1
EXHIBIT 10.20
********************************************************************************
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF
MAY 18, 2001
AMONG
ENTERTAINMENT PROPERTIES TRUST
AND
THE SUBSIDIARY GUARANTORS PARTY HERETO
AND
iSTAR FINANCIAL INC.,
--------------------
$50,000,000
--------------------
********************************************************************************
2
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached but
is inserted for convenience of reference only.
Page
----
Section 1. Definitions and Accounting Matters.................................................................iv
1.01 Certain Defined Terms..................................................................................iv
1.02 Accounting Terms and Determinations.................................................................xxiii
1.03 [Intentionally Omitted]..............................................................................xxiv
1.04 Terms Generally......................................................................................xxiv
Section 2. The Loan, the Note and Prepayments...............................................................xxiv
2.01 Loan.................................................................................................xxiv
2.02 Borrowing............................................................................................xxiv
2.03 Tranche A............................................................................................xxiv
2.04 Tranche B.............................................................................................xxv
2.05 Loan Fee..............................................................................................xxv
2.06 Exit Fee..............................................................................................xxv
2.07 Business Day..........................................................................................xxv
2.08 Note..................................................................................................xxv
2.09 Optional Prepayment..................................................................................xxvi
2.10 Partial Prepayments in connection with Sale of Individual Pad Properties.............................xxvi
Section 3. Payments of Principal and Interest..............................................................xxvii
3.01 Repayment of Loan...................................................................................xxvii
3.02 Interest............................................................................................xxvii
Section 4. Payments; Pro Rata Treatment; Computations; Etc................................................xxviii
4.01 Payments...........................................................................................xxviii
4.02 Late Payment Charge................................................................................xxviii
4.03 Computations.......................................................................................xxviii
4.04 Minimum Amounts......................................................................................xxix
4.05 Certain Notices......................................................................................xxix
4.06 Selection of Interest Period.........................................................................xxix
4.07 Sharing of Payments, Etc.............................................................................xxix
Section 5. Yield Protection, Etc.............................................................................xxx
5.01 Limitation on Eurodollar Base Rate....................................................................xxx
5.02 Illegality............................................................................................xxx
5.03 Compensation..........................................................................................xxx
Section 6. Guarantee........................................................................................xxxi
6.01 The Guarantee........................................................................................xxxi
6.02 Obligations Unconditional............................................................................xxxi
6.03 Reinstatement.......................................................................................xxxii
i
3
6.04 Subrogation.........................................................................................xxxii
6.05 Remedies............................................................................................xxxii
6.06 Instrument for the Payment of Money................................................................xxxiii
6.07 Continuing Guarantee...............................................................................xxxiii
6.08 Rights of Contribution.............................................................................xxxiii
6.09 General Limitation on Guarantee Obligations.........................................................xxxiv
6.10 California Waivers..................................................................................xxxiv
Section 7. Conditions......................................................................................xxxvi
7.01 Effective Date......................................................................................xxxvi
7.02 Initial and Subsequent Extensions of Credit............................................................xl
7.03 Addition of Eligible Properties.......................................................................xli
7.04 Cap Agreement and Assignment of Cap Agreement........................................................xlii
Section 8. Representations and Warranties..................................................................xliii
8.01 Organization; Powers................................................................................xliii
8.02 Authorization; Enforceability........................................................................xliv
8.03 Approvals............................................................................................xliv
8.04 No Breach............................................................................................xliv
8.05 Financial Condition; No Material Adverse Change.......................................................xlv
8.06 Properties............................................................................................xlv
8.07 Litigation............................................................................................xlv
8.08 Environmental Matters................................................................................xlvi
8.09 Compliance with Laws and Agreements................................................................xlviii
8.10 Investment Company Act.............................................................................xlviii
8.11 Public Utility Holding Company Act.................................................................xlviii
8.12 Taxes..............................................................................................xlviii
8.13 ERISA..............................................................................................xlviii
8.14 True and Complete Disclosure.......................................................................xlviii
8.15 Use of Credit........................................................................................xlix
8.16 Material Agreements and Liens........................................................................xlix
8.17 Capitalization.......................................................................................xlix
8.18 Subsidiaries, Etc.......................................................................................l
8.19 REIT Status.............................................................................................l
8.20 Real Estate Investment Trust Structure.................................................................li
8.21 Ground Leases..........................................................................................li
8.22 Leases.................................................................................................li
8.23 Ground Lease Fee Purchase..............................................................................li
8.24 Defaults...............................................................................................li
8.25 Absence of Liens.......................................................................................li
8.26 No Materially Adverse Contracts, Etc...................................................................li
8.27 No Material Obligation................................................................................lii
8.28 Title.................................................................................................lii
8.29 Solvency..............................................................................................lii
8.30 No Plan Assets.......................................................................................liii
8.31 Financial Information................................................................................liii
8.32 Condemnation.........................................................................................liii
ii
4
8.33 Utilities and Public Access...........................................................................liv
8.34 Not a Foreign Person..................................................................................liv
8.35 Separate Lots.........................................................................................liv
8.36 Assessments...........................................................................................liv
8.37 Enforceability........................................................................................liv
8.38 No Prior Assignment...................................................................................liv
8.39 Insurance.............................................................................................liv
8.40 Use of Property.......................................................................................liv
8.41 Certificate of Occupancy; Licenses.....................................................................lv
8.42 Flood Zone.............................................................................................lv
8.43 Physical Condition.....................................................................................lv
8.44 Boundaries.............................................................................................lv
8.45 Leases.................................................................................................lv
8.46 Survey................................................................................................lvi
8.47 No Broker.............................................................................................lvi
8.48 Filing and Recording Taxes............................................................................lvi
8.49 Special Purpose Entity/Separateness...................................................................lvi
8.50 Management of Properties...............................................................................lx
8.51 Ground Leases..........................................................................................lx
8.52 Illegal Activity......................................................................................lxv
8.53 No Change in Facts or Circumstances; Disclosure.......................................................lxv
8.54 Inventory.............................................................................................lxv
8.55 Survival of Representations...........................................................................lxv
iii
5
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 18, 2001, between
ENTERTAINMENT PROPERTIES TRUST, a real estate investment trust duly organized
and validly existing under the laws of the State of Maryland (the "Borrower");
Megaplex Four, Inc., a Missouri corporation ("Megaplex Owner"); Theatre Sub,
Inc., a Missouri corporation ("Archon SPE Holdings") (Megaplex Owner and Archon
SPE Holdings are sometimes referred to individually as a "Subsidiary Guarantor"
and, together, as the "Subsidiary Guarantors" and, together with Borrower, the
"Obligors"), and iSTAR FINANCIAL INC., a Maryland corporation ("Lender").
Borrower is a party to a certain Credit Agreement dated as of March 2,
1998 (as amended, the "BONY Credit Agreement") with, among others, The Bank of
New York ("BONY"), as administrative agent pertaining to a $200,000,000 credit
facility (the "BONY Facility"). Lender has acquired the BONY Facility, the BONY
Credit Agreement and the documents evidencing, securing and/or governing the
BONY Facility. Borrower, the Subsidiary Guarantors and Lender desire to amend
and restate the BONY Credit Agreement to, among other things, reduce the size of
the credit facility to $50,000,000 and change the term of the BONY Facility.
Borrower and the Subsidiary Guarantors are engaged as an integrated
group in businesses related to the Permitted Uses (as hereinafter defined). The
integrated operation requires financing on such a basis that credit supplied to
Borrower be made available from time to time to the Subsidiary Guarantors, as
required for the continued successful operation of the Obligors, separately, and
the integrated operation as a whole. In that connection, the Obligors have
requested that Lender extend credit to Borrower (to be made available by
Borrower to the Subsidiary Guarantors) in an aggregate principal or face amount
not exceeding $50,000,000 to finance the operations of the Obligors for the
Permitted Uses.
To induce Lender to extend such credit, the Obligors and the Lender
propose to enter into this Agreement, pursuant to which Lender will make loans
to Borrower, and each Subsidiary Guarantor will guarantee the credit so extended
to Borrower. Each of the Obligors expects to derive benefit, directly or
indirectly, from the credit so extended to Borrower, both in its separate
capacity and as a member of the integrated group, because the successful
operation of each of the Obligors is dependent on the continued successful
performance of the functions of the integrated group as a whole.
Lender is prepared to extend such credit upon the terms and conditions
hereof, and, accordingly, the BONY Credit Agreement is amended and restated in
its entirety as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"1933 Act" means the Securities Act of 1933, as amended.
iv
6
"Additional Properties" means Real Estate Properties acquired
or deemed acquired, directly or indirectly, with any proceeds of the
Loan by any Obligor. All Real Estate Properties acquired directly or
indirectly by any Obligor within 60 days (before or after) of a draw or
advance of Loan proceeds shall be deemed acquired with the proceeds of
the Loan, unless prior to such acquisition Lender agrees and
acknowledges in writing to Borrower that Real Estate Properties are not
being acquired in whole or in part with any Loan proceeds.
"Adjusted Borrowing Base Receipts" means (x) all revenues,
receipts, rents and income from the Megaplex Properties and the Pad
Properties and (y) all funds distributable pursuant to Section 3.3(a)
of the Deposit Account Agreement dated as of June 29, 1998 among
Securitized Property Owner, Archon Financial, L.P. and UMB Bank, N.A.,
as such agreement may be amended or replaced from time to time with
Lender's written approval or if Securitized Property Owner refinances
its financing with Archon Financial, L.P., then all funds distributable
to Securitized Property Owner from or in any way related to its assets.
"Affiliate" means any Person that directly or indirectly
controls, or is under common control with, or is controlled by,
Borrower and, if such Person is an individual, any member of the
immediate family (including parents, spouse, children and siblings) of
such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any
Person who is controlled by any such member or trust. As used in this
definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") means possession,
directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise),
provided that, in any event, any Person that owns directly or
indirectly securities having 10% or more of the voting power for the
election of directors or other governing body of a corporation or 10%
or more of the partnership or other ownership interests of any other
Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person. Notwithstanding the
foregoing, (a) no individual shall be an Affiliate solely by reason of
his or her being a director, officer or employee of Borrower or any of
its Subsidiaries or Affiliates and (b) none of the Wholly Owned
Subsidiaries of Borrower shall be Affiliates.
"Agent" means The Chase Manhattan Bank, or any successor
Eligible Institution acting as Agent under the Cash Management
Agreement.
"Applicable Margin" means (a) so long as a Dark Theater
Condition does not exist for each Tranche the applicable rate per annum
set forth below under the caption "Margin":
-------------------------------------
Tranche: Margin
-------------------------------------
Tranche A 3.50%
-------------------------------------
Tranche B 4.50%
-------------------------------------
v
7
and (b) so long as a Dark Theater Condition exists, for each Tranche A
and Tranche B shall be 4.50%.
"Assignment of Cap Agreement" means the Assignment of Cap
Agreement by Borrower to and for the benefit of Lender in a form
acceptable to Lender which, among other things, assigns the benefits of
the Cap Agreement to Lender.
"Assignment of Leases" shall mean, with respect to each
Individual Megaplex Property and, to the extent applicable, the
Individual Pad Properties, a first priority Assignment of Leases and
Rents, from Borrower, as assignor, to Lender, as assignee, assigning to
Lender all of the assignor's interest in and to the Leases and Rents of
such Individual Property as security for the Loan, as the same may be
amended, restated, replaced, supplemented or otherwise modified from
time to time.
"Award" shall mean any compensation paid by any Governmental
Authority in connection with the Condemnation in respect of all or any
portion of an Individual Owned Property.
"Archon Securitization Loan Documents" means the documents,
agreements, and instruments listed on Exhibit B hereto, as amended from
time to time with Lender's prior written consent.
"Bankruptcy Code" means Title 11 of the United States Code,
as amended from time to time, together with any successor or
replacement law.
"Base Rate" means, as of any date of determination, the
"prime rate" (or "base rate") reported in the Money Rates column or
section of The Wall Street Journal published on the second full
Business Day preceding the first day of the month with respect to which
interest is being determined, as having been the rate in effect for
corporate loans at large U.S. money center commercial banks (whether or
not such rate has actually been charged by any such bank) or, if The
Wall Street Journal ceases publication of, or does not otherwise
publish, such "prime rate" or "base rate", the annual rate of interest
reasonably selected by Lender as a substitute therefor.
"Buildings" or "Improvements" means, individually and
collectively, the buildings, structures and improvements now or
hereafter located on the Real Estate Properties.
"Business Day" means any day other than (a) a Saturday or
Sunday or (b) a day on which commercial banks are authorized or
required to close in New York City.
"Cap Agreement" means an agreement in form and substance
satisfactory to Lender, between a counterparty satisfactory to Lender
and Borrower, pursuant to which Borrower shall be protected against an
increase in the Eurodollar Base Rate, for any applicable Interest
Period, in excess of the per annum rate of seven percent (7%) on a
notional amount as required by Section 7.04 (and subject to increase as
set forth in Section 7.04 below) for a period ending on the Initial
Maturity Date, and, if the Maturity
vi
8
Date is extended, then at the time such extension is exercised, the Cap
Agreement shall be similarly extended by Borrower.
"Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) Property to the
extent such obligations are required to be classified and accounted for
as a capital lease on a balance sheet of such Person under GAAP, and,
for purposes of this Agreement, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP.
"Cash or Cash Equivalents" means (a) unrestricted cash
(excluding, without limitation, until forfeited or otherwise entitled
to be retained by Borrower or any of its Subsidiaries, tenant security
or other restricted deposits) or (b) any unrestricted investment
(valued at fair market value) which qualifies as a Permitted
Investment. For the purposes hereof, the term "unrestricted" means the
specified asset is not subject to any Liens in favor of any Person.
"Cash Management Agreement" means that certain Cash
Management Agreement by and among Obligors, Agent and Lender, as the
same may be amended, restated, replaced, supplemented or otherwise
modified from time to time, relating to funds deposited in the Lockbox
Account.
"Cash Trap Event" means any time the Megaplex Debt Service
Coverage Ratio does not equal or exceed the Cash Trap MDSCR.
"Cash Trap MDSCR" means a Megaplex Debt Service Coverage
Ratio of 1.25:1.0 for any calendar month.
"Cash Trap Period" shall mean, from time to time, any period
commencing on the date Lender gives Borrower notice that Lender has
determined that a Cash Trap Event has occurred and continuing until
Lender gives Borrower notice of the occurrence of a Cash Trap
Termination Event.
"Cash Trap Termination Event" means and shall be deemed to
occur upon the first to occur of (i) at such time as the Megaplex Debt
Service Coverage Ratio equals or exceeds the Cash Trap MDSCR for each
month, measured month by month, for six (6) consecutive months, or (ii)
the Cash Trap Account (as set forth in the Cash Management Agreement)
has an amount in it equal to one full year's Interest Expense based
upon the principal amount of the Loan outstanding (as it exists from
time to time) and assuming an interest rate equal to the applicable
Eurodollar Base Rate plus Applicable Margin (or Post-Default Rate, if
applicable) in effect at such time and from time to time.
"Change in Control" means, with respect to any Person, (a)
the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the SEC Rules and Regulations thereunder as in
effect on the date hereof) of shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and
outstanding
vii
9
capital stock (or equivalent equity interest) of any such Person; (b)
occupation of a majority of the seats (other than vacant seats) on the
board of directors or trustees (or equivalent body) of such Person by
Persons who were neither (i) nominated by the board of directors or
trustees (or equivalent body) of such Person nor (ii) appointed by
directors or trustees (or equivalent parties) so nominated; or (c) the
acquisition of direct or indirect Control of such Person by any Person
or group.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commission" means the Securities and Exchange Commission.
"Condemnation" shall mean a temporary or permanent taking by
any Governmental Authority as the result or in lieu or in anticipation
of the exercise of the right of condemnation or eminent domain, of all
or any part of any Individual Property, or any interest therein or
right accruing thereto, including any right of access thereto or any
change of grade affecting such Individual Property or any part thereof.
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise.
"Dark Theatre Condition" means when a Megaplex Property is
not operating on a full time basis showing new releases, first run
movies pursuant to either a Qualified Lease or Qualified Operating
Agreement.
"Debt Service" means, for any period, the sum, for Borrower
and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all
regularly scheduled payments of principal of Indebtedness (including,
without limitation, the principal component of any payments in respect
of Capital Lease Obligations), but excluding optional prepayments made
during such period plus (b) all Interest Expense for such period.
"Default" means an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" means lawful money of the United States of
America.
"EBITDA" means, for any period, the sum, for Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) Net Operating Income from
Real Estate Properties (calculated before taxes, Interest Expense,
extraordinary, and unusual items) for such period, plus (b)
depreciation and amortization (to the extent deducted in determining
net operating income) for such period, minus (c) all gains (or plus all
losses) attributable to the sale or other disposition of Properties or
debt restructurings in such period and minus (d) selling, general and
administrative expenses and other overhead expenses.
viii
10
"Effective Date" means the date on which all of the
conditions specified in Section 7.01 are satisfied or waived.
"Eligible Institution" shall mean a depository institution or
trust company, the short term unsecured debt obligations or commercial
paper of which are rated at least P-1 by ▇▇▇▇▇'▇ Investors Service,
Inc. and 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 and "Aa2" by Moody's).
"Eligible Properties" means, as at any date, those Real
Estate Properties located in the United States of America that meet
each of the following criteria:
(a) Are wholly-owned by Borrower or another Obligor or leased
by Borrower or another Obligor pursuant to a Qualified Ground Lease to
Borrower or another Obligor;
(b) Are leased to a third party pursuant to a Qualified Lease
or operated under a Qualified Operating Agreement;
(c) Improvements required under the applicable Qualified
Lease are completed (as evidenced by a building certificate of
occupancy) and operating free of material construction or structural
renovation;
(d) There are no associated title defects, Liens, springing
Liens or negative pledges, other than Permitted Liens;
(e) The property will be used for a Permitted Use;
(f) Are in compliance with all laws, regulations and orders
of any Governmental Authority or regulatory authority or agency
applicable to it, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material
Adverse Effect;
(g) For which Borrower has provided the Lender with
historical or, if applicable, pro forma, operating information in form,
scope and substance reasonably satisfactory to Lender;
(h) For which Borrower has provided Lender with an
Engineering Report and Environmental Report; and
(i) Which has been approved by Lender in its sole discretion.
"Engineering Report" means, a property condition report
satisfactory to Lender addressed to Lender prepared by a firm of
licensed engineers satisfactory to Lender addressing the engineering
and structural condition of the Buildings in question.
"Environmental Claim" means, with respect to any Person, any
written claim, demand or other communication (collectively, a "claim")
by any other Person alleging or
ix
11
asserting such Person's liability for investigatory costs, cleanup
costs, governmental response costs, damages to natural resources or
other Property, personal injuries, fines or penalties arising out of,
based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by
any Governmental Authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or
the environment.
"Environmental Defect" means (a) any Release or threatened
Release, (b) any material violation of Environmental Laws or (c) any
Environmental Claim.
"Environmental Indemnity" shall mean, with respect to each
Individual Property, that certain Environmental and Hazardous Substance
Indemnification Agreement executed by Borrower and the other Obligors
in connection with the Loan for the benefit of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from
time to time.
"Environmental Laws" means any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any
orders or decrees, in each case as now or hereafter in effect, relating
to the regulation or protection of human health, safety or the
environment in connection with emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water, ground
water, wetlands, land or subsurface strata, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals
or toxic or hazardous substances or wastes.
"Environmental Report" means, an environmental survey and
assessment addressed to Lender and satisfactory to Lender prepared by a
firm of licensed engineers (familiar with the identification of toxic
and hazardous substances) satisfactory to Lender, such environmental
survey and assessment to be based upon physical on-site inspections by
such firm, as well as a historical review of the uses of such sites and
facilities.
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any
shareholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
x
12
"ERISA Affiliate" means any corporation or trade or business
that is a member of any group of organizations (i) described in Section
414(b) or (c) of the Code of which Borrower is a member and (ii) solely
for purposes of potential liability under Section 302(c)(11) of ERISA
and Section 412(c)(11) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which Borrower is a member.
"ERISA Event" means any of the following events or
conditions:
(a) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan, as
to which the PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the Code); and any
request for a waiver under Section 412(d) of the Code for any Plan;
(b) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by Borrower or an
ERISA Affiliate to terminate any Plan;
(c) the institution by the PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer Plan;
(d) the complete or partial withdrawal from a Multiemployer
Plan by Borrower or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default) or the receipt
by Borrower or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(e) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
or
(f) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a
part if Borrower or an ERISA Affiliate fails to timely provide security
to the Plan in accordance with the provisions of such Sections.
"Eurodollar Base Rate" means a floating interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the rate for U.S. dollar deposits
xi
13
with maturities equal to the applicable Interest Period as reported in
the Money Rates column or section of The Wall Street Journal published
on the second full Business Day preceding the first day the applicable
Interest Period is to commence, provided that if such rate does not
appear in such publication or such publication ceases, or if the
information contained in such publication, in the reasonable judgment
of Lender shall cease accurately to reflect the rate offered by leading
banks in the London interbank market as reported by any publicly
available source of similar market data selected by Lender, or it shall
be unlawful for Lender to charge interest utilizing rates dependent
under Dollar deposits in the London interbank market, the Eurodollar
Base Rate means the Base Rate per annum.
"Exit Fee" is defined in Section 2.06.
"Extension Conditions" means the following: (a) Not less than
60 days prior to the Initial Maturity Date or First Extended Maturity
Date, as applicable, Borrower shall have delivered to Lender an
irrevocable written notice requesting the extension and in order to
extend to the First Extended Maturity Date simultaneously therewith
shall have paid to Lender a non-refundable extension fee in the amount
equal to 0.5% of the outstanding principal balance of the Loan on the
date of the request for the extension or the Initial Maturity Date,
whichever is greater (such payment shall initially be made computed
based upon the outstanding principal balance of the Loan on the date
such notice is given and, if the outstanding principal amount is then
greater on the Initial Maturity Date, the balance of such payment shall
be due on the Initial Maturity Date); (b) no Default or Event of
Default shall exist either at the time of the delivery of the notice to
extend or at the time of the effective date of the extension; (c) all
representations and warranties herein or in any of the other Loan
Documents shall be true and correct in all material respects both at
the time of the delivery of the notice to extend and the effective date
of the extension; (d) the Megaplex Debt Service Coverage Ratio equals
or exceeds the Cash Trap MDSCR both at the time of the delivery of the
notice to extend and at the time of the effective date of the
extension, in each case as computed for the month immediately preceding
such dates; and (e) Borrower shall give to Lender a completed and
executed certificate from the Financial Officer that the covenants in
Sections 9.07, 9.08, 9.09, 9.10, and 9.11 are true and correct
accompanied by such evidence, including calculations, to evidence the
same, dated effective as of, as applicable, the Initial Maturity Date
or the First Extended Maturity Date.
"FFO" means, for Borrower and its Subsidiaries on a
consolidated basis, "funds from operations" as defined in accordance
with resolutions adopted by the Board of Governors of the National
Association of Real Estate Investment Trusts as in effect on the
Effective Date and as amended from time to time, subject, however, to
the provisions of Section 1.02(b).
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer, controller, chief executive
officer or general counsel of the entity referenced in connection with
such financial officer, and if no such entity is referenced, then of
Borrower.
xii
14
"Financing Statements" means financing statements in form and
substance acceptable to Lender required to evidence and perfect
Lender's interests in collateral for the Loan.
"First Extended Maturity Date" means May 31, 2005.
"Fixed Charges Ratio" means, as at any date, the ratio of (a)
EBITDA for the fiscal quarter ending on or most recently ended prior to
such date to (b) Total Fixed Charges for such fiscal quarter.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which Borrower is located.
For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"Funds Available for Distribution" means, on a cash basis,
FFO plus amortization and minus the aggregate amount of capital
expenditures and principal payments on Indebtedness.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those that, in accordance with Section
1.02(a), are to be used in making the calculations for purposes of
determining compliance with this Agreement.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" means a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under
or with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any Person, or a guarantee of the
payment of dividends or other distributions upon the stock or equity
interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services
primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other financial
institution to issue a letter of credit or other similar instrument for
the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The terms
"Guarantee" and "Guaranteed" used as verbs have the correlative
meanings.
"Hazardous Material" means, collectively, (a) any petroleum
or petroleum products, flammable materials, explosives, radioactive
materials, asbestos, urea formaldehyde foam insulation, and
transformers or other equipment that contain polychlorinated biphenyls
("PCB's"), (b) any chemicals or other materials or substances that are
now or hereafter become defined as or included in the definition of
"hazardous
xiii
15
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants", "contaminants", "pollutants" or words of similar
import under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.
"Hedging Agreement" means the Cap Agreement and any other cap
agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement. For purposes hereof, the "credit
exposure" at any time of any Person under an Hedging Agreement to which
such Person is a party shall be determined at such time in accordance
with the standard methods of calculating credit exposure under similar
arrangements as reasonably prescribed from time to time by the Lender,
taking into account potential interest rate movements and the
respective termination provisions and notional principal amount and
term of such Hedging Agreement.
"Indebtedness" means, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether
by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person);
(b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts
payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business; (c) Indebtedness of
others secured by a Lien on the Property of such Person, whether or not
the respective indebtedness so secured has been assumed by such Person;
(d) obligations of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; (e) Capital Lease
Obligations of such Person; (f) obligations of such Person in respect
of transactions which are treated as financings under the Code; (g)
Indebtedness of others Guaranteed by such Person; and (h) all
obligations under or in respect of Hedging Agreements. The indebtedness
of any Person shall also include the Indebtedness of any other Person
(including any partnership in which such Person is a general partner)
to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Parties" means, collectively, the Lender, and
the Lender's respective predecessors, directors, officers,
shareholders, members, managers, trustees, employees, attorneys,
agents, successors and assigns.
"Independent Director" shall mean an individual reasonably
satisfactory to Lender who shall not be during such individual's term
as Independent Director, shall not have been at the time of such
individual's appointment, and shall not have been at any time during
the preceding five (5) years (i) other than in its capacity as an
Independent Director or other similar capacity, a partner, member,
shareholder of, or an officer or employee of, Borrower or any of its
Subsidiaries or Affiliates, (ii) other than employees
xiv
16
of CT Corporation and its successors, a customer of, or supplier to,
Borrower, or any of its Subsidiaries or Affiliates, (iii) an individual
controlling any such supplier or customer, or (iv) a member of the
immediate family of any officer, employee, supplier or customer of any
other director of Borrower or any of its Subsidiaries or Affiliates.
"Individual Megaplex Property" means, each individual real
estate site comprising one of the Megaplex Properties, including the
land and improvements thereon together with the personal property owned
by Megaplex Owner related to, or located upon, or used in connection
with, such real estate and together with all rights pertaining to such
real property, improvements and personal property.
"Individual Owned Property" means any Individual Megaplex
Property or Individual Pad Property.
"Individual Pad Property" means, each individual real estate
site comprising one of the Pad Properties, including the land and
improvements thereon together with the personal property owned by
Borrower or Obligor related to, or located upon, or used in connection
with, such real estate and together with all rights pertaining to such
real property, improvements and personal property.
"Individual Property" means any Individual Megaplex Property,
Individual Pad Property or Individual Securitized Property.
"Individual Securitized Property" means, each individual real
estate site comprising one of the Securitized Properties, including the
land and improvements thereon together with the personal property owned
by Borrower or Obligor related to, or located upon, or used in
connection with, such real estate and together with all rights
pertaining to such real property, improvements and personal property.
"Initial Maturity Date" means May 31, 2004.
"Initial Megaplex Properties" means, collectively, the Real
Estate Properties listed on Exhibit C.
"Initial Pad Properties" means, collectively, the Real Estate
Properties listed on Exhibit D.
"Initial Properties" means, collectively, (a) the Initial
Megaplex Properties, (b) the Initial Pad Properties and (c) the Initial
Securitized Properties.
"Initial Securitized Properties" means, collectively, the
Real Estate Properties listed on Exhibit E.
"Interest Coverage Ratio" means, as at any date, the ratio of
(a) EBITDA for the fiscal quarter ending on or most recently ended
prior to such date to (b) Interest Expense for such fiscal quarter.
xv
17
"Interest Expense" means, for any period, the sum, for
Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all
interest in respect of Indebtedness related to the Loan (including,
without limitation, the interest component of any payments in respect
of Capital Lease Obligations) accrued or capitalized (excluding
capitalized interest that is funded through a real estate construction
loan provided by a third party financing source) during such period
(whether or not actually paid during such period) plus (b) the net
amount payable (or minus the net amount receivable) under Hedging
Agreements during such period (whether or not actually paid or received
during such period) minus (c) interest income.
"Interest Period" means, a period of one month or three
months as selected by Borrower, or Lender, as the case may be, pursuant
to Section 4.06.
"Investment" means, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person or any agreement to
make any such acquisition (including, without limitation, any "short
sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to, any
other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person), but excluding any such advance,
loan or extension of credit having a term not exceeding 90 days arising
in connection with the sale of inventory or supplies by such Person in
the ordinary course of business; (c) the entering into of any Guarantee
of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such Person; or
(d) the entering into of any Hedging Agreement.
"Lien" means, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Property. For purposes of this Agreement and the other
Loan Documents, a Person shall be deemed to own subject to a Lien any
Property that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement (other than an operating lease)
relating to such Property.
"Loan Documents" means, collectively, this Agreement, the
Note, the Mortgages, the Assignments of Leases, the Cash Management
Agreement, the Pledge Agreement, the Assignment of Cap Agreement,
Environmental Indemnity, the Financing Statement and all other
documents now or hereafter executed and delivered in connection with
the Loan.
"Loan" has the meaning assigned to such term in Section 2.01.
"Margin Stock" means "margin stock" within the meaning of
Regulations T, U and ▇.
▇▇▇
18
"Material Adverse Effect" means a material adverse effect on
(a) the properties, business, operations, financial condition,
prospects, liabilities or capitalization of Borrower and its
Subsidiaries taken as a whole, (b) the ability of any Obligor to
perform its obligations under any of the Loan Documents, (c) the
validity or enforceability of any of the Loan Documents to which an
Obligor is a party, (d) the rights and remedies of the Lender under any
of the Loan Documents or (e) the timely payment (following the
expiration of any applicable grace period) of the principal of or
interest on the Loan or other amounts payable in connection with the
Loan Documents.
"Maturity Date" means the Initial Maturity Date, as extended
if at all in accordance with Section 3.01, when the outstanding
principal balance of the Loan, all accrued and unpaid interest thereon
and all sums owing to Lender pursuant to the Loan Documents shall be
due and payable.
"Megaplex Cash Flow" means, for any period, the sum, for
Megaplex Owner (determined on a consolidated basis in accordance with
GAAP), without duplication, of the following: (a) Net Operating Income
from the Megaplex Properties owned directly by Megaplex Owner
(calculated before income taxes, Interest Expense, extraordinary and
unusual items thereon) for such period, plus (b) depreciation and
amortization (to the extent deducted in determining Net Operating
Income) on such Megaplex Properties owned by Megaplex Owner for such
period, minus (c) all gains (or plus all losses) attributable to the
sale or other disposition of Megaplex Properties or debt restructurings
in such period and minus (d) selling, general and administrative
expenses and other overhead expenses allocable to such Megaplex
Properties owned by Megaplex Owner, minus, to the extent not addressed
in the calculation of Net Operating Income, deposits required to be
deposited with Lender pursuant to Sections 9.30, 9.31, 9.32 and 9.39.
"Megaplex Debt Service" means, for any period, Interest
Expenses calculated solely with respect to the Loan for the period
being measured.
"Megaplex Debt Service Coverage Ratio" means, for any period,
the ratio of (a) Megaplex Cash Flow to (b) Megaplex Debt Service.
"Megaplex Nine Loan Documents" means the documents,
agreements, and instruments listed on Exhibit F hereto, as amended from
time to time with Lender's prior written approval.
"Megaplex Owner" means Megaplex Four, Inc., a Missouri
corporation.
"Megaplex Properties" means, as of any date, collectively all
of the Initial Individual Megaplex Properties and any Individual
Megaplex Property substituted pursuant to Section 9.35 or added
pursuant to Sections 7.03, 9.21(c), or 9.24.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc., and its
successors.
xvii
19
"Mortgages" means, the mortgages or deeds of trust from time
to time securing the Loan encumbering the Megaplex Properties and, to
the extent applicable, the Pad Properties which are subject to a
Qualified Lease.
"Multiemployer Plan" means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made by
Borrower or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"Net Operating Income" means, for any Real Estate Property,
as of any date (a) the aggregate rental income and other income from
the operation of such Real Estate Property for the most recently
completed fiscal quarter, multiplied by four minus (b) all expenses and
other charges incurred in connection with the operation of such Real
Estate Property, including funding all Reserve Funds applicable to such
Real Estate Property for such quarter, multiplied by four; provided,
however, the Net Operating Income of any Real Estate Property which is
not wholly owned by Borrower shall be included only to the extent of
Borrower's ownership interest in the market value of such Real Estate
Property on a fully diluted basis in such Real Estate Property. In the
absence of historical financial information for any Real Estate
Property, pro forma financial information (determined based upon the
terms of the applicable lease governing the lease of such Real Estate
Property) shall be used for the first quarter in the first year of any
applicable lease for such Real Estate Property.
"Net Sales Proceeds" means an amount equal to the gross sales
price and other consideration received or receivable in connection with
the sale of an Individual Pad Property minus the sum of: (a) the amount
of any sales commission actually paid to an independent broker which is
not an Affiliate of Borrower with respect to such sale and in no event
in excess of market rate commissions on similar transactions, (b) the
amount of transfer taxes actually paid by the seller in connection with
such sale and (c) other reasonable expenses paid by the seller in
connection with such sale and customarily paid by sellers of properties
similar to the applicable Individual Pad Property in the local area in
which the applicable Individual Pad Property is located.
"Non-Recourse" means, with reference to any obligation or
liability, any obligations or liability for which Borrower or any of
its Subsidiaries, as obligor thereunder, is not liable or obligated
other than as to Borrower's, or any Subsidiary's, interest in a
designated Real Estate Property or other specifically identified asset
only, subject to such limited exceptions to the non-recourse nature of
such obligation or liability, such as, but not limited to, fraud,
misappropriation, misapplication and environmental indemnities, as are
usual and customary in like transactions involving institutional
lenders at the time of the incurrence of such obligation or liability.
"Note" means the promissory note provided for in Section
2.08(a) and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Notice of Borrowing" means the notice to be given by
Borrower to Lender in respect of each borrowing of the Loan meeting all
of the requirements of Section 4.05.
xviii
20
"Other Charges" shall mean all ground rents, maintenance
charges, impositions other than Taxes, and any other charges, including
vault charges and license fees for the use of vaults, chutes and
similar areas adjoining any Individual Property, now or hereafter
levied or assessed or imposed against such Individual Property or any
part thereof.
"Pad Properties" means, as of any date, collectively all of
the Initial Pad Properties and an Individual Pad Property acquired by
Multiplex Owner after the Effective Date.
"Partially-Owned Entity" means any Person in which Borrower
or its Subsidiaries owns an equity interest, but which is not required
in accordance with GAAP to be consolidated with Borrower for financial
reporting purposes.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Investments" shall have the meaning set forth in
the Cash Management Agreement.
"Permitted Liens" has the meaning assigned to such term in
Section 9.06.
"Permitted Use" shall mean (a) megaplex movie theaters with
predominantly stadium-style seating, (b) entertainment themed retail
centers incorporating megaplex theaters, restaurants, book and/or music
superstores, interactive game centers, live entertainment venues and/or
other specialty retail that is oriented to entertainment or leisure
time activities, (c) integrated movie-going, dining and retail shopping
complexes, and (d) any combination of the uses described in clauses
(a), (b) and (c).
"Person" means any individual, corporation, company,
voluntary association, partnership, limited liability company, joint
venture, trust, unincorporated organization or government (or any
agency, instrumentality or political subdivision thereof).
"Plan" means an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate and that is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"Pledge Agreement" means a pledge and grant of security
interest in Lender's favor by Borrower of all of the capital stock in
Megaplex Owner.
"Post-Default Rate" means a rate per annum equal to 4% plus
the Applicable Margin plus the applicable Eurodollar Base Rate.
"Property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
xix
21
"Qualified Ground Lease" means a ground lease (as the same
may be amended, modified and supplemented in accordance with the terms
of this Agreement) which either (i) is identified on Exhibit G or (ii)
is approved by Lender in its sole discretion.
"Qualified Lease" means (i) a duly executed and delivered
lease (as the same may be amended, modified and supplemented in
accordance with the terms of this Agreement) from an Obligor (other
than Borrower), as landlord, to a third party, as tenant, which is not
an Affiliate of any Obligor which tenant (or lease guarantor) and lease
is approved by the Lender in its reasonable discretion, and (ii) a
Qualified Operating Agreement.
"Qualified Operating Agreement" means an operating agreement
between Megaplex Owner or a subsidiary of Megaplex Owner and a theater
operator, which operating agreement and operator are acceptable to
Lender, which provides for the operation of a first class movie theater
showing first run, new release movies to the public.
"Quarterly Dates" means the last Business Day of March, June,
September and December in each year, the first of which shall be the
first such day after the date hereof.
"Real Estate Properties" means the fixed and tangible
properties consisting of land, buildings and/or other improvements
owned or ground-leased by Megaplex Owner or a Subsidiary of Megaplex
Owner.
"Recourse" means, with reference to any obligation or
liability, any liability or obligation that is not Non-Recourse to the
obligor thereunder, directly or indirectly. For purposes hereof, a
Person shall not be deemed to be "indirectly" liable for the
liabilities or obligations of an obligor solely by reason of the fact
that such Person has an ownership interest in such obligor, provided
that such Person is not otherwise legally liable, directly or
indirectly, for such obligor's liabilities or obligations (e.g., by
reason of a guaranty or contribution obligations, by operation of law
or by reason of such Person being a general partner of such obligor).
"Regulations A, D, T, U and X" means, respectively,
Regulations A, D, G, T, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
"Regulatory Change" means, with respect to any Lender, any
change after the date hereof in Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the
adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Lender of or under
any Federal, state or foreign law or regulations (whether or not having
the force of law and whether or not failure to comply therewith would
be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof.
"REIT" means a "real estate investment trust", as such term
is defined in Section 856 of the Code.
xx
22
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata.
"Release Price" means an amount equal to 90% of Net Sales
Proceeds generated from the sale or transfer of an Individual Pad
Property pursuant to Section 2.10.
"Remediation" shall mean, without limitation, any response,
remedial, removal, or corrective action, any activity to cleanup,
detoxify, decontaminate, contain or otherwise remediate any Hazardous
Material, any actions to cure or mitigate any Release of any Hazardous
Material, including investigation, study, site monitoring, sampling and
testing, laboratory or other analysis, or evaluation necessary to such
actions.
"Rents" shall mean, with respect to each Individual Property,
all rents, percentage rent, rent equivalents, moneys payable as damages
or in lieu of rent or rent equivalents, royalties (including all oil
and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including security, utility and other
deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received
by or paid to or for the account of or benefit of Borrower, any other
Obligor, or their agents or employees from any and all sources arising
from or attributable to the Individual Property, and proceeds, if any,
from business interruption or other loss of income insurance.
"Restoration" shall mean the repair and restoration of an
Individual Property after a casualty or Condemnation as nearly as
possible to the condition the Individual Property was in immediately
prior to such casualty or Condemnation, with such alterations as may be
reasonably approved by Lender.
"Restricted Payment" means dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or
the setting apart of money for a sinking or other analogous fund for,
or the purchase, redemption, retirement or other acquisition of, any
shares of any class of stock of Borrower or of any warrants, options or
other rights to acquire the same (or to make any payments to any
Person, such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market or equity value of
Borrower or any of its Subsidiaries), but excluding dividends payable
solely in shares of common stock of Borrower.
"SEC Rules and Regulations" means the rules and regulations
of the Commission.
"Second Extended Maturity Date" means May 31, 2006.
"Securitized Properties" means, collectively, each of the
Individual Securitized Properties.
xxi
23
"Securitized Property Owner" means EPT DownREIT II, Inc., a
Missouri corporation.
"Structural Defect" means any material structural defect to
the improvements located on the applicable Real Estate Property.
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., and its successors.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, down REIT or other
entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions of such corporation, limited liability
company, partnership or other entity (irrespective of whether or not at
the time securities or other ownership interests of any other class or
classes of such corporation, limited liability company, partnership or
other entity shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly
owned or controlled by such Person or one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person.
Unless otherwise specified, "Subsidiary" means a subsidiary of
Borrower.
"Taxes" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rates, now or hereafter levied
or assessed or imposed against any Individual Property or part thereof.
"Total Fixed Charges" means, for any period, the sum, for
Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a)
Debt Service for such period, (b) the amount of any Capital Improvement
Reserves during such period and (c) any preferred dividends paid during
such period.
"Total Indebtedness" means, as at any date, the sum, for
Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all
Indebtedness (including, without limitation, the aggregate amount of
the Loan under this Agreement) and (b) all other liabilities that
should be classified as liabilities on a balance sheet, including,
without limitation, all reserves (other than general contingency
reserves) and all deferred taxes and other deferred items, but
excluding (i) dividends declared but not yet paid and (ii) trade
payables in the ordinary course of business so long as such trade
payables are payable within 90 days of the date the respective goods
are delivered or the respective services are rendered.
"Tranche" means, either or both, as the context may require,
Tranche A or Tranche B.
"Tranche A" means the portion of the Loan, in an amount not
to exceed $25,000,000 to be advanced pursuant to Section 2.03.
xxii
24
"Tranche B" means the portion of the Loan, in an amount not
to exceed $25,000,000 to be advanced pursuant to Section 2.04.
"U.S. Person" means a citizen or resident of the United
States of America, a corporation, limited liability company,
partnership or other entity created or organized in or under any laws
of the United States of America or any State thereof, or any estate or
trust that is subject to Federal income taxation regardless of the
source of its income.
"U.S. Taxes" means any present or future tax, assessment or
other charge or levy imposed by or on behalf of the United States of
America or any taxing authority thereof.
"Voting Stock" of any Person means outstanding securities of
all classes of such Person ordinarily (and apart from rights accruing
under special circumstances) having the right to elect directors.
"Wholly Owned Subsidiary" means, with respect to any Person,
any corporation, partnership, limited liability company, down REIT or
other entity of which all of the equity securities or other ownership
interests (other than, in the case of a corporation, directors'
qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more Wholly Owned Subsidiaries of such Person or
by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.02 Accounting Terms and Determinations.
(a) GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
Borrower notifies Lender that Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation
of such provision (or if Lender notifies Borrower that Lender requests
an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or
in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such
change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
(b) FFO. If Borrower notifies Lender that the definition of
FFO has been amended by the Board of Governors of the National
Association of Real Estate Investment Trusts after the date of this
Agreement and that Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date
hereof in FFO or in the application thereof on the operation of such
provision (or if Lender notifies Borrower that Lender requests an
amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in FFO or
in the application thereof, then such provision shall be interpreted on
the basis of FFO as in effect and applied immediately before such
change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
xxiii
25
1.03 [INTENTIONALLY OMITTED]
1.04 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
Section 2. The Loan, the Note and Prepayments.
2.01 Loan. Lender agrees, on the terms and conditions of this
Agreement, to lend to Borrower and Borrower agrees to borrow from Lender, a loan
(the "Loan") in Dollars during the period commencing on the Effective Date and
ending on the applicable dates specified in Sections 2.03 and 2.04, in an
aggregate principal amount not to exceed $50,000,000 in accordance with the
terms and conditions of this Agreement. The Loan is not a revolving credit loan
and Borrower shall not reborrow the amount of any amounts prepaid.
2.02 Borrowing. Borrower is irrevocably committed to borrow
and shall be obligated to borrow $50,000,000 in accordance with, as applicable,
Sections 2.03 and 2.04; provided, however, that Borrower shall not be required
to borrow Tranche B if the sole reason for the failure to do so is Borrower's
failure to obtain the Archon Required Amendments after otherwise complying with
the terms of Section 9.37 below. Borrower shall give Lender a Notice of
Borrowing for each borrowing as provided in Section 4.05. Not later than 1:00
p.m., New York City time, on the date specified for each borrowing, Lender shall
disburse the amount of the Loan to be made by it on such date to, or upon the
order of, Borrower. The Loan shall commence to bear interest on the date funds
are disbursed by the Lender, including disbursements into escrow without regard
to the date subsequently disbursed from such escrow. Loan proceeds shall be used
only for Permitted Uses.
2.03 Tranche A. Borrower shall borrow the entire amount of
Tranche A not later than ninety (90) days after the Effective Date. Borrower is
obligated to borrow not less than $5,000,000 of Tranche A on the Effective Date
and shall borrow the remainder of Tranche A in not more than two (2) draws.
xxiv
26
2.04 Tranche B. Borrower shall not borrow Tranche B until
Borrower has borrowed all of Tranche A and obtained the Archon Required
Amendments as required by Section 9.37 below. If Borrower has obtained the
Archon Required Amendments as required by Section 9.37, Borrower shall borrow
the entire amount of Tranche B not later than one hundred eighty (180) days
after the Effective Date in not more than two (2) draws.
2.05 Loan Fee. Borrower shall pay Lender a loan fee in the
amount of $500,000 on the Effective Date.
2.06 Exit Fee. Borrower shall pay Lender an exit fee ("Exit
Fee") as follows:
(a) In the event the Loan is paid in whole or, to the extent
permitted, in part, before the second anniversary of the Effective
Date, Borrower shall pay Lender an Exit Fee in an amount equal to two
percent (2%) of the outstanding principal being paid;
(b) In the event the Loan is paid in whole or, to the extent
permitted, in part, on or after the second anniversary of the Effective
Date, and including on the Maturity Date, Borrower shall pay Lender an
Exit Fee in an amount equal to three percent (3%) of the outstanding
principal being paid; and
(c) In the event an Event of Default occurs and the Loan is
accelerated, Borrower shall immediately pay Lender an Exit Fee in an
amount equal to two percent (2%) of the outstanding principal balance
if the Event of Default occurs prior to the second anniversary of the
Effective Date and three percent (3%) of the outstanding principal
balance if the Event of Default occurs on or after the second
anniversary of the Effective Date.
2.07 Business Day.
Whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, or any time period relating to a payment to be
made hereunder is stated to expire on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and the period will not
expire until the next succeeding Business Day.
2.08 Note.
(a) Note. The Loan shall be evidenced by a single promissory
note of Borrower substantially in the form of Exhibit A, dated the date
hereof, payable to Lender in a principal amount equal to $50,000,000.
(b) Borrower's Loan Account. The balance on Lender's books
and records shall be presumptive evidence (absent manifest error) of
the amounts due and owing to Lender by Borrower; provided that any
failure to so record or any error in so recording shall not limit or
otherwise affect Borrower's obligation under the Loan Documents.
(c) Mutilated, Destroyed, Lost or Stolen Note. In case any
Note shall become mutilated or defaced, or be destroyed, lost or
stolen, Borrower shall, upon request from
xxv
27
Lender, execute and deliver a new Note of like principal amount in
exchange and substitution for the mutilated or defaced Note, or in lieu
of and in substitution for the destroyed, lost or stolen Note. In the
case of a mutilated or defaced Note, the mutilated or defaced Note
shall be surrendered to Borrower upon delivery to Lender of the new
Note. In the case of any destroyed, lost or stolen Note, Lender shall
furnish to Borrower, upon delivery to Lender of the new Note (i)
evidence of the destruction, loss or theft of such Note and (ii) such
security or indemnity as may be reasonably required by Borrower to hold
Borrower harmless.
2.09 Optional Prepayment. Borrower shall not have the right
to prepay Loan in whole or in part, except that: (a) Borrower shall be permitted
to prepay the Loan in its entirety, subject to Section 4.04, upon not less than
30 days' prior irrevocable notice and payment of all accrued and unpaid
interest, (b) Borrower shall be permitted to prepay the Loan in part, subject to
Section 4.04, upon not less than thirty (30) days prior irrevocable notice
pursuant to Section 2.10, (c) Borrower shall give Lender notice of any permitted
prepayment, as provided in Section 4.05 (and, upon the date specified for such
prepayment in any such notice of prepayment, the amount to be prepaid shall
become due and payable hereunder); and (d) each prepayment must be accompanied
by payment of the applicable Exit Fee as specified in Section 2.06 and the
amounts, if any, which may be required pursuant to Section 5.03.
2.10 Partial Prepayments in connection with Sale of
Individual Pad Properties.
(a) Subject to Sections 2.06, 2.09 and 5.03, Borrower will
be permitted to sell an Individual Pad Property and make a partial
prepayment of the Loan in connection with such sale upon the following
terms and conditions:
(i) No Default or Event of Default shall have
occurred and be continuing;
(ii) Borrower shall prepay the Loan in an amount equal
to the Release Price;
(iii) Borrower shall have paid all of Lender's costs
and expenses (including the reasonable fees and expenses of
all attorneys and other consultants retained by Lender)
incurred in connection with Lender's review of such request
for release (whether or not such request is approved) and in
connection with the preparation, negotiation, execution and
delivery of all documents, instruments and agreements
relating thereto;
(iv) Borrower shall pay Lender the Exit Fee required
to be paid and any other amounts payable pursuant to Section
5.03;
(v) The purchaser shall not be an Affiliate of
Borrower;
(vi) Borrower shall have given Lender not less than 30
days' notice of the sale in question together with a copy of
the proposed closing statement (and, at least 2 Business Days
before the closing of the sale in question, Borrower
xxvi
28
shall deliver to Lender, a copy of the final closing
statement, purchase contract and title company disbursement
statement certified as true, correct and complete by an
authorized representative of Borrower with knowledge of the
sale in question);
(vii) Borrower shall pay all accrued and unpaid
interest allocable to the principal prepaid; and
(viii) Borrower shall provide Lender with a certificate
of a Financial Officer on the applicable closing date that
the sale and partial prepayment in question complied with
Section 2.10.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loan. Unless previously accelerated as
permitted by the Loan Documents, the outstanding principal balance of the Loan,
all accrued and unpaid interest thereon and all other sums owing to Lender
pursuant to the Loan Documents, shall be due and payable on the Initial Maturity
Date. Notwithstanding the foregoing, at Borrower's election if the Extension
Conditions are satisfied prior to the Initial Maturity Date, such maturity of
the Loan shall be extended for an additional one year period to the First
Extended Maturity Date, and, also at Borrower's election, if the Extension
Conditions are further satisfied prior to the First Extended Maturity Date, the
maturity of the Loan shall be further extended for an additional one year period
to the Second Extended Maturity Date.
3.02 Interest.
(a) Borrower hereby promises to pay Lender interest on the
unpaid principal amount of the Loan for the period from and including
the date of an advance of the Loan (including the date Loan proceeds
are disbursed to escrow regardless of the date subsequently disbursed)
to but excluding the date such Loan shall be paid in full, at the
applicable Eurodollar Base Rate plus the Applicable Margin except at
such times as the Post-Default Rate applies thereto as set forth in
subsection (b) below.
(b) Notwithstanding the foregoing, Borrower hereby promises
to pay to Lender interest at the Post-Default Rate
(x) on any principal of the Loan and on any other
amount payable by Borrower hereunder or under the Note
or other Loan Documents to or for the account of Lender,
that shall not be paid in full when due (whether at
stated maturity, by acceleration, by mandatory
prepayment or otherwise), for the period from and
including the due date thereof to but excluding the date
the same is paid in full; and
(y) during any period when any Event of Default
shall have occurred and for so long as such Event of
Default shall be continuing.
xxvii
29
(c) Accrued interest shall be payable in arrears (i) monthly
on the tenth (10th) day of each month and (ii) upon the payment or
prepayment but only on the principal amount so paid or prepaid, except
that if interest becomes payable at the Post-Default Rate, such
interest shall be payable from time to time on demand. Promptly after
the determination of any interest rate provided for herein or any
change therein Lender shall give notice thereof to Borrower.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Payments by Borrower. Except to the extent otherwise
provided herein, all payments of principal, interest, and other amounts
to be made by Borrower under this Agreement, the Note, and, except to
the extent otherwise provided therein, all payments to be made by the
Obligors under any Loan Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or
counterclaim, to Lender at an account maintained by Lender not later
than 11:00 A.M., New York City time, on the date on which such payment
shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business
Day).
(b) Lender May Set Off. Lender may debit the amount of any
such payment that is not made by such time to any account of Borrower
with Lender (with notice to Borrower), provided that Lender's failure
to give such notice shall not affect the validity thereof.
(c) Application of Payments. So long as no Event of Default
then exists, payments of principal and interest shall be allocated
between the Tranches pro rata in accordance with the principal balance
of each Tranche immediately prior to the making of the payment. If an
Event of Default has occurred and is continuing, Lender may apply such
payments in such manner as it may determine to be appropriate.
(d) Extension to Next Business Day. If the due date of any
payment under this Agreement or any Loan Document would otherwise fall
on a day that is not a Business Day, such date shall be extended to the
next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
4.02 Late Payment Charge. If any principal, interest or any
other sums due under the Loan Documents is not paid by Borrower on the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid sum or the Maximum Legal Rate in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgages and the
other Loan Documents to the extent permitted by applicable law.
4.03 Computations. Interest shall be computed on the basis of
a year of 360 days and actual days elapsed (including the first day but,
excluding the last day) occurring in the period for which payable.
xxviii
30
4.04 Minimum Amounts. Except for mandatory prepayments made
pursuant to Section 2.10, each borrowing and each prepayment shall be in an
aggregate amount equal to $5,000,000 or a larger integer multiples of
$1,000,000. The foregoing multiples shall not apply to any prepayment of 100% of
the outstanding Loan.
4.05 Certain Notices. Notices by Borrower to Lender of
borrowings, and prepayments, and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received in writing by Lender not
later than 10:30 a.m., New York City time, on the number of days prior to the
date of the relevant borrowing, prepayment, or first day of relevant Interest
Period specified below:
Number of
Notice for Days Prior
---------- ----------
Borrowing of Tranche A 5 Business Days
Borrowing of Tranche B 60
Changes in duration of Interest Period for
Eurodollar Base Rate 2 Business Days
Prepayment 30
Each such Notice of Borrowing or prepayment shall specify, as
applicable, the date on which amount to be borrowed or prepaid is to occur
(which shall be a Business Day). In the event that Borrower fails to timely
select the duration of any Interest Period, the Interest Period commencing
immediately after the end of the then current Interest Period shall be a
one-month Interest Period. Notwithstanding the foregoing, if an Event of Default
shall occur, then, the next Interest Period (and every Interest Period
thereafter, without implying a waiver of any Event of Default) shall, commencing
on the first day of the immediately following Interest Period, be a one-month
Interest Period.
4.06 Selection of Interest Period. Subject to Section 4.05,
Borrower shall be entitled to select the Interest Period except that the
Interest Period commencing on the Effective Date shall be a one-month Interest
Period. Each selection of an Interest Period must be timely received by Lender
as provided in Section 4.05.
4.07 Sharing of Payments, Etc.
(a) Right of Set-off. Each Obligor agrees that, in addition
to (and without limitation of) any right of set-off, banker's lien or
counterclaim Lender may otherwise have, Lender shall be entitled, at
Lender's option (to the fullest extent permitted by law), to set off
and apply any deposit (general or special, time or demand, provisional
or final), or other indebtedness, held by Lender for the credit or
account of such Obligor at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of the Loan
or any other amount payable to Lender hereunder, that is not paid by
the due date and the expiration of any applicable cure period
(regardless of whether such deposit
xxix
31
or other indebtedness is then due to such Obligor), in which case
Lender shall promptly notify such Obligor thereof, provided that
Lender's failure to give such notice shall not affect the validity
thereof.
(b) Rights of Lender; Bankruptcy. Nothing contained herein
shall require Lender to exercise any such right or shall affect the
right of Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation of any
Obligor.
Section 5. Yield Protection, Etc.
5.01 Limitation on Eurodollar Base Rate. Anything herein to
the contrary notwithstanding, if:
(a) Lender determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the Eurodollar Base Rate as
provided herein; or
(b) Lender determines, which determination shall be
conclusive, that the relevant rates of interest referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 upon the basis of
which the rate of interest for Loan for such Interest Period is to be
determined are not likely adequately to cover the cost to Lender of
making or maintaining Loan for the applicable Interest Period at the
Eurodollar Base Rate;
then Lender shall give Borrower prompt notice thereof and, so long as such
condition remains in effect, the Loan shall bear interest with the Eurodollar
Base Rate being deemed to be the Base Rate.
5.02 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Loan to bear interest
at the Eurodollar Base Rate, then Lender shall promptly notify Borrower thereof
and the Loan shall bear interest with the Eurodollar Base Rate being deemed to
be the Base Rate during such period of illegality.
5.03 Compensation. Borrower shall pay to Lender upon the
request of Lender, such amount or amounts as shall be sufficient (in the
reasonable opinion of Lender) to compensate it for any loss, cost or expense
that Lender determines is attributable to:
(a) any change in an Interest Period by reason of the
existence of an Event of Default, any prepayment or conversion from the
Eurodollar Base Rate to the Base Rate for any reason (including the
acceleration of the Loan pursuant to Section 10) on a date other than
the last day of the applicable Interest Period; or
(b) any failure by Borrower for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 to be satisfied) to borrow
xxx
32
Loan proceeds on the date for such borrowing specified in the relevant
Notice of Borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any, of (i) the
amount of interest that otherwise would have accrued on the principal amount so
prepaid, converted or not borrowed for the period from the date of such
prepayment, conversion or failure to borrow to the last day of the then current
Interest Period at the applicable rate of interest for the Loan provided for
herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a Eurodollar Base Rate per annum equal to the
Eurodollar Base Rate that would have been in effect for a one-month Interest
Period commencing on the date of the prepayment, conversion or failure to borrow
in question. A certificate of Lender setting forth any amount or amounts that
Lender is entitled to receive pursuant to this Section shall be delivered to
Borrower and shall be conclusive absent manifest error.
Section 6. Guarantee.
6.01 The Guarantee. The Subsidiary Guarantors hereby jointly
and severally guarantee to Lender and its respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loan made by Lender to, and
the Note held by Lender of, Borrower and all other amounts from time to time
owing to Lender by Borrower or any other Obligor under this Agreement, the Note
and any of the other Loan Documents, in each case strictly in accordance with
the terms hereof or thereof (such obligations being herein collectively called
the "Guaranteed Obligations"). The Subsidiary Guarantors hereby further jointly
and severally agree that if Borrower shall fail to pay in full when due (whether
at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Subsidiary Guarantors will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 6.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of Borrower under this Agreement, the Note or
any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder,
which shall remain absolute and unconditional as described above:
xxxi
33
(i) at any time or from time to time, without notice
to the Subsidiary Guarantors, the time for any performance of
or compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any the acts mentioned in any of the provisions of
this Agreement or the Note or any other agreement or
instrument referred to herein or therein shall be done or
omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations
shall be modified, supplemented or amended in any respect, or
any right under this Agreement or the Note or any other
agreement or instrument referred to herein or therein shall
be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in
favor of, Lender as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that Lender exhaust any right, power or remedy or proceed against
Borrower under this Agreement or the Note or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Subsidiary
Guarantors under this Section 6 shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of Borrower in respect of
the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary
Guarantors jointly and severally agree that they will indemnify Lender on demand
for all reasonable costs and expenses (including fees of counsel) incurred by
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
6.04 Subrogation. The Subsidiary Guarantors hereby jointly
and severally agree that until the indefeasible payment and satisfaction in full
of all Guaranteed Obligations they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 6.01,
whether by subrogation or otherwise, against Borrower or any other guarantor of
any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
6.05 Remedies. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and Lender, the
obligations of Borrower under this Agreement, the Note and the other Loan
Documents may be declared to be forthwith due and
xxxii
34
payable as provided in Section 10 (and shall be deemed to have become
automatically due and payable in the circumstances provided in Section 10) for
purposes of Section 6.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by Borrower)
shall forthwith become due and payable by the Subsidiary Guarantors for purposes
of Section 6.01.
6.06 Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Section 6 constitutes
an instrument for the payment of money, and consents and agrees that Lender, at
its sole option, in the event of a dispute by such Subsidiary Guarantor in the
payment of any moneys due hereunder, shall have the right to bring motions
and/or actions under
New York CPLR Section 3213.
6.07 Continuing Guarantee. The guarantee in this Section 6 is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.08 Rights of Contribution. The Subsidiary Guarantors and
Borrower hereby agree, as between themselves, that if any Subsidiary Guarantor
shall become an Excess Funding Guarantor (as defined below) by reason of the
payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor and Borrower shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Subsidiary Guarantor's or Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the Properties, debts and liabilities of such Excess Funding Guarantor) of the
Excess Payment (as defined below) in respect of such Guaranteed Obligations. The
payment obligation of a Subsidiary Guarantor and Borrower to any Excess Funding
Guarantor under this Section 6.08 shall be subordinate and subject in right of
payment to the prior payment in full of the obligations of (a) such Subsidiary
Guarantor under the other provisions of this Section 6 and (b) Borrower under
the Loan Documents, and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations.
For purposes of this Section 6.08, (i) "Excess Funding Guarantor"
means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "Excess Payment" means, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) "Pro Rata Share" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all Properties of such Subsidiary
Guarantor (excluding any shares of stock of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all Properties of Borrower and all of the Subsidiary Guarantors exceeds
the amount of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the
xxxiii
35
obligations of Borrower and the Subsidiary Guarantors hereunder and under the
other Loan Documents) of Borrower and all of the Subsidiary Guarantors,
determined (A) with respect to any Subsidiary Guarantor that is a party hereto
on the Closing Date, as of the Closing Date, and (B) with respect to any other
Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
6.09 General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 would otherwise, taking into account the provisions of Section
6.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 6.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, Lender, or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
6.10 California Waivers.
(a) Each Subsidiary Guarantor's liability hereunder is a
guaranty of payment and performance and is not conditioned or
contingent upon the genuineness, validity, regularity or enforceability
of any of the provisions of the Loan Documents, and each Subsidiary
Guarantor hereby waives any and all rights, defenses and benefits under
the California Code of Civil Procedure ("CC") Section 2810 and agrees
that by doing so such Subsidiary Guarantor is liable even if Borrower
had no liability at the time of execution of the Loan Documents or
thereafter ceases to be liable. Each Subsidiary Guarantor hereby waives
any and all rights, defenses and benefits under CC Section 2809 and
agrees that each Subsidiary Guarantor's obligations under this Guaranty
are independent of the obligations of Borrower. Each Subsidiary
Guarantor hereby waives any and all rights, defenses and benefits such
Subsidiary Guarantor may now or hereafter have, under CC Section 2815
or otherwise, to revoke this guaranty. Each Subsidiary Guarantor
further hereby waives any and all rights, defenses and benefits that
such Subsidiary Guarantor may now or hereafter have, under CC Section
2819, 2825 or otherwise, arising out of any release or discharge of
Borrower, in whole or in part, from Borrower's liabilities and/or
obligations under the Loan Documents.
(b) Each Subsidiary Guarantor hereby waives any and all
rights, defenses and benefits under CC Section 2845, 2849 and 2850,
including, without limitation, the right to require Lender to (a)
proceed against any other guarantor, (b) proceed against or exhaust any
security or collateral Lender may hold, or (c) pursue any other right
or remedy for such Subsidiary Guarantor's benefit, and agrees that
Lender may proceed against each Subsidiary Guarantor for the Guaranteed
Obligations without taking any action against any other guarantor and
without proceeding against or exhausting any security or collateral
Lender holds. Each Subsidiary Guarantor agrees that Lender may
unqualifiedly exercise in its sole discretion any or all rights and
remedies available to it against any other guarantor without impairing
Lender's rights and remedies in enforcing
xxxiv
36
this guaranty, under which each Subsidiary Guarantor's liabilities
shall remain independent and unconditional. Each Subsidiary Guarantor
agrees that Lender's exercise of certain of such rights or remedies may
affect or eliminate such Subsidiary Guarantor's right of subrogation or
recovery against Borrower and that each Subsidiary Guarantor may incur
a partially or totally nonreimbursable liability under this guaranty.
(c) Each Subsidiary Guarantor hereby waives all rights,
defenses and benefits under CC Sections 2847, 2848 and 2849 and agrees
that it shall have no right of subrogation or reimbursement against
Borrower, and no right of subrogation against any collateral or
security provided for in the Loan Documents and no right of
contribution against any other guarantor. To the extent each Subsidiary
Guarantor's waiver of these rights of subrogation, reimbursement or
contribution as set forth herein are found by a court of competent
jurisdiction to be void or voidable for any reason, each Subsidiary
Guarantor agrees that its rights of subrogation and reimbursement
against Borrower and such Subsidiary Guarantor's right of subrogation
against any collateral or security shall be junior and subordinate to
Lender's rights against Borrower and to Lender's right, title and
interest in such collateral or security, and each Subsidiary
Guarantor's right of contribution against any other guarantor shall be
junior and subordinate to Lender's rights against such other guarantor.
(d) Without limitation, each Subsidiary Guarantor hereby
waives any and all of its rights of subrogation, reimbursement,
indemnification, and contribution and any other rights and defenses
that are or may become available to each Subsidiary Guarantor by reason
of any of the following: Sections 2787 through 2855 of the California
Civil Code. Without limitation, each Subsidiary Guarantor waives all
rights and defenses that such Subsidiary Guarantor may have because the
Borrower's debt to Lender is secured by real property. This means,
among other things:
(i) Lender may collect from each Subsidiary Guarantor
without first foreclosing on any real or personal property
collateral pledged by the Borrower; and
(ii) If Lender forecloses on any real property
collateral pledged by Borrower:
(A) the amount of the debt of Borrower to Lender
may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price; and
(B) Lender may collect from each Subsidiary
Guarantor even if Lender, by foreclosing on the real property collateral, has
destroyed any right any Subsidiary Guarantor may have to collect from Borrower.
This is an unconditional and irrevocable waiver of any rights and defenses each
Subsidiary Guarantor may have because the Borrower's debt to Lender is secured
by real property. These rights and defenses include, but are not limited to, any
rights or defenses based upon Section 580a, 580b, 580d or 726 of the Code of
Civil Procedure.
xxxv
37
Section 7. Conditions.
7.01 Effective Date. The obligation of Lender to make the
initial disbursement of the Loan is subject to (i) the satisfaction, immediately
prior to or concurrent with the Effective Date of the following conditions
precedent and (ii) Lender having received the following documents, each of which
shall be satisfactory to Lender in form and substance:
(a) Agreement. From each party to this Agreement, a duly
executed counterpart of this Agreement.
(b) Opinions of Counsel to the Obligors. Lender shall have
received opinions of Obligor's counsel with respect to due execution,
authority, enforceability of the Loan Documents and such other matters
as Lender may require, all such opinions in form, scope and substance
satisfactory to Lender and Lender's counsel in their sole discretion.
(c) Organizational Documents. With respect to each of the
Obligors and the Securitized Property Owner, its declaration of trust
or certificate of incorporation (or equivalent organizational
document), as applicable, as filed with the Secretary of State in the
respective jurisdiction of organization and in effect on the Effective
Date and certified to be true, correct and complete by the appropriate
Secretary of State as of a date not more than 10 days prior to the
Effective Date, together with a good standing certificate (or the
equivalent thereof) for (i) each such entity from the applicable
Secretary of State for the state in which it was organized, and (ii)
with respect to the Obligors and the Securitized Property Owner, each
state in which the respective Obligor or Securitized Property Owner
owns or ground leases an Initial Property.
(d) Certified Resolutions, etc. A certificate of the
secretary or assistant secretary of each Obligor dated the Effective
Date, certifying (i) the names and true signatures of its incumbent
officers authorized to sign the applicable Loan Documents or other
documents required by Lender, (ii) the declaration of trust, by-laws or
equivalent organizational documents, as the case may be, as in effect
on the Effective Date and (iii) the resolutions of the board of
trustees, directors or members, as the case may be, of each Obligor
approving and authorizing the execution, delivery and performance of
all Loan Documents or other documents required by Lender.
(e) Officer's Certificate. A certificate of the President or
a Financial Officer of Borrower, dated the Effective Date, confirming
compliance with the conditions set forth in the lettered clauses (a)
and (b) of the first sentence of Section 7.02.
(f) Note. The Note, duly completed and executed by Borrower.
(g) Insurance. Evidence of insurance issued on behalf of
Borrower, another Obligor, the tenant under any Qualified Lease,
evidencing the existence of all insurance required to be maintained by
Borrower pursuant to this Agreement, such evidence to be in such form
and contain such information as is specified in this Agreement. In
addition, Borrower shall have delivered a certificate of a Financial
Officer of Borrower setting
xxxvi
38
forth the insurance obtained by it in accordance with the requirements
of this Agreement and stating that such insurance is in full force and
effect and that all premiums then due and payable thereon have been
paid.
(h) Loan Documents. The following Loan Documents: (i)
Mortgages on the Megaplex Properties; (ii) the Assignments of Leases on
the Megaplex Properties; (iii) the Pledge Agreement; and (iv) Cash
Management Agreement.
(i) Financial Statements. Lender shall have received such
financial statements of Borrower (pro forma) as it shall deem
necessary, in each case satisfactory to Lender.
(j) Mortgages, Assignments of Leases. Lender shall have
received evidence that counterparts of the Mortgages and Assignments of
Leases have been delivered to the title company for recording, in the
reasonable judgment of Lender, so as to effectively create upon such
recording a valid and enforceable Lien upon each of the Initial
Megaplex Properties, with first priority, in favor of Lender (or such
other trustee as may be required or desired under local law), subject
only to the Permitted Encumbrances.
(k) Title Insurance. Lender shall have received title
insurance policies issued by a title company acceptable to Lender and
dated as of the Effective Date, with reinsurance and direct access
agreements acceptable to Lender. Such title insurance policies shall
(i) provide coverage in amounts satisfactory to Lender, (ii) insure
Lender that the relevant Mortgages create a valid first priority lien
on the Individual Megaplex Properties encumbered thereby, including on
the fee (ground lessor's fee interest) for the Woodridge, Illinois
location, of the requisite priority, free and clear of all exceptions
from coverage other than Permitted Encumbrances and standard exceptions
and exclusions from coverage (as modified by the terms of any
endorsements), (iii) contain such endorsements and affirmative
coverages as Lender may reasonably request, and (iv) name Lender as the
insured. The title insurance policies shall be assignable. Lender also
shall have received evidence that all premiums in respect of such title
insurance policies have been paid. Lender shall also receive (1) copies
of EPT DownREIT Inc.'s owner's title insurance policies insuring the
Initial Pad Properties certified true, complete, correct, and without
notice of claim or defense by a Financial Officer of Megaplex Owner,
and (2) copies of Securitized Property Owner's owner's title insurance
policies insuring the Initial Securitized Properties certified true,
complete, correct, and without notices of claim or defense by a
Financial Officer of Archon SPE Holdings.
(l) Survey. Lender shall have received a current title
survey for each Individual Megaplex Property, certified to the title
company and Lender and their successors and assigns, in form and
content satisfactory to Lender and prepared by a professional and
properly licensed land surveyor satisfactory to Lender. Additionally,
Lender shall have received copies of the most recently available survey
for each of the Initial Pad Properties.
(m) Environmental Reports and Engineering Reports. Lender
shall have received a Phase I Environmental Report (and, if
recommended by the Phase I
xxxvii
39
environmental report, a Phase II environmental report) and Engineering
Report in respect of each of the Initial Megaplex Properties and, to
the extent available, Initial Pad Properties, in each case satisfactory
in form and substance to Lender.
(n) Zoning. With respect to each Initial Megaplex Property,
Lender shall have received, at Lender's option, either (i) (A) letters
or other evidence with respect to each Megaplex Property from the
appropriate municipal authorities (or other Persons) concerning
applicable zoning and building laws, or (B) an ALTA 3.1 zoning
endorsement for the applicable Title Insurance Policy or (ii) a zoning
opinion letter, in each case in substance reasonably satisfactory to
Lender.
(o) Encumbrances. Borrower shall have taken or caused to be
taken such actions in such a manner so that Lender has a valid and
perfected first Lien as of the Effective Date with respect to each
Mortgage on the applicable Initial Megaplex Properties, subject only to
applicable Permitted Encumbrances and such other liens as are permitted
pursuant to the Loan Documents, and Lender shall have received
satisfactory evidence thereof.
(p) Related Documents. Each additional document not
specifically referenced herein, but relating to the transactions
contemplated herein, shall be in form and substance satisfactory to
Lender, and shall have been duly authorized, executed and delivered by
all parties thereto and Lender shall have received and approved
certified copies thereof.
(q) Budgets. Borrower shall have delivered the Annual Budget
for the Initial Megaplex Properties and Initial Pad Properties current
Fiscal Year.
(r) Basic Carrying Costs. Borrower shall have paid, or shall
have caused the tenants of Qualified Leases to have paid, all (a)
insurance premiums for current periods relating to the Initial Megaplex
Properties and Initial Pad Properties, (b) currently due taxes
(including any in arrears) relating to the Initial Megaplex Properties
and Initial Pad Properties, and (c) currently due other charges
relating to the Initial Megaplex Properties and Initial Pad Properties,
which amounts shall be funded with proceeds of the Loan.
(s) Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all
documents incidental thereto shall be satisfactory in form and
substance to Lender, and Lender shall have received all such
counterpart originals or certified copies of such documents as Lender
may reasonably request.
(t) Payments. All payments, deposits or escrows required to
be made or established by Borrower or the other Obligors under this
Agreement, the Note and the other Loan Documents on or before the
Closing Date shall have been paid.
(u) Ground Lessor Estoppels. Lender shall have received an
executed ground lessor estoppel letter, which shall be in form and
substance satisfactory to the Lender,
xxxviii
40
from each of the ground lessors under the Qualified Ground Leases
pertaining to the Initial Megaplex Properties.
(v) Tenant Estoppels. Lender shall have received an executed
tenant estoppel letter, which shall be in form and substance
satisfactory to Lender, from each tenant under Qualified Leases of the
Initial Megaplex Properties (specifically excluding the tenant at the
Woodridge property) and all guarantors of such leases.
(w) Transaction Costs. Borrower shall have paid or
reimbursed Lender for all title insurance premiums, recording and
filing fees, costs of environmental reports, Engineering Reports,
Environmental Reports, and other reports, the fees and costs of
Lender's counsel and all other third party out-of-pocket expenses
incurred in connection with the origination of the Loan.
(x) Material Adverse Change. There shall have been no
material adverse change in the financial condition or business
condition of any Obligor, any tenant (specifically excluding the tenant
at the Woodridge property) under a Qualified Lease, any parent,
principal or guarantor of any tenant under a Qualified Lease since the
date of the most recent financial statements delivered to Lender. The
income and expenses of the Initial Properties, the occupancy leases
thereof, and all other features of the transaction shall be as
represented to Lender without material adverse change since the date of
the most recent financial statements delivered to Lender. None of
Borrower, its constituent Persons, or any Obligor shall be the subject
of any bankruptcy, reorganization, or insolvency proceeding.
(y) Leases and Rent Roll. Lender shall have received copies
of all tenant leases, certified copies of the leases of the Individual
Owned Properties and certified copies of all ground leases of the
Individual Owned Properties. Lender shall have received a current
certified rent roll of the Individual Owned Properties, reasonably
satisfactory in form and substance to Lender.
(z) Subordination and Attornment. Lender shall have received
appropriate instruments acceptable to Lender subordinating all of the
Qualified Leases affecting the Megaplex Properties (specifically
excluding the tenant at the Woodridge property) to the Mortgages on the
Megaplex Properties. Lender shall have received an agreement to attorn
to Lender satisfactory to Lender from any tenant under a Qualified
Lease that does not provide for such attornment by its terms.
(aa) Tax Lot. Lender shall have received evidence that each
Individual Owned Property constitutes one (1) or more separate tax
lots, which evidence shall be reasonably satisfactory in form and
substance to Lender.
(bb) Engineering Reports. Lender shall have received
Engineering Reports with respect to each Individual Owned Property,
which reports shall be satisfactory in form and substance to Lender and
the Rating Agencies.
xxxix
41
(cc) Inventory. Lender shall have received a complete
inventory, if any, of the fixtures and equipment present at each
Individual Megaplex Property or used in connection with each Individual
Megaplex Property, indicating the owner of each item and its location
(if other than on the site of the related Individual Megaplex
Property); provided, however, that such information with respect to
fixtures and equipment owned, leased or otherwise supplied by the
related tenant shall only be required to the extent such information
has been made available to Borrower or any of its Affiliates.
(dd) [INTENTIONALLY OMITTED]
(ee) Cash Management Agreement. Lender shall have received
evidence that all accounts have been set up as required by the Cash
Management Agreement.
(ff) Certificates of Occupancy. Copies of certificates of
occupancy (certified by a Financial Officer of Megaplex Owner) covering
each of the Initial Megaplex Properties and Initial Pad Properties.
(gg) Purchase Options. Copies of Ground Leases containing the
purchase options for the fee owner's interest in the properties
encumbered by the Ground Leases, and all agreements related thereto,
certified true, correct, complete and without default by a Financial
Officer of Megaplex Owner.
(hh) Solvency. A certificate of a Financial Officer of
Borrower, to the effect that after giving effect to the borrowings
hereunder, none of Borrower and its Subsidiaries (on a consolidated
basis) is insolvent or will be left with unreasonably small capital
with which to engage in its business or will have incurred debts beyond
its ability to pay such debts as they mature, together with a pro forma
balance sheet evidencing the same.
(ii) Checklist Items. All other deliveries, without
duplication, set forth on the closing checklist attached hereto as
Exhibit H.
7.02 Initial and Subsequent Extensions of Credit. The
obligation of Lender to advance any proceeds of the Loan, which advance, at
Lender's election, may be required to be made through an escrow with a title
insurance company, is subject to the further satisfaction of the following
conditions precedent (both immediately prior to the making of such advance and
also after giving effect thereto and to the intended use thereof), each of which
shall be satisfactory to Lender:
(a) the representations and warranties made by Borrower in
the Loan Documents and by each Obligor in each of the Loan Documents to
which it is a party shall be true and complete on and as of the date of
the making of such Loan with the same force and effect as if made on
and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date);
(b) no Default or Event of Default shall have occurred and
be continuing;
xl
42
(c) Lender shall have received a Notice of Borrowing
pursuant to Section 4.05 in the case of a requested Loan disbursement;
(d) Lender shall have received a completed Borrowing
Certificate signed by a Financial Officer setting forth computations
evidencing compliance with the covenants contained in Sections 9.07,
9.08, 9.09, 9.10, and 9.11;
(e) Lender shall have received a certificate from the
Financial Officer that (i) there has been no material adverse change in
the financial condition or business condition of any Obligor, any
tenant (specifically excluding the tenant at the Woodridge property)
under a Qualified Lease, any parent, principal or guarantor of any
tenant under a Qualified Lease since the date of the most recent
financial statements delivered to Lender and (ii) after giving effect
to the advance of the Loan proceeds and transactions related thereto
shall not have a material adverse effect on any of the foregoing; and
(f) On or before the second advance of any proceeds of the
Loan, Borrower shall have presented a plan acceptable to Lender in its
reasonable discretion (a "Woodridge FF&E Plan") as to how to have
adequate furniture, fixtures and equipment to operate the property at
the Woodridge location (which was the property under the Loews Lease)
for a tenant or operator to enter into a Qualified Lease to operate
such property as a reasonably comparable theater property and
consistent with the other Megaplex Properties. The parties acknowledge
such plan may include or be based upon a settlement relating to the
Loews Lease or may require funds to be escrowed for such expenses.
Each Notice of Borrowing shall constitute a certification by Borrower
to the effect set forth in clauses (a) and (b) in the preceding sentence (both
as of the date of such notice or request and, unless Borrower otherwise notifies
Lender in writing prior to the date of such borrowing, as of the date of such
borrowing).
7.03 Addition of Eligible Properties. Borrower's right to
borrow Loan proceeds to fund costs of Megaplex Owner acquiring any additional
Real Estate Properties is subject to (i) the condition precedent that Lender has
received a Notice of Borrowing as required by Section 4.05 and Borrower classify
such Real Estate Property in a written notice to Lender as either a Pad Property
or Multiplex Property for purposes of this Agreement, which classification must
be acceptable to Lender (and following such acquisition such property shall
thereafter be included in the definition of Pad Property or Multiplex Property,
as approved by Lender), and (ii) the requirement that Lender receive the
following, as applicable, within the time periods below:
(a) If the Real Estate Property being acquired will be, upon
acquisition, or is thereafter intended to be subject to a loan secured
by a first priority mortgage or deed of trust (each such Real Estate
Property is herein called a "Prior Encumbered Parcel"), then:
(1) Borrower shall cause Megaplex Owner to form a new
wholly owned, single purpose subsidiary in form reasonably
satisfactory to Lender (each a "Megaplex SPE"); and
xli
43
(2) Borrower shall cause Megaplex Owner to pledge and
grant a security interest to Lender in and to all of the
outstanding stock, partnership interests, or membership
interests, as the case may be, which Megaplex Owner owns in
such single purpose subsidiary, which pledge and security
agreement and related documents shall be in form acceptable
to Lender and be fully executed and delivered prior to the
acquisition of such Prior Encumbered Parcel; and
(3) Once the conditions in (a)(1) and (a)(2) above are
satisfied, the applicable Megaplex SPE can acquire the Prior
Encumbered Parcel; and
(4) Within 30 days following the acquisition by such
Megaplex SPE of the Prior Encumbered Parcel, Borrower shall
cause Megaplex Owner to deliver to Lender a copy, certified
by a Financial Officer to be true, complete, and correct, of
the closing binder(s) relating to the acquisition, leasing,
and financing of such Prior Encumbered Parcel, such closing
binders to contain, at a minimum, copies of the owner's title
insurance policy, survey, applicable lease, financing
documents, and such other documents and instruments as Lender
may reasonably request.
(b) If the Real Estate Property being acquired will not be a
Prior Encumbered Parcel (each such Real Estate Property is herein
called an "Unencumbered Parcel") and such Unencumbered Parcel will not
be subject to a lease, then Borrower shall cause Megaplex Owner to
acquire such Unencumbered Parcel directly in Megaplex Owner's name and
deliver to Lender such information related thereto as Lender may
reasonably request.
(c) If the Real Estate Property being acquired is an
Unencumbered Parcel which will be subject to a lease, then (1) only if
the Real Estate Property is a Megaplex Property then such lease must be
a Qualified Lease, (2) such Unencumbered Parcel shall be acquired
directly in Megaplex Owner's name, and (3) upon such acquisition, or
within five (5) business days following such acquisition, Borrower
shall cause Megaplex Owner to grant a mortgage or deed of trust, in
form and amount acceptable to Lender, to be recorded in Lender's favor
against such Unencumbered Parcel and deliver evidence thereof, together
with a copy of the owner's title insurance policy and survey for such
Unencumbered Parcel to Lender (all within such five (5) business day
period), together with such other information relating thereto as
Lender may reasonably request.
7.04 Cap Agreement and Assignment of Cap Agreement.
(a) As used herein, an "Advance Date" means any date when
Lender advances proceeds of the Loan to or for the benefit of Borrower,
including the initial advance of Loan proceeds on the Effective Date.
(b) Except to the extent provided pursuant to Section 7.04(c)
below, within 45 days following each Advance Date, Borrower shall
provide Lender with evidence that a Cap Agreement on a notional amount
equal to fifty percent (50.0%) of the principal
xlii
44
amount of the Loan outstanding (as of the Advance Date to which it
relates) is in effect, fully paid for and assigned by an Assignment of
Cap Agreement in favor of Lender.
(c) At any time throughout the term of the Loan, if Lender
provides Borrower with written notice that (i) Lender intends to enter
into a Securitization (as defined in Section 12.07) and (ii) demands
that Borrower provide Lender within such time period as Lender
requests, but in no event less than thirty (30) days following such
notice, with evidence that a Cap Agreement on a notional amount equal
to one hundred percent (100.0%) of the principal amount of Loan
outstanding (as of the date of such notice and thereafter increasing
either prior to or contemporaneously with any future Advance Date) is
in effect, fully paid for and assigned by an Assignment of Cap
Agreement in favor of Lender, Borrower shall comply with such demand,
in accordance with its terms and this Agreement.
(d) If Borrower fails to timely provide any Cap Agreement or
Assignment of Cap Agreement as required by this Agreement, Lender shall
have the right, but not the obligation, to purchase (in the name of
Borrower or Lender) the required Cap Agreement and cause it to be
assigned for Lender's benefit pursuant to an Assignment of Cap
Agreement, to the extent applicable, and pay for or be reimbursed, as
applicable, for the costs and expenses related thereto out of cash
otherwise distributable to Borrower under the Cash Management
Agreement, prior to any payments being made to Borrower thereunder.
Borrower hereby consents to and directs that such payments be made
prior to any distributions being made to Borrower.
Section 8. Representations and Warranties. Borrower represents and
warrants, and, as applicable, covenants, to the Lender that:
8.01 Organization; Powers.
(a) Borrower (i) is a real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland; (ii) has all requisite real estate investment trust
power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its
business as now being or as proposed to be conducted; and (iii) is
qualified to do business and is in good standing in all jurisdictions
in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.
(b) Each of Borrower's Subsidiaries: (i) is a corporation,
partnership, limited liability company or other entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization; (ii) has all requisite corporate or
other power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and
(iii) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify could
(either individually or in the aggregate) have a Material Adverse
Effect.
xliii
45
(c) Borrower's U.S. taxpayer identification number is
▇▇-▇▇▇▇▇▇▇. Megaplex Owner's U.S. taxpayer identification number is
43-192287.
(d) Borrower's and each other Obligors' chief executive
office and principal place of business is Union Station, ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and none of the Obligors
has had no other chief executive office or principal place of business
other than Union Station, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(e) No Obligor has used, or uses, any trade name or
fictitious name.
(f) The organizational chart for Borrower and all
Subsidiaries attached hereto as Schedule 8.01(f) is true, complete and
correct.
8.02 Authorization; Enforceability. Each Obligor has all
necessary real estate investment trust, corporate, partnership, limited
liability company or other organizational, as applicable, power, authority and
legal right, to execute, deliver and perform its obligations under each of the
Loan Documents to which it is a party; the execution, delivery and performance
by each Obligor of each of the Loan Documents to which it is a party have been
duly authorized by all necessary corporate or other organizational, as
applicable, action on its part (including any required shareholder approvals);
and this Agreement has been duly and validly executed and delivered by each
Obligor and constitutes, and each of the Loan Documents when executed and
delivered (in the case of the Note, for value) by such Obligor, as applicable,
will constitute, each of their legal, valid and binding obligation, enforceable
against each Obligor, as applicable, in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
8.03 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or regulatory
authority or agency, or any securities exchange, are necessary for the
execution, delivery or performance by any Obligor of this Agreement or any of
the other Loan Documents to which each is a party or for the legality, validity
or enforceability hereof or thereof.
8.04 No Breach. None of the execution and delivery of this
Agreement and the other Loan Documents, the consummation of the transactions
herein and therein contemplated or compliance with the terms and provisions
hereof and thereof will conflict with or result in a breach of, or require any
consent under, the declaration of trust or by-laws (or equivalent organizational
documents) of any Obligor or any applicable law or regulation, or any order,
writ, injunction or decree of any court or Governmental Authority, or any
agreement or instrument to which any Obligor is a party or by which any of them
or any of their Property is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any Property of any Obligor pursuant to
the terms of any such agreement or instrument.
xliv
46
8.05 Financial Condition; No Material Adverse Change.
(a) Financial Condition. Borrower has heretofore furnished
to Lender Borrower's most recent audited consolidated financial
statements and (ii) a pro forma balance sheet, giving effect to the
transactions occurring on the Effective Date. Such audited statements
and pro forma balance sheet are complete and correct and fairly present
the actual, as the case may be, consolidated financial condition of
Borrower as of the dates thereof. None of Borrower and its Subsidiaries
has on the date hereof any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred
to or reflected or provided for in such statements and balance sheet as
at such date.
(b) No Material Adverse Change-Borrower. Since December 31,
2000, there has been no material adverse change in the consolidated
financial condition, operations, business or prospects taken as a whole
of Borrower and its Subsidiaries from that set forth in the balance
sheets and financial statements as at such date referred to in clause
(a) of this Section 8.05.
8.06 Properties.
(a) Property Generally. Each Obligor owns and has on the
date hereof, and will own and have on the Effective Date (after giving
effect to the transactions contemplated to occur on or before the
Effective Date), good and marketable title or leasehold title (subject
only to Permitted Liens) to its Properties, including good and
marketable fee simple title or leasehold title (pursuant to a Qualified
Ground Lease) to its respective Properties, subject in each case only
to Permitted Liens on the Effective Date. Megaplex Owner has good and
marketable title to the Initial Megaplex Properties and the Initial Pad
Properties. Borrower is the sole owner of all of the issued and
outstanding stock in Megaplex Owner. Securitized Property Owner has
good and marketable title to the Initial Securitized Properties. Archon
SPE Holdings is the sole owner of all of the issued and outstanding
stock in Securitized Property Owner. Megaplex Owner is the sole
shareholder in Archon SPE Holdings.
(b) Intellectual Property. Each of Borrower and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its
business, and the use thereof by Borrower and its Subsidiaries does not
infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
8.07 Litigation. Except as disclosed in Schedule 8.07 hereto
and with respect to the Lease Agreement originally between Catellus Development
Corporation, as landlord, and Loews Gurnee ▇▇▇▇▇ Cinemas, Inc., as tenant dated
7-7-97 (as heretofore assigned and amended the "Loews Lease"), there are no
legal or arbitral proceedings, or any proceedings by or before any Governmental
Authority or regulatory authority or agency, now pending or (to the
xlv
47
knowledge of Borrower) threatened against Borrower or any of its Subsidiaries
that, if adversely determined, could (either individually or in the aggregate)
have a Material Adverse Effect.
8.08 Environmental Matters. Each of Borrower and its
Subsidiaries or, as applicable, the tenant under a Qualified Lease, has obtained
all environmental, health and safety permits, licenses and other authorizations
required under all Environmental Laws to carry on its business as now being or
as proposed to be conducted, except to the extent failure to have any such
permit, license or authorization would not (either individually or in the
aggregate) have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of Borrower, its
Subsidiaries and (to the best of Borrower's knowledge) the Properties are in
compliance with the terms and conditions thereof, and is also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply therewith would not (either
individually or in the aggregate) have a Material Adverse Effect. In addition,
except as set forth in Schedule 8.08:
(a) No Pending Environmental Matters. No notice,
notification, demand, request for information, citation, summons or
order has been issued, no complaint has been filed, no penalty has been
assessed and no investigation or review is pending or threatened by any
Governmental Authority or other entity with respect to any alleged
failure by Borrower, any of its Subsidiaries or, to the best of
Borrower's knowledge, any lessee of a Real Estate Property to have any
environmental permit, license or other authorization required under any
Environmental Law in connection with the conduct of the business of
Borrower or any of its Subsidiaries or the Real Estate Properties
leased by any such lessee, or with respect to any generation,
treatment, storage, recycling, transportation, discharge or disposal,
or any Release of any Hazardous Materials generated by Borrower, any of
its Subsidiaries or, to Borrower's best knowledge, any such lessee in
connection with any Real Estate Property.
(b) No Permits Required; Certain Specific Representations.
None of Borrower, any of its Subsidiaries or, to the best of Borrower's
knowledge, any lessee of a Real Estate Property (in the case of such
lessee with respect to such Real Estate Property only) owns, operates
or leases a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act of 1976, as amended,
or under any comparable state or local statute, and to the best of
Borrower's knowledge:
(i) no polychlorinated biphenyls (PCB's) are or have
been present at any site or facility now or previously owned,
operated or leased by Borrower or any of its Subsidiaries;
(ii) no asbestos or asbestos-containing materials is or
has been present at any site or facility now or previously
owned, operated or leased by Borrower or any of its
Subsidiaries;
xlvi
48
(iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials, active or abandoned, at
any site or facility now or previously owned, operated or
leased by Borrower or any of its Subsidiaries;
(iv) no Hazardous Materials have been Released by
Borrower, or to the best of Borrower's knowledge, any other
Person at, on or under any site or facility owned, operated
or leased by Borrower or any of its Subsidiaries in a
reportable quantity established by statute, ordinance, rule,
regulation or order; and
(v) no Hazardous Materials have been otherwise
Released by Borrower or, to the best of Borrower's knowledge,
any other Person at, on or under any site or facility owned,
operated or leased by Borrower or any of its Subsidiaries
that would (either individually or in the aggregate) have a
Material Adverse Effect.
(c) No Hazardous Material Transported to NPL Sites. Neither
Borrower nor any of its Subsidiaries has transported or arranged for
the transportation of any Hazardous Material to any location that is
listed on the National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the NPL by the
Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or
that is the subject of Federal, state or local enforcement actions or
other investigations that may lead to Environmental Claims against
Borrower or any of its Subsidiaries.
(d) No Other Locations. No Hazardous Material generated by
Borrower or any of its Subsidiaries has been recycled, treated, stored,
disposed of or Released by Borrower or any of its Subsidiaries at any
location.
(e) No Notifications or Listings. No written notification of
a Release of a Hazardous Material has been filed by or on behalf of
Borrower or any of its Subsidiaries and, to the best of Borrower's
knowledge, no site or facility now or previously owned, operated or
leased by Borrower or any of its Subsidiaries is listed or proposed for
listing on the NPL, CERCLIS or any similar state list of sites
requiring investigation or clean-up.
(f) No Liens or Restrictions. To the best of Borrower's
knowledge, no Liens have arisen under or pursuant to any Environmental
Laws on any site or facility owned, operated or leased by Borrower or
any of its Subsidiaries and no Governmental Authority action has been
taken or is in process that could subject any such site or facility to
such Liens and none of Borrower or any of its Subsidiaries has been
required to place any notice or restriction relating to the presence of
Hazardous Materials at any site or facility owned by it in any deed to
the real property on which such site or facility is located.
xlvii
49
(g) Full Disclosure. All environmental investigations,
studies, audits, tests, reviews or other analyses that are in the
possession of Borrower, any of its Subsidiaries or any of its
Partially-Owned Entities in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously
owned, operated or leased by Borrower or any of its Subsidiaries have
been made available to Lender.
8.09 Compliance with Laws and Agreements. Each of Borrower,
its Subsidiaries and, to Borrower's best knowledge, the Properties is in
compliance with all laws, regulations and orders of any Governmental Authority
or regulatory authority or agency applicable to it or its Property and all
indentures, agreements and other instruments binding upon it or its Property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
8.10 Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
8.11 Public Utility Holding Company Act. Neither Borrower nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
8.12 Taxes. Borrower and its Subsidiaries have filed all
Federal income tax returns and all other tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by Borrower or any of its Subsidiaries. The charges,
accruals and reserves on the books of Borrower and its Subsidiaries in respect
of taxes and other governmental charges are, in the opinion of Borrower,
adequate. Borrower has not given or been requested to give a waiver of the
statute of limitations relating to the payment of any Federal, state, local and
foreign taxes or other impositions. All of the Borrower's Subsidiaries are
qualified REIT subsidiaries (as defined in the Code) and are not subject to
state or federal income or analogous taxes.
8.13 ERISA. Each Plan, and, to the knowledge of Borrower,
each Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no ERISA
Event has occurred and is continuing as to which Borrower would be under an
obligation to furnish a report to Lender under Section 9.02(c).
8.14 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules, furnished in writing by or on
behalf of Obligors to Lender in connection with the negotiation, preparation or
delivery of this Agreement and the other Loan Documents or included herein or
therein or delivered pursuant hereto or thereto, when taken as a whole do not
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. Lender acknowledges
that Borrower has relied on information furnished by tenants under Qualified
Leases ("Tenant Information") for which Borrower does not represent the accuracy
of such Tenant Information and Borrower has no knowledge that such
xlviii
50
Tenant Information is incorrect. All written information furnished after the
date hereof by Borrower and its Subsidiaries to Lender in connection with this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby will be true, complete and accurate in every material respect, or
(in the case of projections) based on reasonable estimates, on the date as of
which such information is stated or certified. With respect to any projections
furnished to Lender, Borrower represents and warrants only that the assumptions
relating to such projections are reasonable. There is no fact known to Borrower
that could have a Material Adverse Effect that has not been disclosed herein, in
the other Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lender for use in connection
with the transactions contemplated hereby or thereby.
8.15 Use of Credit. Neither Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
8.16 Material Agreements and Liens.
(a) Material Agreements. Except for the transactions
contemplated by this Agreement, Schedule 8.16(a) is a complete and
correct list of each
credit agreement, loan agreement, indenture,
purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or
guaranteed by, Borrower or any of its Subsidiaries outstanding on the
date hereof, or that (after giving effect to the transactions
contemplated to occur on or before the Effective Date) will be
outstanding on the Effective Date, the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $1,000,000,
and the aggregate principal or face amount outstanding or that may
become outstanding under each such arrangement is correctly described
in Schedule 8.16(a).
(b) Liens. Except for the transactions contemplated by this
Agreement, Schedule 8.16(b) is a complete and correct list of each Lien
securing Indebtedness of Borrower or any of its Subsidiaries
outstanding on the date hereof, or that (after giving effect to the
transactions contemplated to occur on or before the Effective Date)
will be outstanding, the aggregate principal or face amount of which
equals or exceeds (or may equal or exceed) $500,000 and covering any
Property of Borrower or any of its Subsidiaries, and the aggregate
Indebtedness secured (or that may be secured) by each such Lien and the
Property covered by each such Lien is correctly described in Schedule
8.16(b).
8.17 Capitalization. The authorized capital stock of Borrower
consists, on the Effective Date of an aggregate of 55,000,000 shares consisting
of (i) 50,000,000 shares of common stock, par value $0.01 per share, of which,
14,723,254 shares were duly and validly issued and outstanding as of March 9,
2001, each of which shares are fully paid and nonassessable and (ii) 5,000,000
shares of preferred stock, with terms to be established by the board of trustees
of Borrower, of which, after giving effect to the transactions contemplated to
occur on the Effective Date, no shares will be issued and outstanding. As of the
Effective Date (after giving effect to the transactions contemplated to
xlix
51
occur on or before the Effective Date and with the exception of incentive stock
options or other options granted or to be granted to trustees, officers and
employees of Borrower), (x) there will be no outstanding Equity Rights with
respect to Borrower and (y) there will be no outstanding obligations of Borrower
or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any
shares of capital stock of Borrower nor will there be any outstanding
obligations of Borrower or any of its Subsidiaries to make payments to any
Person, such as "phantom stock" payments, where the amount thereof is calculated
with reference to the fair market value or equity value of Borrower or any of
its Subsidiaries.
8.18 Subsidiaries, Etc.
(a) Subsidiaries. Set forth in Schedule 8.18(a) is a
complete and correct list of all of the Subsidiaries of Borrower as of
the date hereof, and as of the Effective Date (after giving effect to
the transactions contemplated to occur on or before the Effective
Date), together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership
interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of
such Subsidiary represented by such ownership interests. Except as
disclosed in Part A of Schedule 8.18(a), (x) each of Borrower and its
Subsidiaries owns, or will own on the Effective Date (after giving
effect to the transactions contemplated to occur on or before the
Effective Date), free and clear of Liens (other than Permitted Liens),
and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Part A of Schedule
8.18(a), (y) all of the issued and outstanding capital stock of each
such Person organized as a corporation is validly issued, fully paid
and nonassessable and (z) there are no outstanding Equity Rights with
respect to such Person not otherwise shown on Part A of Schedule
8.18(a).
(b) Investments. Set forth in Schedule 8.18(b) is a complete
and correct list of all Investments (other than Investments disclosed
in Schedule 8.18(b)) held by Borrower or any of its Subsidiaries in any
Person on the date hereof or that will be held on the Effective Date
(after giving effect to the transactions contemplated to occur on or
before the Effective Date) and, for each such Investment, (x) the
identity of the Person or Persons holding such Investment and (y) the
nature of such Investment. Except as disclosed in Schedule 8.18(b),
each of Borrower and its Subsidiaries owns (or will own, after giving
effect to the transactions contemplated to occur on or before the
Effective Date), free and clear of all Liens, all such Investments.
(c) Subsidiaries Not Subject to Certain Restrictions. None of
the Subsidiaries of Borrower is, on the date hereof, subject to any
indenture, agreement, instrument or other arrangement of the type
described in Section 9.15.
8.19 REIT Status. Borrower has not taken any action that
would prevent it from maintaining its qualification as a REIT for its tax year
ended December 31, 2001 or as of the Effective Date, from maintaining such
qualification at all times during the term of the Loan.
l
52
8.20 Real Estate Investment Trust Structure. Borrower has
heretofore delivered to Lender true and complete copies of its declaration of
trust and by-laws.
8.21 Ground Leases. Borrower has heretofore delivered to
Lender a true and complete copy of each Qualified Ground Lease which applies to
any Megaplex Property and such Qualified Ground Lease has not been further
amended, modified or terminated. Each Qualified Ground Lease is in full force
and effect and Borrower is not in default thereunder. To the best of Borrower's
knowledge, no ground lessor under a Qualified Ground Lease is in default under
any material covenant or obligation set forth in any Qualified Ground Lease.
8.22 Leases. Each Megaplex Property and some Pad Properties
are subject to a Qualified Lease. Except for the Loews Lease, each Qualified
Lease (including each applicable third party guaranty) applicable to an
Individual Property is in full force and effect and there exists no default by
Borrower. No lessee under a Qualified Lease has exercised any termination option
under a Qualified Lease.
8.23 Ground Lease Fee Purchase. Prior to the Effective Date
Megaplex Owner was a party to valid, existing options to acquire fee title to
the Megaplex Properties which are subject to and as set forth in the Qualified
Ground Leases (Palm Promenade and Woodridge), each of which agreements is in
full force and effect. Borrower has given Lender true and complete copies of
said agreements and all instruments and modifications related thereto and there
exists no default by Borrower or its Subsidiaries in connection with their
respective obligations thereunder, nor any condition which, given notice or the
passage of time, or both, would constitute a default or event of default by any
of Borrower or any of its Subsidiaries in connection with their respective
obligations thereunder. Neither Borrower nor Megaplex Owner has assigned any of
its rights or interest in said agreements. Borrower intends, upon the Effective
Date, to cause Megaplex Owner to acquire fee title to the Woodridge Megaplex
Property and shortly thereafter for Palm Promenade Megaplex Property.
8.24 Defaults. There is no Default by any Obligor of any of
the Loan Documents.
8.25 Absence of Liens. Except for Permitted Liens, the
Properties are not subject to any Liens.
8.26 No Materially Adverse Contracts, Etc. Neither Borrower
nor any of its Subsidiaries is subject to any declaration of trust, charter,
corporate, partnership or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is reasonably expected in the future to
have a Material Adverse Effect on the respective businesses, assets or financial
conditions of Borrower or any of its Subsidiaries. Obligors and the other
Subsidiaries of Borrower are not a party to any agreement, or otherwise bound by
any agreement which preclude or limits their ability to pay dividends, except as
set forth in the Archon Securitization Loan Documents and Megaplex Nine Loan
Documents. Neither Borrower nor any of its Subsidiaries is a party to any
contract or agreement that has or is expected, in the judgment of their
respective officers, to have any Material Adverse Effect on the respective
businesses of Borrower or any of its Subsidiaries.
li
53
8.27 No Material Obligation. Neither Megaplex Owner nor
Archon SPE Holdings have any material financial obligation under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Person is a party or by which such Person or its Properties is
otherwise bound, other than (a) obligations incurred in the ordinary course of
the operation of such Person's Properties and (b) obligations identified on
Schedule 8.16(a).
8.28 Title. Borrower (or its Subsidiaries) has good,
marketable and insurable fee simple title or leasehold title, as applicable, to
the real property comprising each Individual Property and good title to the
balance of such Individual Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. The Permitted
Encumbrances in the aggregate do not materially and adversely affect the value,
operation or use of the applicable Individual Property (as currently used) or
Borrower's ability to repay the Loan. Each Mortgage, when properly recorded in
the appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (a) a
valid, perfected first priority lien on the applicable Individual Property,
subject only to Permitted Encumbrances and the Liens created by the Loan
Documents and (b) perfected security interests in and to, and perfected
collateral assignments of, all personality (including the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. To the best of Borrower's
knowledge, there are no claims for payment for work, labor or materials
affecting the Properties which are or may become a lien prior to, or of equal
priority with, the Liens created by the Loan Documents, other than those claims
with respect to which insurance coverage is provided pursuant to the related
Title Insurance Policy. Except for Lender's interest under the Pledge Agreement,
Borrower is the holder, free and clear, of 100% of the issued and outstanding
common stock of Megaplex Owner. Megaplex Owner is the owner, free and clear, of
100% of the issued and outstanding stock in Archon SPE Holdings. Archon SPE
Holdings is the owner, free and clear, of 100% of the issued and outstanding
stock in Securitization Property Owner. Except for such stock owned in
Securitization Property Owner, Archon SPE Holdings does not own, and will not
own, any other asset or Property. The Pledge Agreement, with delivery of the
appropriate common stock, will create (a) a valid, perfected first priority lien
on the issued and outstanding stock of Megaplex Owner, and (b) perfected
security interests in and to such stock all in accordance with the terms of the
Pledge Agreement.
8.29 Solvency. Borrower (a) has not entered into the
transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received
reasonably equivalent value in exchange for its obligations under such Loan
Documents. Giving effect to the Loan, the fair saleable value of Borrower's
assets exceeds and will, immediately following the making of the Loan, exceed
Borrower's total liabilities, including subordinated, unliquidated, disputed and
contingent liabilities. The fair saleable value of Borrower's assets is and
will, immediately following the making of the Loan, be greater than Borrower's
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Borrower's assets do not
and, immediately following the making of the Loan will not, constitute
unreasonably small capital to
lii
54
carry out its business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur debt and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt and liabilities as they mature (taking into account the
timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower). Except as expressly
disclosed to Lender in writing, no petition in bankruptcy has been filed against
Borrower or any Subsidiary in the last seven (7) years, and neither Borrower nor
any constituent Person in the last seven (7) years has ever made an assignment
for the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. Neither Borrower nor any of its Subsidiaries are
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
Borrower's assets or property, and Borrower has no knowledge of any Subsidiary
contemplating the filing of any such petition against it or Obligor or any
Subsidiary.
8.30 No Plan Assets. Borrower is not an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Borrower constitutes or will constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in effect, which prohibit or otherwise
restrict the transactions contemplated by this Loan Agreement.
8.31 Financial Information. All financial data, including any
statements of cash flow and income and operating expense, that have been
prepared by Borrower or any of its Affiliates or, to the best of knowledge of
Borrower, on behalf of Borrower and delivered to Lender in respect of the
Properties (i) are true, complete and correct in all material respects, (ii)
accurately represent the financial condition of the Properties as of the date of
such reports, and (iii) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein. Except for
Permitted Encumbrances, 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 any Individual
Property or the operation thereof as a megaplex movie theater, except as
referred to or reflected in said financial statements. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower from that set forth in
said financial statements. Borrower has no reason to believe or suspect that any
financial data provided by or on behalf of any tenant in respect of any of the
Properties and delivered to Lender is not true, complete and correct in all
material respects or does not accurately represent the financial condition of
the related Individual Property as of the date thereof.
8.32 Condemnation. No Condemnation or other proceeding has
been commenced or, to Borrower's best knowledge, is threatened or contemplated
with respect to all
liii
55
or any portion of any Individual Property or for the relocation of roadways
providing access to any Individual Property.
8.33 Utilities and Public Access. Each Individual Property
has rights of access to public ways and is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service such Individual Property
for its respective intended uses. All public utilities necessary or convenient
to the full use and enjoyment of each Individual Property are located either in
the public right-of-way abutting such Individual Property (which are connected
so as to serve such Individual Property without passing over other property) or
in recorded easements serving such Individual Property and such easements are
set forth in and insured by the Title Insurance Policies. All roads necessary
for the use of each Individual Property for their current respective purposes
have been completed and dedicated to public use and accepted by all Governmental
Authorities.
8.34 Not a Foreign Person. No Obligor or any other Subsidiary
of Borrower is a "foreign person" within the meaning of ss.1445(f)(3) of the
Code.
8.35 Separate Lots. Each Individual Property is comprised of
one (1) or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Individual
Property.
8.36 Assessments. To the best knowledge of Borrower, there
are no pending or proposed special or other assessments for public improvements
or otherwise affecting any Individual Property, nor are there any contemplated
improvements to any Individual Property that may result in such special or other
assessments.
8.37 Enforceability. The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by any Obligor,
including the defense of usury, nor would the operation of any of the terms of
the Loan Documents, or the exercise of any right thereunder, render the Loan
Documents unenforceable (subject to principles of equity and bankruptcy,
insolvency and other laws generally affecting creditors' rights and the
enforcement of debtors' obligations), and Obligors have not asserted any right
of rescission, set-off, counterclaim or defense with respect thereto.
8.38 No Prior Assignment. There are no prior assignments of
the Leases or any portion of the Rents due and payable or to become due and
payable which are presently outstanding.
8.39 Insurance. Borrower or the tenant under a Qualified
Lease has obtained and Borrower has delivered to Lender evidence of insurance
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. No claims have been made under any insurance policy evidenced by
such certificates and Borrower has not and, to Borrower's best of knowledge, no
other Person, has done, by act or omission, anything which would impair the
coverage of any such policy.
8.40 Use of Property. Each Megaplex Property is used
exclusively as a movie theater and for other appurtenant and related uses.
liv
56
8.41 Certificate of Occupancy; Licenses. All certificates of
completion and occupancy permits and, to the best knowledge of Borrower, all
other certifications, permits, licenses and approvals, including any applicable
liquor license required for the legal use, occupancy and operation of each
Individual Property as a megaplex movie theater and all appurtenant and related
uses (collectively, the "Licenses"), have been obtained and are in full force
and effect. Borrower shall keep and maintain, or cause the applicable tenants to
keep and maintain, all licenses necessary for the operation of each Individual
Property as a megaplex movie theater and all appurtenant and related uses. The
use being made of each Individual Property is in conformity with the certificate
of occupancy issued for such Individual Property.
8.42 Flood Zone. None of the Improvements on any Individual
Property are located in an area as identified by the Federal Emergency
Management Agency as an area having special flood hazards and, if so located,
the flood insurance required pursuant to Section 9.05 is in full force and
effect with respect to each such Individual Property.
8.43 Physical Condition. To the best knowledge of Borrower,
each Individual Property, including all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects;
there exists no structural or other material defects or damages in any
Individual Property, whether latent or otherwise. Borrower has not received
notice from any insurance company or bonding company of any defects or
inadequacies in any Individual Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
8.44 Boundaries. All the improvements located on an
Individual Property lie wholly within the boundaries and building restriction
lines of such Individual Property, and no improvements on adjoining properties
encroach upon such Individual Property, and no easements or other encumbrances
upon the applicable Individual Property encroach upon any of the improvements,
so as to affect the value or marketability of the applicable Individual Property
except those which are insured against by title insurance.
8.45 Leases. The Individual Properties are not subject to any
leases, licenses, or other possessory interests other than the Qualified Leases.
Borrower is the owner and lessor of landlord's interest in the Qualified Leases.
No Person has any possessory interest in any Individual Property or right to
occupy the same except under and pursuant to the provisions of the Qualified
Leases. The Qualified Leases are in full force and effect and there are no
material defaults thereunder by either party and there are no conditions that,
with the passage of time or the giving of notice, or both, would constitute
defaults thereunder. No Rent (including security deposits) has been paid more
than one (1) month in advance of its due date. All work to be performed by
Borrower under each Qualified Lease has been performed as required and has been
accepted by the applicable tenant, and any payments, free rent, partial rent,
rebate of rent or other payments, credits, allowances or abatements required to
be given by Borrower to any tenant has already been received by such tenant.
There has been no prior sale, transfer or assignment,
lv
57
hypothecation or pledge of any Qualified Lease or of the Rents received therein.
No tenant under a Qualified Lease has assigned its Lease or sublet all or any
portion of the premises demised thereby, no tenant under a Qualified Lease or
such other tenant holds its leased premises under assignment or sublease, nor
does anyone except the related tenant under a Qualified Lease or such other
tenant and its employees occupy such leased premises. No tenant under any
Qualified Lease has a right or option pursuant to such lease or otherwise to
purchase all or any part of the leased premises or the building of which the
leased premises are a part. No tenant under any Qualified Lease has any right or
option for additional space in the Improvements. To the best knowledge of
Borrower, no hazardous wastes or toxic substances, as defined by applicable
federal, state or local statutes, rules and regulations, have been disposed,
stored or treated by any tenant under any Lease on or about the leased premises
nor does Borrower have any knowledge of any tenant's intention to use its leased
premises for any activity which, directly or indirectly, involves the use,
generation, treatment, storage, disposal or transportation of any petroleum
product or any toxic or hazardous chemical, material, substance or waste.
8.46 Survey. The Survey for each Individual Property
delivered to Lender in connection with this Agreement has been prepared in
accordance with the provisions of Section 7.01(l) hereof, and does not fail to
reflect any material matter affecting such Individual Property or the title
thereto.
8.47 No Broker. No broker's or finder's fees, commission or
similar compensation will be payable with respect to the Loan, the issuance of
the Note or any of the other transactions contemplated hereby or by any of the
Loan Documents based upon any broker or lender engaged by Borrower, any
Subsidiary Guarantor or any other Affiliate of Borrower. No other similar fees
or commissions will be payable by Borrower, or any other Affiliate of Borrower
for any other services rendered to Borrower, or any other Affiliate of Borrower
relating to the Loan transaction contemplated hereby.
8.48 Filing and Recording Taxes. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the transfer of the Properties to Borrower have
been paid. All mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgages, been paid, and, under current
Legal Requirements, each of the Mortgages is enforceable in accordance with
their respective terms by Lender (or any subsequent holder thereof), subject to
principles of equity and bankruptcy, insolvency, fraudulent conveyance and other
laws generally applicable to creditors' rights and the enforcement of debtors'
obligations.
8.49 Special Purpose Entity/Separateness.
(a) Until the Loan and all other obligations of Borrower to
Lender under the Loan Documents have been paid in full, Borrower hereby
represents, warrants and covenants that both Megaplex Owner and Archon
SPE Holdings are, and Borrower shall cause both Megaplex Owner and
Archon SPE Holdings to be and shall continue to be, a
lvi
58
Special Purpose Entity. As used herein "Special Purpose Entity" means a
corporation which:
(i) is organized solely for the purpose of
acquiring, developing, owning, holding, selling, leasing,
transferring, exchanging, managing and operating the
Properties owned by it (directly or indirectly), entering
into this Agreement with Lender, refinancing the Properties
owned by it (directly or indirectly) in connection with a
permitted repayment of the Loan, and transacting lawful
business that is incident, necessary and appropriate to
accomplish the foregoing;
(ii) is not engaged and will not engage in any
business unrelated to the acquisition, development,
ownership, management or operation of the Properties owned by
it (directly or indirectly);
(iii) does not have and will not have any assets
other than those related to the Properties owned by it
(directly or indirectly);
(iv) has not engaged, sought or consented to and
will not engage in, seek or consent to any dissolution,
winding up, liquidation, consolidation, merger, sale of all
or substantially all of its assets or amend its articles of
incorporation, certificate of formation with respect to the
matters set forth in this definition;
(v) has a certificate of incorporation or articles
that provide that such entity will not: (1) dissolve, merge,
liquidate, consolidate; (2) sell all or substantially all of
its assets; (3) engage in any other business activity, or
amend its organizational documents with respect to the
matters set forth in this definition without the consent of
Lender; or (4) without the affirmative vote of one (or two,
if and when required by Section 9.34 below) Independent
Directors and of all other directors of the corporation file
a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or to any other
entity in which it has a direct or indirect legal or
beneficial ownership interest;
(vi) is and will remain solvent and pay its debts
and liabilities (including, as applicable, shared personnel
and overhead expenses) from its assets as the same shall
become due, and is maintaining and will maintain adequate
capital for the normal obligations reasonably foreseeable in
a business of its size and character and in light of its
contemplated business operations;
(vii) has not failed and will not fail to correct any
known misunderstanding regarding the separate identity of
such entity;
(viii) has maintained and will maintain its accounts;
books and records separate from any other Person and will
file its own tax returns, except to the extent that it is
required to file consolidated tax returns by law;
lvii
59
(ix) has maintained and will maintain its own
records, books, resolutions and agreements;
(x) other than as provided in the Cash Management
Agreement, (a) has not commingled and will not commingle its
funds or assets with those of any other Person and (b) has
not participated and will not participate in any cash
management system with any other Person;
(xi) has held and will hold its assets in its own
name;
(xii) has conducted and will conduct its business in
its own name;
(xiii) has maintained and will maintain its financial
statements, accounting records and other entity documents
separate from any other Person and has not permitted and will
not permit its assets to be listed as assets on the financial
statement of any other entity except as required by GAAP;
provided, however, that any such consolidated financial
statement shall contain a note indicating that its separate
assets and liabilities are neither available to pay the debts
of the consolidated entity nor constitute obligations of the
consolidated entity;
(xiv) has paid and will pay its own liabilities and
expenses, including the salaries of its own employees, out of
its own funds and assets, and has maintained and will
maintain a sufficient number of employees in light of its
contemplated business operations;
(xv) has observed and will observe all corporate
formalities;
(xvi) has and will have no Indebtedness other than
(i) related to the Loan, (ii) liabilities incurred in the
ordinary course of business relating to the ownership and
operation of the Properties and the routine administration of
such corporation, in amounts not to exceed $250,000 which
liabilities are not more than sixty (60) days past the date
incurred, are not evidenced by a note and are paid when due,
and which amounts are normal and reasonable under the
circumstances, and (iii) such other liabilities that are
permitted pursuant to this Agreement;
(xvii) has not and will not assume or guarantee or
become obligated for the debts of any other Person or hold
out its credit as being available to satisfy the obligations
of any other Person except as existing or permitted pursuant
to this Agreement;
(xviii) has not and will not acquire obligations or
securities of its shareholders or any other Affiliate;
lviii
60
(xix) has allocated and will allocate fairly and
reasonably any overhead expenses that are shared with any
Affiliate, including paying for shared office space and
services performed by any employee of an Affiliate;
(xx) maintains and uses and will maintain and use
separate stationery, invoices and checks bearing its name.
The stationery, invoices, and checks utilized by the Special
Purpose Entity or utilized to collect its funds or pay its
expenses shall bear its own name and shall not bear the name
of any other entity unless such entity is clearly designated
as being the Special Purpose Entity's agent;
(xxi) has not pledged and will not pledge its assets
for the benefit of any other Person except in favor of Lender
under the Loan Documents;
(xxii) has held itself out and identified itself and
will hold itself out and identify itself as a separate and
distinct entity under its own name;
(xxiii) has maintained and will maintain its assets in
such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from
those of any other Person;
(xxiv) has not made and will not make loans to any
Person or hold evidence of indebtedness issued by any other
Person or entity (other than cash and investment-grade
securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity);
(xxv) has not identified and will not identify its
partners, members or shareholders, or any Affiliate of any of
them, as a division or part of it, and has not identified
itself and shall not identify itself as a division of any
other Person;
(xxvi) has not entered into or been a party to, and
will not enter into or be a party to, any transaction with
its shareholders or Affiliates except (A) in the ordinary
course of its business and on terms which are intrinsically
fair, commercially reasonable and are no less favorable to it
than would be obtained in a comparable arm's-length
transaction with an unrelated third party and (B) in
connection with this Agreement;
(xxvii) has not and will not have any obligation to,
and will not, indemnify its officers, directors or
shareholders, as the case may be, unless such an obligation
is fully subordinated to the Loan and will not constitute a
claim against it in the event that cash flow in excess of the
amount required to pay the Loan is insufficient to pay such
obligation;
(xxviii) shall consider the interests of its creditors
in connection with all corporate actions;
lix
61
(xxix) does not and will not have its obligations
guaranteed by any Affiliate;
(xxx) has complied and will comply with all of the
terms and provisions contained in its organizational
documents. The statement of facts contained in its
organizational documents are true and correct and will remain
true and correct; and
(xxxi) has and shall maintain at least 1 Independent
Director and caused the articles of incorporation for such
Person to require at least 1 Independent Director.
(b) The representations, warranties and covenants set forth
in Section 8.49 shall survive for so long as any amount remains payable
to Lender under this Agreement or any other Loan Document.
(c) All of the factual assumptions made in any insolvency
opinion, including any exhibits attached thereto, are true and correct
in all respects and any factual assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Loan
Documents (an "Additional Insolvency Opinion"), including any exhibits
attached thereto, will have been and shall be true and correct in all
respects. Borrower has complied and will comply with all of the factual
assumptions made with respect to it in the Insolvency Opinion. Borrower
will have complied and will comply with all of the factual assumptions
made with respect to it in any Additional Insolvency Opinion. Each
entity other than Borrower with respect to which a factual assumption
shall be made in any Additional Insolvency Opinion will have complied
and will comply with all of the factual assumptions made with respect
to it in any Additional Insolvency Opinion.
8.50 Management of Properties. Each Individual Property is
self-managed by the Obligor which owns it (or by a subsidiary of such Obligor)
in so far as each Individual Property is leased to a tenant which is required to
perform typical property management functions (other than collection of Rents
under Qualified Leases) pursuant to the related Qualified Lease and no third
party property manager has been retained with respect to any Individual
Property.
8.51 Ground Leases. Borrower covenants, represents and
warrants to Lender with respect to the Qualified Ground Leases, if any, as
follows:
(a) Except as previously disclosed to Lender, no default has
occurred and is continuing under the terms of any Qualified Ground
Lease, and no event has occurred that, with the passage of time or
service of notice, or both, would constitute an event of default under
any Qualified Ground Lease.
(b) Each Qualified Ground Lease is in full force and effect.
(c) All rents, additional rents, percentage rents and all
other charges due and payable under each Qualified Ground Lease have
been fully paid.
lx
62
(d) Subject to the Permitted Encumbrances, Megaplex Owner is
the owner of the entire lessee's interest in and under each Qualified
Ground Lease and has the right and authority under each Qualified
Ground Lease to execute this Agreement, the related Mortgage and other
related Loan Documents, and to encumber Megaplex Owner's interest in
the Qualified Ground Leases.
(e) Borrower shall, at its sole cost and expense, promptly
and timely perform and observe, or cause Megaplex Owner or the
applicable tenant under a Qualified Lease to promptly and timely
perform and observe, all the material terms, covenants and conditions
required to be performed and observed by Megaplex Owner as lessee under
each Qualified Ground Lease (including the payment of all rent,
additional rent, percentage rent and other charges required to be paid
under such Qualified Ground Lease).
(f) If Borrower or Megaplex Owner shall violate any of the
covenants specified above, then, subject to the applicable Qualified
Ground Lease terms, Borrower and Megaplex Owner each grant Lender the
right (but not the obligation) to cause the default or defaults under
any Qualified Ground Lease to be remedied and otherwise exercise any
and all rights of Borrower or Megaplex Owner under each Qualified
Ground Lease, as may be necessary to prevent or cure any default,
provided such actions are necessary to protect Lender's interest under
this instrument, and Lender shall have the right subject to the terms
of the Qualified Ground Lease to enter all or any portion of the
Megaplex Property at such times and in such manner as Lender deems
necessary, to prevent or to cure any such default.
(g) The actions or payments of Lender to cure any default by
Borrower under any Qualified Ground Lease shall not remove or waive, as
between any Obligor and Lender, the default that occurred under this
Agreement by virtue of the default by Borrower or Megaplex Owner under
any Qualified Ground Lease. All sums expended by Lender to cure any
such default shall be paid by Borrower to Lender, upon demand, with
interest on such sum at the rate set forth in the Note from the date
such sum is expended to and including the date the reimbursement
payment is made to the Lender. All such indebtedness shall be deemed to
be secured by the Mortgages and other Loan Documents.
(h) Borrower shall notify Lender promptly in writing after
any Obligor receives notice of the occurrence of any material default
by the lessor under any Qualified Ground Lease or the occurrence of any
event that, with the passage of time or service of notice, or both,
would constitute a material default by the lessor under any Qualified
Ground Lease, and the receipt by Borrower of any notice (written or
otherwise) from the lessor under any Qualified Ground Lease noting or
claiming the occurrence of any default by any Obligor under any
Qualified Ground Lease or the occurrence of any event that, with the
passage of time or service of notice, or both, would constitute a
default by any Obligor under any Qualified Ground Lease. Borrower shall
promptly deliver to Lender a copy of any such written notice of
default.
(i) Within thirty (30) days after written demand by Lender,
Borrower shall use reasonable efforts (other than payments to the
lessor) to obtain from the lessor under
lxi
63
any Qualified Ground Lease and furnish to Lender the estoppel
certificate of such lessor stating the date through which rent has been
paid and whether or not there are any defaults thereunder and
specifying the nature of such claimed defaults, if any.
(j) Subject to the applicable Qualified Ground Lease terms,
Borrower shall, and shall cause Megaplex Owner to, promptly execute,
acknowledge and deliver to Lender such instruments as may reasonably be
required to permit Lender to cure any default under any Qualified
Ground Lease or permit Lender to take such other action required to
enable Lender to cure or remedy the matter in default and preserve the
security interest of Lender under the Loan Documents with respect to
any Property which is the subject of a Qualified Ground Lease. Borrower
and Megaplex Owner each irrevocably appoint Lender as its true and
lawful attorney-in-fact to do, in its name or otherwise, any and all
acts and to execute any and all documents that are necessary to
preserve any rights of Borrower or Megaplex Owner under or with respect
to the Qualified Ground Leases, including the right to effectuate any
extension or renewal of any Qualified Ground Lease, or to preserve any
rights of Borrower whatsoever in respect of any part of any Qualified
Ground Lease (and the above powers granted to Lender are coupled with
an interest and shall be irrevocable).
(k) The generality of the provisions of this section
relating to the Qualified Ground Leases shall not be limited by other
provisions of this Agreement or the other Loan Documents setting forth
particular obligations of any Obligor that are also required of
Borrower with respect to the Qualified Ground Leases or the related
Properties subject to such Qualified Ground Lease.
(l) Borrower shall not, and shall not permit Megaplex Owner
to, without Lender's prior written consent, surrender, terminate,
forfeit, or suffer or permit the surrender, termination or forfeiture
of, or change, modify or amend in a material or adverse manner, any
Qualified Ground Lease. Consent to one amendment, change, agreement or
modification shall not be deemed to be a waiver of the right to require
consent to other, future or successive amendments, changes, agreements
or modifications. Any acquisition of any lessor's interest in any
Qualified Ground Lease by Borrower or any affiliate of Borrower shall
be accomplished by Borrower in such a manner so as to avoid a merger of
the interests of lessor and lessee in such Qualified Ground Lease,
unless consent to such merger is granted by Lender.
(m) Notwithstanding anything to the contrary contained in
this Agreement with respect to the Qualified Ground Leases:
(i) The lien of the related Mortgage attaches to all
of Megaplex Owner's rights and remedies at any time arising
under or pursuant to Subsection 365(h) of the Bankruptcy
Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code"),
including all of Megaplex Owner's rights, as debtor, to
remain in possession of the related Property subject to such
Qualified Ground Lease.
(ii) Neither Borrower nor Megaplex Owner shall, without
Lender's written consent, elect to treat any Qualified Ground
Lease as terminated under
lxii
64
subsection 365(h)(1) of the Bankruptcy Code. Any such
election made without Lender's prior written consent shall be
void.
(iii) As security for the Loan, Borrower and Megaplex
Owner unconditionally assign, transfer and set over to Lender
all of Borrower's claims and rights to the payment of damages
arising from any rejection by the lessor under any Qualified
Ground Lease under the Bankruptcy Code. Lender and Borrower
and Megaplex Owner shall proceed jointly or in the name of
Borrower or Megaplex Owner in respect of any claim, suit,
action or proceeding relating to the rejection of any
Qualified Ground Lease, including the right to file and
prosecute any proofs of claim, complaints, motions,
applications, notices and other documents in any case in
respect of lessor under the Bankruptcy Code. This assignment
constitutes a present, irrevocable and unconditional
assignment of the foregoing claims, rights and remedies, and
shall continue in effect until all of the Loan and other
obligations of Borrower to Lender under the Loan Documents
shall have been satisfied and discharged in full. Any amounts
received by Lender or Borrower or Megaplex Owner as damages
arising out of the rejection of any Qualified Ground Lease as
aforesaid shall be applied first to all costs and expenses of
Lender (including attorneys' fees and costs) incurred in
connection with the exercise of any of its rights or remedies
under this Section 8.51 (m) and then in accordance with the
other applicable provisions of this Agreement.
(iv) If, pursuant to subsection 365(h) of the
Bankruptcy Code, Borrower or Megaplex Owner seeks to offset,
against the rent reserved in any Qualified Ground Lease, the
amount of any damages caused by the nonperformance by the
lessor of any of its obligations thereunder after the
rejection by lessor of any Qualified Ground Lease under the
Bankruptcy Code, then Borrower or Megaplex Owner shall not
effect any offset of the amounts so objected to by Lender. If
Lender has failed to object as aforesaid within ten (10) days
after notice from Borrower or Megaplex Owner in accordance
with the first sentence of this subsection, Borrower or
Megaplex Owner may proceed to offset the amounts set forth in
such notice.
(v) If any action, proceeding, motion or notice shall be
commenced or filed in respect of any lessor of all or any
part of the leasehold property in connection with any case
under the Bankruptcy Code, Lender, Borrower and Megaplex
Owner shall cooperatively conduct and control any such
litigation with counsel agreed upon between Borrower, Lender
and Megaplex Owner in connection with such litigation.
Borrower and Megaplex Owner shall, upon demand, pay to Lender
all costs and expenses (including reasonable attorneys' fees
and costs) actually paid or actually incurred by Lender in
connection with the cooperative prosecution or conduct of any
such proceedings. All such costs and expenses shall be
secured by the lien of the Mortgages and other Loan
Documents.
lxiii
65
(vi) Borrower and Megaplex Owner shall promptly, after
obtaining knowledge of such filing notify Lender orally of
any filing by or against any lessor under a Qualified Ground
Lease of a petition under the Bankruptcy Code. Borrower and
Megaplex Owner shall thereafter promptly give written notice
of such filing to Lender, setting forth any information
available to Borrower and Megaplex Owner as to the date of
such filing, the court in which such petition was filed, and
the relief sought in such filing. Borrower shall promptly
deliver to Lender any and all notices, summonses, pleadings,
applications and other documents received by Borrower in
connection with any such petition and any proceedings
relating to such petition.
(n) In addition to those events otherwise set forth in this
Agreement, the occurrence of any of the following events shall, at
Lender's option, constitute an Event of Default, as such term is
defined in Section 10 hereof and, upon the occurrence of an Event of
Default, Lender shall have all of the rights and remedies available to
it under this Agreement and the other Loan Documents:
(i) A breach or default by Borrower under any condition
or obligation contained in any Qualified Ground Lease that is
not cured within any applicable cure period provided therein;
(ii) The occurrence of any event or condition that
gives the lessor under any Qualified Ground Lease a right to
terminate or cancel such Qualified Ground Lease unless cured
by Borrower or Megaplex Owner (in case of nonpayment by a
tenant under the applicable Qualified Lease); or
(iii) Borrower's or Megaplex Owner's failure to permit
Lender and/or its representatives at all reasonable times
upon reasonable prior written notice, but subject to the
applicable Qualified Ground Lease and Qualified Lease
respective terms, to make investigation or examination
concerning Borrower's or Megaplex Owner's performance and
observance of the terms, covenants and conditions of any
Qualified Ground Lease.
(o) Borrower shall not, without Lender's written consent,
fail to exercise or cause Megaplex Owner to exercise any option or
right to renew or extend the term of any Qualified Ground Lease at
least six (6) months prior to the date of termination of any such
option or right, and shall give immediate written notice to Lender and
shall execute, acknowledge, deliver and record any document requested
by Lender to evidence the lien of the applicable Mortgage on such
extended or renewed lease term; provided, however, Borrower shall not
be required to exercise any particular such option or right to renew or
extend to the extent Borrower shall have received the prior written
consent of Lender (which consent may be withheld by Lender in its sole
and absolute discretion) allowing Borrower to forego exercising such
option or right to renew or extend. If Borrower shall fail to exercise
or cause Megaplex Owner to exercise any such option or right as
aforesaid, Lender may exercise the option or right as Megaplex Owner's
and Borrower's agent and attorney-in-fact as provided above in Lender's
own name or in the name of and
lxiv
66
on behalf of a nominee of Lender, as Lender may determine in the
exercise of its sole and absolute discretion.
(p) Upon the request of Lender, Borrower shall deposit with
Lender a copy of each fully executed Qualified Ground Lease certified
by Borrower as true and correct, as further security to Lender, until
all of the obligations are fully paid and performed.
(q) Neither Borrower nor Megaplex Owner shall waive, excuse,
condone or in any way release or discharge the lessor under any
Qualified Ground Lease of or from such lessor's material obligations,
covenant and/or conditions under such Qualified Ground Lease without
the prior written consent of Lender.
(r) To the best of Borrower's knowledge, as of the Effective
Date, there has been no event which would materially alter information
contained in those ground lessor estoppels delivered by Borrower to
Lender with respect to the Qualified Ground Leases prior to the date
hereof.
8.52 Illegal Activity. No portion of any Individual Property
has been or will be purchased by Borrower or any of its Affiliates with proceeds
of any illegal activity.
8.53 No Change in Facts or Circumstances; Disclosure. All
information submitted by Borrower to Lender and to the best of knowledge of
Borrower, submitted on behalf of Borrower to Lender, including all financial
statements, rent rolls, reports, certificates and other documents submitted in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by Borrower in this Agreement or in any other Loan
Document, are accurate, complete and correct in all material respects. Lender
acknowledges Borrower has relied on Tenant Information, which Borrower
represents and warrants that Borrower has no knowledge that such Tenant
Information is incorrect. Except for the Loews Lease, there has been no material
adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially adversely affects or might materially
adversely affect the use, operation or value of any Individual Property or the
business operations or the financial condition of Borrower unless such change
has been fully disclosed in writing to Lender. Borrower has disclosed to Lender
all material facts and has not failed to disclose any material fact that could
cause any provided information or representation or warranty made herein to be
materially misleading.
8.54 Inventory. Borrower is the owner of all of the equipment
and assets at the Individual Properties or used in connection with the
Individual Properties, other than those owned by the tenant under a Qualified
Lease and Borrower shall not lease any equipment or assets other than as
permitted hereunder.
8.55 Survival of Representations. Borrower agrees that all of
the representations and warranties of Borrower set forth in this Agreement and
in the other Loan Documents shall survive for so long as any amount remains
owing to Lender under this Agreement or any of the other Loan Documents by
Borrower. All representations, warranties, covenants and agreements made in this
Agreement or in the other Loan Documents by Borrower
lxv
67
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
Section 9. Covenants of Borrower.........................................63
9.01 Financial Statements and Other Information........................63
9.02 Existence; Compliance with Legal Requirements; Insurance..........66
9.03 Notices of Material Events........................................67
9.04 Existence, Etc....................................................68
9.05 Insurance.........................................................69
9.06 Prohibition of Fundamental Changes................................72
9.07 Liens.............................................................73
9.08 Indebtedness......................................................74
9.09 Investments.......................................................74
9.10 Restricted Payments...............................................75
9.11 Certain Financial Covenants.......................................75
9.12 [Intentionally Deleted]...........................................75
9.13 Lines of Business.................................................75
9.14 Transactions with Affiliates......................................75
9.15 Restrictive Agreements............................................76
9.16 Use of Proceeds...................................................76
9.17 Ownership of Subsidiaries.........................................76
9.18 Modifications of Certain Documents................................77
9.19 Further Assurances................................................77
9.20 Environmental Compliance..........................................77
9.21 Qualified Ground Leases...........................................77
9.22 Qualified Leases..................................................78
9.23 Manner of Making Payments; Cash Management........................79
9.24 Additional Real Estate Acquisitions...............................80
9.25 Taxes and Other Charges...........................................80
9.26 Access to Individual Properties...................................81
9.27 Further Assurances................................................81
9.28 Condemnation......................................................82
9.29 Restoration.......................................................82
9.30 Tax and Insurance Escrow Fund.....................................87
9.31 Replacements and Replacement Reserve..............................88
9.32 Ground Lease Reserve Fund.........................................94
9.33 FEIN For Archon SPE Holdings......................................95
9.34 Independent Directors.............................................95
9.35 Substitution Rights...............................................95
9.36 Reserve Funds, Generally..........................................95
lxvi
68
9.37 Archon Securitization Loan Documents..............................96
9.38 Pad Mortgages.....................................................96
9.39 [Intentionally Deleted]...........................................96
9.40 Required Repairs Fund.............................................96
Section 10. Events of Default.............................................98
Section 11. [Intentionally Omitted]......................................100
Section 12. Miscellaneous................................................100
12.01 Notices..........................................................100
12.02 Waiver...........................................................101
12.03 Amendments, Etc..................................................101
12.04 Expenses, Etc....................................................101
12.05 Successors and Assigns...........................................102
12.06 Assignments by Obligors..........................................102
12.07 Secondary Market Transaction in Loan and Note....................102
12.08 Sale of Note and Securitization..................................105
12.09 Cooperation with Rating Agencies.................................106
12.10 Securitization Indemnification...................................106
12.11 Retention of Servicer............................................108
12.12 Survival.........................................................109
12.13 Counterparts.....................................................109
12.14 Governing Law; Submission to Jurisdiction........................109
12.15 WAIVER OF JURY TRIAL.............................................110
12.16 Captions.........................................................110
12.17 Treatment of Certain Information; Confidentiality................110
12.18 Interest Rate Limitation.........................................111
12.19 Construction of Documents........................................111
lxvii
69
Section 9. Covenants of Borrower. Borrower covenants and agrees with
Lender that, so long as the Loan is outstanding and until payment in full of all
amounts payable by Borrower hereunder:
9.01 Financial Statements and Other Information. Borrower
shall deliver to Lender:
(a) as soon as available and in any event within 90 days
after the end of each fiscal year of Borrower, consolidated and
consolidating statements of income, retained earnings and cash flows of
Borrower and its Subsidiaries for such fiscal year and the related
consolidated and consolidating balance sheets of Borrower and its
Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding consolidated and
consolidating figures for the preceding fiscal year, and accompanied
(i) in the case of such consolidated statements and balance sheet of
Borrower, by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that such consolidated financial statements fairly present the
consolidated financial condition and results of operations of Borrower
and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with generally accepted accounting principles, and a
statement of such accountants to the effect that, in making the
examination necessary for their opinion, nothing came to their
attention that caused them to believe that Borrower was not in
compliance with Section 9.11, insofar as such Section relates to
accounting matters, and (ii) in the case of such consolidating
statements and balance sheets, by a certificate of a Financial Officer
of Borrower, which certificate shall state that such consolidating
financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of
Borrower and of each of its Subsidiaries, in each case in accordance
with generally accepted accounting principles, consistently applied, as
at the end of, and for, such fiscal year;
(b) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of Megaplex Owner, Archon SPE
Holdings and Securitized Property Owner unaudited statements of income,
retained earnings and cash flows for each of such Person for such year
and each of the Megaplex Properties, Pad Properties, and, collectively,
for the Securitized Properties for such year and unaudited balance
sheets for each of such Persons and such Individual Properties as of
the end of such year setting forth in each case the corresponding
figures for the preceding fiscal year accompanied by a certificate of a
financial officer of Borrower, stating that such statements and balance
sheet fairly present the financial conditions and results of operations
of the Properties in accordance with generally accepted accounting
principles consistently applied.
(c) as soon as available and in any event within 45 days
after the end of each quarterly fiscal period of each fiscal year of
Borrower, unaudited consolidated and consolidating statements of
income, retained earnings and cash flows of Borrower and its
Subsidiaries and separately for each of the Subsidiary Guarantors for
such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated and
consolidating balance sheets of Borrower and its Subsidiaries and
separately for each of the Subsidiary Guarantors as at the end of such
63
70
period, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
corresponding periods in the preceding fiscal year (except that, in the
case of balance sheets, such comparison shall be to the last day of the
prior fiscal year), accompanied by a certificate of a Financial Officer
of Borrower or other Obligor, as applicable, which certificate shall
state that such consolidated financial statements fairly present the
consolidated financial condition and results of operations of the
respective Person(s), and such consolidating financial statements
fairly present the respective individual unconsolidated financial
condition and results of operations of Borrower and its Subsidiaries
and each of the Subsidiary Guarantors, in each case in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such period (subject to normal year-end audit
adjustments);
(d) as soon as available and in any event within 90 days
after the end of each fiscal year of Borrower, statements of Net
Operating Income and outstanding Indebtedness as at the end of such
fiscal year and for the fiscal year then ended for Borrower, each of
the Subsidiary Guarantors and each Individual Property, in each case
certified by a Financial Officer as true and correct in all material
respects;
(e) as soon as available and in any event within 45 days
after the end of each fiscal quarter of Borrower, unaudited statements
of Net Operating Income and outstanding Indebtedness as at the end of
such fiscal quarter and for the portion of the fiscal year then elapsed
for Borrower, each of the Subsidiary Guarantors and each Individual
Property, in each case certified by a Financial Officer as true and
correct in all material respects;
(f) concurrently with any delivery of financial statements
under clause (a) or (c) of this Section 9.01, and, in any event within
45 days of the end of each quarterly fiscal period of Borrower's fiscal
year, a certificate of a Financial Officer of Borrower (i) to the
effect that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that Borrower has taken or
proposes to take with respect thereto) and (ii) setting forth in
reasonable detail the computations necessary to determine whether
Borrower is in compliance with Sections 9.07, 9.08, 9.09, 9.10 and 9.11
as of the end of the respective quarterly fiscal period or fiscal year;
(g) Borrower will furnish, or cause to be furnished, to
Lender on or before twenty (20) days after the end of each calendar
month the following items, accompanied by a certificate of Financial
Officer of Borrower stating that such items are true, correct,
accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and, to the extent Borrower
receives such information from the tenants under Qualified Leases, the
Individual Properties on a combined basis as well as each Individual
Property (subject to normal year-end adjustments) as applicable: a rent
collection report and reports on theater ticket and other sales for the
calculation of percentage rents under the Qualified Leases to the
extent such information is available to Borrower pursuant to the terms
and provisions of the Qualified Leases. In addition, within 20 days of
the end of each month, Borrower shall provide Lender the Megaplex Debt
Service Coverage Ratio and the calculation thereof for each of the
immediately
64
71
preceding twelve (12) months as of the last day of each such month
accompanied by an Officer's Certificate with respect thereto. In
addition, such certificate shall also be accompanied by a certificate
of Financial Officer of Borrower stating that the representations and
warranties of Borrower set forth in Section 8.49 are true and correct
as of the date of such certificate and that there are no trade payables
for any Obligor outstanding for more than sixty (60) days.
(h) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that
Borrower shall have filed with the Commission (or any Governmental
Authority substituted therefor) or any national securities exchange,
including each Form 8-K, Form 10-K and Form 10-Q filed with the
Commission;
(i) promptly upon the mailing thereof to the shareholders of
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(j) contemporaneously with (or promptly after) the filing or
mailing thereof, copies of all material of a financial nature sent to
the holders of any Indebtedness of Borrower or any Subsidiary of
Borrower (other than the Loan) for borrowed money, to the extent that
the information or disclosure contained in such material refers to or
could reasonably be expected to have a Material Adverse Effect;
(k) from time to time such other information regarding the
financial condition, operations, business or prospects of Borrower, any
of its Subsidiaries, including any Obligor, the Real Estate Properties
and any unconsolidated subordinary or minority in interests (including
any Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA), or compliance with the terms of this
Agreement and the other Loan Documents, as Lender may reasonably
request; provided, however, Borrower's obligation to deliver any
information with respect to a lessee of any Real Estate Property shall
be limited to the information which Borrower or any other Obligor
actually has in its possession; and
(l) Promptly after receipt, or giving, as applicable, of
each notice, demand, request, certificate, report, financial statement
or other material correspondence given to, or received by, Borrower or
any of its subsidiaries, from any tenant or any Lender or any ground
lessors.
(m) Throughout the term of the Loan and until the Loan and
all obligations of Borrower to Lender have been paid in full, Borrower
shall operate and cause Megaplex Owner to operate in accordance with an
annual budget which has been approved by Borrower and delivered to
Lender (each, an "Approved Annual Budget"), except as permitted by
subsection (n) below. For the partial year commencing on the date
hereof, the Approved Annual Budget is attached hereto as Exhibit I. For
each calendar year thereafter, Borrower shall deliver to Lender the
Annual Budget not later than sixty (60) days prior to the commencement
of such calendar year in form reasonably satisfactory to Lender. Until
such time as a new Approved Annual Budget is delivered to Lender, the
most recently Approved Annual Budget delivered to Lender shall apply.
Notwithstanding
65
72
the foregoing, at such times and from time to time while an Event of
Default exists, (i) Lender shall have the right to approve the then
applicable Approved Annual Budget, and (ii) any portion of the then
applicable Approved Annual Budget disapproved by Lender shall not be
deemed a part of the Approved Annual Budget. Lender shall give Borrower
notice of any such disapproval.
(n) In the event that, Borrower or Megaplex Owner must incur
an extraordinary operating expense or capital expense not set forth in
the Approved Annual Budget (each an "Extraordinary Expense"), then
Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such Extraordinary Expense; provided that if such
Extraordinary Expense occurs during the occurrence of an Event of
Default such Extraordinary Expense must be approved in writing by
Lender prior to being paid or incurred.
(o) If requested by Lender, Borrower shall provide Lender,
promptly upon request, with any other or additional financial
statements, or financial, statistical or operating information, as
shall be reasonably requested by the Lender (to the extent any such
information regarding the operation of any Individual Property by a
tenant under a Qualified Lease is available to Borrower).
(p) Any reports, statements or other information required to
be delivered under this Agreement shall be delivered (i) in paper form,
(ii) on a diskette, and (iii) if requested by Lender and within the
capabilities of Borrower's data systems without change or modification
thereto, in electronic form and prepared using a Microsoft Word for
Windows or WordPerfect for Windows files (which files may be prepared
using a spreadsheet program and saved as word processing files).
Obligors agree that Lender may disclose information regarding the
Individual Properties and such Obligor that is provided to Lender
pursuant to this Section in connection with the Securitization to such
parties requesting such information in connection with such
Securitization.
(q) Notwithstanding the foregoing, provisions of Section
9.01(a), (b), (c), (d) and (e) shall be suspended and waived by Lender
for so long as and to the extent Borrower is a reporting company under
the Securities Exchange Act of 1934, as amended, and copies of
Borrower's form 10-K, 10-Q and annual reports are delivered to Lender
promptly (and in any event within 10 business days) following their
filing with the Securities and Exchange Commission.
9.02 Existence; Compliance with Legal Requirements;
Insurance. Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply, or cause applicable tenants to
comply, with all Legal Requirements applicable to it and the Individual
Properties. There shall never be committed by Borrower (or any other Obligor)
and, if known to Borrower, Borrower shall not suffer or permit to be committed
by any other Person in occupancy of or involved with the operation or use of any
of the Individual Properties, any act or omission affording the federal
government or any state or local government the right of forfeiture as against
any Individual Property or any part thereof or any monies paid in performance of
Borrower's obligations under any of the Loan Documents. Borrower hereby
covenants and
66
73
agrees not to commit, permit or suffer to exist any act or omission affording
such right of forfeiture. Obligors shall at all times maintain, preserve and
protect all franchises and trade names and preserve all the remainder of its
property used or useful in the conduct of its business and shall, or shall cause
the tenants under Qualified Leases to, keep the Individual Properties in good
working order and repair, and from time to time make, or cause to be made, all
reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, subject to the terms of any applicable Qualified Lease,
all as more fully provided in any applicable mortgage. Borrower shall, or shall
cause the applicable tenant under Qualified Leases to, keep each Individual
Property insured at all times by financially sound and reputable insurers, to
such extent and against such risks, and Borrower shall, or shall cause the
applicable tenant under a Qualified Lease to, maintain liability and such other
insurance, as is more fully provided in this Agreement. After prior written
notice to Lender and subject to the terms of a Qualified Lease (other than and
specifically excluding the Loews Lease), Borrower or the tenant under a
Qualified Lease, at its own expense, may contest by appropriate legal proceeding
promptly initiated and conducted in good faith and with due diligence, the
validity of any Legal Requirement, the applicability of any Legal Requirement to
Borrower, the applicable tenant under a Qualified Lease or any Individual
Property or any alleged violation of any Legal Requirement, provided that (i) no
Default or Event of Default has occurred and remains uncured; (ii) such contest
is permitted under the provisions of any mortgage or deed of trust applicable
thereto; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any instrument to which Borrower or any
Obligor is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances; (iv) no Individual Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost; (v) promptly upon final determination thereof, Borrower shall, or shall
cause the applicable Subsidiary Guarantor or tenant under a Qualified Lease to,
comply with any such Legal Requirement determined to be valid or applicable or
cure any violation of any Legal Requirement; (vi) such proceeding shall suspend
the enforcement of the contested Legal Requirement against Borrower, the
Subsidiary Guarantor, the applicable tenant, and any Individual Property, as
applicable; and (vii) Borrower shall furnish, or shall cause the applicable
tenant under a Qualified Lease to furnish, such security as may be required in
the proceeding, or as may be requested by Lender, to ensure compliance with such
Legal Requirement, together with all interest and penalties payable in
connection therewith. Lender may apply any such security, as necessary to cause
compliance with such Legal Requirement at any time when, in the reasonable
judgment of Lender, the validity, applicability or violation of such Legal
Requirement is finally established or any Individual Property (or any part
thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost.
9.03 Notices of Material Events. Borrower will furnish the
following to Lender in writing:
(a) promptly after Borrower knows or has reason to believe
that any Default has occurred, notice of such Default;
(b) prompt notice of all legal or arbitral proceedings, and
of all proceedings by or before any Governmental Authority or
regulatory authority or agency, and of any material development in
respect of such legal or other proceedings, affecting Borrower,
67
74
any of its Subsidiaries or the Individual Properties, except
proceedings that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect;
(c) as soon as possible, and in any event within ten days
after Borrower knows or has reason to believe that any ERISA Event has
occurred or exists with respect to any Plan of Borrower, notice of the
occurrence of such ERISA Event and a copy of any report or notice
required to be filed with or given to the PBGC by Borrower or an ERISA
Affiliate with respect to such ERISA Event;
(d) prompt notice of (i) any Environmental Defect with
respect to an Individual Property, (ii) the assertion of any
Environmental Claim by any Person against, or with respect to the
activities of, Borrower, any of its Subsidiaries or any Individual
Property and (iii) any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other
than, in the case of clause (ii) or (iii), any Environmental Claim or
alleged violation that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect,
including copies of any related Environmental Report;
(e) prompt notice of any default under any Qualified Lease or
Qualified Ground Lease;
(f) prompt notice of any other development that results in,
or could reasonably be expected to result in, a Material Adverse
Effect; and
(g) notice of any acquisition of a Real Estate Property by
Borrower or any of its Subsidiaries within 15 days after such
acquisition; and, at Lender's request, Borrower shall deliver to
Lender, with respect to such Real Estate Property, a brief description
and recent photograph, a rent roll summary, a pro forma and historic
(if available) income statement and a summary of the key business terms
of such acquisition.
Each notice delivered under this Section 9.03 shall be
accompanied by a statement of a Financial Officer or other executive
officer of Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to
be taken with respect thereto.
9.04 Existence, Etc.
(a) Borrower will, and will cause each of its Subsidiaries
to:
(i) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 9.04 shall prohibit
any transaction expressly permitted under Section 9.06);
(ii) comply with the requirements of all applicable
laws, rules, regulations and orders of any Governmental
Authority or regulatory authorities if failure to comply with
such requirements could (either individually or in the
aggregate) have a Material Adverse Effect;
68
75
(iii) subject to the applicable Qualified Lease (other
than and specifically excluding the Loews Lease), pay and
discharge, or cause to be paid or discharged by the tenant,
all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its
Property prior to the date on which interest or penalties
attach thereto, except for any such tax, assessment, charge
or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves
are being maintained; provided that Borrower shall pay, or
cause the tenant under a Qualified Lease to pay, all such
taxes, assessments, charges and levies being contested prior
to the consummation of any proceedings to foreclose any Lien
that may have attached as security therefor;
(iv) maintain, or cause to be maintained, all of its
Individual Properties used or useful in its business in good
working order and condition, ordinary wear and tear excepted;
(v) keep adequate records and books of account, in
which complete entries will be made in accordance with
generally accepted accounting principles consistently
applied; and
(vi) subject to the terms of any applicable Qualified
Lease, permit representatives of Lender, during normal
business hours, to examine, copy and make extracts from its
books and records, to inspect any of the Individual
Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by Lender.
(b) Borrower shall give Lender notice in the event it does
not maintain its status as a REIT or takes any action which could lead
to its disqualification as a REIT.
(c) Borrower shall give Lender notice in the event it does
not continue to be listed on one of the major United States stock
exchanges, including NASDAQ.
9.05 Insurance.
(a) Without limitation of the provisions of Section 9.05(b),
Borrower will, and will cause each of its Subsidiaries to, maintain
insurance with insurance companies rated A- or better, with respect to
risks of a character usually maintained by corporations engaged in the
same or similar business similarly situated, against loss, damage and
liability of the kinds and in the amounts customarily maintained by
such corporations. Borrower shall, prior to the expiration of any
insurance required hereunder, deliver to the Lender evidence of
insurance evidencing the existence of all such insurance, such
certificates to be in form and substance reasonably satisfactory to
Lender, it being agreed that such insurance and certificates may be
maintained by the tenant under its applicable Qualified Lease.
(b) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Individual Owned Properties
providing at least the following coverages:
69
76
(i) property insurance for each Individual Property,
will be maintained by the tenant under each Qualified Lease,
at Tenant's sole cost and expense, for the mutual benefit of
such tenant, Borrower and Lender. The requirements as
specified in the Qualified Leases will be the required
coverage under this Agreement for the property to which such
Qualified Lease relates. Borrower and Lender agree that the
coverage in place as of the Effective Date for Qualified
Leases on the Megaplex Properties are acceptable to Lender
and meet the requirements of this Agreement.
(ii) at all times during which structural construction,
repairs or alterations are being made with respect to the
Improvements, and only if the Individual Property coverage
form does not otherwise apply, (A) owner's contingent or
protective liability insurance, otherwise known as Owner
Contractors Protective Liability covering claims not covered
by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the
insurance provided for in subsection (i) above written in a
so-called builder's risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against
pursuant to subsection (i) above, (3) including permission to
occupy the Individual Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(iii) commercial general liability insurance against
claims for personal injury, bodily injury, death or property
damage occurring upon, in or about the Individual Property,
such insurance (A) to be on the so-called "occurrence" form
with a combined limit of not less than Two Million Dollars
($2,000,000) in the aggregate and One Million Dollars
($1,000,000) per occurrence; (B) to continue at not less than
the aforesaid limit until required to be changed by Lender in
writing by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the
following hazards: (1) premises and operations; (2) products
and completed operations on an "if any" basis; (3)
independent contractors; (4) blanket contractual liability
for all legal contracts; and (5) contractual liability
covering the indemnities contained in Article 9 of the
Mortgages to the extent the same is available;
(iv) automobile liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles
containing minimum limits per occurrence of One Million
Dollars ($1,000,000);
(v) worker's compensation and employee's liability
insurance subject to the worker's compensation laws of the
applicable state;
(vi) umbrella liability insurance in an amount not less
than Fifty Million Dollars ($50,000,000) per occurrence on
terms consistent with the commercial general liability
insurance policy required under subsection (iii) above
including supplemental coverage for commercial general
liability, employer's liability, and automobile liability.
70
77
(c) All insurance provided for in Section 9.05(b) shall be
obtained under valid and enforceable policies (collectively, the
"Policies" or in the singular, the "Policy"), and shall be subject to
the approval of Lender as to insurance companies, amounts, deductibles,
loss payees and insureds. The Policies shall be issued by financially
sound and responsible insurance companies authorized to do business in
the State and having a financial strength rating of not less than the
better of the rating specified in Section 9.04(a) and "A2" or better by
the rating agencies selected by Lender. The Policies described in
Section 9.04(b) shall designate Lender as additional insured on all
policies of liability insurance, and shall include a loss payable
clause and standard non-contributing mortgagee clause in favor of
Lender providing that any loss thereunder shall be payable to Lender.
Not less than ten (10) days prior to the expiration dates of the
Policies theretofore furnished to Lender, Borrower shall cause
certificates of insurance evidencing the Policies specified in Section
9.05(b) accompanied by evidence satisfactory to Lender of payment of
the premiums due thereunder (the "Insurance Premiums"), to be delivered
by Borrower to Lender.
(d) Any blanket insurance Policy shall specifically allocate
to the Individual Property the amount of coverage from time to time
required hereunder and shall otherwise provide the same protection as
would a separate Policy insuring only the Properties in compliance with
the provisions of Section 9.05(b).
(e) All Policies provided for in Section 9.05(b) shall
contain clauses or endorsements to the effect that:
(i) no act or negligence of any Obligor, or anyone
acting for Obligor, or of any tenant or occupant, or failure
to comply with the provisions of any Policy, which might
otherwise result in a forfeiture of the insurance or any part
thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is
concerned;
(ii) the Policy shall not be materially changed (other
than to increase the coverage provided thereby) or canceled
without at least thirty (30) days' written notice to Lender
and any other party named therein as an additional insured;
(iii) the issuers thereof shall give written notice to
Lender if the Policy has not been renewed thirty (30) days
prior to its expiration; and
(iv) Lender shall not be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and
effect, Lender shall have the right, without notice to any Obligor, to
take such action as Lender deems necessary to protect its interest in
the Individual Properties, including the obtaining of such insurance
coverage as Lender in its sole discretion deems appropriate. All
premiums incurred by Lender in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by
71
78
Borrower to Lender upon demand and, until paid, shall be secured by the
Mortgages and shall bear interest at the Default Rate.
9.06 Prohibition of Fundamental Changes.
(a) Borrower will not, nor will it permit any Subsidiary
Guarantor or the Securitization Property Owner to, enter into any
transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution).
Notwithstanding the foregoing provisions of this Section 9.06:
(i) any Subsidiary of Borrower (other than any
Subsidiary Guarantor or Securitized Property Owner) may be
merged or consolidated with or into: (i) Borrower if Borrower
shall be the continuing or surviving entity or (ii) any other
such Subsidiary; provided that if any such transaction shall
be between a Subsidiary and a Wholly Owned Subsidiary, the
Wholly Owned Subsidiary shall be the continuing or surviving
entity;
(ii) any Subsidiary (other than any Subsidiary
Guarantor or Securitized Property Owner) of Borrower may
sell, lease, transfer or otherwise dispose of any or all of
its Property (upon voluntary liquidation or otherwise) to
Borrower; and
(iii) Borrower may merge or consolidate with any other
Person in connection with the acquisition of Real Estate
Properties if (i) Borrower is the surviving entity and, (ii)
after giving effect thereto no Default would exist hereunder,
provided that prior to such merger or consolidation, Borrower
shall provide to Lender a certificate signed by a Financial
Officer setting forth in reasonable detail computations
evidencing compliance with the covenants contained in
Sections 9.07, 9.08, 9.09, 9.10 and 9.11 and certifying that
no Default has occurred and is continuing, or would occur and
be continuing after giving effect to such merger or
consolidation and all liabilities, fixed or contingent,
pursuant thereto.
(b) Borrower will not, nor will it permit any of its
Subsidiary Guarantors or Securitization Property Owner to, dispose of
any Real Estate Properties in any single transaction having a sales
price (net of any Indebtedness secured by a Lien on such Real Estate
Properties, if any) in excess of $50,000,000 or ▇▇▇▇▇ ▇ ▇▇▇▇ to secure
Indebtedness in any single transaction in an amount in excess of
$25,000,000 (except as permitted in Section 7.03) unless, in each such
event, Borrower has provided to the Lender a certificate signed by a
Financial Officer setting forth in reasonable detail computations
evidencing compliance with the covenants contained in Sections 9.07,
9.08, 9.09, 9.10, and 9.11, and certifying that no Default has occurred
and is continuing, or would occur and be continuing after giving effect
to such proposed sale or Lien, taking into account any Loan to be
prepaid from the proceeds of such transaction. Furthermore, Borrower
will not permit Obligors to dispose or permit the disposition of all or
any part of the Individual Properties, or any direct or indirect
interest therein provided, however, (a) a
72
79
Megaplex Property may be replaced pursuant to Section 9.35, and (b) a
Pad Property may be sold pursuant to Section 2.10.
9.07 Liens.
(a) Borrow er will not, nor will it permit any other Obligor
to, create, incur, assume or suffer to exist any Lien upon any of the
Individual Properties, whether now owned or hereafter acquired, except
the following (collectively, "Permitted Liens"):
(i) Liens imposed by any Governmental Authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if,
unless the amount thereof is not material with respect to it
or its financial condition, adequate reserves with respect
thereto are maintained on the books of Borrower or the
affected Subsidiaries, as the case may be, in accordance with
GAAP;
(ii) carriers', warehousemen's, mechanics' (other than
mechanic's liens shown in the title policies and title
reports listed on Schedule VIII, which shall be deemed
Permitted Liens), materialmen's, repairmen's or other like
Liens arising in the ordinary course of business that are not
overdue for a period of more than 60 days or that are being
contested in good faith and by appropriate proceedings and
Liens securing judgments but only to the extent for an amount
and for a period not resulting in an Event of Default under
clause (k) of Section 10;
(iii) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(iv) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(v) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of the
Individual Property or minor imperfections in title thereto
or other encumbrances listed in title reports approved by
Lender that, in the aggregate, are not material in amount,
and that do not in any case materially detract from the value
of the Individual Property subject thereto or interfere with
the ordinary conduct of the business of Borrower or any of
its Subsidiaries;
(vi) Qualified Leases permitted under the terms of
this Agreement;
(vii) Qualified Ground Leases permitted under the terms
of this Agreement;
73
80
(viii) Any lien existing on the Effective Date and set
forth on Schedule 8.16(b) hereto; and
(ix) Any lien arising as permitted by Section 7.03(c),
Section 9.08(c) or Section 9.08(d) below.
(b) Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its other Property, whether now owned or hereafter acquired,
which would cause a Default hereunder or under any other agreements to
which Borrower or any of its Subsidiaries are parties or by which any
of them or any of their respective assets is bound.
9.08 Indebtedness. Borrower will not permit any Subsidiary
Guarantor or Securitization Property Owner to, create, incur or suffer to exist
any Indebtedness except:
(a) Indebtedness to Lender hereunder;
(b) Recourse Indebtedness for (i) dividends declared but not
yet paid, (ii) trade payables in the ordinary course of business so
long as such trade payables are payable within 90 days after the date
of the original invoice and (iii) equipment leases either having rental
of no more than $500,000 in the aggregate which (x) is unsecured by a
Lien and (y) does not otherwise cause a Default under the terms of this
Agreement or any other agreement to which Borrower or a Subsidiary is a
party or by which it or its assets is otherwise bound or equipment
leases included as part of the Woodridge FF&E Plan;
(c) Subsidiaries other than the Subsidiary Guarantors and
other than Securitized Property Owner may incur Non-Recourse
Indebtedness or Recourse Indebtedness which does not otherwise cause a
Default under the terms of this Agreement or any other agreement to
which Borrower or its Subsidiaries or by which any of such Persons or
such Person's assets may be bound; and
(d) any Indebtedness associated with an acquisition in
accordance with either Section 7.03(ii)(a) or 7.03(c) alone, or
Sections 9.24 and either 7.03(ii)(a) or 7.03(c).
9.09 Investments. Megaplex Owner will not, nor will it permit
any of its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the date hereof and
identified in Schedule 8.18(b);
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by Borrower and its Subsidiaries in Borrower
and its Subsidiaries for Permitted Uses;
74
81
(e) Subject to the provisions of Section 9.24, Investments
in Real Estate Properties (including investments in down REIT's and to
joint ventures formed to hold or develop properties);
(f) Hedging Agreements required under Section 9.12;
(g) The Cap Agreement; or
(h) The acquisition of the Ground Leases.
9.10 Restricted Payments. Borrower will not, nor will it
permit any of its Subsidiaries to, as determined on an aggregate annual basis,
declare or make any Restricted Payment (a) in excess of 90% of Funds Available
for Distribution in any year or (b) during any period when an Event of Default
shall have occurred and be continuing. Notwithstanding the foregoing sentence,
Borrower's Subsidiaries may distribute up to 100% of FFO to Borrower (or a pro
rata portion thereof based on Borrower's ownership interest in its respective
Subsidiaries). Notwithstanding the foregoing, Borrower and its Subsidiaries
shall have the right to make any Restricted Payment required to enable Borrower
to maintain its REIT status.
9.11 Certain Financial Covenants.
(a) Minimum Fixed Charges Ratio. As at the end of each fiscal
quarter, the Fixed Charges Ratio shall not be less than 1.75 to 1.
(b) Minimum Interest Coverage Ratio. As at the end of each
fiscal quarter, the Interest Coverage Ratio shall not be less than 2.0
to 1.
9.12 [INTENTIONALLY DELETED]
9.13 Lines of Business. Borrower will not, nor will it permit
any of its Subsidiaries to, engage to any substantial extent in any line or
lines of business activity other than the businesses contemplated by the
definition of Permitted Uses and Investments permitted under Section 9.09.
9.14 Transactions with Affiliates. Except as expressly
permitted by this Agreement, Borrower will not permit any Subsidiary Guarantors
or the Securitization Property Owner to, directly or indirectly: (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any Property to an Affiliate; (c) merge into or consolidate with or
purchase or acquire Property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including Guarantees and assumptions of obligations of an Affiliate, but
excluding investments in Subsidiaries; provided that (x) any Affiliate who is an
individual may serve as a director, trustee, officer or employee of Borrower or
any of its Subsidiaries and receive reasonable compensation for his or her
services in such capacity, (y) a Subsidiary, other than the Subsidiary
Guarantors and other than the Securitization Property Owner, may convey a Real
Property to a wholly owned Subsidiary of Borrower in connection with
Indebtedness incurred by the transferee Subsidiary to the extent such
Non-Recourse Indebtedness is permitted under this Agreement, and (z) Borrower
may, in connection with any such permitted Indebtedness of a Subsidiary agree to
indemnify the applicable lender in
75
82
connection with such Non-Recourse Indebtedness with respect to customary
environmental indemnities and customary carve-outs for Non-Recourse
Indebtedness.
9.15 Restrictive Agreements. Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its Real Estate
Properties, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to Borrower or any other Subsidiary or to Guarantee
Indebtedness of Borrower or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement, (ii) clause (a) of the foregoing shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to the
property or assets securing such Indebtedness and (iii) clause (a) of the
foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof. Borrower will cause Subsidiary Guarantors to
make timely sufficient distributions and dividends to pay the Indebtedness
incurred pursuant to the Loan Document as and when due and payable.
9.16 Use of Proceeds. Borrower will use the proceeds of the
Loan hereunder solely for (a) working capital purposes, (b) the acquisition,
leasing, development and expansion of Individual Properties for Permitted Uses,
(c) to finance the payment of fees, expenses, and other costs payable in
connection with this Agreement, and (d) Investments permitted under Section 9.09
and uses ancillary to any of the foregoing, all of the foregoing subject,
however, to the terms and conditions of this Agreement (including Section 9.24
below). No part of the proceeds of any Loan will be used, directly or
indirectly, for any purpose that entails a violation of Regulations T, U and X,
the 1933 Act, the Securities Exchange Act of 1934 or the SEC Rules and
Regulations. To the extent that proceeds are used, directly or indirectly, to
acquire Individual Properties, Borrower shall (subject to the provisions of
Section 7.03) cause Lender to obtain a Lien in its favor on such Individual
Properties or upon equity or debt instruments pertaining to the Persons in which
an Investment is made. Lender will, in connection therewith, obtain all
mortgages, pledges, consents, estoppels, subordination agreements and other
information and rights as Lender currently has, or is permitted to have, on
comparable Property in connection with the Loan and security therefor, all
provided by, or at the expense of, Borrower.
9.17 Ownership of Subsidiaries.
(a) Ownership of Subsidiaries. Borrower will, and will cause
each of its Subsidiaries to, take such action from time to time as
shall be necessary to ensure that each of its Subsidiaries remains a
Subsidiary.
(b) Certain Restrictions. Borrower will not permit Megaplex
Owner or any of Megaplex Owner's Subsidiaries to enter into, after the
date hereof, any indenture, agreement, instrument or other arrangement
that, directly or indirectly, prohibits or restrains, or has the effect
of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence or payment of Indebtedness, the granting of Liens,
the
76
83
declaration or payment of dividends, the making of loans, advances or
Investments or the sale, assignment, transfer or other disposition of
Property.
9.18 Modifications of Certain Documents. No Obligor will
consent to (or permit Securitized Property Owner to enter into) any
modification, supplement or waiver of any of the provisions of (a) any Loan
Document; (b) such Person's declaration of trust, by-laws or other charter
documents if, in the case of this clause (b) such changes would materially and
adversely affect any of the rights of Lender under any Loan Document, or (c) the
documents evidencing or securing Indebtedness evidenced by the Megaplex Nine
Loan Documents or Archon Securitized Loan Documents, without, in the case of any
of clause (a), (b) or (c), the prior consent of Lender.
9.19 Further Assurances. Borrower shall, and shall cause each
Obligor to, cooperate with Lender and will execute any and all further
documents, agreements and instruments, and take all such further actions which
may be required under any applicable law, or which Lender may reasonably
request, to effectuate the transactions contemplated by the Loan Documents.
9.20 Environmental Compliance.
(a) Borrower covenants and agrees that (i) the uses and
operations on or of the Real Estate Properties, shall be in material
compliance with all Environmental Laws and permits issued pursuant
thereto, (ii) it shall use diligent efforts to enforce the provisions
of each Qualified Lease relative to compliance with all applicable
Environmental Laws and permits and (iii) in the event that any
Hazardous Materials are present on, under or emanate from the Real
Estate Properties, or migrate onto or into the Real Estate Properties,
Borrower shall, if required by any Governmental Authority, cause (or
use diligent efforts to cause the lessee under any Qualified Lease to
cause) the Remediation of such Hazardous Materials, in accordance with
applicable Environmental Laws.
(b) If Lender has reasonable grounds to believe that an
Environmental Defect has occurred with respect to any one or more of
the Individual Properties which would cost in excess of $1,000,000 to
remediate, whether or not a Default shall have occurred, Lender may,
from time to time, for the purpose of assessing and determining whether
an Environmental Defect has in fact occurred, cause Borrower to obtain
one or more environmental assessments or audits of such Individual
Property prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by Lender to (i) evaluate or
confirm (A) whether any Hazardous Materials are present in the soil or
water at such Individual Property and (B) whether the use and operation
of such Individual Property including any and all storage areas,
storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and (ii) if and to
the extent reasonable, appropriate and required pursuant to applicable
Environmental Laws, the taking of soil samples, surface water samples
and ground water samples, as well as such other investigations or
analyses as Lender reasonably deems appropriate. All such environmental
assessments shall be at the sole cost and expense of Borrower.
9.21 Qualified Ground Leases.
77
84
(a) Borrower shall, or shall cause the applicable Obligor or
tenant to, (i) pay or cause to be paid all rents, additional rents and
other sums required to be paid by any Obligor, as tenant under and
pursuant to the provisions of any Qualified Ground Lease related to an
Individual Property on or before the date on which such rent or other
charge becomes overdue, (ii) diligently perform and observe all of the
terms, covenants and conditions of any such Qualified Ground Lease on
the part of any Obligor, as tenant thereunder, to be performed and
observed prior to the expiration of any applicable grace period therein
provided, (iii) promptly notify Lender of the giving of any notice by
the landlord under any such Qualified Ground Lease to any Obligor of
any default by such Obligor, as tenant thereunder, to be performed or
observed and promptly deliver to Lender a true copy of each such
notice, (iv) take all necessary action to prevent the termination of
any such Qualified Ground Lease and (v) enforce each material covenant
or obligation of any such Qualified Ground Lease in accordance with its
terms.
(b) Except as permitted by Section 9.21(c) below, Borrower
shall not, and shall not permit any Obligor to, surrender the leasehold
estate created by any Qualified Ground Lease relating to an Individual
Property, or terminate or cancel such Qualified Ground Lease except to
the extent permitted pursuant to the Loan Documents. Borrower shall
not, and shall not permit any Obligor to, without the prior written
consent of Lender, modify, change, supplement, alter or amend such
Qualified Ground Lease, in any respect, either orally or in writing, in
any manner; provided, however, Lender shall not unreasonably withhold
or delay Lender's consent to any proposed modification, change,
supplementation, alteration or amendment provided same does not in any
manner adversely affect the Lender or in any manner adversely impair
the collateral value of the leasehold created by such Qualified Ground
Lease.
(c) If and to the extent on or before the Effective Date
Megaplex Owner has not acquired fee title interest to the Megaplex
Properties which are subject to Qualified Ground Leases (Palm Promenade
and Woodridge) then Borrower shall cause Megaplex Owner to acquire fee
title interest to the Megaplex Properties which are subject to
Qualified Ground Leases (Palm Promenade and Woodridge) pursuant to the
options referenced in Section 8.23 in a manner in which there is no
reduction in amounts paid by the tenant under the Qualified Lease for
such property, all no later than ninety (90) days after the Effective
Date. Such acquisitions shall be accomplished subjecting such acquired
property to the Lien of a Mortgage in form and for such amount as
approved by Lender and Lender shall receive title insurance insuring
such Lien in form and amount satisfactory to Lender.
9.22 Qualified Leases.
(a) Borrower shall, and shall cause each Obligor to, (i)
promptly perform and fulfill, or cause to be performed and fulfilled,
each and every material term and provision of such Obligor's
obligations under any Qualified Lease relating to an Individual
Property, (ii) give to Lender a duplicate notice of default of each
default by any lessee under any such Qualified Lease, (iii) cause each
Qualified Lease executed after the date hereof to require the lessee
thereunder to agree to give to Lender written notice of each and every
notice of default given by such lessee to such Obligor under its
respective
78
85
Qualified Lease and (iv) enforce each material covenant or obligation
of any such Qualified Lease in accordance with its terms.
(b) Borrower shall not, and shall prohibit each Obligor from,
performing or failing to perform any act which would (i) amend, extend,
cancel, abridge, or otherwise modify, or accept surrender of, or renew,
any Qualified Lease relating to an Individual Property (except with
respect to the Loews Lease), now existing or hereafter made, in such a
manner as to cause same to be materially changed from the terms and
conditions contained in Exhibit __ without the consent of Lender, which
consent shall not be unreasonably withheld or delayed, (ii) assign,
transfer, pledge, subordinate or mortgage any such Qualified Lease or
any rent due thereunder, (iii) waive, excuse, release or condone any
material nonperformance of any covenant of any such Qualified Lease by
any lessee thereunder or (iv) release any guarantor from its
obligations under any guaranty of any such Qualified Lease.
9.23 Manner of Making Payments; Cash Management.
(a) Deposits into Lockbox Account. Borrower shall cause all
Rents from the Pad Properties and the Megaplex Properties to be
deposited into the Lockbox Account in accordance with the Cash
Management Agreement. Without limitation of the foregoing, Borrower
shall (a) deliver irrevocable written instructions to all tenants under
leases of the Pad Properties and Megaplex Properties to deliver all
Rents payable thereunder directly to the Lockbox Account, and (b)
deposit all amounts received by Borrower constituting Rents or other
revenue of any kind from the Pad Properties and Megaplex Properties
into the Lockbox Account within one (1) Business Day of receipt
thereof. Additionally, Borrower shall cause all distributions and
payments otherwise payable to or for the account of Archon SPE Holdings
from Securitization Property Owner or the Securitized Properties to be
deposited into the Lockbox Account in accordance with the Cash
Management Agreement. Without limitation of the foregoing, Borrower
shall, and shall cause Archon SPE Holdings and Securitization Property
Owner, to (1) deliver irrevocable written instructions to the agent
under and senior lender under the Archon Securitized Loan Documents to
deliver all such payments referenced in the immediately preceding
sentence directly to the Lockbox Account, and (2) deposit all such
amounts referenced in the immediately preceding sentence received by
Borrower, Archon SPE Holdings or Securitization Property Owner into the
Lockbox Account within one (1) Business Day of receipt thereof.
Disbursements from the Lockbox Account will be made in accordance with
the terms and conditions of this Agreement and the Cash Management
Agreement. Lender shall have sole dominion and control over the Lockbox
Account and any other cash management account established pursuant to
the Cash Management Agreement and, except as set forth in the Cash
Management Agreement, Borrower shall have no rights to make withdrawals
therefrom. Borrower shall be responsible for all costs of maintaining
all such accounts.
(b) Making of Payments. Each payment by Borrower hereunder or
under the Note shall be made in funds settled through the
New York
Clearing House Interbank Payments System or other funds immediately
available to Lender by 11:00 a.m.,
New York City time, on the date such
payment is due, to Lender by deposit to such account as
79
86
Lender may designate by written notice to Borrower. Whenever any
payment hereunder or under the Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the first
Business Day preceding such scheduled due date.
(c) Payments Received in the Lockbox Account. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, and provided no Event of Default has occurred and is
continuing, Borrower's obligations with respect to the monthly payment
of principal and interest and any amounts due for the Reserve Funds
shall be deemed satisfied to the extent sufficient amounts are
deposited in the Lockbox Account to satisfy such obligations and any
other obligations due on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.
(d) Following an Event of Default, in addition to any other
right or remedy Lender may have under the Loan Documents, Lender shall
have the option, acting in its sole and absolute discretion, to apply
funds, if any, on deposit in the Cash Trap Account (as set forth in the
Cash Management Agreement) (the "Cash Paydown Option") with application
of the payment of the associated Exit Fee to payment of Loan and other
obligations owing Lender on account of the Loan Documents.
Additionally, Lender agrees (i) to provide notice to Borrower of the
occurrence of a Cash Trap Termination Event under the Cash Management
Agreement promptly once Lender has knowledge such event has occurred,
and (ii) at such time as Lender has knowledge that the Megaplex Debt
Service Coverage Ratio equals or exceeds the Cash Trap MDSCR for each
month, measured month by month, for six (6) consecutive months, Lender
shall advise Agent and Borrower and permit the Cash Trap Account to be
disbursed to Borrower pursuant to the Cash Management Agreement
(subject to Section 7.04(d)).
9.24 Additional Real Estate Acquisitions. Subject to the
conditions set forth in this Section 9.24, Borrower shall be permitted to permit
Megaplex Owner to acquire, certain Real Estate Property without utilizing Loan
proceeds only if the conditions (other than utilizing Loan proceeds) set forth
in Section 7.03 are satisfied to Lender's satisfaction.
9.25 Taxes and Other Charges. Borrower shall, or shall cause
the applicable tenant under a Qualified Lease, if so required, to, pay all Taxes
and Other Charges now or hereafter levied or assessed or imposed against the
Individual Properties or any part thereof as the same become due and payable;
provided, however, Borrower's obligation to directly pay, or cause the
applicable tenant to directly pay, Taxes with respect to an Individual Property
shall be suspended for so long as such Taxes are paid from the Tax and Insurance
Escrow Fund and Borrower complies with the terms and provisions of Section 9.30
hereof. Borrower shall furnish to Lender receipts for the payment of the Taxes
and the Other Charges prior to the date the same shall become delinquent
(provided, however, that Borrower is not required to furnish such receipts for
payment of Taxes in the event that such Taxes have been paid by Lender pursuant
to Section 9.30 hereof). Borrower shall not suffer and shall promptly cause to
be paid by the tenant under a Qualified Lease for such property and discharged
any Lien or charge whatsoever which may be or become a Lien or charge against
the Individual Properties, and shall promptly pay, or cause the applicable
tenant under a Qualified Lease to pay, for all utility services provided to the
Individual Properties. After prior written notice to Lender, Borrower or the
applicable tenant
80
87
under a Qualified Lease, at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes or Other Charges, provided that (i) no Default or Event of Default has
occurred and remains uncured; (ii) such contest is permitted under the
provisions of any mortgage or deed of trust superior in lien to the applicable
Mortgage; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iv) no Individual Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, cancelled or lost; (v) Borrower or
the applicable tenant under a Qualified Lease shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (vi) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the applicable Individual Property; and
(vii) Borrower shall furnish, or shall cause the applicable tenant under a
Qualified Lease to furnish, such security as may be required in the proceeding,
or as may be requested by Lender but subject to the terms of any Qualified Lease
applicable thereto, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon. Lender may pay over any such
cash deposit or part thereof held by Lender to the claimant entitled thereto at
any time when, in the judgment of Lender, the entitlement of such claimant is
established or any Individual Property (or part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost or
there shall be any danger of the Lien of any Mortgage being primed by any
related Lien.
9.26 Access to Individual Properties. Borrower shall permit
(or cause the requisite permission to be obtained to permit) agents,
representatives and employees of Lender to inspect the Individual Properties or
any part thereof at reasonable hours upon reasonable advance notice and subject
to the rights of tenants under the Qualified Leases.
9.27 Further Assurances. Borrower shall, at Borrower's sole
cost and expense:
(a) furnish to Lender all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and
specifications, appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement
and instrument required to be furnished by Borrower pursuant to the
terms of the Loan Documents or reasonably requested by Lender in
connection therewith;
(b) execute and deliver (or cause execution and delivery by
other Obligors) to Lender such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary or
desirable, to evidence, preserve and/or protect the collateral at any
time securing or intended to secure the obligations of Borrower under
the Loan Documents, as Lender may reasonably require; and
(c) do and execute (or cause other Obligors to do and
execute) all and such further lawful and reasonable acts, conveyances
and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as
Lender shall reasonably require from time to time.
81
88
9.28 Condemnation. Subject to Section 9.29 hereof and the
terms of the applicable Qualified Lease, Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the
Condemnation of any Individual Property and shall deliver to Lender copies of
any and all papers served in connection with such proceedings. Lender may
participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by it to permit such participation.
Borrower shall, at its expense, or shall cause tenant under a Qualified Lease,
to the extent applicable, to, diligently prosecute any such proceedings and
shall consult with Lender, its attorneys and experts, and cooperate with them in
the carrying on or defense of any such proceedings. Notwithstanding any taking
by any public or quasi-public authority through Condemnation or otherwise
(including any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Loan and all other obligations
of Borrower to Lender under the Loan Documents at the time and in the manner
provided for its payment in the Note and in this Agreement and the Loan and all
other obligations of Borrower to Lender under the Loan Documents shall not be
reduced until any Award shall have been actually received and applied by Lender,
after the deduction of expenses of collection, to the reduction or discharge of
the Loan and all other obligations of Borrower to Lender under the Loan
Documents. Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest
at the rate or rates provided herein or in the Note. If any Individual Property
or any portion thereof is taken by a condemning authority, Borrower shall
promptly commence and diligently prosecute, or shall cause the applicable tenant
under a Qualified Lease, to the extent applicable, to promptly commence and
diligently prosecute, the Restoration of the applicable Individual Property and
otherwise comply with the provisions of Section 9.29. Subject to Section 9.29(e)
hereof, if any Individual Property is sold, through foreclosure or otherwise,
prior to the receipt by Lender of the Award, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Loan and all other obligations of Borrower to Lender under the Loan
Documents.
9.29 Restoration. Subject to the terms of the applicable
Qualified Lease (other than and specifically excluding the Loews Lease), the
following provisions shall apply in connection with the Restoration of any
Individual Property:
(a) If the Net Proceeds shall be less than One Hundred
Thousand and No/100 Dollars ($100,000) and the costs of completing the
Restoration shall be less than One Hundred Thousand and No/100 Dollars
($100,000), the Net Proceeds will be disbursed by Lender to Borrower
upon receipt, provided that all of the conditions set forth in Section
9.29 are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due
diligence, or cause the tenant under a Qualified Lease, to the extent
applicable, to expeditiously commence and to satisfactorily complete
with due diligence, the Restoration in accordance with the terms of
this Agreement and the Qualified Lease.
(b) If the Net Proceeds are equal to or greater than One
Hundred Thousand and No/100 Dollars ($100,000) or the costs of
completing the Restoration is equal to or greater than One Hundred
Thousand and No/100 Dollars ($100,000) Lender shall make the Net
Proceeds available for the Restoration in accordance with the
provisions of this
82
89
Section 9.29. The term "Net Proceeds" for purposes of this Section 9.29
shall mean: (i) the net amount of all insurance proceeds received by
Lender pursuant to Section 9.05(b)(i), (iii), (iv) and (ix) as a result
of such damage or destruction, after deduction of its reasonable costs
and expenses (including reasonable counsel fees), if any, in collecting
same ("Insurance Proceeds"), or (ii) the net amount of the Award, after
deduction of its reasonable costs and expenses (including reasonable
counsel fees), if any, in collecting same ("Condemnation Proceeds"),
whichever the case may be.
(i) The Net Proceeds shall be made available to
Borrower for Restoration provided that each of the following
conditions are met:
A. no Event of Default shall have occurred and be continuing;
B. (1) in the event the Net Proceeds are Insurance Proceeds, less than
twenty-five percent (25%) of the total floor area of the Improvements on the
Individual Property has been damaged, destroyed or rendered unusable as a result
of such fire or other casualty or (2) in the event the Net Proceeds are
Condemnation Proceeds, less than ten percent (10%) of the land constituting the
Individual Property is taken, and such land is located along the perimeter or
periphery of the Individual Property, and no portion of the Improvements is
located on such land;
C. The applicable Qualified Lease shall remain in full force and effect
during and after the completion of the Restoration, notwithstanding the
occurrence of any such fire or other casualty or taking, whichever the case may
be;
D. Borrower shall commence, or shall cause the tenant under a Qualified
Lease, to the extent applicable, to commence, the Restoration as soon as
reasonably practicable (but in no event later than sixty (60) days after such
damage or destruction or taking, whichever the case may be, occurs) and shall
diligently pursue, or shall cause the tenant under a Qualified Lease, to the
extent applicable, to pursue, the same to satisfactory completion;
E. Lender shall be satisfied that any operating deficits, including all
scheduled payments of principal and interest under the Note, which will be
incurred with respect to the Individual Property as a result of the occurrence
of any such fire or other casualty or taking, whichever the case may be, will be
covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in
Section 9.05(b)(ii), if applicable, or (3) by other funds of Borrower;
F. Lender shall be satisfied that the Restoration will be completed on
or before the earliest to occur of (1) six (6) months prior to the Maturity
Date, (2) the earliest date required for such completion under the terms of any
Qualified Leases, (3) such time as may be required under applicable zoning law,
ordinance, rule or regulation in order to repair and restore the applicable
Individual Property to the condition it was in immediately prior to such fire or
other casualty or to as nearly as possible the condition it was in immediately
prior to such taking, as applicable or (4) the expiration of the insurance
coverage referred to in Section 9.05(b);
G. the Individual Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable zoning laws,
ordinances, rules and regulations;
83
90
H. the Restoration shall be done and completed by Borrower or the
tenant under a Qualified Lease, to the extent applicable, in an expeditious and
diligent fashion and in compliance with all applicable governmental laws, rules
and regulations (including all applicable environmental laws);
I. such fire or other casualty or taking, as applicable, does not
result in the loss of access to the Individual Property or the related
Improvements;
J. Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower's or a Qualified Lease tenant's
architect or engineer stating the entire cost of completing the Restoration,
which budget shall be acceptable to Lender; and
K. the Net Proceeds together with any cash or cash equivalent deposited
by Borrower or the tenant under a Qualified Lease, to the extent applicable,
with Lender are sufficient in Lender's discretion to cover the cost of the
Restoration.
(ii) The Net Proceeds shall be held by Lender in an
interest-bearing Eligible Account and, until disbursed in
accordance with the provisions of this Section 9.29(b), shall
constitute additional security for the Loan and other
obligations under the Loan Documents. The Net Proceeds shall
be disbursed by Lender to, or as directed by, Borrower from
time to time during the course of the Restoration, upon
receipt of evidence satisfactory to Lender that (A) all
materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested
disbursement) in connection with the Restoration have been
paid for in full, and (B) there exist no notices of pendency,
stop orders, mechanic's or materialman's liens or notices of
intention to file same, or any other liens or encumbrances of
any nature whatsoever on the Individual Property which have
not either been fully bonded to the satisfaction of Lender and
discharged of record or in the alternative fully insured to
the satisfaction of Lender by the title company issuing the
Title Insurance Policy.
(iii) All plans and specifications required in
connection with the Restoration shall be subject to prior
review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the
"Casualty Consultant"). Lender shall have the use of the plans
and specifications and all permits, licenses and approvals
required or obtained in connection with the Restoration. The
identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts under
which they have been engaged, shall be subject to prior review
and acceptance by Lender and the Casualty Consultant. All
costs and expenses incurred by Lender in connection with
making the Net Proceeds available for the Restoration
including reasonable counsel fees and disbursements and the
Casualty Consultant's fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal
to the costs actually incurred from
84
91
time to time for work in place as part of the Restoration, as
certified by the Casualty Consultant, minus the Casualty
Retainage. The term "Casualty Retainage" shall mean an amount
equal to ten percent (10%) of the costs actually incurred for
work in place as part of the Restoration, as certified by the
Casualty Consultant, until the Restoration has been completed.
The Casualty Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section
9.29(b), be less than the amount actually held back by
Borrower or the tenant under a Qualified Lease, to the extent
applicable, from contractors, subcontractors and materialmen
engaged in the Restoration. The Casualty Retainage shall not
be released until the Casualty Consultant certifies to Lender
that the Restoration has been completed in accordance with the
provisions of this Section 9.29(b) and that all approvals
necessary for the re-occupancy and use of the Individual
Property have been obtained from all appropriate governmental
and quasi-governmental authorities, and Lender receives
evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out
of the Casualty Retainage; provided, however, that Lender will
release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman
engaged in the Restoration as of the date upon which the
Casualty Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all
work and has supplied all materials in accordance with the
provisions of the contractor's, subcontractor's or
materialman's contract, the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment
in full of all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the
title company issuing the Title Insurance Policy, and Lender
receives an endorsement to its Title Insurance Policy insuring
the continued priority of the lien of the related Mortgage and
evidence of payment of any premium payable for such
endorsement. If required by Lender, the release of any such
portion of the Casualty Retainage shall be approved by the
surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor
or materialman.
(v) Lender shall not be obligated to make
disbursements of the Net Proceeds more frequently than once
every calendar month or in the amount less than Ten Thousand
Dollars ($10,000) (or a lesser amount if the total remaining
Net Proceeds are less than Ten Thousand Dollars ($10,000), in
which case only one disbursement of the remaining Net Proceeds
shall be made).
(vi) If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in the opinion of
Lender in consultation with the Casualty Consultant, be
sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower
shall deposit the deficiency (the "Net Proceeds Deficiency")
with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited
with Lender shall be held by Lender and shall be disbursed for
costs actually incurred in connection with the Restoration on
the same conditions applicable to the disbursement of the
85
92
Net Proceeds, and until so disbursed pursuant to this Section
9.29(b) shall constitute additional security for the Loan and
other obligations under the Loan Documents.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency
deposited with Lender after the Casualty Consultant certifies
to Lender that the Restoration has been completed in
accordance with the provisions of this Section 9329(b), and
the receipt by Lender of evidence satisfactory to Lender that
all costs incurred in connection with the Restoration have
been paid in full, shall be deposited by Lender in the Lockbox
Account to be applied in accordance with the priorities set
forth therein, provided no Event of Default shall have
occurred and shall be continuing under the Note, this
Agreement or any of the other Loan Documents.
(c) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section 9.29(b)(vii) will be retained and applied
by Lender toward the payment of the Loan and all other amounts owed by
Borrower to Lender under the Loan Documents whether or not then due and
payable in such order, priority and proportions as Lender in its sole
discretion shall deem proper, or, at the discretion of Lender, the same
may be paid, either in whole or in part, to Borrower for such purposes
as Lender shall approve, in its discretion.
(d) In the event of foreclosure of the Mortgage with respect
to the Individual Property, or other transfer of title to the
Individual Property in extinguishment in whole or in part of the Loan
all right, title and interest of Borrower in and to the Policies that
are not blanket Policies then in force concerning the Individual
Property and all proceeds payable thereunder shall thereupon vest in
the purchaser at such foreclosure or Lender or other transferee in the
event of such other transfer of title.
(e) Notwithstanding anything to the contrary set forth in this
Section 9.29, Lender and Borrower agree that, at all times while the
Qualified Lease is in full force and effect with respect to an
Individual Property, if (i) neither the applicable tenant thereunder
nor Borrower shall elect to terminate the related Qualified Lease and
(ii) the applicable tenant shall elect to restore such Individual
Property after the occurrence of a Casualty or Condemnation affecting
such Individual Property pursuant to the terms and provisions of the
related Qualified Lease, then (A) any related Net Proceeds shall be
deposited with Lender (or any disbursing agent approved by Lender) and
shall be disbursed by Lender (or any disbursing agent approved by
Lender) to the applicable tenant for application to the Restoration of
the related Individual Property in accordance with the terms and
provisions of an escrow agreement among Borrower, the applicable tenant
and Lender (or any disbursing agent approved by Lender), which escrow
agreement (1) shall provide for the disbursement of the deposited Net
Proceeds as the Restoration of the related Individual Property is
completed in accordance with an Application and Certificate in the form
of AIA Document G702 to be properly completed and executed by the
applicable tenant's contractor (or by the applicable tenant if such
tenant acts as its own contractor) and architect and submitted to
Lender (or any disbursing agent approved by Lender) in connection with
each disbursement of any
86
93
portion of the deposited Net Proceeds, (2) shall provide for the
disbursement of the portion of the deposited Net Proceeds that is the
subject of any such completed and executed Application and Certificate
within five (5) Business Days of receipt by Lender (or any disbursing
agent approved by Lender) thereof, (3) shall provide for the release of
the deposited Net Proceeds to Borrower if the applicable tenant shall
fail to complete the Restoration of the related Individual Property in
accordance with the related Qualified Lease, (4) shall be in form and
substance satisfactory to Lender and (5) shall provide that such escrow
agreement may not be modified or amended without the prior written
consent of Lender; (B) Borrower shall immediately pay to Lender any
related Net Proceeds released to Borrower by Lender (or any disbursing
agent approved by Lender) pursuant to the escrow agreement described in
clause (A) above, which Net Proceeds shall be applied in accordance
with the terms and provisions of Section 9.29(a)-(c); and (C) the terms
and provisions of this Section 9.29 shall be deemed to be satisfied so
long as the applicable tenant diligently pursues and completes the
Restoration of such Individual Property in accordance with the terms
and provisions of the related Qualified Lease. If Borrower shall elect
to restore any Individual Property affected by a Casualty or
Condemnation pursuant to the terms and provisions of the related
Qualified Lease, Borrower's rights and obligations with respect to the
related Restoration and Net Proceeds shall be as otherwise set forth in
this Section 9.29.
9.30 Tax and Insurance Escrow Fund.
(a) Tax and Insurance Escrow Fund. Borrower shall pay to
Lender on each date a payment of interest on the Loan is due (i)
one-twelfth of the Taxes that Lender estimates will be payable during
the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Taxes at least thirty (30) days prior
to their respective due dates, and (ii) one-twelfth of the Insurance
Premiums that Lender estimates will be payable for the renewal of the
coverage afforded by the Policies upon the expiration thereof in order
to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of the
Policies (said amounts in (a) and (b) above hereinafter called the "Tax
and Insurance Escrow Fund"). The Tax and Insurance Escrow Fund and the
payments of interest or principal or both, payable pursuant to the
Note, shall be added together and shall be paid as an aggregate sum by
Borrower to Lender. Lender will apply the Tax and Insurance Escrow Fund
to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to this Agreement and under the Mortgages. In making
any payment relating to the Tax and Insurance Escrow Fund, Lender may
do so according to any ▇▇▇▇, statement or estimate procured from the
appropriate public office (with respect to Taxes) or insurer or agent
(with respect to Insurance Premiums), without inquiry into the accuracy
of such ▇▇▇▇, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If
the amount of the Tax and Insurance Escrow Fund shall exceed the actual
amounts due for Taxes and Insurance Premiums, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Escrow Fund. Any
amount remaining in the Tax and Insurance Escrow Fund after the Loan
and all of Borrower's other obligations to Lender have been paid in
full shall be returned to Borrower. In allocating such excess, Lender
may deal with the Person shown on the records of Lender to be the
87
94
owner of the Individual Properties. If at any time Lender reasonably
determines that the Tax and Insurance Escrow Fund is not or will not be
sufficient to pay Taxes and Insurance Premiums by the dates set forth
in (i) and (ii) above, Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments to
Lender by the amount that Lender estimates is sufficient to make up the
deficiency at least thirty (30) days prior to delinquency of the Taxes
and/or thirty (30) days prior to expiration of the Policies, as the
case may be.
(b) Exemption from Tax and Insurance Escrow Requirements.
Notwithstanding the terms and provisions of Section 9.30(a), Borrower
shall not be required to contribute to the Tax and Insurance Escrow
Fund, provided that (a) no Event of Default shall have occurred and (b)
Borrower delivers, or causes the tenant under a Qualified Lease, to the
extent applicable, to deliver, to Lender (i) receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges
with respect to each Individual Property have been paid no later than
ten (10) days prior to the date the same shall become delinquent
(unless Borrower or the tenant under a Qualified Lease, to the extent
applicable, is contesting such Taxes or Other Charges in accordance
with the terms and provisions of this Agreement and the other Loan
Documents) and (ii) written evidence satisfactory to Lender that all
Policies required pursuant to Section 9.05 and by the Mortgage are in
full force and effect and that all related Insurance Premiums have been
paid no later than ten (10) days prior to the expiration dates of such
Policies. Upon the occurrence of an Event of Default or notice from
Lender that the terms and provisions of clause (b)(i) or clause (b)(ii)
above have not been satisfied, Borrower shall begin to make monthly
payments to the Tax and Insurance Escrow Fund in accordance with the
terms and provisions of Section 9.30(a) commencing on the next date
interest is due to be paid to Lender.
9.31 Replacements and Replacement Reserve.
(a) Replacement Reserve Fund. Borrower shall pay to Lender on
each date a payment of interest on the Loan is due one-twelfth (1/12)
of the amount (the "Replacement Reserve Monthly Deposit") reasonably
estimated by Lender in its sole discretion to be due for replacements
and repairs required to be made to the Individual Properties during the
calendar year in order to maintain the Individual Properties in a first
class condition (collectively, the "Replacements"). Amounts so
deposited shall hereinafter be referred to as Borrower's "Replacement
Reserve Fund" and the account in which such amounts are held shall
hereinafter be referred to as Borrower's "Replacement Reserve Account."
Lender may reassess its estimate of the amount necessary for the
Replacement Reserve Fund from time to time, and may increase the
monthly amounts required to be deposited into the Replacement Reserve
Fund upon thirty (30) days notice to Borrower if Lender determines in
its reasonable discretion that an increase is necessary to maintain the
proper maintenance and operation of the Individual Properties. Any
amount held in the Replacement Reserve Account and allocated for an
Individual Property shall be retained by Lender and credited toward the
future Replacement Reserves Monthly Deposits required by Lender
hereunder in the event such Individual Property is released from the
Lien of its related Mortgage in accordance with the Loan Documents.
88
95
(b) Disbursements from Replacement Reserve Account.
(i) Lender shall make disbursements from the
Replacement Reserve Account to pay Borrower only for the costs
of the Replacements. Lender shall not be obligated to make
disbursements from the Replacement Reserve Account to
reimburse Borrower for the costs of routine maintenance to an
Individual Property or for costs which are to be reimbursed
from the Required Repair Fund.
(ii) Lender shall, upon written request from Borrower
and satisfaction of the requirements set forth in this Section
9.31(b), disburse to Borrower amounts from the Replacement
Reserve Account necessary to pay for the actual approved costs
of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion
in the case of Replacements made pursuant to Section
9.31(b)(v) as determined by Lender. In no event shall Lender
be obligated to disburse funds from the Replacement Reserve
Account if a Default or an Event of Default exists.
(iii) Each request for disbursement from the
Replacement Reserve Account shall be in a form specified or
approved by Lender and shall specify (i) the specific
Replacements for which the disbursement is requested, (ii) the
quantity and price of each item purchased, if the Replacement
includes the purchase or replacement of specific items, (iii)
the price of all materials (grouped by type or category) used
in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which such
request for disbursement is made. With each request Borrower
shall certify that all Replacements have been made in
accordance with all applicable Legal Requirements of any
Governmental Authority having jurisdiction over the applicable
Individual Property to which the Replacements are being
provided. Each request for disbursement shall include copies
of invoices for all items or materials purchased and all
contracted labor or services provided and, unless Lender has
agreed to issue joint checks as described below in connection
with a particular Replacement, each request shall include
evidence satisfactory to Lender of payment of all such
amounts. Except as provided in Section 9.31(b)(v), each
request for disbursement from the Replacement Reserve Account
shall be made only after completion of the Replacement for
which disbursement is requested. Borrower shall provide Lender
evidence of completion satisfactory to Lender in its
reasonable judgment.
(iv) Borrower shall pay all invoices in connection
with the Replacements with respect to which a disbursement is
requested prior to submitting such request for disbursement
from the Replacement Reserve Account or, at the request of
Borrower, Lender will issue joint checks, payable to Borrower
and the contractor, supplier, materialman, mechanic,
subcontractor or other party to whom payment is due in
connection with a Replacement. In the case of payments made by
joint check, Lender may require a waiver of lien from each
89
96
Person receiving payment prior to Lender's disbursement from
the Replacement Reserve Account. In addition, as a condition
to any disbursement, Lender may require Borrower to obtain
lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount
equal to or greater than Twenty-Five Thousand and NO/100
Dollars ($25,000) for completion of its work or delivery of
its materials. Any lien waiver delivered hereunder shall
conform to the requirements of applicable law and shall cover
all work performed and materials supplied (including equipment
and fixtures) for the applicable Individual Property by that
contractor, supplier, subcontractor, mechanic or materialman
through the date covered by the current reimbursement request
(or, in the event that payment to such contractor, supplier,
subcontractor, mechanic or materialmen is to be made by a
joint check, the release of lien shall be effective through
the date covered by the previous release of funds request).
(v) If (i) the cost of a Replacement exceeds
Twenty-Five Thousand and NO/100 Dollars ($25,000), (ii) the
contractor performing such Replacement requires periodic
payments pursuant to terms of a written contract, and (iii)
Lender has approved in writing in advance such periodic
payments, a request for reimbursement from the Replacement
Reserve Account may be made after completion of a portion of
the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work,
(B) the materials for which the request is made are on site at
the applicable Individual Property and are properly secured or
have been installed in such Individual Property, (C) all other
conditions in this Agreement for disbursement have been
satisfied, (D) funds remaining in the Replacement Reserve
Account are, in Lender's judgment, sufficient to complete such
Replacement and other Replacements when required, and (E) if
required by Lender, each contractor or subcontractor receiving
payments under such contract shall provide a waiver of lien
with respect to amounts which have been paid to that
contractor or subcontractor.
(vi) Borrower shall not make a request for
disbursement from the Replacement Reserve Account more
frequently than once in any calendar month and (except in
connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than Twenty-Five
Thousand and NO/100 Dollars ($25,000.00).
(c) Performance of Replacements. Each of the following are and
shall be subject to the terms of the Qualified Lease applicable
thereto, if any:
(i) Borrower shall make, or cause the tenant under a
Qualified Lease, to the extent applicable, to make,
Replacements when required in order to keep each Individual
Property in condition and repair consistent with comparable
properties, including for Megaplex Properties, other movie
theater properties in the same market segment in metropolitan
areas comparable to the one in which the respective Megaplex
Property is located, and to keep each Individual Property or
any portion thereof from deteriorating. Borrower shall
complete all
90
97
Replacements in a good and workmanlike manner as soon as
practicable following the commencement of making each such
Replacement.
(ii) Lender reserves the right, at its option, to
approve all contracts or work orders with materialmen,
mechanics, suppliers, subcontractors, contractors or other
parties providing labor or materials in connection with the
Replacements. Upon Lender's request, Borrower shall assign any
contract or subcontract to Lender.
(iii) In the event Lender determines in its
reasonable discretion that any Replacement is not being
performed in a workmanlike or timely manner or that any
Replacement has not been completed in a workmanlike or timely
manner, Lender shall have the option to withhold disbursement
for such unsatisfactory Replacement and to proceed under
existing contracts or to contract with third parties to
complete such Replacement and to apply the Replacement Reserve
Fund toward the labor and materials necessary to complete such
Replacement, without providing any prior notice to Borrower
and to exercise any and all other remedies available to Lender
upon an Event of Default hereunder.
(iv) In order to facilitate Lender's completion or
making of the Replacements pursuant to Section 9.31(c)(iii)
above, Borrower grants Lender the right to enter onto any
Individual Property and perform any and all work and labor
necessary to complete or make the Replacements and/or employ
watchmen to protect such Individual Property from damage. All
sums so expended by Lender, to the extent not from the
Replacement Reserve Fund, shall be deemed to have been
advanced under the Loan to Borrower and secured by the
Mortgages and all other security for the Loan. For this
purpose Borrower constitutes and appoints Lender its true and
lawful attorney-in-fact with full power of substitution to
complete or undertake the Replacements in the name of
Borrower. Such power of attorney shall be deemed to be a power
coupled with an interest and cannot be revoked. Borrower
empowers said attorney-in-fact as follows: (i) to use any
funds in the Replacement Reserve Account for the purpose of
making or completing the Replacements; (ii) to make such
additions, changes and corrections to the Replacements as
shall be necessary or desirable to complete the Replacements;
(iii) to employ such contractors, subcontractors, agents,
architects and inspectors as shall be required for such
purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against any
Individual Property, or as may be necessary or desirable for
the completion of the Replacements, or for clearance of title;
(v) to execute all applications and certificates in the name
of Borrower which may be required by any of the contract
documents; (vi) to prosecute and defend all actions or
proceedings in connection with any Individual Property or the
rehabilitation and repair of any Individual Property; and
(vii) to do any and every act which Borrower might do in its
own behalf to fulfill the terms of this Agreement.
(v) Nothing in this Section 9.31 shall: (i) make
Lender responsible for making or completing the Replacements;
(ii) require Lender to expend funds
91
98
in addition to the Replacement Reserve Fund to make or
complete any Replacement; (iii) obligate Lender to proceed
with the Replacements; or (iv) obligate Lender to demand from
Borrower additional sums to make or complete any Replacement.
(vi) Borrower shall permit Lender and Lender's agents
and representatives (including Lender's engineer, architect,
or inspector) or third parties making Replacements pursuant to
this Section 9.31 to enter onto each Individual Property
during normal business hours (subject to the rights of tenants
under their Qualified Leases) to inspect the progress of any
Replacements and all materials being used in connection
therewith, to examine all plans and shop drawings relating to
such Replacements which are or may be kept at each Individual
Property, and to complete any Replacements made pursuant to
this Section 9.31. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender's
representatives or such other persons described above in
connection with inspections described in this Section
9.31(cxvi) or the completion of Replacements pursuant to this
Section 9.31.
(vii) Lender may require an inspection of the
Individual Property at Borrower's expense prior to making a
disbursement from the Replacement Reserve Account in order to
verify completion of the Replacements for which reimbursement
is sought. Lender may require that such inspection be
conducted by an appropriate independent qualified professional
selected by Lender and/or may require a copy of a certificate
of completion by an independent qualified professional
acceptable to Lender prior to the disbursement of any amounts
from the Replacement Reserve Account. Borrower shall pay the
expense of the inspection as required hereunder, whether such
inspection is conducted by Lender or by an independent
qualified professional.
(viii) The Replacements and all materials, equipment,
fixtures, or any other item comprising a part of any
Replacement shall be constructed, installed or completed, as
applicable, free and clear of all mechanics', materialmen's or
other liens (except for those Liens existing on the date of
this Agreement which have been approved in writing by Lender).
(ix) Before each disbursement from the Replacement
Reserve Account, Lender may require Borrower to provide Lender
with a search of title to the applicable Individual Property
effective to the date of the disbursement, which search shows
that no mechanics' or materialmen's liens or other liens of
any nature have been placed against the applicable Individual
Property since the date of recordation of the related Mortgage
and that title to such Individual Property is free and clear
of all Liens (other than the lien of the related Mortgage and
any other Liens previously approved in writing by Lender, if
any).
(x) All Replacements shall comply with all applicable
Legal Requirements of all Governmental Authorities having
jurisdiction over the applicable Individual Property and
applicable insurance requirements including,
92
99
without limitation, applicable building codes, special use
permits, environmental regulations, and requirements of
insurance underwriters.
(xi) In addition to any insurance required under the
Loan Documents, Borrower shall provide or cause to be provided
workmen's compensation insurance, builder's risk, and public
liability insurance and other insurance to the extent required
under applicable law in connection with a particular
Replacement. All such policies shall be in form and amount
reasonably satisfactory to Lender. All such policies which can
be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed.
Certified copies of such policies shall be delivered to
Lender.
(d) Failure to Make Replacements.
(i) It shall be an Event of Default under this
Agreement if Borrower fails to comply with any provision of
this Section 9.31 and such failure is not cured within thirty
(30) days after notice from Lender. Upon the occurrence of
such an Event of Default, Lender may use the Replacement
Reserve Fund (or any portion thereof) for any purpose,
including but not limited to completion of the Replacements as
provided in Section 9.31, or for any other repair or
replacement to any Individual Property or toward payment of
the Loan or other obligations of Borrower to Lender in such
order, proportion and priority as Lender may determine in its
sole discretion. Lender's right to withdraw and apply the
Replacement Reserve Funds shall be in addition to all other
rights and remedies provided to Lender under this Agreement
and the other Loan Documents.
(ii) Nothing in this Agreement shall obligate Lender
to apply all or any portion of the Replacement Reserve Fund on
account of an Event of Default to payment of the Loan or other
amounts owed by Borrower to Lender pursuant to the Loan
Documents or in any specific order or priority.
(e) Balance in a Replacement Reserve Account. The
insufficiency of any balance in the Replacement Reserve Account shall
not relieve Borrower from its obligation to fulfill all preservation
and maintenance covenants in the Loan Documents.
(f) Indemnification. Borrower shall indemnify Lender and hold
Lender harmless from and against any and all actions, suits, claims,
demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys fees and
expenses) arising from or in any way connected with the performance of
the Replacements. Borrower shall assign to Lender all rights and claims
Borrower may have against all persons or entities supplying labor or
materials in connection with the Replacements; provided, however, that
Lender may not pursue any such right or claim unless an Event of
Default has occurred and remains uncured.
(g) Exemption from Replacement Reserve Fund Requirements.
Notwithstanding the terms and provisions of Section 9.31(a) and Section
9.31(b),
93
100
Borrower shall not be required to make the Replacement Reserve Monthly
Deposit, provided that (a) no Event of Default shall have occurred and
(b) Borrower makes, or causes the applicable tenant under a Qualified
Lease to make, the Replacements in accordance with the terms and
provisions of this Section 9.31. Upon (i) the occurrence of an Event of
Default or (ii) Borrower's failure to make, or cause to be made, all
Replacements in accordance with the terms and provisions of this
Section 9.31 within ten (10) days after notice of such failure from
Lender, Borrower shall begin to make the Replacement Reserve Monthly
Deposit in accordance with the terms and provisions of Section 9.31(a)
commencing on the next date interest is due to be paid to Lender.
9.32 Ground Lease Reserve Fund.
(a) Deposits to Ground Lease Fund. On each date a payment of
interest is due after the date hereof and so long as an Obligor is a
tenant under a Ground Lease, Borrower shall pay to Lender one-twelfth
of the rents (including both base and additional rents) and other
charges that Lender estimates will be payable by the applicable Obligor
as tenant under the Ground Leases (collectively, "Ground Rents") during
the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such rents and other charges at least
thirty (30) days prior to their respective due dates. Amounts so
deposited shall hereinafter be referred to as the "Ground Lease Reserve
Fund" and the account in which such amounts are held shall hereinafter
be referred to as the "Ground Lease Reserve Account."
(b) Release of Ground Lease Funds. Lender shall have the right
to apply the Ground Lease Funds to payment of rents and other charges
due under any Ground Lease. In making any payment relating to rents and
other charges under any Ground Lease, Lender may do so according to any
▇▇▇▇, statement or estimate procured from the lessor under such Ground
Lease, without inquiry into the accuracy of such ▇▇▇▇, statement or
estimate. If the amount of Ground Lease Reserve Funds shall exceed the
amounts due for rents and other charges under the Ground Leases for the
immediately succeeding twelve (12) months as determined by Lender,
Lender shall, in its sole discretion, return any excess to Borrower or
credit such excess against future payments to be made to the Ground
Lease Funds. Any Ground Lease Funds remaining after the Loan and all
other obligations of Borrower to Lender under the Loan Documents have
been paid in full shall be returned to Borrower.
(c) Exemption from Ground Lease Reserve Fund Requirements.
Notwithstanding the terms and provisions of Section 9.32(a) and Section
9.32(b), Borrower shall not be required to contribute to the Ground
Lease Reserve Fund provided that (a) no Event of Default shall have
occurred, (b) the ground lessors under the Ground Leases shall remain
obligated to notify Lender of any default by Borrower, as tenant, under
the Ground Leases and permit Lender a reasonable opportunity to cure
such default and (c) no payment or other default by Borrower, as
tenant, shall have occurred under any Ground Lease. Upon the occurrence
of an Event of Default or notice from Lender that the conditions set
forth in clauses (b) or (c) above have not been satisfied, Borrower
shall begin to make payments to the Ground Lease Reserve Fund in
accordance with the
94
101
terms and provisions of Section 9.32(a) commencing on the next date
interest is due to be paid to Lender.
9.33 FEIN For Archon SPE Holdings. Promptly upon Borrower's
receipt of Archon SPE Holdings U.S. taxpayer identification number, Borrower
shall notify Lender in writing of such identification number.
9.34 Independent Directors. Within thirty days of Lender's
written request (which may be given at any time and in Lender's sole
discretion), Borrower shall cause Megaplex Owner, Archon SPE holdings, or both,
to have at least two Independent Directors and cause the articles of
incorporation for such Persons to be amended to require such two Independent
Directors, and thereafter will not cause or allow the board of directors of such
entity to take any action requiring the unanimous affirmative vote of one
hundred percent (100%) of the members of its board of directors unless two
Independent Directors shall have participated in such vote.
9.35 Substitution Rights. From time to time Borrower may
request the right to sell an existing Megaplex Property and have it be released
from the Mortgage Lien and, simultaneously with such sale, acquire a new Real
Estate Property which is a reasonably comparable theater property which would
become a Megaplex Property under the Loan Documents and be subject to the Lien
of a Mortgage securing the Loan and other obligations of Obligors to Lender. If
Lender consents to such request (which consent can be granted, withheld or
conditioned in Lender's sole discretion), Borrower shall comply (i) with all of
the provisions of Section 7.03(c) (other than the requirement of using Loan
proceeds) for the acquisition of additional Real Estate Properties plus
appropriate title insurance and other deliveries so that Lender's position and
information about such new property is comparable with Lender's position and
information relating to the Initial Megaplex Properties, and (ii) with such
other conditions as Lender may impose in its sole and absolute condition. If
Lender does not consent to such request, Lender shall have no obligation to
release its Mortgage Lien on such existing Megaplex Property or otherwise
consent to any sale or disposition of such Megaplex Property.
9.36 Reserve Funds, Generally.
(a) Borrower grants to Lender a first priority perfected
security interest in each Tax and Insurance Escrow Fund, Replacement
Reserve Fund, Ground Lease Reserve Fund, the Required Repairs Fund, and
any other escrow or reserve fund established by the Loan Documents
(each such fund is herein called a "Reserve Fund" and collectively, the
"Reserve Funds") and any and all monies now or hereafter deposited in
each Reserve Fund as additional security for payment of the Loan and
other obligations of Borrower to Lender. Until expended or applied in
accordance herewith, the Reserve Funds shall constitute additional
security for the Loan and other obligations of Borrower to Lender.
(b) Upon the occurrence of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender,
apply any sums then present in any or all of the Reserve Funds to the
payment of the Loan and other obligations of Borrower to Lender in any
order in its sole discretion.
95
102
(c) The Reserve Funds shall not constitute trust funds and may
be commingled with other monies held by Lender.
(d) Borrower shall not, without obtaining the prior written
consent of Lender, further pledge, assign or grant any security
interest in any Reserve Fund or the monies deposited therein or permit
any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC-1 Financing Statements, except those naming Lender
as the secured party, to be filed with respect thereto.
9.37 Archon Securitization Loan Documents. Borrower shall
cause Archon SPE Holdings and Securitization Property Owner at all times to
comply with and not permit an event of default to occur under the Archon
Securitization Loan Documents. Borrower shall not permit Archon SPE Holdings or
Securitization Property Owner to amend or modify the Archon Securitization Loan
Documents without Lender's prior written consent. Additionally, Borrower shall
use its best efforts to cause, within 180 days of the Effective Date, Archon SPE
Holdings and Securitization Property Owner to amend the Archon Securitized Loan
Documents to permit, without further action or consent (other than notice to any
party), Lender or its designee, to foreclose or otherwise take title to and
assume all ownership rights with respect to the stock which is pledged to Lender
pursuant to the Pledge Agreement and to enter into an intercreditor agreement
with Lender, all in forms reasonably acceptable to Lender (the foregoing
requirements to obtain such amendment and intercreditor agreement, to the extent
not waived by Lender as provided in the last sentence of this Section 9.37, are
collectively referred to herein as the "Archon Required Amendments"). Lender
agrees to negotiate in good faith and on a commercially reasonable basis in
obtaining Archon Required Amendments. Lender reserves the right, but is under no
obligation, to waive (as Lender determines in its sole and absolute discretion)
all or any portion of the requirements that Borrower obtain the Archon Required
Amendments.
9.38 Pad Mortgages. Upon the earlier of thirty (30) days of
the Effective Date or the date of the second disbursement of the Loan, Borrower
shall cause Megaplex Owner to provide (i) a mortgage encumbering each Pad
Property which is subject to a lease, including a Qualified Lease, providing
Lender with a first mortgage lien on such Pad Property, in such form as
acceptable to Lender, and (ii) such other information as Lender is entitled to
for acquisitions of Real Estate Properties pursuant to Section 7.03(ii)(c). All
costs and expenses associated with such requirements, including Lender's
attorneys fees and expenses shall be paid by Borrower.
9.39 [INTENTIONALLY DELETED]
9.40 Required Repairs Fund.
(a) Borrower shall perform, or shall cause Megaplex Owner or
the tenant under the applicable Qualified Lease to perform, the repairs
at the Individual Owned Properties, as more particularly set forth on
Schedule 9.40 hereto (such repairs hereinafter referred to as "Required
Repairs"). Borrower shall complete, or shall cause Megaplex Owner or
the tenant under the applicable Qualified Lease to complete, the
Required Repairs on or before the required deadline for each repair as
set forth on Schedule 9.40. It shall be an Event of Default under this
Agreement if (a) Borrower does not complete,
96
103
or cause to be completed, the Required Repairs at each Individual Owned
Property by the required deadline for each repair as set forth on
Schedule 9.40, and (b) Borrower does not satisfy each condition
contained in 9.40(b) hereof. Upon the occurrence of such an Event of
Default, Lender, at its option, may withdraw all Required Repair Funds
from the Required Repair Account and Lender may apply such funds either
to completion of the Required Repairs at one or more of the Individual
Owned Properties or toward payment of the Loan and other obligations
owed by Borrower to Lender in such order, proportion and priority as
Lender may determine in its sole discretion. Lender's right to withdraw
and apply Required Repair Funds shall be in addition to all other
rights and remedies provided to Lender under this Agreement and the
other Loan Documents. On the Effective Date, Borrower shall deposit
with Lender the amount for each Individual Owned Property set forth on
such Schedule 9.40 hereto to perform the Required Repairs for such
Individual Owned Property. Amounts so deposited shall hereinafter be
referred to as Borrower's "Required Repair Fund" and the accounts are
held shall hereinafter be referred to as Borrower's "Required Repair
Account".
(b) Lender shall disburse to Borrower the Required Repair
Funds from the Required Repair Account from time to time upon
satisfaction by Borrower of each of the following conditions: (a)
Borrower shall submit a written request for payment to Lender at least
thirty (30) days prior to the date on which Borrower requests such
payment be made and specifies the Required Repairs to be paid, (b) on
the date such request is received by Lender and on the date such
payment is to be made, no Default or Event of Default shall exist and
remain uncured, (c) Lender shall have received a certificate from
Borrower (i) stating that all Required Repairs at the applicable
Individual Owned Property to be funded by the requested disbursement
have been completed in good and workmanlike manner and in accordance
with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any
license, permit or other approval by any Governmental Authority
required to commence and/or complete the Required Repairs, (ii)
identifying each Person that supplied materials or labor in connection
with the Required Repairs performed at such Individual Owned Property
to be funded by the requested disbursement, and (iii) stating that each
such Person has been paid in full or will be paid in full upon such
disbursement, such certificate to be accompanied by lien waivers or
other evidence of payment satisfactory to Lender, (d) at Lender's
option, a title search for such Individual Owned Property indicating
that such Individual Owned Property is free from all liens, claims and
other encumbrances not previously approved by Lender, and (e) Lender
shall have received such other evidence as Lender shall reasonably
request that the Required Repairs at such Individual Owned Property to
be funded by the requested disbursement have been completed and are
paid for or will be paid upon such disbursement to Borrower. Lender
shall not be required to make disbursements form the Required Repair
Account with respect to any Individual Owned Property unless such
requested disbursement is in an amount greater than Twenty-Five
Thousand and No/100 Dollars ($25,000) (or a lesser amount if the total
amount in the Required Repair Account is less than Twenty-Five Thousand
and No/100 Dollars ($25,000), in which case only one disbursement of
the amount remaining in the account shall be made) and such
disbursement shall be made only upon satisfaction of each condition
contained in this Section 9.40(b).
97
104
Section 10. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur and be
continuing:
(a) Borrower shall default in the payment of any principal of
the Loan when due (whether at stated maturity or at mandatory or
optional prepayment); or
(b) Borrower shall default in the payment of (i) any interest
on any Loan, (ii) any fee or (iii) any other amount (other than an
amount referred to in clause (a) of this Section 10) payable by it
hereunder or under any other Loan Document when due and such default
shall, in the case of (ii) or (iii), have continued unremedied for more
than 5 Business Days (but not beyond the stated maturity of the Loan
(whether lapse of time, prepayment, acceleration or otherwise); or
(c) any representation, warranty or certification made or
deemed made herein or in any other Loan Document (or in any
modification or supplement hereto or thereto) by Borrower or any of its
Subsidiaries, or any certificate furnished by any Obligor, to Lender
pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading as of the time made or furnished in any material
respect (except to the extent derived from Tenant Information which
Borrower did not know was incorrect); or
(d) any Obligor shall default in the performance of any of its
obligations under any of Sections 9.03, 9.04 (as to its legal existence
and REIT status), 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.12, 9.13,
9.14, 9.15, 9.16, 9.17, 9.20(b), 9.21(b) or 9.22(b), and 9.23; or
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Section 10) or any other
Loan Document and such failure shall continue unremedied for a period
of 30 or more days after notice thereof to Borrower by Lender; or
(f) Borrower or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating $2,500,000 or more; or Borrower or any of its
Subsidiaries shall default in the payment when due of any amount
aggregating $2,500,000 or more under any Hedging Agreement and, in
either case, shall not have cured such default within the applicable
grace period, if any; or
(g) any event specified in any note, agreement, indenture or
other document evidencing or relating to any other Indebtedness
aggregating $2,500,000 or more of Borrower or any of its Subsidiaries
shall occur if the effect of such event is to cause, or (with the
giving of any notice or the lapse of time or both) to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, such Indebtedness to become due, or
to require that it be prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise), prior to its stated maturity or to
have the interest rate thereon reset to a level so that securities
evidencing such Indebtedness trade at a higher level; or any event
specified in any Hedging Agreement shall occur if the effect of such
event is to cause, or (with the giving of any notice or the
98
105
lapse of time or both) to permit, termination or liquidation payment or
payments aggregating $2,500,000 or more to become due; or
(h) a proceeding or case shall be commenced, without the
application or consent of Borrower or its affected Subsidiary, in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of Borrower or
such Subsidiary or of all or any substantial part of its Property, or
(iii) similar relief in respect of Borrower or such Subsidiary under
any law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 or more days; or an order for relief
against Borrower or any of its Subsidiaries shall be entered in an
involuntary case under the Bankruptcy Code; or
(i) Borrower or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of
all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary
case under the Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code or
(vi) take any corporate action for the purpose of effecting any of the
foregoing; or
(j) Borrower or any of its Subsidiaries shall admit in writing
its inability to, or be generally unable to, pay its debts as such
debts become due; or
(k) a final judgment or judgments for the payment of money of
$2,500,000 or more in the aggregate (exclusive of judgment amounts
covered by insurance where the insurer has admitted or failed to deny
liability in respect of such judgment) shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against Borrower or any of its Subsidiaries and the same shall not be
discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 30 days from
the date of entry thereof or Borrower or the relevant Subsidiary shall
not, within such period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(l) an event or condition shall occur or exist with respect to
any Plan or Multiemployer Plan and, as a result of such event or
condition, together with all other such events or conditions, Borrower
or any ERISA Affiliate shall incur or in the opinion of the Lender
shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or the PBGC (or any combination of the foregoing)
that, in the determination of the Lender, would (either individually or
in the aggregate) have a Material Adverse Effect; or
99
106
(m) there shall have been asserted against Borrower or any of
its Subsidiaries an Environmental Claim that, in the judgment of the
Lender, is reasonably likely to be determined adversely to Borrower or
any of its Subsidiaries, and the amount thereof (either individually or
in the aggregate) is reasonably likely to have a Material Adverse
Effect (insofar as such amount is payable by Borrower or any of its
Subsidiaries but after deducting any portion thereof that is reasonably
expected to be covered by insurance or paid by other creditworthy
Persons jointly and severally liable therefor); or
(n) a Change in Control of any Obligor shall occur; or
(o) If Borrower has not borrowed all of Tranche A within 90
days (or such longer period as Lender may elect in its sole discretion)
of the Effective Date;
(p) If Borrower has not borrowed all of Tranche B within 180
days (or such longer period as Lender may elect in its sole discretion)
of the Effective Date; provided however, that it shall not be an Event
of Default under this subsection (p) if the sole reason for Borrower's
failure to borrow all of Tranche B within such time frame is Borrower's
failure to obtain the Archon Required Amendments after otherwise
complying with the terms of Section 9.37; or
(q) any "Event of Default" under any other provision of this
Agreement or any other Loan Document.
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (h) or (i) of this Section 10 with respect to any Obligor,
Lender may, by notice to Borrower, terminate the obligation of Lender to advance
Loan Proceeds and/or declare the principal amount then outstanding of, and the
accrued interest on, the Loan and all other amounts payable by the Obligors
hereunder and under the Note (including any amounts payable under Section 5.03)
to be forthwith due and payable, whereupon such amounts shall be immediately due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by each Obligor; and (2) in the
case of the occurrence of an Event of Default referred to in clause (h) or (i)
of this Section 10 with respect to any Obligor, the obligation of Lender to
advance Loan Proceeds shall automatically be terminated and the principal amount
then outstanding of, and the accrued interest on, the Loan, and all other
amounts payable by the Obligors hereunder and under the Note (including any
amounts payable under Section 5.03) shall automatically become immediately due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by each Obligor.
Section 11. [INTENTIONALLY OMITTED]
Section 12. Miscellaneous.
12.01 Notices. All notices, requests and other communications
provided for herein (including any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including by
telecopy), delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof (below the name of
Borrower, in the case of any Subsidiary Guarantor); or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided
100
107
in this Agreement, all such communications shall be deemed to have been duly
given when transmitted by telecopier or personally delivered or, in the case of
a mailed notice, upon receipt, in each case given or addressed as aforesaid.
12.02 Waiver. No failure on the part of the Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement or Note preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law.
12.03 Amendments, Etc. Except as otherwise expressly provided
in this Agreement, any provision of this Agreement may be modified or
supplemented only by an instrument in writing signed by Borrower and Lender and
any provision of this Agreement may be waived by Lender.
12.04 Expenses, Etc. Borrower agrees to pay or reimburse
Lender, upon demand from Lender, for: (a) all reasonable out-of-pocket costs and
expenses of Lender (including, without limitation, the reasonable fees and
expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, special counsel to Lender and the reasonable
fees and expenses of Lender's special state counsel) in connection with (i) the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents and the extension of credit hereunder and (ii) the negotiation or
preparation of any modification, supplement or waiver of any of the terms of
this Agreement or any of the other Loan Documents (whether or not consummated);
(b) all reasonable out-of-pocket costs and expenses of Lender (including the
reasonable fees and expenses of legal counsel) in connection with (i) any
Default and any enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding
up or liquidation proceedings, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated) and
(ii) the enforcement of this Section 12.04; and (c) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein.
Borrower hereby agrees to defend, indemnify and hold each of the
Indemnified Parties harmless from and against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them, whether or not Lender is a
party thereto) arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) relating to the extensions of credit hereunder or any actual or
proposed use by Borrower or any of its Subsidiaries of the proceeds of any of
the extensions of credit hereunder, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified or such
Indemnified Party's material breach of this Agreement, or claims against such
Indemnified Party arising from its own acts or omissions to the extent wholly
unrelated to this Agreement). Without limiting the
101
108
generality of the foregoing, Borrower will defend, indemnify and hold each of
the Indemnified Parties harmless against, any losses, liabilities, claims,
damages or expenses described in the preceding sentence (but excluding, as
provided in the preceding sentence, any loss, liability, claim, damage or
expense incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified or such Indemnified Party's material breach of this
Agreement, or claims against such Indemnified Party arising from its own acts or
omissions to the extent wholly unrelated to this Agreement) arising under any
Environmental Law as a result of the past, present or future operations of
Borrower or any of its Subsidiaries, or the past, present or future condition of
any site or facility owned, operated or leased at any time by Borrower or any of
its Subsidiaries, or any Release or threatened Release of any Hazardous
Materials at or from any such site or facility, excluding any such Release or
threatened Release that shall occur during any period when Lender shall be in
possession of any such site or facility following the exercise by the Lender of
any of its rights and remedies hereunder, but including any such Release or
threatened Release occurring during such period that is a continuation of
conditions previously in existence, or of practices employed by Borrower and its
Subsidiaries, at such site or facility.
12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 Assignments by Obligors. No Obligor may assign any of
its rights or obligations hereunder or under the Note without the prior consent
of the Lender.
12.07 Secondary Market Transaction in Loan and Note. Borrower
and each Subsidiary Guarantor agrees that Lender has the absolute right to
securitize, sell, assign, pledge, syndicate, grant participations in, or
otherwise dispose of, all or any portion of the Loan (each such transaction, a
"Securitization"). Lender may determine to resell some or all of the Loan or
retain title to some or all of the Loan as part of a Securitization. Provided
that the following are at no material additional expense to any Obligor (other
than expenses which an Obligor is otherwise obligated to pay pursuant the Loan
Documents), do not create any additional material obligations of any Obligor or
materially adversely affect any Obligor's rights under the Loan Documents:
(a) Borrower agrees that Borrower shall cooperate, and
Borrower shall cause each Subsidiary Guarantor to cooperate, in all
reasonable respects at the request of Lender in connection with any
such Securitization, including in connection with any documentation
changes and any site inspections, updated appraisals, financial
information (including financial statements and other financial
information as described in this Agreement) or other diligence
requested or conducted by any investors, and/or any Rating Agency,
whether before or after funding. In connection with any Securitization,
Lender may, among other things, in its sole discretion, determine to
(i) reconstitute the Loan such that it is recast into multiple loans of
such priorities and terms as Lender may determine (so long as the
economic terms of the Loan do not, in the aggregate, materially
change), and/or (ii) sever the Loan or any tranche thereof into two or
more self-contained, internally cross-collateralized mortgage loan
financings (any of all of the foregoing, a "Loan Reconstitution").
Borrower agrees that Borrower will reasonably cooperate, and cause each
Subsidiary Guarantor to reasonably cooperate, in all material respects
at the request of the Lender in connection with any such Loan
Reconstitution.
102
109
(b) Without in any way limiting the generality of the
foregoing, each Obligor agrees that Lender may, among other things, in
its sole discretion, elect to effect a Loan Reconstitution pursuant to
which the Loan is recast into a senior loan tranche (the "Senior
Tranche") and a junior loan tranche (the "Junior Tranche") as follows:
(i) the principal amount of each of the Senior Tranche and the Junior
Tranche will be determined by Lender in its sole discretion (provided
that the aggregate principal amount thereof shall not exceed the
aggregate principal amount of the Loan outstanding immediately prior to
such Loan Reconstitution); (ii) the interest rate applicable to each of
the Senior Tranche and the Junior Tranche shall be determined by Lender
in its sole discretion (provided that the blended interest rate from
time to time applicable to the Senior Tranche and the Junior Tranche
and the payments as a result thereof shall not exceed the interest rate
and the payments as a result thereof which, but for such Loan
Reconstitution, would have been applicable from time to time under the
Loan pursuant to this Agreement), (iii) the Senior Tranche will
continue to be evidenced and secured by the Loan Documents and the
Junior Tranche will be evidenced and secured by one (1) or more pledge
agreements of all of the stock, shares, partnership interests,
membership interests, beneficial interests or other ownership interests
in Obligors and by other loan documents which are substantially in the
forms of the Loan Documents, in each case with such documentation
changes as Lender may reasonably request (1) to evidence the principal
amount of and interest rate applicable to each of the Senior Tranche
and the Junior Tranche and the subordination of the Junior Tranche to
the Senior Tranche, (2) at Lender's election to cause the Senior
Tranche to cross-default the Junior Tranche and/or the Junior Tranche
to cross default the Senior Tranche, (3) at Lender's election, to cause
certain of the provisions of this Agreement (including, without
limitation, the definition of or affecting financial ratios and the
release price calculations) to be applicable to the Senior Tranche and
the Junior Tranche on an aggregate basis, (4) at Lender's election, the
pledgor(s) under the pledge agreement securing the Junior Tranche shall
be the obligor(s) with regard to the Junior Tranche, Borrower shall
cause the pledgors in question to execute the applicable documentation
required by Lender and the applicable Obligor will no longer be an
obligor with regard to the portion of the Loan represented by the
Junior Tranche; and (5) to reflect such other documentation changes
and/or changes to the structure of the Loan and the organizational
documents of each Obligor and the other pledgors, if any, as Lender may
reasonably request in connection with the Senior Tranche and/or the
Junior Tranche. At Lender's election, the Senior Tranche and Junior
Tranche may each be subject to one or more Securitizations.
(c) Except to the extent the Loan Documents otherwise require,
Obligors shall not be required to pay for material third party
out-of-pocket costs and expenses which are incurred in a Securitization
subsequent to the Closing Date.
(d) Without in any way limiting the generality of the
foregoing, each Obligor agrees that, in order to implement a
Securitization involving a public offering or private placement of
certificates ("Certificates"), (i) Lender may transfer, pledge or
assign to one or more of a depositor, indenture trust, owner trust or
other trust (collectively, a "Depositor") all right, title and interest
of Lender in, to and under the Loan and the Loan Documents, (ii) if
such Securitization is a public offering of Certificates, some or all
of Lenders in, or the Depositor, as the case may be, may exercise the
Replacement Option,
103
110
and (iii) the Depositor may enter into a pooling and servicing
agreement or other agreement which provides for issuance of the
Certificates (the "Pooling and Servicing Agreement"). Pursuant to the
Pooling and Servicing Agreement, the Depositor will assign, pledge or
grant to the certificate trustee (or to the indenture trustee, as
trustee, if such Securitization involves a public or private offering
of Certificates), among other things, all of the Depositor's right,
title and interest in, to and under each of the Loan Documents (as such
Loan Documents may have therefore been amended or reconstituted,
including in connection with the exercise of the Replacement Option, if
applicable) and may grant to the certificate trustee (or to the
indenture trustee, as trustee, if applicable in connection with a
Securitization involving a public or private offering of Certificates)
the full or any part of the exclusive and irrevocable right, power and
authority to exercise or to determine to refrain from exercising, any
rights, powers and privileges of the Lender under the Loan Documents,
including, without limitation, (x) the right to grant or withhold any
and all consents or approvals which may be requested or given pursuant
to this Agreement or any of the other Loan Documents, and the right to
exercise any vote or abstain from voting on any matter on which a vote
may be required hereunder or thereunder, including any determination to
amend, modify, waiver or terminate any provision hereof or thereof, (y)
the right to give and receive any and all notices, demands or other
communication which are required to be, or may be, given hereunder or
thereunder, and (z) the right to exercise or determine to refrain from
exercising any and all rights and remedies hereunder or thereunder. For
all purposes of this Agreement and the other Loan Documents, each
Obligor may assume, and shall recognize, that upon such assignment
(other than for collateral purposes and, if for collateral purposes,
upon assignment in connection with the exercise of remedies or in lieu
of the exercise of remedies) to the certificate trustee or the
indenture trustee, as the case may be, the certificate trustee or the
indenture trustee, as the case may be, shall be and become the Lender
for all purposes hereunder and under the other Loan Documents and shall
have all rights of Lender hereunder and thereunder, including, without
limitation, the right to exercise or refrain from exercising any and
all of such rights, powers and privileges. Each Obligor further agrees
that the Depositor, Lender, certificate trustee and/or the indenture
trustee may delegate any or all of Lender's rights, powers and
privileges to a servicer ("Servicer") and each Obligor shall recognize
the Servicer as the agent of the certificate trustee and/or the
indenture trustee, as the case may be.
(e) Each Obligor acknowledges and agrees that the Certificates
representing beneficial interests in the Loan may be offered to the
public in a transaction requiring registration under the Securities Act
of 1933, as amended. In such event, the holder of the Loan (who at such
time may be Lender, an administrative agent, as agent, for Lender or
the Depositor) shall have the absolute right at any time in connection
with effecting such Securitization, to exercise the Replacement Option,
provided that each Obligor is afforded not less than 10 Business Days'
prior written notice of the intention to exercise the Replacement
Option. "Replacement Option", when used herein or in any of the other
Loan Documents, shall mean the right and option of the then holder of
the Loan to require Borrower to (i) execute and deliver an indenture
(the "Indenture") with a trustee (which trustee shall be qualified to
act as such under the Trust Indenture Act of 1939 and shall otherwise
be selected by and satisfactory to the then holder of the Loan) which
Indenture shall amend and restate this Agreement (or otherwise replace
this Agreement)
104
111
in its entirety insofar as it relates to the Loan, (ii) cooperate with
the then holder of the Loan and any other required Persons in
connection with the qualification of the Indenture under the Trust
Indenture Act of 1939, (iii) issue notes under and pursuant to the
Indenture (the "Indenture Notes"), which Indenture Notes shall be duly
authenticated and delivered by the indenture trustee, in replacement of
the Note evidencing the Loan, (iv) take all actions as are required to
cause the Indenture Notes to be secured by the Loan Documents, and to
ensure that the priority of the Mortgage is not impaired by virtue of
such replacement of the Note with the Indenture Notes, and (v)
cooperate with the then holder of the Loan in connection with the
assignment of such holder's interest under the Loan Documents in
question to the indenture trustee, as trustee for the benefit of the
holder of the Indenture Notes.
(f) Each Obligor will, upon request from Lender, in connection
with a Securitization, enter into such acknowledgments and
confirmations of the applicable assignments as Lender may request.
12.08 Sale of Note and Securitization. At the request of the
holder of the Note and, to the extent not already required to be provided by an
Obligor under this Agreement or the other Loan Documents, each Obligor shall,
subject to the terms and provisions of this Section 12.08, use reasonable
efforts to satisfy the market standards to which the holder of the Note
customarily adheres or which may be reasonably required in the marketplace or by
the Rating Agencies in connection with a Securitization, including using
reasonable efforts to do (or cause to be done) the following (but Obligors will
not in any event be required pursuant to any of the provisions of this Section
12.08 to incur, suffer or accept (except to a de minimis extent) (i) any lesser
rights or greater obligations as are currently set forth in the Loan Documents
or an Obligor's organizational documents (unless Borrower is made whole by the
holder of the Note), or (ii) except as expressly set forth in this Section
12.08, any expense:
(a) (i) provide such financial and other information as may be
reasonably requested, subject to the terms and provisions hereof, with
respect to the Individual Property, Borrower, Subsidiary Guarantors and
their Subsidiaries and affiliates, and, to the extent in the possession
of an Obligor and not subject to confidentiality restrictions, any
tenants of any Individual Property, (ii) provide business plans and
budgets relating to the Individual Property (and to the extent such
information is readily available to Borrower, the same shall be
provided without cost to Lender) and (iii) to perform or permit or
cause to be performed or permitted or allow Lender to perform such site
inspection, appraisals, market studies, environmental reviews and
reports (Phase I's and, if appropriate, Phase II's), engineering
reports and other due diligence investigations of the Property, as may
be reasonably requested by Lender or the Rating Agencies or as may be
necessary or appropriate in connection with the Securitization (the
"Provided Information"), together, if customary, with appropriate
verification and/or consents of the Provided Information to the extent
reasonably obtainable, through letters of auditors, engineers or
appraisers or opinions of counsel; and
(b) cause independent counsel to render opinions as to
fraudulent conveyance or any other opinion customary in securitization
transactions with respect to the Individual Property, and Borrower, and
its affiliates (but not a true sale or 10b-5 opinion),
105
112
including, without limitation, a nonconsolidation opinion and/or
insolvency option acceptable to Lender and all applicable rating
agencies, which counsel and opinions shall be reasonably satisfactory
to Lender and the Rating Agencies and which shall be addressed to such
Persons as shall be reasonably designated by the holder of the Note.
Any Obligor's failure to deliver the opinions required hereby within
such ten (10) Business Days after written request therefor shall
constitute an "Event of Default" hereunder.
12.09 Cooperation with Rating Agencies. In the event this
Loan becomes an asset in or of a Securitization, Borrower agrees upon Lender's
request to meet with representatives of the Rating Agencies in connection with
such a Securitization to discuss the business and operations of the Individual
Properties and, in that regard, agrees to cooperate with the reasonable requests
of the Rating Agencies including, without limitation delivering any existing
environmental materials relating to the Individual Properties in Borrower's
possession.
12.10 Securitization Indemnification.
(a) Each Obligor understands that certain of the Provided
Information and the information required to be delivered by Borrower
hereunder (the "Required Reports") may be included in disclosure
documents in connection with the Securitization, including a prospectus
or private placement memorandum (each, a "Disclosure Document") and may
also be included in filings with the United States Securities and
Exchange Commission pursuant to applicable law, or provided or made
available to investors or prospective investors in the Securities, the
Rating Agencies, and service providers relating to the Securitization.
In the event that the Disclosure Document is required to be revised
prior to the sale of Securities or other transfer of ownership with
respect to the Securitization, each Obligor will cooperate with the
holder of the Note in updating the Provided Information or Required
Reports for inclusion or summary in the Disclosure Document by
providing all current information pertaining to any Obligor, any
Subsidiary of an Obligor, and the Individual Properties necessary to
keep the Disclosure Document accurate and complete in all material
respects with respect to such matters.
(b) In connection with each of (x) a preliminary and a private
placement memorandum or (y) a preliminary and final prospectus, as
applicable, Borrower agrees to provide an indemnification certificate:
(i) provided Borrower has been requested by Lender to
do so, and if the applicable items have been revised to
reflect all of Borrower's comments, certifying that Borrower
has examined those portions of such memorandum or prospectus,
as applicable, expressly pertaining to any Obligor, any
Subsidiary of an Obligor, and the Individual Properties and
the Loan including applicable portions of the sections
entitled "Special Considerations," "Description of the
Mortgages," "Description of the Mortgage Loans and Mortgaged
Properties," "Borrower" and "Certain Legal Aspects of the
Mortgage Loan," (or analogous portions or sections) and such
sections (and any other sections reasonably requested and
pertaining to any Obligor, any Subsidiary of an Obligor, and
the Individual Properties or the Loan), all of which sections
have been identified to
106
113
Borrower by Lender do not contain any untrue statement of a
material fact or, to the best of Borrower's knowledge, omit to
state a material fact necessary in order to make the
statements made, in the light of the circumstances under which
they were made, not materially misleading as the applicable
sections pertain to Borrower, the Loan and the Properties;
(ii) indemnifying Lender and the Affiliates of Lender
that have filed a registration statement relating to the
Securitization (the "Registration Statement"), each of their
directors, each of their officers who have signed the
Registration Statement and each Person who controls Lender or
Lender Parent within the meaning of any federal or state
securities laws (collectively, the "Lender Group"), any
underwriters selected by Lender or Lender Parent for the
Securitization, and each Person who controls the underwriters
in question, within the meaning of any federal or state
securities laws (collectively, the "Underwriter Group") for
any losses, claims, damages or liabilities (the "Liabilities")
to which Lender, the Lender Group or the Underwriter Group may
become subject insofar as the Liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the applicable portions of such
sections described in Section 12.10(b)(i) expressly applicable
and relating to the Obligors, any Subsidiary of the Obligors,
the Individual Properties or the Loan, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated in the applicable portions
of such sections or necessary in order to make the statements
in the applicable portions of such sections or in light of the
circumstances under which they were made, not misleading,
provided, however, that Borrower shall not be required to
indemnify Lender for any Liabilities relating to untrue
statements or omissions which Borrower identifies to Lender in
writing at the time of Borrower's examination of the
Registration Statement; and
(iii) agreeing to reimburse the Lender, the Lender
Group and the Underwriter Group for any legal or other
expenses reasonably incurred by such Persons in connection
with investigating or defending the Liabilities. Borrower's
Liability under clauses (i), (ii) above and this clause (iii)
shall be limited to Liabilities arising out of or based upon
any such untrue statement or omission made therein in reliance
upon and in conformity with information prepared and furnished
to Lender by any Obligor pursuant to provisions of Sections
12.08. 12.09, and 12.10 hereof. This indemnity agreement will
be in addition to any liability which Borrower may otherwise
have.
(c) Promptly after receipt by an indemnified party under this
Section 12.10 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 12.10, notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the
event that any action is brought against any indemnified party, and it
notifies the
107
114
indemnifying party of the commencement thereof, the indemnifying party
will be entitled, jointly with any other indemnifying party, to
participate therein and, to the extent that it (or they) may elect by
written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume
the defense thereof with counsel satisfactory to such indemnified
party. After notice from the indemnifying party to such indemnified
party under this Section 12.10, the indemnifying party shall not be
liable for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, if the defendants
in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there are any legal defenses available to it and/or
other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or
parties shall have the right, following notice to and consultation with
Borrower, to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of
such indemnified party or parties at the expense of the indemnifying
party. The indemnifying party shall not be liable for the expenses of
more than one separate counsel unless an indemnified party shall have
reasonably concluded that there may be legal defenses available to it
that are different from or additional to those available to another
indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in this Section 12.10
is for any reason held to be unenforceable by an indemnified party in
respect of any losses, claims, damages or liabilities (or action in
respect thereof) referred to therein which would otherwise be
indemnifiable under this Section 12.10 the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in
respect thereof); provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. In determining
the amount of contribution to which the respective parties are
entitled, the following factors shall be considered: (i) the Lender
Group's and Borrower's relative knowledge and access to information
concerning the matter with respect to which claim was asserted; (ii)
the opportunity to correct and prevent any statement or omission; and
(iii) any other equitable considerations appropriate in the
circumstances. Lender and Borrower hereby agree that it may not be
equitable if the amount of such contribution were determined by pro
rata or per capita allocation.
(e) Rating Surveillance. Lender may retain the Rating Agencies
to provide rating surveillance services on any certificates issued in a
Securitization.
12.11 Retention of Servicer. Lender reserves the right to
retain a servicer to act as its agent hereunder with such powers as are
specifically delegated to the servicer by Lender, whether pursuant to the terms
of this Agreement, the Mortgage or otherwise, together with such other powers as
are reasonably incidental thereto. In no event shall any Obligor be required to
pay any servicer fees, securitization trustee fees or other securitization
administrative expenses except as may be expressly provided in this Agreement.
Notwithstanding the foregoing,
108
115
Borrower shall pay any reasonable fees and expenses of the servicer in
connection with a prepayment, release of an Individual Property, assumption or
modification of the Loan, enforcement of the Loan Documents or any other amounts
which Borrower may be obligated to pay pursuant to the Loan Documents.
12.12 Survival. The obligations of Borrower under Sections
5.03, 12.04, and 12.10 the obligations of each Subsidiary Guarantor under
Section 6.03 shall survive the repayment of the Loan the expiration or
termination of the Lender's obligation to advance and the termination of this
Agreement or any provision hereof and, in the case of Lender that may assign any
interest in the Loan hereunder, shall survive the making of such assignment,
notwithstanding that such assigning Lender may cease to be a "Lender" hereunder.
In addition, each representation and warranty made, or deemed to be made by a
notice of any extension of credit, herein or pursuant hereto shall survive the
making of such representation and warranty, and Lender shall not be deemed to
have waived, by reason of making any extension of credit hereunder, any Default
that may arise by reason of such representation or warranty proving to have been
false or misleading, notwithstanding that Lender may have had notice or
knowledge or reason to believe that such representation or warranty was false or
misleading at the time such extension of credit was made.
12.13 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.14 Governing Law; Submission to Jurisdiction.
(a) Governing Law. This Agreement and the Note shall be
governed by, and construed in accordance with, the law of the State of
New York.
(b) Submission to Jurisdiction. Each Obligor hereby
irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that Lender may otherwise have to
bring any action or proceeding relating to this Agreement against such
Obligor or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in paragraph (b) of
this
109
116
Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such court.
(d) Service of Process. Each party to this Agreement
irrevocably consents to service of process in the manner provided for
notices in Section 12.01. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other
manner permitted by law.
12.15 WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS AND LENDER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.16 Captions. The table of contents and captions and
section headings appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.
12.17 Treatment of Certain Information; Confidentiality.
(a) Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or
provided to Borrower or one or more of its Subsidiaries (in connection
with this Agreement or otherwise) by Lender or by one or more
subsidiaries or affiliates of Lender and Borrower hereby authorizes
Lender to share any information delivered to Lender by Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such
subsidiary or affiliate, it being understood that any such subsidiary
or affiliate receiving such information shall be bound by the
provisions of paragraph (b) below as if it were a Lender hereunder.
Such authorization and binding effect shall survive the repayment of
the Loan.
(b) Lender agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of the same
nature and in accordance with safe and sound lending practices and
shall not use same for any purpose other than in connection with this
Agreement or as permitted below or elsewhere in this Section 12, any
non-public information supplied to it by Borrower pursuant to this
Agreement, provided that nothing herein shall limit the disclosure of
any such information (i) after such information shall have become
public (other than through a violation of this Section 12.17), (ii) to
the extent required by applicable law or judicial process, (iii) to
counsel for the Lender, (iv) to bank examiners (or any other regulatory
authority having jurisdiction over any Lender), or to auditors,
accountants or advisors, (v) to the Lender, (vi) in connection with any
litigation to which the Lender or another Indemnified Party is a party,
or in connection with the enforcement of rights or remedies hereunder
or under any other Loan Document, (vii) to a subsidiary or affiliate of
such Lender as provided in paragraph (a) above, (viii) to any rating
agency
110
117
or insurer, or (ix) in connection with a Securitization so long as any
assignee, pledgee, transferor, servicer, fiscal agent of transferee or
participant (or prospective assignee, pledgee, transferor, servicer,
fiscal agent of transferee or participant) is advised of the
confidential nature of the items in question. The obligations of Lender
under this Section 12.17 shall supersede and replace the obligations of
such Lender under any confidentiality agreement, if any. The foregoing
covenants may be enforced by Borrower by obtaining injunctive or
specific relief from a court of competent jurisdiction, without the
necessity of posting bond or proving lack of adequate remedy at law,
such remedies to be cumulative and not exclusive of any other remedies
available to Borrower at law or in equity.
12.18 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 12.18 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Rate to the date of repayment, shall
have been received by such Lender.
12.19 Construction of Documents. The parties hereto
acknowledge that they were represented by counsel in connection with the
negotiation and drafting of the loan Documents and that the Loan Documents shall
not be subject to the principle of construing their meaning against the party
which drafted same.
[Signature pages follow]
111
118
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
BORROWER:
ENTERTAINMENT PROPERTIES TRUST
By: ___________________________________
Name:__________________________________
Title:_________________________________
Address for Notices:
Union Station
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
SUBSIDIARY GUARANTORS:
MEGAPLEX FOUR, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
Address for Notices:
Union Station
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
112
119
THEATRE SUB, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
Address for Notices:
Union Station
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
113
120
LENDER:
iStar Financial Inc.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:______________________________
Telecopier No.:_________________________
Telephone No.:__________________________
114
121
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$50,000,000.00 May 18, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED,
ENTERTAINMENT PROPERTIES TRUST, a Maryland real
estate investment trust (the "Borrower"), hereby promises to pay to iStar
Financial Inc., a Maryland corporation (the "Lender"), at the office of 1114
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the principal sum
of Fifty Million Dollars ($50,000,000.00) (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Loans made by Lender to Borrower
under the Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Agreement, and to pay interest on the unpaid principal amount of such
Loan, at such office, in like money and funds, for the period commencing on the
date of such Loan until such Loan shall be paid in full, at the rates per annum
and on the dates provided in the Agreement.
The date, amount, interest rate and duration of Interest Period (if
applicable) of the Loan (and each advance of Loan proceeds) made by Lender to
Borrower, and each payment made on account of the principal thereof, shall be
recorded by Lender on its books provided that the failure of Lender to make any
such recordation or endorsement shall not affect the obligations of Borrower to
make a payment when due of any amount owing under the Agreement or hereunder in
respect of the Loans made by the Lender.
This Note is the Note referred to in the Amended and Restated
Credit
Agreement dated as of May 18, 2001 (as modified and supplemented and in effect
from time to time, the "Agreement") between Borrower, the Subsidiary Guarantors
party thereto, and evidence the Loan made by Lender thereunder. Terms used but
not defined in this Note have the respective meanings assigned to them in the
Agreement.
The Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York.
ENTERTAINMENT PROPERTIES TRUST, a
Maryland real estate investment trust
By:_____________________________________
Name:___________________________________
Title___________________________________
122
EXHIBIT A
[FORM OF NOTE]
12.20 PROMISSORY NOTE
$50,000,000.00 ____________ ___, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED,
ENTERTAINMENT PROPERTIES TRUST, a Maryland real
estate investment trust (the "Borrower"), hereby promises to pay to iStar
Financial Inc., a Maryland corporation (the "Lender"), at the office of 1114
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the principal sum
of Fifty Million Dollars ($50,000,000.00) (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Loan made by Lender to Borrower
under the Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Agreement, and to pay interest on the unpaid principal amount of the
Loan, at such office, in like money and funds, for the period commencing on the
date of the Loan until the Loan shall be paid in full, at the rates per annum
and on the dates provided in the Agreement.
The date of advance of proceeds, amount, interest rate and duration of
Interest Period of the Loan (and each advance of Loan proceeds) made by Lender
to Borrower, and each payment made on account of the principal thereof, shall be
recorded by Lender on its books provided that the failure of Lender to make any
such recordation or endorsement shall not affect the obligations of Borrower to
make a payment when due of any amount owing under the Agreement or hereunder in
respect of the Loan made by the Lender.
This Note is the Note referred to in the Amended and Restated Credit
Agreement dated as of ____ __, 2001 (as modified and supplemented and in effect
from time to time, the "Agreement") between Borrower, the Subsidiary Guarantors
party thereto, and Lender, and evidence the Loan made by Lender thereunder.
Terms used but not defined in this Note have the respective meanings assigned to
them in the Agreement.
The Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of the Loan upon
the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York.
ENTERTAINMENT PROPERTIES TRUST, a
Maryland real estate investment trust
2
123
By:____________________________________
Name:__________________________________
Title__________________________________
3
124
12.21 EXHIBIT B
(a) ARCHON SECURITIZATION LOAN DOCUMENTS
4
125
Section 13. 1. Loan Agreement, dated as of June 29, 1998, between
Borrower and Lender.
Section 14. 2. Promissory Note, dated as of June 29, 1998, made by
Borrower in favor of Lender in the original principal amount of $105,000,000.
Section 15. 3. Environmental Indemnity Agreement, dated as of June
29, 1998, between Borrower and Lender.
Section 16. 4. Deposit Account Agreement, dated June 29, 1998,
among Borrower, Lender and UMB Bank, N.A., as Agent.
Section 17. 5. Mortgage Loan Cooperation Agreement, dated June 29,
1998, among Borrower,
Entertainment Properties Trust, as Indemnitor, and Lender.
Section 18. REAL ESTATE DOCUMENTS
Section 19. 6. Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing, dated as of June 29, 1998, made by Borrower
to ▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee, for Lender and securing the property known as
Grand 24.
Section 20. 7. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
Grand 24.
Section 21. 8. Assignment of Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the property known as
Grand 24.
Section 22. 9. Assignment of Assignment of Leases and Rents, dated
June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ Sachs Mortgage Company and relating the
property known as Grand 24.
Section 23. 10. UCC-1 Financing Statements to be filed in the
following jurisdictions:
Section 24. a. Texas Secretary of State
Section 25. b. Dallas County, Texas
Section 26. 11. UCC-3 Financing Statements assigning all of
Lender's rights under the original Financing Statement to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company to be filed in the following jurisdictions:
Section 27. a. Texas Secretary of State
Section 28. b. Dallas County, Texas
Section 29. 12. Title Policy relating to the property known as
Grand 24.
5
126
Section 30. 13. Survey relating to the property known as Grand 24.
Section 31. 14. Subordination, Non-disturbance and Attornment
Agreements with respect to Grand 24.
Section 32. 15. Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing, dated as of June 29, 1998, made by Borrower
to ▇▇▇▇▇▇▇ Title of California, as Trustee, for Lender and securing the property
known as ▇▇▇▇▇▇▇▇▇ ▇▇.
Section 33. 16. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
▇▇▇▇▇▇▇▇▇ ▇▇.
Section 34. 17. Assignment of Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the property known as
▇▇▇▇▇▇▇▇▇ ▇▇.
Section 35. 18. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ Sachs Mortgage Company and
relating the property known as ▇▇▇▇▇▇▇▇▇ ▇▇.
Section 36. 19. UCC-1 Financing Statements to be filed in the
following jurisdictions:
Section 37. a. California Secretary of State
Section 38. b. Los Angeles County, California
Section 39. 20. UCC-2 Financing Statements assigning all of
Lender's rights under the original Financing Statement to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company to be filed in the following jurisdictions:
Section 40. a. California Secretary of State
Section 41. b. Los Angeles County, California
Section 42. 21. Title Policy relating to the property known as
▇▇▇▇▇▇▇▇▇ ▇▇.
Section 43. 22. Survey relating to the property known as ▇▇▇▇▇▇▇▇▇
▇▇.
Section 44. 23. Subordination, Non-disturbance and Attornment
Agreements with respect to ▇▇▇▇▇▇▇▇▇ ▇▇.
Section 45. 24. Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing, dated as of June 29, 1998, made by Borrower
to ▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee, for Lender and securing the property known as
Studio 30.
Section 46. 25. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
Studio 30.
6
127
Section 47. 26. Assignment of Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the property known as
Studio 30.
Section 48. 27. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ Sachs Mortgage Company and
relating the property known as Studio 30.
Section 49. 28. UCC-1 Financing Statements to be filed in the
following jurisdictions:
Section 50. a. Texas Secretary of State
Section 51. ▇. ▇▇▇▇▇▇ County, Texas
Section 52. 29. UCC-3 Financing Statements assigning all of
Lender's rights under the original Financing Statement to ▇▇▇▇▇▇▇ Sachs Mortgage
Company to be filed in the following jurisdictions:
Section 53. a. Texas Secretary of State
Section 54. ▇. ▇▇▇▇▇▇ County, Texas
Section 55. 30. Title Policy relating to the property known as
Studio 30.
Section 56. 31. Survey relating to the property known as Studio
30.
Section 57. 32. Subordination, Non-disturbance and Attornment
Agreements with respect to Studio 30.
Section 58. 33. Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing, dated as of June 29, 1998, made by Borrower
to ▇▇▇▇▇▇▇ Title of California, as Trustee, for Lender and securing the property
known as Ontario ▇▇▇▇▇ 30.
Section 59. 34. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
Ontario ▇▇▇▇▇ 30.
Section 60. 35. Assignment of Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the property known as
Ontario ▇▇▇▇▇ 30.
Section 61. 36. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
relating the property known as Ontario ▇▇▇▇▇ 30.
Section 62. 37. UCC-1 Financing Statements to be filed in the
following jurisdictions:
Section 63. a. California Secretary of State
7
128
Section 64. b. San Bernardino County, California
Section 65. 38. UCC-2 Financing Statements assigning all of
Lender's rights under the original Financing Statement to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company to be filed in the following jurisdictions:
Section 66. a. California Secretary of State
Section 67. b. San Bernardino County, California
Section 68. 39. Title Policy relating to the property known as
Ontario ▇▇▇▇▇ 30.
Section 69. 40. Survey relating to the property known as Ontario
▇▇▇▇▇ 30.
Section 70. 41. Subordination, Non-disturbance and Attornment
Agreements with respect to Ontario ▇▇▇▇▇ 30.
Section 71. 42. Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing, dated as of June 29, 1998, made by Borrower
to ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustee, for Lender and securing the property known as
West Olive 16.
Section 72. 43. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
West Olive 16.
Section 73. 44. Assignment of Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Lender to ▇▇▇▇▇▇▇ Sachs Mortgage Company and relating the property known as West
Olive 16.
Section 74. 45. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
relating the property known as West Olive 16.
Section 75. 46. UCC-1 Financing Statements reflecting the
assignment of Lender's rights under the Financing Statements to ▇▇▇▇▇▇▇ Sachs
Mortgage Company which are to be filed in the following jurisdictions:
Section 76. a. Missouri Secretary of State
Section 77. b. St. Louis County, Missouri
Section 78. 47. Title Policy relating to the property known as
West Olive 16.
Section 79. 48. Survey relating to the property known as West
Olive 16.
Section 80. 49. Subordination, Non-disturbance and Attornment
Agreements with respect to West Olive 16.
8
129
Section 81. 50. Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing, dated as of June 29, 1998, made by Borrower
to ▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee, for Lender and securing the property known as
▇▇▇▇▇▇▇ Oaks 24.
Section 82. 51. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
▇▇▇▇▇▇▇ Oaks 24.
Section 83. 52. Assignment of Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the property known as
▇▇▇▇▇▇▇ Oaks 24.
Section 84. 53. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
relating the property known as ▇▇▇▇▇▇▇ Oaks 24.
Section 85. 54. UCC-1 Financing Statements to be filed in the
following jurisdictions:
Section 86. a. Texas Secretary of State
Section 87. b. Bexar County, Texas
Section 88. 55. UCC-3 Financing Statements assigning all of
Lender's rights under the original Financing Statement to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company to be filed in the following jurisdictions:
Section 89. a. Texas Secretary of State
Section 90. b. Bexar County, Texas
Section 91. 56. Title Policy relating to the property known as
▇▇▇▇▇▇▇ Oaks 24.
Section 92. 57. Survey relating to the property known as ▇▇▇▇▇▇▇
Oaks 24.
Section 93. 58. Subordination, Non-disturbance and Attornment
Agreements with respect to ▇▇▇▇▇▇▇ Oaks 24.
Section 94. 59. Open-End Leasehold Mortgage, Assignment of Leases
and Rents, Security Agreement and Fixture Filing, dated as of June 29, 1998,
made by Borrower to Lender and securing the property known as Lennox 24.
Section 95. 60. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
Lennox 24.
Section 96. 61. Assignment of Open-End Leasehold Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated
June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the
property known as Lennox 24.
9
130
Section 97. 62. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
relating the property known as Lennox 24.
Section 98. 63. UCC-1 Financing Statements reflecting the
assignment of Lender's rights under the Financing Statements to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company which are to be filed in the following jurisdictions:
Section 99. a. Ohio Secretary of State
Section 100. ▇. ▇▇▇▇▇▇▇▇ County, Ohio
Section 101. 64. Title Policy relating to the property known as
Lennox 24.
Section 102. 65. Survey relating to the property known as Lennox
24.
Section 103. 66. Subordination, Non-disturbance and Attornment
Agreements with respect to Lennox 24.
Section 104. 67. Leasehold Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, dated June 29, 1998, made by
Borrower to Lender and securing the property known as Mission Valley 20.
Section 105. 68. Assignment of Leases and Rents, dated as of June
29, 1998, made by Borrower in favor of Lender and relating the property known as
Mission Valley 20.
Section 106. 69. Assignment of Leasehold Deed of Trust, Security
Agreement, Assignment of Leases and Rents and Fixture Filing, dated June 29,
1998, made by Lender to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and relating the property
known as Mission Valley 20.
Section 107. 70. Assignment of Assignment of Leases and Rents,
dated June 29, 1998, made by Lender to ▇▇▇▇▇▇▇ Sachs Mortgage Company and
relating the property known as Mission Valley 20.
Section 108. 71. UCC-1 Financing Statements to be filed in the
following jurisdictions:
Section 109. a. California Secretary of State
Section 110. b. San Diego County, California
Section 111. 72. UCC-3 Financing Statements assigning all of
Lender's rights under the original Financing Statement to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company to be filed in the following jurisdictions:
Section 112. a. California Secretary of State
Section 113. b. San Diego County, California
10
131
Section 114. 73. Title Policy relating to the property known as
Mission Valley 20.
Section 115. 74. Survey relating to the property known as Mission
Valley 20.
Section 116. 75. Subordination, Non-disturbance and Attornment
Agreements with respect to Mission Valley 20.
Section 117. 76. Indemnity Agreement by
Entertainment Properties
Trust ("EPT") to ▇▇▇▇▇▇▇ Title Company relating to Mechanics Liens.
Section 118. 77. Estoppel Certificate, dated July 30, 1998, made
by Borrower and EPT to Lender.
Section 119. 78. Estoppel Certificate, dated July 24, 1998, made
by Mission Valley Partnership to Lender and agreed to by Borrower.
Section 120. 79. Certificate of Borrower and Lender dated July 30,
1998.
11
132
Section 121. DOCUMENTS REFLECTING PRIOR TRANSFER OF REAL ESTATE
FROM
ENTERTAINMENT PROPERTIES TRUST ("EPT")
Section 122. TO EPT DOWNREIT II, INC. ("EPT II")
Section 123. 80. Special Warranty Deed made by EPT granting the
property known as Grand 24 to EPT II.
Section 124. 81. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on Grand 24 to
EPT II.
Section 125. 82. Grant Deed made by EPT granting the property
known as Promenade 16 to EPT II.
Section 126. 83. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on Promenade 16
to EPT II.
Section 127. 84. Special Warranty Deed made by EPT granting the
property known as Studio 30 to EPT II.
Section 128. 85. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on Studio 30 to
EPT II.
Section 129. 86. Grant Deed made by EPT granting the property
known as Ontario ▇▇▇▇▇ 24 to EPT II.
Section 130. 87. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on Ontario ▇▇▇▇▇
24 to EPT II.
Section 131. 88. Special Warranty Deed made by EPT granting the
property known as West Olive 16 to EPT II.
Section 132. 89. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on West Olive 16
to EPT II.
Section 133. 90. Special Warranty Deed made by EPT granting the
property known as ▇▇▇▇▇▇▇ Oaks 24 to EPT II.
Section 134. 91. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on ▇▇▇▇▇▇▇ Oaks
24 to EPT II.
Section 135. 92. Assignment and Assumption Agreement whereby EPT
assigned its rights under a certain Ground Lease Agreement on Lennox 24 to EPT
II.
Section 136. 93. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on Lennox 24 to
EPT II.
Section 137. 94. Assignment and Assumption Agreement whereby EPT
assigned its rights under a certain Ground Lease Agreement on Mission Valley 20
to EPT II.
12
133
Section 138. 95. Assignment and Assumption Agreement whereby EPT
assigned its rights as Landlord under a certain Lease Agreement on Mission
Valley 20 to EPT II.
Section 139. 96. Affidavit by EPT to ▇▇▇▇▇▇▇ Title Guaranty
Company.
Section 140. 97. Affidavit by EPT II to ▇▇▇▇▇▇▇ Title Guaranty
Company.
Section 141. 98. ▇▇▇▇ of Sale made by EPT to EPT II transferring
all of the personal property located on each of the properties.
Section 142. LEGAL OPINIONS
Section 143. 99. Opinion of ▇▇▇▇▇▇▇, Mag & Fizzell, P.C. with
respect to due authorization, enforceability and non-contravention.
Section 144. 100. Non-consolidation opinion of ▇▇▇▇▇▇▇, Mag &
Fizzell, P.C.
Section 145. 101. Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ with respect to
due authorization and enforceability.
Section 146. 102. Opinion of Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
with respect to due authorization and enforceability.
Section 147. 103. Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. with respect
to due authorization and enforceability.
Section 148. CORPORATE DOCUMENTS
Section 149. 104. Statement of Unanimous Consent of the Board of
Trustees of EPT.
Section 150. 105. Officer's Certificate of EPT II as to the
Articles of Incorporation, Bylaws and Board Resolutions.
Section 151. 106. Certificates of Good Standing of EPT issued by
the Secretary of State of each of Maryland and Missouri.
Section 152. 107. Certificate of Good Standing of EPT issued by
the Secretary of State of Missouri.
Section 153.
13
134
153.01 EXHIBIT C
(a) INITIAL MEGAPLEX PROPERTIES
1. LOEWS WOODRIDGE 18: Lease Agreement by and between Catellus Development
Corporation ("Landlord") and Loews Gurnee ▇▇▇▇▇ Cinemas, Inc.
("Tenant"), dated July 7, 1997.
2. PALM PROMENADE 24: Lease by and between EPT DOWNREIT, INC. ("Landlord")
and American Multi-Cinema, Inc. ("Tenant"), dated February 10, 2000.
3. ▇▇▇▇ CROSSROADS 20: Lease Agreement by and between ▇▇▇▇ Crossroads
Cinema, LLC ("Landlord") and ▇▇▇▇ Cinema LLC, successor in interest to
Consolidated Theatres Management, LLC ("Tenant"), dated December 21,
1998 as amended by that First Amendment to Lease Agreement, dated
December 21, 1998.
4. TALMPA PALMS 20: Lease by and between EPT DOWNREIT, INC. ("Landlord")
and Muvico Entertainment, L.L.C. ("Tenant"), dated June 17, 1999.
14
135
EXHIBIT D
153.02 INITIAL PAD PROPERTIES
1. Cantera Lot 2 located adjacent to Cantera theatre at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
2. Cantera Lot 5 located adjacent to Cantera theatre at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
3. Gulf Point Pad A - Texas Land & Cattle located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇. Lease Agreement between EPT DownREIT, Inc. and Tx.C.C.,
Inc., dated February 5, 1999.
4. Gulf Pointe Pad B - Bennigan's located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇. Lease Agreement between EPT DownREIT, Inc. and Steak
and Ale of Texas, Inc., dated February 10, 1999, as amended.
5. Gulf Pointe Pad C located adjacent to Gulf Pointe theatre at ▇▇▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇.
6. Mesquite Pad A - Bennigan's located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇. Lease Agreement between EPT DownREIT, Inc. and Steak
and Ale of Texas, Inc., dated February 10, 1999.
7. Mesquite Pad B - Texas Roadhouse located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇. Lease Agreement between EPT DownREIT, Inc. and Texas
Roadhouse Holdings, LLC.
8. Mesquite Pad C - On the Border located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇. Lease Agreement between EPT DownREIT, Inc. and ▇▇▇▇▇▇▇ Texas,
L.P., dated July 24, 1998.
9. Mesquite Pad D located adjacent to Mesquite theatre at ▇▇▇▇▇ ▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
10. Pompano Pad A - Kmart located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇. Assignment and Assumption Agreement between Pompano Theaters
Holdings, LTD. and EPT DownREIT, Inc., dated October 30, 1998.
11. Pompano Pad B - ▇▇▇▇▇▇▇ located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇. Assignment and Assumption Agreement between Pompano
Theaters Holdings, LTD. and EPT DownREIT, Inc., dated November 1, 1998.
15
136
12. Powder Springs Pad A located adjacent to Roadhouse Grill located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
13. Powder Springs Pad B located adjacent to Roadhouse Grill located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
14. Powder Springs Pad C - Roadhouse Grill located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
15. Woodridge Lot A located adjacent to Loews theatre at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
16. Woodridge Lot B located adjacent to Loews theatre at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
17. Woodridge Lot C located adjacent to Loews theatre at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
16
137
EXHIBIT E
(a) INITIAL SECURITIZED PROPERTIES
1. First Colony 24 located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇.
2. Grand 24 located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇, ▇▇▇▇▇.
3. Lennox 24 located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇.
4. Mission Valley 20 located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇.
5. Ontario ▇▇▇▇▇ 30 located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ California.
6. ▇▇▇▇▇▇▇▇▇ ▇▇ located at 21801 Oxnard, Woodland Hills, California.
7. Studio 30 located at ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
8. West Olive 16 located at 12657 Olive Street, Creve Coeur, Missouri.
17
138
EXHIBIT F
(b) MEGAPLEX NINE LOAN DOCUMENTS
1. Mezzanine Loan Agreement
2. Promissory Note
3. Pledge and Security Agreement
4. Acknowledgement and Consent to Pledge and Security Agreement by
Borrower
5. Intercreditor Agreement (between Senior Lender and Mezzanine Lender)
6. UCC-1 Financing Statements
7. Indemnity Agreement
8. Environmental Indemnity Agreement
9. Mezzanine Cash Management Agreement
10. Copy of Pledged Stock Certificate No. 1 Representing 100 Shares of
Capital Stock in Megaplex Nine, Inc.
11. Stock Power, in blank, by Mezzanine Borrower
12. Opinion of counsel for Borrower and Mezzanine Borrower with respect to
the due execution and enforceability (Missouri)
13. Opinion of counsel for Borrower and Mezzanine Borrower with respect to
enforceability of the loan documents (New York)
14. Opinion of counsel for Mezzanine Borrower (New York, Missouri and
Illinois) regarding creation and perfection of security interests in
collateral including accounts
15. Substantive Non-Consolidation Opinion (Senior Loan)
16. Substantive Non-Consolidation Opinion (Mezzanine Loan)
17. Closing Statement
18
139
EXHIBIT G
(c) QUALIFIED GROUND LEASES
1. LOEWS WOODRIDGE 18: Ground Lease by and between Catellus
Development Corporation, a Delaware corporation and EPT
DOWNREIT, INC., a Missouri corporation ("Tenant") dated
December 28, 1998; as assigned to Megaplex Four, Inc., a
Missouri corporation.
2. PALM PROMENADE 24: Ground Lease by and between AMC Realty,
Inc. ("Lessor") and EPT DOWNREIT, INC., a Missouri corporation
dated February 10, 2000; as assigned to Megaplex Four, Inc., a
Missouri corporation.
19
140
EXHIBIT H
(d) CLOSING CHECKLIST
Lender: [iStar Entity]
Borrower: Entertainment Properties Trust
Mortgagor: Megaplex Four, Inc.
Property: Palm Promenade
Woodridge 18
Crossroads 20
Tampa Starlight 20
Retail Pad Portfolio
Archon/EPT DownREIT II Portfolio
LEGAL CLOSING CHECKLIST(1)
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 154. ORGANIZATIONAL DOCUMENTS OF BORROWER, MORTGAGOR/PROPERTY OWNERS
AND PLEDGOR
--------- ------------------------------------------------------------------------------------- ---------- ---------
BORROWER:
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.01 Declaration of Trust and all amendments thereto, certified as
filed by SDAT of Maryland
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.02 By-laws, certified by Borrower
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.03 Certificate of Good Standing issued by SDAT of Maryland
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.04 Certificate of Good Standing issued by Secretary of State of
Missouri
--------- ------------------------------------------------------------------------------------- ---------- ---------
--------
(1) THIS PRELIMINARY CLOSING CHECKLIST (THIS "CHECKLIST") IS A STANDARD
FORM CHECKLIST, HAS BEEN PREPARED ON THE ASSUMPTION THAT A COMMITMENT
HAS BEEN ISSUED BY LENDER, BUT MAY NOT REFLECT ALL CONDITIONS TO
CLOSING CONTEMPLATED BY THE COMMITMENT. THIS CHECKLIST DOES NOT
CONSTITUTE A COMMITMENT BY LENDER TO MAKE A LOAN, AND SHOULD NOT BE
RELIED ON AS SUCH.
THIS CHECKLIST COVERS PRIMARILY THOSE ITEMS WHICH ARE TO BE SUBMITTED
TO LENDER'S COUNSEL, AND DOES NOT INCLUDE ALL CLOSING REQUIREMENTS
WHICH MAY BE SET FORTH IN ANY COMMITMENT RELATED TO THE PROPOSED LOAN,
SUCH AS AN APPRAISAL, AN ENVIRONMENTAL REPORT OR AN ENGINEERING REPORT.
20
141
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.05 Certificate of Corporate Resolutions and Incumbency
--------- ------------------------------------------------------------------------------------- ---------- ---------
MORTGAGOR (OWNER OF FOUR MEGAPLEX THEATERS AND PAD SITES):(2')
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.06 Certificate of Incorporation and all amendments thereto,
certified as filed by Secretary of State where incorporated
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.07 By-laws, certified by Secretary of Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.08 Certificate of Good Standing issued by Secretary of State where
incorporated
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.09 Certificate of Good Standing issued by Secretary of State where
property is located
a. California
b. Illinois
c. Florida
154.10 d. North Carolina
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.11 Certificate of Corporate Resolutions and Incumbency
--------- ------------------------------------------------------------------------------------- ---------- ---------
PROPERTY OWNERS AND ARCHON SPE PLEDGOR (I.E., OWNER OF SHARES IN EPT DOWNREIT II,
INC. AND OWNER OF "ARCHON" PORTFOLIO)(3')
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.12 Certificate of Incorporation and all amendments thereto,
certified as filed by Secretary of State where incorporated
154.13 a. Archon SPE Pledgor
154.14 b. EPT DownREIT II, Inc.
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.15 By-laws, certified by Secretary of applicable Property Owner
154.16 a. Archon SPE Portfolio
154.17 b. EPT DownREIT II, Inc.
--------
(2') MORTGAGOR (I.E., MEGAPLEX FOUR, INC.) MUST BE A BANKRUPTCY REMOTE,
NEWLY FORMED, SPE.
(3') ARCHON SPE PLEDGOR MUST BE A BANKRUPTCY REMOTE FORMED SPE.
21
142
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.18 Certificate of Good Standing issued by Secretary of State where
incorporated
154.19 a. Archon Pledgor
154.20 b. EPT DownREIT II, Inc.
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.21 Certificate of Secretary of State Where Property is Located
154.22 a. Archon SPE Pledgor
154.23 i. Illinois
154.24 ii. Texas
154.25 iii. Florida
154.26 iv. Georgia
154.27 b. EPT DownREIT II, Inc. [list applicable states]
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.28 Certificate of Corporate Resolutions and Incumbency for Archon
SPE Pledgor
--------- ------------------------------------------------------------------------------------- ---------- ---------
THEATRE SUB, INC., A MISSOURI CORPORATION
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.29 Certificate of Incorporation and all amendments thereto,
certified as filed by Secretary of State where incorporated
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.30 By-laws, certified by Secretary of Pledgor
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.31 Certificate of Good Standing issued by Secretary
of State where incorporated
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.32 Certificate of Good Standing issued by Secretary of State of
Missouri
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 154.33 Certificate of Corporate Resolutions and Incumbency
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 155. GROUND LEASES
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 155.01 Certified copy of Ground Leases, including all modifications and
amendments thereto
22
143
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
a) Palm Promenade, San Diego, California
--------- ------------------------------------------------------------------------------------- ---------- ---------
b) Woodridge, Illinois
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 155.02 Assignments of Ground Leases from EPT DownREIT, Inc., to
Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
a) Palm Promenade, San Diego, California
--------- ------------------------------------------------------------------------------------- ---------- ---------
b) Woodridge, Illinois
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 155.03 Ground Lease Estoppel Certificates from Ground Lessor to Lender
--------- ------------------------------------------------------------------------------------- ---------- ---------
a) Palm Promenade, San Diego, California
--------- ------------------------------------------------------------------------------------- ---------- ---------
b) Woodridge, Illinois
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 156. SPACE LEASES
--------- ------------------------------------------------------------------------------------- ---------- ---------
23
144
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.01 Certified copies of Theater Leases and any other Space Leases,
including all modifications and amendments thereto
156.02
a) Theater Leases
i) AMC - Palm Promenade
ii) Loews - Woodridge 18
iii) Consolidated - Crossroads 20
iv) Muvico - Tampa Starlight 20
b) Space Leases
i) Gulf Pointe
1) TX C.C., Inc. (S&A Restaurant Corp.,
guarantor)
2) S&A
ii) Mesquite
1) Steak and Ale of Texas, Inc. (S&A Restaurant
Corp., guarantor)
2) Texas Roadhouse Holdings, LLC
3) ▇▇▇▇▇▇▇ Texas, L.P.
iii) Pompano
1) K-Mart
2) ▇▇▇▇▇▇▇ of Canada
iv) Powder Springs
1) Roadhouse Grill, Inc.
v) Other
c) Archon Portfolio
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.03 Certified copies of all Guaranties of Theater
Leases and of any other Space Leases for all properties
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.04 Confirmation of ▇▇▇▇'▇ Lease(4')
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.05 Form of Space Leases (if applicable)
--------- ------------------------------------------------------------------------------------- ---------- ---------
--------
(4') ▇▇▇▇'▇ OPERATING AGREEMENT WILL BE PC.
24
145
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.06 Chain of Assignment of Theater Leases to Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.07 Assignment of Rights under 4th amendment of Credit Agreement to
Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.08 [Reserved]
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 156.09 Rent Roll or Occupancy Statement (if applicable)
a) Theater Leases
i) AMC - Palm Promenade
ii) Loews - Woodridge 18
iii) Consolidated - Crossroads 20
iv) Muvico - Tampa Starlight 20
b) Space Leases
i) Gulf Pointe
1) TX C.C., Inc. (S&A Restaurant Corp.,
guarantor)
2) S&A
ii) Mesquite
1) Steak and Ale of Texas, Inc. (S&A Restaurant
Corp., guarantor)
2) Texas Roadhouse Holdings, LLC
3) ▇▇▇▇▇▇▇ Texas, L.P.
iii) Pompano
1) K-Mart
2) ▇▇▇▇▇▇▇ of Canada
iv) Powder Springs
1) Roadhouse Grill, Inc.
v) Other
c) Archon
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 157. ESTOPPEL LETTERS AND SUBORDINATION AND NON-DISTURBANCE AGREEMENTS
--------- ------------------------------------------------------------------------------------- ---------- ---------
25
146
--------- ------------------------------------------------------------------------------------- ---------- ---------
SENT/
RESP. DOCUMENT REC'D STATUS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 157.01 Tenant Estoppel Letters in agreed form
a) Theater Leases
i) AMC - Palm Promenade
ii) Loews - Woodridge 18
iii) Consolidated - Crossroads 20
iv) Muvico - Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
157.02 "CCNR" Estoppels"
a) Woodridge
b) Tampa
c) Palm Promenade
d) Crossroads
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 157.03 Lease Guarantor Joinder & Estoppel
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 157.04 Subordination, Non-Disturbance and Attornment Agreements in
agreed form
a) Theater Leases
i) AMC - Palm Promenade
ii) Loews - Woodridge 18
iii) Consolidated - Crossroads 20
157.05 iv) Muvico - Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
26
147
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 158. ZONING, USE AND OCCUPANCY
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 1. Certificates of Occupancy
a) Theater Leases
i) Palm Promenade
ii) Woodridge 18 - Rec'd
iii) Crossroads 20 - Rec'd
iv) Tampa Starlight 20 - Rec'd
b) Pad Portfolio
i) Cantera
ii) Gulf Pointe
iii) Mesquite
iv) Pompano
v) Woodridge
vi) Powder Springs
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 2. Zoning Research for four Megaplexes (Letter from municipality re:
zoning and building compliance)
a) Palm Promenade
b) Woodridge 18
c) Crossroads 20
d) Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 3. Municipal departmental violation searches (building code), including
environmental lien searches and letter from municipality for four
Megaplexes
a) Palm Promenade
b) Woodridge 18
c) Crossroads 20
d) Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 159. FINANCIAL STATEMENTS; AND ENGINEERING/ENVIRONMENTAL REPORTS
--------- ------------------------------------------------------------------------------------- ---------- ---------
159.01 Audited Consolidated Financial Statements of Borrower
27
148
--------- ------------------------------------------------------------------------------------- ---------- ---------
159.02 Operating Statement of Properties, prepared and certified by
Borrower
Four Megaplex Properties
b. Pad Properties
c. Archon Portfolio
--------- ------------------------------------------------------------------------------------- ---------- ---------
159.03 Reserved
--------- ------------------------------------------------------------------------------------- ---------- ---------
159.04 Engineering Reports for Properties
--------- ------------------------------------------------------------------------------------- ---------- ---------
159.05 Environmental Reports for Properties
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 160. CASUALTY INSURANCE POLICIES
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.01 All Risk
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.02 Boiler Damage and Liability Insurance
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.03 Business/Rental Interruption Insurance
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.04 Public Liability Insurance
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.05 Umbrella Insurance
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.06 Flood Insurance policy or evidence that premises are not located
in flood zone
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 160.07 Other Insurance required by Lender
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 161. TITLE INSURANCE
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 4. Marked title commitment and/or pro forma title policy with the following
endorsements: (a) comprehensive, (b) creditors rights, (c) variable
rate, (d) doing business, (e) ALTA zoning 3.1 (with
parking), (f) multistate mortgage, (g) tie-in, (h)
mortgage tax, (i) same as survey, (j) tax parcel, (k)
usury, (l) contiguity (if applicable), (m) access,
(n) subdivision, (o) PUD (if applicable), (p) First Dollar, (q)
environmental lien (if applicable/available) and (r) Last Dollar
a) Palm Promenade
b) Woodridge 18
c) Crossroads 20
d) Tampa Starlight 20
COPY OF EXISTING POLICY CONFIRMING THAT EPT DOWNREIT II, INC. OWNS THE
ARCHON SITES.
--------- ------------------------------------------------------------------------------------- ---------- ---------
28
149
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.01 Copy of existing policy confirming (in the case of a) - f))
that Pad Portfolio Owner is the owner of record (and, if not the owner of record, an
endorsement or new policy insuring that Pad Portfolio Owner is the owner of record)
a) Cantera
161.02 b) Gulf Pointe
161.03 c) Mesquite
161.04 d) Pompano
161.05 e) Woodridge
161.06 f) Powder Springs
161.07 g) Archon (copy of owners policy)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.08 Copies of all recorded easements, rights of way, restrictive
covenants, leases and other instruments of record (except for Archon portfolio)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.09 Approval of title company and re-insuring title insurance
companies and amounts taken
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.10 Evidence that required ALTA Direct Facultative Reinsurance
Agreements will be issued by companies and in amounts satisfactory to Lender
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.11 UCC-1 financing statement search, tax lien search, judgment
search, pending litigation and bankruptcy search (Secretary of State and county
where property is located and where Borrower, Mortgagor, Pad Property Owner and
Pledgor is organized and has chief executive office/principal place of business)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 5. Most recent tax bills for each property
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.12 Verification of independent tax lot status for each property
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.13 Evidence of required affirmative insurance and special
endorsements required by Lender
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.14 Insured closing letter from title insurance company (if required)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 161.15 Final Title Policies Per Commitment under #50
--------- ------------------------------------------------------------------------------------- ---------- ---------
29
150
Section 162. SURVEYS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 6. Survey (7 copies)
a) Palm Promenade - Received
162.01 b) Woodridge 18
162.02 c) Crossroads 20
162.03 d) Tampa Starlight
162.04 e) Cantera (copy of existing survey only)
162.05 f) Gulf Pointe (copy of existing survey only)
162.06 g) Mesquite (copy of existing survey only)
h) Pompano (copy of existing survey only)
i) Woodridge (copy of existing survey only)
j) Powder Springs (copy of existing survey only)
h) Archon sites (copy of existing survey only)
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 163. OPINION LETTERS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 163.01 Opinion of counsel for Borrower, Pledgors and Mortgagor with
respect to due execution, enforceability etc. (Missouri)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 163.02 Opinion of counsel for Borrower, Pledgors and Mortgagor with
respect to enforceability of the loan documents (New York)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 7. Opinions of local counsel
a) Illinois
b) California
c) Florida
d) North Carolina
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 163.03 Maryland opinion for Borrower
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 163.04 Substantive Non-Consolidation Opinion
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 164. EXISTING MORTGAGES TO BE RELEASED OR ASSIGNED
--------- ------------------------------------------------------------------------------------- ---------- ---------
164.01 Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
164.02 Other
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 165. LOAN DOCUMENTS
--------- ------------------------------------------------------------------------------------- ----------
30
151
C/B 165.01 Credit Agreement
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.02 Promissory Note
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.03 Mortgage/Leasehold Mortgage and Security Agreement/Deed of Trust
a. Palm Promenade
b. Woodridge 18
c. Crossroads 20
d. Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 8. Assignment of Leases and Rents
a. Palm Promenade
b. Woodridge 18
c. Crossroads 20
d. Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.04 UCC-1 Financing Statements (with Schedule A attached)
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.05 UCC-1 Financing Statements
a) Missouri
b) Maryland
c) New York
d) Florida
e) North Carolina
f) California
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.06 Environmental Indemnity Agreement
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.07 Asbestos Operations and Maintenance Agreement (if required)
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.08 Illinois RPTA Statement or Certification that IRPTA is Not Applicable
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.09 Post Closing Endeavor Letter
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.10 Cash Management Agreement
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.11 Lockbox account opening requirements, including resolutions,
signature cards, W-9, and Borrower's wiring instructions (if required)
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.12 Escrow Instructions
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.13 Disbursement Letter from Borrower to Lender
--------- ------------------------------------------------------------------------------------- ---------- ---------
31
152
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 165.14 W-9 Form
--------- ------------------------------------------------------------------------------------- ---------- ---------
165.15 Collateral Assignment of Interest Rate Protection Agreement
a) Interest Rate Protection Agreement with Counterparty
Satisfactory to Lender
b) Counterparty Consent
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 166. PLEDGE DOCUMENTS
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 166.01 Pledge and Security Agreement (Mortgagor)
--------- ------------------------------------------------------------------------------------- ---------- ---------
166.02 Borrower's Certificate
166.03
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 166.04 Acknowledgement and Consent to Pledge and Security Agreement
a) Stock in Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 166.05 Instructions to Register Pledge Agreement
a) Stock in Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 166.06 Intercreditor Agreement (with Senior Lender) (Archon)
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 167. MISCELLANEOUS LOAN ITEMS
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 167.01 Pledged Stock Certificate
a) Stock in Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 167.02 Stock Powers in blank
a) Stock in Mortgagor
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 168. TAX IDENTIFICATION NUMBER:
--------- ------------------------------------------------------------------------------------- ---------- ---------
168.01 Borrower's Taxpayer Identification Number - ▇▇-▇▇▇▇▇▇▇
--------- ------------------------------------------------------------------------------------- ---------- ---------
168.02 Mortgagor's Taxpayer Identification Number - 43-192287
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 168.03 Pledgor's Taxpayer Identification Number
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 169. NOTICES
32
153
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 169.01 Ground Lessors
a) Palm Promenade
169.02 b) Woodridge
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 169.03 Tenants
a) Palm Promenade
169.04 b) Woodridge
169.05 c) Crossroads 20
169.06 d) Tampa Starlight 20
--------- ------------------------------------------------------------------------------------- ---------- ---------
169.07 Pad Tenants
--------- ------------------------------------------------------------------------------------- ---------- ---------
169.08 Archon Cash Management Bank
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 170. Transfer Documents
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 170.01 Deed of Assignment of Ground Lease and Closing Statement (Woodridge)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 170.02 Bills of Sale
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 170.03 Transfer Tax Declaration/Exemption
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 170.04 Assignments of Intangibles
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 170.05 Transfer of, and Re-issuance of Stock Relating to, EPT DownREIT
II, Inc. to Archon SPE Pledgor
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 171. OTHER
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.01 Purchase Agreements for Ground Lease Sites or Evidence of Option
Exercise and Continued Validity of Option Exercise
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.02 Inventory
--------- ------------------------------------------------------------------------------------- ---------- ---------
171.03 Officer's Certificate regarding Absence of Default, Proforma
B Compliance, Solvency (including proforma financials)
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.04 Borrowing Request
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.05 Interest Period Election
--------- ------------------------------------------------------------------------------------- ---------- ---------
33
154
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.06 Annual Budgets for four Megaplexes and Pads
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.07 Confirmation that carrying costs for four Megaplexes and Pads are
current
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 171.08 Payment of Lender's Fees and Expenses
a) Origination Fee
b) Other Expenses
c) KMZ and Local Counsel
--------- ------------------------------------------------------------------------------------- ---------- ---------
Section 172. Miscellaneous post-closing matters
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 172.01 Mortgage/Deed of Trust
a) Cantera
172.02 b) Gulf Pointe
172.03 c) Mesquite
172.04 d) Pompano
172.05 e) Woodridge
172.06 f) Powder Springs
172.07
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 172.08 Assignment of Leases
a) Cantera
172.09 b) Gulf Pointe
172.10 c) Mesquite
172.11 d) Pompano
172.12 e) Woodridge
172.13 f) Powder Springs
--------- ------------------------------------------------------------------------------------- ---------- ---------
C/B 172.14 UCC-1 Financing Statements for Pads
--------- ------------------------------------------------------------------------------------- ---------- ---------
34
155
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 172.15 Mortgage Title Policies
a) Cantera
172.16 b) Gulf Pointe
172.17 c) Mesquite
172.18 d) Pompano
172.19 e) Woodridge
172.20 f) Powder Springs
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 172.21 Illinois RPTA Statement (for Woodridge) or Certification that
IRPTA is not applicable
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 172.22 ▇▇▇▇'▇ Operating Agreement
--------- ------------------------------------------------------------------------------------- ---------- ---------
B 172.23 ▇▇▇▇'▇ Approval to reject the Lease
--------- ------------------------------------------------------------------------------------- ---------- ---------
KEY
C - Lender's Counsel
B - Borrower/Borrower's Counsel
C/B - Lender's Counsel to prepare/Borrower's counsel to obtain or
arrange for execution
L - Lender
X - Satisfactory documentation delivered
N/A - Not Applicable
R - Received but not reviewed or issues exist
AF - Approved Form
CG - Comments Given
PC - Post-Closing
XC - Need Certificate
35
156
EXHIBIT I
(a) APPROVED ANNUAL BUDGET
36
157
SCHEDULE 8.01(F)
(b) ORGANIZATIONAL CHART
--------------------------------------------
Entertainment Properties Trust
--------------------------------------------
|
|
|
| 100%
\/
--------------------------------------------
Megaplex Four, Inc.
Missouri Special Purpose
Entity Corporation
--------------------------------------------
|
|
|
| 100%
\/
--------------------------------------------
Theatre Sub, Inc.
Missouri Special Purpose
Entity Corporation
--------------------------------------------
|
|
|
| 100%
\/
--------------------------------------------
EPT Down REIT, II, Inc.
Missouri Special Purpose
Entity Corporation
--------------------------------------------
37
158
SCHEDULE 8.16(a)
(c) MATERIAL AGREEMENTS AND AGGREGATE OUTSTANDING AMOUNT
EPT DownReit II, Inc.
GMAC Loan - Due 2008 $ 101,715,129.99
3 Theatres, Inc. Loan - Due 2005
▇▇▇▇▇ Fargo - Raleigh $ 4,117,519.84
▇▇▇▇▇ Fargo - Pompano $ 7,889,858.19
▇▇▇▇▇ Fargo - Boise $ 7,889,858.19
subtotal $ 19,897,236.22
------------------
Megapiex 9, Inc. Loan - Due 2006
Pass Thru Certificates $ 103,600,000.00
Mezz Loan - iStar $ 20,950,000.00
Catellus - Land Parcel Note due 12/01 $ 3,304,000.00
38
159
SCHEDULE 8.16(b)
(d) LIENS AND AGGREGATE INDEBTEDNESS
EPT DownReit II, Inc.
GMAC Loan - Due 2008 $ 101,715,129.99
3 Theatres, Inc. Loan - Due 2005
▇▇▇▇▇ Fargo - Raleigh $ 4,117,519.84
▇▇▇▇▇ Fargo - Pompano $ 7,889,858.19
▇▇▇▇▇ Fargo - Boise $ 7,889,858.19
subtotal $ 19,897,236.22
------------------
Megapiex 9, Inc. Loan - Due 2006
Pass Thru Certificates $ 103,600,000.00
Mezz Loan - iStar $ 20,950,000.00
Catellus - Land Parcel Note due 12/01 $ 3,304,000.00
39
160
SCHEDULE 8.18(a)
(e) LIST OF SUBSIDIARIES
Cantera 30, L.P.
MO
Cantera 30, Inc.
General Partner
EPT DownREIT, Inc. and Atlantic, Limited Partners
EPT DownREIT, Inc.
MO
Common stock owned 100% by EPR
Cantera 30, Inc.
MO
Common stock owned 100% by EPT DownREIT, Inc.
Theatre Sub, Inc.
MO
Common stock owned 100% by Megaplex Four, Inc.
Megaplex Holdings, Inc.
MO
Common stock owned 100% by EPT DownREIT, Inc.
40
161
Megaplex Four, Inc.
MO
Common Stock owned 100% by EPR
Megaplex Nine, Inc.
MO
Common stock owned 100% by EPT DownREIT, Inc.
3 Theatres, Inc.
MO
Common stock owned 100% by EPT DownREIT, Inc.
EPT DownREIT, II, Inc.
MO
Common stock owned 100% by Theatre Sub, Inc.
41
162
SCHEDULE 8.18(b)
(f) INVESTMENTS
Cash and Cash Equivalent Deposits $ 3,078,059.00
Restricted Cash Deposits $ 6,495,000.00
Investment in Westcol LLP $ 13,426,577.00
Investment in Cantera 30, Inc. $ 12,766,550.00
42
163
SCHEDULE 9.40(a)
(g) REQUIRED REPAIRS
NONE
43