Exhibit 10.24
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is executed as of
November 30, 2004, by and between ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a
New York limited liability company (the "Borrower"), whose
address for purposes of this Agreement is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, and DCI USA, Inc. (the "Lender"),
whose address for purposes of this Agreement is ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
RECITALS
A. Borrower recently acquired an additional 25% of the
total membership interests ("the Borrower's Additional
Interest"), of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Property Development, LLC,
a New York limited liability company ("the Property Owner"),
which in turn owns fee simple certain real property
described in Exhibit A hereto (the "Property"). Prior to the
acquisition of the Borrower's Additional Interest, the
Borrower owned a 35% interest of the total membership
interest in the Property Owner ("the Borrower's Original
Interest"). The Borrower's Original Interest is currently
subject to a loan agreement, promissory note, pledge
agreement, option agreement, and modification and assignment
agreement ("the Original Interest Loan Documents"), attached
hereto as Exhibit B.
B. Borrower proposes to borrow funds totaling six
hundred thousand dollars ($600,000) ("the Loan Proceeds")
from the Lender and to hypothecate the Borrower's Additional
Interest in favor of the Lender to secure the repayment of
the Loan Proceeds.
NOW, THEREFORE, Borrower and Lender agree as follows:
ARTICLE 1. DEFINITIONS
1.1. Defined Terms. The following capitalized terms
generally used in this Agreement shall have the meanings
defined or referenced below. Certain other capitalized terms
as set forth in the Recitals above shall have the meanings
defined or as set forth in the Recitals. Certain other
capitalized terms as used only in specific sections of this
Agreement are defined in such sections.
"Affiliate" means, as to any person or entity, any
person or entity which, directly or indirectly, controls, is
controlled by or is under common control with, or which has
the power to control the management or operations of, such
person or entity.
"Bankruptcy Code" means the Bankruptcy Reform Act of
1978 (11 U.S.C. 101-1330) as now or hereafter amended or
recodified.
"Business Day" means a day of the week (but not a
Saturday, Sunday or holiday) on which the offices of Bank
are open to the public for carrying on substantially all of
Banks business functions. Unless specifically referenced in
this Agreement as a Business Day, all references to days
shall be to calendar days.
"Default" shall have the meaning ascribed to such term
in Section 11.1.
"Distribution" means any transfer of cash or other
property from Borrower to any constituent member or
statutory manager thereof, whether characterized as a
distribution, dividend, redemption, fee, re-payment of a
loan or otherwise.
"Effective Date" means the date hereof.
"Extension Date" means June 15, 2007.
"Loan" or "Loan Proceeds" means the principal sum that
Lender agrees to lend and Borrower agrees to borrow pursuant
to the terms and conditions of this Agreement: SIX HUNDRED
THOUSAND DOLLARS ($600,000.00).
"Loan Documents" means those documents, as hereafter
amended, supplemented, replaced or modified, properly
executed and in recordable form, if necessary, listed in
Exhibit C as Loan Documents.
"Maturity Date" means June 15, 2006.
"Note" means that certain Promissory Note Secured by
the Pledge Agreement of even date herewith, in the original
principal amount of the Loan, executed by Borrower and
payable to the order of Lender, as hereafter amended,
supplemented, replaced or modified.
"Obligee" shall have the meaning ascribed to such term
in Section 8.1.
"Revised Operating Agreement of Borrower" means the
limited liability company agreement of the Borrower dated as
of November 29, 2004, in the form delivered to Lender, as
hereafter amended, supplemented, replaced or modified as
permitted in this Agreement.
"Other Borrower Loan Documents" means those documents,
as hereafter amended, supplemented, replaced or modified
from time to time, properly executed and in recordable form,
if necessary, listed in Exhibit C as Other Borrower Loan
Documents.
"Other Related Documents" means those documents, as
hereafter amended, supplemented, replaced or modified from
time to time, properly executed and in recordable form, if
necessary, listed in Exhibit C as Other Related Documents.
1.2. Exhibits Incorporated. Exhibits A, B and C, all
attached hereto, are hereby incorporated into this
Agreement.
ARTICLE 2. LOAN
2.1. Loan. By and subject to the terms of this Agreement,
Lender agrees to lend to Borrower and Borrower agrees to
borrow from Lender the principal sum of SIX HUNDRED THOUSAND
DOLLARS ($600,000.00) said sum to be evidenced by the Note
of even date herewith. The Note shall be secured, in part,
by the Pledge Agreement of even date herewith, hypothecating
the Borrower's Additional Interest. Amounts disbursed to or
on behalf of Borrower pursuant to the Note shall be used for
any legal purpose of the Borrower, including but not limited
to disbursement to its members.
2.2. Loan Documents. Borrower shall deliver to Lender
concurrently with this Agreement each of the documents,
properly executed and in recordable form, as applicable,
described in Exhibit C as Loan Documents, together with
those documents described in Exhibit C as Other Related
Documents. Notwithstanding anything to the contrary
contained elsewhere within this Agreement, Lender agrees
that is shall not record the Pledge Agreement until and if
there is an event of Default hereunder.
2.3. Effective Date. The Effective Date is the date hereof.
2.4. Maturity Date; Prepayment. Upon the Maturity Date, all
sums due and owing under this Agreement and the other Loan
Documents shall be repaid in full. All payments due to
Lender under this Agreement, whether at the Maturity Date or
otherwise, shall be paid in immediately available funds.
Amounts owing under the Note may not be prepaid by Borrower
without prior written approval.
(a) Extension Date. At any time prior to the Maturity
Date or prepayment, the Lender may by written notice to
Borrower extend the Maturity Date to the Extension Date, at
which time the Extension Date becomes the new date of
maturity of the Loan and Note.
2.5 Disbursement.
(a) Disbursement Disbursement. Lender shall disburse
pursuant to this Agreement and upon the Effective Date SIX
HUNDRED THOUSAND DOLLARS ($600,000) to Borrower
("Disbursement"). Borrower's attorney shall hold in escrow
all of the Loan Documents, including but not limited to,
this Agreement, the Note, and the Pledge Agreement, until
the end of the Disbursement Date. If the Disbursement is
made by the Disbursement Date, Borrower's attorney shall
release to Lender all of the Loan Documents.
(b) Reserved.
2.6. Credit for Principal Payments. Any payment made upon
the outstanding principal balance of the Loan shall be
credited as of the Business Day received, provided such
payment is received by Lender no later than 11:00a.m.
Eastern Time) and constitutes immediately available funds.
Any principal payment received after said time or which does
not constitute immediately available funds shall be credited
upon such funds having become unconditionally and
immediately available to Lender.
2.7. Full Repayment. Upon receipt of all sums owing and
outstanding under the Loan Documents, Lender shall issue a
Satisfaction of the Pledge Agreement and otherwise release
Lender's security interest in all other personal property
collateral that secure the Loan; provided, however, that all
of the following conditions shall be satisfied at the time
of, and with respect to, such satisfaction: (a) Lender shall
have received all escrow, closing and recording costs, the
costs of preparing and delivering such satisfaction and any
sums then due and payable under the Loan Documents.
ARTICLE 3. DISBURSEMENT
3.1. Conditions Precedent. Lender's obligation to make any
disbursements or take any other action under the Loan
Documents shall be subject at all times to satisfaction of
each of the following conditions precedent:
(a) Reserved.
(b) Lender shall have received all Loan Documents,
other documents, instruments, policies, and forms of
evidence or other materials requested by Lender under the
terms of this Agreement or any of the other Loan Documents;
and
(c) There shall exist no Default, as defined in this
Agreement or in any of the other Loan Documents.
3.2. Reserved.
ARTICLE 4. [Reserved]
ARTICLE 5. INSURANCE
Borrower shall, while any obligation of Borrower under any
Loan Document remains outstanding, maintain at Borrower's
sole expense, with licensed insurers approved by Lender, the
following policies of insurance in form and substance
satisfactory to Lender, except that equivalent insurance
coverage maintained by the Property Owner shall satisfy the
requirements of this Article:
5.1. Property Insurance. A Hazard Insurance policy,
including, without limitation, such endorsements as Lender
may require, insuring the Property Owner against damage to
the Property and any improvements in an amount acceptable to
Lender.
5.2. Flood Hazard Insurance. A policy of flood insurance, as
required by applicable governmental regulations, or as
deemed necessary by Lender.
5.3. Liability Insurance. A policy of commercial general
liability insurance with limits as required by Lender,
insuring against liability for injury and/or death to any
person and/or damage to any property occurring on the
Property and/or in the any improvements from any cause
whatsoever.
5.4. General. Borrower shall provide to Lender the originals
of all required insurance policies, or other evidence of
insurance acceptable to Lender. All insurance policies shall
provide that the insurance shall not be cancelable or
materially changed without ten (10) days prior written
notice to Property Owner. Borrower shall provide to Lender
evidence of any other hazard insurance Lender may deem
necessary at any time during the Loan.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
As a material inducement to Lender's entry into this
Agreement, Borrower represents and warrants to Lender as of
the Effective Date that:
6.1. Authority/Enforceability. Borrower is in substantial
compliance with all laws and regulations applicable to its
organization, existence and transaction of business and has
all necessary rights and powers to own, develop and operate
the Property and any improvements as contemplated by the
Loan Documents.
6.2. Binding Obligations. Borrower is authorized to execute,
deliver and perform its obligations under the Loan Documents
and such obligations are and shall continue to be valid and
binding obligations of Borrower.
6.3. Formation and Organizational Documents. Borrower has
delivered to Lender all formation and organizational
documents of Borrower and all such formation and
organizational documents remain in full force and effect and
have not been amended or modified since they were delivered
to or otherwise approved by Lender. Borrower shall
immediately provide Lender with copies of any amendments or
modifications of the formation or organizational documents,
to the extent permitted hereunder.
6.4. No Violation. Borrower's execution, delivery, and
performance under the Loan Documents do not: (a) require any
consent or approval not heretofore obtained under any
partnership agreement, operating agreement, limited
liability company agreement, articles of incorporation,
bylaws or other document; (b) materially violate any
governmental requirement applicable to the Property and any
improvements or any other statute, law, regulation or
ordinance or any order or ruling of any court or
governmental entity; (c) materially conflict with, or
constitute a material breach or default or permit the
acceleration of obligations under any agreement, contract,
lease, or other document by which the Borrower is or the
Property and any improvements are bound or regulated; or
(d) materially violate any statute, law, regulation or
ordinance, or any order of any court or governmental entity.
6.5. Compliance with Laws. Borrower and Owner, individually
and collectively, have, and at all applicable times shall
have obtained, all permits, licenses, exemptions, and
approvals necessary to construct, occupy, operate and market
the Property and any improvements for the applicable stage
of development and operation, and shall maintain substantial
compliance with all governmental requirements applicable to
the Property and any improvements and all other applicable
statutes, laws, regulations and ordinances necessary for the
transaction of its business.
6.6. Litigation. Except as disclosed to Lender in writing,
there are no claims, actions, suits, or proceedings pending,
or to Borrower's knowledge threatened, against Borrower, or
affecting the Property or any improvements that are of a
material nature and that, if successfully prosecuted against
Borrower would create a material adverse change in the
financial condition of Borrower.
6.7. Financial Condition. All financial statements and
information relating to the financial condition of Borrower,
the Property, and the any improvements, which have been
heretofore and hereafter are delivered to Lender by
Borrower, fairly and accurately represent as of the date of
such delivery the financial condition of the subject thereof
and have been prepared (except as noted therein) in
accordance with generally accepted accounting principles
consistently applied. Borrower acknowledges and agrees that
Lender may request and obtain additional information from
third parties regarding any of the above, including, without
limitation, credit reports.
6.8. [Reserved]
6.9. [Reserved]
6.10. Accuracy. All reports, documents, instruments,
information and forms of evidence delivered to Lender
concerning the Loan or security for the Loan or required by
the Loan Documents are accurate, correct and sufficiently
complete to give Lender true and accurate knowledge of their
subject matter, and do not contain any material
misrepresentation or omission.
6.11. Tax Liability. Borrower and Property Owner have filed
all required federal, state, county and municipal tax
returns and has paid all taxes and assessments owed and
payable by Borrower or with respect to the Property, and
Borrower has no knowledge of any basis for any additional
payment with respect to any such taxes and assessments.
6.12. Utilities. All utility services, including, without
limitation, gas, water, sewage, electrical and telephone,
necessary for the development and occupancy of the Property
and any planned improvements are available at or within the
boundaries of the Property, or Borrower has taken all steps
reasonably necessary to date to assure that all such
services will be available upon completion of any planned
improvements.
6.13. Compliance. Borrower and Owner are familiar with and
in substantial compliance with all governmental requirements
and regulations affecting the Property and any use of the
Property
6.14. Americans With Disabilities Act Compliance. Any
improvements made to the Property have been or will be
designed and shall be constructed and completed, and
thereafter maintained, in general accordance and substantial
compliance with all of the requirements of the Americans
with Disabilities Act, of July 26, 1990, Pub. L. ▇▇. ▇▇▇-
▇▇▇, ▇▇▇ ▇▇▇▇. ▇▇▇, ▇▇ ▇.▇.▇. ▇▇▇▇▇, et seq., as amended
from time to time. Borrower shall be responsible for all ADA
compliance costs; provided however, Lender acknowledges and
agrees that construction and operation of portions of the
any improvements which are intended to satisfy the foregoing
representation and warranty and any related covenant of
Borrower may be funded by the Loan.
6.15. Business Loan. The Loan is a business loan transaction
in the stated amount solely for the purpose of carrying on
the business of Borrower.
ARTICLE 7. HAZARDOUS MATERIALS
7.1. Special Representations and Warranties. Without in any
way limiting the other representations and warranties set
forth in this Agreement, and after reasonable investigation
and inquiry, and except as disclosed in the Environmental
Report or otherwise disclosed in writing to Lender prior to
the date of this Agreement, Borrower hereby specially
represents and warrants to the best of Borrower's knowledge
as of the date of this Agreement as follows:
(a) Hazardous Materials. The Property and any
improvements are not and have not been a site for the use,
generation, manufacture, storage, treatment, release,
threatened release, discharge, disposal, transportation or
presence of any oil, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, hazardous
wastes, toxic or contaminated substances or similar
materials, including, without limitation, any substances
which are hazardous substances, hazardous wastes, hazardous
materials, toxic substances, wastes, regulated substances,
industrial solid wastes, or pollutants under the Hazardous
Materials Laws, as described below, and/or other applicable
environmental laws, ordinances or regulations (collectively,
the Hazardous Materials). Hazardous Materials shall not
include commercially reasonable amounts of such materials
used in the ordinary course of preparation of the Property
for construction, construction of the any improvements and
operation of the Property which are used and stored in
accordance with all applicable environmental laws,
ordinances and regulations.
(b) Hazardous Materials Laws. The Property and any
improvements are in substantial compliance with all laws,
ordinances and regulations relating to Hazardous Materials
(Hazardous Materials Laws), including, without limitation:
the Clean Air Act, as amended, 42 U.S.C. Section 7401 et
seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. Section 1251 et seq.; the Resource Conservation
and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901
et seq.; the Comprehensive Environment Response,
Compensation and Liability Act of 1980, as amended
(including the Superfund Amendments and Reauthorization Act
of 1986, CERCLA), 42 U.S.C. Section 9601 et seq.; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 2601
et seq.; the Occupational Safety and Health Act, as amended,
29 U.S.C. Section 651, the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.;
the Mine Safety and Health Act of 1977, as amended, 30
U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as
amended, 42 U.S.C. Section 300f et seq.; and all comparable
state and local laws, laws of other applicable jurisdictions
or orders and regulations.
(c) Hazardous Materials Claims. There are no claims or
actions (Hazardous Materials Claims) pending or threatened
against Borrower, the Property or any improvements by any
governmental entity or agency or by any other person or
entity relating to Hazardous Materials or pursuant to the
Hazardous Materials Laws.
7.2. Hazardous Materials Covenants. Borrower agrees as
follows:
(a) No Hazardous Activities. Except for the
implementation of remediation programs or plans required
under agreements, orders or consent decrees referenced in
the Environmental Report, Borrower shall not cause or permit
the Property or any improvements to be used as a site for
the use, generation, manufacture, storage, treatment,
release, discharge, disposal, transportation or presence of
any Hazardous Materials.
(b) Compliance. Except to the extent such compliance is
to be the result of the implementation of remediation
programs or plans required under agreements, orders or
consent decrees referenced in the Environmental Report,
Borrower shall comply and cause the Property and any
improvements to comply with all Hazardous Materials Laws.
(c) Notices. Except for those matters set forth in the
Environmental Report or otherwise disclosed in writing to
Lender prior to the date of this Agreement, Borrower shall
immediately notify Lender in writing of: (i) the discovery
of any Hazardous Materials on, under or about the Property
and any improvements; (ii) any knowledge by Borrower that
the Property and any improvements are not in material
compliance with any Hazardous Materials Laws; (iii) any
Hazardous Materials Claims; and (iv) the discovery of any
occurrence or condition on any real property adjoining or in
the vicinity of the Property that could cause the Property
or any part thereof to be designated as Border Zone
Property.
(d) Remedial Action. Except with respect to any
Hazardous Materials, violations of Hazardous Materials Laws
and Hazardous Materials Claims that are to be remedied by
the implementation of remediation programs or plans required
under agreements, orders or consent decrees referenced in
the Environmental Report, in response to the presence of any
Hazardous Materials on, under or about the Property or any
improvements, Borrower shall immediately take, at Borrower's
sole expense, all remedial action required by any Hazardous
Materials Laws or any judgment, consent decree, settlement
or compromise in respect to any Hazardous Materials Claims.
(e) Inspection By Lender. Upon reasonable prior notice
to Borrower, Lender, its employees and agents, may from time
to time (whether before or after the commencement of a
nonjudicial or judicial foreclosure proceeding) enter and
inspect the Property and any improvements for the purpose of
determining the existence, location, nature and magnitude of
any past or present release or threatened release of any
Hazardous Materials into, onto, beneath or from the Property
and any improvements.
(f) Hazardous Materials Indemnity. BORROWER HEREBY
AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER, ITS
DIRECTORS, OFFICERS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS,
SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL LOSSES,
DAMAGES, LIABILITIES, CLAIMS, ACTIONS, JUDGMENTS, COURT
COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS FEES AND EXPENSES) WHICH LENDER MAY
INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF THE USE,
GENERATION, MANUFACTURE, STORAGE, DISPOSAL, THREATENED
DISPOSAL, TRANSPORTATION OR PRESENCE OF HAZARDOUS MATERIALS
IN, ON, UNDER OR ABOUT THE PROPERTY OR IMPROVEMENTS.
BORROWER SHALL IMMEDIATELY PAY TO LENDER UPON DEMAND ANY
AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH INTEREST
FROM THE DATE THE INDEBTEDNESS ARISES UNTIL PAID AT THE RATE
OF INTEREST APPLICABLE TO THE PRINCIPAL BALANCE OF THE NOTE.
BORROWER'S DUTY AND OBLIGATIONS TO DEFEND, INDEMNIFY AND
HOLD HARMLESS LENDER SHALL SURVIVE THE CANCELLATION OF THE
NOTE AND THE RELEASE, OR SATISFACTION OF THE PLEDGE
AGREEMENT.
(g) Legal Effect of Section. It is expressly understood
that Borrower's duty to indemnify Lender hereunder shall
survive: (i) any judicial or non-judicial foreclosure under
the Pledge Agreement, or transfer of the Property in lieu
thereof; (ii) the release and satisfaction or cancellation
of the Mortgage; and (iii) the satisfaction of all of
Borrower's obligations under the Loan Documents.
ARTICLE 8. [Reserved]
ARTICLE 9. COVENANTS OF BORROWER
9.1. Expenses. Borrower shall immediately pay Lender upon
demand all Lender's reasonable out-of-pocket costs and
expenses actually incurred by Lender in connection with: (a)
the preparation of this Agreement, all other Loan Documents
and Other Related Documents contemplated hereby; (b) the
administration of this Agreement, the other Loan Documents
and Other Related Documents for the term of the Loan; and
(c) the enforcement or satisfaction by Lender of any of
Borrower's obligations under this Agreement, the other Loan
Documents or the Other Related Documents. For all purposes
of this Agreement, Lender's costs and expenses shall
include, without limitation, all appraisal fees, cost
engineering and inspection fees, legal fees and expenses,
accounting fees, environmental consultant fees, auditor
fees, and the cost to Lender of any title insurance
premiums, title surveys, satisfaction and notary fees.
Borrower recognizes and agrees that Lender may, at its
option, require inspection of the Property and any
improvements by an independent supervising architect and/or
cost engineering specialist.
9.2. [Reserved]
9.3. Leasing. Once the any improvements are completed and
ready for occupancy, Borrower shall use its commercially
reasonable efforts to maintain all leasable space in the
Property leased at no less than fair market rental rates.
9.4. [Reserved]
9.5. Revenue to be Applied to Debt Service. Following the
occurrence and during the continuation of any Default, no
Distributions shall be made or distributed to any partner,
venturer, member or equity investor of Borrower.
9.6. [Reserved]
9.7. Further Assurances. Upon Lender's request and at
Borrower's sole cost and expense, Borrower shall execute,
acknowledge and deliver any other instruments and perform
any other acts necessary, desirable or proper, as determined
by Lender, to carry out the purposes of this Agreement and
the other Loan Documents or to perfect and preserve any
liens created by the Loan Documents.
9.8. Assignment. Without the prior written consent of
Lender, Borrower shall not assign Borrower's interest under
any of the Loan Documents, or in any monies due or to become
due thereunder, and any assignment without such consent
shall be void. In this regard, Borrower acknowledges that
Lender would not make this Loan except in reliance on
Borrower's expertise, reputation, prior experience in
developing and constructing commercial real property,
Lender's knowledge of Borrower, and Lender's understanding
that this Agreement is more in the nature of an agreement
involving personal services than a standard loan where
Lender would rely on security which already exists.
9.9. Governing Documents. Without the prior written consent
of Lender, Borrower shall not modify or permit to be
modified the formation or organizational documents of
Borrower, or any partners, joint venturers or members
thereof.
9.10. WAIVER OF FIDUCIARY CLAIMS. BORROWER ACKNOWLEDGES THAT
IT HAS GRANTED TO LENDER AN OPTION TO ACQUIRE THE PROPERTY
IF AN EVENT OF DEFAULT HAS OCURRED. NEVERTHELESS, BORROWER
ACKNOWLEDGES AND AGREES THAT LENDER IS ADVANCING FUNDS TO
BORROWER AS EVIDENCED BY THIS AGREEMENT SOLELY IN ITS ROLE
AS A THIRD PARTY LENDER, AND THAT THIS AGREEMENT AND ANY
OTHER LOAN DOCUMENTS, TOGETHER WITH LENDER'S RIGHT TO
EXERCISE ITS REMEDIES AS A LENDER IN THE EVENT OF ANY
DEFAULT, IS COMPLETELY SEPARATE FROM ANY RIGHTS UNDER THE
OPTION AGREEMENT. BORROWER FURTHER ACKNOWLEDGES THAT LENDER
WOULD NOT HAVE MADE THE LOAN TO BORROWER WITHOUT THE WAIVER
SET FORTH BELOW. THEREFORE, BORROWER, FOR ITSELF AND ON
BEHALF OF BORROWER'S AFFILIATES AND ALL CONSTITUENT MEMBERS
AND MANAGERS OF EITHER, HEREBY WAIVES ANY RIGHT THAT IT OR
ANY SUCH AFFILIATE OR ANY OF SUCH CONSTITUENT MEMBERS OR
MANAGERS WOULD OTHERWISE HAVE, UNDER ANY OF THE LOAN
DOCUMENTS OR OTHERWISE UNDER ANY LEGAL THEORY BASED UPON
STATUTORY OR COMMON LAW, TO BRING ANY CLAIM AGAINST LENDER
OR ANY PARTY THAT CONTROLS LENDER, ASSERTING THAT LENDER'S
ADVANCING FUNDS PURSUANT TO THIS AGREEMENT OR LENDER'S
EXERCISE OF ITS RIGHTS OR REMEDIES AS A LENDER HEREUNDER OR
UNDER THE MORTGAGE OR ANY OTHER LOAN DOCUMENTS, CONSTITUTES
A BREACH BY LENDER OR ANY PARTY THAT CONTROLS LENDER OF ANY
FIDUCIARY DUTY TO BORROWER, ANY BORROWER AFFILIATE OR TO THE
CONSTITUENT MEMBERS OR MANAGERS OF EITHER. BY EXECUTING
BELOW, BORROWER ACKNOWLEDGES THAT IT WAS ADVISED BY
COMPETENT LEGAL COUNSEL IN REVIEWING THIS PROVISION,
INCLUDING, WITHOUT LIMITATION, A DETAILED DISCUSSION OF THE
FACT THAT LENDER'S EXERCISE OF ITS REMEDIES (FOR EXAMPLE, IN
THE CONTEXT OF COST OVERRUNS THAT BORROWER IS UNABLE TO
FUND) WOULD DISPROPORTIONATELY AFFECT BORROWER'S CONSTITUENT
MEMBERS WHO HOLD DISPROPORTIONATE PROFITS INTEREST IN
BORROWER, AND THAT IT HAS ELECTED TO WAIVE ITS RIGHTS AND
THE RIGHTS OF EACH BORROWER AFFILIATE AND EACH OF THEIR
CONSTITUENT MEMBERS AND MANAGERS AS PROVIDED ABOVE IN
CONSIDERATION OF LENDER'S AGREEMENT TO ADVANCE THE FUNDS
EVIDENCED BY THIS AGREEMENT.
ARTICLE 10. REPORTING COVENANTS
10.1. Financial Information. Within thirty (30) days after
Lender's request, Borrower shall Deliver to Lender such
quarterly and other financial information regarding the
Property, or Borrower, as Lender requests. If audited
financial information is prepared, Borrower shall deliver to
Lender copies of that information within fifteen (15) days
after its final preparation. Except as otherwise agreed to
by Lender, all such financial information shall be prepared
in accordance with generally accepted accounting principles
consistently applied. Upon written request of Lender,
Borrower use good faith efforts to obtain and deliver to
Lender any specific financial reports and information
pertaining to the members, managers, partners and
shareholders of Borrower.
10.2. Books and Records. Borrower shall maintain complete
books of account and other records for the Property and any
improvements and for disbursement and use of the proceeds of
the Loan and Borrower's Funds, and the same shall be
available for inspection and copying by Lender upon
reasonable prior notice.
ARTICLE 11. DEFAULTS AND REMEDIES
11.1. Default. The occurrence of any one or more of the
following shall constitute an event of default (hereinafter,
Default) under this Agreement and the other Loan Documents:
(a) Any Event of Default defined in the Pledge Agreement
delivered by Borrower dated the date hereof; or
(b) Performance of Obligations. Borrower's failure to
perform any obligation under any of the Loan Documents
within thirty (30) days following the date of delivery of
written notice from Lender; or
(c) Reserved; or
(d) Liens, Attachment; Condemnation. (i) The recording
of any claim of lien against the Property or any
improvements and the continuance of such claim of lien for
twenty (20) days without discharge, satisfaction or
provision for payment being made by Borrower in a manner
satisfactory to Lender, subject to the provisions herein and
the Pledge Agreement; or (ii) the condemnation, seizure or
appropriation of, or occurrence of an uninsured casualty
with respect to any material portion of the Property or any
improvements that is not otherwise offset by Borrower's
deposit of sufficient restoration funds (including any
applicable deductible amount under any applicable policy of
casualty insurance) into a mutually agreed upon escrow
account within forty-five (45) days after the occurrence of
such event; or
(e) Representations and Warranties. (i) The material
failure of any representation or warranty of Borrower in any
of the Loan Documents to be true, correct and complete as of
the date made, and the continuation of such failure for more
than ten (10) Business Days after written notice to Borrower
from Lender requesting that Borrower cure such failure; or
(f) Voluntary Bankruptcy; Insolvency; Dissolution. (i)
The filing of a petition by Borrower for relief under the
Bankruptcy Code, or under any other present or future state
or federal law regarding bankruptcy, reorganization or other
debtor relief law; (ii) a general assignment by Borrower for
the benefit of creditors; or (iii) Borrower applying for, or
the appointment of, a receiver, trustee, custodian or
liquidator of Borrower or any of its property; or
(g) Involuntary Bankruptcy. (i) The filing of any
pleading or an answer by Borrower in any involuntary
proceeding under the Bankruptcy Code or other debtor relief
law which admits the jurisdiction of the court or the
petitions material allegations regarding Borrower's
insolvency; or (ii) the failure of Borrower to effect a full
dismissal of any involuntary petition under the Bankruptcy
Code or under any other debtor relief law that is filed
against Borrower or in any way restrains or limits Borrower
or Lender regarding the Loan, the Property or the any
improvements, prior to the earlier of the entry of any court
order granting relief sought in such involuntary petition,
or forty-five (45) days after the date of filing of such
involuntary petition; or
(h) Partners; Indemnitors. The occurrence of any of the
events specified in Section 11.1(f) or 11.1(g) as to any
member of the Borrower; or
(i) Change In Management or Control. The occurrence of
any material management or organizational change in Borrower
or in the partners, venturers or members of Borrower; or
(j) Hazardous Materials. The discovery of any
significant Hazardous Materials in, on or about the Property
or any improvements subsequent to the Effective Date (to the
extent not disclosed in the Environmental Report or
otherwise disclosed in writing to Lender prior to the date
of this Agreement); provided, however, if such Default is
curable, but the nature of such failure is such that it
cannot reasonably be cured within thirty (30) days, then if
Borrower fails to commence a cure thereof within said time
and thereafter fails to diligently pursue a cure thereof and
fails to complete same within ninety (90) days after
Lender's written demand. Any such Hazardous Materials shall
be significant for this purpose if said Hazardous Materials,
in Lender's sole discretion, have a materially adverse
impact on the value of the Property and any improvements; or
(k) Other Related Documents. The default by Borrower
under any of the Other Related Documents following the
satisfaction or expiration of any notice or cure periods
applicable thereunder; or.
(l) Financial Condition. If Lender determines, in its
sole discretion, that there has been a material change in
the financial condition of Borrower, and of the members of
Borrower or of the Property;
11.2. Acceleration Upon Default; Remedies. Upon the
occurrence of any Default specified in this Article XI,
Lender may, at its sole option, declare all sums owing to
Lender under the Note, this Agreement and the other Loan
Documents immediately due and payable. Upon such
acceleration, Lender may, in addition to all other remedies
permitted under this Agreement and the other Loan Documents
and at law or equity, apply any sums in the Account and
Borrower's Funds Account to the sums owing under the Loan
Documents and any and all obligations of Lender to fund
further disbursements under the Loan shall terminate.
11.3. Disbursements to Third Parties. Upon the occurrence of
a Default occasioned by Borrower's failure to pay money to a
third party as required by this Agreement, Lender may but
shall not be obligated to make such payment from the Loan
proceeds, or other funds of Lender. If such payment is made
from proceeds of the Loan or from Borrower's Funds, Borrower
shall immediately repay such funds upon written demand of
Lender. The Default with respect to which any such payment
has been made by Lender shall not be deemed cured until
repayment has been made by Borrower to Lender.
11.4. Miscellaneous. Notwithstanding anything to the
contrary in this Article XI or in any other provision of
this Agreement, the parties herein acknowledge and agree
that the Property Owner shall have the right without
triggering an event of Default under this Agreement to
obtain a construction loan up to $11 million and to mortgage
the Property up to this amount for purposes of making the
renovations currently under planning.
11.5. [Reserved]
11.6. [Reserved]
11.7. Repayment of Funds Advanced. Any funds expended by
Lender in the exercise of its rights or remedies under this
Agreement and the other Loan Documents shall be payable to
Lender upon demand, together with interest at the rate
applicable to the principal balance of the Note from the
date the funds were expended.
11.8. Rights Cumulative, No Waiver. All Lender's rights and
remedies provided in this Agreement and the other Loan
Documents, together with those granted by law or at equity,
are cumulative and may be exercised by Lender at any time.
Lender's exercise of any right or remedy shall not
constitute a cure of any Default unless all sums then due
and payable to Lender under the Loan Documents are repaid
and Borrower has cured all other Defaults. No waiver shall
be implied from any failure of Lender to take, or any delay
by Lender in taking, action concerning any Default or
failure of condition under the Loan Documents, or from any
previous waiver of any similar or unrelated Default or
failure of condition. Any waiver or approval under any of
the Loan Documents must be in writing and shall be limited
to its specific terms.
ARTICLE 12. MISCELLANEOUS PROVISIONS
12.1. Indemnity. BORROWER HEREBY AGREES TO DEFEND, INDEMNIFY
AND HOLD HARMLESS LENDER, ITS DIRECTORS, OFFICERS, MEMBERS,
MANAGERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS FROM AND
AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS,
ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS FEES AND EXPENSES)
WHICH LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE
OF: (A) THE PURPOSE TO WHICH BORROWER APPLIES THE LOAN
PROCEEDS; (B) THE FAILURE OF BORROWER TO PERFORM ANY
OBLIGATIONS AS AND WHEN REQUIRED BY THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS; (C) ANY FAILURE AT ANY TIME OF ANY
OF BORROWER'S REPRESENTATIONS OR WARRANTIES TO BE TRUE AND
CORRECT; OR (D) ANY ACT OR OMISSION BY BORROWER, ANY
CONSTITUENT PARTNER OR MEMBER OF BORROWER, ANY CONTRACTOR,
SUBCONTRACTOR OR MATERIAL SUPPLIER, ENGINEER, ARCHITECT OR
OTHER PERSON OR ENTITY WITH RESPECT TO ANY OF THE PROPERTY
OR IMPROVEMENTS, EXCEPT TO THE EXTENT CAUSED OR CONTRIBUTED
TO BY THE BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF LENDER. BORROWER SHALL IMMEDIATELY PAY TO LENDER UPON
DEMAND ANY AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH
INTEREST FROM THE DATE THE INDEBTEDNESS ARISES UNTIL PAID AT
THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL BALANCE OF
THE NOTE. BORROWER'S DUTY AND OBLIGATIONS TO DEFEND,
INDEMNIFY AND HOLD HARMLESS LENDER SHALL SURVIVE
CANCELLATION OF THE NOTE AND THE RELEASE, OR SATISFACTION OF
THE PLEDGE AGREEMENT.
12.2. Form of Documents. The form and substance of all
documents, instruments, and forms of evidence to be
delivered to Lender under the terms of this Agreement and
any of the other Loan Documents shall be subject to Lender's
approval and shall not be modified, superseded or terminated
in any respect without Lender's prior written approval,
except to the extent otherwise provided in this Agreement.
12.3. No Third Parties Benefited. No person other than
Lender and Borrower and their permitted successors and
assigns shall have any right of action under any of the Loan
Documents.
12.4. Notices. All notices, demands, or other communications
under this Agreement and the other Loan Documents shall be
in writing and shall be delivered to the appropriate party
at the address set forth on the signature page of this
Agreement (subject to change from time to time by written
notice to all other parties to this Agreement). All
communications shall be deemed served upon delivery of, or
if mailed, upon receipt or rejection after the deposit in
the United States Postal Service mail, certified postage
prepaid-return receipt requested and addressed to the
address of Borrower or Lender at the address specified;
provided, however, that non-receipt of any communication as
the result of any change of address of which the sending
party was not notified or as the result of a refusal to
accept delivery shall be deemed receipt of such
communication.
12.5. Attorney-in-Fact. Borrower hereby irrevocably appoints
and authorizes Lender, as Borrower's attorney-in-fact, which
agency is coupled with an interest, to execute and/or record
in Lender's or Borrower's name any notices, instruments or
documents that Lender deems appropriate to protect Lender's
interest under any of the Loan Documents.
12.6. Actions. Borrower agrees that Lender, in exercising
the rights, duties or liabilities of Lender or Borrower
under the Loan Documents, may commence, appear in or defend
any action or proceeding purporting to affect the Property,
the any improvements, or the Loan Documents and Borrower
shall immediately reimburse Lender upon demand for all such
expenses so incurred or paid by Lender, including, without
limitation, attorneys fees and expenses and court costs.
12.7. Right of Contest. Borrower may contest in good faith
any claim, demand, levy or assessment (other than liens,
subject to the provisions herein of this Agreement) by any
person other than Lender which would constitute a Default
if: (a) Borrower pursues the contest diligently, in a manner
which Lender determines is not prejudicial to Lender, and
does not impair the rights of Lender under any of the Loan
Documents; and (b) Borrower deposits with Lender any funds
or other forms of assurance which Lender in good faith
determines from time to time appropriate to protect Lender
from the consequences of the contest being unsuccessful.
Borrower's compliance with this Section shall operate to
prevent such claim, demand, levy or assessment from becoming
a Default.
12.8. Relationship of Parties. The relationship of Borrower
and Lender under the Loan Documents is, and shall at all
times remain, solely that of borrower and lender, and Lender
neither undertakes nor assumes any responsibility or duty to
Borrower or to any third party with respect to the Property
or any improvements, except as expressly provided in this
Agreement and the other Loan Documents.
12.9. Delay Outside Lender's Control. Lender shall not be
liable in any way to Borrower or any third party for
Lender's failure to perform or delay in performing under the
Loan Documents if such failure to perform or delay in
performing results directly or indirectly from, or is based
upon, the action, inaction, or purported action, of any
governmental or local authority, or because of war,
rebellion, insurrection, strike, lockout, boycott or
blockade (whether presently in effect, announced or in the
sole judgment of Lender deemed probable), or from any Act of
G-d or other cause or event beyond Lender's control.
12.10. Attorneys Fees and Expenses; Enforcement. If any
attorney is engaged by Lender to enforce or defend any
provision of this Agreement, any of the other Loan Documents
or Other Related Documents, or as a consequence of any
Default under the Loan Documents, with or without the filing
of any legal action or proceeding, and including, without
limitation, any fees and expenses incurred in any bankruptcy
proceeding of the Borrower, then Borrower shall immediately
pay to Lender, upon demand, the amount of all attorneys fees
and expenses and all costs incurred by Lender in connection
therewith, together with interest thereon from the date of
such demand until paid at the rate of interest applicable to
the principal balance of the Note as specified therein.
12.11. Immediately Available Funds. Unless otherwise
expressly provided for in this Agreement, all amounts
payable by Borrower to Lender shall be payable only in
United States currency, immediately available funds.
12.12. Lender's Consent. Wherever in this Agreement there is
a requirement for Lender's consent and/or a document to be
provided or an action taken to the satisfaction of Lender,
it is understood by such phrase that Lender shall exercise
its consent, right or judgment in a reasonable manner given
the specific facts and circumstance applicable at the time.
12.13. Related Party Transaction. The parties acknowledge
that members of the Borrower are or may be considered
related and/or affiliated parties of the Lender and waive
any conflict of interest resulting therefrom.
12.14. Lender's Agents. Lender may designate an agent or
independent contractor to exercise any of Lender's rights
under this Agreement and any of the other Loan Documents.
Any reference to Lender in any of the Loan Documents shall
include Lender's agents, employees or independent
contractors. Borrower shall pay the costs of such agent or
independent contractor either directly to such person or to
Lender in reimbursement of such costs, as applicable.
12.15. Reserved.
12.16. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, COUNTERCLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (a) ARISING UNDER THE LOAN DOCUMENTS, INCLUDING,
WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION
THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THE LOAN DOCUMENTS (AS NOW OR HEREAFTER
MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY
JURY.
12.17. Severability. If any provision or obligation under
this Agreement and the other Loan Documents shall be
determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable, that provision shall be
deemed severed from the Loan Documents and the validity,
legality and enforceability of the remaining provisions or
obligations shall remain in full force as though the
invalid, illegal, or unenforceable provision had never been
a part of the Loan Documents, provided, however, that if the
rate of interest or any other amount payable under the Note
or this Agreement or any other Loan Document, or the right
of collectibility therefore, are declared to be or become
invalid, illegal or unenforceable, Lender's obligations to
make advances under the Loan Documents shall not be
enforceable by Borrower.
12.18. Heirs, Successors and Assigns. Except as otherwise
expressly provided under the terms and conditions of this
Agreement, the terms of the Loan Documents shall bind and
inure to the benefit of the heirs, successors and assigns of
the parties.
12.19. Time. Time is of the essence of each and every term
of this Agreement.
12.20. Headings. All article, section or other headings
appearing in this Agreement and any of the other Loan
Documents are for convenience of reference only and shall be
disregarded in construing this Agreement and any of the
other Loan Documents.
12.21. Governing Law. This Agreement shall be governed by,
and construed and enforced in accordance with the laws of
the State of New York, except to the extent preempted by
federal laws. Borrower and all persons and entities in any
manner obligated to Lender under the Loan Documents consent
to the jurisdiction of any federal or state court within the
State of New York having proper venue and also consent to
service of process by any means authorized by New York or
federal law.
12.22. Integration; Interpretation. The Loan Documents
contain or expressly incorporate by reference the entire
agreement of the parties with respect to the matters
contemplated therein and supersede all prior negotiations or
agreements, written or oral. The Loan Documents shall not be
modified except by written instrument executed by all
parties. Any reference in any of the Loan Documents to the
Property or any improvements shall include all or any part
of the Property or any improvements. Any reference to the
Loan Documents includes any amendments, renewals or
extensions now or hereafter approved by Lender in writing.
12.23. Joint and Several Liability. The liability of all
persons and entities obligated in any manner under this
Agreement and any of the Loan Documents shall be joint and
several.
12.24. Counterparts. This Agreement, any of the other Loan
Documents (except for the Note), any Other Related Documents
and any subsequent modifications, amendments, waivers,
consents or supplements thereof, if any, may be executed in
any number of counterparts, each of which when executed and
delivered shall be deemed to be an original and all such
counterparts together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Borrower and Lender have executed
this Agreement as of the date appearing on the first page of
this Agreement.
Lender:
DCI USA, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇
Lender's US address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BORROWER:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Borrower's address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇