Exhibit 10.377
LOAN AGREEMENT
Dated as of September 8, 2004
Between
CAPITAL CENTRE FUNDING LLC, as Borrower
and
CAPITAL CENTRE LLC, as Grantor
and
BEAR ▇▇▇▇▇▇▇ COMMERCIAL MORTGAGE, INC.,
as Lender
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1
Section 1.1 Definitions............................................................. 1
Section 1.2 Principles of Construction..............................................21
ARTICLE II GENERAL TERMS 21
Section 2.1 Loan Commitment; Disbursement to Borrower...............................21
Section 2.2 Interest; Loan Payments; Late Payment Charge............................22
Section 2.3 Prepayments.............................................................23
Section 2.4 Intentionally Omitted...................................................25
Section 2.5 Release of Property.....................................................25
Section 2.6 Manner of Making Payments...............................................25
Section 2.7 Release of Out Parcels..................................................26
ARTICLE III CONDITIONS PRECEDENT 27
Section 3.1 Conditions Precedent to Closing.........................................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES 31
Section 4.l Borrower and Grantor Representations....................................31
Section 4.2 Survival of Representations.............................................42
ARTICLE V BORROWER AND GRANTOR COVENANTS 43
Section 5.1 Affirmative Covenants...................................................43
Section 5.2 Negative Covenants......................................................51
ARTICLE VI INSURANCE; CASUALTY; CONDEMNATION 56
Section 6.1 Insurance...............................................................56
Section 6.2 Casualty................................................................59
Section 6.3 Condemnation............................................................60
Section 6.4 Restoration.............................................................60
ARTICLE VII RESERVE FUNDS 65
Section 7.1 Required Repair Funds...................................................65
Section 7.2 Tax and Insurance Escrow Fund...........................................66
Section 7.3 Replacements and Replacement Reserve....................................67
Section 7.4 Home Depot Exercise Consideration Reserve...............................72
Section 7.5 Intentionally Omitted.........................ERROR! BOOKMARK NOT DEFINED.
Section 7.6 Intentionally Omitted...................................................73
Section 7.7 Reserve Funds, Generally................................................74
ARTICLE VIII DEFAULTS 75
Section 8.1 Event of Default........................................................75
Section 8.2 Remedies................................................................77
Section 8.3 Remedies Cumulative; Waivers............................................78
ARTICLE IX SPECIAL PROVISIONS 78
Section 9.1 Sale of Notes and Securitization........................................78
Section 9.2 Securitization..........................................................79
Section 9.3 Rating Surveillance.....................................................79
Section 9.4 Exculpation.............................................................79
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Section 9.5 Termination of Manager..................................................81
Section 9.6 Service.................................................................82
Section 9.7 Splitting the Loan......................................................82
ARTICLE X MISCELLANEOUS 83
Section 10.l Survival...............................................................83
Section 10.2 Lender's Discretion....................................................83
Section 10.3 Governing Law..........................................................83
Section l0.4 Modification, Waiver in Writing........................................83
Section 10.5 Delay Not a Waiver.....................................................84
Section l0.6 Notices................................................................84
Section 10.7 Trial by Jury..........................................................85
Section 10.8 Headings...............................................................85
Section l0.9 Severability...........................................................85
Section 10.10 Preferences...........................................................85
Section 10.11 Waiver of Notice......................................................86
Section 10.12 Remedies of Borrower..................................................86
Section 10.13 Expenses; Indemnity...................................................86
Section 10.14 Schedules Incorporated................................................87
Section 10.15 Offsets, Counterclaims and Defenses...................................87
Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries.........88
Section 10.17 Publicity.............................................................88
Section 10.18 Waiver of Marshalling of Assets.......................................88
Section 10.19 Waiver of Counterclaim................................................88
Section 10.20 Conflict; Construction of Documents; Reliance.........................89
Section 10.21 Brokers and Financial Advisors........................................89
Section 10.22 Prior Agreements......................................................89
Section 10.23 Transfer of Loan......................................................89
Section 10.24 Joint and Several Liability...........................................89
SCHEDULES
Schedule I - Tenant Direction Letter
Schedule II - Intentionally Omitted
Schedule III - Required Repairs
Schedule IV - Rent Roll
Schedule V - Out Parcel
Schedule VI - Out Parcel Sublease Conditions
Schedule VII - Remaining Construction
Schedule VIII - Intentionally Omitted
Schedule IX - Intentionally Omitted
Schedule X - Other Contract Funds Agreements
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LOAN AGREEMENT
THIS
LOAN AGREEMENT, dated as of this 8th day of September, 2004 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this "AGREEMENT"), between BEAR ▇▇▇▇▇▇▇ COMMERCIAL MORTGAGE, INC., a New
York corporation, having an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("LENDER") and CAPITAL CENTRE FUNDING LLC, a Maryland limited liability
company, having an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("BORROWER"), and CAPITAL CENTRE LLC, a Maryland limited liability company,
having an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("GRANTOR")
WITNESSETH:
WHEREAS, Borrower desires that Lender purchase an existing loan made
to Borrower and make an additional advance thereunder to Borrower; and
WHEREAS, Grantor desires to guarantee Borrower's obligations with
respect to the Loan (as hereinafter defined) by executing the Limited Guaranty
(as hereinafter defined) and to secure the Limited Guaranty with the Mortgage
(as hereinafter defined); and
WHEREAS, Lender is willing to purchase the existing loan and make the
addition advance to Borrower, subject to and in accordance with the terms of
this Agreement and the other Loan Documents (as hereinafter defined).
NOW, THEREFORE, in consideration of the purchase of the existing loan
and the making of the additional advance by Lender and the covenants,
agreements, representations and warranties set forth in this Agreement, the
parties hereto hereby covenant, agree, represent and warrant as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly required or unless the context clearly indicates a contrary
intent:
"ADDITIONAL INSOLVENCY OPINION" shall mean any subsequent Insolvency
Opinion.
"AFFILIATE" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"ANCHOR TENANT" shall mean each Tenant under an Anchor Tenant Lease.
"ANCHOR TENANT LEASE" shall mean that each lease demising not less
than 15,000 square feet of space at the Property.
"ANNUAL BUDGET" shall mean the operating budget, including all planned
capital expenditures, for the Property prepared by Grantor for the applicable
Fiscal Year or other period.
"ASSIGNMENT OF LEASES" shall mean, with respect to the Property, that
certain first priority Assignment of Leases and Rents, dated as of the Closing
Date, from Borrower, as assignor, to Lender, as assignee, assigning to Lender
all of Grantor's interest in and to the Leases and Rents of the Property as
security for the Loan, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean that certain
Assignment of Management Agreement and Subordination of Management Fees dated as
of the Closing Date among Lender, Grantor and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
"AWARD" shall mean any compensation paid by any Governmental Authority
in connection with a Condemnation in respect of all or any part of the Property.
"BASIC CARRYING COSTS" shall mean, with respect to the Property, the
sum of the following costs associated with the Property for the relevant Fiscal
Year or payment period: (i) Taxes and (ii) Insurance Premiums.
"BORROWER" shall mean the parties identified as Borrower in the
preable hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York are not open for
business.
"CAPITAL EXPENDITURES" shall mean, for any period, the amount expended
for items capitalized under accounting principles reasonably acceptable to
Lender, consistently applied (including expenditures for building improvements
or major repairs, leasing commissions and tenant improvements).
"CASH EXPENSES" shall mean, for any period, the operating expenses for
the operation of the Property as set forth in an Approved Annual Budget to the
extent that such expenses are actually incurred by Grantor minus any payments
into the Tax and Insurance Escrow Fund.
"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash Management
Agreement of even date herewith by and among Grantor, Lender and Lockbox Bank.
"CASH MANAGEMENT TERMINATION EVENT" shall mean the Debt Service
Coverage Ratio shall be equal to or greater than 1.35 to 1.0 for two (2)
complete, consecutive calendar quarters following the calendar quarter in which
the Cash Management Trigger caused by a Debt Service Coverage Ratio deficiency
occurred, PROVIDED, HOWEVER, there shall not be more than two (2) Cash
Management Termination Events during the term of the Loan.
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"CASH MANAGEMENT TRIGGER" shall mean (i) the existence of an Event of
Default, (ii) the bankruptcy or insolvency of Borrower, Grantor or Manager, or
(iii) Lender's determination that the Debt Service Coverage Ratio for the
preceding six (6) months annualized is less than or equal to 1.25 to 1.0.
"CASUALTY" shall have the meaning specified in Section 6.2 hereof.
"CASUALTY/CONDEMNATION PREPAYMENT" shall have the meaning specified in
Section 6.4(e) hereof.
"CASUALTY CONSULTANT" shall have the meaning set forth in Section
6.4(b)(iii) hereof.
"CASUALTY RETAINAGE" shall have the meaning set forth in Section
6.4(b)(iv) hereof.
"CLOSING DATE" shall mean the date hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, as it
may be further amended from time to time, and any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"CONDEMNATION" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
"DEBT" shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums (including the Prepayment Consideration) due
to Lender in respect of the Loan under the Note, this Agreement, the Mortgage or
any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular period of
time, scheduled interest payments under the Note.
"DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the applicable
period in which:
(a) the numerator is the Net Operating Income (excluding interest on
credit accounts) for such period as set forth in the statements required
hereunder, without deduction for (i) actual management fees incurred in
connection with the operation of the Property, (ii) amounts paid to the Reserve
Funds, less (A) management fees equal to the greater of (1) assumed management
fees of four percent (4.0%) of Gross Income from Operations or (2) the actual
management fees incurred, (B) assumed Replacement Reserve Fund contributions
equal to $0.15 per square foot of gross leaseable area at the Property; and (C)
assumed reserves for tenant improvements and leasing commissions equal to $0.22
per square foot of gross leaseable area at the Property; and
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(b) the denominator is the aggregate amount of interest due and
payable on the Note for such applicable period.
"DEFAULT" shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate per annum
equal to the lesser of (a) the maximum rate permitted by applicable law, or (b)
five percent (5%) above the Interest Rate.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in Section 9.2
hereof.
"EARNOUT" shall have the meaning specified in Section 2.3.2(c) hereof
"EARNOUT DATE" shall have the meaning specified in Section 2.3.2(c)
hereof.
"EARNOUT PREPAYMENT" shall have the meaning specified in Section
2.3.2(c) hereof.
"ELIGIBLE ACCOUNT" shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (b)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution or trust
company insured by the Federal Deposit Insurance Corporation the short term
unsecured debt obligations or commercial paper of which are rated at least A-1
by Standard & Poor's Ratings Services, P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.,
and F-1+ by Fitch, Inc. in the case of accounts in which funds are held for 30
days or less (or, in the case of accounts in which funds are held for more than
30 days, the long term unsecured debt obligations of which are rated at least
"AA" by Fitch and S&P and "Aa" by Moody's).
"EMBARGOED PERSON" shall mean any person, entity or government subject
to trade restrictions under U.S. law, including, but not limited to, The USA
PATRIOT Act (including the anti-terrorism provisions thereof), the International
Emergency Economic Powers Act, 50 U.S.C. Sections 1701, et seq., The Trading
with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or
regulations promulgated thereunder including those related to Specially
Designated Nationals and Specially Designated Global Terrorists, with the result
that the investment in Borrower, Principal or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan made by the Lender is
in violation of law.
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"ENVIRONMENTAL INDEMNITY" shall mean that certain Environmental
Indemnity Agreement executed by Grantor 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 REPORT" shall have the meaning as defined in the
Environmental Indemnity executed by the Grantor.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1(a)
hereof.
"EXCESS CASH FLOW" shall have the meaning set forth in Section 2.6.3
hereof.
"EXCESS CASH FLOW COLLATERAL RESERVE" shall have the meaning set forth
in Section 7.5 hereof.
"EXCHANGE ACT" shall have the meaning set forth in Section 9.2 hereof.
"FISCAL YEAR" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or
otherwise) whether now or hereafter in existence.
"GROSS INCOME FROM OPERATIONS" shall mean all sustainable income as
reported on the financial statements delivered by the Grantor in accordance with
this Agreement, computed in accordance with accounting principles reasonably
acceptable to Lender, consistently applied, derived from the ownership and
operation of the Property from whatever source, INCLUDING, but not limited to,
(i) Rents from Tenants that are in occupancy, open for business and paying
unabated Rent, (ii) utility charges, (iii) escalations, (iv) intentionally
omitted; (v) service fees or charges, (vi) license fees, (vii) parking fees, and
(viii) other required pass-throughs but EXCLUDING (i) Rents from Tenants that
are subject to any bankruptcy proceeding (unless such Tenant has affirmed its
Lease or Inland Western Retail Real Estate Trust, Inc. has master leased such
Tenant's premises for full contract rent for a period not less than three years,
and the net worth of Inland Western Retail Real Estate Trust, Inc. (as
determined by Lender) is not less than, such entity's net worth as of July 31,
2004), or are not in occupancy, open for business or paying unabated Rent, (ii)
sales, use and occupancy or other taxes on receipts required to be accounted for
by Grantor to any Governmental Authority, (iii) refunds and uncollectible
accounts, (iv) sales of furniture, fixtures and equipment, (v) Insurance
Proceeds (other than business interruption or other loss of income insurance),
(vi) Awards, (vii) unforfeited security deposits, (viii) utility and other
similar deposits and (ix) any disbursements to Grantor from the Reserve Funds.
Gross income shall not be diminished as a result of the Mortgage or the creation
of any intervening estate or interest in the Property or any part thereof.
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"GROUND LEASE" shall mean that certain First Amended and Restated
Ground Lease dated April 17, 2000 between Ground Lessor and Grantor, as amended
by: (i) that certain First Amendment to First Amended and Restated Ground Lease
dated August 24, 2001 and recorded among the Land Records of Prince George's
County, Maryland in Liber 16229, pages 256 et. seq., (ii) that certain letter
agreement, dated September 22, 2000, by and between Ground Lessor and Grantor,
(iii) that certain letter agreement, dated October 22, 2000, by and between
Ground Lessor and Grantor, and (v) by that certain Supplemental Agreement, dated
as of November 13, 2000, by and between Ground Lessor and Grantor.
"GROUND RENT" shall mean all Rents and other charges payable by
Grantor under the Ground Lease.
"GROUND LESSOR" shall mean the REVENUE AUTHORITY OF PRINCE GEORGE'S
COUNTY, a body corporate and politic of the State of Maryland.
"GROUND LESSOR ESTOPPEL" shall have the meaning set forth in Section
3.1.23 hereof.
"GROUND RENT ESCROW FUND" shall have the meaning set forth in Section
7.4 hereof hereof.
"IMPROVEMENTS" shall have the meaning set forth in the granting clause
of the Mortgage with respect to the Property.
"INDEBTEDNESS" of a Person, at a particular date, means the sum
(without duplication) at such date of (a) indebtedness or liability for borrowed
money; (b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed.
"INDEMNITOR" shall mean Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation.
"INDEMNITY AGREEMENT" shall mean that certain Indemnity Agreement
dated as of the Closing Date by Grantor and Indemnitor in favor of Lender.
"INDEPENDENT DIRECTOR" shall mean a director of a corporation or a
limited liability company who is not at the time of initial appointment, or at
any time while serving as a director of such an entity, and has not been at any
time during the preceding five (5) years: (a) a stockholder, director (with the
exception of serving as the Independent Director), officer, employee, partner,
attorney or counsel of the Grantor or any Affiliate of either of them; (b) a
customer, supplier or other person who derives any of its purchases or revenues
from its activities with the Grantor or any Affiliate of either of them; (c) a
Person controlling or under common control with any such stockholder, director,
officer, partner, customer, supplier or other
6
Person; or (d) a member of the immediate family of any such stockholder,
director, officer, employee, partner, customer, supplier or other person. As
used in this definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of management,
policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise.
"INDEPENDENT MANAGER" shall mean a manager of a limited liability
company who is not at the time of initial appointment, or at any time while
serving as a manager of such an entity, and has not been at any time during the
preceding five (5) years: (a) a stockholder, director (with the exception of
serving as an Independent Director), manager (with the exception of serving as
an Independent Manager), officer, employee, partner, attorney or counsel of the
Grantor or any Affiliate of either of them; (b) a customer, supplier or other
person who derives any of its purchases or revenues from its activities with the
Grantor or any Affiliate of either of them; (c) a Person controlling or under
common control with any such stockholder, director, manager, officer, partner,
customer, supplier or other Person; or (d) a member of the immediate family of
any such stockholder, director, manager, officer, employee, partner, customer,
supplier or other person. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
"INLAND WESTERN RETAIL REAL ESTATE TRUST, INC." shall mean Inland
Western Retail Real Estate Trust, Inc., a Maryland corporation.
"INSOLVENCY OPINION" shall have the meaning set forth in Section
3.1.6 hereof.
"INSURANCE PREMIUMS" shall have the meaning set forth in Section
6.1(b) hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in Section
6.4(b) hereof.
"INTEREST RATE" shall mean five and twelve hundredths percent (5.12%)
per annum, subject to adjustment pursuant to Section 9.8 hereof.
"LEASE" shall mean any lease, sublease or subsublease, letting,
license, concession or other agreement (whether written or oral and whether now
or hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property of Grantor, and every modification, amendment or other agreement
relating to such lease, sublease, subsublease, or other agreement entered into
in connection with such lease, sublease, subsublease, or other agreement and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.
"LEGAL REQUIREMENTS" shall mean, with respect to the Property, all
federal, state, county, municipal and other governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting the Property or any part thereof, or the
construction, use, alteration or operation thereof, or any part thereof,
whether now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Grantor, at any time in force affecting
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the Property or any part thereof, including, without limitation, any which may
(a) require repairs, modifications or alterations in or to the Property or any
part thereof, or (b) in any way limit the use and enjoyment thereof.
"LENDER" shall mean Bear ▇▇▇▇▇▇▇ Commercial Mortgage, Inc., together
with its successors and assigns.
"LICENSES" shall have the meaning set forth in Section 4.1.22 hereof.
"LIEN" shall mean, with respect to the Property, any mortgage, deed of
trust, deed to secure debt, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance, charge or transfer of, on or affecting
Grantor, the Property, any portion thereof or any interest therein, including,
without limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic's, materialmen's
and other similar liens and encumbrances.
"LIMITED GUARANTY" shall mean that certain Amended and Restated
Limited Guaranty Agreement dated as of the date hereof from Grantor in favor of
Lender.
"LOAN" shall mean the loan made by Lender to Borrower pursuant to this
Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note,
the Limited Guaranty, the Mortgage, the Assignment of Leases and Rents, the
Environmental Indemnity, the Assignment of Management Agreement, the Indemnity
Agreement, the Cash Management Agreement, and all other documents executed
and/or delivered in connection with the Loan.
"LOCKBOX ACCOUNT" shall have the meaning specified in Section 2.6.3
hereof.
"LOCKBOX BANK" shall LaSalle Bank National Association or another
institution acceptable to Lender in its sole discretion that executes the Cash
Management Agreement.
"LOCKBOX TRIGGER" shall mean (i) Lender's determination that the Debt
Service Coverage Ratio for the preceding six (6) months annualized is less than
or equal to 1.75 to 1.0 or (ii) a Cash Management Trigger.
"MANAGEMENT AGREEMENT" shall mean, with respect to the Property, the
management agreement entered into by and between Grantor and the Manager,
pursuant to which the Manager is to provide management and other services with
respect to the Property.
"MANAGER" shall mean INLAND NORTHWEST MANAGEMENT CORP., a Delaware
corporation.
"MATURITY DATE" shall mean October 1, 2009, or such other date on
which the final payment of principal of the Note becomes due and payable as
therein or herein provided, whether at such stated maturity date, by declaration
of acceleration, or otherwise.
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"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
"MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean an amount equal to
$305,066.67, subject to adjustment pursuant to Section 9.8 hereof.
"MORTGAGE" shall mean, with respect to the Property, that certain
first priority Amended and Restated Indemnity Deed of Trust and Security
Agreement, dated the Closing Date, executed and delivered by Grantor as security
for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"NET CASH FLOW" shall mean, with respect to the Property for any
period, the amount obtained by subtracting Operating Expenses and Capital
Expenditures for such period from Gross Income from Operations for such period.
"NET CASH FLOW AFTER DEBT SERVICE" shall mean, with respect to the
Property for any period, the amount obtained by subtracting Debt Service for
such period from Net Cash Flow for such period.
"NET CASH FLOW SCHEDULE" shall have the meaning set forth in Section
5.1.11(b) hereof.
"NET OPERATING INCOME" shall mean the amount obtained by subtracting
from Gross Income from Operations (i) Operating Expenses, and (ii) a vacancy
allowance equal to the greater of (x) market vacancy (as reasonably determined
by Lender), less actual vacancy, and (y) underwritten vacancy of 4.81% less
actual vacancy. Notwithstanding the foregoing, if actual vacancy exceeds market
vacancy and underwritten vacancy, then there shall be no adjustment for a
vacancy allowance.
"NET PROCEEDS" shall have the meaning set forth in Section 6.4(b)
hereof.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in Section
6.4(b)(vi) hereof.
"NET PROCEEDS PREPAYMENT" shall have the meaning set forth in Section
6.4(e) hereof.
"NOTE" shall mean that certain Amended and Restated Promissory Note of
even date herewith in the principal amount of SEVENTY ONE MILLION FIVE HUNDRED
THOUSAND and NO/100 Dollars ($71,500,000.00), made by Borrower in favor of
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
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"OFFICERS' CERTIFICATE" shall mean a certificate delivered to Lender
by Borrower or Grantor which is signed by the Indemnitor.
"OPERATING EXPENSES" shall mean the total of all expenditures,
computed in accordance with accounting principles reasonably acceptable to
Lender, consistently applied, of whatever kind relating to the operation,
maintenance and management of the Property that are incurred on a regular
monthly or other periodic basis, including without limitation, utilities,
ordinary repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, management fees, payroll and related taxes,
computer processing charges, operational equipment or other lease payments as
approved by Lender, and other similar costs, but excluding depreciation, Debt
Service, Capital Expenditures and contributions to the Reserve Funds.
"OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"OTHER CONTRACT FUNDS" shall mean any payment due to Borrower or
Grantor under any of the agreements described on SCHEDULE X.
"OUT PARCEL" shall have the meaning set forth in Section 2.7 hereof.
"OUT PARCEL DEVELOPER" shall mean the tenant under the ground lease of
the Out Parcel, as described in Section 2.7 hereof.
"OUT PARCEL SUBLEASE" shall have the meaning set forth in Section 2.7
hereof.
"OUT PARCEL SUBLEASE CONDITIONS" shall have the meaning set forth in
Section 2.7 hereof.
"PAYMENT DATE" shall mean the first (1st) day of each calendar month
during the term of the Loan or, if such day is not a Business Day, the
immediately succeeding Business Day.
"PERMITTED ENCUMBRANCES" shall mean, with respect to the Property,
collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy relating to the Property or any part thereof, (c) Liens, if
any, for Taxes imposed by any Governmental Authority not yet due or delinquent,
and (d) such other title and survey exceptions as Lender has approved or may
approve in writing in Lender's reasonable discretion, which Permitted
Encumbrances in the aggregate do not materially adversely affect the value or
use of the Property or Grantor's ability to fulfill its obligations under the
Limited Guaranty or the Mortgage.
"PERMITTED INVESTMENTS" shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by Servicer, the trustee under any Securitization or any
of their respective Affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior
10
to the First Payment Date following the date of acquiring such investment and
meeting one of the appropriate standards set forth below:
(i) obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full
faith and credit of the United States of America including, without
limitation, obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI
financing), the Small Business Administration (guaranteed participation
certificates and guaranteed pool certificates), the U.S. Department of
Housing and Urban Development (local authority bonds) and the Washington
Metropolitan Area Transit Authority (guaranteed transit bonds); PROVIDED,
HOWEVER, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and
(D) such investments must not be subject to liquidation prior to their
maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations),
the Farm Credit System (consolidated systemwide bonds and notes), the
Federal Home Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the Student Loan
Marketing Association (debt obligations), the Financing Corp, (debt
obligations), and the Resolution Funding Corp. (debt obligations);
PROVIDED, HOWEVER, that the investments described in this clause must (A)
have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an "r" highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with that index,
and (D) such investments must not be subject to liquidation prior to their
maturity;
(iv) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with maturities of
not more than 365 days of any bank, the short term obligations of which at
all times are rated in the highest short term rating category by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency in the highest short term rating category and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current
ratings assigned to the Securities); PROVIDED, HOWEVER, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C)
if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread
11
(if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand
and time deposits in, or certificates of deposit of, or bankers'
acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all
times are rated in the highest short term rating category by each Rating
Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current
ratings assigned to the Securities); PROVIDED, HOWEVER, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C)
if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365 days
and at all times rated by each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current
ratings assigned to the Securities) in its highest long-term unsecured
rating category; PROVIDED, HOWEVER, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an
"r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(vii) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or
on a specified date not more than one year after the date of issuance
thereof) with maturities of not more than 365 days and that at all times is
rated by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial,
or, if higher, then current ratings assigned to the Securities) in its
highest short-term unsecured debt rating; PROVIDED, HOWEVER, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C)
if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity;
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(viii) units of taxable money market funds, which funds are
regulated investment companies, seek to maintain a constant net asset value
per share and invest solely in obligations backed by the full faith and
credit of the United States, which funds have the highest rating available
from each Rating Agency (or, if not rated by all Rating Agencies, rated by
at least one Rating Agency and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial,
or, if higher, then current ratings assigned to the Securities) for money
market funds; and
(ix) any other security, obligation or investment which has been
approved as a Permitted Investment in writing by (a) Lender and (b) each
Rating Agency, as evidenced by a written confirmation that the designation
of such security, obligation or investment as a Permitted Investment will
not, in and of itself, result in a downgrade, qualification or withdrawal
of the initial, or, if higher, then current ratings assigned to the
Securities by such Rating Agency;
PROVIDED, HOWEVER, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.
"PERMITTED PREPAYMENT DATE" shall mean the date that is three (3)
years from the first day of the calendar month immediately following the Closing
Date.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"PERSONAL PROPERTY" shall have the meaning set forth in the granting
clause of the Mortgage with respect to the Property.
"PHYSICAL CONDITIONS REPORT" shall mean, with respect to the Property,
a report prepared by a company satisfactory to Lender regarding the physical
condition of the Property, satisfactory in form and substance to Lender in its
sole discretion, which report shall, among other things, (a) confirm that the
Property and its use complies, in all material respects, with all applicable
Legal Requirements (including, without limitation, zoning, subdivision and
building laws) and (b) include a copy of a final certificate of occupancy with
respect to all Improvements on the Property.
"POLICIES" shall have the meaning specified in Section 6.1(b) hereof.
"PREPAYMENT CONSIDERATION" shall have the meaning set forth in
Section 2.3.1.
"PREPAYMENT RATE" shall mean the bond equivalent yield (in the
secondary market) on the United States Treasury Security that as of the
Prepayment Rate Determination Date has a remaining term to maturity closest to,
but not exceeding, the remaining term to the
13
Maturity Date, as most recently published in the "Treasury Bonds, Notes and
Bills" section in The Wall Street Journal as of the date of the related tender
of the payment. If more than one issue of United States Treasury Securities has
the remaining term to the Maturity Date referred to above, the "Prepayment Rate"
shall be the yield on the United States Treasury Security most recently issued
as of such date. If the publication of the Prepayment Rate in The Wall Street
Journal is discontinued. Lender shall determine the Prepayment Rate on the basis
of "Statistical Release H.15(519), Selected Interest Rates," or any successor
publication, published by the Board of Governors of the Federal Reserve System,
or on the basis of such other publication or statistical guide as Lender may
reasonably select.
"PREPAYMENT RATE DETERMINATION DATE" shall mean the date which is five
(5) Business Days prior to the prepayment date.
"PROPERTY" shall mean the parcel of real property, the Improvements
thereon and all personal property owned by Borrower or leased by Borrower
pursuant to the Ground Lease and encumbered by the Mortgage, together with all
rights pertaining to such property and Improvements, as more particularly
described in the Granting Clauses of the Mortgage and referred to therein as the
"Property".
"PROVIDED INFORMATION" shall have the meaning set forth in Section
9.1 (a) hereof.
"QUALIFYING ENTITY" shall have the meaning set forth in Section
5.2.13(b) hereof.
"QUALIFYING MANAGER" shall mean either (a) a reputable and experienced
management organization reasonably satisfactory to Lender, which organization or
its principals possess at least ten (10) years experience in managing properties
similar in size, scope and value of the Property and which, on the date Lender
determines whether such management organization is a Qualifying Manager, manages
at least one million square feet of retail space, provided that Grantor shall
have obtained prior written confirmation from the Rating Agency that management
of the Property by such entity will not cause a downgrading, withdrawal or
qualification of the then current rating of the securities issued pursuant to
the Securitization, or (b) the fee owner of the Property, provided that such
owner possesses experience in managing and operating properties similar in size,
scope and value of the Property. Lender acknowledges that on the Closing Date,
Manager shall be deemed to be a Qualifying Manager.
"RATING AGENCIES" shall mean each of Standard & Poor's Ratings
Services, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., ▇▇▇▇▇'▇ Investors Service, Inc, and
Fitch, Inc., or any other nationally-recognized statistical rating agency which
has been approved by Lender.
"RATING SURVEILLANCE CHARGE" shall have the meaning set forth in
Section 9.3 hereof.
"RELEVANT LEASING THRESHOLD" shall mean, any Lease for an amount of
leasable square footage equal to or greater than 10,000 square feet.
"RELEVANT RESTORATION THRESHOLD" shall mean Three Hundred Fifty
Thousand and No/100 dollars ($350,000.00).
14
"REMAINING CONSTRUCTION" shall have the meaning set forth in Section
7.6 hereof.
"REMAINING CONSTRUCTION ACCOUNT" shall have the meaning set forth in
Section 7.6 hereof.
"REMAINING CONSTRUCTION RESERVE" shall have the meaning set forth in
Section 7.6 hereof.
"REMIC TRUST" shall mean a "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code that holds the Note.
"RENTS" shall mean, with respect to the Property, all rents, rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including, without limitation, security, utility and other deposits), accounts,
cash, issues, profits, charges for services rendered, and other consideration of
whatever form or nature received by or paid to or for the account of or benefit
of Grantor or its agents or employees from any and all sources arising from or
attributable to the Property, and proceeds, if any, from business interruption
or other loss of income insurance, including the Other Contract Funds.
"REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth in
Section 7.3.1 hereof.
"REPLACEMENT RESERVE FUND" shall have the meaning set forth in Section
7.3.1 hereof.
"REPLACEMENT RESERVE MONTHLY DEPOSIT" shall have the meaning set forth
in Section 7.3.1 hereof.
"REPLACEMENTS" shall have the meaning set forth in Section 7.3.1(a)
hereof.
"REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in Section
7.1.1 hereof.
"REQUIRED REPAIR FUND" shall have the meaning set forth in Section
7.1.1 hereof.
"REQUIRED REPAIRS" shall have the meaning set forth in Section 7.1.1
hereof.
"RESERVE FUNDS" shall mean the Tax and Insurance Escrow Fund, the
Replacement Reserve Fund, the Required Repair Fund (if any), the Ground Rent
Escrow Fund, the Remaining Construction Reserve (if any), the Excess Cash Flow
Collateral Reserve or any other escrow fund established by the Loan Documents.
"RESTORATION" shall have the meaning set forth in Section 6.2 hereof.
15
"SECURITIES" shall have the meaning set forth in Section 9.1 hereof.
"SECURITIES ACT" shall have the meaning set forth in Section 9.2
hereof.
"SECURITIZATION" shall have the meaning set forth in Section 9.1
hereof.
"SERVICER" shall have the meaning set forth in Section 9.6 hereof.
"SERVICING AGREEMENT" shall have the meaning set forth in Section 9.6
hereof.
"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in Section
8.2(c) hereof.
"SEVERING DOCUMENTATION" shall have the meaning set forth in Section
9.7 hereof.
"SPECIAL PURPOSE ENTITY" means a corporation, limited partnership,
limited liability company, or Delaware statutory trust which at all times on and
after the Closing Date:
(i) is organized solely for the purpose of (A) acquiring,
developing, owning, holding, selling, leasing, transferring, exchanging,
managing and operating the Property (and guarantying the obligations of the
borrower entity and owning all of the interests in such entity, such
guaranty being secured by an indemnity deed of trust ("IDOT"), entering
into this Agreement with the Lender, refinancing the Property in connection
with a permitted repayment of the Loan, and transacting lawful business
that is incident, necessary and appropriate to accomplish the foregoing;
(B) acting as a general partner of the limited partnership that owns the
Property, a member of the limited liability company that owns the Property
or the beneficiary or trustee of a Delaware business trust that owns the
Property or (C) serving as the borrower under an IDOT transaction;
(ii) is not engaged and will not engage in any business unrelated
to (A) the acquisition, development, ownership, management or operation of
the Property (and the ownership of the borrower under an IDOT transaction),
(B) acting as general partner of the limited partnership that owns the
Property, (C) acting as a member of the limited liability company that owns
the Property, (D) acting as the beneficiary or trustee of a Delaware
business trust that owns the Property, as applicable; or (E) acting as the
borrower under an IDOT transaction;
(iii) does not have and will not have any assets other than those
related to the Property or its partnership interest in the limited
partnership, the member interest in the limited liability company or the
beneficial interest in the Delaware business trust that owns the Property
or acts as the general partner, managing member or beneficiary or trustee
thereof, as applicable, or the ownership interests in the borrower entity
under an IDOT transaction;
(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,
transfer of partnership, membership or beneficial or trustee
16
interests (if such entity is a general partner in a limited partnership, a
member in a limited liability company or a beneficiary of a Delaware trust)
or amendment of its limited partnership agreement, articles of
incorporation, articles of organization, certificate of Formation,
operating agreement or trust formation and governance documents (as
applicable) with respect to the matters set forth in this definition;
(v) if such entity is a limited partnership, has as its only
general partners, Special Purpose Entities that are corporations, limited
partnerships or limited liability companies;
(vi) if such entity is a corporation, has at least one (1)
Independent Director, and has not caused or allowed and will not cause or
allow the board of directors of such entity to take any action related to a
bankruptcy or insolvency proceeding or a voluntary dissolution without the
unanimous affirmative vote of 100% of the members of its board of
directors, including the Independent Director;
(vii) if such entity is a limited liability company and such
limited liability company has more than one member, such limited liability
company has as its manager a Special Purpose Entity that is a corporation
and that owns at least 1.0% (one percent) of the equity of the limited
liability company;
(viii) if such entity is a limited liability company and such
limited liability company has only one member, such limited liability
company (a) has been formed under Delaware law (or in the case or a Grantor
hereunder, has been formed under Maryland law) and (b) has either a
corporation or one (1) entity that shall become a member of the limited
liability company upon the dissolution or disassociation of the member, (c)
has not less than one (1) Independent Manager, and (d) will not cause or
take any action related to a bankruptcy or insolvency proceeding or a
voluntary dissolution without the affirmative vote of the Independent
Manager;
(ix) if such entity is (a) a limited liability company, has
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, (b) a limited partnership, has a limited
partnership agreement, (c) a corporation, has a certificate or articles of
incorporation and bylaws, as applicable, or (d) a Delaware statutory trust,
has organizational documents that, in each case, provide that such entity
will not: (1) dissolve, merge, liquidate, consolidate; (2) except as
permitted herein, sell all or substantially all of its assets or the assets
of the Grantor (as applicable) except as permitted herein; (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
the Lender; or (4) without the affirmative vote of (A) all directors of the
corporation that is such entity or the general partner or managing or
co-managing member or manager of such entity) or (B) the Independent
Manager of the limited liability, 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;
17
(x) has not entered into or been a party to, and will not enter
into or be a party to, any transaction with its partners, members,
beneficiaries, 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;
(xi) is solvent and pays its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its assets as the
same become due, and is maintaining adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations;
(xii) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;
(xiii) will file its own tax returns; PROVIDED, however, that
Borrower's and/or Grantor's assets and income may be included in a
consolidated tax return of its parent companies if inclusion on such
consolidated tax return is in compliance with applicable law;
(xiv) has maintained and will maintain its own resolutions and
agreements;
(xv) (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, except
with respect to a custodial account maintained by the Manager on behalf of
Affiliates of Grantor and, with respect to funds in such custodial account,
has separately accounted, and will continue to separately account for, each
item of income and expense applicable to the Property and Grantor;
(xvi) has held and will hold its assets in its own name;
(xvii) has conducted and will conduct its business in its name or
in a name franchised or licensed to it by an entity other than an Affiliate
of Borrower or Grantor;
(xviii) has maintained and will maintain its balance sheets,
operating statements 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 or
permitted by applicable accounting principles acceptable to Lender,
consistently applied; PROVIDED, HOWEVER, that (i) any such consolidated
financial statement shall contain a note indicating that it maintains
separate balance sheets and operating statements for the Grantor and the
Property, or (ii) if such Person is controlled by Inland Western Retail
Real Estate Trust, Inc., then such Person may be included in the
consolidated financial statement of Inland Western Retail Real Estate
Trust, Inc. provided such consolidated financial statement contains a note
indicating that it maintains separate financial records for each Person
controlled by Inland Western Retail Real Estate Trust, Inc.;
18
(xix) has a sufficient number of employees in light of its
contemplated business operations, which may be none;
(xx) has observed and will observe all partnership, corporate,
limited liability company or Delaware statutory trust formalities, as
applicable;
(xxi) has and will have no Indebtedness (including loans (whether
or not such loans are evidenced by a written agreement) between Borrower or
Grantor and any Affiliates of Borrower or Grantor and relating to the
management of funds in the custodial account maintained by the Manager)
other than (i) the Loan, (ii) liabilities incurred in the ordinary course
of business relating to the ownership and operation of the Property and the
routine administration of Grantor, which liabilities are not more than
sixty (60) days past the date incurred (unless disputed in accordance with
applicable law), are not evidenced by a note and are paid when due, and
which amounts are normal and reasonable under the circumstances, (iii) the
Limited Guaranty, and (iv) such other liabilities that are permitted
pursuant to this Agreement;
(xxii) 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 for the Limited
Guaranty and as otherwise permitted pursuant to this Agreement;
(xxiii) has not and will not acquire obligations or securities of
its partners, members, beneficiaries or shareholders or any other
Affiliate;
(xxiv) has allocated and will allocate fairly and reasonably any
overhead expenses that are shared with any Affiliate, including, but not
limited to, paying for shared office space and services performed by any
employee of an affiliate;
(xxv) has not maintained or used, and will not maintain or use,
invoices and checks bearing the name of any other Person, PROVIDED,
HOWEVER, that Manager, on behalf of such Person, may maintain and use
invoices and checks bearing Manager's name;
(xxvi) has not pledged and will not pledge its assets for the
benefit of any other Person except for the Limited Guaranty and as
otherwise permitted or required pursuant to this Agreement;
(xxvii) 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 or in a name franchised or licensed to it by an entity other than
an Affiliate of Borrower or Grantor and not as a division or part of any
other Person, except for services rendered by Manager under the Management
Agreement, so long as Manager holds itself out as an agent of the Grantor;
(xxviii) 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;
19
(xxix) 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);
(xxx) has not identified and will not identify its partners,
members, beneficiaries 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;
(xxxi) does not and will not have any of its obligations guaranteed
by any Affiliate except for the Limited Guaranty and as otherwise required
in the Loan Documents;
(xxxii) has not entered into or been a party to, and will not enter
into or be a party to, any transaction with its partners, members,
beneficiaries, 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; and
(xxxiii) 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.
"STATE" shall mean, with respect to the Property, the State or
Commonwealth in which the Property or any part thereof is located.
"SURVEY" shall mean a survey of the Property in question prepared by a
surveyor licensed in the State and satisfactory to Lender and the company or
companies issuing the Title Insurance Policy, and containing a certification of
such surveyor satisfactory to Lender.
"TAX AND INSURANCE ESCROW FUND" shall have the meaning set forth in
Section 7.2 hereof regardless of whether the funds held therein are held by
Lender for the payment of Taxes or Insurance Premiums or both.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
"TENANT" shall mean any person or entity with a possessory right to
all or any part of the Property pursuant to a Lease or other written agreement.
"TENANT DIRECTION LETTER" shall mean a letter in the form of Schedule
I attached hereto from Grantor to the tenant under each Lease with respect to
the Property (whether such Lease is presently effective or executed after the
Closing Date) directing such tenant to send directly to the Lockbox Account all
payments of Rent payable to Grantor under such Lease.
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"TITLE INSURANCE POLICY" shall mean, with respect to the Property, an
ALTA mortgagee title insurance policy in the form (acceptable to Lender) (or,
if the Property is in a State which does not permit the issuance of such ALTA
policy, such form as shall be permitted in such State and acceptable to Lender)
issued with respect to the Property and insuring the lien of the Mortgage
encumbering the Property.
"TRANSFEREE" shall have the meaning set forth in Section 5.2.13
hereof.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial
Code as in effect in the applicable State in which the Property is located.
"U.S. OBLIGATIONS" shall mean direct non-callable obligations of the
United States of America as defined in Section 2(a)(16) of the Investment
Company Act as amended (15 USC 80a-1) stated in REMIC Section 1.86 OG-2(a)(8).
Section 1.2PRINCIPLES OF CONSTRUCTION. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word "including" shall mean "including, without
limitation" unless the context shall indicate otherwise. Unless otherwise
specified, the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.
ARTICLE II
GENERAL TERMS
Section 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.
2.1.1 THE LOAN. Subject to and upon the terms and conditions set
forth herein. Lender hereby agrees to make and Borrower hereby agrees to accept
the Loan on the Closing Date.
2.1.2 DISBURSEMENT TO BORROWER. Borrower may request and receive
only one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed.
2.1.3 THE NOTE, MORTGAGE AND LOAN DOCUMENTS. The Loan shall be
evidenced by the Note and guarantied by the Limited Guaranty. The Limited
Guaranty shall be secured by the Mortgage, the Assignment of Leases and the
other Loan Documents.
2.1.4 USE OF PROCEEDS. Borrower shall use the proceeds of the Loan
to (a) repay and discharge any existing loans relating to the Property, (b) pay
all past-due Basic Carrying Costs, if any, in respect of the Property, (c) make
deposits into the Reserve Funds on the Closing Date in the amounts provided
herein, (d) pay costs and expenses incurred in connection with the closing of
the Loan, as approved by Lender, (e) fund any working capital requirements of
the Property, and (f) distribute the balance, if any, to Borrower.
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Section 2.2INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE.
2.2.1 INTEREST GENERALLY. Interest on the outstanding principal
balance of the Loan shall accrue from the Closing Date to but excluding the
Maturity Date at the Interest Rate.
2.2.2 INTEREST CALCULATION. Interest on the outstanding principal
balance of the Loan shall be calculated on the basis of a three hundred sixty
(360) day year comprised of twelve (12) months of thirty (30) days each, except
that interest due and payable for a period of less than a full month shall be
calculated by multiplying the actual number of days elapsed in the period for
which the calculation is being made by a daily rate based on a three hundred
sixty (360) day year.
2.2.3 PAYMENTS GENERALLY. Borrower shall pay to Lender (a) on the
Closing Date, an amount equal to interest only on the outstanding principal
balance of the Loan from the Closing Date up to but not including the first
Payment Date following the Closing Date, and (b) on November 1, 2004 and each
Payment Date thereafter up to but not including the Maturity Date, an amount
equal to the Monthly Debt Service Payment Amount, which shall be applied to
interest on the outstanding principal amount of the Loan for the prior calendar
month at the Interest Rate.
2.2.4 INTENTIONALLY OMITTED.
2.2.5 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender on
the Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and other the Loan Documents.
2.2.6 PAYMENTS AFTER DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, interest on the outstanding principal
balance of the Loan and, to the extent permitted by law, overdue interest and
other amounts due in respect of the Loan, shall accrue at the Default Rate,
calculated from the date such payment was due without regard to any grace or
cure periods contained herein. Interest at the Default Rate shall be computed
from the occurrence of the Event of Default until the actual receipt and
collection of the Debt (or that portion thereof that is then due). To the extent
permitted by applicable law, interest at the Default Rate shall be added to the
Debt, shall itself accrue interest at the same rate as the Loan and shall be
guarantied by the Limited Guaranty. This paragraph shall not be construed as an
agreement or privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default and Lender retains its rights under the Note
and this Agreement to accelerate and to continue to demand payment of the Debt
upon the happening and continuance of any Event of Default.
2.2.7 LATE PAYMENT CHARGE. If any principal, interest or any other
sums due under the Loan Documents is not paid by Borrower or Grantor on or prior
to the date which is five (5) days after 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 amount permitted by applicable law in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be guarantied by the Limited Guaranty
and secured
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by the Mortgage and the other Loan Documents to the extent permitted by
applicable law, The foregoing late payment charge shall not apply to the payment
of all outstanding principal, interest and other sums due on the Maturity Date.
2.2.8 USURY SAVINGS. This Agreement and the Note are subject to
the express condition that at no time shall Borrower or Grantor be obligated or
required to pay interest on the principal balance of the Loan pursuant to the
Note or the Limited Guaranty, as applicable, at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower or Grantor is at any time required or obligated to pay
interest on the principal balance at a rate in excess of the Maximum Legal Rate,
the Interest Rate or the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate of interest from time
to time in effect and applicable to the Loan for so long as the Loan is
outstanding.
Section 2.3PREPAYMENTS.
2.3.1 VOLUNTARY PREPAYMENTS.
(a) Except as otherwise provided herein, Borrower shall not have the
right to prepay the Loan in whole or in part prior to the Permitted Prepayment
Date. After the Permitted Prepayment Date, Borrower may, provided it has given
Lender prior written notice in accordance with the terms of this Agreement,
prepay the unpaid principal balance of the Loan in whole, but not in part, by
paying, together with the amount to be prepaid, (i) interest accrued and unpaid
on the outstanding principal balance of the Loan being prepaid to and including
the date of prepayment, (ii) unless prepayment is tendered on a Payment Date, an
amount equal to the interest that would have accrued on the amount being prepaid
after the date of prepayment through and including the next Payment Date had the
prepayment not been made (which amount shall constitute additional consideration
for the prepayment), (iii) all other sums then due under this Agreement, the
Note, the Mortgage and the other Loan Documents, and (iv) if prepayment occurs
prior to the Payment Date which is one month prior to the Maturity Date, a
prepayment consideration (the "PREPAYMENT CONSIDERATION") equal to the greater
of (A) one percent (1%) of the outstanding principal balance of the Loan being
prepaid or (B) the excess, if any, of (1) the sum of the present values of all
then-scheduled payments of principal and interest under this Agreement
including, but not limited to, principal and interest on the Maturity Date (with
each such payment discounted to its present value at the date of prepayment at
the rate which, when compounded monthly, is equivalent to the Prepayment Rate),
over (2) the outstanding principal amount of the Loan. Lender shall notify
Borrower of the amount and the basis of determination of the required prepayment
consideration.
(b) On the Payment Date that is one month prior to the Maturity Date,
and on each day thereafter through the Maturity Date, Borrower may, at its
option, prepay the Debt
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without payment of any Prepayment Consideration or other penalty or premium;
PROVIDED, HOWEVER, if such prepayment is not paid on a regularly scheduled
Payment Date, the Debt shall include interest that would have accrued on such
prepayment through and including the day immediately preceding the Maturity
Date. Borrower's right to prepay any portion of the principal balance of the
Loan shall be subject to (i) Borrower's submission of a notice to Lender setting
forth the amount to be prepaid and the projected date of prepayment, which date
shall be no less than thirty (30) days from the date of such notice, and (ii)
Borrower's actual payment to Lender of the amount to be prepaid as set forth in
such notice on the projected date set forth in such notice or any day following
such projected date occurring in the same calendar month as such projected date.
2.3.2 MANDATORY PREPAYMENTS. (a) On the next occurring Payment
Date following the date on which Borrower or Grantor actually receives any Net
Proceeds, if Lender is not obligated to make such Net Proceeds available to
Borrower or Grantor pursuant to this Agreement for the restoration of the
Property, Borrower shall, at Lender's option, prepay the outstanding principal
balance of the Note in an amount equal to one hundred percent (100%) of such Net
Proceeds. No Prepayment Consideration or other penalty or premium shall be due
in connection with any prepayment made pursuant to this Section 2.3.2. Any
partial prepayment under this Section shall be applied to the last payments of
principal due under the Loan.
(b) On the date on which Borrower tenders a
Casualty/Condemnation Prepayment pursuant to Section 6.4(e) below, such tender
shall include (a) all accrued and unpaid interest and the principal indebtedness
being prepaid, including interest on the outstanding principal amount of the
applicable Note through the last day of the month within which such tender
occurs, and (b) any other sums due hereunder relating to the applicable Note.
Except as set forth in this Section 2.3.2(b), other than following an Event of
Default, no Prepayment Consideration or other penalty or premium shall be due in
connection with any Casualty/Condemnation Prepayment.
(c) Pursuant to that certain Contribution Agreement dated as of
July 21, 2004 Inland Capital HC, L.L.C., a Delaware limited liability company,
which is wholly-owned by Indemnitor, has a contingent obligation to make a
capital contribution to Capital Centre Holding, LLC of up to $6,947,764 (the
"Earnout") not later than the date which is two (2) years from the Closing Date
(the "Earnout Date") based upon certain additional leasing at the Property after
the Closing Date. On or before the Earnout Date, Grantor shall deliver evidence
acceptable to Lender reflecting that portion of the Earnout that has been paid.
If less than the entire Earnout has been paid. Lender, at Grantor's expense,
shall obtain an appraisal of the Property from an appraiser satisfactory to
Lender. If the ratio of the outstanding principal balance of the Loan to the
fair market value of the Property reflected in such appraisal is greater than
55% (as determined by Lender), then Grantor shall prepay (together with the
applicable Prepayment Consideration) an amount that will result in a loan to
value ratio of 55% (the "Earnout Prepayment"). Indemnitor by its execution of
this
Loan Agreement below, irrevocably and unconditionally guarantees payment of
the Earnout Prepayment required under this provision when due as a primary
obligor. The foregoing guaranty is an irrevocable, absolute, continuing guaranty
of payment and performance, is not merely a guaranty of collection, and may be
enforced by Lender and any subsequent holder of the Note and shall not be
discharged by the assignment or negotiation of all or part of the Note.
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2.3.3 PREPAYMENTS AFTER DEFAULT. Following an Event of Default, if
Borrower or anyone on Borrower's or Grantor's behalf makes a tender of payment
of all or any portion of the Debt at any time prior to a foreclosure sale
(including a sale under the power of sale under the Mortgage), or during any
redemption period after foreclosure, (i) the tender of payment shall constitute
an evasion of Borrower's obligation to pay any Prepayment Consideration due
under this Agreement and such payment shall, therefore, to the maximum extent
permitted by law, include a premium equal to the Prepayment Consideration that
would have been payable on the date of such tender had the Loan not been so
accelerated, or (ii) if at the time of such tender a prepayment of the principal
amount of the Loan would have been prohibited under this Agreement had the
principal amount of the Loan not been so accelerated, the tender of payment
shall constitute an evasion of such prepayment prohibition and shall, therefore,
to the maximum extent permitted by law, include an amount equal to the greater
of (i) 1% of the then principal amount of the Loan (or the relevant portion
thereof being prepaid) and (ii) an amount equal to the excess of (A) the sum of
the present values of a series of payments payable at the times and in the
amounts equal to the payments of principal and interest (including, but not
limited to the principal and interest payable on the Maturity Date) which would
have been scheduled to be payable after the date of such tender under this
Agreement had the Loan (or the relevant portion thereof) not been accelerated,
with each such payment discounted to its present value at the date of such
tender at the rate which when compounded monthly is equivalent to the Prepayment
Rate, over (B) the then principal amount of the Loan.
Section 2.4INTENTIONALLY OMITTED.
Section 2.5RELEASE OF PROPERTY. Except as set forth in this Section
2.5, no repayment or prepayment of all or any portion of the Loan shall cause,
give rise to a right to require, or otherwise result in, the release of any Lien
of the Mortgage on the Property, If Borrower has elected to prepay the entire
amount of the Loan pursuant to Section 2.3.1 and the requirements of this
Section 2.5 have been satisfied, the Property shall be released from the Lien of
the Mortgage.
2.5.1 RELEASE ON PAYMENT IN FULL. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of all principal
and interest on the Loan and all other amounts due and payable under the Loan
Documents in accordance with the terms and provisions of Section 2.3.1 of this
Loan Agreement, release the Lien of the Mortgage on the Property not theretofore
released.
2.5.2 INTENTIONALLY OMITTED.
Section 2.6MANNER OF MAKING PAYMENTS.
2.6.1 MAKING OF PAYMENTS. Each payment by Borrower or Grantor
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 1:00 p.m., New York City time, on the date such payment is due, to
Lender by deposit to such account as Lender may designate by written notice to
Borrower or Grantor. 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 next succeeding Business Day.
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2.6.2 NO DEDUCTIONS. ETC. All payments made by Borrower or Grantor
hereunder or under the Note or the other Loan Documents shall be made
irrespective of, and without any deduction for, any setoff, defense or
counterclaims.
2.6.3 CASH MANAGEMENT. In connection with the Closing, Borrower
(i) Borrower shall enter into a "cash management agreement" with Lender and
Lockbox Bank, in form and substance acceptable to Lender ("Cash Management
Agreement"), which shall provide, among other things, that upon the occurrence
of a Lockbox Trigger tenants at the Property shall deposit Rent and other
receivables related to the Property directly into an account at the Lockbox Bank
(the "Lockbox Account") owned and controlled by Lender, and (ii) shall execute
and deliver to Lender a Tenant Direction Letter for each of the tenants at the
Property. which Tenant Direction Letter instructs each such tenant to deposit
Rent and other receivables related to the Property directly into the Lockbox
Account. Borrower covenants and agrees to execute and deliver to Lender a Tenant
Direction letter for each new tenant at the Property within thirty (30) days
after the execution of each new Lease for premises at the Property. Lender will
hold the Tenant Direction Letters in escrow; provided, however, upon the
occurrence of a Lockbox Trigger, Lender shall have the right to deliver a Tenant
Direction Letter to each tenant at the Property. The Lockbox Bank shall apply
funds in the Lockbox Account to pay debt service and required reserves, fees of
the Lockbox Bank and budgeted operating expenses for the Property, as to be more
particularly set forth in the Cash Management Agreement. Funds remaining in the
Lockbox Account after payment of the foregoing (the "Excess Cash Flow") shall be
distributed to Borrower; provided, however, upon the occurrence of a Cash
Management Trigger and until the occurrence of a Cash Management Termination
Event, such Excess Cash Flow shall be distributed to Borrower only to the extent
of unbudgeted operating expenses approved by Lender and any remaining funds
shall be distributed to Lender to hold as additional collateral for the Loan in
the Excess Cash Flow Collateral Reserve pursuant to Section 7.5 hereof. The
Borrower shall be responsible for the costs associated with the Lockbox Bank and
the Lockbox Account.
Section 2.7 RELEASE OF OUT PARCELS.
Lender acknowledges that Grantor has requested the right to sublease
(the "OUT PARCEL SUBLEASE") a certain parcel of land described on Schedule V
hereto (as same may be modified with Lender's approval, the "OUT PARCEL")
consistent with certain obligations of Grantor under the Ground Lease. Lender
hereby agrees that, subject to the terms and conditions set forth in this
Section 2.7, Grantor may sublease the Out Parcel and that it will subordinate
the Lien of the Mortgage (and the related Loan Documents) encumbering the
Property to the ground lease covering the Out Parcel, provided that (a) no Event
of Default has occurred or is continuing, (b) Grantor provides Lender with a
written request for such a release, and (c) Grantor satisfies within ninety (90)
days of the date Lender receives such written request each of the conditions
listed on Schedule VI hereof (the "OUT PARCEL SUBLEASE CONDITIONS"). In the
event the foregoing conditions shall be satisfied, Lender shall agree that it
will subordinate the Lien of its Mortgage to the rights of the Out Parcel
Developer, that the Out Parcel Developer may finance and encumber its rights
under the Out Parcel Sublease without the consent of Lender, that Lender will
execute and deliver subordination and non-disturbance agreements on terms
acceptable to Lender in its reasonable discretion with Out Parcel Developer's
lenders, that Out Parcel Developer may lease its improvements without the
consent of Lender and tenants may finance and encumber their rights under such
leases without the consent of Lender.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO CLOSING. The obligation of Lender
to make the Loan hereunder is subject to the fulfillment by Borrower or Grantor
or waiver by Lender of the following conditions precedent no later than the
Closing Date:
3.1.1 REPRESENTATIONS AND WARRANTIES: COMPLIANCE WITH CONDITIONS.
The representations and warranties of Grantor contained in this Agreement and
the other Loan Documents shall be true and correct in all material respects on
and as of the Closing Date with the same effect as if made on and as of such
date, and no Default or an Event of Default shall have occurred and be
continuing; and Grantor shall be in compliance in all material respects with all
terms and conditions set forth in this Agreement and in each other Loan Document
on its part to be observed or performed.
3.1.2
LOAN AGREEMENT, NOTE AND LIMITED GUARANTY. Lender shall have
received a copy of this Agreement, the Note and the Guaranty, in each case, duly
executed and delivered on behalf of Borrower or Grantor, as applicable.
3.1.3 DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS;
LEASES, ETC.
(a) MORTGAGE. ASSIGNMENT OF LEASES AND OTHER LOAN DOCUMENTS. Lender
shall have received from Grantor fully executed and acknowledged counterparts of
the Mortgage and the Assignment of Leases and evidence that counterparts of the
Mortgage and Assignment 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 valid and enforceable first priority Liens upon the Property
in favor of Lender (or such trustee as may be required under local law), subject
only to the Permitted Encumbrances and such other Liens as are permitted
pursuant to the Loan Documents. Lender shall have also received from Grantor
fully executed counterparts of the Assignment of Management Agreement and the
other Loan Documents.
(b) TITLE INSURANCE. Lender shall have received a Title Insurance
Policy issued by a title company acceptable to Lender and dated as of the
Closing Date. Such Title Insurance Policy shall (i) provide coverage in an
amount equal to the principal amount of the Loan together with, if applicable, a
"tie-in" or similar endorsement, (ii) insure Lender that the Mortgage creates a
valid first priority lien on the Property encumbered thereby, 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, its successors and assigns,
as the insured. The Title Insurance Policy shall be assignable without cost to
Lender. Lender also shall have received evidence that all premiums in respect of
such Title Insurance Policy have been paid.
(c) SURVEY. Lender shall have received a title survey for the
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
27
Lender in accordance with the most recent Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys. The following additional items from the list
of "Optional Survey Responsibilities and Specifications" (Table A) should be
added to each survey: 2, 3, 4, 6, 8, 9, 10, 11 and 13. The survey shall reflect
the same legal description contained in the Title Insurance Policy relating to
the Property referred to in clause (ii) above and shall include, among other
things, a legal description of the real property comprising part of such
Property reasonably satisfactory to Lender. The surveyor's seal shall be affixed
to each survey and the surveyor shall provide a certification for each survey in
form and substance acceptable to Lender.
(d) INSURANCE. Lender shall have received valid certificates of
insurance for the policies of insurance required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all premiums
payable for the existing policy period.
(e) ENVIRONMENTAL REPORTS. Lender shall have received an environmental
report in respect of the Property, in each case reasonably satisfactory to
Lender.
(f) ZONING. With respect to the Property, Lender shall have received,
at Lender's option, (i) letters or other evidence with respect to the Property
from the appropriate municipal authorities (or other Persons) concerning
applicable zoning and building laws, (ii) an ALTA 3.1 zoning endorsement to the
Title Insurance Policy or (iii) other evidence of zoning compliance, in each
case in substance reasonably satisfactory to Lender.
(g) ENCUMBRANCES. Grantor shall have taken or caused to be taken such
actions in such a manner so that Lender has a valid and perfected first Lien on
the Property as of the Closing Date with respect to the Mortgage, 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.
3.1.4 RELATED DOCUMENTS. Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and Lender shall have received and approved certified copies thereof.
3.1.5 DELIVERY OF ORGANIZATIONAL DOCUMENTS. On or before the
Closing Date, Borrower or Grantor, as applicable, shall deliver or cause to be
delivered to Lender copies certified by Borrower or Grantor, as applicable, of
all organizational documentation related to Borrower or Grantor and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Lender may request in its sole discretion, including, without
limitation, good standing certificates, qualifications to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and incumbency certificates as may be requested by Lender.
3.1.6 OPINIONS OF COUNSEL. Lender shall have received opinions of
Borrower's or Grantor's counsel (and if applicable, Borrower's or Grantor's
local counsel) (a) with respect to non -consolidation issues (an "INSOLVENCY
OPINION") and (b) with respect to due execution, authority, enforceability of
the Loan Documents and such other matters as Lender may
28
reasonably require, all such opinions in form, scope and substance reasonably
satisfactory to Lender and Lender's counsel in their reasonable discretion.
3.1.7 BUDGETS. Grantor shall have delivered, and Lender shall have
approved, the Annual Budget for the current Fiscal Year.
3.1.8 BASIC CARRYING COSTS. Grantor shall have paid all Basic
Carrying Costs relating to the Property which are in arrears, including without
limitation, (a) accrued but unpaid insurance premiums relating to the Property,
(b) currently due and payable Taxes (including any in arrears) relating to the
Property, and (c) currently due Other Charges relating to the Property, which
amounts shall be funded with proceeds of the Loan.
3.1.9 COMPLETION OF PROCEEDINGS. All organizational 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
reasonably 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.
3.1.10 PAYMENTS. AH payments, deposits or escrows required to be
made or established by Borrower or Grantor under this Agreement, the Note and
the other Loan Documents on or before the Closing Date shall have been paid.
3.1.11 TENANT ESTOPPELS. Grantor shall exercise reasonable
commercial efforts to deliver estoppel letters from Tenants occupying not less
than eighty percent (80%) of the gross leasable area of the Property; provided,
however, that, in the event that Grantor is unable to deliver some or all of the
estoppels described above in this Section 3.1.11, Lender agrees that the
requirement to deliver such letters to Lender shall be waived by Lender as a
condition precedent to the closing of the Loan so long as Grantor delivers on
or before the Closing Date, a certificate executed by Grantor with respect to
all applicable leases which shall be in substantially the same form and contain
the same terms as set forth in Lender's standard form of estoppel certificate.
Grantor shall deliver to Lender an estoppel letter executed by Anchor Tenant in
form reasonably acceptable to Lender.
3.1.12 TRANSACTION COSTS. Borrower or Grantor shall have paid or
reimbursed Lender for all title insurance premiums, recording and filing fees or
taxes, costs of environmental reports, Physical Conditions Reports, appraisals
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.
3.1.13 MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the financial condition or business condition of Borrower,
Grantor or the Property since the date of the most recent financial statements
delivered to Lender. The income and expenses of the Property, the occupancy
leases thereof, and all other features of the transaction shall be as
represented to Lender without material adverse change. Neither Borrower or
Grantor, any of their respective constituent Persons, shall be the subject of
any bankruptcy, reorganization, or insolvency proceeding.
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3.1.14 LEASES AND RENT ROLL. Lender shall have received copies of
all tenant leases, certified copies of any tenant leases as requested by Lender
and certified copies of all ground leases affecting the Property. Lender shall
have received a current certified rent roll of the Property, reasonably
satisfactory in form and substance to Lender.
3.1.15 SUBORDINATION AND ATTORNMENT Lender shall have received
appropriate instruments acceptable to Lender in its commercially reasonable
discretion subordinating any Leases of record prior to the Mortgage and
including an agreement by such Tenants to attorn to Lender in the event of a
foreclosure or delivery of a deed in lieu thereof.
3.1.16 TAX LOT. Lender shall have received evidence that the
Property constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.
3.1.17 PHYSICAL CONDITIONS REPORTS. Lender shall have received
Physical Conditions Reports with respect to the Property, which reports shall be
reasonably satisfactory in form and substance to Lender.
3.1.18 MANAGEMENT AGREEMENT. Lender shall have received a certified
copy of the Management Agreement with respect to the Property which shall be
satisfactory in form and substance to Lender. Lender acknowledges that it has
reviewed the Management Agreement, and as drafted, such Management Agreement
does not violate Grantor's covenant that affiliated agreements be 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.
3.1.19 APPRAISAL. Lender shall have received an appraisal of the
Property, which shall be satisfactory in form and substance to Lender.
3.1.20 FINANCIAL STATEMENTS. Lender shall have received (a) a
balance sheet with respect to the Property for the two most recent Fiscal Years
and statements of income and statements of cash flows with respect to the
Property for the three most recent Fiscal Years, each in form and substance
reasonably satisfactory to Lender or (b) such other Financial statements
relating to the ownership and operation of the Property, in form and substance
reasonably satisfactory to Lender.
3.1.21 FURTHER DOCUMENTS. Lender or its counsel shall have received
such other and further approvals, opinions, documents and information as Lender
or its counsel may have reasonably requested including the Loan Documents in
form and substance reasonably satisfactory to Lender and its counsel.
3.1.22 ENVIRONMENTAL INSURANCE. If required by Lender, Grantor
shall have obtained a secured creditor environmental insurance policy with
respect to the Property, which shall be in form and substance satisfactory to
Lender. Any such policy shall have a term not less than the term of the Loan.
Grantor shall have provided to Lender evidence that the premiums for such policy
has been paid in full.
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3.1.23 GROUND LESSOR ESTOPPEL. Borrower shall have delivered, or
cause to be delivered, to Lender a ground lessor estoppel from the Ground Lessor
in form and substance acceptable to Lender (the "Ground Lessor Estoppel").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 BORROWER AND GRANTOR REPRESENTATIONS. Each of Borrower and
Grantor, as applicable, represents and warrants as of the date hereof and as of
the Closing Date that:
4.1.1 ORGANIZATION. Each of Borrower and Grantor has been duly
organized and is validly existing and in good standing, and in the case of
Grantor, has the requisite power and authority to own the Property and to
transact the businesses in which it is now engaged. Each of Borrower and Grantor
is duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with the Loan, its
Property, businesses and operations. Grantor possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own the Property and to transact the businesses in which it is now engaged,
and the sole business of Grantor is the ownership, management and operation of
the Property.
4.1.2 PROCEEDINGS. Each of Borrower and Grantor has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents. This Agreement and such other Loan
Documents have been duly executed and delivered by or on behalf of Borrower
and/or Grantor and constitute legal, valid and binding obligations of Borrower
and/or Grantor enforceable against such party in accordance with their
respective terms, subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of creditors generally, and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).
4.1.3 NO CONFLICTS. The execution, delivery and performance of
this Agreement and the other Loan Documents by Borrower or Grantor will not
conflict with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than pursuant to the Loan Documents) upon any of
the property or assets of Borrower or Grantor pursuant to the terms of any
indenture, mortgage, deed of trust,
loan agreement, partnership agreement or
other agreement or instrument to which Borrower or Grantor is a party or by
which any of Borrower's or Grantor's property or assets is subject, nor will
such action result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over Borrower or Grantor or any of Borrower's or Grantor's
properties or assets, and any consent, approval, authorization, order,
registration or qualification of or with any court or any such regulatory
authority or other governmental agency or body required for the execution,
delivery and performance by Borrower or Grantor of this Agreement or any other
Loan Documents has been obtained and is in full force and effect.
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4.1.4 LITIGATION. To Borrower's and Grantor's knowledge, there are
no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or threatened against or
affecting Borrower, Grantor or the Property, which actions, suits or
proceedings, if determined against Borrower, Grantor or the Property, might
materially adversely affect the condition (financial or otherwise) or business
of Borrower or Grantor or the condition or ownership of the Property.
4.1.5 AGREEMENTS. Except such instruments and agreements set forth
as Permitted Exceptions in the Title Insurance Policy, neither Borrower nor
Grantor is a party to any agreement or instrument or subject to any restriction
which might materially and adversely affect Borrower, Grantor or the Property,
or Borrower's or Grantor's business, properties or assets, operations or
condition, financial or otherwise. To Borrower's and Grantor's knowledge,
neither Borrower nor Grantor is in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by
which Borrower, Grantor or the Property are bound. Neither Borrower nor Grantor
has a material financial obligation under any indenture, mortgage, deed of
trust,
loan agreement or other agreement or instrument to which Borrower or
Grantor is a party or by which Borrower, Grantor or the Property is otherwise
bound, other than (a) obligations incurred in the ordinary course of the
operation of the Property and (b) obligations under the Loan Documents.
4.1.6 TITLE. Grantor has a good, marketable and insurable
leasehold and/or subleasehold estate to the real property comprising part of the
Property and good title to the balance of the Property, free and clear of all
Liens whatsoever except the Permitted Encumbrances, such other Liens as are
permitted pursuant to the Loan Documents and the Liens created by the Loan
Documents. The Mortgage, when properly recorded in the appropriate records,
together with any Uniform Commercial Code financing statements required to be
filed in connection therewith, will create (a) a valid, perfected lien on the
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 assignment of, all personalty (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. There are no claims for
payment for work, labor or materials affecting the Property which are due and
unpaid under the contracts pursuant to which such work or labor was performed
or materials provided which are or may become a lien prior to, or of equal
priority with, the Liens created by the Loan Documents.
4.1.7 SOLVENCY; NO BANKRUPCY FILING. Neither Borrower nor Grantor
(a) has 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) has not received reasonably equivalent value in exchange for
its obligations under the applicable Loan Documents. The fair saleable value of
Grantor's assets exceeds and will, immediately following the execution and
delivery of the Limited Guaranty, exceed Grantor's total liabilities, including,
without limitation, subordinated, unliquidated, disputed and contingent
liabilities. The fair saleable value of Grantor's assets is and will,
immediately following the execution and delivery of the Limited Guaranty, be
greater than Grantor's probable liabilities, including the maximum amount of its
contingent liabilities on its debts as such debts become absolute and matured.
Neither
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Borrower's nor Grantor's assets now and immediately following the making of the
Loan, will constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. Neither Borrower nor Grantor intends
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). No petition in bankruptcy has been filed
against Borrower or Grantor, or to the best of each such party's knowledge, any
constituent Person in the last seven (7) years, and neither Borrower, Grantor,
nor to the best of such party's knowledge, any constituent Person in the last
seven (7) years has made an assignment for the benefit of creditors or taken
advantage of any insolvency act for the benefit of debtors. Neither Borrower,
Grantor nor any of such party's constituent Persons 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 any such party's assets or
property, and no such party has no knowledge of any Person contemplating the
filing of any such petition against it or such constituent Persons.
4.1.8 FULL AND ACCURATE DISCLOSURE. To Borrower's and Grantor's
knowledge, no statement of fact made by Borrower or Grantor in this Agreement
or in any of the other Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no material fact presently
known to Borrower or Grantor which has not been disclosed to Lender which
adversely affects, nor as far as Borrower or Grantor can foresee, might
adversely affect, the Property or the business, operations or condition
(financial or otherwise) of Borrower or Grantor.
4.1.9 NO PLAN ASSETS. Neither Borrower nor Grantor is 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 or Grantor 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) neither Borrower nor Grantor is a "governmental
plan" within the meaning of Section 3(32) of ERISA and (b) transactions by or
with Borrower or Grantor 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.
4.1.10 COMPLIANCE. To Grantor's knowledge, Grantor and the Property
and the use thereof comply in all material respects with all applicable Legal
Requirements, including, without limitation, building and zoning ordinances and
codes. Grantor is not in default or violation of any order, writ, injunction,
decree or demand of any Governmental Authority. There has not been committed by
Grantor or, to Grantor's knowledge, any other Person in occupancy of or involved
with the operation or use of the Property any act or omission affording the
federal government or any other Governmental Authority the right of forfeiture
as against the Property or any part thereof or any monies paid in performance of
Grantor's obligations under any of the Loan Documents.
4.1.11 FINANCIAL INFORMATION. All financial data, including,
without limitation, the statements of cash flow and income and operating
expense, that have been delivered to Lender in respect of the Property (i) are
true, complete and correct in all material respects, (ii) accurately
33
represent the financial condition of the Property 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 accounting
principles reasonably acceptable to Lender, consistently applied throughout the
periods covered, except as disclosed therein; provided, however, that if any
financial data is delivered to Lender by any Person other than Borrower,
Grantor, Indemnitor or any of their Affiliates, or if such financial data has
been prepared by or at the direction of any Person other than Borrower, Grantor,
Indemnitor or any of their Affiliates, then the foregoing representations with
respect to such financial data shall be to the best of Borrower's and Grantor's
knowledge, after due inquiry. Neither Borrower nor Grantor has 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 or Grantor and reasonably likely to have a materially adverse effect
on the Property or the operation thereof as a retail shopping center, 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 or Grantor from that set
forth in said financial statements.
4.1.12 CONDEMNATION. No Condemnation or other proceeding has been
commenced or, to Grantor's knowledge, is contemplated with respect to all or any
portion of the Property or for the relocation of roadways providing access to
the Property.
4.1.13 FEDERAL RESERVE REGULATIONS. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
4.1.14 UTILITIES AND PUBLIC ACCESS. The Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service the Property for its respective intended
uses. All public utilities necessary or convenient to the full use and enjoyment
of the Property are located either in the public right-of-way abutting the
Property (which are connected so as to serve the Property without passing over
other property) or in recorded easements serving the Property and such easements
are set forth in and insured by the Title Insurance Policy. All roads necessary
for the use of the Property for their current respective purposes have been
completed and dedicated to public use and accepted by all Governmental
Authorities.
4.1.15 NOT A FOREIGN PERSON. Neither Borrower nor Grantor is a
"foreign person" within the meaning of Section 1445(f)(3) of the Code.
4.1.16 SEPARATE LOTS. The 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 the Property.
4.1.17 ASSESSMENTS. There are no pending, or to Grantor's
knowledge, proposed special or other assessments for public improvements or
otherwise affecting the Property, nor are
34
there any contemplated improvements to the Property that may result in such
special or other assessments.
4.1.18 ENFORCEABILITY. The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by Borrower or Grantor,
including the defense of usury, nor would the operation of any of the terms of
the Loan Documents, or the exercise of any right thereunder, render the Loan
Documents unenforceable, and neither Borrower nor Grantor has asserted any right
of rescission, set-off, counterclaim or defense with respect thereto.
4.1.19 NO PRIOR ASSIGNMENT. There is no prior assignment of the
Leases or any portion of the Rents by Grantor or any of its predecessors in
interest, given as collateral security which are presently outstanding.
4.1.20 INSURANCE. Grantor has obtained and has delivered to Lender
certified copies of all insurance policies reflecting the insurance coverages,
amounts and other requirements set forth in this Agreement. To the best of
Grantor's knowledge, no claims have been made under any such policy, and no
Person, including Grantor, has done, by act or omission, anything which would
impair the coverage of any such policy.
4.1.21 USE OF PROPERTY. The Property is used exclusively for retail
purposes and other appurtenant and related uses.
4.1.22 CERTIFICATE OF OCCUPANCY; LICENSES. All certifications,
permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits required to be obtained by Grantor for the
legal use, occupancy and operation of the Property as a retail shopping center
have been obtained and are in full force and effect, and to the best of
Grantor's knowledge, after due inquiry, all certifications, permits, licenses
and approvals, including without limitation, certificates of completion and
occupancy permits required to be obtained by any Person other than Grantor for
the legal use, occupancy and operation of the Property as a retail shopping
center, have been obtained and are in full force and effect (all of the
foregoing certifications, permits, licenses and approvals are collectively
referred to as the "LICENSES"). Grantor shall and shall cause all other Persons
to, keep and maintain all licenses necessary for the operation of the Property
as a retail shopping center. To Grantor's knowledge, the use being made of the
Property is in conformity with all certificates of occupancy issued for the
Property.
4.1.23 FLOOD ZONE. To the best of Grantor's knowledge, after due
inquiry, no Improvements on the Property are located in an area identified by
the Federal Emergency Management Agency as an area having special flood hazards.
4.1.24 PHYSICAL CONDITION. Except as disclosed in the Physical
Conditions Reports delivered to Lender in connecting with this Loan, to
Grantor's knowledge, the Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects; there exists no structural or other material defects
or damages in the Properly, whether latent or
35
otherwise, and Grantor has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part
thereof, which would 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.
4.1.25 BOUNDARIES. To the best of Grantor's knowledge, after due
inquiry, all of the improvements which were included in determining the
appraised value of the Property lie wholly within the boundaries and building
restriction lines of the Property, and no improvements on adjoining properties
encroach upon the Property, and no easements or other encumbrances upon the
Property encroach upon any of the improvements, so as to affect the value or
marketability of the Property except those which are insured against by title
insurance.
4.1.26 LEASES. The Property is not subject to any Leases other than
the Leases described on the Rent Roll attached as SCHEDULE IV hereto and made a
part hereof (and subleases permitted under the Anchor Lease). No Person has any
possessory interest in the Property or right to occupy the same except under and
pursuant to the provisions of the Leases. The current Leases are in full force
and effect and to Grantor's knowledge after inquiry, there are no 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 Grantor under each Lease
has been performed as required and has been accepted by the applicable tenant,
and any payments, free rent, partial rent, rebate of rent or other payments,
credits, allowances or abatements required to be given by Grantor to any tenant
has already been received by such tenant. There has been no prior sale, transfer
or assignment, hypothecation or pledge of any Lease or of the Rents received
therein which is outstanding. To Grantor's knowledge after inquiry, except as
set forth on SCHEDULE IV, no tenant listed on SCHEDULE IV has assigned its Lease
or sublet all or any portion of the premises demised thereby, no such tenant
holds its leased premises under assignment or sublease, nor does anyone except
such tenant and its employees occupy such leased premises. No tenant under any
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. Except as set forth in SCHEDULE IV, no tenant under any Lease has
any right or option for additional space in the Improvements except as set forth
in SCHEDULE IV. To Grantor's actual knowledge based on the Environmental Report
delivered to Lender in connection herewith, 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 Grantor 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, except in either event, in compliance with
applicable federal, state or local statues, rules and regulations.
4.1.27 SURVEY. The Survey for the Property delivered to Lender in
connection with this Agreement has been prepared in accordance with the
provisions of Section 3.1.3(c) hereof, and does not fail to reflect any material
matter affecting the Property or the title thereto.
36
4.1.28 LOAN TO VALUE. The maximum principal amount of the Note does
not exceed one hundred twenty-five percent (125%) of the fair market value of
the Property as set forth on the appraisal of the Property delivered to Lender.
4.1.29 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 acquisition of the Property by Grantor have been paid or are
simultaneously being 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 Mortgage, have been paid, and,
under current Legal Requirements, the Mortgage is enforceable in accordance with
its terms by Lender (or any subsequent holder thereof).
4.1.30 SPECIAL PURPOSE ENTITY/SEPARATENESS. (a) Until the Debt has
been paid in full, each of Borrower and Grantor hereby represents, warrants and
covenants that each of Borrower and Grantor is, shall be and shall continue to
be a Special Purpose Entity.
(b) The representations, warranties and covenants set forth in Section
4.1.30(a) shall survive for so long as any amount remains payable to Lender
under this Agreement or any other Loan Document.
(c) Any and all of the assumptions made in any Insolvency Opinion,
including, but not limited to, any exhibits attached thereto, will have been and
shall be true and correct in all respects, and Borrower and/or Grantor will have
complied and will comply with all of the assumptions made with respect to it in
any Insolvency Opinion. Each entity other than Borrower or Grantor with respect
to which an assumption is made in any Insolvency Opinion will have complied and
will comply with all of the assumptions made with respect to it in any such
Insolvency Opinion.
4.1.31 MANAGEMENT AGREEMENT. The Management Agreement is in full
force and effect and, to Grantor's knowledge, there is no default thereunder by
any party thereto and no event has occurred that, with the passage of time
and/or the giving of notice would constitute a default thereunder.
4.1.32 ILLEGAL ACTIVITY. To Grantor's knowledge, no portion of the
Property has been or will be purchased with proceeds of any illegal activity.
4.1.33 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. All
information submitted by Borrower and/or Grantor to Lender and in 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 and/or Grantor in this Agreement or in any
other Loan Document, are accurate, complete and correct in all material
respects, provided, however, that if such information was provided to Borrower
and/or Grantor by non-affiliated third parties. Borrower and Grantor each
represent that such information is, to the best of its knowledge after due
inquiry, accurate, complete and correct in all material
37
respects. 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 and adversely affects or might materially and adversely affect the
Property or the business operations or the financial condition of Borrower
and/or Grantor. Borrower and Grantor have disclosed to Lender all material facts
and has not failed to disclose any material fact that could cause any
representation or warranty made herein to be materially misleading.
4.1.34 INVESTMENT COMPANY ACT. Neither Borrower nor Grantor is (a)
an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
4.1.35 PRINCIPAL PLACE OF BUSINESS AND ORGANIZATION. Neither
Borrower nor Grantor shall change its principal place of business set forth in
the introductory paragraph of this Agreement without first giving Lender thirty
(30) days prior written notice. Neither Borrower nor Grantor shall change the
place of its organization as set forth in the introductory paragraph of this
Agreement without the consent of Lender, which consent shall not be unreasonably
withheld, conditioned or delayed. Upon Lender's request, Borrower and Grantor
shall execute and deliver additional financing statements, security agreements
and other instruments which may be necessary to effectively evidence or perfect
Lender's security interest in the Property as a result of such change of
principal place of business or place of organization.
4.1.36 ACQUISITION COSTS. Grantor represents and warrants that all
consideration payable to the seller of the Property to Grantor has been, or
shall be in connection with the funding of the loan, paid in full, and that no
further obligation to any such seller, contingent or otherwise, shall remain
outstanding after the date hereof.
4.1.37 EMBARGOED PERSON. As of the Closing Date, to the best of
Borrower's and/or Grantor's knowledge, (a) none of the funds or other assets of
Borrower or Grantor constitute property of, or are beneficially owned, directly
or indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest
of any nature whatsoever in Borrower or Grantor with the result that the
investment in Borrower or Grantor (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law; and (c) none of the funds
of Borrower or Grantor have been derived from any unlawful activity with the
result that the investment in Borrower or Grantor (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law.
4.1.38 GROUND LEASE. (a) Grantor will comply in all material
respects with the terms and conditions of the Ground Lease. Grantor will not do
or permit anything to be done, the doing of which, or refrain from doing
anything, the omission of which, will impair or tend to impair the security of
the Property under the Ground Lease or will be grounds for declaring a
forfeiture of the Ground Lease.
38
(b) Grantor shall enforce the Ground Lease and will not terminate,
modify, cancel, change, supplement, alter or amend the Ground Lease, or waive,
excuse, condone or in any way release or discharge the lessors under each Ground
Lease (individually and collectively, the "GROUND LESSOR") of or from any of the
material covenants and conditions to be performed or observed by the lessors
under each Ground Lease. Grantor hereby expressly covenants with Lender not to
cancel, surrender, amend, modify or alter in any way the terms of the Ground
Lease. Grantor hereby assigns to Lender, as further security for the payment of
the Debt and for the performance and observance of the terms, covenants and
conditions of the Mortgage, all of the rights, privileges and prerogatives of
Grantor as tenant under the Ground Lease to surrender the leasehold estate
created by the Ground Lease or to terminate, cancel, modify, change, supplement,
alter or amend the Ground Lease, and any such surrender of the leasehold estate
created by the Ground Lease or termination, cancellation, modification, change,
supplement, alteration or amendment of the Ground Lease without the prior
consent of Lender shall be void and of no force and effect.
(c) Grantor will give Lender prompt (and in all events within three
(3) days) notice of any default under the Ground Lease of which it has knowledge
or of the receipt by Grantor of any notice of default from Ground Lessor.
Grantor will promptly (and in all events within three (3) days) furnish to
Lender copies of all information furnished to Ground Lessor by the terms of the
Ground Lease or the provisions of this Section. Grantor will deliver to Lender
an exact copy of any notice, communication, plan, specification or other
instrument or document received or given by Grantor in any way relating to or
affecting the Ground Lease which may concern or affect the estate of Ground
Lessor or Grantor thereunder in or under the Ground Lease or in the real estate
thereby demised.
(d) Lender shall have the right, but not the obligation, to perform
any obligations of Grantor under the terms of the Ground Lease during the
continuance of a default thereunder. All costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) so incurred, shall be
treated as an advance secured by the Mortgage, shall bear interest thereon at
the Default Rate from the date of payment by Lender until paid in full and shall
be paid by Grantor to Lender during the continuance of a default within five (5)
days after demand. No performance by Lender of any obligations of Grantor shall
constitute a waiver of any default arising by reason of Grantor's failure to
perform the same. If Lender shall make any payment or perform any act or take
action in accordance with this provision, Lender will notify Grantor of the
making of any such payment, the performance of any such act, or the taking of
any such action. In any such event, Lender and any person designated by Lender
shall have, and are hereby granted, the right to enter upon the Property at any
time and from time to time for the purpose of taking any such action.
(e) To the extent permitted by law, the price payable by Grantor or
any other person or entity in the exercise of any right of redemption following
foreclosure of the Property shall include all rents paid and other sums advanced
by Lender, together with interest thereon at the Default Rate as ground lessee
under the Ground Lease, on behalf of Grantor on account of the Property.
(f) Unless Lender shall otherwise consent, the fee title and the
leasehold estate in the Property shall not merge but shall always be kept
separate and distinct, notwithstanding the
39
union of said estates either in Ground Lessor or in Grantor, or in a third
party, by purchase or otherwise.
(g) Upon acquisition by Grantor of the fee title or any other estate,
title or interest in the Property, the Mortgage shall, automatically and without
the necessity of execution of any other documents, attach to and cover and be a
lien upon such other estate so acquired, and such other estate shall be
considered as mortgaged, assigned and conveyed to Lender and the lien hereof
spread to cover such estate with the same force and effect as though
specifically herein mortgaged, assigned and conveyed. The provisions of this
subsection (g) shall not apply if Lender acquires fee title to the Property
unless Lender shall so elect.
(h) In the event there is a conflict between any notice sent by Ground
Lessor to Grantor and Lender and any notice sent by Grantor to Lender, Lender
may rely on such notice sent by Ground Lessor.
(i) Grantor shall exercise each individual option, if any, to extend
or renew the term of the Ground Lease promptly (and in all events within five
(5) days) after demand by Lender made at any time within one (1) year prior to
the last day upon which any such option may be exercised, and Grantor hereby
expressly authorizes and appoints Lender its attorney-in-fact to exercise any
such option in the name of and upon behalf of Grantor to so exercise such option
if Grantor fails to exercise as herein required, which power of attorney shall
be irrevocable and shall be deemed to be coupled with an interest.
(j) Each Lease hereafter made and each renewal of any existing Lease
affecting the Property shall provide that, (i) in the event of the termination
of the Ground Lease, the Lease shall not terminate or be terminable by the
lessee; (ii) in the event of any action for the foreclosure of the Mortgage, the
Lease shall not terminate or be terminable by the lessee by reason of the
termination of the Ground Lease unless the lessee is specifically named and
joined in any such action and unless a judgment is obtained therein against the
lessee; and (iii) in the event that the Ground Lease is terminated as aforesaid,
the lessee under the Lease shall attorn to the lessor under the Ground Lease or
to the purchaser at the sale of the Property on such foreclosure, as the case
may be.
(k) Grantor hereby assigns, transfers and sets over to Lender all of
Grantor's claims and rights to the payment of damages arising from any rejection
by the Ground Lessor of the Ground Lease under the Bankruptcy Code. Grantor
shall notify Lender promptly (and in any event within five (5) days) of any
claim, suit action or proceeding relating to the rejection of the Ground Lease.
Lender is hereby irrevocably appointed as Grantor's attorney-in-fact, coupled
with an interest, with exclusive power to file and prosecute, to the exclusion
of Grantor, any proofs of claim, complaints, motions, applications, notices and
other documents, in any case in respect of the Ground Lessor under the
Bankruptcy Code during the continuance of any default. Grantor may make any
compromise or settlement in connection with such proceedings (subject to
Lender's approval); provided, however, that Lender shall be authorized and
entitled to compromise or settle any such proceeding if such compromise or
settlement is made after the occurrence of an Event of Default. Grantor shall
promptly execute and deliver to Lender any and all instruments reasonably
required in connection with any such proceeding after request therefor by
Lender. Except as set forth above, Grantor shall not adjust, compromise, settle
or
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enter into any agreement with respect to such proceedings without the prior
written consent of Lender.
(l) Grantor shall not, without Lender's prior written consent, elect
to treat the Ground Lease as terminated under Section 365(h)(1) of the
Bankruptcy Code. Any such election made without Lender's prior written consent
shall be void.
(m)If pursuant to Section 365(h)(2) of the Bankruptcy Code, Grantor
seeks to offset against the rent reserved in the Ground Lease the amount of any
damages caused by the non-performance by the Ground Lessor of any of the Ground
Lessor's obligations under the Ground Lease after the rejection by the Ground
Lessor of the Ground Lease under the Bankruptcy Code, Grantor shall, prior to
effecting such offset, notify Lender of its intention to do so, setting forth
the amounts proposed to be so offset and the basis therefor. If Lender has
failed to object as aforesaid within ten (10) days after notice from Grantor in
accordance with the first sentence of this subsection (m), Grantor may proceed
to effect such offset in the amounts set forth in Grantor's notice. Neither
Lender's failure to object as aforesaid nor any objection or other communication
between Lender and Grantor relating to such offset shall constitute an approval
of any such offset by Lender, Grantor shall indemnify and save Lender harmless
from and against any and all claims, demands, actions, suits, proceedings,
damages, losses, costs and expenses of every nature whatsoever (including,
without limitation, reasonable attorneys' fees and disbursements) arising from
or relating to any such offset by Grantor against the rent reserved in the
Ground Lease.
(n) If any action, proceeding, motion or notice shall be commenced or
filed in respect of Grantor or, following an Event of Default, the Property in
connection with any case under the Bankruptcy Code, Lender shall have the
option, to the exclusion of Grantor, exercisable upon notice from Lender to
Grantor, to conduct and control any such litigation with counsel of Lender's
choice. Lender may proceed in its own name or in the name of Grantor in
connection with any such litigation, and Grantor agrees to execute any and all
powers, authorizations, consents and other documents required by Lender in
connection therewith. Grantor shall pay to Lender all costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
paid or incurred by Lender in connection with the prosecution or conduct of any
such proceedings within five (5) days after notice from Lender setting forth
such costs and expenses in reasonable detail. Any such costs or expenses not
paid by Grantor as aforesaid shall be secured by the lien of the Mortgage, shall
be added to the principal amount of the Debt and shall bear interest at the
Default Rate. Grantor shall not commence any action, suit, proceeding or case,
or file any application or make any motion, in respect of the Ground Lease in
any such case under the Bankruptcy Code without the prior written consent of
Lender.
(o) Grantor shall immediately, after obtaining knowledge thereof,
notify Lender of any filing by or against the Ground Lessor of a petition under
the Bankruptcy Code. Grantor shall thereafter forthwith give written notice of
such filing to Lender, setting forth any information available to Grantor as to
the date of such filing, the court in which such petition was filed, and the
relief sought therein. Grantor shall promptly deliver to Lender following
receipt any and all notices, summonses, pleadings, applications and other
documents received by Grantor in connection with any such petition and any
proceedings relating thereto.
41
(p) If there shall be filed by or against Grantor a petition under the
Bankruptcy Code, and Grantor, as the tenant under the Ground Lease, shall
determine to reject the Ground Lease pursuant to Section 365(a) of the
Bankruptcy Code, then Grantor shall give Lender not less than ten (10) days'
prior written notice of the date on which Grantor shall apply to the bankruptcy
court for authority to reject the Ground Lease. Lender shall have the right, but
not the obligation, to serve upon Grantor within such 10-day period a notice
stating that (i) Lender demands that Grantor assume and assign the Ground Lease
to Lender pursuant to Section 365 of the Bankruptcy Code and (ii) Lender
covenants to cure or provide adequate assurance of prompt cure of all defaults
and provide adequate assurance of future performance under the Ground Lease. If
Lender serves upon Grantor the notice described in the preceding sentence,
Grantor shall not seek to reject the Ground Lease and shall comply with the
demand provided for in clause (i) of the preceding sentence within thirty (30)
days after the notice shall have been given, subject to the performance by
Lender of the covenant provided for in clause (ii) of the preceding sentence.
(q) Effective upon the entry of an order for relief in respect of
Grantor under the Bankruptcy Code, Grantor hereby assigns and transfers to
Lender a non-exclusive right to apply to the Bankruptcy Court under Section
365(d)(4) of the Bankruptcy Code for an order extending the period during which
the Ground Lease may be rejected or assumed.
(r) Grantor represents and warrants that (i) the Ground Lease may be
assigned from time to time without the consent of Ground Lessor (or if such
consent is required, it has properly been obtained); (ii) Grantor has the right
under the Ground Lease to mortgage the Ground Lease and the leasehold estate
thereby created without the prior consent of Ground Lessor of such if consent is
required, it has properly been obtained; (iii) if any default by Grantor shall
occur under the Ground Lease, Lender is entitled under the Ground Lease to
receive notice of such default from Ground Lessor and an opportunity to cure any
such default which is susceptible of cure by Lender; (iv) if the Ground Lease is
terminated by reason of a default by Grantor, Lender or its designce is entitled
under the Ground Lease to enter into a new lease (the "New Lease") with Ground
Lessor for the remainder of the term of the Ground Lease upon the same base rent
and additional rent and other terms, covenants, conditions and agreements as are
contained in the Ground Lease; (v) the Ground Lease or a supplemental agreement
requires the Ground Lessor to give copies of all notices of default which are
given under the Ground Lease to Grantor contemporaneously to Lender; (vi) the
Ground Lease represents the entire agreement between the parties thereto and is
in full force and effect and has not been modified or supplemented; (vii) the
Ground Lease cannot be canceled solely by Ground Lessor and requires Grantor's
consent for all material modifications; (viii) all rents (including additional
rents and other charges) reserved for in the Ground Lease and payable prior to
the date hereof have been paid; (ix) no party to the Ground Lease is in default
of any obligation such party has thereunder and no event has occurred which,
with the giving of notice or the lapse of time, or both, would constitute such a
default; and (x) no notice or other written or oral communication has been
provided to any party under the Ground Lease which alleges that, as of the date
hereof, either a default exists or with the passage of time will exist under the
provisions of such Ground Lease.
Section 4.2 SURVIVAL OF REPRESENTATIONS. Borrower and Grantor agree
that all of the representations and warranties of Borrower and Grantor,
respectively, set forth in Section 4.1 and elsewhere in this Agreement and in
the other Loan Documents shall survive for so long as
42
any amount remains owing to Lender under this Agreement or any of the other Loan
Documents by Borrower or Grantor. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents by Borrower or
Grantor shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.
ARTICLE V
BORROWER AND GRANTOR COVENANTS
Section 5.1 AFFIRMATIVE COVENANTS. From the Closing Date and until
payment and performance in full of all obligations of Borrower and Grantor under
the Loan Documents or the earlier release of the Lien of the Mortgage
encumbering the Property (and all related obligations) in accordance with the
terms of this Agreement and the other Loan Documents, Borrower and Grantor
hereby covenant and agree with Lender that:
5.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS; INSURANCE.
Grantor shall do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its existence, rights, licenses, permits and
franchises and comply with all Legal Requirements applicable to it and the
Property. Grantor shall not commit, nor shall Grantor permit any other Person in
occupancy of or involved with the operation or use of the Property to commit,
any act or omission affording the federal government or any state or local
government the right of forfeiture as against the Property or any part thereof
or any monies paid in performance of Borrower's or Grantor's obligations under
any of the Loan Documents. Borrower and Grantor hereby covenant and agree not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Grantor shall at all times maintain, preserve and protect all its
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and shall keep the Property 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, all as more fully provided in the Mortgage. Grantor shall
keep the Property insured at all times by financially sound and reputable
insurers, to such extent and against such risks, and maintain liability and such
other insurance, as is more fully provided in this Agreement. Grantor shall
operate, or cause the tenant to operate, any Property that is the subject of an
O&M Agreement (if any) in accordance with the terms and provisions thereof in
all material respects. After prior written notice to Lender, Grantor, 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 Grantor or the
Property or any alleged violation of any Legal Requirement, provided that (i) no
Event of Default has occurred and remains uncured; (ii) intentionally omitted;
(iii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any instrument to which Grantor 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) the Property
or any part thereof or interest therein will not be in danger of being sold,
forfeited, terminated, cancelled or lost; (v) Grantor shall promptly upon final
determination thereof 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 Grantor or the
43
Property; and (vii) Grantor shall furnish such security as may be required in
the proceeding, or as may be requested by Lender, to insure 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 the Property (or any part thereof or
interest therein) shall be in danger of being sold, forfeited, terminated,
cancelled or lost.
5.1.2 TAXES AND OTHER CHARGES. Grantor shall pay or cause to be
paid all Taxes and Other Charges now or hereafter levied or assessed or imposed
against the Property or any part thereof as the same become due and payable;
PROVIDED, HOWEVER, Grantor's obligation to directly pay to the appropriate
taxing authority Taxes shall be suspended for so long as Grantor complies with
the terms and provisions of Section 7.2 hereof. Grantor will deliver to Lender
receipts for payment or other evidence satisfactory to Lender that the Taxes and
Other Charges have been so paid or are not then delinquent no later than ten
(10) days prior to the date on which the Taxes and/or Other Charges would
otherwise be delinquent if not paid (PROVIDED, HOWEVER, that Grantor 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 7.2 hereof). If Grantor pays
or causes to be paid all Taxes and Other Charges and provides a copy of the
receipt evidencing the payment thereof to Lender, then Lender shall reimburse
Grantor, provided that there are then sufficient proceeds in the Tax and
Insurance Escrow Fund and provided that the Taxes are being paid pursuant to
Section 7.2. Upon written request of Grantor, if Lender has paid such Taxes
pursuant to Section 7.2 hereof, Lender shall provide Grantor with evidence that
such Taxes have been paid. Grantor shall not suffer and shall promptly cause to
be paid and discharged any Lien or charge whatsoever which may be or become a
Lien or charge against the Property, and shall promptly pay for all utility
services provided to the Property. After prior written notice to Lender,
Grantor, 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) Grantor is permitted to do so under the provisions of
any mortgage or deed of trust superior in lien to the Mortgage; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Grantor is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iii) the Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, cancelled or lost; (iv) Grantor shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (v) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the Property; and (vi) Grantor shall
furnish such security as may be required in the proceeding, or as may be
reasonably requested by Lender, 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 reasonable judgment of Lender, the entitlement
of such claimant is established.
5.1.3 LITIGATION. Borrower and Grantor shall give prompt written
notice to Lender of any litigation or governmental proceedings pending or
threatened against Borrower or
44
Grantor which might materially adversely affect such party's condition
(financial or otherwise) or business or the Property.
5.1.4 ACCESS TO PROPERTY. Grantor shall permit agents,
representatives and employees of Lender to inspect the Property or any part
thereof at reasonable hours upon reasonable advance notice, subject to the
rights of Tenants under their respective Leases.
5.1.5 NOTICE OF DEFAULT. Borrower and Grantor shall promptly
advise Lender of any material adverse change in Borrower's or Grantor's
condition, financial or otherwise, or of the occurrence of any Default or Event
of Default of which Borrower or Grantor has knowledge.
5.1.6 COOPERATE IN LEGAL PROCEEDINGS. Borrower and Grantor shall
cooperate fully with Lender with respect to any proceedings before any court,
board or other Governmental Authority which may in any way affect the rights of
Lender hereunder or any rights obtained by Lender under any of the other Loan
Documents and, in connection therewith, permit Lender, at its election, to
participate in any such proceedings.
5.1.7 PERFORM LOAN DOCUMENTS. Borrower and Grantor shall observe,
perform and satisfy all the terms, provisions, covenants and conditions of, and
shall pay when due all costs, fees and expenses to the extent required under the
Loan Documents executed and delivered by, or applicable to, Borrower or Grantor.
5.1.8 INSURANCE BENEFITS. Grantor shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable in connection with the Property, and Lender shall be
reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys' fees and disbursements, and the payment by Grantor of the
expense of an appraisal on behalf of Lender in case of a fire or other casualty
affecting the Property or any part thereof) out of such Insurance Proceeds.
5.1.9 FURTHER ASSURANCES. Borrower or Grantor shall, at Borrower's
or Grantor's sole cost and expense:
(a) (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 or Grantor pursuant to the terms of the Loan Documents or reasonably
requested by Lender in connection therewith;
(b) (b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower or Grantor under the
Loan Documents, as Lender may reasonably require; and
(c) (c) 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.
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5.1.10 INTENTIONALLY OMITTED.
5.1.11 FINANCIAL REPORTING. (a) Borrower and Grantor will keep and
maintain or will cause to be kept and maintained on a Fiscal Year basis, in
accordance with the requirements for a Special Purpose Entity set forth above,
proper and accurate books, records and accounts reflecting all of the financial
affairs of Borrower or Grantor and all items of income and expense in connection
with the operation on an individual basis of the Property. Lender shall have the
right from time to time at all limes during normal business hours upon
reasonable notice to examine such books, records and accounts at the office of
Borrower, Grantor or other Person maintaining such books, records and accounts
and to make such copies or extracts thereof as Lender shall desire. After the
occurrence and during the continuance of an Event of Default, Grantor shall pay
any costs and expenses incurred by Lender to examine Grantor's accounting
records with respect to the Property, as Lender shall reasonably determine to be
necessary or appropriate in the protection of Lender's interest.
(b) Grantor will furnish to Lender annually, within ninety (90) days
following the end of each Fiscal Year of Grantor, either (i) a complete copy of
Borrower's or Grantor's annual financial statements audited by an accounting
firm or other independent certified public accountant reasonably acceptable to
Lender in accordance with the requirements for a Special Purpose Entity set
forth above, or (ii) a consolidated and annotated financial statement of
Borrower and Grantor (as applicable), audited by an accounting firm or other
independent certified public accountant reasonably acceptable to Lender in
accordance with the requirements for a Special Purpose Entity set forth above,
together with unaudited financial statements relating to the Borrower, Grantor
and the Property. Such financial statements for the Property for such Fiscal
Year and shall contain statements of profit and loss for Borrower Grantor and
the Property and a balance sheet for Grantor. Such statements shall set forth
the financial condition and the results of operations for the Property for such
Fiscal Year, and shall include, but not be limited to, amounts representing
annual Net Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses. Such annual financial statements shall be accompanied by (i)
a comparison of the budgeted income and expenses and the actual income and
expenses for the prior Fiscal Year, (ii) a certificate executed by the chief
financial officer of Grantor or Indemnitor, as applicable, stating that each
such annual financial statement presents fairly the financial condition and the
results of operations of Borrower, Grantor and the Property being reported upon
and has been prepared in accordance with accounting principles reasonably
acceptable to Lender, consistently applied, (iii) an unqualified opinion of an
accounting firm or other independent certified public accountant reasonably
acceptable to Lender, (iv) a certified rent roll containing current rent, lease
expiration dates and the square footage occupied by each tenant; (v) a schedule
audited by such independent certified public accountant reconciling Net
Operating Income to Net Cash Flow (the "NET CASH FLOW SCHEDULE"), which shall
itemize all adjustments made to Net Operating Income to arrive at Net Cash Flow
deemed material by such independent certified public accountant. Together with
Borrower's and Grantor's annual financial statements, Grantor shall furnish to
Lender an Officer's Certificate certifying as of the date thereof whether there
exists an event or circumstance which constitutes a Default or Event of Default
under the Loan Documents executed and delivered by, or applicable to, Borrower
or Grantor, and if such Default or Event of Default exists, the nature thereof,
the period of time it has existed and the action then being taken to remedy the
same.
46
(c) Grantor will furnish, or cause to be furnished, to Lender on or
before forty five (45) days after the end of each calendar quarter the following
items, accompanied by a certificate of the chief financial officer of Grantor or
indemnitor, as applicable, stating that such items are true, correct, accurate,
and complete and fairly present the financial condition and results of the
operations of Grantor and the Property (subject to normal year-end adjustments)
as applicable: (i) a rent roll for the subject month accompanied by an Officer's
Certificate with respect thereto; (ii) quarterly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar quarter,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund, and
other information necessary and sufficient to fairly represent the financial
position and results of operation of the Property during such calendar month,
and containing a comparison of budgeted income and expenses and the actual
income and expenses together with a detailed explanation of any variances of
five percent (5%) or more between budgeted and actual amounts for such periods,
all in form satisfactory to Lender; (iii) a calculation reflecting the annual
Debt Service Coverage Ratio for the immediately preceding twelve (12) month
period as of the last day of such month accompanied by an Officer's Certificate
with respect thereto; and (iv) a Net Cash Flow Schedule (such Net Cash Flow for
the Grantor may be unaudited if it is certified by an officer of the Grantor).
In addition, such certificate shall also be accompanied by a certificate of the
chief financial officer of Grantor or Indemnitor stating that the
representations and warranties of Grantor set forth in Section 4.1.30(a) are
true and correct as of the date of such certificate.
(d) For the partial year period commencing on the Closing Date, and
for each Fiscal Year thereafter, Grantor shall submit to Lender an Annual Budget
not later than thirty (30) days after the commencement of such period or Fiscal
Year in form reasonably satisfactory to Lender.
(e) Borrower or Grantor shall furnish to Lender, within ten (10)
Business Days after request (or as soon thereafter as may be reasonably
possible), such further detailed information with respect to the operation of
the Property and the financial affairs of Borrower or Grantor as may be
reasonably requested by Lender.
(f) Grantor shall furnish to Lender, within ten (10) Business Days
after Lender's request (or as soon thereafter as may be reasonably possible),
financial and sales information from any Tenant designated by Lender (to the
extent such financial and sales information is required to be provided under the
applicable Lease and same is received by Grantor after request therefor).
(g) Borrower or Grantor will cause Indemnitor to furnish to Lender
annually, within one hundred twenty (120) days following the end of each Fiscal
Year of Indemnitor, financial statements audited by an independent certified
public accountant, which shall include an annual balance sheet and profit and
loss statement of Indemnitor, in the form reasonably required by Lender.
(h) 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 or Grantor's data systems without change or
47
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).
5.1.12 BUSINESS AND OPERATIONS. Grantor will continue to engage in
the businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property. Borrower and Grantor will qualify to do business and will remain in
good standing under the laws of each jurisdiction as and to the extent the same
are required for the ownership, maintenance, management and operation of the
Property.
5.1.13 TITLE TO THE PROPERTY. Grantor will warrant and defend (a)
the title to the Property and every part thereof, subject only to Liens
permitted hereunder (including Permitted Encumbrances) and (b) the validity and
priority of the Liens of the Mortgage and the Assignment of Leases on the
Property, subject only to Liens permitted hereunder (including Permitted
Encumbrances), in each case against the claims of all Persons whomsoever.
Grantor shall reimburse Lender for any losses, costs, damages or expenses
(including reasonable attorneys' fees and court costs) incurred by Lender if an
interest in the Property, other than as permitted hereunder, is claimed by
another Person.
5.1.14 COSTS OF ENFORCEMENT. In the event (a) that the Mortgage
encumbering the Property is foreclosed in whole or in part or that the Mortgage
is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to
the Mortgage encumbering the Property in which proceeding Lender is made a
party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower or Grantor or any of their respective
constituent Persons or an assignment by Borrower or Grantor or any of their
respective constituent Persons for the benefit of its creditors, Borrower or
Grantor, its successors or assigns, shall be chargeable with and agrees to pay
all costs of collection and defense, including reasonable attorneys' fees and
costs, incurred by Lender, Grantor or Borrower in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, together with all required service or use taxes.
5.1.15 ESTOPPEL STATEMENT. (a) After request by Lender, Borrower
and/or Grantor shall within ten (10) days furnish Lender with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the applicable interest rate of the Note, (iv) the date installments of
interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.
(b) Grantor shall use commercially reasonable efforts to deliver to
Lender upon request, tenant estoppel certificates from each commercial tenant
leasing space at the Property in form and substance reasonably satisfactory to
Lender provided that Grantor shall not be required to deliver such certificates
more frequently than one (1) time in any calendar year.
48
(c) Within thirty (30) days of request by Borrower and/or Grantor,
Lender shall deliver to such party a statement setting forth the items described
at (a)(i), (ii), (iii) and (iv) of this Section 5.1.15.
5.1.16 LOAN PROCEEDS. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in Section
2.1.4.
5.1.17 PERFORMANCE BY BORROWER. Borrower and Grantor shall in a
timely manner observe, perform and fulfill each and every covenant, term and
provision of each Loan Document executed and delivered by, or applicable to,
Borrower or Grantor, and shall not enter into or otherwise suffer or permit any
amendment, waiver, supplement, termination or other modification of any Loan
Document executed and delivered by, or applicable to, Borrower or Grantor
without the prior written consent of Lender.
5.1.18 CONFIRMATION OF REPRESENTATIONS. Borrower and Grantor shall
deliver, in connection with any Securitization, (a) one or more Officer's
Certificates certifying as to the accuracy of all representations made by
Borrower and/or Grantor in the Loan Documents as of the date of the closing of
such Securitization, and (b) certificates of the relevant Governmental
Authorities in all relevant jurisdictions indicating the good standing and
qualification of Borrower and/or Grantor and their respective members as of the
date of the Securitization.
5.1.19 NO JOINT ASSESSMENT. Grantor shall not suffer, permit or
initiate the joint assessment of the Property (a) with any other real property
constituting a tax lot separate from the Property, and (b) which constitutes
real property with any portion of the Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such real property portion of the Property.
5.1.20 LEASING MATTERS. Any Leases with respect to the Property
written after the Closing Date for more than the Relevant Leasing Threshold
square footage shall be subject to the prior written approval of Lender, which
approval may be given or withheld in the sole discretion of Lender. Lender shall
approve or disapprove any such Lease within ten (10) Business Days of Lender's
receipt of a final execution draft of such Lease (including all exhibits,
schedules, supplements, addenda or other agreements relating thereto) and a
written notice from Grantor requesting Lender's approval to such Lease, and such
Lease shall be deemed approved, if Lender does not disapprove such Lease within
said ten (10) Business Day period PROVIDED such written notice conspicuously
states, in large bold type, that "PURSUANT TO SECTION 5.1.20 OF THE
LOAN
AGREEMENT, THE LEASE SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE
CONTRARY WITHIN TEN (10) BUSINESS DAYS OF LENDER'S RECEIPT OF SUCH LEASE AND
WRITTEN NOTICE". Grantor shall furnish Lender with executed copies of all
Leases. All renewals of Leases and all proposed Leases shall provide for rental
rates comparable to existing local market rates (unless such rental rates are
otherwise set forth in the Leases executed prior to the Closing Date). All
proposed Leases shall be on commercially reasonable terms and shall not contain
any terms which would materially affect Lender's rights under the Loan
Documents. All Leases executed after the Closing Date shall provide that they
are subordinate to the Mortgage encumbering the Property and that the tenant
thereunder agrees to attorn to Lender or any purchaser at a sale by foreclosure
49
or power of sale. Grantor (i) shall observe and perform the obligations imposed
upon the lessor under the Leases in a commercially reasonable manner; (ii) shall
enforce the terms, covenants and conditions contained in the Leases upon the
part of the tenant thereunder to be observed or performed in a commercially
reasonable manner and in a manner not to impair the value of the Property
involved except that no termination by Grantor or acceptance of surrender by a
tenant of any Lease shall be permitted unless by reason of a tenant default and
then only in a commercially reasonable mariner to preserve and protect the
Property PROVIDED, HOWEVER, that no such termination or surrender of any Lease
covering more than the Relevant Leasing Threshold will be permitted without the
written consent of Lender which consent may be withheld in the sole discretion
of Lender; (iii) shall not collect any of the rents more than one (1) month in
advance (other than security deposits); (iv) shall not execute any other
assignment of lessor's interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (v) shall not alter, modify or change the
terms of the Leases in a manner inconsistent with the provisions of the Loan
Documents without the prior written consent of Lender, which consent may be
withheld in the sole discretion of Lender; and (vi) shall execute and deliver at
the request of Lender all such further assurances, confirmations and assignment
in connection with the Leases as Lender shall from time to time reasonably
require. Notwithstanding the foregoing, Grantor may, without the prior written
consent of Lender, terminate any Lease which demises less than the Relevant
Leasing Threshold under any of the following circumstances: (i) the tenant under
said Lease is in default beyond any applicable grace and cure period, and
Grantor has the right to terminate such Lease; (ii) such termination is
permitted by the terms of the Lease in question and Grantor has secured an
obligation from a third party to lease the space under the Lease to be
terminated at a rental equal to or higher than the rental due under the Lease to
be terminated; and (iii) if the tenant under the Lease to be terminated, has
executed a right under said Lease to terminate its lease upon payment of a
termination fee to Grantor, and has in fact terminated its lease and paid said
fee, Grantor may accept said termination.
5.1.21 ALTERATIONS. Subject to the rights of tenants to make
alterations pursuant to the terms of their respective Leases, Grantor shall
obtain Lender's prior written consent to any alterations to any Improvements,
which consent shall not be unreasonably withheld or delayed except with respect
to alterations that may have a material adverse effect on Grantor's financial
condition, the value of the Property or the Net Operating Income.
Notwithstanding the foregoing, Lender's consent shall not be required in
connection with any alterations that will not have a material adverse effect on
Grantor's financial condition, the value of the Property or the Net Operating
Income, provided that such alterations are made in connection with (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the Closing Date, (b) tenant improvement work performed pursuant to the
terms and provisions of a Lease and not adversely affecting any structural
component of any Improvements, any utility or HVAC system contained in any
Improvements or the exterior of any building constituting a part of any
Improvements, (c) alterations performed in connection with the restoration of
the Property after the occurrence of a casualty in accordance with the terms and
provisions of this Agreement or (d) any structural alteration which costs less
than $50,000.00 in the aggregate for all components thereof which constitute
such alteration or any non-structural alteration which costs less than
$100,000.00 in the aggregate for all components thereof which constitute such
alteration. If the total unpaid amounts due and payable with respect to
alterations to the Improvements at the Property (other than such amounts to be
paid or reimbursed by tenants under the Leases) shall at any time equal or
exceed $350,000.00 (the "THRESHOLD AMOUNT"),
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Grantor, upon Lender's request, shall promptly deliver to Lender as security for
the payment of such amounts and as additional security for Grantor's obligations
under the Loan Documents any of the following: (A) cash, (B) U.S. Obligations,
(C) other securities having a rating acceptable to Lender and that the
applicable Rating Agencies have confirmed in writing will not, in and of itself,
result in a downgrade, withdrawal or qualification of the initial, or, if
higher, then current ratings assigned in connection with any Securitization, or
(D) a completion bond or letter of credit issued by a financial institution
having a rating by Standard & Poor's Ratings Group of not less than A-1+ if the
term of such bond or letter of credit is no longer than three (3) months or, if
such term is in excess of three (3) months, issued by a financial institution
having a rating that is acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization. Such security
shall be in an amount equal to the excess of the total unpaid amounts with
respect to alterations to the Improvements on the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases) over the Threshold
Amount and, if cash, may be applied from time to time, at the option of Grantor,
to pay for such alterations. At the option of Lender, following the occurrence
and during the continuance of an Event of Default, Lender may terminate any of
the alterations and use the deposit to restore the Property to the extent
necessary to prevent any material adverse effect on the value of the Property.
5.1.22 INTENTIONALLY OMITTED.
5.1.23 GROUND LEASE. Borrower shall timely pay all Ground Rents and
other sums due under the Ground Lease and shall timely perform all of its
obligations under the Ground Lease.
Section 5.2 NEGATIVE COVENANTS. From the Closing Date until payment
and performance in full of all obligations of Borrower and/or Grantor under
the Loan Documents or the earlier release of the Lien of the Mortgage
encumbering the Property in accordance with the terms of this Agreement and
the other Loan Documents, Borrower and Grantor each covenants and agrees with
Lender that it will not do, directly or indirectly, any of the following:
5.2.1 OPERATION OF PROPERTY. Grantor shall not, without the
prior consent of Lender, terminate the Management Agreement or otherwise
replace the Manager or enter into any other management agreement with respect
to the Property unless the Manager is in default thereunder beyond any
applicable grace or cure period, in which event no consent by Lender shall be
required. Lender agrees that its consent will not be unreasonably withheld,
delayed or conditioned provided that the Person chosen by Grantor as the
replacement Manager is a Qualifying Manager and provided further that Grantor
shall deliver an acceptable non- consolidation opinion covering such
replacement Manager if such Person was not covered by such opinion delivered
at the closing of the Loan.
5.2.2 LIENS. Grantor shall not, without the prior written consent
of Lender, create, incur, assume or suffer to exist any Lien on any portion of
the Property or permit any such action to be taken, except:
(i) Permitted Encumbrances;
51
(ii) Liens created by or related to Indebtedness permitted
pursuant to the Loan Documents; and
(iii) Liens for Taxes or Other Charges not yet due (or that
Grantor is contesting in accordance with the terms of Section 5.1.2
hereof).
5.2.3 DISSOLUTION. Neither Borrower nor Grantor shall (a) engage
in any dissolution, liquidation or consolidation or merger with or into any
other business entity, (b) in the case of Grantor, engage in any business
activity not related to the ownership and operation of the Property, (c)
transfer, lease or sell, in one transaction or any combination of transactions,
the assets or all or substantially all of the properties or assets of Grantor
except to the extent permitted by the Loan Documents, (d) modify, amend, waive
or terminate its organizational documents or its qualification and good standing
in any jurisdiction or (e) cause the Indemnitor to (i) dissolve, wind up or
liquidate or take any action, or omit to take an action, as a result of which
the Indemnitor would be dissolved, wound up or liquidated in whole or in part,
or (ii) amend, modify, waive or terminate the formation documents of the
Indemnitor, in each case, without obtaining the prior written consent of Lender
or Lender's designee.
5.2.4 CHANGE IN BUSINESS. Borrower shall not enter into any line
of business other than the ownership and operation of the Property, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business.
5.2.5 DEBT CANCELLATION. Neither Borrower nor Grantor shall cancel
or otherwise forgive or release any claim or debt (other than termination of
Leases in accordance herewith) owed to Borrower or Grantor by any Person, except
for adequate consideration and in the ordinary course of Borrower's or Grantor's
business.
5.2.6 AFFILIATE TRANSACTIONS. Neither Borrower nor Grantor shall
enter into, or be a party to, any transaction with an Affiliate of Borrower or
Grantor or any of the partners of Borrower or Grantor except in the ordinary
course of business and on terms which are fully disclosed to Lender in advance
and are no less favorable to Borrower or Grantor or such Affiliate than would be
obtained in a comparable arm's-length transaction with an unrelated third party.
5.2.7 ZONING. Grantor shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender.
5.2.8 ASSETS. Grantor shall not purchase or own any properties
other than the Property owned by Grantor as of the Closing Date as reflected in
the applicable Title Insurance Policy.
5.2.9 DEBT. Neither Borrower nor Grantor shall create, incur or
assume any Indebtedness other than the Debt or the guaranteed obligations under
the Limited Guaranty except to the extent expressly permitted hereby.
52
5.2.10 NO JOINT ASSESSMENT. Grantor shall not suffer, permit or
initiate the joint assessment of the Property with (a) any other real property
constituting a tax lot separate from the Property, or (b) any portion of the
Property which may be deemed to constitute personal property, or any other
procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property.
5.2.11 INTENTIONALLY OMITTED.
5.2.12 ERISA. (a) Neither Borrower nor Grantor shall engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender of any of its rights under the Note, the
Limited Guaranty, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
underERISA.
(b) Each of Borrower and Grantor further covenants and agrees to
deliver to Lender such certifications or other evidence from time to time
throughout the term of the Loan, as requested by Lender in its sole discretion,
that (A) Borrower or Grantor is not and does not maintain an "employee benefit
plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a "governmental plan" within the meaning of Section 3(3) of ERISA; (B)
Borrower or Grantor is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; and (C) one or more of
the following circumstances is true:
(i) Equity interests in Borrower or Grantor are publicly offered
securities, within the meaning of 29 C.F.R. Section 2510.3-l01(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrow Borrower or Grantor er are held by "benefit
plan investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower or Grantor qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29 C.F.R. Section
2510.3-l0l(c) or (e).
5.2.13 TRANSFERS. Unless such action is permitted by the provisions
of this Section 5.2.13, neither Borrower nor Grantor will (i) sell, assign,
convey, transfer or otherwise dispose of its interests in the Property or any
part thereof, (ii) permit any owner, directly or indirectly, of an ownership
interest in the Property, to transfer such interest, whether by transfer of
stock or other interest in Grantor or any entity, or otherwise, (iii) incur
Indebtedness, (iv) mortgage, hypothecate or otherwise encumber or grant a
security interest in the Property or any part thereof, (v) sell, assign, convey,
transfer, mortgage, encumber, grant a security interest in, or otherwise dispose
of any direct or indirect ownership interest in Borrower or Grantor, or permit
any owner of an interest in Borrower or Grantor to do the same, or (vi) file a
declaration of condominium with respect to the Property (any of the foregoing
transactions, a "TRANSFER"). For purposes hereof, a "Transfer" shall not include
(A) any issuance, sale or transfer of interests in Inland Western Retail Real
Estate Trust, Inc., (B) transfer by devise or descent or by operation of law
upon the death of a member of Borrower or Grantor, and (C) a sale, transfer or
hypothecation of a membership interest in Borrower or Grantor, whichever the
case may be, by
53
the current member(s), as applicable, to an immediate family member (i.e.,
parents, spouses, siblings, children or grandchildren) of such member (or a
trust for the benefit of any such persons).
(a) On and after the date that is twelve (12) months following the
Closing Date, Lender shall not withhold its consent to a Transfer of the
Property, provided that the following conditions are satisfied:
(1) the transferree of the Property shall be a Special Purpose Entity
(the "TRANSFEREE") which at the time of such transfer will be in
compliance with the covenants contained in Section 5.1.1 and the
representations contained in 4.1.30 hereof and which shall have
assumed in writing (subject to the terms of Section 9.4 hereof)
and agreed to comply with all the terms, covenants and conditions
set forth in this Loan Agreement and the other Loan Documents,
expressly including the covenants contained in Section 5.1.1 and
the representations contained in 4.1.30 hereof;
(2) if requested by Lender, Grantor shall deliver confirmation in
writing from the Rating Agencies that such proposed Transfer will
not cause a downgrading, withdrawal or qualification of the then
current rating of any securities issued pursuant to such
Securitization;
(3) if Manager does not act as manager of the transferred Property
then the manager of the Property must be a Qualifying Manager;
(4) no Event of Default shall have occurred and be continuing;
(5) if required or requested by any of the Rating Agencies, Grantor
shall deliver a substantive non-consolidation opinion with
respect to Transferee, which opinion shall be acceptable to
Lender in its reasonable discretion;;
(6) Grantor shall have paid (A) an assumption fee equal to one
percent (1.0%) of the then outstanding principal balance of the
Loan, and (B) the reasonable and customary third-party expenses
(including reasonable attorneys' fees and disbursements) actually
incurred by Lender in connection with such Transfer; PROVIDED,
HOWEVER, no assumption fee shall be required for a Transfer of
the Property to a Transferee acceptable to Lender in connection
with a joint venture between Inland Western Retail Real Estate
Trust, Inc. and an institution acceptable to Lender provided
Inland Western Retail Real Estate Trust, Inc., or an Affiliate
wholly-owned (directly or indirectly) by Inland Western Retail
Real Estate Trust, Inc., owns at least twenty percent (20%) of
the ownership interests in such Transferee and for which Inland
Western Retail Real Estate Trust, Inc., or an Affiliate
wholly-owned (directly or indirectly) by Inland Western Retail
Real Estate Trust, Inc., is the managing entity and otherwise
maintains operational and managerial control of such Transferee,
provided that Grantor shall pay all of Lender's reasonable and
54
customary third-party expenses (including reasonable attorneys'
fees and disbursements) actually incurred by Lender in connection
with such Transfer and a processing fee of $5,000.
Lender shall approve or disapprove any proposed Transfer governed by this
Section 5.2.13(a) within thirty (30) days of Lender's receipt of a written
notice from Grantor requesting Lender's approval, provided such notice includes
all information necessary to make such decision, and further provided that such
written notice from Grantor shall conspicuously state, in large bold type, that
"PURSUANT TO SECTION 5.2.13 OF THE LOAN AGREEMENT, A RESPONSE IS REQUIRED WITHIN
THIRTY (30) DAYS OF LENDER'S RECEIPT OF THIS WRITTEN NOTICE". If Lender fails to
disapprove any such matter within such period, Grantor shall provide a second
written notice requesting approval, which written notice shall conspicuously
state, in large bold type, that "PURSUANT TO SECTION 5.2.13 OF THE LOAN
AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF LENDER DOES
NOT RESPOND TO THE CONTRARY WITHIN TEN (10) DAYS OF LENDER'S RECEIPT OF THIS
WRITTEN NOTICE". Thereafter, if Lender does not disapprove such matter within
said ten (10) day period such matter shall be deemed approved.
(b) On and after the date that is twelve (12) months following the
Closing Date, Lender shall not withhold its consent to, and shall not charge an
assumption fee in connection with, (1) a Transfer of up to, in the aggregate,
forty-nine percent (49%) of the direct or indirect ownership interests in
Grantor, or (2) a Transfer of greater than forty-nine percent (49%) of the
direct or indirect ownership interest in Grantor, PROVIDED that (A) such
transfer is to a Qualified Entity (as defined below), and (B) Grantor shall pay
all of Lender's reasonable and customary third-party expenses (including
reasonable attorneys' fees and disbursements) actually incurred by Lender in
connection with such Transfer and a processing fee of $5,000. For purposes of
this Agreement, a "QUALIFIED ENTITY" shall mean an entity (x) with a net worth
of $200,000,000 or more, (y) with sufficient experience (determined by Lender in
its reasonable discretion) in the ownership and management of properties similar
to the Property, and (z) which owns or manages retail properties containing at
least 1,000,000 square feet of gross leasable area. If required or requested by
any of the Rating Agencies, Grantor shall deliver a substantive
non-consolidation opinion with respect to any party not now owning more than 49%
of the ownership interests in Grantor acquiring more than 49% of the ownership
interests in Grantor.
(c) Notwithstanding anything in this Section 5.2.13 to the contrary,
on or after the date that is twelve (12) months after the Closing Date, Grantor
shall be permitted to Transfer the entire Property in a single transaction to
one newly-formed Special Purpose Entity which shall be wholly-owned subsidiary
of Inland Western Retail Real Estate Trust, Inc. ("PERMITTED AFFILIATE
TRANSFEREE") which shall be approved by Lender in its reasonable discretion
("PERMITTED AFFILIATE TRANSFER"), provided (1) no Event of Default shall have
occurred and be continuing, (2) the creditworthiness of Inland Western Retail
Real Estate Trust, Inc., as applicable, has not deteriorated, in the sole
discretion of Lender, from the Closing Date to the date of the proposed
Transfer, and (3) Grantor shall have paid all reasonable and customary third
party expenses (including reasonable attorneys' fees and disbursements) actually
incurred by Lender in connection with such Transfer (but not. any assumption or
processing fee).
55
(d) Grantor, without the consent of Lender, may grant easements,
restrictions, covenants, reservations and rights of way in the ordinary course
of business for access, parking, water and sewer lines, telephone and telegraph
lines, electric lines and other utilities or for other similar purposes,
provided that no transfer, conveyance or encumbrance shall materially impair the
utility and operation of the Property or materially adversely affect the value
of the Property or the Net Operating Income of the Property. If Grantor shall
receive any consideration in connection with any of said described transfers or
conveyances, Grantor shall have the right to use any such proceeds in connection
with any alterations performed in connection therewith, or required thereby. In
connection with any transfer, conveyance or encumbrance permitted above, the
Lender shall execute and deliver any instrument reasonably necessary or
appropriate to evidence its consent to said action or to subordinate the Lien of
the Mortgage to such easements, restrictions, covenants, reservations and rights
of way or other similar grants upon receipt by the Lender of: (A) a copy of the
instrument of transfer; and (B) an Officer's Certificate stating with respect to
any transfer described above, that such transfer does not materially impair the
utility and operation of the Property or materially reduce the value of the
Property or the Net Operating Income of the Property.
(e) Notwithstanding any provision herein to the contrary, in the event
of any conflict between the provisions of this Agreement and the provisions of
the Ground Lease with respect to Restoration, the provisions of the Ground Lease
shall govern.
ARTICLE VI
INSURANCE; CASUALTY; CONDEMNATION
Section 6.1 INSURANCE. (a) Grantor shall obtain and maintain, or shall
cause Anchor Tenant to maintain, insurance for Grantor and the Property
providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and the
Personal Property, including contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent
(100%) of the "Full Replacement Cost," which for purposes of this Agreement
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing an agreed amount endorsement with respect to
the Improvements and Personal Property waiving all co-insurance provisions;
(C) providing for no deductible in excess of Ten Thousand and No/100
Dollars ($10,000) for all such insurance coverage; and (D) containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses. In addition, Grantor shall obtain: (y)
if any portion of the Improvements is currently or at any time in the
future located in a federally designated "special flood hazard area", flood
hazard insurance in an amount equal to the lesser of (1) the outstanding
principal balance of the Note or (2) the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act
of 1994, as each may be amended or such greater amount as Lender shall
require; and (z) earthquake insurance
56
in amounts and in form and substance satisfactory to Lender in the event
the Property is located in an area with a high degree of seismic activity,
provided that the insurance pursuant to clauses (y) and (z) hereof shall be
on terms consistent with the comprehensive all risk insurance policy
required under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in
or about the Property, such insurance (A) to be on the so-called
"occurrence" form with a combined limit, including umbrella coverage, of
not less than Five Million and No/100 Dollars ($5,000,000.00); (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 Mortgage to the extent the same
is available;
(iii) business income insurance (A) with loss payable to Lender;
(B) covering all risks required to be covered by the insurance provided for
in subsection (i) above; (C) covering rental losses or business
interruption, as may be applicable, for a period of at least eighteen (18)
months after the date of the casualty and containing an extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and Personal Property has been repaired, the continued loss of
income will be insured until such income either returns to the same level
it was at prior to the loss, or the expiration of six (6) months from the
date that the Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period; and (D) in an annual amount equal to
(100%) of the rents or estimated gross revenues from the operation of the
Property (as reduced to reflect expenses not incurred during a period of
Restoration). The amount of such business income insurance shall be
determined prior to the date hereof and at least once each year thereafter
based on Grantor's reasonable estimate of the gross income from the
Property for the succeeding twelve (12) month period. All proceeds payable
to Lender pursuant to this subsection shall be held by Lender and shall be
applied to the obligations secured by the Loan Documents from time to time
due and payable hereunder and under the Note or the Limited Guaranty;
PROVIDED, HOWEVER, that nothing herein contained shall be deemed to relieve
Grantor of its obligations to pay the obligations guarantied by the Limited
Guaranty on the respective dates of payment provided for in the Note and
the other Loan Documents except to the extent such amounts are actually
paid out of the proceeds of such business income insurance;
(iv) at all times during which structural construction, repairs
or alterations are being made with respect to the Improvements, and only if
the Property coverage form does not otherwise apply, (A) owner's contingent
or protective liability insurance covering claims not covered by or under
the terms or provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in subsection (i)
above written in a so-called builder's risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
subsection (i) above,
57
(3) including permission to occupy the Property, and (4) with an agreed
amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of
the State;
(vi) comprehensive boiler and machinery insurance, if applicable,
in amounts as shall be reasonably required by Lender on terms consistent,
with the commercial property insurance policy required under subsection (i)
above;
(vii) umbrella liability insurance in an amount not less than
Twenty Five Million and No/100 Dollars ($25,000,000.00) per occurrence on
terms consistent with the commercial general liability insurance policy
required under subsection (ii) above;
(viii) if any of the policies of insurance covering the risks
required to be covered under subsections (i) through (vii) above contains
an exclusion from coverage for acts of terrorism, Grantor shall obtain and
maintain a separate policy providing such coverages in the event of any act
of terrorism, provided such coverage is commercially available for
properties similar to the Property and located in or around the region in
which the Property is located.
(ix) upon sixty (60) days' written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time
are commonly insured against for property similar to the Property located
in or around the region in which the Property is located.
(b) All insurance provided for in Section 6.1 (a) shall be obtained
under valid and enforceable policies (collectively, the "POLICIES" or in the
singular, the "POLICY"), and shall be subject to the 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 rating of "A:X" or
better in the current Best's Insurance Reports and a claims paying ability
rating of "AA" or better by at least two (2) of the Rating Agencies including,
(i) Standard & Poor's Ratings Group, and (ii) ▇▇▇▇▇'▇ Investors Services, Inc.
if ▇▇▇▇▇'▇ Investors Service, Inc. is rating the Securities. The Policies
described in Section 6.1 (other than those strictly limited to liability
protection) shall designate Lender as loss payee. Not less than thirty (30) days
prior to the expiration dates of the Policies theretofore furnished to Lender,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to Lender of payment of the premiums due thereunder (the "INSURANCE
PREMIUMS"), shall be delivered by Grantor to Lender.
(c) Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 6.1(a).
(d) All Policies of insurance provided for or contemplated by Section
6.1(a), except for the Policy referenced in Section 6.1(a)(v), shall name
Grantor, or the Tenant, as the insured and Lender as the additional insured, as
its interests may appear, and in the case of property damage, boiler and
machinery, flood and earthquake insurance, shall contain a so-called
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New York standard non-contributing mortgagee clause in favor of Lender providing
that the loss thereunder shall be payable to Lender.
(e) All Policies of insurance provided for in Section 6.1(a) shall
contain clauses or endorsements to the effect that:
(i) no act or negligence of Grantor, or anyone acting for
Grantor, or of any Tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of
the insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;
(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty
(30) days' 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 fifteen (15) 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, after ten (10) Business Days written notice to Grantor, to take such
action as Lender deems necessary to protect its interest in the Property,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole 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 Grantor to Lender upon demand and, until paid, shall be
secured by the Mortgage and shall bear interest at the Default Rate. If Grantor
fails in so insuring the Property or in so assigning and delivering the
Policies, Lender may, at its option, obtain such insurance using such carriers
and agencies as Lender shall elect from year to year and pay the premiums
therefor, and Grantor will reimburse Lender for any premium so paid, with
interest thereon as stated in the Note from the time of payment, on demand, and
the amount so owning to Lender shall be secured by the Mortgage. The insurance
obtained by Lender may, but need not, protect Grantor's interest and the
coverage that Lender purchases may not pay any claim that Grantor makes or any
claim that is made against Grantor in connection with the Property.
Section 6.2CASUALTY. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a "CASUALTY"), Grantor (a) shall
give to Lender prompt notice of such damage reasonably estimated by Grantor to
cost more than One Hundred Thousand Dollars ($100,000.00) to repair, and (b)
shall promptly commence and diligently prosecute the completion of the repair
and restoration of the Property as nearly as possible to the condition the
Property was in immediately prior to such fire or other casualty, with such
alterations as may be reasonably approved by Lender (a "RESTORATION") and
otherwise in accordance with Section 6.4. Grantor shall pay all costs of such
Restoration whether or not such costs are covered by insurance. Lender may, but
shall not be obligated to make proof of loss if not made promptly by Grantor.
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Section 6.3 CONDEMNATION. Grantor shall promptly give Lender notice of
the actual or threatened commencement of any proceeding for the Condemnation of
the 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 Grantor shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Grantor shall, at its
expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking). Grantor shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the Debt
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 Debt. 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 the Property or any portion thereof is taken by a condemning authority,
Grantor shall promptly commence and diligently prosecute the Restoration of the
Property and otherwise comply with the provisions of Section 6.4. If the
Property is sold, through foreclosure or otherwise, prior to the receipt by
Lender of the Award, Lender shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to receive the
Award, or a portion thereof sufficient to pay the Debt.
Section 6.4 RESTORATION. The following provisions shall apply in
connection with the Restoration of the Property:
(a) If the Net Proceeds shall be less than Relevant Restoration
Threshold and the costs of completing the Restoration shall be less than the
Relevant Restoration Threshold, the Net Proceeds will be disbursed by Lender to
Grantor upon receipt, provided that all of the conditions set forth in clauses
(A), (E), (F), (G), (H), (J) and (L) of Section 6.4(b)(i) below are met and
Grantor delivers to Lender a written undertaking to expeditiously commence and
to satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Agreement.
(b) If the Net Proceeds are equal to or greater than the Relevant
Restoration Threshold or the costs of completing the Restoration is equal to or
greater than the Relevant Restoration Threshold, then in either case, Lender
shall make the Net Proceeds available for the Restoration in accordance with the
provisions of this Section 6.4(b). The term "NET PROCEEDS" for purposes of this
Section 6.4 shall mean: (x) the net amount of all insurance proceeds received by
Lender pursuant to Section 6.1 (a)(i), (iv), (vi) and (viii) as a result of such
damage or destruction, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
same ("INSURANCE PROCEEDS"), or (y) the net amount of the Award, after deduction
of its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same ("CONDEMNATION PROCEEDS"), whichever
the case may be.
(i) The Net Proceeds shall be made available to Grantor for
Restoration provided that each of the following conditions are met:
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(A) no Event of Default shall have occurred and be
continuing;
(B)(1) in the event the Net Proceeds are Insurance Proceeds,
and (x) less than twenty-five percent (25%) of the total floor
area of the Improvements on the Property has been damaged,
destroyed or rendered unusable as a result of such fire or other
casualty, or (y) Grantor is required under a Lease exceeding the
Relevant Leasing Threshold to use the Net Proceeds for the
restoration of the Property, or (2) in the event the Net Proceeds
are Condemnation Proceeds, and (x) less than ten percent (10%) of
the land constituting the Property is taken, and such land is
located along the perimeter or periphery of the Property, and no
portion of the improvements is located on such land, or (y)
Grantor is required under a Lease exceeding the Relevant Leasing
Threshold to use the Net Proceeds for the restoration of the
Property;
(C) Leases demising in the aggregate a percentage amount
equal to or greater than the Rentable Space Percentage of the
total rentable space in the Property which has been demised under
executed and delivered Leases in effect as of the date of the
occurrence of such fire or other casualty or taking, whichever
the case may be, 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, and will make all necessary repairs
and restorations thereto at their sole cost and expense. The term
"RENTABLE SPACE PERCENTAGE" shall mean (x) in the event the Net
Proceeds are Insurance Proceeds, a percentage amount equal to
fifty percent (50%) and (y) in the event the Net Proceeds are
Condemnation Proceeds, a percentage amount equal to fifty percent
(50%);
(D) Grantor shall commence the Restoration as soon as
reasonably practicable (but in no event later than ninety (90)
days after such damage or destruction or taking, whichever the
case may be, occurs) and shall diligently 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 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
6.1(a)(iii), if applicable, or (3) by other funds of Grantor;
(F) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) the Maturity
Date, (2) the earliest date required for such completion under
the terms of any Leases, (3) such time as may be required under
applicable zoning law, ordinance, rule or regulation in order to
repair and restore the Property to the condition it
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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 6.l(a)(iii);
(G) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable
zoning laws, ordinances, rules and regulations provided, however,
that compliance with such zoning laws, ordinances, rules and
regulations (including, without limitation, parking requirements)
will not require restoration of the Improvements or the Property
to a size, condition, or configuration materially different than
that which existed immediately prior to such Casualty or taking;
(H) the Restoration shall be done and completed by Grantor
in an expeditious and diligent fashion and in compliance with all
applicable governmental laws, rules and regulations (including,
without limitation, all applicable environmental laws);
(I) such fire or other casualty or taking, as applicable,
does not result in the loss of access to the Property or the
related Improvements;
(J) the Debt Service Coverage Ratio, after giving effect to
the Restoration, shall be equal to or greater than 2.39:1.0;
(K) Grantor shall deliver or cause to be delivered to Lender
a signed detailed budget approved in writing by Grantor's
architect or engineer stating the entire cost of completing the
Restoration, which budget should be consistent with restoration
budgets of similar retail properties then owned and operated by
nationally recognized owners and operators of retail properties
located in the areas in which the Property is located; and
(L) the Net Proceeds together with any cash or cash
equivalent deposited by Grantor 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
account and, until disbursed in accordance with the provisions of this
Section 6.4(b), shall constitute additional security for the Debt and other
obligations under the Loan Documents. The Net Proceeds shall be disbursed
by Lender to, or as directed by, Grantor 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 to be paid
for out of the requested disbursement in connection with the Restoration
have been performed, 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
Property which have not either been fully
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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"), such review and acceptance not to be unreasonably
withheld or delayed. 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, such review
and acceptance not to be unreasonably withheld or delayed. All costs and
expenses incurred by Lender in connection with making the Net Proceeds
available for the Restoration including, without limitation, reasonable
counsel fees and disbursements and the Casualty Consultant's fees, shall be
paid by Grantor.
(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 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
6.4(b), be less than the amount actually held back by Grantor 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 6.4(b) and that all approvals necessary
for the re-occupancy and use of the 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 the Title Insurance
Policy insuring the continued priority of the lien of the 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.
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(v) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable 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 Casually Consultant to be incurred in
connection with the completion of the Restoration, Grantor shall deposit
the deficiency (the "NET PROCEEDS DEFICIENCY") with Lender before any
further disbursement of the Net Proceeds shall be made. The Net Proceeds
Deficiency deposited with Lender shall be held by Lender and shall be
disbursed for costs actually incurred in connection with the Restoration on
the same conditions applicable to the disbursement of the Net Proceeds, and
until so disbursed pursuant to this Section 6.4(b) shall constitute
additional security for the Debt 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 6.4(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 remitted by Lender to Grantor, 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 Grantor as excess Net Proceeds pursuant to
Section 6.4(b)(vii) may be retained and applied by Lender toward the payment of
the Debt whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper (provided no
Event of Default exists, such Grantor shall not be required to pay any
Prepayment Consideration in connection with such payment), or, at the discretion
of Lender, the same may be paid, either in whole or in part, to Grantor for such
purposes as Lender shall designate, in its discretion.
(d) In the event of foreclosure of the Mortgage with respect to the
Property, or other transfer of title to the Property in extinguishment in whole
or in part of the Debt all right, title and interest of Grantor in and to the
Policies that are not blanket Policies then in force concerning the Property and
all proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title.
(e) Lender shall with reasonable promptness following any Casualty or
Condemnation notify Grantor whether or not Net Proceeds are required to be made
available to Grantor for restoration pursuant to this Section 6.4. All Net
Proceeds not required to be made available for Restoration shall be retained and
applied by Lender in accordance with SECTION 2.3.2(a) hereof (a "NET PROCEEDS
PREPAYMENT"). If such Net Proceeds Prepayment shall be equal to or greater than
FORTY TWO MILLION and 00/100 Dollars ($42,000,000.00), Borrower shall have the
right to elect to prepay the remaining outstanding principal balance of
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the Note (a "CASUALTY/CONDEMNATION PREPAYMENT") in accordance with SECTION
2.3.2(b) hereof upon satisfaction of the following conditions: (i) within thirty
(30) days following the date of the Net Proceeds Prepayment, Borrower shall
provide Lender with written notice of Borrower's intention to pay the Note in
full, (ii) Borrower shall prepay the Note in accordance with Section 2.3.2(b)
hereof on or before the second Payment Date occurring following the date of the
Net Proceeds Prepayment, and (iii) no Event of Default shall exist on the date
of such Casualty/Condemnation Prepayment. Notwithstanding anything in Section
6.2 or Section 6.3 to the contrary, Borrower shall have no obligation to
commence Restoration of the Property upon delivery of the written notice set
forth in clause (i) of the preceding sentence (unless Borrower subsequently
shall fail to satisfy the requirement of clause (ii) of the preceding sentence).
ARTICLE VII
RESERVE FUNDS
Section 7.1REQUIRED REPAIR FUNDS.
7.1.1 DEPOSITS. Grantor shall perform the repairs at the Property, if
any, as more particularly set forth on SCHEDULE III hereto (such repairs
hereinafter referred to as "REQUIRED REPAIRS") within nine (9) months from the
Closing Date, or such earlier time as specified on SCHEDULE III. If Grantor has
not delivered to Lender evidence reasonably satisfactory to Lender that it has
completed all Required Repairs on or before the date that is nine (9) months
from the Closing Date, or such earlier time as specified on SCHEDULE III,
Grantor shall deposit with Lender the amount for the Property set forth on such
SCHEDULE III hereto, if any (less the amount allocated to the performance of
Required Repairs for which evidence of completion has been delivered to Lender),
to perform the Required Repairs for the Property. Amounts so deposited with
Lender, if any, shall be held by Lender in an interest bearing account. Amounts
so deposited, if any, shall hereinafter be referred to as Grantor's "REQUIRED
REPAIR FUND" and the account, if any, in which such amounts are held shall
hereinafter be referred to as Grantor's "REQUIRED REPAIR ACCOUNT". It shall be
an Event of Default under this Agreement if Grantor does not either (i) does not
deposit with Lender the Required Repair Fund as set forth above, or (ii)
complete the Required Repairs at the Property within twelve (12) months from the
Closing Date. 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
the Property or toward payment of the Debt in such order, proportion and
priority as Lender may determine in Us 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.
7.1.2 RELEASE OF REQUIRED REPAIR FUNDS. Lender shall disburse to
Grantor the Required Repair Funds from the Required Repair Account from time to
time upon satisfaction by Grantor of each of the following conditions: (i)
Grantor shall submit a written request for payment to Lender at least fifteen
(15) days prior to the date on which Grantor requests such payment be made and
specifies the Required Repairs to be paid, (ii) 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, (iii) Lender shall have
received a certificate from Grantor (A) stating that all Required Repairs at the
Property to be funded by the requested disbursement have
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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, (B) identifying each Person that supplied materials or labor in
connection with the Required Repairs performed at the Property to be funded by
the requested disbursement under a contract in excess of $50,000, and (C)
stating that each Person who has supplied materials or labor in connection with
the Required Repairs to be funded by the requested disbursement 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,
(iv) at Lender's option, a title search for the Property indicating that the
Property is free from all liens, claims and other encumbrances not previously
approved by Lender, and (v) Lender shall have received such other evidence as
Lender shall reasonably request that the Required Repairs at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Grantor. Lender shall not be required to
make disbursements from the Required Repair Account with respect to the Property
more than once each calendar month and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 7.1.2.
Section 7.2TAX AND INSURANCE ESCROW FUND.
Borrower or Grantor shall pay to Lender on each Payment Date (a)
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 (b) 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 are hereinafter called the "TAX
AND INSURANCE ESCROW FUND"). The Ground Rent 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 or Grantor to Lender. Lender will apply the Tax and Insurance Escrow
Fund to payments of Taxes and Insurance Premiums required to be made by Grantor
pursuant to this Agreement and under the Mortgage. 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) or
from Grantor 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, provided, however, Lender shall use reasonable
efforts to pay such real property taxes sufficiently early to obtain the benefit
of any available discounts of which it has knowledge. If the amount of the Tax
and Insurance Escrow Fund shall exceed the amounts due for Taxes and Insurance
Premiums, Lender shall, in its sole discretion, return any excess to Grantor or
credit such excess against future payments to be made to the Tax and Insurance
Escrow Fund. The Tax and Insurance Escrow Fund shall be held by Lender in an
interest-bearing account and shall at Lender's option be held in Eligible
Account at an Eligible Institution. Any interest earned on said account shall
accrue in said account for the benefit of Grantor, but shall remain in and
constitute part of the Tax and Insurance Escrow Fund, and shall be disbursed in
accordance with the terms hereof. Any amount remaining in the Tax and Insurance
Escrow Fund after the Debt has been paid in
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full shall be returned to Grantor. In allocating such excess, Lender may deal
with the Person shown on the records of Lender to be the owner of the Property.
If at any time Lender reasonably determines that the Tax and Insurance Escrow
Fund is not or will not be sufficient to pay Taxes or Insurance Premiums by the
dates set forth above. Lender shall notify Grantor of such determination and
Borrower or Grantor 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 or Insurance Premiums.
Notwithstanding anything to the contrary hereinbefore contained, in the
event that Grantor provides (1) evidence satisfactory to Lender that the
Property is insured in accordance with SECTION 6.1 of this Agreement and (2)
evidence satisfactory to Lender that the Taxes for the Property have been paid
in accordance with the requirements set forth in this Agreement, Lender will
waive the requirement set forth herein for Borrower or Grantor to make deposits
into the Tax and Insurance Escrow Fund for the payment of Insurance Premiums and
for payment of such Taxes, provided, however, Lender expressly reserves the
right to require Borrower or Grantor to make deposits to the Tax and Insurance
Escrow Fund for the payment of Insurance Premiums if at any time the Property is
not insured in accordance with SECTION 6.1 of this Agreement or Taxes are not
paid in accordance with the requirements of this Agreement.
Section 7.3REPLACEMENTS AND REPLACEMENT RESERVE.
Section 7.3.1 REPLACEMENT RESERVE FUND. Borrower or Grantor shall pay
to Lender on the Closing Date and on each Payment Date one twelfth 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 Property during the calendar year (collectively, the "REPLACEMENTS"),
which Replacement Reserve Monthly Deposit shall be in an amount equal to no less
than $0.15 per year per square foot of gross leasable area. 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 Property, Any amount held in the Replacement
Reserve Account and allocated for the Property shall be retained by Lender in an
interest bearing account, or, at the option of Lender, in an Eligible Account at
an Eligible Institution; PROVIDED, HOWEVER, that, any interest earned on said
account shall accrue in said account for the benefit of Borrower, but shall
remain in and constitute part of the Replacement Reserve Fund, and shall be
disbursed in accordance with the terms hereof.
Notwithstanding anything to the contrary in this Section 7.3, Borrower
shall not be required to make Replacement Reserve Monthly Deposits, provided
that: (i) no Event of Default shall have occurred; and (ii) Borrower makes all
necessary Replacements and otherwise maintains the Property to Lender's
satisfaction. Upon notice from Lender following: (a) an Event of Default; or (b)
the failure of Borrower to make necessary Replacements or otherwise maintain the
Property to Lender's satisfaction, Borrower or Grantor shall begin to deposit
the
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Replacement Reserve Monthly Deposit into the Replacement Reserve Fund beginning
on the Payment Date (as defined herein) immediately following the date of such
notice.
Section 7.3.2 DISBURSEMENTS FROM REPLACEMENT RESERVE ACCOUNT.
(a) Lender shall make disbursements from the Replacement Reserve
Account to pay Grantor only for the costs of the Replacements. Lender shall not
be obligated to make disbursements from the Replacement Reserve Account to
reimburse Grantor for the costs of routine maintenance to the Property or for
costs which are to be reimbursed from the Required Repair Fund (if any).
(b) Lender shall, upon written request from Grantor and satisfaction
of the requirements set forth in this Section 7.3.2, disburse to Grantor amounts
from the Replacement Reserve Account necessary to pay for the actual approved
costs of Replacements or to reimburse Grantor therefor, upon completion of such
Replacements (or, upon partial completion in the case of Replacements made
pursuant to Section 7.3.2(f)) 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.
(c) 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 Grantor shall certify that all Replacements have been made in
accordance with all applicable Legal Requirements of any Governmental Authority
having jurisdiction over the Property to which the Replacements are being
provided and, unless Lender has agreed to issue joint checks as described below,
each request shall include evidence of payment of all such amounts. Each request
for disbursement shall include copies of invoices for all items or materials
purchased and all contracted labor or services provided. Except as provided in
Section 7.3.2(e), each request for disbursement from the Replacement Reserve
Account shall be made only after completion of the Replacement for which
disbursement is requested. Grantor shall provide Lender evidence of completion
satisfactory to Lender in its reasonable judgment.
(d) Grantor 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 Grantor, Lender will issue joint checks, payable to Grantor 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 Person
receiving payment prior to Lender's disbursement from the Replacement Reserve
Account. In addition, as a condition to any disbursement, Lender may require
Grantor to obtain lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater
than $100,000 for completion of its work or delivery of its materials. Any lien
waiver delivered hereunder shall conform to the requirements of applicable law
and
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shall cover all work performed and materials supplied (including equipment and
fixtures) for the 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).
(e) If (i) the cost of a Replacement exceeds $100,000, (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 Property and are properly secured or have been installed in the 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.
(f) Grantor 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 $5,000.00.
Section 7.3.3 PERFORMANCE OF REPLACEMENTS.
(g) Grantor shall make Replacements when required in order to keep the
Property in condition and repair consistent with other first class, full service
retail properties in the same market segment in the metropolitan area in which
the Property is located, and to keep the Property or any portion thereof from
deteriorating. Grantor shall complete all Replacements in a good and workmanlike
manner as soon as practicable following the commencement of making each such
Replacement.
(h) 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 under contracts for an
amount in excess of $100,000 in connection with the Replacements performed by
Grantor. Upon Lender's request, Grantor shall assign any contract or subcontract
to Lender.
(i) 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, and
such failure continues to exist for more than thirty (30) days after notice from
Lender to Grantor, 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
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Replacement, without providing any prior notice to Grantor and to exercise any
and all other remedies available to Lender upon an Event of Default hereunder.
(j) In order to facilitate Lender's completion or making of the
Replacements pursuant to Section 7.3.3(c) above, Grantor grants Lender the right
to enter onto the Property and perform any and all work and labor necessary to
complete or make the Replacements and/or employ watchmen to protect the Property
from damage, subject to the rights of Tenants. 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 and guarantied by the Limited Guaranty. For this
purpose Grantor 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 Grantor. Such power of attorney shall be deemed to
be a power coupled with an interest and cannot be revoked but shall only be
effective following an Event of Default. Grantor 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 the 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 Grantor which may be required by
any of the contract documents; (vi) to prosecute and defend all actions or
proceedings in connection with the Property or the rehabilitation and repair of
the Property; and (vii) to do any and every act which Grantor might do in its
own behalf to fulfill the terms of this Agreement.
(k) Nothing in this Section 7.3.3 shall: (i) make Lender responsible
for making or completing the Replacements; (ii) require Lender to expend funds
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 Grantor additional sums to make or complete any Replacement.
(l) Grantor shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties making Replacements pursuant to this Section 7.3.3
to enter onto the Property during normal business hours (subject to the rights
of tenants under their 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 the Property,
and to complete any Replacements made pursuant to this Section 7.3.3. Grantor
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 7.3.3(f) or the completion of
Replacements pursuant to this Section 7.3.3.
(m)Lender may require an inspection of the Property at Grantor's
expense prior to making a monthly disbursement in excess of $10,000 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
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qualified professional acceptable to Lender prior to the disbursement of any
amounts from the Replacement Reserve Account. Grantor shall pay the expense of
the inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional.
(n) 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 mechanic's, materialman's or
other liens (except for those Liens existing on the date of this Agreement which
have been approved in writing by Lender).
(o) Before each disbursement from the Replacement Reserve Account,
Lender may require Grantor to provide Lender with a search of title to the
Property effective to the date of the disbursement, which search shows that no
mechanic's or materialmen's liens or other liens of any nature have been placed
against the Property since the date of recordation of the Mortgage and that
title to the Property is free and clear of all Liens (other than the lien of the
Mortgage and any other Liens previously approved in writing by Lender, if any).
(p) All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.
(q) In addition to any insurance required under the Loan Documents,
Grantor 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.
Section 7.3.4 FAILURE TO MAKE REPLACEMENTS. (a) It shall be an Event of
Default under this Agreement if Grantor fails to comply with any provision of
this Section 7.3 and such failure is not cured within thirty (30) days after
notice from Lender; PROVIDED, HOWEVER, if such failure is not capable of being
cured within said thirty (30) day period, then provided that Grantor commences
action to complete such cure and thereafter diligently proceeds to complete such
cure, such thirty (30) day period shall be extended for such time as is
reasonably necessary for Grantor, in the exercise of due diligence, to cure such
failure, but such additional period of time shall not exceed sixty (60) days.
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 7.3.3, or for
any other repair or replacement to the Property or toward payment of the Debt in
such order, proportion and priority as Lender may determine in its sole
discretion. Lender's right to withdraw and apply the Replacement Reserve Funds
shall be in addition to all other rights and remedies provided to Lender under
this Agreement and the other Loan Documents.
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(s) 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 Debt or in any specific order or priority.
Section 7.3.5 BALANCE IN THE REPLACEMENT RESERVE ACCOUNT. The insufficiency
of any balance in the Replacement Reserve Account shall not relieve Grantor from
its obligation to fulfill all preservation and maintenance covenants in the Loan
Documents.
Section 7.3.6 INDEMNIFICATION. Grantor 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 unless the same are
solely due to gross negligence or willful misconduct of Lender. Grantor shall
assign to Lender all rights and claims Grantor 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.
Section 7.4GROUND RENT RESERVE. Borrower or Grantor shall pay to
Lender on each Payment Date one-twelfth of the Ground Rent 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 Ground Rent at least
thirty (30) days prior to their respective due dates (said amounts (hereinafter
called the "GROUND RENT ESCROW FUND"). The Ground Rent 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 or Grantor to Lender. Lender will apply the Ground Rent Escrow
Fund to payments of Ground Rent required to be made by Grantor pursuant to this
Agreement and under the Ground Lease. If the amount of the Ground Rent Escrow
Fund shall exceed the amounts due for Ground Rent, Lender shall, in its sole
discretion, return any excess to Grantor or credit such excess against future
payments to be made to the Ground Rent Escrow Fund. The Ground Rent Escrow Fund
shall be held by Lender in an interest-bearing account and shall at Lender's
option be held in Eligible Account at an Eligible Institution. Any interest
earned on said account shall accrue in said account for the benefit of Grantor,
but shall remain in and constitute part of the Ground Rent Escrow Fund, and
shall be disbursed in accordance with the terms hereof. Any amount remaining in
the Ground Rent Escrow Fund after the Debt has been paid in full shall be
returned to Grantor. In allocating such excess, Lender may deal with the Person
shown on the records of Lender to be the owner of the Property. If at any time
Lender reasonably determines that the Ground Rent. Escrow Fund is not or will
not be sufficient to pay Ground Rent by the dates set forth above, Lender shall
notify Grantor of such determination and Borrower or Grantor shall pay to Lender
the amount that Lender estimates is sufficient to make up the deficiency within
thirty (30) days of Lender's request.
Notwithstanding anything to the contrary hereinbefore contained, in the
event that Grantor provides evidence satisfactory to Lender that the Ground Rent
for the Property have been timely paid in accordance with the requirements set
forth in the Ground Lease and in this Agreement, Lender will waive the
requirement set forth herein for Borrower or Grantor to make deposits into the
Ground Rent Escrow Fund for the payment of Ground Rent, provided, however,
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Lender expressly reserves the right to require Borrower or Grantor to make
deposits to the Ground Rent Escrow Fund for the payment of Ground Rent if at any
time Lender determines that Ground Rent has not been paid in accordance with the
requirements of the Ground Lease or this Agreement.
Section 7.5EXCESS CASH RESERVE.
The Excess Cash Flow Collateral Reserve shall be held by Lender as additional
collateral for the Loan, and shall be disbursed to Borrower upon the earlier of
(i) payment in full of the Debt, and (ii) the occurrence of a Cash Management
Termination Event, upon which Lender shall disburse to Borrower all amounts in
the Excess Cash Flow Collateral Reserve.
Section 7.6REMAINING CONSTRUCTION RESERVE.
7.6.1 As of the date hereof, Lender acknowledges that the work
identified on SCHEDULE VII hereto (the "REMAINING CONSTRUCTION") remains
incomplete. Grantor shall perform the Remaining Construction within six (6)
months from the Closing Date. If Grantor has not delivered to Lender evidence
reasonably satisfactory to Lender that it has completed all Remaining
Construction on or before the date that is six (6) months from the Closing Date,
Grantor shall deposit with Lender 125% of the estimated amount complete such
Remaining Construction as set forth on such SCHEDULE VII hereto, (less the
amount allocated to the performance of Remaining Construction for which evidence
of completion has been delivered to Lender), to fund performance of the
Remaining Construction. Amounts so deposited with Lender, if any, shall be held
by Lender in an interest bearing account. Amounts so deposited, if any, shall
hereinafter be referred to as the "REMAINING CONSTRUCTION RESERVE" and the
account, if any, in which such amounts are held shall hereinafter be referred to
as the "REMAINING CONSTRUCTION ACCOUNT". It shall be an Event of Default under
this Agreement if Grantor does not either (i) deposit with Lender the Remaining
Construction Reserve as set forth above, or (ii) complete the Remaining
Construction at the Property within twelve (12) months from the Closing Date.
Upon the occurrence of such an Event of Default, Lender, at its option, may
withdraw all remaining funds in the Remaining Construction Reserve from the
Remaining Construction Account and Lender may apply such funds either to
completion of the Remaining Construction or toward payment of the Debt in such
order, proportion and priority as Lender may determine in its sole discretion.
Lender's right to withdraw and apply Remaining Construction Reserve shall be in
addition to all other rights and remedies provided to Lender under this
Agreement and the other Loan Documents.
7.6.2 RELEASE OF REMAINING CONSTRUCTION RESERVE. Lender shall disburse
to Grantor the Remaining Construction Reserve from the Remaining Construction
Account from time to time upon satisfaction by Grantor of each of the following
conditions: (i) Grantor shall submit a written request for payment to Lender at
least fifteen (15) days prior to the date on which Grantor requests such payment
be made and specifies the Remaining Construction to be paid, (ii) 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, (iii) Lender
shall have received a certificate from Grantor (A) stating that all Remaining
Construction at the 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
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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 Remaining
Construction, (B) identifying each Person that supplied materials or labor in
connection with the Remaining Construction performed at the Property to be
funded by the requested disbursement under a contract in excess of $50,000, and
(C) stating that each Person who has supplied materials or labor in connection
with the Remaining Construction to be funded by the requested disbursement 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, (iv) at Lender's option, a title search for the Property
indicating that the Property is free from all liens, claims and other
encumbrances not previously approved by Lender, and (v) Lender shall have
received such other evidence as Lender shall reasonably request that the
Remaining Construction at the Property to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to Grantor. Lender shall not be required to make disbursements from
the Remaining Construction Account with respect to the Property more than once
each calendar month and such disbursement shall be made only upon satisfaction
of each condition contained in this Section 7.6.2.
7.6.3 GUARANTY OF REMAINING CONSTRUCTION OBLIGATIONS. Indemnitor by
its execution of this Loan Agreement below, irrevocably and unconditionally
guarantees payment of the Remaining Construction Reserve required under this
provision when due as a primary obligor. The foregoing guaranty is an
irrevocable, absolute, continuing guaranty of payment and performance, is not
merely a guaranty of collection, and may be enforced by Lender and any
subsequent holder of the Note and shall not be discharged by the assignment or
negotiation of all or part of the Note.
Section 7.7RESERVE FUNDS, GENERALLY.
7.7.1 Borrower and Grantor grant to Lender a first-priority perfected
security interest in each of the Reserve Funds and any and all monies now or
hereafter deposited in each Reserve Fund as additional security for payment of
the Debt. Until expended or applied in accordance herewith, the Reserve Funds
shall constitute additional security for the Debt.
7.7.2 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 Debt
in any order in its sole discretion.
7.7.3 The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender.
7.7.4 Intentionally omitted.
7.7.5 Neither Borrower nor Grantor shall, 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.
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7.7.6 Lender shall not be liable for any loss sustained on the
investment of any funds constituting the Reserve Funds unless occasioned by the
gross negligence or willful misconduct of Lender.
7.7.7 Upon payment in full of the Debt and performance of all other
obligations under this Agreement and the other Loan Documents, Lender shall
disburse to Grantor all remaining Reserve Funds.
ARTICLE VIII
DEFAULTS
Section 8.1EVENT OF DEFAULT, (a) Each of the following events shall
constitute an event of default hereunder (an "EVENT OF DEFAULT"):
(i) if any portion of the Debt is not paid within five (5) days of
the applicable due date;
(ii) if any of the Taxes or Other Charges are not paid prior to the
date when the same become delinquent, except to the extent that Grantor is
contesting same in accordance with the terms of Section 5.1.2 hereof, or
there are sufficient funds in the Tax and Insurance Escrow Fund to pay such
Taxes or Other Charges and Lender fails to or refuses to release the same
from the Tax and Insurance Escrow Fund;
(iii) if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender within ten
(10) days of request;
(iv) if Grantor transfers or encumbers any portion of the Property
without Lender's prior written consent (to extent such consent is required)
or otherwise violates the provisions of Section 5.2.13 of this Loan
Agreement;
(v) if any material representation or warranty made by Borrower or
Grantor herein or in any other Loan Document, or in any report,
certificate, financial statement or other instrument, agreement or document
furnished to Lender shall have been false or misleading in any material
respect as of the date the representation or warranty was made;
(vi) if Borrower or Grantor or indemnitor or any guarantor under any
guaranty or indemnity issued in connection with the Loan shall make an
assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for
Borrower or Grantor or any guarantor or indemnitor under any guarantee or
indemnity issued in connection with the Loan or if Borrower or Grantor or
such guarantor or indemnitor shall be adjudicated a bankrupt or insolvent,
or if any petition for bankruptcy, reorganization or arrangement pursuant
to federal bankruptcy law, or any similar federal or state law, shall be
filed by or against, consented to, or acquiesced in by, Borrower or Grantor
or such guarantor or indemnitor, or if any proceeding for the dissolution
or
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liquidation of Borrower or Grantor or such guarantor or indemnitor shall be
instituted; PROVIDED, HOWEVER, if such appointment, adjudication, petition
or proceeding was involuntary and not consented to by Borrower or Grantor
or such guarantor or indemnitor, upon the same not being discharged, stayed
or dismissed within one hundred eighty (180) days;
(viii) if Borrower or Grantor attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;
(ix) if Borrower or Grantor breaches any of its respective negative
covenants contained in Section 5.2 or any covenant contained in Section
4.1.30 hereof:
(x) with respect to any term, covenant or provision set forth
herein which specifically contains a notice requirement or grace period, if
Borrower or Grantor shall be in default under such term, covenant or
condition after the giving of such notice or the expiration of such grace
period;
(xi) if any of the assumptions contained in any Insolvency Opinion
or Additional Insolvency Opinion are or shall become untrue in any material
respect;
(xii) if Borrower or Grantor shall continue to be in Default under
any of the other terms, covenants or conditions of this Agreement not
specified in subsections (i) to (xi) above, for ten (10) days after notice
to Borrower or Grantor from Lender, in the case of any Default which can be
cured by the payment of a sum of money, or for thirty (30) days after
notice from Lender in the case of any other Default; PROVIDED, HOWEVER,
that if such non-monetary Default is susceptible of cure but cannot
reasonably be cured within such 30-day period and provided further that
Borrower or Grantor shall have commenced to cure such Default within such
30-day period and thereafter diligently and expeditiously proceeds to cure
the same, such 30-day period shall be extended for such time as is
reasonably necessary for Borrower or Grantor in the exercise of due
diligence to cure such Default, such additional period not to exceed one
hundred eighty (180) days;
(xiii) if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, whether as
to Borrower or Grantor or the Property, or if any other such event shall
occur or condition shall exist, if the effect of such event or condition is
to accelerate the maturity of any portion of the Debt or to permit Lender
to accelerate the maturity of all or any portion of the Debt; or
(xiv) if Borrower shall be in default under the Ground Lease beyond
any applicable cure periods contained therein.
(b) Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter Lender may, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower or Grantor and in
the Property, including, without limitation, declaring the Debt to be
immediately due and payable,
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and Lender may enforce or avail itself of any or all rights or remedies provided
in the Loan Documents against Borrower or Grantor and the Property, including,
without limitation, all rights or remedies available at law or in equity; and
upon any Event of Default described in clauses (vi), (vii) or (viii) above, the
Debt and all other obligations of Borrower or Grantor hereunder and under the
other Loan Documents shall immediately and automatically become due and payable,
without notice or demand, and Borrower and Grantor each hereby expressly waives
any such notice or demand, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
Section 8.2 REMEDIES. (a) Upon the occurrence of an Event of Default,
all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower or Grantor under this Agreement or any of
the other Loan Documents executed and delivered by, or applicable to, Borrower
or Grantor or at law or in equity may be exercised by Lender at any time and
from time to time, whether or not all or any of the Debt shall be declared due
and payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to the Property. Any such actions taken
by Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
Lender may determine in its sole discretion, to the fullest extent permitted by
law, without impairing or otherwise affecting the other rights and remedies of
Lender permitted by law, equity or contract or as set forth herein or in the
other Loan Documents. Without limiting the generality of the foregoing, Borrower
and Grantor each agrees that if an Event of Default is continuing (i) Lender is
not subject to any "one action" or "election of remedies" law or rule, and (ii)
all liens and other rights, remedies or privileges provided to Lender shall
remain in full force and effect until Lender has exhausted all of its remedies
against the Property and the Mortgage has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Debt or the Debt has been paid in full.
(b) Lender shall have the right from time to time to partially
foreclose the Mortgage in any manner and for any amounts secured by the Mortgage
then due and payable as determined by Lender in its sole discretion including,
without limitation, the following circumstances: (i) in the event Borrower
defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal and interest, Lender may make demand under the
Limited Guaranty and foreclose the Mortgage to recover such delinquent payments,
or (ii) in the event Lender elects to accelerate less than the entire
outstanding principal balance of the Loan, Lender may make demand under the
Limited Guaranty and foreclose the Mortgage to recover so much of the
obligations guarantied thereby as Lender may accelerate and such other sums
guarantied by the Limited Guaranty and secured by the Mortgage as Lender may
elect. Notwithstanding one or more partial foreclosures, the Property shall
remain subject to the Mortgage to secure payment of sums secured by the Mortgage
and not previously recovered.
(c) Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "SEVERED LOAN DOCUMENTS") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower and/or Grantor
shall execute and deliver to Lender from time to time, promptly after the
request of Lender, a severance agreement and such other documents as Lender
shall request
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in order to effect the severance described in the preceding sentence, all in
form and substance reasonably satisfactory to Lender. Borrower and Grantor each
hereby absolutely and irrevocably appoints Lender following the occurrence of an
Event of Default as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect the aforesaid severance, Borrower and Grantor ratifying all that its said
attorney shall do by virtue thereof; PROVIDED, HOWEVER, Lender shall not make or
execute any such documents under such power until three (3) days after notice
has been given to Borrower or Grantor by Lender of Lender's intent to exercise
its rights under such power. Borrower or Grantor shall not be obligated to pay
any costs or expenses incurred in connection with the preparation, execution,
recording or filing of the Severed Loan Documents, and the Severed Loan
Documents shall not contain any representations, warranties or covenants not
contained in the Loan Documents and any such representations and warranties
contained in the Severed Loan Documents will be given by Borrower and Grantor
only as of the Closing Date.
(d) As used in this Section 8.2, a "foreclosure" shall include any
sale by power of sale.
Section 8.3 REMEDIES CUMULATIVE: WAIVERS. The rights, powers and
remedies of Lender under this Agreement shall be cumulative and not exclusive of
any other right, power or remedy which Lender may have against Borrower or
Grantor pursuant to this Agreement or the other Loan Documents, or existing at
law or in equity or otherwise. Lender's rights, powers and remedies may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lender may determine in Lender's sole discretion. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or Event of
Default with respect to Borrower or Grantor shall not be construed to be a
waiver of any subsequent Default or Event of Default by Borrower or Grantor or
to impair any remedy, right or power consequent thereon.
ARTICLE IX
SPECIAL PROVISIONS
Section 9.1 SALE OF NOTES AND SECURITIZATION. At the request of the
holder of the Note and, to the extent not already required to be provided by
Borrower or Grantor under this Agreement, Borrower and Grantor shall cooperate
with Lender to allow Lender 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 the sale of the Note or
participations therein or the first successful securitization (such sale and/or
securitization, the "SECURITIZATION") of rated single or multi-class securities
(the "SECURITIES") secured by or evidencing ownership interests in the Note and
the Mortgage. In this regard Borrower and Grantor shall:
(a)(i) provide such financial and other information with respect to
the Property, Borrower, Grantor and the Manager, (ii) provide budgets relating
to the Property and (iii) to perform or permit or cause to be performed or
permitted such site inspection, appraisals, market
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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 the holder of the Note 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 through
letters of auditors or opinions of counsel of independent attorneys acceptable
to Lender and the Rating Agencies;
(b) cause counsel to render opinions, which may be relied upon by the
holder of the Note, the Rating Agencies and their respective counsel, agents and
representatives, as to non-consolidation, fraudulent conveyance, and true sale
and/or lease or any other opinion customary in securitization transactions,
which counsel and opinions shall be reasonably satisfactory to the holder of the
Note and the Rating Agencies;
(c) make such representations and warranties as of the closing date of
the Securitization with respect to the Property, Borrower, Grantor, and the Loan
Documents as are consistent with the representations and warranties made in the
Loan Documents; and
(d) execute such amendments to the Loan Documents and organizational
documents as may be reasonably requested by the holder of the Note or the Rating
Agencies or otherwise to effect the Securitization; PROVIDED, HOWEVER, that
Borrower or Grantor shall not be required to modify or amend any Loan Document
if such modification or amendment would (i) change the interest rate, the stated
maturity or the amortization of principal set forth in the Note, or (ii) modify
or amend any other material economic term of the Loan.
All material out-of-pocket third party costs and expenses incurred by
Borrower or Grantor in connection with complying with requests made under this
Section 9.1 shall be paid by Lender.
Section 9.2 SECURITIZATION. Each of Borrower and Grantor understands
that certain of the Provided Information may be included in disclosure documents
in connection with the Securitizaition, including, without limitation, a
prospectus, prospectus supplement or private placement memorandum (each, a
"DISCLOSURE DOCUMENT") and may also be included in filings with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or the Securities and Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), 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 all Securities, Borrower and Grantor will
cooperate with the holder of the Note in updating the Disclosure Document by
providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.
Section 9.3 RATING SURVEILLANCE. Lender, at its option, may retain the
Rating Agencies to provide rating surveillance services on any certificates
issued in a Securitization. Such rating surveillance will be at the expense of
Lender (the "RATING SURVEILLANCE CHARGE").
Section 9.4 EXCULPATION. Subject to the qualifications below. Lender
shall not enforce the liability and obligation of Borrower or Grantor to perform
and observe the
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obligations contained in the Note, this Agreement, the Limited Guaranty, the
Mortgage or the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower or Grantor, except that Lender or
Trustee may bring a foreclosure action, an action for specific performance or
any other appropriate action or proceeding to enable Lender or Trustee to
enforce and realize upon its interest under the Note, this Agreement, the
Limited Guaranty, the Mortgage and the other Loan Documents, or in the Property,
the Rents following an Event of Default, or any other collateral given to Lender
or Trustee pursuant to the Loan Documents; provided, however, that, except as
specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower or Grantor only to the extent of Grantor's
interest in the Property, in the Rents following an Event of Default and in any
other collateral given to Lender or Trustee, and Lender or Trustee, by accepting
the Note, this Agreement, the Limited Guaranty, the Mortgage and the other Loan
Documents, agree that it shall not ▇▇▇ for, seek or demand any deficiency
judgment against Borrower or Grantor in any such action or proceeding under or
by reason of or under or in connection with the Note, this Agreement, the
Limited Guaranty, the Mortgage or the other Loan Documents, The provisions of
this section shall not however, (a) constitute a waiver, release or impairment
of any obligation evidenced or secured by any of the Loan Documents; (b) impair
the right of Lender or Trustee to name Borrower or Grantor as a party defendant
in any action or suit for foreclosure and sale under any of the Mortgage; (c)
affect the validity or enforceability of the Limited Guaranty or any other
guaranty made in connection with the Loan or any of the rights and remedies of
Lender or Trustee thereunder; (d) impair the right of Lender or Trustee to
obtain the appointment of a receiver; (e) impair the enforcement of any of the
Assignment of Leases following an Event of Default; (f) constitute a prohibition
against Lender or Trustee commencing any other appropriate action or proceeding
in order for Lender or Trustee to exercise its remedies against the Property; or
(g) constitute a waiver of the right of Lender or Trustee to enforce the
liability and obligation of Borrower or Grantor, by money judgment or otherwise,
to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender or Trustee (including attorneys' fees and costs
reasonably incurred) arising out of or in connection with the following:
(i) fraud or intentional misrepresentation by Borrower or Grantor
or any guarantor in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower or
Grantor;
(iii) material physical waste of the Property;
(iv) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the Mortgage
concerning environmental laws, hazardous substances and asbestos and any
indemnification of Lender with respect thereto in either document;
(v) the removal or disposal of any portion of the Property after an
Event of Default;
(vi) the misapplication or conversion by Borrower or Grantor of (A)
any insurance proceeds paid by reason of any loss, damage or destruction to
the Property which are not applied by Borrower or Grantor in accordance
with this Agreement, (B)
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any awards or other amounts received in connection with the condemnation of
all or a portion of the Property which are not applied by Borrower or
Grantor in accordance with this Agreement, or (C) any Rents following an
Event of Default;
(vii) failure to pay charges for labor or materials or other charges
that can create liens on any portion of the Property;
(viii) any security deposits, advance deposits or any other deposits
collected with respect to the Property which are not delivered to Lender
upon a foreclosure of the Property or action in lieu thereof, except to the
extent any such security deposits were applied in accordance with the terms
and conditions of any of the Leases prior to the occurrence of the Event of
Default that gave rise to such foreclosure or action in lieu thereof; or
(ix) failure to obtain Lender's prior written consent to any
material amendment or material modification of the Ground Lease.
Notwithstanding anything to the contrary in this Agreement, the Note,
the Limited Guaranty or any of the Loan Documents, (A) the Debt shall be fully
recourse to Borrower and the Limited Guaranty shall be fully recourse to Grantor
and (B) Lender shall not be deemed to have waived any right which Lender may
have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Debt or the full
amount of the obligations secured by the Mortgage or to require that all
collateral shall continue to secure all of the Debt or the guaranteed
obligations owing to Lender in accordance with the Loan Documents in the event
that the (I) first full monthly payment under the Note is not paid within five
(5) days of notice that such payment is late (provided, however, that such grace
period relates only to the recourse trigger described in this paragraph), or
(II) failure of Borrower or Grantor to permit on-site inspections of the
Property subject to the rights of Tenants and any applicable cure period set
forth in the Loan Documents, to provide financial information as required under
the Loan Documents subject to any applicable cure period (except for financial
information required to be delivered by a Tenant pursuant to its Lease that has
not been delivered to Grantor, provided Grantor has requested such financial
information from such Tenant), or to comply with Section 4.1.30 hereof, or (III)
failure of Borrower or Grantor to obtain Lender's prior written consent to any
subordinate financing or other voluntary lien encumbering the Property, or (IV)
failure of Borrower or Grantor to obtain Lender's prior written consent to any
assignment, transfer or conveyance of the Property, or any portion thereof, or
any interest therein as required by this Agreement. Notwithstanding the
provision set forth in clause (III) of this paragraph, a voluntary lien OTHER
THAN a lien securing an extension of credit filed against the Property shall not
constitute a recourse trigger for purposes of this paragraph provided such lien
(A) is fully bonded to the satisfaction of Lender and discharged of record
within ninety (90) days of filing, or (B) within such ninety (90) day period,
Lender receives affirmative title insurance from the title insurance company
insuring the lien of the Mortgage that such lien is subject and subordinate to
the lien of the Mortgage and no enforcement action is commenced by the
applicable lien holder.
Section 9.5 TERMINATION OF MANAGER. If (a) the amounts evidenced by
the Note have been accelerated pursuant to Section 8.1(b) hereof, (b) the
Manager shall become insolvent,
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(c) the Manager is in default under the terms of the Management Agreement
beyond any applicable grace or cure period, (d) the Debt Service Coverage Ratio
for any Property for the preceding twelve month period is less than or equal to
1.15 to 1.0, or (e) Lender determines that Manager is not managing the Property
in accordance with the management practices of nationally recognized management
companies managing similar properties in locations comparable to those of the
Property, then, in the case of (a), (b), (c), (d) or (e), Grantor shall, at the
request of Lender, terminate the Management Agreement and replace the Manager
with a manager reasonably approved by Lender on terms and conditions reasonably
satisfactory to Lender, it being understood and agreed that the management fee
for such replacement manager shall not exceed then prevailing market rates. In
addition and without limiting the rights of Lender hereunder or under any of the
other Loan Documents, in the event that (i) the Management Agreement is
terminated, (ii) the Manager no longer manages the Property, or (iii) a
receiver, liquidator or trustee shall be appointed for Manager or if Manager
shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Manager, or if any proceeding for the dissolution or liquidation of
Manager shall be instituted, then Grantor (at Grantor 's sole cost and expense)
shall immediately, in its name, establish new deposit accounts separate from any
other Person with a depository satisfactory to Lender into which all Rents and
other income from the Property shall be deposited and shall grant Lender a first
priority security interest in such account pursuant to documentation
satisfactory in form and substance to Lender.
Section 9.6 SERVICER. At the option of Lender, the Loan may be
serviced by a servicer/trustee (the "SERVICER") selected by Lender and Lender
may delegate all or any portion of its responsibilities under this Agreement
and the other Loan Documents to the Servicer pursuant to a servicing
agreement (the "SERVICING AGREEMENT") between Lender and Servicer. Lender
shall be responsible for any set-up fees or any other costs relating to or
arising under the Servicing Agreement.
Section 9.7 SPLITTING THE LOAN. At the election of Lender in its sole
discretion, the Loan or any individual Note making up the Loan shall be split
and severed into two or more loans which, at Lender's election, shall not be
cross-collateralized or cross-defaulted with each other. Borrower and Grantor
each hereby agrees to deliver to Lender to effectuate such severing of the Loan
or any individual Note, as the case may be, as reasonably requested by Lender,
(a) additional executed documents, or amendments and modifications to the
applicable Loan Documents, (b) new opinions or updates to the opinions delivered
to Lender in connection with the closing of the Loan, (c) endorsements and/or
updates to the title insurance policies delivered to Lender in connection with
the closing of the Loan, and (d) any other certificates, instruments and
documentation reasonably determined by Lender as necessary or appropriate to
such severance (the items described in subsections (a) through (d) collectively
hereinafter shall be referred to as "Severing Documentation"), which Severing
Documentation shall be acceptable to Lender in form and substance in its
reasonable discretion. Lender hereby agrees to be responsible for all reasonable
third-party expenses incurred in connection with the preparation and delivery of
the Severing Documentation and the effectuation of the uncrossing of the Loan
from the additional Loans. Borrower and Grantor each hereby acknowledges and
agrees that upon such severing of the Loan. Lender may effect, in its sole
discretion, one or more Securitizations of which the severed loans may be a
part.
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Section 9.8 MODIFICATION OF INTEREST RATE. Notwithstanding anything
herein to the contrary, if, in connection with a Securitization, two or more
Rating Agencies do not rate the entire Loan BBB- or better, the Interest Rate
shall be increased upon written notice from Lender to Grantor and Borrower to
5.17% and the Monthly Debt Service Payment Amount shall be increased
accordingly, both such adjustments to be effective on the Payment Date
immediately following such notice from Lender. Lender's notice to Borrower and
Grantor shall include information regarding the actual ratings given by the
applicable Rating Agencies.
Section 9.9 INTENTIONALLY OMITTED.
ARTICLE X
MISCELLANEOUS
Section 10.1 SURVIVAL. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower and/or Grantor, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.
Section 10.2 LENDER'S DISCRETION. Whenever pursuant to this Agreement,
Lender exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive.
Section 10.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AND
APPLICABLE FEDERAL LAWS.
Section 10.4 MODIFICATION, WAIVER IN WRITING. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, or of the Note, or of any other Loan Document, nor consent to any
departure by Borrower or Grantor therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower or
Grantor, shall entitle Borrower or Grantor to any other or future notice or
demand in the same, similar or other circumstances.
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Section 10.5 DELAY NOT A WAIVER. Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Note or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Note
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.
Section 10.6 NOTICES. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):
If to Lender:
Bear ▇▇▇▇▇▇▇ Commercial Mortgage, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
if to Trustee:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 28202-1935
If to Borrower or Grantor:
[NAME OF ENTITY]
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Inland Western Retail Real Estate Trust, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
and with a copy to:
Inland Western Retail Real Estate Trust, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
A notice shall be deemed to have been given: in the case of hand
delivery, at the time of delivery; in the case of registered or certified mail,
when delivered or the first attempted delivery on a Business Day; or in the case
of expedited prepaid delivery and telecopy, upon the first attempted delivery on
a Business Day.
Section 10.7 TRIAL BY JURY. BORROWER AND LENDER HEREBY AGREE NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH, THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY BORROWER AND LENDER.
Section 10.8 HEADINGS. The Article and/or Section headings and the
Table of Contents in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 10.9 SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 10.10 PREFERENCES.
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Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower or Grantor to any portion
of the obligations of Borrower or Grantor hereunder. To the extent Borrower or
Grantor makes a payment or payments to Lender, which payment or proceeds or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or part thereof intended to be satisfied shall be revived
and continue in full force and effect, as if such payment or proceeds had not
been received by Lender.
Section 10.11 WAIVER OF NOTICE. Neither Borrower nor Grantor shall be
entitled to any notices of any nature whatsoever from Lender except with respect
to matters for which this Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by Lender to Borrower or Grantor and
except with respect to matters for which Borrower or Grantor is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Borrower
and Grantor hereby expressly waive the right to receive any notice from Lender
with respect to any matter for which this Agreement or the other Loan Documents
do not specifically and expressly provide for the giving of notice by Lender to
Borrower or Grantor.
Section 10.12 REMEDIES OF BORROWER. In the event that a claim or
adjudication is made that Lender or its agents have acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement or
the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower and Grantor each agrees that
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower's and/or Grantor's sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
Section 10.13 EXPENSES; INDEMNITY.
(a) Borrower and Grantor each covenants and agrees to pay or, if
Borrower or Grantor fails to pay, to reimburse, Lender upon receipt of written
notice from Lender for all reasonable costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel (including
without limitation any opinions requested by Lender as to any legal matters
arising under this Agreement or the other Loan Documents with respect to the
Property); (ii) Borrower's and/or Grantor's ongoing performance of and
compliance with Borrower's and/or Grantor's respective agreements and covenants
contained in this Agreement and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance requirements;
(iii) Lender's ongoing performance and compliance with all agreements and
conditions contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the Closing Date; (iv) except as
otherwise provided in this Agreement, the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
86
modifications to this Agreement and the other Loan Documents and any other
documents or matters reasonably requested by Lender; (v) securing Borrower's
and/or Grantor's compliance with any requests made pursuant to the provisions of
this Agreement; (vi) the filing and recording fees and expenses, title insurance
and reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred in creating and perfecting
the Liens in favor of Lender pursuant to this Agreement and the other Loan
Documents; (vii) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting Borrower, Grantor, this
Agreement, the other Loan Documents, the Property, or any other security given
for the Loan; and (viii) enforcing any obligations of or collecting any payments
due from Borrower and/or Grantor under this Agreement, the other Loan Documents
or with respect to the Property or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower and/or Grantor shall not be liable for the payment of
any such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender.
(b) Borrower and Grantor each shall indemnify, defend and hold
harmless Lender from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for Lender in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not Lender shall be designated a party
thereto), that may be imposed on, incurred by, or asserted against Lender in any
manner relating to or arising out of (i) any breach by Borrower or Grantor of
its obligations under, or any material misrepresentation by Borrower or Grantor
contained in, this Agreement or the other Loan Documents, or (ii) the use or
intended use of the proceeds of the Loan (collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, HOWEVER, that Borrower or Grantor shall not have any
obligation to Lender hereunder to the extent that such Indemnified Liabilities
arise from the gross negligence, illegal acts, fraud or willful misconduct of
Lender. To the extent that the undertaking to indemnify, defend and hold
harmless set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower and/or Grantor shall pay the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by Lender.
Section 10.14 SCHEDULES INCORPORATED. The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.
Section 10.15 OFFSETS, COUNTERCLAIMS AND DEFENSES. Any assignee of
Lender's interest in and to this Agreement, the Note, the Limited Guaranty and
the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
and/or Grantor may otherwise have against any assignor of such documents, and no
such unrelated counterclaim or defense shall be interposed or asserted by
Borrower or Grantor in any action or proceeding brought by any such assignee
upon such documents and any such right to interpose or assert any such unrelated
offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower and Grantor.
87
Section 10.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower, Grantor and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower,
guarantor and lender. Nothing herein or therein is intended to create a joint
venture, partnership, tenancy-in-common, or joint tenancy relationship between
Borrower, Grantor and Lender nor to grant Lender any interest in the Property
other than that of mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the
benefit of Lender, Grantor and Borrower and nothing contained in this Agreement
or the other Loan Documents shall be deemed to confer upon anyone other than
Lender, Grantor and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein.
All conditions to the obligations of Lender to make the Loan hereunder are
imposed solely and exclusively for the benefit of Lender and no other Person
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that Lender will refuse to make the
Loan in the absence of strict compliance with any or all thereof and no other
Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender's sole discretion, Lender deems it advisable or desirable
to do so.
Section 10.17 PUBLICITY. All news releases, publicity or advertising
by Borrower or their Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, Bear ▇▇▇▇▇▇, or any of their Affiliates shall be subject
to the prior written approval of Lender. All news releases, publicity or
advertising by Lender through any media intended to reach the general public
which refers solely to the Borrower, Grantor or to the Loan made by the Lender
to the Borrower shall be subject to the prior written approval of Borrower,
provided however, the foregoing shall not apply to Provided Information included
in disclosure documents in connection with a Securitization.
Section 10.18 WAIVER OF MARSHALLING OF ASSETS. To the fullest extent
permitted by law, Grantor, for itself and its successors and assigns, waives all
rights to a marshalling of the assets of Grantor, Grantor's partners and others
with interests in Grantor, and of the Property, or to a sale in inverse order of
alienation in the event of foreclosure of the Mortgage or sale of the Property
by power of sale, and agrees not to assert any right under any laws pertaining
to the marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.
Section 10.19 WAIVER OF COUNTERCLAIM. Borrower and Grantor each hereby
waives the right to assert a counterclaim, other than a compulsory counterclaim,
in any action or proceeding brought against it by Lender or its agents.
88
Section 10.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE. In the
event of any conflict between the provisions of this Loan Agreement and any of
the other Loan Documents, the provisions of this Loan Agreement shall control.
The parties hereto acknowledge that they were represented by competent counsel
in connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents or any other agreements or instruments which govern the
Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of
Lender of any equity interest any of them may acquire in Borrower or Grantor,
and Borrower and Grantor each hereby irrevocably waives the right to raise any
defense or take any action on the basis of the foregoing with respect to
Lender's exercise of any such rights or remedies. Borrower and Grantor each
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower, Grantor or their Affiliates.
Section 10.21 BROKERS AND FINANCIAL ADVISORS. Borrower and Grantor
hereby represent that they have dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement other than Inland Mortgage Corp.
Borrower and Grantor hereby agree to indemnify, defend and hold Lender harmless
from and against any and all claims, liabilities, costs and expenses of any kind
(including Lender's reasonable attorneys' fees and expenses) in any way relating
to or arising from a claim by any Person that such Person acted on behalf of
Borrower or Grantor or Lender in connection with the transactions contemplated
herein. The provisions of this Section 10.21 shall survive the expiration and
termination of this Agreement and the payment of the Debt.
Section 10.22 PRIOR AGREEMENTS. This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements or understandings among or between such parties, whether oral or
written, are superseded by the terms of this Agreement and the other Loan
Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of such prior agreement do not
survive execution of this Agreement.
Section 10.23 TRANSFER OF LOAN. In the event that Lender transfers the
Loan, Borrower shall continue to make payments at the place set forth in the
Note until such time that Borrower is notified in writing by Lender that
payments are to be made at another place.
Section 10.24 JOINT AND SEVERAL LIABILITY. If Borrower consists of
more than one person or party, the obligations and liabilities of each person or
party shall be joint and several.
89
(THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK)
90
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.
BORROWER;
CAPITAL CENTRE FUNDING LLC, a Maryland
limited liability company
By:Capital Centre LLC, a Maryland limited liability
company, its sole member
By:Capital Centre Holding LLC, a Delaware
limited liability company, its sole member
By:Inland Capital HC, L.L.C., a Delaware
limited liability company, its manager
By:Inland Western Retail Real Estate Trust,
Inc., a Maryland corporation, its sole
member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Asst. Secretary
GRANTOR:
CAPITAL CENTRE LLC, a Maryland limited
liability company
By:Capital Centre Holding LLC, a Delaware
limited liability company, its sole member
By:Inland Capital HC, L.L.C., a Delaware
limited liability company, its manager
By:Inland Western Retail Real Estate Trust,
Inc., a Maryland corporation, its sole
member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Asst. Secretary
THE UNDERSIGNED INDEMNITOR
EXECUTES THIS AGREEMENT TO
EVIDENCE ITS OBLIGATIONS PURSUANT
TO SECTIONS 2.3.2(c), 7.6.3 AND 9.9
HEREOF:
INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC., a Maryland, corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Asst. Secretary
LENDER:
BEAR ▇▇▇▇▇▇▇ COMMERCIAL
MORTGAGE, INC., a New York corporation
BY:
----------------------------------
Name:
Managing Director
SCHEDULE I
TENANT DIRECTION LETTER
_____________________________________,L.L.C.
_________ ___, 200_
(Tenant's name and address)
__________________________
__________________________
Re: Lease, dated ____________________, by and between ___________________,
as original landlord and predecessor-in-interest to Inland _________
_______, L.L.C., as landlord, and _____________________ as tenant as
the same has been amended, concerning premises at ____________________
Ladies and Gentlemen:
The undersigned hereby requests that, commencing with the first Rent
payment date occurring after the date hereof, you deliver all Rent to the
following address:
_________________
_________________
_________________
Account Name: __________________________
Account No. _________________
Attention: _________________
ABA# _________________
___________________________, L.L.C., a Delaware
limited liability company
By:
-----------------------------, a
---------------------------------, its
-----------------------------
By:
-----------------------------, a
---------------------------------, its
-----------------------------
By:
-----------------------------------
Name:
Title:
SCHEDULE II
Intentionally Omitted
X-2
SCHEDULE III
REQUIRED REPAIRS
None.
X-3
SCHEDULE IV
RENT ROLL
X-4
RETAIL PROPERTY RENT ROLL
PROPERTY NAME: Boulevard at the Capital Centre
PROPERTY ADDRESS: Capital Centre Boulevard KEY:
PROPERTY CITY: Landover Fixturing
PROPERTY STATUS: MD Linear Construction
LOAN NUMBER: 41497
RENT ROLL
AS OF DATE 07/12/04
NRSF 482,355
LEASE LEASE ANNUAL RENT
TENANTS SUITE TENANT SF START (1) EXPIRE (1) PRO RATA RENT P.S.F.*
1 PC103 Sports Authority 40,500 08/01/04 07/01/14 8.40% $ 500,260 $ 12.50
2 C101 Linens N Things 34,440 03/01/2004 01/31/15 7.14% $ 430,500 $ 12.50
3 PC101 Circuit City 33,828 02/01/04 01/31/20 7.01% $ 490,999 $ 14.51
4 PC104 DSW 25,000 08/01/04 10 Years 5.18% $ 331,250 $ 13.25
5 A101 Borders Group, Inc. 22,915 12/30/00 01/31/24 4.76% $ 443,440 $ 19.35
6 Pad1 Golden Corral 11,??7 01/01/04 12/31/23 2.48% $ 112,800 $ 59.40
7 Pa04 ▇▇▇▇▇ E Cheese 11,300 03/01/04 02/28/19 2.34% $ 98,000 $ 8.41
8 D101 Pier 1 Imports 10,000 12/01/03 11/30/13 2.07% $ 180,000 $ 18.00
9 1105 Shoe City 7,700 12/01/03 11/30/13 1.60% $ 180,950 $ 23.50
10 L104 Red Star Tavern 7,681 12/31/03 12/31/13 1.??% $ 258,135 $ 38.00
11 B105 Merrs Warehouse 6,400 12/01/03 11/30/13 1.33% $ 147,200 $ 23.00
12 Pa02 Bugaboo Creek Holdings 6,400 12/01/03 11/30/18 1.33% $ 110,000 $ 17.19
13 B103 The Childrens Place 6,000 12/30/00 01/31/14 1.24% $ 132,000 $ 22.00
14 Pa03 Pizzeria Uno 5,719 11/01/03 10/31/18 1.19% $ 110,000 $ 19.23
15 D108 ▇▇▇ ▇▇▇▇▇▇ (9) 5,471 07/01/04 01/31/15 1.18% $ 76,000 $ 13.71
16 D102 ▇ ▇ ▇▇▇▇▇, Inc. 5,194 12/01/03 11/30/13 1.08% $ 142,835 $ 27.50
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 5,000 11/01/03 01/31/14 1.04% $ 120,000 $ 24.00
18 H101 Lenscrafters 4,653 12/01/03 11/30/13 0.98% $ 139,590 $ 30.00
19 J102 The Big Screen Store 4,600 01/01/04 12/31/13 0.93% $ 103,500 $ 23.00
20 I108 Technicolor Salon & Spa 4,413 01/31/04 03/31/14 0.91% $ 110,325 $ 26.00
21 Ha06 Chick-[ILLEGIBLE] 4,200 12/01/03 11/30/23 0.88% $ ??,000 $ 20.00
22 H104 Mattress Warehouse 4,112 03/01/04 02/28/14 0.??% $ 102,800 $ 26.00
23 G101 Changes at Capital Centre, Inc. 4,000 12/31/03 12/31/13 0.83% $ 104,000 $ 28.00
24 G102 Total Sport 3,758 01/31/04 01/31/14 0.78% $ 103,553 $ 27.57
25 D103 Casual Mela Big & Tax 3,500 03/01/04 03/31/09 0.73% $ 84,000 $ 24.00
26 F105 Footaction USA 2,500 12/01/03 11/30/13 0.73% $ 98,000 $ 28.00
27 I104 Foot Locker Store 3,433 12/01/03 11/30/13 0.71% $ 99,887 $ 29.00
28 F103 Oxford Street, Inc. 3,400 12/31/03 12/31/10 0.70% $ 85,000 $ 25.00
29 Pad5 Provident Bank of Md. 3,215 12/01/03 11/30/18 0.67% $ 95,000 $ 29.55
30 I105 Teaming Up/Expressions 3,103 01/01/04 12/31/13 0.64% $ 70,593 $ 22.75
31 F102 Odoba Mexican Grill 3,000 12/01/03 11/30/15 0.52% $ 97,500 $ 32.00
32 G104 Fashion Group / Lucays 3,000 01/01/04 12/31/13 0.62% $ 83,000 $ 21.00
33 J101 Cambridge Beauty Supply 2,900 12/01/03 01/31/14 0.80% $ 76,400 $ 25.00
34 J103 Mchunn House of Style 2,000 08/01/04 04/30/14 0.?0% $ 7?,850 $ 26.50
35 I102Y Payless Shoes 2,800 02/01/04 01/31/14 0.58% $ 76,400 $ 28.00
36 H103 Hoad 2 Hoad 2,558 12/31/03 12/31/10 0.53% $ 65,484 $ 25.50
37 E105 Panda Express 2,100 12/01/03 11/25/13 0.44% $ 73,500 $ 35.00
38 ?102 Yankee Candle Co. 2,000 12/01/03 11/30/13 0.41% $ 48,000 $ 24.00
39 I1022 Galary of African Wildlife 2,000 03/31/04 03/31/11 0.41% $ 58,000 $ 29.00
40 I107 Drakes Place 2,000 12/01/03 11/30/13 0.41% $ 48,000 $ 24.00
41 M101 Jilliano Shoes 1,998 02/01/04 01/31/11 0.41% $ 40,955 $ 20.50
42 I109 Sprint Spectrum 1,955 12/07/03 11/30/05 0.41% $ 84,845 $ 33.00
43 H102 Nextel 1,871 12/01/03 11/30/08 0.39% $ 74,840 $ 40.00
44 F104 T-Mobile 1,800 12/31/03 01/31/11 0.37% $ 72,000 $ 40.00
TOTAL
STOP STOP RENT &
TENANTS SUITE TENANT DATE RENT ILELLIGIBLE PSF
1 PC103 Sports Authority None None $ 677,776 -
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ $ 886,577 $ 17.32
3 PC101 Circuit City Year 8 $ 540,099 $ 868,051 $ 19.78
4 PC104 DSW Year 5 $ 358,250 $ 448,806 -
5 A101 Borders Group, Inc. Year 5 $ 477,319 $ 542,691 $ 23.58
6 Pad1 Golden Corral Year 6 $ 124,876 $ 191,282 $ 18.98
7 Pa04 ▇▇▇▇▇ E Cheese Year 6 $ 104,000 $ 143,841 $ 12.73
8 D101 Pier 1 Imports Year 6 $ 198,000 $ 218,813 $ 21.00
9 1105 Shoe City Year 6 $ 202,664 $ 231,829 $ 30.12
10 L104 Red Star Tavern Year 2 $ 276,179 $ 318,830 $ 41.58
11 B105 Merrs Warehouse Year 6 $ 160,000 $ 182,090 $ 28.45
12 Pa02 Bugaboo Creek Holdings Year 6 $ 121,000 $ 142,278 $ 22.23
13 B103 The Childrens Place Year 6 $ 144,000 $ 171,352 $ 28.59
14 Pa03 Pizzeria Uno Year 6 $ 123,200 $ 140,399 $ 24.56
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ (▇) ▇▇▇▇ ▇▇▇▇ $ 75,000 $ 13.71
16 D102 ▇ ▇ ▇▇▇▇▇, Inc. Year 3 $ 148,548 $ 177,074 $ 34.09
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ $ 145,217 $ 28.04
18 H101 Lenscrafters Year 4 $ 151,223 $ 162,303 $ 34.88
19 J102 The Big Screen Store Year 6 $ 113,860 $ 128,691 $ 28.13
20 I108 Technicolor Salon & Spa Year 2 $ 110,635 $ 140,403 $ 31.82
21 Ha06 Chick-[ILLEGIBLE] Year 8 $ 96,200 $ 107,572 $ 25.33
22 H104 Mattress Warehouse Year 6 $ 115,136 $ 130,024 $ 31.62
23 G101 Changes at Capital Centre, Inc. Year 4 $ 112,000 $ 124,260 $ 31.07
24 G102 Total Sport Year 2 $ 106,000 $ 129,753 $ 34.39
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ & ▇▇▇ ▇▇▇▇ ▇▇▇▇ $ 103,181 $ 29.48
26 F105 Footaction USA Year 5 $ 107,800 $ 120,268 $ 34.38
27 I104 Foot Locker Store Year 2 $ 102,040 $ 117,859 $ 34.33
28 F103 Oxford Street, Inc. Year 2 $ 87,560 $ 108,174 $ 31.82
29 Pad5 Provident Bank of Md. Year ? $ 106,400 $ 116,813 $ 38.36
30 I105 Teaming Up/Expressions Year 2 $ 85,720 $ 91,743 $ 29.57
31 F102 Odoba Mexican Grill Year 5 $ 109,200 $ 123,947 $ 41.32
32 G104 Fashion Group / Lucays Year 3 $ 89,000 $ 83,447 $ 27.82
33 J101 Cambridge Beauty Supply Year 2 $ 77,??2 $ 95,165 $ 32.88
34 J103 Mchunn House of Style Year 0 $ 88,377 $ 98,050 $ 33.12
35 I102Y Payless Shoes Year 6 $ 88,200 $ 92,088 $ 32.80
36 H103 Hoad 2 Hoad Year 3 $ 58,750 $ 82,987 $ 32.32
37 E105 Panda Express Year 6 $ 84,525 $ 53,634 $ 44.50
38 ?102 Yankee Candle Co. Year 4 $ 51,600 $ 61,241 $ 30.62
39 I1022 Galary of African Wildlife Year 4 $ 69,740 $ 71,632 $ 36.82
40 I107 Drakes Place Year 2 $ 49,440 $ 61,632 $ 30.82
41 M101 Jilliano Shoes Year 2 $ 42,183 $ 54,573 $ 27.31
42 I109 Sprint Spectrum None None $ 77,773 $ 39.58
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ $ 87,227 $ ??.??
44 F104 T-Mobile Year 6 $ 82,800 $ 83,917 $ 46.62
TENANTS SUITE TENANT RENEWAL OPTIONS NOTES
1 PC103 Sports Authority 3,5 year options
2 C101 Linens N Things 2,5 year options
3 PC101 Circuit City 3,6 year options Base Rent + 10% Every 6
4 PC104 DSW 4,5 year options
5 A101 Borders Group, Inc. 4,5 year options
6 Pad1 Golden Corral 3,5 year options Ground Lease
7 Pa04 ▇▇▇▇▇ E Cheese 4,5 year options
8 D101 Pier 1 Imports 2,5 year options
9 1105 Shoe City 2,5 year options
10 L104 Red Star Tavern 2,5 year options 3% Annual Rent Increases
11 B105 Merrs Warehouse 2,5 year options
12 Pa02 Bugaboo Creek Holdings 2,5 year options
13 B103 The Childrens Place 2,5 year options
14 Pa03 Pizzeria Uno 3,5 year options Ground Lease
15 D108 ▇▇▇ ▇▇▇▇▇▇ (9) 2,5 year options Gross, Flat Rent Through
16 D102 ▇ ▇ ▇▇▇▇▇, Inc. 1,5 year options 4% Rent Inc. Every Odd Year
17 B104 Lane ▇▇▇▇▇▇ 2,5 year options
18 H101 Lenscrafters 2,6 year options
19 J102 The Big Screen Store 2,5 year options
20 I108 Technicolor Salon & Spa 1,5 year options 3% Annual Rent Increases
21 Ha06 Chick-[ILLEGIBLE] 3,5 year options
22 H104 Mattress Warehouse 2,6 year options
23 G101 Changes at Capital Centre, Inc. 1,5 year options
24 G102 Total Sport 1,5 year options 3% Annual Rent Increases
25 D103 Casual Mela Big & Tax 1,5 year options
26 F105 Footaction USA 2,6 year options
27 I104 Foot Locker Store 2,5 year options 2.5% Annual Rent Increases
28 F103 Oxford Street, Inc. 1,5 year options 3% Annual Rent Increases
29 Pad5 Provident Bank of Md. 3,5 year options Ground Lease
30 I105 Teaming Up/Expressions 1,5 year options (5)
31 F102 Odoba Mexican Grill 2,5 year options (6)
32 G104 Fashion Group / Lucays 1,6 year options
33 J101 Cambridge Beauty Supply 1,5 year options
34 J103 Mchunn House of Style 2,5 year options
35 I102Y Payless Shoes 2,5 year options
▇▇ ▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇ ▇,▇ year options 5% Rent Inc. Every Odd Year
37 E105 Panda Express 1,5 year options (6)
38 ?102 Yankee Candle Co. 1,6 year options
39 I1022 Galary of African Wildlife 1,3 year options
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇,▇ year options
41 M101 Jilliano Shoes 1,5 year options 3% Annual Rent Increases
42 I109 Sprint Spectrum 1,5 year options (4)
43 H102 Nextel 1,5 year options
44 F104 T-Mobile 1,5 year options
Retail Property Rent Roll
[ILLEGIBLE]
SCHEDULE V
LEGAL DESCRIPTION OF OUT PARCEL
BEGINNING FOR THE SAME at a point on the Easterly Right of Way of the
Capital Beltway, Interstate Route 95 (a variable width Right of Way), 150.00'
Easterly from and perpendicular to baseline station 823+98.37, thence running
with the Easterly Right of Way Line of said Capital Beltway, Interstate Route
95.
1) Northwesterly by a curve to the right, having a Radius of
3,669.72', an Arc Length of 955,21', subtended by a Chord of N 09 DEG. 19'51" W,
952.52', thence running for new line of division through the Lands of The
Boulevard at the Capital Centre, the following nine (9) courses and distances,
viz;
2) N 88 DEG. 12'48" E. 114.48',
3) S 26 DEG. 20'11" E, 43.06',
4) S 38 DEG. 12'15" E, 38.77',
5) S 48 DEG. 15'10" E, 30.50',
6) S 54 DEG. 32'59" E, 36.41',
7) S 55 DEG. 48'16" E, 161.86',
8) S 44 DEG. 46'17" E, 34.04'.
9) N 49 DEG. 26'17" E, 24.06',
10) S 29 DEG. 13'01" E, 704.40', thence running with the Southerly
outline of the Lands of The Boulevard at the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇) ▇ ▇▇ ▇▇▇. 36'52" W, 472.42',
12) S 04 DEG. 23'08" E, 578.15', thence running with the aforesaid
Easterly Right of Way Line of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇,
▇▇) N 16 DEG. 47'16" W, 720.23' to the Point of Beginning.
CONTAINING 10.8838 Acres (474,098 SQ.FT.) of Land, more or less.
X-5
SCHEDULE VI
OUT PARCEL SUBLEASE CONDITIONS
1. Lender shall have received, together with the request for subordination, a
current survey in form acceptable to Lender in its reasonable discretion
depicting the Out Parcel and the balance of the Property (the "REMAINING
PROPERTY") and any appurtenant easements;
2. Lender shall have received a "bring down" or "date down" of the title
insurance policies insuring the lien of the Mortgage on the Property and any
necessary easements or agreements in connection with the subordination to the
Sublease;
3. Lender shall have received a $1,000.00 fee in addition to payment of all
Lender's costs and expenses, including reasonable counsel fees and disbursements
incurred in connection with the subordination by the Lender to the Sublease in
connection with the Out Parcel and the review and approval of the documents and
information required to be delivered in connection therewith;
4. Lender shall have approved the Sublease and the legal description for the Out
Parcel, including any appurtenant easements for access, parking or drainage
comprising part of the Out Parcel, which approval shall not unreasonably be
withheld or delayed;
5. Lender shall have received evidence reasonably satisfactory to Lender that
the Out Parcel Developer shall be an entity other than Grantor;
6. Lender shall have received evidence satisfactory to Lender in its reasonable
discretion that the Remaining Property has adequate access to a public road (a)
for the use of the Remaining Property in connection with its use as a shopping
center, and (b) in accordance with applicable zoning laws, ordinances and
regulations. A date down endorsement to the title policy delivered at the
closing, which included endorsements for access and zoning, without exception
for such matters, shall satisfy the foregoing; an
7. Lender shall have received evidence satisfactory to Lender in its reasonable
discretion that the Sublease and the proposed uses of the Out Parcel do not
violate any tenant exclusives granted to tenants under leases of the Remaining
Property as of the Closing Date;
8. The Out Parcel Developer shall be required under the Sublease to pay a
reasonably allocated share of the Taxes attributable to the Out Parcel; and
9. The Sublease shall not violate the terms and provisions of the Ground Lease.
X-6
SCHEDULE VII
REMAINING CONSTRUCTION
CONTRACT BALANCE TO
DESCRIPTION AMOUNT CURRENT DUE COMPLETE NOTES
----------------------------------------------------------------------------------------------------------------------
HARD COSTS:
Last Stop $ 97,979.00 $ 43,254.00 $ 54,725.00
Power Center - Arch. Fees 251,423.00 15,150.00 -
Power Center - Base Bldg. Cnstr. 2,939,062.00 69,439.24 3,650.00
Power Center - Tenants 2,107,865.00 56,619.16 -
Buildings P & Q - Base Bldg Cnstr 1,647,709.00 667,363.45 590,639.25
Dynamics (D105 - 3,000 sf x $20 psf) - - 60,000.00 Tenant
buildout
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (I102 - 4,300 sf x $25 psf) - - 107,500.00 Tenant
buildout
Vacant (E103 -1,532 sf X $20 psf) - - 30,640.00 Tenant
buildout
Vacant (M102 - 1,157 SF x $20 psf) - - 23,140.00 Tenant
buildout
U.S. Army (P101 - 4,700 sf x $37 psf) - - 173,900.00 Tenant
buildout
Loews Utilities - - 74,300.00
Loews Footing - - 5,000.00
TOTALS 7,044,038.00 851,825.85 1,118,494.25
Remaining Construction Reserve @ 1.25% = $1,398,117.81
X-7
SCHEDULE VIII
Intentionally Omitted.
X-8
SCHEDULE IX
Intentionally Omitted.
X-9
SCHEDULE X
OTHER CONTRACT FUNDS AGREEMENTS
None.
X-10