applicable law.
This Note is the Mezzanine Note referred to in Section 2.2 of
the Loan Agreement, dated the date hereof (the "LOAN AGREEMENT"), between the
undersigned and Mezzanine Lender and is entitled to the benefits thereof and is
subject to the terms thereof. Capitalized terms used herein but not defined
herein shall have the meanings ascribed thereto in the Loan Agreement.
The Loan Agreement contains provisions for voluntary and
mandatory prepayments of the principal amount hereof prior to the Maturity Date,
upon the terms and conditions specified therein.
Upon the occurrence and during the continuance of any one or
more of the Events of Default specified in the Loan Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of the Borrower or Mezzanine Lender, but only by an agreement in writing
signed by the party against whom enforcement of any such modification,
amendment, waiver, extension, change, discharge or termination is sought.
Whenever used, the singular number shall include the plural, the plural the
singular, and the words "Mezzanine Lender" and "Borrower" shall include their
respective successors, assigns, heirs, executors and administrators.
Borrower and all others who may become liable for the payment
of all or any part of the indebtedness hereunder do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest, notice of nonpayment, notice of intent to accelerate the maturity
hereof and of acceleration, except for such notices as are required to be given
to Borrower under the Loan Agreement or any of the other Mezzanine Loan
Documents. No release of any security for the indebtedness hereunder or of any
person liable for payment of the indebtedness hereunder, no extension of time
for payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Mezzanine Loan Documents made by agreement
between Mezzanine Lender and any other person or party shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Borrower, or any other person or party who may become liable under the Mezzanine
Loan Documents for the payment of all or any part of the indebtedness hereunder.
Borrower represents that Borrower has full power, authority
and legal right to execute, deliver and perform its obligations under this Note,
the Loan Agreement and the other Mezzanine Loan Documents and that this Note,
the Loan Agreement and the other Mezzanine Loan Documents constitute valid and
binding obligations of Borrower.
The provisions of Section 9.14 of the Loan Agreement are
hereby incorporated by reference into this Note to the same extent and with the
same force as if fully set forth herein.
All notices or other communications required or permitted to
be given pursuant hereto shall be given in the manner specified in Section 9.2
of the Loan Agreement directed to the parties at their respective addresses as
provided therein.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
2
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed and delivered as of the day first above written.
CAMEZZ LLC, a Delaware limited liability company
By: Beacon/▇▇ ▇▇▇▇▇▇▇ LLC, a Delaware limited
liability company, its Manager
By: Beacon Capital Partners, L.P., a
Delaware limited partnership, its
Manager
By: Beacon Capital Partners,
Inc., a Maryland corporation,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
and Treasurer