LOAN AGREEMENT Dated as of September 12, 2007 Between MAGUIRE PROPERTIES-355 S. GRAND, LLC, a Delaware limited liability company, as Borrower and EUROHYPO AG, NEW YORK BRANCH, as Lender

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I.	DEFINITIONS; PRINCIPLES OF CONSTRUCTION	1
Section 1.1.	Definitions	1
Section 1.2.	Principles of Construction	26
II.	THE LOAN	27
Section 2.1.	The Loan	27
Section 2.2.	Interest Rate	32
Section 2.3.	Loan Payments	36
Section 2.4.	Prepayments	37
Section 2.5.	Interest Rate Swap	39
Section 2.6.	Guarantee Rights	39
III.	REPRESENTATIONS AND WARRANTIES	40
Section 3.1.	Borrower Representations	40
Section 3.2.	Survival of Representations	52
IV.	BORROWER COVENANTS	52
Section 4.1.	Borrower Affirmative Covenants	52
Section 4.2.	Borrower Negative Covenants	62
V.	INSURANCE, CASUALTY AND CONDEMNATION	66
Section 5.1.	Insurance	66
Section 5.2.	Casualty and Condemnation	71
Section 5.3.	Delivery of Net Proceeds	72
VI.	RESERVE FUNDS	76
Section 6.1.	KPMG Abatement Funds	76
Section 6.2.	Tax Funds	76
Section 6.3.	Insurance Funds	77
Section 6.4.	Capital Expenditure Funds	78
Section 6.5.	Rollover Funds	80
Section 6.6.	Existing Tenant Improvement Funds	81
Section 6.7.	▇▇▇▇▇▇ Landlord Work Funds	82
Section 6.8.	Security Interest in Reserve Funds	85

 

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VII.	PROPERTY MANAGEMENT	86
Section 7.1.	The Management Agreement	86
Section 7.2.	Prohibition Against Termination or Modification	87
Section 7.3.	Replacement of Manager	87
VIII.	TRANSFERS	87
Section 8.1.	Transfer or Encumbrance of Property.	87
IX.	SALE AND SECURITIZATION OF MORTGAGE	92
Section 9.1.	Sale of Mortgage and Securitization	92
Section 9.2.	Securitization Indemnification	94
X.	DEFAULTS	97
Section 10.1.	Event of Default	97
Section 10.2.	Remedies	99
Section 10.3.	Right to Cure Defaults	100
Section 10.4.	Remedies Cumulative	101
Section 10.5.	▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement Cash Collateral or Collateral Letter of Credit.	101
XI.	MISCELLANEOUS	105
Section 11.1.	Successors and Assigns	105
Section 11.2.	Lender’s Discretion	105
Section 11.3.	Governing Law	105
Section 11.4.	Modification, Waiver in Writing	107
Section 11.5.	Delay Not a Waiver	107
Section 11.6.	Notices	107
Section 11.7.	Trial by Jury	108
Section 11.8.	Headings	109
Section 11.9.	Severability	109
Section 11.10.	Preferences	109
Section 11.11.	Waiver of Notice	109
Section 11.12.	Remedies of Borrower	109
Section 11.13.	Expenses; Indemnity	110
Section 11.14.	Schedules Incorporated	111

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Section 11.15.	Offsets, Counterclaims and Defenses	111
Section 11.16.	No Joint Venture or Partnership; No Third Party Beneficiaries	111
Section 11.17.	Publicity	112
Section 11.18.	Waiver of Marshalling of Assets	112
Section 11.19.	Waiver of Offsets/Defenses/Counterclaims	112
Section 11.20.	Conflict; Construction of Documents; Reliance	112
Section 11.21.	Brokers and Financial Advisors	113
Section 11.22.	Exculpation	113
Section 11.23.	Prior Agreements	116
Section 11.24.	Servicer	116
Section 11.25.	Joint and Several Liability	117
Section 11.26.	Creation of Security Interest	117
Section 11.27.	Assignments and Participations	117
Section 11.28.	[Reserved]	118
Section 11.29.	Component Notes.	118
Section 11.30.	Approvals; Third Parties; Conditions	119
Section 11.31.	Limitation on Liability of Lender’s Officers, Employees, etc	119
Section 11.32.	Mezzanine Loan Option	120
Section 11.33.	Exclusivity.	121
Section 11.34.	Rating Agency Confirmation	121

 

 

 

 

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▇▇▇▇▇▇▇▇▇ of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Affiliated Hedge Party” means ▇▇▇▇▇▇▇ Properties, L.P., a Maryland limited partnership.

 

“Affiliated Manager” shall mean any managing agent in which Borrower, Borrower Principal, any SPC Party (if any) or any Affiliate of such Persons has, directly or indirectly, any legal, beneficial or economic interest.

 

“Agent” shall mean Bank of the West (and any successor Eligible Institution thereto) or any Eligible Institution.

 

“Aggregate Calculated Debt Service” shall mean, with respect to any particular period of time, the sum of the Calculated Debt Service plus the payments of interest that would be due on a principal balance equal the maximum commitment amount under each a Permitted Mezzanine Loan, assuming interest payments at the greater of (i) an annualized interest rate of 6.5% and (ii) the actual interest rate under each such Permitted Mezzanine Loan for the most recently ended calendar quarter.

 

“Aggregate Debt” shall mean the outstanding principal amount of the Loan and the Permitted Mezzanine Loan, together with all interest accrued and unpaid thereon.

 

“Aggregate Debt Service Coverage Ratio” shall mean a ratio for the applicable period in which:

 

(i)

the numerator is the Historical Net Operating Income for such period as set forth in the financial statements required in accordance with this Agreement; and

 

(ii)

the denominator is the Aggregate Calculated Debt Service due for such period.

 

“Aggregate Loan to Value Ratio” shall mean the ratio, as of a particular date, in which the numerator is equal to the Aggregate Debt and the denominator is equal to the appraised value of the Property based on an Appraisal, as determined by Lender in its sole and absolute discretion.

 

“ALTA” shall mean American Land Title Association or any successor thereto.

 

“Alteration Threshold” shall mean an amount equal to five percent (5%) of the original principal amount of the Loan.

 

“Annual Budget” shall have the meaning set forth in Section 4.1.6.

 

 

 

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when the Loan is a LIBOR Loan or (ii) the Substitute Rate plus the Substitute Spread with respect to any period when the Loan is a Substitute Rate Loan.

 

“Appraisal” shall mean an appraisal of the Property in its then “as is” condition, prepared not more than  ninety (90) days prior to the Closing Date (or other relevant date with respect to an updated Appraisal or an Appraisal with respect to the Property) by an appraiser selected by Lender, which appraisal (i) shall meet the minimum appraisal standards for national banks promulgated by the Comptroller of the Currency pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (FIRREA), and (ii) otherwise shall be in both form and substance satisfactory to Lender in its sole and absolute discretion.

 

“Approved Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) Lender, (b) an Affiliate of Lender or (c) an entity or an Affiliate of an entity that administers or manages Lender.

 

“Approved Transferee” means a Person who (i) is not and has not, within the preceding two (2) years, been adverse to any Note B Lender in any judicial, arbitral or similar proceeding, (ii) is not a Prohibited Person, and (iii) in the event that the Guarantor or REIT shall no longer own at least fifty-one percent (51%) of the direct or indirect ownership interests in Borrower as a result of a transfer permitted hereunder, is an Institutional Investor.

 

“Assignment of Leases” shall mean that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Assignment of Letter of Credit” shall mean an assignment and/or security agreement in form and content acceptable to Lender, executed by a Person that is assigning to and granting a security interest in a Tenant Letter of Credit in favor of Lender that names such Person as account party and/or beneficiary.

 

“Assignment of Management Agreement” shall mean that certain Assignment of Management Agreement and Subordination of Management Fees dated the date hereof among Borrower, Manager and Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Assignment of Protection Agreement” shall mean that certain Collateral Assignment of Interest Rate Protection Agreement dated the date hereof among Borrower and Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of the Property.

 

 

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but without taking into account straight-lining of rents and extraordinary revenues (including, but not limited to lease termination payments) (provided that in no event shall the Rents taken into account in this clause (a) be based on straight-lining of rents or include Rents from month-to-month tenants, or from tenants in bankruptcy, or from tenants in monetary default for sixty (60) days or more under their Leases, or from tenants with Leases expiring within six (6) months of the applicable test date (unless the applicable tenant has an executed letter of intent for an extension or provided written confirmation of its election to exercise a renewal option), and the Rents taken into account in this clause (i) shall be adjusted for a deemed vacancy factor equal to five percent (5%) of the revenues referred to in clause (a) for the applicable period (if the actual vacancy factor is less)) minus (b) the sum of all annualized Operating Expenses during the applicable period, including, without duplication, (i) annualized insurance premiums allocable to the applicable period, (ii) annualized real estate taxes allocable to the applicable period, (iii) capital expenses at an imputed annual rate of $0.15 per rentable square foot allocable to the applicable period, and (iv) management fees (in the amount equal to the greater of (1) management fees actually paid during the applicable period, and (2) an imputed rate of two percent (2.00%) of annualized revenues referred to in clause (a) allocable to the applicable period).  Historical Net Operating Income shall in no event include extraordinary non-recurring revenues (such as lease termination payments) or expenses (it being understood that any payments that Borrower makes to U.S. Bank Tower owner pursuant to the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement are deemed as extraordinary non-recurring expenses), or any debt service payable with respect to the Loan.

 

“Improvements” shall have the meaning set forth in the granting clause of the Mortgage.

 

 

 

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Monthly Payment Date occurring in September, 2007, the Interest Period shall be the period commencing on the Closing Date to and including October 8, 2007.  Each Interest Period, except for the Interest Period ending October 8, 2007, shall be a full month and shall not be shortened by reason of any payment of the Loan prior to the expiration of such Interest Period.  Notwithstanding anything to the contrary, in the event Lender exercises its right to change the Monthly Payment Date in accordance with the terms of the definition thereof, the commencement dates and dates of each subsequent Interest Period hereunder shall change accordingly whereby the Interest Period thereafter shall commence on the Monthly Payment Date of the preceding calendar month and terminate on the day immediately preceding the Monthly Payment Date of the current calendar month (by the way of example, in the event Lender changes the Monthly Payment Date to the tenth (10th) day of the calendar month, the Interest Period thereafter, with respect to any Monthly Payment Date, shall commence on the tenth (10th) day of the preceding calendar month and terminate on the ninth (9th) day of the current calendar month).

 

“Interest Rate Protection Agreement” shall mean one or more interest rate hedge agreements (together with the confirmation and schedules relating thereto) in form and substance satisfactory to Lender, between Borrower (but only if such hedge agreement is a rate cap under which the sole obligation of Borrower is to make payment of an up-front premium) or Guarantor (if such hedge agreement is a swap agreement or other hedge agreement other than a rate cap under which the sole obligation of Borrower is to make payment of an up-front premium) and, subject to Section 4.1.12, Bank of America N.A. or a Counterparty reasonably acceptable to Lender with a Minimum Counterparty Rating, and all amendments, restatements, replacements, supplements and modifications thereto.

 

“Interest Shortfall” shall have the meaning specified in Section 2.4.1(b).

 

“Issuing Bank” shall mean, with respect to a Tenant Letter of Credit, the Person issuing such Tenant Letter of Credit.

 

“Issuing Bank Acknowledgment” shall mean a written acknowledgment from an Issuing Bank acceptable to Lender in form and substance acknowledging the Lender’s collateral assignment of and security interest in a Tenant Letter of Credit issued by such Issuing Bank.

 

“KPMG Abatement Funds” shall have the meaning specified in Section 6.1.

 

“KPMG” shall have the meaning specified in Section 11.22(xv).

 

“KPMG Lease” shall mean that certain lease agreement with KPMG LLP, a Delaware limited liability partnership (formerly known as KPMG Peat Marwick LLP), as tenant, with respect to space at the Property, dated June 1, 1998, as modified, amended, supplemented and in effect from time to time.

 

“▇▇▇▇▇▇ Landlord Work” shall have the meaning set forth in Section 6.7.1.

 

“▇▇▇▇▇▇ Landlord Work Budget” shall have the meaning set forth in Section 6.7.2.

 

“▇▇▇▇▇▇ Landlord Work Funds” shall have the meaning set forth in Section 6.7.1.

 

 

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affect the Property, in law or in equity, including without limitation the following:  (A) the REA; (B) that certain Covenant and Agreement Re – Central Plant dated as of December 20, 1982, by and between ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties Phase I, a California limited partnership, and ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties-South Tower, a California limited partnership, recorded in the Official Records on December 22, 1982 as Instrument No. ▇▇-▇▇▇▇▇▇▇ (the “Central Plant REA”); (C) that certain Reciprocal Grant of Easements and Declaration of Establishment of Restrictions and Covenants – Parcels X-2(a) and X-2(b) dated as of September 25, 1981, by and between ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties-South Tower, a joint venture, The RHF Bunker Hill Corporation, a California non-profit corporation, and The Community Redevelopment Agency of the City of Los Angeles, California, a public body corporate and politic (the “CRA”), and recorded in the Official Records on February 12, 1982, as Instrument no. 82-160076, as amended by that certain First Amendment to Reciprocal Grant of Easements and Declaration of Establishment of Restrictions and Covenants – Parcels X-2(a) and X-2(b) and ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ dated as of November 14, 1986 and recorded in the Official Records on November 20, 1986 as Instrument No. ▇▇-▇▇▇▇▇▇▇; (D) that certain Covenant and Agreement Regarding Maintenance of Off-Street Parking Space dated as of July 11, 1988, executed by ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Partners-South Tower, a California limited partnership, and recorded in the Official Records on July 28, 1988, as Instrument No. ▇▇-▇▇▇▇▇▇▇; (E) that certain Covenant and Agreement Regarding Maintenance of Off-Street Parking space dated as of July 25, 1988, executed by System Parking Inc., a California corporation, and Cullen-Los Angeles, Inc., a California corporation, and recorded in the Official Records on November 22, 1989, as Instrument No. 89-1888018; (F) that certain Covenant and Agreement Regarding Maintenance of Off-Street Parking Space dated as of July 12, 1988, executed by ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Partners-South Tower, a California limited partnership, and recorded in the Official Records on July 28, 1988, as Instrument No. ▇▇-▇▇▇▇▇▇▇; and (G) that certain Agreement Containing Covenants Affecting Real Property in Connection with Certificate of Completion dated as of November 21, 1984, executed by ▇▇▇▇▇▇▇ Partners-▇▇▇▇▇▇▇ Properties-South Tower, a California limited partnership, and the CRA and recorded in the Official Records on November 27, 1984, as Instrument No. ▇▇-▇▇▇▇▇▇▇.

 

“Maturity Date” shall mean October 9, 2012 or such other date on which the final payment of principal of the Notes become due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

 

“Maximum Legal Rate” shall mean the maximum non-usurious 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 Notes 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.

 

“Mezzanine Borrower” shall have the meaning set forth in Section 11.32.

 

“Mezzanine Lender” shall have the meaning set forth in Section 11.32.

 

“Mezzanine Loan” shall have the meaning set forth in Section 11.32.

 

“Mezzanine Option” shall have the meaning set forth in Section 11.32.

 

 

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computer processing charges, tenant improvements, leasing commissions and normalized capital expenditures (but only to the extent funded from Gross Income from Operations), operational equipment or other lease payments as approved by Lender, and other similar costs, but excluding from such calculation depreciation, debt service and interest costs, Capital Expenditures, and contributions to Capital Expenditure Funds, the Tax Funds, Insurance Funds, the Rollover Funds, the Existing Tenant Improvement Funds and any other reserves required under the Loan Documents.

 

“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.

 

“Outside Future Advance Date” shall mean December 31, 2008, which date shall be subject to extension as a result of Unavoidable Delay, but not to a date later than February 28, 2009.

 

“Patriot Act” shall mean collectively all laws relating to terrorism or money laundering, including Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56).

 

“Permitted Encumbrances” shall mean, collectively, (i) the Liens and security interests created by the Loan Documents, (ii) all Liens, encumbrances and other matters expressly set forth on Schedule A or Schedule B of the Title Insurance Policy, (iii) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, and (iv) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole, but good faith discretion, or that are otherwise expressly permitted by this Agreement or the other Loan Documents.

 

“Permitted Fund Manager” means any Person that on the date of determination is a nationally-recognized manager of investment funds investing in debt or equity interests relating to commercial real estate, and in each case is (a) investing through a fund with committed capital of at least $250,000,000.00, and (b) not subject to any bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor-creditor relationships.

 

“Permitted Investments” shall have the meaning set forth in the Cash Management Agreement.

 

“Permitted Mezzanine Borrower” means the obligor of any Permitted Mezzanine Loan, which obligor shall be a wholly-owned subsidiary of Guarantor (or of another Person who shall have acquired its indirect interest in Borrower in a transfer that complies with Article 8 hereof) whose principal asset, directly or indirectly, shall be the ownership interests in Borrower.

 

“Permitted Mezzanine Lender” means the holder from time to time of a Permitted Mezzanine Loan (subject to the terms of any applicable intercreditor agreement that relates to such Permitted Mezzanine Loan).

 

 

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relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”);

 

(ii)           that is owned or controlled by, or acting for or on behalf of, any Person or entity that is listed in the Annex to, or is otherwise subject to the provisions of the Executive Order;

 

(iii)           with whom Lender is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering Law, including the Executive Order;

 

(iv)           who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order;

 

(v)           that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website or at any replacement website or other replacement official publication of such list; or

 

(vi)           who is an Affiliate of a Person listed above.

 

“Prohibited Transfer” shall have the meaning specified in Section 8.1(a).

 

“Property” shall mean, collectively, (a) the parcel of real property located in the City of Los Angeles, State of California, the Improvements thereon and all personal property owned by Borrower and encumbered by the Mortgage, together with all rights pertaining to such property and Improvements, all as more particularly described in the granting clauses of the Mortgage and located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (commonly referred to as the “KPMG Tower”) and (b) the parcel of real property located in the City of Los Angeles, State of California, the Improvements thereon and all personal property owned by Borrower and encumbered by the Mortgage, together with all rights pertaining to such property and Improvements, all as more particularly described in the granting clauses of the Mortgage and located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (commonly referred to as the “X-2 Parking Structure”).

 

“Property Condition Report” shall mean that certain Property Condition Report prepared by EMG, dated August 14, 2007.

 

“Property Insurance Sharing Agreement” shall mean that certain Amended and Restated Property Insurance Sharing Agreement, dated as of June 27, 2003, between Borrower’s predecessor in interest, REIT and certain of their respective Affiliates, as amended by that certain First Amendment to at he Amended and Restated Property Insurance Sharing Agreement dated as of December 15, 2003.

 

“Proposed Lender” shall have the meaning set forth in Section 2.2.3(d).

 

 

 

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designated by Lender and, after the final Securitization of the Loan, shall mean any of the foregoing that have rated any of the Securities.

 

“Rating Agency Confirmation” shall mean a written affirmation from each of the Rating Agencies that the credit rating of the Securities by such Rating Agency immediately prior to the occurrence of the event with respect to which such Rating Agency Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrence of such event, which affirmation may be granted or withheld in such Rating Agency’s sole and absolute discretion.

 

“REA” shall mean, collectively, as the same may be amended, restated, supplemented or otherwise modified from time to time, those certain agreements more specifically described on Schedule V attached hereto and made a part hereof.

 

“Recourse Guarantee” shall mean that certain Recourse Guarantee of even date herewith from Guarantor for the benefit of Lender.

 

“Registration Statement” shall have the meaning set forth in Section 9.2(b).

 

“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Loan (or if applicable, Note A).

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System from time to time in effect, including any successor or other Regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.

 

“REIT” shall mean ▇▇▇▇▇▇▇ Properties, Inc., a Maryland real estate investment trust.

 

“Related Entity” means, as to any Person, (a) any Affiliate of such Person; (b) any other Person into which, or with which, such Person is merged, consolidated or reorganized, or which is otherwise a successor to such Person by operation of law, or which acquires all or substantially all of the assets of such Person; (c) any other Person which is a successor to the business operations of such Person and engages in substantially the same activities; or (d) any Affiliate of the Persons described in clause (b) or (c) of this definition.

 

“Related Loan” shall mean a loan made to an Affiliate of Borrower or secured by a Related Property, which is included in a Securitization with the Loan.

 

“Related Property” shall mean a parcel of real property, together with improvements thereon and personal property related thereto, that is “related”, within the meaning of the definition of Significant Obligor, to the Property.

 

 

 

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deposits (including, without limitation, any Tenant Letter of Credit, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or its agents or employees from any and all sources arising from or attributable to the Property, and proceeds, if any, from business interruption or other loss of income insurance.

 

“Requesting Lender” shall have the meaning set forth in Section 2.2.3(d).

 

“Reserve Funds” shall mean, collectively, the KPMG Abatement Funds, the Capital Expenditure Funds, the Insurance Funds, the Tax Funds, the Rollover Funds, the Sweep Account, and the Existing Tenant Improvement Funds.

 

“Reserve Requirements” means with respect to any Interest Period, the maximum rate of all reserve requirements (including, without limitation, all basic, marginal, emergency, supplemental, special or other reserves and taking into account any transitional adjustments or other schedule changes in reserve requirements during the Interest Period) which are imposed under Regulation D on eurocurrency liabilities (or against any other category of liabilities which includes deposits by reference to which LIBOR is determined or against any category of extensions of credit or other assets which includes loans by a non-United States office of a depository institution to United States residents or loans which charge interest at a rate determined by reference to such deposits) during the Interest Period and which are applicable to member banks of the Federal Reserve System with deposits exceeding one billion dollars, but without benefit or credit of proration, exemptions or offsets that might otherwise be available from time to time under Regulation D.  The determination of the Reserve Requirements shall be based on the assumption that Lender funded 100% of the Loan in the interbank eurodollar market.  In the event of any change in the rate of such Reserve Requirements under Regulation D during the Interest Period, or any variation in such requirements based upon amounts or kinds of assets or liabilities, or other factors, including, without limitation, the imposition of Reserve Requirements, or differing Reserve Requirements, on one or more but not all of the holders of the Loan or any participation therein, Lender may use any reasonable averaging and/or attribution methods which it deems appropriate and practical for determining the rate of such Reserve Requirements which shall be used in the computation of the Reserve Requirements.  Lender’s computation of same shall be final absent manifest error.  Reserve Requirements hereunder shall not exceed any reserve requirements determined by Lender for other loans similar to this Loan.

 

“Restoration” shall have the meaning set forth in Section 5.2.1.

 

“Restoration Threshold” shall mean Three Million Dollars ($3,000,000).

 

“Restricted Party” shall mean Borrower, Borrower Principal, any SPC Party (if any), any Affiliated Manager, or any shareholder, partner, member or non-member manager, or any direct or indirect legal or beneficial owner of Borrower, Borrower Principal, any Affiliated Manager or any non-member manager.

 

“Rollover Funds” shall have the meaning set forth in Section 6.5.1.

 

 

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and 88/100 Dollars ($364,894,526.88).  Such advance shall be evidenced by Note A and Note B-1.

 

2.1.6                      Conditions Precedent for Future Advances.  Note B-2 Lender’s obligation to make any Future Advance is subject to the satisfaction of the following conditions:

 

(a)           Minimum Amount of Advance Request.  During any calendar month, any Advance Request for a Future Advance shall be for no less than One Hundred Thousand and No/100 Dollars ($100,000) (or, if less, the full amount of the unfunded TI/LC Maximum Advance Amount or Maximum ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Amount, as applicable).

 

(b)           Title Policy Endorsement.  Lender shall have received an endorsement to the title insurance policy delivered to Lender in connection with the closing of the Loan, in form reasonably acceptable to Lender, redating the date of such policy to be as of the date of the Future Advance and, if necessary, increasing the amount insured thereby to the amount of the Loan Amount then advanced, without additional exception.

 

(c)           No Event of Default.  No Event of Default shall exist on the date of the Advance Request for any Future Advance or on the date the Future Advance is actually made.

 

(d)           Secured Amount.  Each Future Advance shall be considered an advance of the Loan Amount, shall be added to the unpaid principal balance of the Loan as of the day such advance is made for purposes of Borrower’s payment obligations under this Agreement, and repayment thereof, together with interest thereon, shall be secured by the Mortgage and other collateral given for the Loan.

 

No waiver given by Note B-2 Lender of any condition precedent to a Future Advance shall preclude Note B-2 Lender from requiring that such condition be satisfied prior to making any other Future Advance.

 

2.1.7                      Additional TI/LC Advances.  Upon the satisfaction (or waiver in writing by Note B-2 Lender) of the conditions pursuant to Section 2.1.6 and this Section 2.1.7, Note B-2 Lender shall make to Borrower advances for payment of tenant improvement expenses and leasing commissions incurred by Borrower pursuant to the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease (each, a “TI/LC Advance”) in the aggregate amount of up to Twenty-One Million Two Hundred Five Thousand Four Hundred Seventy-Three and 12/100 Dollars ($21,205,473.12) (the “TI/LC Maximum Advance Amount”). Each TI/LC Advance shall be considered an advance of the Loan, shall be added to the unpaid principal balance of the Loan as of the day such advance is made and shall be evidenced by Note B-2, and repayment thereof, together with interest thereon, shall be secured by the Mortgage and other collateral given for the Loan.  The following conditions apply to each TI/LC Advance:

 

 

 

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the Manager for tenant improvement supervision/coordination fees in accordance with the Management Agreement.

 

(b)           Disbursement Requirements.  Together with each Advance Request for a TI/LC Advance, Borrower shall furnish Lender and Note B-2 Lender with copies of bills and other documentation (including lien releases or lien releases conditioned only upon payment) reasonably required by Note B-2 Lender (and consistent with the documentation required to be delivered under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease) to establish that the related tenant improvement expenses and leasing commissions have actually been incurred in accordance with the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease, that any work relating thereto has been completed and that such amounts that are then due and payable or have been paid.  Note B-2 Lender shall approve or disapprove any Advance Request (and, if approved, make the related TI/LC Advance to Borrower or Borrower’s designee) within ten (10) Business Days after Note B-2 Lender’s receipt of such Advance Request.

 

(c)           Lien Free.  Note B-2 Lender is satisfied that, in accordance with the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease, the tenant improvements are being constructed Lien free, substantially in accordance with the tenant improvement plans approved in accordance with the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease, and withholding such disbursement is whole or in part is not required under any applicable lien law.

 

(d)           Access.  Borrower shall have provided Note B-2 Lender, and any consultant on behalf of Note B-2 Lender, prompt and reasonable access to the Property (in accordance with Borrower’s rights under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease) in order to inspect the tenant improvement work then completed.

 

In the event that the Borrower has not drawn on the full amount of the TI/LC Maximum Advance Amount on or before the Outside Future Advance Date, Note B-2 Lender’s commitment to advance the then unfunded portion of the TI/LC Maximum Amount shall be of no further force or effect.

 

Note B-2 Lender shall have the right to delegate in writing all of its approval rights under this Section 2.1.7 to the Note B Designated Representative.  In such case, from and after the date on which written notice of such delegation is delivered to Borrower, all notices, requests and other materials to be delivered to Note B-2 Lender under this Section 2.1.7 shall be delivered to the Note B Designated Representative in accordance with written instructions delivered by Note B-2 Lender to Borrower, and all notices received by Borrower from the Note B Designated Representative shall be binding on Note B-2 Lender.

 

 

 

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respect to all such ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advances, the sum of Thirteen Million Nine Hundred Thousand and No/100 Dollars ($13,900,000.00) (the “Maximum ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance Amount”).   Each ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance shall be considered an advance of the Loan, shall be added to the unpaid principal balance of the Loan as of the day such advance is made for purposes of Borrower’s payment obligations under this Agreement, and repayment thereof, together with interest thereon, shall be secured by the Mortgage and other collateral given for the Loan.  The following additional terms and provisions apply to each ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance:

 

(a)           ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance on Monthly Payment Date.  Note B-2 Lender shall, provided Lender and Note B-2 Lender receive written request from Borrower delivered not later than five (5) Business Days prior to the pending Monthly Payment Date, make a ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance to Borrower on such Monthly Payment Date.  The amount of such ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance shall be in the amount requested by Borrower, not to exceed the amount that would have been due, on the first day of the month in which such Monthly Payment Date occurs, in monthly rent (inclusive of base rent, anticipated operating expense reimbursements and anticipated contributions to parking revenues) under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease, as if the first day of the first full month after the Closing Date were the date on which the obligation of the tenant to pay rent under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease commenced, as certified by Borrower to Lender and Note B-2 Lender in its applicable Advance Request.  The amount of each such ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance shall be advanced directly by Note B-2 Lender for credit to the account of Borrower in partial payment of the interest due and payable under the Notes on the Monthly Payment Date on which such amount is advanced.  Note B-2 Lender’s failure to make a ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance shall not relieve Borrower of its obligation to pay all amounts due in accordance with this Agreement on any Monthly Payment Date.  Subject to Section 2.18(b) below, Note B-2 Lender shall have no obligation to make any ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance after the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Commencement Date.

 

 

 

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Maximum ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance Amount on or before the Outside Future Advance Date, Note B-2 Lender’s commitment to advance the then unfunded portion of the Maximum ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance Amount shall be of no further force or effect.

 

(c)           Note B-2 Lender shall have the right to delegate in writing all of its approval rights under this Section 2.1.8 to the Note B Designated Representative.  In such case, from and after the date on which written notice of such delegation is delivered to Borrower, all notices, requests and other materials to be delivered to Note B-2 Lender under this Section 2.1.8 shall be delivered to the Note B Designated Representative in accordance with written instructions delivered by Note B-2 Lender to Borrower, and all notices received by Borrower from the Note B Designated Representative shall be binding on Note B-2 Lender.

 

 

 

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Puerto Rico).  If any Foreign Taxes are required to be withheld from any amounts payable to Lender hereunder, the amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after payment of all Foreign Taxes) interest or any such other amounts payable hereunder at the rate or in the amounts specified hereunder.  Whenever any Foreign Tax is payable pursuant to applicable law by Borrower, as promptly as possible thereafter, Borrower shall send to Lender an original official receipt, if available, or certified copy thereof showing payment of such Foreign Tax.  Borrower hereby indemnifies Lender for any incremental taxes, interest or penalties that may become payable by Lender which may result from any failure by Borrower to pay any such Foreign Tax when due to the appropriate taxing authority or any failure by Borrower to remit to Lender the required receipts or other required documentary evidence.  If any Lender, other than a REMIC Trust, requests compensation pursuant to this Section 2.2.3(d) (any such Lender, other than a REMIC Trust, requesting such compensation, or whose obligations are so suspended, being herein called a “Requesting Lender”), Borrower, upon three (3) Business Days’ notice, may require that such Requesting Lender transfer all of its right, title and interest under this Agreement and such Requesting Lender’s Note to an Eligible Assignee (a “Proposed Lender”) identified by Borrower that is satisfactory to the Note B Designated Representative,  (i) if such Proposed Lender agrees to assume all of the obligations of such Requesting Lender hereunder in accordance with Section 11.27, and to purchase all of such Requesting Lender’s Loans hereunder for consideration equal to the aggregate outstanding principal amount of such Requesting Lender’s Loans, together with interest thereon to the date of such purchase (to the extent not paid by Borrower), and satisfactory arrangements are made for payment to such Requesting Lender of all other amounts accrued and payable hereunder to such Requesting Lender as of the date of such transfer (including any fees accrued hereunder as if all of such Requesting Lender’s Loans were being prepaid in full on such date) and (ii) if such Requesting Lender has requested compensation pursuant to this Section 2.2.3(d), such Proposed Lender’s aggregate requested compensation, if any, pursuant to this Section 2.2.3(d) with respect to such Requesting Lender’s Loans is lower than that of the Requesting Lender.  Upon the assignment and assumption of such Requesting Lender’s interest pursuant to the provisions of Section 11.27, such Proposed Lender shall be a “Lender” for all purposes hereunder.  Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements of Borrower contained in this Section 2.2.3(d) and any other provisions of this Agreement with respect to payment of expenses (without duplication of any payments made to such Requesting Lender by Borrower or the Proposed Lender) shall survive for the benefit of such Requesting Lender under this Section 2.2.3(d) with respect to the time prior to such replacement.

 

 

 

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reasonably incurred by Lender in making any conversion in accordance with this Agreement, including, without limitation, any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain the LIBOR Loan hereunder.  Lender’s notice of such costs, as certified to Borrower, shall be set forth in reasonable detail and Lender’s calculation shall be conclusive absent manifest error.

 

(f)           In the event that any change in any requirement of law or in the interpretation or application thereof, or compliance by Lender with any request or directive (whether or not having the force of law) hereafter issued from any central bank or other Governmental Authority:

 

(i)           shall hereafter have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to capital adequacy) by any amount deemed by Lender to be material;

 

(ii)           shall hereafter impose, modify, increase or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of Lender which is not otherwise included in the determination of the rate hereunder; or

 

(iii)           shall hereafter impose on Lender any other condition and the result of any of the foregoing is to increase the cost to Lender of making, renewing or maintaining loans or extensions of credit or to reduce any amount receivable hereunder;

 

then, in any such case, Borrower shall promptly pay Lender, upon demand, any additional amounts necessary to compensate Lender for such additional cost or reduced amount receivable which Lender deems to be material as reasonably determined by Lender.  If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.2.3(f), Borrower shall not be required to pay same unless they are the result of requirements imposed generally on lenders as foreign banks or trustee in a Securitization similar to Lender and not the result of some specific reserve or similar requirement imposed on Lender as a result of Lender’s special circumstances.  If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.2.3(f), Lender shall provide Borrower with not less than thirty (30) days written notice specifying in reasonable detail the event by reason of which it has become so entitled and the additional amounts required to fully compensate Lender for such additional costs or reduced amounts.  A certificate as to any additional costs or amounts payable pursuant to the foregoing sentence, executed by an authorized signatory of Lender and submitted by Lender to Borrower shall be conclusive in the absence of manifest error.  This provision shall survive payment of the Notes and the satisfaction of all other obligations of Borrower under this Agreement and the Loan Documents.

 

 

 

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interest on a LIBOR Loan, including, without limitation, any such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or mandatory) of the LIBOR Loan on a day that (A) is not the Monthly Payment Date immediately following the last day of an Interest Period with respect thereto or (B) is the Monthly Payment Date immediately following the last day of an Interest Period with respect thereto if Borrower did not give the prior written notice of such prepayment required pursuant to the terms of this Agreement, including, without limitation, such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain the LIBOR Loan hereunder, (iii) the conversion (for any reason whatsoever, whether voluntary or involuntary) of the Applicable Interest Rate to the Substitute Rate plus the Substitute Spread with respect to any portion of the outstanding principal amount of the Loan then bearing interest at a rate other than the Substitute Rate plus the Substitute Spread on a date other than the Monthly Payment Date immediately following the last day of an Interest Period, including, without limitation, such loss or expenses arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan hereunder or (iv) any failure of Borrower to borrower a Future Advance on the date specified in the relevant Advance Request (the amounts referred to in clauses (i), (ii), (iii) and (iv) are herein referred to collectively as the “Breakage Costs”).  Without limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (I) the amount of interest that otherwise would have accrued on the principal amount not so paid, or so prepaid or converted, or not so borrowed for the period from the date of such required payment, prepayment, or conversion or failure to borrow to the last day of the then current Interest Period for such principal amount (or, in the case of a failure to borrow, the Interest Period for such Future Advance that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such LIBOR Loan or Future Advance provided for herein over (II) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount such Lender would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such Lender), or if such Lender shall cease to make such bids, the equivalent rate, as reasonably determined by such Lender, derived from Page 3750 of the Dow ▇▇▇▇▇ Markets (Telerate) Service or other publicly available source as described in the definition of LIBOR.

 

(h)           The provisions of this Section 2.2.3 shall survive payment of the Notes in full and the satisfaction of all other obligations of Borrower under this Agreement and the other Loan Documents.

 

 

 

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on account of the interest due hereunder.  All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

 

Section 2.3.                                Loan Payments.

 

2.3.1                      Payment Before Maturity Date.  Monthly installments of interest only shall be paid on each Monthly Payment Date commencing on November 9, 2007 and on each subsequent Monthly Payment Date thereafter to the Maturity Date for the Interest Period immediately prior to the date on which such Monthly Payment Date or Maturity Date occurs.  Interest on the outstanding principal amount of the Loan for the period through and including October 8, 2007 shall be paid by Borrower on the Closing Date.

 

2.3.2                      Payment on Maturity Date.

 

(a)           The outstanding principal balance of the Loan together with all accrued and unpaid interest thereon (including, without limitation, all interest that would accrue on the outstanding principal balance of the Loan through the end of the Interest Period immediately prior to the date on which the Maturity Date occurs) and all other amounts outstanding hereunder and under the Notes, the Mortgage and the other Loan Documents shall be due and payable, and Borrower shall pay all such sums to Lender, on the Maturity Date.

 

(b)           Borrower shall not have any option to extend the Maturity Date of the Loan.

 

2.3.3                      Interest Rate and Payment after Default.  In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the outstanding principal balance of the Loan shall accrue interest at the Default Rate, calculated from the date the Default occurred which led to such an Event of Default without regard to any grace or cure periods contained herein.  If all or any part of the principal amount of the Loan is repaid upon acceleration of the Loan following the occurrence of an Event of Default prior to the Permitted Prepayment Date, Borrower shall be required to pay to Lender, in addition to all other amounts then payable hereunder, a prepayment fee equal to one percent (1%) of the amount of principal being repaid together with a Spread Maintenance Premium calculated with respect to the amount of principal being repaid and Breakage Costs.

 

2.3.4                      Late Payment Charge.  If any principal, interest or any other sum due under the Loan Documents, other than the payment of principal due on the Maturity Date, is not paid by Borrower on the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of (a) five percent (5%) of such unpaid sum or (b) the maximum amount permitted by applicable law in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment.  Any such amount shall be secured by the Mortgage and the other Loan Documents.

 

 

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principal amount being prepaid which would have accrued through the end of the next succeeding Interest Period (the “Interest Shortfall”).  Any prepayment received by Lender on a date other than a Monthly Payment Date shall be held by Lender as collateral security for the Loan and shall be applied to the Debt on the next Monthly Payment Date;

 

(c)           Breakage Costs, if any, without duplication of any sums paid pursuant to the preceding clauses (a) and (b); and

 

(d)           [reserved]

 

(e)           all other sums then due under this Agreement, the Notes or the other Loan Documents.

 

If a notice of prepayment is given by Borrower to Lender pursuant to this Section 2.4.1, the amount designated for prepayment and all other sums required under this Section 2.4.1 shall be due and payable on the Prepayment Date.  If Borrower prepays the Loan in full, the obligation of the Note B-2 Lender to make any Future Advance shall be of no further force or effect.  Notwithstanding the foregoing, (x) Borrower shall have the right (in each case by notice to the Lender not later than five (5) Business Days prior to the scheduled date of prepayment) to postpone the date of prepayment specified in its prepayment notice on one or more occasions for an aggregate of up to ninety (90) days for all postponements, and (b) no more than two (2) times during the term of the Loan, Borrower shall have the right (in each case by notice to the Lender not later than five (5) Business Days prior to the  scheduled date of prepayment) to revoke its notice of its intention to prepay.

 

2.4.2                      Mandatory Prepayments.  On the next occurring Monthly Payment Date following the date on which Borrower actually receives any Net Proceeds, if and to the extent Lender is not obligated to make such Net Proceeds available to Borrower for the Restoration of the Property, Borrower shall prepay the outstanding principal balance of the Notes in an amount equal to one hundred percent (100%) of such Net Proceeds.  Such prepayment shall be applied, first, to interest on the outstanding principal balance of the Loan that would have accrued at the Applicable Interest Rate on the amount prepaid through the end of the Interest Period immediately prior to the date on which such prepayment occurs, and then to all other amounts then due to Lender under this Agreement or any of the other Loan Documents and then to the outstanding principal balance of the Loan.  Any partial prepayment shall be applied first to any balloon payment due at maturity, and then to installments of principal in the inverse order of their maturity.  No Spread Maintenance Premium shall be payable under this Section 2.4.2.

 

 

 

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Applicable Interest Rate on the amount of principal being prepaid through the end of the Interest Period immediately prior to the date on which such prepayment occurs, (ii) the Interest Shortfall, if applicable, with respect to the amount prepaid, (iii) Breakage Costs, if any, without duplication of any sums paid pursuant to  the preceding clause (ii); and (v) all other sums due under this Agreement (including Section 2.3.3), the Notes or the other Loan Documents in connection with a partial or total prepayment.

 

2.4.4                      If the Loan is prepaid in full at any time prior to the funding of the full amount of the TI/LC Maximum Advance Amount and Maximum ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance Amount, then the Note B Lenders’ obligations to fund any unfunded portion of the TI/LC Maximum Advance Amount and Maximum ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Imputed Rent Advance shall thereupon be null and void and of no further force or effect.

 

Section 2.5.                                Interest Rate Swap.  At all times during the term of the Loan, the Affiliated Hedge Party shall maintain in effect an Interest Rate Protection Agreement, with a notional amount equal to not less than the Facility Amount and with Bank of America N.A. (so long as it maintains a Minimum Counterparty Rating) or another Counterparty acceptable to Lender having a Minimum Counterparty Rating.  If the Affiliated Hedge Party obtains one (1) Interest Rate Protection Agreement, the LIBOR strike rate under the Interest Rate Protection Agreement shall be equal to or less than the Capped LIBOR Rate, or if the Affiliated Hedge Party obtains more than one (1) Interest Rate Protection Agreement, the blended LIBOR strike rate under the Interest Rate Protection Agreement, as determined by Lender, shall be equal to or less than the Capped LIBOR Rate.  The Interest Rate Protection Agreement shall be in form and substance reasonably satisfactory to Lender.  In the event of any downgrade or withdrawal of the rating of such Counterparty by any Rating Agency below the Minimum Counterparty Rating, Borrower shall cause the Affiliated Hedge Party to replace the Interest Rate Protection Agreement not later than thirty (30) Business Days following receipt of notice from Lender of such downgrade or withdrawal with an Interest Rate Protection Agreement in form and substance reasonably satisfactory to Lender (and meeting the requirements set forth in this Section 2.5) from a Counterparty acceptable to Lender having a Minimum Counterparty Rating; provided, however, that if Eurohypo AG is the Counterparty and any Rating Agency withdraws or downgrades the credit rating of Lender below the Minimum Counterparty Rating, Borrower shall not be required to cause the Affiliated Hedge Party to replace the Counterparty under the Interest Rate Protection Agreement provided that within thirty (30) Business Days following Lender’s notice to Borrower of such downgrade or withdrawal Eurohypo AG posts additional collateral acceptable to the Rating Agencies securing its obligations under the Interest Rate Protection Agreement.  Notwithstanding the foregoing, if S&P or Fitch withdraws or downgrades the credit rating of Eurohypo AG below “A”, or ▇▇▇▇▇’▇ withdraws or downgrades the credit rating of Eurohypo AG below “Aa3”, Borrower shall cause the Affiliated Hedge Party to replace the Interest Rate Protection Agreement not later than fifteen (15) Business Days following receipt of notice from Lender of such downgrade or withdrawal with an Interest Rate Protection Agreement in form and substance satisfactory to Lender (and meeting the requirements set forth in this Section 2.5) from a Counterparty acceptable to Lender having a Minimum Counterparty Rating.  

 

 

 

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portion of any of the Notes, and Lender agrees, provided that such guaranty does not adversely affect any of Lender’s rights and interests under the Loan Documents or violate any applicable Legal Requirements and the conditions set forth below are satisfied, to accept such guaranty.  Lender may condition its acceptance of such guaranty upon delivery to Lender of a satisfactory non-consolidation opinion (which opinion shall be in form, scope and substance acceptable in all respects to Lender and the Rating Agencies) and modification of the Loan Documents to reflect the existence and terms of such guaranty.  All expenses incurred by Lender in connection with its review of a proposed guaranty and the satisfaction of the conditions set forth above (including, without limitation, legal fees and expenses in connection therewith) shall be jointly and severally payable by Borrower and Guarantor whether or not Lender accepts the proposed guaranty.

 

III.

REPRESENTATIONS AND WARRANTIES

 

Section 3.1.                                Borrower Representations.

 

Borrower represents and warrants as of the Closing Date (without limiting the effectiveness of Borrower’s representations and warranties in accordance with Section 3.1.24 or any Advance Request) that:

 

3.1.1                      Organization.

 

(a)           Each of Borrower and each SPC Party is duly organized, validly existing and in good standing with full power and authority to own its assets and conduct its business, and is duly qualified in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect on its ability to perform its obligations hereunder, and Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents by it, and has the power and authority to execute, deliver and perform under this Agreement, the other Loan Documents and all the transactions contemplated hereby.

 

(b)           Borrower’s exact legal name is correctly set forth in the first paragraph of this Agreement.  Borrower is an organization of the type specified in the first paragraph of this Agreement.  Borrower is incorporated or organized under the laws of the state specified in the first paragraph of this Agreement.  Borrower’s principal place of business and chief executive office, and the place where Borrower keeps its books and records, including recorded data of any kind or nature, regardless of the medium of recording, including software, writings, plans, specifications and schematics, has been for the preceding four (4) months (or, if less than four (4) months, the entire period of the existence of Borrower) and will continue to be the address of Borrower set forth in the first paragraph of this Agreement (unless Borrower notifies Lender in writing at least thirty (30) days prior to the date of such change).  Borrower’s organizational identification number, if any, assigned by the state of its incorporation or organization is 4400680.  Borrower’s federal tax identification number is ▇▇-▇▇▇▇▇▇▇.

 

 

 

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except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

3.1.3                      No Conflicts.  The execution and delivery of this Agreement and the other Loan Documents by Borrower and the performance of its obligations hereunder and thereunder will not conflict with any provision of any law or regulation to which Borrower is subject, or conflict with, result in a breach of, or constitute a default under, any of the terms, conditions or provisions of any of Borrower’s organizational documents or any agreement or instrument to which Borrower is a party or by which it is bound, or any order or decree applicable to Borrower, or result in the creation or imposition of any lien on any of Borrower’s assets or property (other than pursuant to the Loan Documents).

 

3.1.4                      Litigation.  There is no action, suit, proceeding or investigation pending or, to Borrower’s knowledge, threatened against Borrower in any court or by or before any other Governmental Authority that would have a Material Adverse Effect.  Borrower is not in default with respect to any order or decree of any court or any order, regulation or demand of any Governmental Authority, which default might have a Material Adverse Effect.

 

3.1.5                      Agreements.  Borrower is not a party to any agreement or instrument or subject to any restriction which would have a Material Adverse Effect.  Borrower is not 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 or the Property is bound.  Borrower has no material financial obligation under any agreement or instrument to which Borrower is a party or by which Borrower 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.

 

3.1.6                      Consents.  No consent, approval, authorization or order of any court or Governmental Authority is required for the execution, delivery and performance by Borrower of, or compliance by Borrower with, this Agreement or the consummation of the transactions contemplated hereby, other than those which have been obtained by Borrower.

 

 

 

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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; except as disclosed in the Property Condition Report or the Environmental Report, to Borrower’s knowledge, there exists no structural or other material defects or damages in the Property, whether latent or otherwise, and Borrower has not received notice from any insurance company or bonding company of any defects or inadequacies in the Property, or any part thereof, that have not been corrected and 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.

 

3.1.21                      Boundaries.  Except as disclosed on the Survey, 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 affecting the Property encroach upon any of the improvements, so as to affect the value or marketability of the Property except those which are insured against by title insurance each of which, whether or not insured are, to the best of Borrower’s knowledge after due inquiry, shown on the Survey.

 

3.1.22                      Leases.  Borrower represents and warrants to Lender with respect to the Leases that:  (a) the rent roll attached hereto as Schedule I is true, complete and correct in all material respects and the Property is not subject to any Leases other than the Leases described in Schedule I, (b) the Leases identified on Schedule I are in full force and effect and there are no defaults under any Major Leases by either party, (c) there are no defaults under any non-Major Leases by either party that, individually or in the aggregate, could be reasonably expected to have a Material Adverse Effect, (d) the copies of the Leases delivered to Lender are true and complete, and there are no oral agreements with respect thereto, (e) no Rent (including security deposits) has been paid more than one (1) month in advance of its due date (other than security deposits, percentage rents, escalation and estimated payments of taxes, insurance premiums and operating expenses payable by Tenants pursuant to the terms and provisions of their respective Leases), (f) all work to be performed by Borrower under each Lease has been performed as required and has been accepted by the applicable Tenant, (g) any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by Borrower to any Tenant has already been received by such Tenant, (h) all security deposits and each Tenant Letter of Credit are being held in accordance with applicable Legal Requirements, (i) neither the landlord nor any Tenant is in default under any of the Leases; (j) Borrower has no knowledge of any notice of termination or default with respect to any Lease; (k) Borrower has not assigned or pledged any of the Leases, the rents, any Tenant Letter of Credit, or any interests therein except to Lender; (l) no Tenant or other party has an option or right of first refusal or offer, to purchase all or any portion of the Property; (m) no Tenant has the right to terminate its Lease prior to expiration of the stated term of such Lease; (n) all existing Leases are subordinate to the Mortgage either pursuant to their terms or a recorded subordination agreement; and (p) as of the Closing Date, the only Tenant Letters of Credit are those described in Schedule VIII attached hereto.  The term “Lease” as used in this Section 3.1.22 shall be limited to tenant leases and does not include subleases, licenses, concession agreements or other agreements otherwise included in the definition of the term “Lease” contained in Section 1.1 hereof.

 

 

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Property on the date hereof as disclosed on Schedule I attached hereto or Leases entered into after the date hereof in accordance with this Agreement, make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates;

 

(f)           fail to remain solvent or fail to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due to the extent it has adequate funds to do so;

 

(g)           fail to do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent;

 

(h)           fail to maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party.  Borrower’s assets will not be listed as or list its assets on the financial statement of any other Person, provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i)  appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet;

 

(i)           fail to file its own (or consolidated) tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person, except where Borrower is required to file consolidated tax returns by applicable Legal Requirements.

 

(j)           fail to maintain its books, records, resolutions and agreements as official records;

 

(k)           fail to be, or fail to hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate or constituent party of Borrower), fail to correct any known misunderstanding regarding its status as a separate entity, fail to conduct business in its own name, or fail to maintain and utilize separate stationery, invoices and checks bearing its own name, and Borrower shall not identify itself or any of its Affiliates as a division or part of the other;

 

(l)           fail to use commercially reasonable efforts to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided, however, the foregoing shall not require the members of Borrower to make any additional capital contributions to Borrower;

 

 

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common control with any such stockholder, partner, customer, supplier or other Person prohibited by clause (i) or (ii) above, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person prohibited by clause (i) or (ii) above.  (For purposes of this subclause (o), the term “Affiliate” means any person controlling, under common control with, or controlled by the person in question; and 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 or entity, whether through ownership of voting securities, by contract or otherwise.) A natural person who satisfies the foregoing definition other than subparagraph (ii) shall not be disqualified from serving as an Independent Director or Independent Manager of the SPC Party if such individual is an independent director or independent manager provided by a nationally-recognized company that provides professional independent directors or independent managers and that also provides other corporate services in the ordinary course of its business.  A natural person who otherwise satisfies the foregoing definition except for being the independent director or independent manager of a “special purpose entity” affiliated with the borrower that does not own a direct or indirect equity interest in the borrower or any co-borrower shall not be disqualified from serving as an Independent Director or Independent Manager of the SPC Party if such individual is at the time of initial appointment, or at any time while serving as a Independent Director or Independent Manager of the SPC Party, an Independent Director or Independent Manager of a “special purpose entity” affiliated with the Borrower or the SPC Party (other than any entity that owns a direct or indirect equity interest in borrower or any co-borrower) if such individual is an independent director or independent manager provided by a nationally-recognized company that provides professional independent directors or independent managers.  For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities substantially similar to those set forth in the SPC Party’s organizational documents.

 

(r)           cause or permit the board of directors or managers of any SPC Party or Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a vote of the board of directors or managers of each SPC Party and Borrower unless at the time of such action there shall be at least two (2) members of the board of directors or managers who are each an Independent Director or Independent Manager.

 

(s)           fail to conduct its business so that the assumptions made with respect to Borrower in the Insolvency Opinion shall be true and correct in all respects.  In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Insolvency Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.

 

(t)           permit any Affiliate or constituent party of Borrower independent access to its bank accounts.

 

 

 

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(if any) in light of its contemplated business operations; provided, however, the foregoing shall not require the members of Borrower to may any additional contributions to Borrower.

 

(v)           fail to compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.

 

3.1.25                      Tax Filings.  To the extent required by applicable Legal Requirements, Borrower has filed (or has obtained effective extensions for filing) all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Borrower.  Borrower believes that its tax returns (if any), taking into account any subsequent amended tax returns that may have been filed, properly reflect the income and taxes of Borrower for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.

 

3.1.26                      Solvency.  Borrower (a) has not entered into the transactions contemplated by this Agreement or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (b) received reasonably equivalent value in exchange for its obligations under the Loan Documents.  Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed and known contingent liabilities.  The fair saleable value of Borrower’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s probable liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured.  Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted.  Borrower does not intend to, and does not believe that it will, incur Indebtedness and liabilities (including known contingent liabilities and other commitments) beyond its ability to pay such Indebtedness 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).

 

3.1.27                      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.

 

3.1.28                      Organizational Chart.  The organizational chart attached as Schedule III hereto, relating to Borrower and certain Affiliates and other parties, is true, complete and correct on and as of the date hereof.

 

 

 

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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.

 

3.1.30                      Access/Utilities.  Except as disclosed on the Survey, all public utilities necessary to the continued use and enjoyment of the Property as presently used and enjoyed are located either in the public right-of-way abutting the Property or in recorded appurtenant easements serving the Property.  All roads necessary for the full utilization of the Property for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities or are the subject of access easements for the benefit of the Property.

 

3.1.31                      No Bankruptcy Filing.  Borrower is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of its assets or property, and Borrower does not have any knowledge of any Person contemplating the filing of any such petition against it.

 

3.1.32                      Full and Accurate Disclosure.  To Borrower’s knowledge, no information pertaining to Borrower, Guarantor, the SPC Party or the Property contained in this Agreement, the other Loan Documents, or any written statement furnished by or on behalf of Borrower pursuant to the terms of this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.  There is no fact or circumstance presently known to Borrower pertaining to Borrower, Guarantor, the SPC Party or the Property which has not been disclosed to Lender and which will have a Material Adverse Effect.

 

3.1.33                      Foreign Person.  Borrower is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code.

 

3.1.34                      No Change in Facts or Circumstances; Disclosure.  To the best of Borrower’s knowledge, there has been no material adverse change in any condition, fact, circumstance or event that would make the financial statements, rent rolls, reports, certificates or other documents submitted in connection with the Loan inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially and adversely affects the business operations or the financial condition of Borrower or the Property.

 

3.1.35                      Perfection of Accounts.

 

(a)           The Cash Management Agreement creates a valid and continuing security interest (as defined in the Uniform Commercial Code) in the Accounts (as defined in the Cash Management Agreement) in favor of Lender, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from Borrower.  Other than in connection with the Loan Documents, Borrower has not sold or otherwise conveyed the Accounts;

 

(b)           The Accounts constitute “deposit accounts” or “securities accounts” within the meaning of the Uniform Commercial Code, as set forth in the Cash Management Agreement; and

 

 

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determination thereof comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement, (v) such proceeding shall suspend the enforcement of the contested Legal Requirement against Borrower and the Property, and (vi) Borrower 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.

 

4.1.2                      Taxes and Other Charges.  Borrower shall pay all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof as the same become due and payable, subject to Section 6.2 hereof.  Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the date the same shall become delinquent; provided, however, that Borrower is not required to furnish such receipts for payment of Taxes in the event that such Taxes have been paid by Lender pursuant to Section 6.2 hereof.  Borrower shall not permit or suffer and, subject to Sections 4.1.1 and 4.2.1 hereof, shall promptly discharge any lien or charge against the Property.  After prior notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, conducted in good faith and with due diligence, the amount or validity of any Taxes or Other Charges, provided that (a) no Default (other than a Default that is the subject matter being contested) or Event of Default has occurred and remains uncured; (b) such proceeding shall be permitted under and be conducted in accordance with all applicable statutes, laws and ordinances; (c) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost; (d) Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (e) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the Property; (f) Borrower shall furnish such security as may be required by the proceeding in order to suspend Borrower’s obligations to pay such Taxes or Other Charges or, if no such requirement is specified, deposit with Lender cash, or other security as may be approved by Lender, in an amount equal to one hundred twenty-five percent (125%) of the contested amount, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon; and (g) such contest by Borrower is not in violation of Leases or Operating Agreements.  Lender may pay over any such cash or other security held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender, the entitlement of such claimant is established.

 

4.1.3                      Litigation.  Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or threatened against Borrower which if adversely determined would have a Material Adverse Effect.

 

4.1.4                      Access to Property.  Borrower shall permit agents, representatives and employees of Lender to inspect the Property or any part thereof at reasonable hours upon reasonable advance notice, and subject to the rights of Tenants under their Leases entered into in accordance with the Loan Documents.

 

 

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rates and landlord concessions comparable to existing local market rates, shall be an arms length transaction and in no event be with an Affiliate of Borrower, and shall be established pursuant to the Leasing Guidelines attached hereto as Schedule IV; (F) the Lease shall be to a tenant which Borrower, in its professional and commercially reasonably judgment, has determined is creditworthy; (G) the Lease shall not contain any options or right of renewal, extension or expansion by tenant at rental rates which are below reasonably comparable market rates at the time such Lease is to be executed; and (H) the Lease is for a term of not more than ten (10) years, exclusive of renewal options or rights, which together with the initial term shall not exceed fifteen (15) years).  Lender shall execute and deliver a Subordination Non-Disturbance and Attornment Agreement in the form annexed hereto as Schedule IV to Tenants under future commercial Major Leases approved by Lender promptly upon request with such commercially reasonable changes as may be requested by Tenants, from time to time, and which are reasonably acceptable to Lender.

 

(b)           Borrower (i) shall perform the obligations which Borrower is required to perform under the Leases; (ii) shall enforce the obligations to be performed by the tenants; (iii) shall promptly furnish to Lender any notice of default or termination received by Borrower from any tenant, and any notice of default or termination given by Borrower to any tenant; (iv) shall not collect any rents for more than thirty (30) days in advance of the time when the same shall become due, except for bona fide security deposits not in excess of an amount equal to two months rent; (v) shall not enter into any ground Lease or master Lease of any part of the Property; (vi) shall not further assign or encumber any Lease; (vii) shall not, except with Lender’s prior written consent, cancel or accept surrender or termination of any Lease; (viii) shall not, except with Lender’s prior written consent, modify or amend any Lease (except for minor modifications and amendments entered into in the ordinary course of business, consistent with prudent property management practices, not affecting the economic terms of the Lease), and (ix) any Lease termination or cancellation fees shall be paid to Lender and held in the Rollover Fund.  Any action in violation of clauses (v), (vi), (vii), and (viii) of this Section 4.1.9(b) shall be void at the election of Lender.

 

(c)           Within thirty (30) days after the Closing Date, Borrower shall deliver to Lender the original of each Tenant Letter of Credit, together with a blank assignment for each Tenant Letter of Credit as Lender may reasonably require. While any Event of Default exists, Borrower shall use commercially reasonable efforts to obtain from the Issuing Bank its consent to an assignment of each Tenant Letter of Credit to Lender.  Provided no Event of Default exists, Lender shall (a) at Borrower’s request, promptly return each or any Tenant Letter of Credit to Borrower in order to allow Borrower to apply or realize upon the same in accordance with the terms of the applicable lease or (b) at Borrower’s request, retain possession of each or any Tenant Letter of Credit, provided, however, that in the case of this clause (b) Lender shall take all steps reasonably necessary to assist Borrower in connection with a draw upon the same in accordance with the terms of the applicable Lease.  Any proceeds of such a draw shall be deposited in the Clearing Account.

 

4.1.10                      [RESERVED]

 

 

 

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Lease, under any Lease approved by Lender or under any Lease for which approval was not required by Lender under this Agreement) (a) adversely affecting structural components of the Property, utilities, HVAC or the exterior of the building, (b) that may have a Material Adverse Effect on Borrower’s financial condition, the value of the Property or the on-going revenues or expenses of the Property or (c) the cost of which (including any related alteration, improvement or replacement) is reasonably anticipated to exceed the Alteration Threshold which approval may be granted or withheld in Lender’s sole but reasonable discretion.  The provisions of this Section 4.1.11 shall not require Lender’s consent for Restoration work, which consent rights are instead governed by Section 5.2 hereof.  If the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements shall at any time exceed the Alteration Threshold, Borrower shall promptly deliver to Lender as security for the payment of such amounts and as additional security for Borrower’s obligations under the Loan Documents any of the following:  (i) cash, (ii) Letters of Credit, (iii) U.S. Obligations, (iv) other securities acceptable to Lender, provided that Lender shall have received a Rating Agency Confirmation as to the form and issuer of same, or (v) a completion bond, provided that Lender shall have received a Rating Agency Confirmation as to the form and issuer of same.  Such security shall be in an amount equal to the excess of the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements (other than such amounts to be paid or reimbursed by Tenants under the Leases) over the Alteration Threshold.

 

4.1.12                      Material Agreements.  Borrower shall (a) diligently perform and/or observe in all material respects all of the material covenants and agreements required to be performed and observed by it under each Material Agreement and Operating Agreement to which it is a party, and shall use commercially reasonable efforts to preserve and to keep unimpaired its rights thereunder, (b) promptly notify Lender in writing of the giving of any notice of any default by any party under any Material Agreement and Operating Agreement of which it is aware and (c) promptly enforce the performance and observance of all of the material covenants and agreements required to be performed and/or observed by the other party under each Material Agreement and Operating Agreement to which it is a party in a commercially reasonable manner.

 

4.1.13                      Performance by Borrower.  Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision of each Loan Document executed and delivered by Borrower, 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 Borrower without the prior consent of Lender.

 

 

 

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with any appellate proceeding or post-judgment action involved therein, which shall be due and payable on demand, together with interest thereon from the date incurred by Lender at the Default Rate, and together with all required service or use taxes.

 

4.1.15                      Business and Operations.  Borrower will continue to engage in the businesses currently conducted by it as and to the extent the same are necessary for the ownership and leasing of the Property.  Borrower 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 and leasing of the related Property.  Borrower shall at all times cause the Property to be maintained as a “Class A” office property consistent with other “Class A” office properties located in Los Angeles, California.

 

4.1.16                      Loan Fees.  Borrower shall pay all fees and costs (including, without limitation, all origination and commitment fees) required of Borrower pursuant to the terms of that certain fee letter between Borrower and Eurohypo AG, New York Branch, of even date herewith (the “Fee Letter”).

 

4.1.17                      [Reserved]

 

4.1.18                      Handicapped Access.

 

(a)           Borrower covenants and agrees that the Property shall at all times strictly comply to the extent applicable with the requirements of the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all state and local laws and ordinances related to handicapped access and all rules, regulations, and orders issued pursuant thereto including, without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (collectively, “Access Laws”).

 

(b)           Notwithstanding any provisions set forth herein or in any other document regarding Lender’s approval of alterations of the Property, Borrower shall not alter the Property in any manner which would increase Borrower’s responsibilities for compliance with the applicable Access Laws without the prior written approval of Lender.  The foregoing shall apply to tenant improvements constructed by Borrower or by any of its tenants.  Lender may condition any such approval upon receipt of a certificate of Access Law compliance from an architect, engineer, or other person acceptable to Lender.

 

(c)           Borrower covenants and agrees to give prompt notice to Lender of the receipt by Borrower of any written complaints related to violation of any Access Laws by any Governmental Authority and of the commencement of any proceedings or investigations which relate to the Property’s compliance with applicable Access Laws.

 

4.1.19                      Management Agreement.  Borrower shall maintain the Management Agreement in full force and effect and timely perform all of Borrower’s obligations thereunder and enforce performance of all obligations of the Manager.  Borrower will enter into and cause the Manager to enter into the Assignment of Management Agreement in form satisfactory to Lender, assigning and subordinating the manager’s interest in the Property and all fees and other rights of the Manager pursuant to such Management Agreement to the rights of Lender.

 

 

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whole or in part of the Lien, provided that (i) no Default (other than a Default that is the subject matter being contested) or Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the applicable provisions of any other instrument to which Borrower or the Property 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 not be in danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall promptly upon final determination thereof pay the amount of any such Lien (and perform any such act to discharge the same of record), together with all costs, interest and penalties which may be payable in connection therewith; (v) such proceeding shall suspend the enforcement of the Lien by any party against the Property; and (vi) Borrower shall furnish such security as may be required in the proceeding in order to suspend the enforcement of such Lien, or as may be reasonably requested by Lender, to insure the payment (and discharge from record) of any such Lien, 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 or the Property (or part thereof or interest therein) shall be in imminent danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of the Mortgage being primed by any related Lien.

 

4.2.2                      Dissolution.  Borrower shall not (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (b) 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, all or substantially all of the property or assets of Borrower except to the extent expressly permitted by the Loan Documents, or (d) cause, permit or suffer any SPC Party to (i) dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of which such SPC Party would be dissolved, wound up or liquidated in whole or in part, or (ii) amend, modify, waive or terminate the certificate of incorporation or bylaws of such SPC Party, in each case without obtaining the prior consent of Lender.

 

4.2.3                      Debt Cancellation.  Borrower shall not cancel or otherwise forgive or release any material claim or debt (other than termination of Leases in accordance herewith) owed to Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s business or for other legal or business considerations deemed prudent by Borrower.

 

4.2.4                      Zoning.  Borrower shall not initiate or consent to any zoning reclassification of any portion of the Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of the Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the prior written consent of Lender.

 

4.2.5                      No Joint Assessment.  Borrower 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) with any portion of the Property which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to the Property.

 

 

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Material Agreement or such Material Agreement prior to such modification or amendment thereto.  Whenever such approval or consent is required pursuant to this Section 4.2.8, Lender shall use good faith efforts to respond within ten (10) Business Days after Lender’s receipt of Borrower’s written request for such approval or consent, as applicable, such request to include such evidence as would be requested by a reasonably prudent lender in connection with its decision to approve or consent to the matters provided in this Section 4.2.8.  If Lender fails to respond to such request within ten (10) Business Days, and Borrower sends a second request which contains a bold faced, conspicuous legend at the top of the first page stating “IF YOU FAIL TO RESPOND TO THIS REQUEST FOR APPROVAL AND/OR CONSENT WITHIN SEVEN (7) BUSINESS DAYS, YOUR APPROVAL AND/OR CONSENT SHALL BE DEEMED GIVEN”, and if Lender fails to respond within seven (7) Business Days of its receipt of such second request and Lender has received such evidence detailed above, then such approval or consent, as applicable, will be deemed to have been given; provided, however, such provisions shall not apply to Section 7.3 hereof

 

4.2.9                      REA.  Borrower agrees that without the prior written consent of Lender, Borrower will not execute modifications to the REA.

 

4.2.10                      ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement. Borrower agrees to perform all its obligations under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement.  Borrower shall not enter into any modification or supplement to the U.S. Bank Tower Lease or the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement, nor incur any additional obligations to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP with respect to the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease or the premises leased thereunder (other than the obligations under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement) without Lender’s prior written consent.  Borrower shall not permit ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ to exercise any extension option that remains available under the U.S. Bank Tower Lease without Lender’s prior written consent.

 

4.2.11                      O & M Agreement.  Borrower covenants and agrees that, during the term of the Loan, including any extension or renewal thereof, Borrower shall comply in all respects with the terms and conditions of any operations and maintenance program for asbestos containing materials, mold or other item as recommended in the Environmental Report or Property Condition Report (“O & M Program”).  Borrower shall protect, indemnify, and hold harmless Lender and its successors and assigns, respective parents, subsidiaries and affiliates, their respective officers, directors, shareholders, members, managers, employees and agents, and their respective heirs, legal representatives, successors and assigns from and against all liabilities, obligations, claims, demands, damages, penalties, causes of action, losses, fines, costs and expenses (including without limitation reasonable attorneys' fees and expenses), imposed upon or incurred by or asserted against Lender by reason of Borrower's failure to comply with the O & M Program as required under this Agreement, which shall survive any termination, satisfaction or assignment of the Loan Documents or the entry of a judgment of foreclosure, sale of the Property by nonjudicial foreclosure sale, delivery of a deed in lieu of foreclosure or the exercise by Lender of any of its other rights and remedies under the Loan Documents.

 

4.2.12                      Change in Business.  Borrower shall not enter into any line of business other than the ownership and operation of the Property.

 

 

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otherwise satisfactory to Lender, insuring against all such excluded acts or events in the amounts required for such coverage under subsections (i) and (iii) above, or such lesser amount as may be approved by Lender in its sole discretion.  The endorsement or policy shall be in form and substance reasonably satisfactory to Lender and shall meet Rating Agency criteria for securitized loans;

 

(xiii)                      upon sixty (60) days’ 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; and

 

(xiv)                      Lender shall be satisfied that, upon the completion of the Restoration, (I) the Loan to Value Ratio for the Property is equal to at least that which it was immediately preceding the Casualty or Condemnation of the Property, as determined by Lender in its sole discretion, and (II) the Debt Service Coverage Ratio on the outstanding principal amount of the Loans shall be at or above 1.10:1.00, whichever is greater.

 

(b)           All insurance provided for in Section 5.1.1(a) shall be obtained under valid and enforceable policies (collectively, the “Policies” or, in the singular, the “Policy”) and, to the extent not specified above, shall be subject to the approval of Lender as to deductibles, loss payees and insureds.  Not less than ten (10) days prior to the expiration dates of the Policies theretofore furnished to Lender, evidence of renewal of such insurance (which may be provided in the form of certificates of insurance policy binders, or other evidence reasonably satisfactory to Lender of such renewal accompanied by evidence satisfactory to Lender of payment of the premiums then due thereunder (the “Insurance Premiums”), shall be delivered by Borrower to Lender.

 

(c)           All insurance required hereunder may be effected by one or more blanket Policies covering the Property and other property and assets of Affiliates of Borrower or REIT not constituting a part of the Property.  Any blanket insurance Policy shall specifically allocate to the Property the amount of coverage from time to time required hereunder and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of Section 5.1.1(a).

 

(d)           All Policies of insurance provided for or contemplated by Section 5.1.1(a) shall be primary coverage and, except for the Policy referenced in Section 5.1.1(a)(v), shall name Borrower as the insured and Lender and its successors and/or assigns as the additional insured, as its interests may appear, and in the case of property damage, boiler and machinery, flood, earthquake and terrorism insurance, shall contain a so-called New York standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender.  Borrower shall not procure or permit any of its constituent entities to procure any other insurance coverage which would be on the same level of payment as the Policies or would adversely impact in any way the ability of Lender or Borrower to collect any proceeds under any of the Policies.

 

 

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not a deficiency judgment on the Notes shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt.

 

5.2.3                      Casualty Proceeds.  Notwithstanding the last sentence of Section 5.1.1(a)(iii) and provided no Event of Default then exists hereunder, proceeds received by Lender on account of the business interruption insurance specified in Section 5.1.1(a)(iii) above with respect to any Casualty shall be deposited by Lender directly into the Deposit Account (as defined in the Cash Management Agreement) but (a) only to the extent it reflects a replacement for lost Rents that would have been due under Leases existing on the date of such Casualty, and (b) only to the extent necessary to fully make the disbursements required by Section 3.3 (a)(i) through (v) of the Cash Management Agreement.  All other such proceeds shall be held by Lender and disbursed in accordance with Section 5.3 hereof.

 

Section 5.3.                                Delivery of Net Proceeds.

 

5.3.1                      Minor Casualty or Condemnation.  If a Casualty or Condemnation has occurred to the Property and the Net Proceeds shall be less than the Restoration Threshold and the reasonably anticipated costs of completing the Restoration shall be less than the Restoration Threshold, and provided (a) no Event of Default shall have occurred and remain uncured and (b) the Casualty or Condemnation shall have occurred prior to the Maturity Date, the Net Proceeds will be disbursed by Lender to Borrower.  Promptly after receipt of the Net Proceeds, Borrower shall commence and satisfactorily complete with reasonable diligence the Restoration in accordance with the terms of this Agreement.  If any Net Proceeds are received by Borrower and may be retained by Borrower pursuant to the terms hereof, such Net Proceeds shall, until completion of the Restoration, be held in trust for Lender and shall be segregated from other funds of Borrower to be used to pay for the cost of Restoration in accordance with the terms hereof.

 

5.3.2                      Major Casualty or Condemnation.

 

(a)           If a Casualty or Condemnation has occurred to the Property and the Net Proceeds are equal to or greater than the Restoration Threshold or the costs of completing the Restoration are reasonably anticipated to be equal to or greater than the Restoration Threshold, Lender shall make the Net Proceeds available for the Restoration, provided that each of the following conditions are met:

 

(i)           no Event of Default shall have occurred and be continuing;

 

(ii)           (A) in the event the Net Proceeds are insurance proceeds, less than thirty percent (30%) of the total floor area of the Improvements at the Property has been damaged, destroyed or rendered unusable as a result of such Casualty or (B) in the event the Net Proceeds are an Award, less than fifteen percent (15%) of the land constituting the Property is taken, and such land is located along the perimeter or periphery of the Property, and no portion of the Improvements is the subject of the Condemnation;

 

 

 

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twelve (12) month period immediately preceding the Casualty or Condemnation and all Major Leases shall remain in full force and effect during and after the completion of the Restoration without abatement of rent beyond the time required for Restoration, notwithstanding the occurrence of such Casualty or Condemnation;

 

(iv)           Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than sixty (60) days after such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion;

 

(v)           Lender shall be satisfied that any operating deficits and all payments of principal and interest under the Notes will be paid during the period required for Restoration from (A) the Net Proceeds, or (B) other funds of Borrower;

 

(vi)           Lender shall be satisfied that the Restoration will be completed on or before the earliest to occur of (A) the date six (6) months prior to the Maturity Date, (B) the earliest date required for such completion under the terms of any Lease, (C) such time as may be required under applicable Legal Requirements in order to repair and restore the Property to the condition it was in immediately prior to such Casualty or to as nearly as possible the condition it was in immediately prior to such Condemnation, as applicable or (D) the expiration of the insurance coverage referred to in Section 5.1.1(a)(iii);

 

(vii)           the Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Legal Requirements;

 

(viii)                      the Restoration shall be done and completed by Borrower in an expeditious and diligent fashion and in compliance with all applicable Legal Requirements;

 

(ix)           such Casualty or Condemnation, as applicable, does not result in the loss of access to the Property or the related Improvements;

 

(x)           all Operating Agreements shall remain in full force and effect; and

 

(xi)           After giving effect to such Restoration, the Debt Service Coverage Ratio for the Property shall be equal to the greater of (i) the Debt Service Coverage Ratio for the twelve (12) full calendar months immediately preceding the Closing Date, and (ii) the Debt Service Coverage Ratio for the Property for the twelve (12) full calendar months immediately preceding the Casualty or Condemnation of the Property.

 

 

 

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that (i) all requirements set forth in Section 5.3.2(a) have been satisfied, (ii) all materials installed and work and labor performed in connection with the requested disbursement (except to the extent that they are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and (iii) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on the Property arising out of the Restoration which have not either been fully bonded to the satisfaction of Lender and discharged of record or in the alternative fully insured to the reasonable satisfaction of Lender by the title company issuing the Title Insurance Policy.

 

(c)           All plans and specifications required in connection with the Restoration shall be subject to prior approval of Lender and an independent architect selected by Lender (the “Casualty Consultant”).  The plans and specifications shall require that the Restoration be completed in a first-class workmanlike manner at least equivalent to the quality and character of the original work in the Improvements (provided, however, that in the case of a partial Condemnation, the Restoration shall be done to the extent reasonably practicable after taking into account the consequences of such partial Condemnation), so that upon completion thereof, the Property shall be at least equal in value and general utility to the Property prior to the damage or destruction; it being understood, however, that Borrower shall not be obligated to restore the Property to the precise condition of the Property prior to such Casualty provided the Property is restored, to the extent practicable, to be of at least equal value and of substantially the same character as prior to the Casualty.  Borrower shall restore all Improvements such that when they are fully restored and/or repaired, such Improvements and their contemplated use fully comply with all applicable material Legal Requirements.  The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which they have been engaged, shall be subject to approval by Lender and the Casualty Consultant.  All costs and expenses incurred by Lender in connection with recovering, holding and advancing the Net Proceeds for the Restoration including, without limitation, reasonable attorneys’ fees and disbursements and the Casualty Consultant’s fees and disbursements, shall be paid by Borrower.  Lender shall use good faith efforts to respond within ten (10) Business Days of its receipt of Borrower’s written request for approval of any plans and specifications (or contractors, subcontractors or materialmen in connection therewith).  If Lender fails to respond to such request within ten (10) Business Days of such request and Borrower sends a second written notice which contains a bold faced, conspicuous legend at the top of the first page stating “IF YOU FAIL TO RESPOND TO THIS REQUEST FOR APPROVAL WITHIN TEN (10) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN”, and if Lender fails to respond within ten (10) Business Days of its receipt of such second request and the related plans and specifications and all information reasonably required in order to adequately review the same, then such approval will be deemed to have been given.

 

 

 

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and notwithstanding anything to the contrary set forth above in this Section 5.3.2(d), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration.  The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 5.3.2(d) and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate Governmental Authorities, and Lender receives evidence reasonably 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.

 

(e)           Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

 

(f)           If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of the Net Proceeds shall be made.  The Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 5.3.2 shall constitute additional security for the Debt.

 

(g)           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 5.3.2, 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 Borrower, provided no Event of Default shall have occurred and shall be continuing under any of the Loan Documents; provided, however, the amount of such excess returned to Borrower in the case of a Condemnation shall not exceed the amount of Net Proceeds Deficiency deposited by Borrower with the balance being applied to the Debt in the manner provided for in subsection 5.3.2(h).

 

 

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used herein means 1/12 of the aggregate of the Deposit and the Regular Payments for each annual period, as such amounts may be adjusted as hereinafter set forth.  On the first Monthly Payment Date and on each Monthly Payment Date in calendar year 2007, the Financing Installment shall be in the applicable amount shown on Schedule II attached hereto.  Not less than twenty (20) days prior to each renewal date of each blanket policy, Borrower shall provide Lender in writing the estimated premium for such blanket policy for the following renewal period, and not less than ten (10) days after the renewal date, Borrower will provide Lender in writing the actual amount of such premium.  Borrower will also notify Lender in writing within ten (10) days after any change in the amounts allocated to the Property under the Blanket Insurance Premium Financing Arrangement or any other charge in premiums or amounts due from Borrower under the Blanket Insurance Premium Financing Arrangement.  Thereafter, the Financing Installment shall be adjusted as reasonably determined by Lender.  In the event of any material change in the Blanket Insurance Premium Financing Arrangement, the foregoing provisions shall be modified as reasonably determined by Lender in order to carry out the intent and purposes hereof.  The term “Insurance Premiums”, for the purposes of this Agreement, shall include any Deposits, any Regular Payments and any Financing Installments required to be paid by Borrower under any Blanket Insurance Premium Financing Arrangement, including, without limitation, the Property Insurance Sharing Agreement.  Notwithstanding the foregoing, Borrower covenants and agrees that the finance company (or finance companies) entering into the Blanket Insurance Premium Financing Arrangement shall have no collateral from Borrower for Borrower’s obligations under such arrangement other than Borrower’s interest in any unearned Insurance Premiums and shall not have the ability to terminate or compel Borrower to terminate an insurance policy the premiums for which have been financed through the Blanket Insurance Premium Financing Arrangement without Borrower first having in place a replacement insurance policy in accordance with the terms of this Agreement.

 

Section 6.4.                                Capital Expenditure Funds.

 

6.4.1                      Deposits of Capital Expenditure Funds.  Borrower shall deposit to the Capital Expenditure Account established under the Cash Management Agreement on each Monthly Payment Date, an amount equal to Fourteen Thousand Four Hundred Eighty-Seven and 69/100 Dollars ($14,487.69) for annual Capital Expenditures payable to Persons unaffiliated with Borrower approved by Lender, which approval shall not be unreasonably withheld or delayed.  Amounts deposited pursuant to this Section 6.4.1 are referred to herein as the “Capital Expenditure Funds.”  Lender may reassess its estimate of the amount necessary for capital expenditures from time to time and, and may require Borrower to increase the monthly deposits required pursuant to this Section 6.4.1 upon thirty (30) days notice to Borrower if Lender determines in its reasonable discretion that an increase is necessary to maintain proper operation of the Property.

 

6.4.2                      Release of Capital Expenditure Funds.

 

(a)           Lender shall disburse, or caused to be disbursed, Capital Expenditure Funds only for Capital Expenditures.

 

 

 

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subject to the conditions set forth in this Section 6.4.2) upon satisfaction by Borrower of each of the following conditions:  (i) Borrower shall submit a request for payment to Lender at least ten (10) days prior to the date on which Borrower requests such payment be made and specifies the Capital Expenditures to be paid, (ii) on the date such request is received by Lender and on the date such payment is to be made, no Event of Default shall exist and remain uncured, (iii) Lender shall have received a certificate from Borrower (A) stating that the items to be funded by the requested disbursement are Capital Expenditures payable to Persons unaffiliated with Borrower, (B) stating that all Capital Expenditures at the Property to be funded by the requested disbursement have been completed in a good and workmanlike manner and in accordance with all applicable Legal Requirements, such certificate to be accompanied by a copy of any license, permit or other approval required by any Governmental Authority in connection with the Capital Expenditures, (C) identifying each Person that supplied materials or labor in connection with the Capital Expenditures to be funded by the requested disbursement, and (D) stating that each such Person has been paid in full or will be paid in full upon such disbursement, such certificate to be accompanied by lien waivers or other evidence of payment satisfactory to Lender, (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, (v) at Lender’s option, if the cost of any individual Capital Expenditure exceeds Fifty Thousand and No/100 Dollars ($50,000.00), Lender shall have received a report satisfactory to Lender in its reasonable discretion from an architect or engineer approved by Lender in respect of such architect or engineer’s inspection of the required repairs, and (vi) Lender shall have received such other evidence as Lender shall reasonably request that the Capital Expenditures 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 Borrower.  Lender shall not be required to disburse Capital Expenditure Funds more frequently than once each calendar month, and each disbursement must be at least an amount greater than the Minimum Disbursement Amount (or a lesser amount if the total amount of Capital Expenditure Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the account shall be made).

 

(c)           Nothing in this Section 6.4.2 shall (i) make Lender responsible for making or completing the Capital Expenditures Work; (ii) require Lender to expend funds in addition to the Capital Expenditure Funds to complete any Capital Expenditures Work; (iii) obligate Lender to proceed with the Capital Expenditures Work; or (iv) obligate Lender to demand from Borrower additional sums to complete any Capital Expenditures Work.

 

(d)           Borrower shall permit Lender and Lender’s agents and representatives (including, without limitation, Lender’s engineer, architect, or inspector) or third parties to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to inspect the progress of any Capital Expenditures Work and all materials being used in connection therewith and to examine all plans and shop drawings relating to such Capital Expenditures Work.  Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s representatives or such other Persons described above in connection with inspections described in this Section 6.4.2(d).

 

 

 

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verify completion of the Capital Expenditures Work for which reimbursement is sought.  Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and may require a certificate of completion by an independent qualified professional architect acceptable to Lender prior to the disbursement of Capital Expenditure Funds.  Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional architect.

 

(f)           In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent required under applicable law in connection with Capital Expenditures Work.All such policies shall be in form and amount reasonably satisfactory to Lender.

 

Section 6.5.                                Rollover Funds.

 

6.5.1                      Deposits of Rollover Funds.  While a Cash Trap Period exists, there shall be deposited to the Rollover Account established under the Cash Management Agreement on each Monthly Payment Date the sum of One Hundred Thousand and No/100 Dollars ($100,000.00), for tenant improvements and leasing commissions, lease cancellation fees, buy-out fees or a similar cost payable to Persons unaffiliated with Borrower that may be incurred while such Cash Trap Period exists.  Amounts deposited pursuant to this Section 6.5.1 are referred to herein as the “Rollover Funds.”

 

 

 

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that (i) all required work is complete and (ii) such tenant is in occupancy and paying full unabated rent or has taken possession of the demised premises, and (h) Lender shall have received such other evidence as Lender shall reasonably request that the tenant improvements 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 Borrower.  Lender shall not be required to disburse Rollover Funds more frequently than once each calendar month, and each disbursement must be in an amount greater than the Minimum Disbursement Amount (or a lesser amount if the total amount of Rollover Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the account shall be made).

 

Section 6.6.                                Existing Tenant Improvement Funds.

 

6.6.1                      Deposits of Existing Tenant Improvement Funds.  On the Closing Date, Borrower shall deposit with Lender the amount of Eight Hundred Nine Thousand Nine Hundred and No/100 Dollars ($809,900.00) (the “Existing Tenant Improvement Funds”) representing the amounts not yet disbursed by Borrower on account of tenant improvement allowances under Leases (other than the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease) in effect on the date hereof and payable to Persons unaffiliated with Borrower.   Lender shall cause the Existing Tenant Improvement Funds to be deposited with Agent for credit to the “Existing Tenant Improvement Funds Account” established under the Cash Management Agreement within five (5) Business Days following the Closing Date.

 

 

 

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from all Liens, claims and other encumbrances not previously approved by Lender, (g) to the extent required to be delivered by the tenant under the applicable lease to Borrower, Lender shall have received an estoppel certificate from the applicable tenant stating that (i) all required work is complete and (ii) such tenant is in occupancy and paying full unabated rent or has taken possession of the demised premises, and (h) Lender shall have received such other evidence as Lender shall reasonably request and as shall be required to be delivered pursuant to the applicable lease that the tenant improvements 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 Borrower.  Lender shall not be required to disburse Tenant Improvement Funds more frequently than once each calendar month, and each disbursement must be in an amount greater than the Minimum Disbursement Amount (or a lesser amount if the total amount of Tenant Improvement Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the account shall be made).

 

Section 6.7.                                ▇▇▇▇▇▇ Landlord Work Funds.

 

6.7.1                      Deposits of ▇▇▇▇▇▇ Landlord Work Funds.  On the Closing Date, Borrower shall deposit with Lender the amount of Eight Million and No/100 Dollars ($8,000,000.00) (the “▇▇▇▇▇▇ Landlord Work Funds”) representing the amounts not yet disbursed by Borrower on account of the anticipated costs to be incurred by Borrower under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease with respect to the construction work required to be undertaken by Borrower thereunder and payable to Persons unaffiliated with Borrower (the “▇▇▇▇▇▇ Landlord Work”).  Lender shall cause the ▇▇▇▇▇▇ Landlord Work Funds to be deposited with Agent for credit to the “▇▇▇▇▇▇ Landlord Work Funds Account” established under the Cash Management Agreement within five (5) Business Days following the Closing Date.

 

 

 

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in connection with the completion of the ▇▇▇▇▇▇ Landlord Work (as reasonably determined by Lender) exceed the balance of the ▇▇▇▇▇▇ Landlord Work Funds then held in the ▇▇▇▇▇▇ Landlord Work Funds Account, then Borrower shall deliver to Lender, within five (5) Business Days after written demand by Lender, such additional funds for deposit in the ▇▇▇▇▇▇ Landlord Funds Account as may be required so that the balance held therein is not less than the remaining amount to be paid or estimated to be incurred in connection with the completion of the ▇▇▇▇▇▇ Landlord Work (as determined by Lender).  Borrower shall obtain Lender’s prior written consent to any modification to the ▇▇▇▇▇▇ Landlord Work Budget or schedule that would cause the ▇▇▇▇▇▇ Landlord Budget or schedule not to be in compliance with the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease.

 

6.7.3                      Release of ▇▇▇▇▇▇ Landlord Work Funds. Lender shall disburse, or caused to be disbursed, to Borrower from time to time the ▇▇▇▇▇▇ Landlord Work Funds upon satisfaction by Borrower of each of the following conditions:

 

(a)           Borrower shall submit a request for disbursement to Lender at least ten (10) days prior to the date on which Borrower requests such disbursement be made, which disbursement request shall specify the costs relating to the ▇▇▇▇▇▇ Landlord Work to be paid from such disbursement,

 

(b)           on the date such request is received by Lender and on the date such disbursement is to be made, no Event of Default shall exist and remain uncured, and the representations and warranties made by Borrower in this Agreement and in the other Loan Documents shall be true and correct in all material respects on and as of the date of the making of such disbursement with the same force and effect as if made on and as of such date,

 

(c)           after giving effect to such disbursement, the amount of the ▇▇▇▇▇▇ Landlord Work Funds held in the ▇▇▇▇▇▇ Landlord Work Funds Account will be equal to or greater than the remaining costs to be paid or estimated to be incurred in connection with the completion of the ▇▇▇▇▇▇ Landlord Work, as determined by Lender,

 

 

 

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accompanied by the items described in clauses (g) and (h) below, (v) stating that the amount of the ▇▇▇▇▇▇ Landlord Work Funds remaining unfunded after such disbursement will be sufficient on completion of such construction to pay for the unpaid costs required to complete the remaining ▇▇▇▇▇▇ Landlord Work (as estimated by the certifying party), and (vi) at Lender’s option, if the amount of the requested disbursement exceeds Five Hundred Thousand and No/100 Dollars ($500,000.00), a title search for the Property indicating that the Property is free from all Liens, claims and other encumbrances not previously approved by Lender,

 

(e)           at Lender’s option, if the cost of any individual item of ▇▇▇▇▇▇ Landlord Work exceeds One Million and No/100 Dollars ($1,000,000.00), Lender shall have received a report satisfactory to Lender in its reasonable discretion from an architect or engineer approved by Lender in respect of such architect or engineer’s inspection of such ▇▇▇▇▇▇ Landlord Work,

 

(f)           Lender shall have received contractors’ waivers or releases of lien for the work covered by the disbursement request, in form and substance reasonably satisfactory to Lender,

 

(g)           Lender shall have received such other evidence as Lender shall reasonably request that the portion of the ▇▇▇▇▇▇ Landlord Work to be funded by the requested disbursement has been completed and has been paid for or will be paid upon such disbursement to Borrower, and

 

(h)           notwithstanding the foregoing, Lender shall have the right to retain an amount equal to ten percent (10%) of the amount of any disbursement request pending the completion of all ▇▇▇▇▇▇ Landlord Work and the receipt by Lender of an estoppel certificate from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ which confirms that (i) all ▇▇▇▇▇▇ Landlord Work is complete and (ii) there is no default on the part of Borrower under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Lease.

 

 

 

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item, then Borrower may also reallocate such cost savings to contingency or to another line item with Lender’s prior written approval.  So long as no Event of Default exists and Borrower is in compliance with its obligations in Section 6.7.2, Borrower may request disbursement, and Lender shall disburse, from contingency to pay costs of the ▇▇▇▇▇▇ Landlord Work, provided that the amount remaining in the contingency line item following such disbursement is an adequate contingency line item, as determined by Lender in its reasonable discretion, for the remaining ▇▇▇▇▇▇ Landlord Work.

 

Nothing in this Section 6.7 shall (i) make Lender responsible for making or completing the ▇▇▇▇▇▇ Landlord Work; (ii) require Lender to expend funds in addition to the ▇▇▇▇▇▇ Landlord Work Funds to complete any ▇▇▇▇▇▇ Landlord Work; (iii) obligate Lender to proceed with the ▇▇▇▇▇▇ Landlord Work; or (iv) obligate Lender to demand from Borrower additional sums to complete any ▇▇▇▇▇▇ Landlord Work.

 

Borrower shall permit Lender and Lender’s agents and representatives (including, without limitation, Lender’s engineer, architect, or inspector) or third parties to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to inspect the progress of any ▇▇▇▇▇▇ Landlord Work and all materials being used in connection therewith and to examine all plans and shop drawings relating to such ▇▇▇▇▇▇ Landlord Work.  Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s representatives or such other Persons described above in connection with inspections described in this Section 6.7.3.

 

If a disbursement of the ▇▇▇▇▇▇ Landlord Work Funds will exceed Five Hundred Thousand and No/100 Dollars ($500,000.00), Lender may require an inspection of the Property at Borrower’s expense prior to making a disbursement of ▇▇▇▇▇▇ Landlord Work Funds in order to verify completion of the ▇▇▇▇▇▇ Landlord Work for which reimbursement is sought.  Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and may require a certificate of completion by an independent qualified professional architect acceptable to Lender prior to the disbursement of ▇▇▇▇▇▇ Landlord Work Funds.  Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional architect.

 

In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent required under applicable law in connection with the ▇▇▇▇▇▇ Landlord Work.  All such policies shall be in form and amount reasonably satisfactory to Lender.

 

Borrower hereby consents to any disbursement of the ▇▇▇▇▇▇ Landlord Work Funds to Guarantor in accordance with the terms of the Recourse Guarantee.

 

Section 6.8.                                Security Interest in Reserve Funds.  

 

 

 

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Reserve Funds as additional security for the payment of the Loan. The Reserve Funds shall be held in Lender’s name and may be commingled with Lender’s own funds at financial institutions selected by Lender in its sole discretion.  Upon the occurrence of an Event of Default, Lender may apply any sums then present in the Reserve Funds to the payment of the Loan in any order in its sole discretion.  Until expended or applied as above provided, the Reserve Funds shall constitute additional security for the Loan.  Lender shall have no obligation to release any of the Reserve Funds while any Event of Default or Default then exists.

 

6.8.2                      Income.  All interest on the Reserve Funds shall accrue for the benefit of Borrower, shall be credited to such Reserve Funds and shall be subject to Lender’s security interest in and to the Reserve Funds.  The Reserve Funds shall bear interest at the customary market rate offered by Lender for escrow deposits of this nature, and shall be held and released by Lender, and used by Borrower, in accordance with the terms and conditions of this Agreement.  Borrower shall report on its federal, state and local income tax returns all interest or income earned by Borrower on the applicable Reserve Funds.

 

6.8.3                      Prohibition Against Further Encumbrance.  Borrower shall not, without the prior consent of Lender, further pledge, assign or grant any security interest in the Reserve Funds or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.

 

VII.	PROPERTY MANAGEMENT

 

Section 7.1.                                The Management Agreement.

 

Borrower shall cause Manager to manage the Property in accordance with the Management Agreement.  Borrower shall (a) diligently perform and observe in all material respects all of the material terms, covenants and conditions of the Management Agreement on the part of Borrower to be performed and observed, (b) promptly notify Lender of any notice to Borrower of any default by Borrower in the performance or observance of any of the terms, covenants or conditions of the Management Agreement on the part of Borrower to be performed and observed, and (c) promptly deliver to Lender a copy of each periodic report received by Borrower under the Management Agreement and, promptly upon request, deliver to Lender a copy of any other financial statement, business plan, capital expenditures plan, report and estimate received by it under the Management Agreement.  If Borrower shall default in the performance or observance of any material term, covenant or condition of the Management Agreement on the part of Borrower to be performed or observed, then, without limiting Lender’s other rights or remedies under this Agreement or the other Loan Documents, and without waiving or releasing Borrower from any of its obligations hereunder or under the Management Agreement, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act as may be appropriate to cause all the material terms, covenants and conditions of the Management Agreement on the part of Borrower to be performed or observed.  Manager shall be entitled to receive a fee of no more than 3.00% of “Project Income” (as defined in the Management Agreement) as in effect on the date hereof.

 

 

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interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock in one or a series of transactions; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general or limited partner or any profits or proceeds relating to such partnership interests or the creation or issuance of new partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of any member or any profits or proceeds relating to such membership interest or the creation or issuance of new membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the Manager (including, without limitation, an Affiliated Manager) other than in accordance with Article VII.

 

(c)           Notwithstanding the provisions of Section 8.1(b), the following transfers shall not be deemed to be a Prohibited Transfer: (a) a transfer by devise or descent or by operation of law upon the death of a member, partner or shareholder of a Restricted Party; (b) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the stock, limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such transfers shall result in a change in Control in the Restricted Party, a change in control of the Property or a Change in Control; no transfer shall be made to any Prohibited Person; as a condition to each such transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed transfer; and, if Borrower is a single member limited liability company on the date of this Agreement, no such transfer shall consist of the transfer of any interest in or admission of any person as a member in Borrower; (c) a transfer by Guarantor or REIT of a portion of its direct or indirect ownership interests in Borrower to an Approved Transferee, so long as (i) at the time of such transfer there exist no monetary defaults or Events of Default under the Loan Documents, (ii) at all times following such transfer, Guarantor or REIT owns at least twenty percent (20%) of the direct or indirect ownership interests in Borrower, (iii) at all times following such transfer, Guarantor or REIT continues to Control Borrower and there is no Change of Control of Guarantor or REIT, and (v) at all times following such transfer Guarantor or REIT or an Affiliate thereof is Manager; or (d) a Permitted Mezzanine Loan Lien in accordance with the provisions of Section 8.1(i).  Notwithstanding the foregoing, Sponsor may pledge its direct or indirect ownership interests in Borrower as security for Sponsor’s obligations under its primary credit facility; provided that (i) such pledge shall not be subject to foreclosure, nor shall there be any conveyance in lieu thereof, nor shall there be any other action in respect of such pledged interests inconsistent with the consent and acknowledgement referred to in clause (iii) below, without Lender’s prior written consent; (ii) such pledge, by its express terms, shall be subject to the limitations on foreclosure and conveyance in lieu thereof set forth above; and (iii) the pledgee shall deliver such acknowledgments of and consents to the foregoing as Lender may request.  Without limiting the foregoing, if Lender exercises the Mezzanine Option, the pledgee shall release its pledge on any of the ownership interest that form the collateral for the Mezzanine Loan (without limiting the rights of Sponsor, in accordance with this Section 8.1.3, to pledge to such pledgee other indirect ownership interests in Borrower that do not form the collateral for the Mezzanine Loan).

 

 

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indirectly, of which is any ownership interests in Borrower, deliver written notice thereof to Lender and provide to Lender copies of the proposed documentation for such mezzanine loan, together with such documentation and certifications of Borrower as Lender shall require in order to confirm that such indebtedness is a Permitted Mezzanine Loan.  Lender reserves the right to condition its consent to any proposed mezzanine loan upon:

 

(i)           the delivery to Lender of information (including without limitation an Appraisal and such financial reports as Lender may require) confirming that such proposed mezzanine loan (A) is in a maximum principal amount (measured in the aggregate for such proposed mezzanine loan together with all other Permitted Mezzanine Loans that would remain in effect after the consummation of such proposed mezzanine loan) shall not exceed the lesser of $50,000,000 or the Permitted Mezzanine Loan Underwritten Amount; (B) is evidenced and secured by loan documents in form and substance reasonably acceptable to Lender based on forms used in comparable transactions, has a term expiring on or after the Maturity Date, involves cash management arrangements satisfactory to Lender, and is the subject of an intercreditor agreement between Lender and the proposed lender of such proposed mezzanine loan, which shall be in a customary form reasonably acceptable to the Lender; notwithstanding the foregoing, it is understood that during the twelve (12) month period following the Closing Date, the Appraised Value of the Property shall be based upon the Appraisal obtained by Lender prior to the Closing Date and that during the twelve (12) month period following Lender’s approval of any other Appraisal, the Appraised Value of the Property for these purposes shall be based upon such Appraisal, and that no new Appraisal shall be required for purposes of this Section 8.1(i)(i) during such periods;

 

(ii)           receipt by Lender of Rating Agency Confirmation with respect to the proposed loan;

 

(iii)           delivery to Lender of evidence that, after giving effect to the proposed mezzanine loan, Borrower will be in compliance with the covenants set forth in this Agreement (including, without limitation, the covenants in Section 3.1.24) and the other Loan Documents;

 

(iv)           Borrower having no direct or indirect liability for the obligations of the mezzanine borrower under the proposed mezzanine loan;

 

(v)           the delivery to Lender of a satisfactory non-consolidation opinion (which opinion shall be in form, scope and substance acceptable in all respects to Lender and the Rating Agencies), modified organizational documents and modifications of the Loan Documents to reflect the existence and terms of such mezzanine loan; and

 

(vi)           the Borrower of such Permitted Mezzanine Loan shall not be the Mezzanine Borrower as defined in Section 11.32.

 

 

 

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connection with the preparation, negotiation of an intercreditor agreement relating thereto) shall be payable by Borrower whether or not Lender consents to the proposed mezzanine loan.

 

IX.

SALE AND SECURITIZATION OF MORTGAGE

 

Section 9.1.                                Sale of Mortgage and Securitization.

 

(a)           Lender shall have the right (i) to sell or otherwise transfer the Loan or any portion thereof as a whole loan, (ii) to sell participation interests in the Loan or (iii) to securitize the Loan or any portion thereof in a single asset securitization or a pooled loan securitization.  (The transactions referred to in clauses (i), (ii) and (iii) shall hereinafter be referred to collectively as “Secondary Market Transactions” and the transaction referred to in clause (iii) shall hereinafter be referred to as a “Securitization.”  Any certificates, notes or other securities issued in connection with a Securitization are hereinafter referred to as “Securities”).

 

(b)           If requested by Lender, Borrower shall assist Lender, in satisfying the market standards to which Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with any Secondary Market Transactions, including, without limitation, to:

 

(i)           provide updated financial and other information with respect to the Property, the business operated at the Property, Borrower and the Manager, provide updated budgets relating to the Property and provide updated appraisals, market studies, environmental reviews (including, Phase I and Phase II reports, as applicable), property condition reports and other due diligence investigations of the Property (the “Updated Information”), together, with appropriate verification of the Updated Information through letters of auditors or opinions of counsel acceptable to Lender and the Rating Agencies;

 

(ii)           provide opinions of counsel, which may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives, as to non-consolidation, fraudulent conveyance and “true sale” or any other opinion customary in Secondary Market Transactions or required by the Rating Agencies with respect to Property and Borrower and Affiliates, which counsel and opinions shall be satisfactory to Lender and the Rating Agencies;

 

(iii)           provide updated, as of the closing date of the Secondary Market Transaction, representations and warranties made in the Loan Documents and such additional representations and warranties as the Rating Agencies may require; and

 

 

 

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Management Agreement, if applicable, with respect to the newly created components such that the pricing and marketability of the Securities and the size of each class of Securities and the rating assigned to each such class by the Rating Agencies shall provide the most favorable rating levels and achieve the optimum rating levels for the Loan; provided, however, any such amendments or agreements will not materially alter the payment terms set forth in this Agreement or the other Loan Documents or materially and adversely affect Borrower or impose additional material obligations or liabilities upon Borrower and shall comply with Section 11.29.

 

(v)           attend management meetings and conduct tours of the Property.

 

(c)           If, at the time one or more Disclosure Documents are being prepared for a Securitization, Lender expects that Borrower alone or Borrower and one or more Affiliates of Borrower collectively, or the Property alone or the Property and Related Properties collectively, will be a Significant Obligor, Borrower shall furnish to Lender upon request (i) the selected financial data or, if applicable, Historical Net Operating Income, required under Item 1112(b)(1) of Regulation AB, if Lender expects that the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization and at any time during which the Loan and any Related Loans are included in a Securitization does, equal or exceed ten percent (10%) (but less than twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Securitization or (ii) the financial statements required under Item 1112(b)(2) of Regulation AB, if Lender expects that the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization and at any time during which the Loan and any Related Loans are included in a Securitization does, equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Securitization.  Such financial data or financial statements shall be furnished to Lender (A) within ten (10) Business Days after notice from Lender in connection with the preparation of Disclosure Documents for the Securitization, (B) not later than thirty (30) days after the end of each fiscal quarter of Borrower and (C) not later than seventy-five (75) days after the end of each fiscal year of Borrower; provided, however, that Borrower shall not be obligated to furnish financial data or financial statements pursuant to clauses (B) or (C) of this sentence with respect to any period for which a filing pursuant to the Exchange Act in connection with or relating to the Securitization (an “Exchange Act Filing”) is not required.  If requested by Lender, Borrower shall furnish to Lender financial data and/or financial statements (if available to Borrower) for any Tenant of any of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such tenant or group of affiliated tenants, a concentration within all of the mortgage loans included or expected to be included, as applicable, in the Securitization such that such tenant or group of affiliated tenants would constitute a Significant Obligor.

 

 

 

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statements referred to in Section 9.1(c)(ii) above shall be audited by independent accountants of Borrower acceptable to Lender in accordance with Regulation AB and all other applicable legal requirements, shall be accompanied by the manually executed report of the independent accountants thereon, which report shall meet the requirements of Regulation AB and all other applicable legal requirements, and shall be further accompanied by a manually executed written consent of the independent accountants, in form and substance acceptable to Lender, to the inclusion of such financial statements in any Disclosure Document and any Exchange Act Filing and to the use of the name of such independent accountants and the reference to such independent accountants as “experts” in any Disclosure Document and Exchange Act Filing, all of which shall be provided at the same time as the related financial statements are required to be provided.  All financial data and financial statements (audited or unaudited) provided by Borrower under Section 9.1(c) shall be accompanied by an Officer’s Certificate which shall state that such financial statements meet the requirements set forth in the first sentence of this Section 9.1(d).

 

(e)           If requested by Lender, Borrower shall provide Lender, promptly upon request, with any other or additional financial statements, or financial, statistical or operating information, as Lender shall determine to be required pursuant to Regulation AB or any amendment, modification or replacement thereto or other legal requirements in connection with any Disclosure Document or any Exchange Act Filing or as shall otherwise be reasonably requested by Lender.

 

(f)           In the event Lender determines, in connection with a Securitization, that the financial data and financial statements required in order to comply with Regulation AB or any amendment, modification or replacement thereto or other legal requirements are other than as provided herein, then notwithstanding the provisions of Sections 9.1(c) and (d), Lender may request, and Borrower shall promptly provide, such other financial statements as Lender determines to be necessary or appropriate for such compliance.

 

Section 9.2.                                Securitization Indemnification.

 

(a)           Borrower understands that information provided to Lender by Borrower and its agents, counsel and representatives may be included in disclosure documents in connection with the Securitization, including, without limitation, an offering circular, a prospectus, prospectus supplement, private placement memorandum or other offering document (each, a “Disclosure Document”) and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and may be made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers relating to the Securitization.

 

 

 

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Property, Manager and all other aspects of the Loan and solely to the extent the information therein was furnished to Lender by or on behalf of Borrower in connection with the preparation of the Disclosure Documents or the underwriting and closing of the Loan (collectively, the “Covered Disclosure Information”), do not contain any untrue statement of a material fact known to Borrower or omit to state a material fact known to Borrower necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, (B) indemnifying Lender (and for purposes of this Section 9.2, Lender hereunder shall include its officers and directors), the Affiliate of Lender that has filed the registration statement relating to the Securitization (the “Registration Statement”), each of its directors, each of its officers who have signed the Registration Statement and each Person that controls the Affiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Lender Group”), and Lender, and any other placement agent or underwriter with respect to the Securitization, each of their respective directors and each Person who controls Lender or any other placement agent or underwriter within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or liabilities (collectively, the “Liabilities”) to which Lender, the Lender Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Covered Disclosure Information or arise out of or are based upon the omission or alleged omission to state in the Covered Disclosure Information a material fact required to be stated therein or necessary in order to make the statements in the Covered Disclosure Information, in light of the circumstances under which they were made, not misleading, and (C) agreeing to reimburse Lender, the Lender Group and/or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, such Lender Group and the Underwriter Group in connection with investigating or defending the Liabilities; provided, however, that Borrower will be liable in any such case under clauses (B) or (C) above only to the extent that any such loss claim, damage or liability arises out of or is based upon any such untrue statement or omission made therein in reliance upon and in conformity with information furnished to Lender by or on behalf of Borrower in connection with the preparation of the Disclosure Document or in connection with the underwriting or closing of the Loan, including, without limitation, financial statements of Borrower, operating statements and rent rolls with respect to the Property.  This indemnity agreement will be in addition to any liability which Borrower may otherwise have.

 

(c)           In connection with Exchange Act Filings, Borrower shall (i) indemnify Lender, the Lender Group and the Underwriter Group for Liabilities to which Lender, the Lender Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon the omission or alleged omission to state in the Disclosure Document a material fact required to be stated in the Disclosure Document in order to make the statements in the Disclosure Document, in light of the circumstances under which they were made, not misleading and (ii) reimburse Lender, the Lender Group or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Lender Group or the Underwriter Group in connection with defending or investigating the Liabilities.

 

 

 

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indemnifying party in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to the indemnifying party.  In the event that any action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified party.  After notice from the indemnifying party to such indemnified party under this Section 9.2, such indemnified party shall pay for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party at the cost of the indemnifying party.  The indemnifying party shall not be liable for the expenses of more than one separate counsel unless an indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to another indemnified party.

 

(e)           In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 9.2(b) or (c) is for any reason held to be unenforceable as to an indemnified party in respect of any losses, claims, damages or liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 9.2(b) or (c), the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages or liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered:  (i) Lender’s and Borrower’s relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances.  Lender and Borrower hereby agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.

 

(f)           The liabilities and obligations of both Borrower and Lender under this Section 9.2 shall survive the termination of this Agreement and the satisfaction and discharge of the Debt.

 

 

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X.

DEFAULTS

 

Section 10.1.                                Event of Default.

 

(a)           Each of the following events shall constitute an event of default hereunder (an “Event of Default”):

 

(i)           if (A) any monthly installment of principal and/or interest due under the Notes is not paid on or prior to the date on which it is due or the payment due on the Maturity Date is not paid on the Maturity Date or (B) any other portion of the Debt is not paid when due and such non-payment in this Section 10.1(a)(i)(B) continues for five (5) days following notice to Borrower that the same is due and payable;

 

(ii)           if any of the Taxes or Other Charges are not paid prior to delinquency;

 

(iii)           if the Policies are not kept in full force and effect;

 

(iv)           if Borrower breaches or permits or suffers a breach of Article 6 of the Mortgage or Article VIII of this Agreement, or Section 2.5 of this Agreement;

 

(v)           (I) Except as set forth in Section 10.1(a)(v)(II) below, if any representation or warranty made by Borrower herein or in any other Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Lender shall have been false or misleading in any material respect as of the date the representation or warranty was made; (II) Any representation or warranty made or deemed made at any time after the Closing Date in Sections 3.1.5, 3.1.9, 3.1.25, or 3.1.37 of this Agreement proves to be untrue in any material respect when so made or deemed made, but only if (in the case of any such breach which is not intentional) Borrower does not cure such breach within ten (10) Business Days after Borrower, Guarantor or the REIT obtains knowledge of the same, it being understood that the foregoing cure rights shall not apply to any such breach which is intentional.

 

(vi)           if Borrower, any SPC Party or Guarantor shall make an assignment for the benefit of creditors;

 

(vii)           if Borrower or Guarantor fails or admits its inability to pay debts generally as they become due;

 

 

 

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and SPC Party or Guarantor, upon the same not being discharged, stayed or dismissed within sixty (60) days or if an order for relief is entered;

 

(ix)           if Borrower attempts to assign its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the Loan Documents;

 

(x)           a default under any agreement creating a Lien or encumbrance on the Property and, provided the Property (or part thereof or interest therein) shall not be in imminent danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of the Mortgage being primed by any related Lien, such Lien has not been discharged or bonded over within thirty (30) days;

 

(xi)           if any of the assumptions contained in the Insolvency Opinion, or in any other non-consolidation opinion delivered by Borrower to Lender in connection with the Loan, or in any other non-consolidation delivered by Borrower to Lender in connection with the Loan subsequent to the closing of the Loan, is or shall become untrue in any material respect;

 

(xii)           if Borrower breaches any representation, warranty or covenant contained in Section 3.1.24 hereof;

 

(xiii)                      if Borrower breaches any of the negative covenants contained in Section 4.2.9 hereof or acts or neglects to act in such a manner as to be considered a  material default under the REA;

 

(xiv)                      if Borrower breaches in any material respect any covenant, warranty or representation contained in the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement;

 

(xv)           if Guarantor breaches in any material respect any covenant, warranty or representation contained in the Guarantee or a “Guarantor Event of Default” (as defined in the Guarantee) occurs;

 

(xvi)                      if Borrower shall continue to be in Default under any of the other terms, covenants or conditions of this Agreement not specified in subsections (i) through and including (xv) above, for ten (10) days after notice to Borrower from Lender, in the case of any Default which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default; provided, however, that if such non-monetary Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed sixty (60) days; or

 

 

 

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whether as to Borrower or the Property, or if any other such event shall occur or condition shall exist, if the effect of such event or condition is to accelerate the maturity of any portion of the Debt or to permit Lender to accelerate the maturity of all or any portion of the Debt.

 

(b)           Upon the occurrence of an Event of Default (other than an Event of Default described in Section 10.1(a) (vi), (vii) or (viii) above) and at any time thereafter Lender may, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in and to the Property, including, without limitation, declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and the Property, including, without limitation, all rights or remedies available at law or in equity; and upon any Event of Default described in Section 10.1(a) (vi), (vii) or (viii) above, the Debt and all other obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.

 

Section 10.2.                                Remedies.

 

(a)           Subject to the limitations set forth in Section 11.22 hereof, upon the occurrence of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to the Property.  Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents.  Without limiting the generality of the foregoing, 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.

 

 

 

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Mortgage to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by the Mortgage as Lender may elect.  Notwithstanding one or more partial foreclosures, the Property shall remain subject to the Mortgage to secure payment of sums secured by the Mortgage and not previously recovered.

 

(c)           Lender shall have the right from time to time to sever the Notes 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 shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender.  Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall not make or execute any such documents under such power until three (3) days after notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power.  Except as may be required in connection with a Securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be obligated to pay any costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan Documents, and (ii) the Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only as of the Closing Date.

 

(d)           Any amounts recovered from the Property or any other collateral for the Loan after an Event of Default may be applied by Lender toward the payment of any interest and/or principal of the Loan and/or any other amounts due under the Loan Documents in such order, priority and proportions as Lender in its sole discretion shall determine.

 

Section 10.3.                                Right to Cure Defaults.

 

 

 

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security interests provided to Lender under the Loan Documents and shall be immediately due and payable upon demand by Lender therefore.

 

Section 10.4.                                Remedies Cumulative.

 

Subject to the limitations contained in Section 11.22 hereof, the rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise.  Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion.  No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient.  A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.

 

Section 10.5.                                ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement Cash Collateral or Collateral Letter of Credit.

 

 

 

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▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement, and Lender shall (provided that no Event of Default then exists) promptly following its receipt of such request accept a replacement Collateral Letter of Credit in such reduced amount or release cash collateral (to the extent it is in excess of such reduced amount).

 

10.5.1                      Establishment and Maintenance of the Controlled Account.

 

(a)           Each Controlled Account required hereunder (i) shall be established at, and a separate and identifiable account from all other funds held by, a Depository Bank and (ii) shall contain only funds required to be deposited pursuant to this Section 10.5.  Any interest which may accrue on the amounts on deposit in a Controlled Account shall be added to and shall become part of the balance of such Controlled Account.  Borrower, Lender and the applicable Depository Bank shall enter into an agreement (a “Controlled Account Agreement”), substantially in the form of Schedule X attached hereto (with such changes thereto as may be required by such Depository Bank and satisfactory to Lender) which shall govern such Controlled Account and the rights, duties and obligations of each party to such Controlled Account Agreement.

 

(b)           Each Controlled Account Agreement shall provide that (i) the Controlled Account shall be established in the name of Lender, (ii) the Controlled Account shall be subject to the sole dominion, control and discretion of Lender, and (iii) neither Borrower nor any other Person other than Lender, including, without limitation, any Person claiming on behalf of or through Borrower, shall have any right or authority, whether express or implied, to make use of or withdraw, or cause the use or withdrawal of, any proceeds from the Controlled Account or any of the other proceeds deposited in the Controlled Account.

 

10.5.2                      Controlled Account Fees.  Borrower shall pay any and all fees charged by Depository Bank in connection with the maintenance of the Controlled Account required to be established by or for it hereunder, and the performance of the Depository Bank’s duties.

 

10.5.3                      Security Interest.

 

(a)           Borrower hereby grants a perfected first priority security interest in favor of Lender in each Controlled Account established by or for it hereunder and all financial assets and other property and sums at any time held, deposited or invested therein, and all security entitlements and investment property relating thereto, together with any interest or other earnings thereon, and all proceeds thereof, whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities (collectively, “Controlled Account Collateral”), together with all rights of a secured party with respect thereto to secure the Loans

 

(b)           Borrower covenants and agrees:

 

(i)           to do all acts that may be reasonably necessary to maintain, preserve and protect the Controlled Account Collateral;

 

(ii)           to pay promptly when due all material taxes, assessments, charges, encumbrances and liens now or hereafter imposed upon or affecting the Controlled Account Collateral;

 

 

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collateral or Collateral Letter of Credit (subject to its rights hereunder) until all of Borrower’s obligations under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ U.S. Bank Tower Lease Takeover Agreement are paid and performed, notwithstanding that any Event of Default that may have triggered Borrower’s obligation to deliver such cash collateral or Collateral Letter of Credit has been cured.

 

XI.

MISCELLANEOUS

 

Section 11.1.                                Successors and Assigns.

 

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, shall inure to the benefit of the legal representatives, successors and assigns of Lender.

 

Section 11.2.                                Lender’s Discretion.

 

Whenever pursuant to this Agreement Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole but good faith discretion of Lender and shall be final and conclusive.  Prior to a Securitization, whenever pursuant to this Agreement the Rating Agencies are given any right to approve or disapprove, or any arrangement or term is to be satisfactory to the Rating Agencies, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory, based upon Lender’s good faith determination of Rating Agency criteria, shall be substituted therefor.  The Note B Designated Representative shall be entitled to the benefits of this Section 11.2 as if each reference herein to “Lender” included, without limitation Note B Designated Representative.

 

Section 11.3.                                Governing Law.

 

 

 

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Borrower of its obligations under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, or (ii) the use or intended use of the proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to the Lender Indemnitees hereunder to the extent that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of the Lender Indemnitees.  To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Lender Indemnitees.

 

(c)           The Note B Designated Representative shall be entitled to the benefits of this Section 11.13 as if each reference herein to “Lender” included, without limitation Note B Designated Representative.

 

Section 11.14.                                Schedules Incorporated.

 

The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

 

Section 11.15.                                Offsets, Counterclaims and Defenses.

 

Any assignee of Lender’s interest in and to this Agreement and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.

 

Section 11.16.                                No Joint Venture or Partnership; No Third Party Beneficiaries.

 

(a)           Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender.  Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.

 

 

 

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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.  This Section 11.16(b) does not impair or affect in any manner the rights of the Note B Designated Representative provided for herein and in the other Loan Documents.

 

Section 11.17.                                Publicity.

 

All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender or any of its Affiliates shall be subject to the prior written approval of Lender (except, and only to the extent, required by applicable Legal Requirements).  Borrower authorizes Lender to issue press releases, advertisements and other promotional materials in connection with Lender’s own promotional and marketing activities, including in connection with a Secondary Market Transaction, and such materials may describe the Loan in general terms or in detail and Lender’s participation therein in the Loan.  All references to Lender contained in any press release, advertisement or promotional material issued by Borrower shall be approved in writing by Lender in advance of issuance.

 

Section 11.18.                                Waiver of Marshalling of Assets.

 

To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Property, and shall not 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 11.19.                                Waiver of Offsets/Defenses/Counterclaims.

 

Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents or otherwise to offset any obligations to make the payments required by the Loan Documents.  No failure by Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any offset against, any payments which Borrower is obligated to make under any of the Loan Documents.

 

Section 11.20.                                Conflict; Construction of Documents; Reliance.

 

 

 

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statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender.  Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies.  Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.

 

Section 11.21.                                Brokers and Financial Advisors.

 

Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement, other than Eastdil Secured (the “Broker”).  Borrower hereby agrees to pay all fees and commissions due and payable to Broker.  Lender has not engaged any broker in connection with the transactions contemplated by this Agreement. Borrower shall indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any Person (including Broker) that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein.  The provisions of this Section 11.21 shall survive the expiration and termination of this Agreement and the payment of the Debt.

 

Section 11.22.                                Exculpation.

 

 

 

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rights of Lender under any other certificate or agreement delivered by Guarantor; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Mortgage or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (g) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with and Borrower shall be personally liable for the following:

 

(i)           fraud or intentional misrepresentation by Borrower Guarantor, or their affiliates in connection with the Loan;

 

(ii)           willful misconduct of Borrower, Guarantor or their affiliates;

 

(iii)           the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity or in the Mortgage concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in either document to the extent not otherwise covered by an environmental insurance policy obtained by Borrower and approved by Lender;

 

(iv)           the removal or disposal by Borrower, Guarantor or their affiliates of any portion of the Property following the occurrence and during the continuance of an Event of Default;

 

(v)           the misapplication or misappropriation by Borrower, Guarantor or their affiliates of (A) any insurance proceeds paid by reason of any Casualty to the Property, (B) any Awards received in connection with the Condemnation of all or a portion of the Property, (C) any Rents following the occurrence and during the continuance of an Event of Default and not applied to the Debt, or (D) any Rents paid  more than one (1) month in advance to the extent such Rents or any other payments in respect of the Leases and other income of the Property or any other collateral are not applied to the costs of maintenance and operation of the Property and to the payment of taxes, lien claims, insurance premiums, debt service and other amounts due under the Loan Documents;

 

(vi)           failure to pay (or otherwise bond) charges for labor or materials or other charges for work performed at the Property prior to foreclosure and transfer of title to the Property and resulting in Liens on any portion of the Property (excluding such unpaid work performed for Lender or any receiver);

 

 

 

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any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;

 

(viii)                      the breach by Borrower of any of its indemnification obligations set forth in Section 9.2 of this Agreement or referred to in Section 7.10 of the Mortgage;

 

(ix)           Borrower’s failure to maintain insurance as required by this Agreement or to pay any taxes or assessments affecting the Property but only (A) to the extent that the Property generates cash flow sufficient to permit (and that is available to) Borrower to pay the same when due and (B) if such failure does not result from the failure of Lender, in violation of this Agreement, to release to Borrower Insurance Funds or Tax Funds, respectively, for the payment of applicable insurance premiums or taxes or assessments;

 

(x)           intentional, physical waste, damage or destruction of any portion of the Property caused by the acts or omissions of Borrower or Guarantor or their respective affiliates, agents, employees or contractors;

 

(xi)           commission of a criminal act by Borrower Guarantor or their affiliates;

 

(xii)           Borrower’s failure to appoint a new property manager upon the request of Lender after an Event of Default as required by, and in accordance with the terms and provisions of, this Agreement and the Mortgage;

 

(xiii)                      Borrower’s failure to provide financial information in accordance with, and required by, this Agreement (which damages will be limited to Lender’s cost for accountants and other consultants to prepare such financial information);

 

(xiv)                      Borrower’s failure to maintain its status as a single purpose entity as required by, and in accordance with, the terms and provisions of, this Agreement and the Mortgage, excluding Borrower’s obligations under Section 3.1.24(f) or (j);

 

(xv)           any defenses, offset rights or counterclaims that KPMG LLP, a Delaware limited liability partnership or its successors (“KPMG”) assert at any time subsequent to the date Lender takes possession of the Property or a receiver is appointed therefor, or the date Lender or another purchaser becomes the owner of the Property by reason of a foreclosure, deed in lieu of foreclosure or otherwise (the “Turnover Date”)) arising from the following:  (x) liability for certain real estate taxes pursuant to Section 10.2 of that certain KPMG Lease arising from acts or events prior to the Turnover Date, (y) the process of reconciliation of Additional Rent (as such term is defined in the KPMG Lease) for Operating Expenses (as such term is defined in the KPMG Lease) and Real Property Taxes (as such term is defined in the KPMG Lease) for the years 2002 through and including 2007 or any other period prior to the Turnover Date or (z) liability for any “Additional Tenant Improvement Allowance” (as such term is defined in the KPMG Lease) pursuant to Section 5.4 of the KPMG Lease; or

 

 

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costs and expenses as and to the same extent (but without duplication) as Lender is entitled thereto under the applicable provisions of this Agreement and the other Loan Documents.

 

(b)           Upon notice thereof from Lender, Servicer shall have the right to exercise all rights of Lender and enforce all obligations of Borrower pursuant to the provisions of this Agreement, the Notes and the other Loan Documents.

 

(c)           Provided Borrower shall have been given notice of Servicer’s address by Lender, Borrower shall deliver to Servicer duplicate originals of all notices and other instruments which Borrower may or shall be required to deliver to Lender pursuant to this Agreement, the Notes and the other Loan Documents (and no delivery of such notices or other instruments by Borrower shall be of any force or effect unless delivered to Lender and Servicer as provided above).

 

Section 11.25.                                Joint and Several Liability.

 

If more than one Person has executed this Agreement as “Borrower,” the representations, covenants, warranties and obligations of all such Persons hereunder shall be joint and several.

 

Section 11.26.                                Creation of Security Interest.

 

Notwithstanding any other provision set forth in this Agreement, the Notes, the Mortgage or any of the other Loan Documents, Lender may at any time create a security interest in all or any portion of its rights under this Agreement, the Notes, the Mortgage and any other Loan Document (including, without limitation, the advances owing to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

 

Section 11.27.                                Assignments and Participations.

 

 

 

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Loan Documents shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents.  Borrower agrees that each such participant shall be entitled to the benefits of Section 2.2.3(d), (e), (f) and (g) to the same extent as if it were a Lender and had acquired its interest by assignment.

 

(d)           In addition to the assignments and participations permitted under the foregoing provisions of this Section (but without being subject thereto), any Lender may (without notice to Borrower) assign and pledge all or any portion of its Loan and its Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any operating circular issued by such Federal Reserve Bank, and such Loan and Note shall be fully transferable as provided therein.  No such assignment shall release the assigning Lender from its obligations hereunder.

 

(e)           Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 11.27, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to Borrower or any of its Affiliates or to any aspect of the Loan that has been furnished to the Lender by or on behalf of the Borrower or any of its Affiliates.

 

Section 11.28.                                [Reserved]

 

Section 11.29.                                Component Notes.

 

 

 

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Borrower fails to execute and deliver such documents to Lender within five (5) Business Days following such request by Lender, Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such transactions, Borrower ratifying all that such attorney shall do by virtue thereof; provided, however, that notwithstanding any other provision of Section 9.2 or this Section 11.29 to the contrary, Borrower shall not be required to enter into any such documents and amendments which would increase Borrower’s affirmative obligations or decrease Borrower’s rights under the Loan Documents or adversely affect the economic terms of the Loans, except for the effect on the weighted average interest rate that may result while an Event of Default exists from the repayment of any lower-yielding senior note or senior participation prior to the repayment of any higher-yielding junior note or junior participation.

 

It shall be an Event of Default under this Agreement, the Notes, the Mortgage and the other Loan Documents if Borrower fails to comply with any of the terms, covenants or conditions of this Section 11.29 within ten (10) Business Days of notice thereof.

 

Section 11.30.                                Approvals; Third Parties; Conditions.  

 

All approval rights retained or exercised by Lender with respect to Leases, contracts, plans, studies and other matters are solely to facilitate Lender’s credit underwriting, and shall not be deemed or construed as a determination that Lender has passed on the adequacy thereof for any other purpose and may not be relied upon by Borrower or any other Person.  This Agreement is for the sole and exclusive use of Lender and Borrower and may not be enforced, nor relied upon, by any Person other than Lender and Borrower.  All conditions of the obligations of Lender hereunder, including the obligation to make advances, if any, are imposed solely and exclusively for the benefit of Lender, its successors and assigns, and no other Person shall have standing to require satisfaction of such conditions or be entitled to assume that Lender will refuse to make advances in the absence of strict compliance with any or all of such conditions, and no other Person shall, under any circumstances, be deemed to be a beneficiary of such conditions, any and all of which may be freely waived in whole or in part by Lender at any time in Lender’s sole discretion. The Note B Designated Representative shall be entitled to the benefits of this Section 11.30 as if each reference herein to “Lender” included, without limitation the Note B Designated Representative.

 

Section 11.31.                                Limitation on Liability of Lender’s Officers, Employees, etc.  

 

Any obligation or liability whatsoever of Lender which may arise at any time under this Agreement or any other Loan Document shall be satisfied, if at all, out of Lender’s interest in the Property only.  No such obligation or liability shall be personally binding upon, nor shall resort for the enforcement thereof be had to, the property of any of Lender’s shareholders, directors, officers, employees or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise.  Note B Designated Representative shall be entitled to the benefits of this Section 11.31 as if each reference herein to “Lender” included, without limitation Note B Designated Representative.

 

 

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transactions, Mortgage Borrower and/or Mezzanine Borrower, as applicable, ratifying all that such attorney shall do by virtue thereof.

 

(d)           It shall be an Event of Default under this Agreement, the Notes, the Mortgage and the other Loan Documents if Borrower or Mezzanine Borrower fails to comply with any of the terms, covenants or conditions of this Section 11.32 within ten (10) Business Days of notice thereof.

 

Section 11.33.                                Exclusivity.

 

Until the earlier of ninety (90) days from the Closing Date or completion of syndication of the Loan, Borrower agrees that no other similar credit facilities or debts issued by Borrower or Sponsor will be syndicated or privately placed which might, in Lender’s opinion, have a detrimental effect on the successful completion of the syndication of the Loan, and will advise Lender immediately if any issue is contemplated.

 

Section 11.34.                                Rating Agency Confirmation.  

 

Whenever in this Agreement or any Loan Document a requirement to obtain a Rating Agency Confirmation applies, such requirement shall instead require the approval of Lender during any period when no portion of the Loan is held by a REMIC trust.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.